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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) September 13, 1996
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American Restaurant Group, Inc.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
33-48183 33-0193602
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(Commission File Number) (I.R.S. Employer Identification No.)
450 Newport Center Drive, Newport Beach, CA 92660
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(Address of Principal Executive Officer) (Zip Code)
(714) 721-8000
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On September 13, 1996 the Company, through two of its subsidiaries, completed a
sale/leaseback transaction under which it sold the real property relating to 24
Stuart Anderson's Black Angus and Stuart Anderson's Cattle Company restaurants
for an aggregate sales price of $48.1 million and simultaneously executed
long-term leases under which it will continue to operate the restaurants. The
leases call for aggregate annual rent payments of $5.8 million which will
increase every five years by the lesser of the increase in the consumer price
index or 10%. With the exception of one property, the leases are for initial
terms of 25 years with three, five-year renewal options. One of the leases is
for a maximum term of three years, during which the Company intends to seek and
develop an alternate location in the same market.
The proceeds of the transaction have been applied in accordance with the
requirements of the Company's debt instruments, as follows: to redeem at par
principal and interest thereon of its senior secured notes in the amount of
$34.3 million; to repay bank debt and to partially cash collateralize
outstanding letters of credit in a combined amount of $4.8 million; for fees and
expenses of this transaction as well as the Company's recently completed consent
solicitation in a total amount of $4.6 million; and $4.4 million retained by the
Company to be invested in productive assets within six months.
The effect of this transaction on a pro forma basis, had it occurred as of the
beginning of the year ended December 25, 1995, would be to increase rent expense
by $5.4 million, decrease depreciation expense by $1.5 million, increase
amortization of debt costs by $0.5 million, decrease interest expense by $2.6
million and record a loss on extinguishment of debt of $1.9 million.
The pro forma effect on the twenty-six weeks ended June 24, 1996 would be to
increase rent expense by $2.7 million, decrease depreciation expense by $0.8
million, increase amortization of debt costs by $0.4 million, decrease interest
expense by $1.4 million and record a loss on extinguishment of debt of $1.4
million.
On a pro forma basis as of June 24, 1996, the Company's cash would increase by
$5.2 million, net property and equipment would decrease by $41.2 million, net
other assets would increase by $3.7 million, accrued liabilities would increase
by $0.5 million, a deferred gain of $5.8 million would be added, short-term debt
would decrease by $5.0 million, long-term debt would decrease by $32.4 million
and its accumulated deficit would increase by $1.2 million reflecting the loss
on extinguishment of debt.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(b) Pro forma condensed financial statements. See narrative
description in Item 2. above.
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(c) List of Exhibits
EXHIBIT NO. DESCRIPTION
2.1 Purchase Agreement dated as of September 11, 1996 by and
between ARG Property Management Corporation and ARG
Enterprises, Inc. and ARG Properties I, LLC.
2.2 Master lease dated September 11, 1996 between ARG Properties
I, LLC, as Landlord and ARG Enterprises, Inc. as Tenant.
2.3 Lease #06152 dated September 11, 1996 between Captec Net Lease
Realty, Inc. and ARG Enterprises, Inc. as Tenant for
Bloomington, Minnesota.
2.4 Lease #06153 dated September 11, 1996 between Captec Net
Lease Realty, Inc. and ARG Enterprises, Inc. as Tenant for
Fridley, Minnesota.
2.5 Lease #06154 dated September 11, 1996 between Captec Net
Lease Realty, Inc. and ARG Enterprises, Inc. as Tenant for
Minnetonka, Minnesota.
2.6 Lease #06155 dated September 11, 1996 between Captec Net
Lease Realty, Inc. and ARG Enterprises, Inc. as Tenant for
Roseville, Minnesota.
2.7 Lease dated September 11, 1996 between Safeway Inc., as
Landlord and ARG Enterprises, Inc., as Tenant.
2.8 Guaranty of Lease dated September 11, 1996 by ARG
Enterprises, Inc. as Tenant to ARG Properties I, LLC as
Landlord.
2.9 A Guaranty of Lease dated September 11, 1996 by ARG
Enterprises, Inc. as Tenant to Captec Net Lease Realty, Inc.
as Landlord for each of four Minnesota restaurants.
2.10 Guaranty of Lease dated September 11, 1996 by ARG Enterprises,
Inc. as Tenant and Safeway Inc. as Landlord.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN RESTAURANT GROUP, INC.
(Registrant)
Date: September 30, 1996 By: /s/William J. McCaffrey, Jr.
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William J. McCaffrey, Jr.
Chief Financial Officer
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EXHIBIT 2.1
PURCHASE AGREEMENT
THIS AGREEMENT is dated as of September 11, 1996, by and between ARG
PROPERTY MANAGEMENT CORPORATION ("ARGPM"), a California corporation and ARG
ENTERPRISES, INC., a California corporation (collectively the "Seller"), and ARG
PROPERTIES I, LLC, a California limited liability company ("Buyer").
IN CONSIDERATION of the respective agreements hereinafter set forth,
Seller and Buyer agree as follows:
1. Property Included in Sale. Each Seller hereby agrees to sell
and convey to Buyer, and Buyer hereby agrees to purchase from such Seller,
subject to the terms and conditions set forth herein, the following:
(a) that certain real property consisting of twenty-four
(24) separate parcels of land, being more particularly described in Exhibits A-1
through A-24 attached hereto being designated as owned by each Seller (the "Real
Property");
(b) all of such Seller's right, title and interest in and
to all rights, privileges and easements (including without limitation reciprocal
easement agreements and covenants, conditions and restrictions) appurtenant to
the Real Property, including, without limitation, all minerals, oil, gas and
other hydrocarbon substances on and under the Real Property, as well as all
development rights, parking rights, air rights, water, water rights, riparian
rights and water stock relating to the Real Property and any rights-of-way or
other appurtenances used in connection with the beneficial use and enjoyment of
the Real Property, and all roads and alleys adjoining or servicing the Real
Property (collectively, the "Appurtenances"); and
(c) all improvements and fixtures located on the Real
Property, including, without limitation, twenty-four (24) separate buildings
located on the Real Property, currently being operated as Stuart Anderson's
Cattle Company or Stuart Anderson's Black Angus restaurants, as well as all
other buildings and structures presently located on the Real Property, and along
with all on-site parking (collectively, the "Improvements").
All of the items referred to in subparagraphs (a), (b) and (c) above
are collectively referred to as the "Property."
2. Purchase Price.
(a) The aggregate purchase price for the Property is
Forty-Eight Million Eighty Thousand Dollars ($48,080,000) subject to reduction
by any credits due Buyer hereunder (the "Purchase Price").
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(b) The Purchase Price shall be paid to Seller in
immediately available funds at the closing of the purchase and sale contemplated
hereunder (the "Closing"). Seller acknowledges and agrees that Buyer may be
required to withhold a portion of the Purchase Price pursuant to Section 1445 of
the United States Internal Revenue Code (the "Federal Code") or Sections 18805
and 26131 of the California Revenue and Taxation Code (the "State Code")
(Sections 18805 and 26131 of the State Code, together with any regulations now
or hereafter promulgated thereunder, are sometimes collectively referred to
below as the "State Withholding Provisions" and Section 1445 of the Federal
Code, together with any regulations now or hereafter promulgated thereunder, are
sometimes collectively referred to below as the "Federal Withholding
Provisions"). Any amount properly so withheld by Buyer (as described in
Subparagraph 6(c)(vi) or 6(c)(vii) below) shall be deemed to have been paid by
Buyer as part of the Purchase Price, and Seller's obligation to consummate the
transactions contemplated herein shall not be excused, reduced, terminated or
otherwise affected thereby.
(c) The Purchase Price shall be allocated among the
various parcels of land and improvements and other property constituting the
Property as set forth in Exhibit B attached hereto.
3. Title to the Property. At the Closing, Seller shall convey to
Buyer marketable and insurable fee simple title to the Real Property, by duly
executed and acknowledged grant deeds or special warranty deeds substantially in
the form attached hereto as Exhibit C (the "Deeds"). Evidence of delivery of
marketable and insurable fee simple title shall be the issuance by Chicago Title
Insurance Company (the "Title Company") to Buyer, at Seller's sole cost and
expense, of ALTA Owner's Policies of Title Insurance (Form B, rev. 10/17/70) in
the aggregate amount of the Purchase Price and allocated among the various
parcels of Real Property in the manner set forth in Exhibit B attached hereto,
at no more than the Title Company's standard rates, insuring fee simple title to
the Real Property and the Improvements in Buyer, subject only to such exceptions
as Buyer shall approve pursuant to Subparagraph 4(a) below (the "Title
Policies"). Each of the Title Policies shall provide full coverage against
mechanics' and materialmen's liens arising out of the construction, repair or
alteration of any of the Improvements including any tenant improvements therein
and shall contain such special endorsements as Buyer may reasonably require,
including, without limitation, a Subdivision Map Act endorsement or analogous
endorsement for any Property located outside California, an access endorsement,
a zoning endorsement and a contiguity endorsement if any of the Real Property is
made up of two (2) or more contiguous parcels (the "Endorsements"). The Title
Company shall also provide for reinsurance with direct access with such
companies and in such amounts as Buyer shall reasonably request.
4. Conditions to Closing.
A. The following conditions are precedent to Buyer's
obligation to purchase the Property (the "Conditions Precedent"):
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(a) Buyer's review and approval of title to the
Property, including without limitation:
(i) current extended coverage
preliminary title reports on the Real Property, issued by Title
Company, accompanied by copies of all documents referred to in the
reports (collectively, the "Preliminary Reports"), and together with an
ownership search disclosing all prior owners of the Real Property for
the fifty (50) year period preceding each date when Seller acquired
each portion of the Real Property;
(ii) "as-built" surveys of the Real
Property and Improvements prepared by a surveyor or civil engineer
licensed in the States in which the Property is located. Said surveys
shall be acceptable to, and certified to, Buyer, Title Company and any
mortgagees or beneficiaries of Buyer in form satisfactory to Buyer
signed by the surveyor or engineer preparing the surveys and in
sufficient detail to provide the basis for the Title Policies without
boundary, encroachment or survey exceptions; and
(iii) copies of the most recent property
tax bills for the Property.
(b) Buyer's review and approval of pro forma
Title Policies (the "Pro Forma Owner's Policies"). The Pro Forma Owner's
Policies shall show title to the Property vested in Buyer, or such other persons
or entities designated by Buyer, subject only to the lien of real property taxes
for the current fiscal year not yet due and payable and exceptions on the
Preliminary Reports approved by Buyer.
(c) Buyer's review and approval of certificates
of occupancy, environmental reports, engineering reports, insurance policies,
and insurance certificates and such other information relating to the Property
that is specifically requested by Buyer of Seller in writing to the extent such
information either is in the possession or control of Seller, or any affiliate
of Seller, or may be obtained by Seller, or any affiliate of Seller, through the
exercise of commercially reasonable efforts (collectively, the "Other
Documents").
(d) Buyer's review and approval of the
structural, mechanical, electrical and other physical characteristics and
condition of the Property, engineering reports and plans and copies of the
as-built plans and specifications for the Property. Such review shall include an
examination for the presence or absence of Hazardous Material (as defined in
Subparagraph 7(l) below), which shall be performed or arranged by Buyer at
Seller's sole cost and expense; and if Buyer's consultants reasonably determine
that, based upon their Phase I examination, a Phase II examination is necessary
with respect to all or a part of the Real Property, Buyer may elect to perform a
Phase II examination and Seller shall pay the cost of any such Phase II
examination performed by Buyer or Buyer's Consultants.
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(e) Buyer's review and approval, of all
governmental permits and approvals relating to the construction, operation, use
or occupancy of the Property, and all zoning, land-use, subdivision,
environmental, building and construction laws and regulations restricting or
regulating or otherwise affecting the use, occupancy or enjoyment of the
Property.
(f) [Intentionally Omitted]
(g) Seller shall have caused to be executed and
delivered to Buyer, Captec Financial Group, Inc. and/or Safeway Inc., as
applicable:
(i) a Master Lease for nineteen (19) of
the restaurants comprising the Property between Buyer, as Landlord, and
ARG Enterprises, Inc., a California corporation, as Tenant ("Tenant"),
in the form attached hereto as Exhibit E (the "Master Lease"), together
with a short-form memorandum of the Master Lease in the form attached
hereto as Exhibit E-1 (the "Short Form Master Lease"), and together
with a guaranty of the Master Lease executed by American Restaurant
Group, Inc., a Delaware corporation ("Guarantor") in favor of Buyer in
the form attached hereto as Exhibit F (the "Guaranty of Master Lease"),
a certificate of Guarantor in the form attached hereto as Exhibit G
(the "Certificate of Guarantor"), and a certificate of Tenant in the
form attached hereto as Exhibit G-1 (the "Certificate of Tenant"); (ii)
four (4) individual leases for the four (4) restaurants comprising the
Property located in the State of Minnesota (the "Minnesota Assets")
between Captec Net Lease Realty, Inc., a Michigan corporation or its
affiliate ("Captec"), as Landlord, and Tenant, as tenant, each in the
form attached hereto as Exhibit H (the "Minnesota Leases"), together
with four (4) short-form memoranda of the Minnesota Leases in the form
attached hereto as Exhibit H-1 (the "Short Form Minnesota Leases"), and
together with a guaranty of each Minnesota Lease executed by Guarantor
in favor of Captec in the form attached hereto as Exhibit I (the
"Minnesota Lease Guaranties"), and (iii) an individual lease for the
restaurant comprising the Property located in the City of Pleasanton in
the State of California (the "Pleasanton Asset") between Safeway Inc.,
a Delaware corporation or its affiliate ("Safeway"), as Landlord, and
Tenant, as tenant, in the form attached hereto as Exhibit J (the
"Safeway Lease"), together with a short-form memorandum of the Safeway
Lease in the form attached hereto as Exhibit J-1 (the "Short Form
Safeway Lease"), and together with a guaranty of the Safeway Lease
executed by guarantor in favor of Safeway in the form attached hereto
as Exhibit K (the "Safeway Lease Guaranty") (the Master Lease, the
Short Form Master Lease, the Guaranty of Master Lease, the Guarantor's
Certificate, the Minnesota Leases, the Minnesota Lease Guaranties, the
Short Form Minnesota Leases, the Safeway Lease, the Safeway Lease
Guaranty and the Short Form Safeway Lease are sometimes referred to
herein collectively as the "Lease Documents").
(h) Buyer obtaining acquisition financing from
such lenders, in such amounts and on such terms and conditions as are
satisfactory to Buyer in its sole discretion.
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(i) [Intentionally Omitted]
(j) All of Seller's representations and
warranties contained in or made pursuant to this Agreement shall have been true
and correct when made and shall be true and correct as of the Closing Date. At
the Closing, Seller shall deliver to Buyer a certificate certifying that each of
Seller's representations and warranties contained in Paragraph 7 below are true
and correct as of the Closing Date.
(k) The physical condition of the Property shall
be substantially the same on the day of Closing as on the date of Buyer's
execution of this Agreement, reasonable wear and tear and loss by casualty
excepted (subject to the provisions of Paragraph 10 below), and, as of the day
of Closing, there shall be no litigation or administrative agency or other
governmental proceeding of any kind whatsoever, pending or threatened, which
after Closing would, in Buyer's reasonable discretion, materially adversely
affect the value of the Property or the ability of Buyer to operate the Property
in the manner in which it is currently being operated, and no proceedings shall
be pending or threatened which could or would cause the redesignation or other
modification of the zoning classification of, or of any building or
environmental code requirements applicable to, any of the Property.
(l) Buyer's review and approval of a legal
opinion or opinions from Seller's counsel in form and substance satisfactory to
Buyer (the "Seller's Opinion").
(m) The concurrent closing of the sale of the
Minnesota Assets to Captec and of the Pleasanton Asset to Safeway, and Buyer
obtaining from each of Captec and Safeway a duly executed assignment of this
Agreement in form and substance satisfactory to Buyer in its sole discretion
with respect to the assets being so acquired by each of them.
The Conditions Precedent contained in Subparagraphs 4(a) through (m)
are intended solely for the benefit of Buyer. Subject to the provisions of
Paragraph 5 below, if any of the Conditions Precedent is not satisfied, Buyer
shall have the right in its sole discretion either to waive in writing the
Condition Precedent and proceed with the purchase or terminate this Agreement.
B. The following conditions are precedent to
Seller's obligations to transfer all of Seller's right, title and interest in
and to the Property to Buyer:
1. All representations and warranties
of Buyer contained in this Agreement shall have been true in all material
respects when made and shall be true and correct as of the date of closing and
Buyer shall have performed and complied in all material respects with all
covenants, agreements and conditions required by this Agreement to be performed
or complied with by Buyer at or prior to the closing;
2. Seller shall have received the
documents described in subsection 6(d) below; and
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3. Buyer shall have delivered to
Seller, at Closing, all cash or other immediately available funds due from Buyer
in accordance with subsection 2(a).
5. Remedies.
In the event the sale of the Property is not consummated because of a
default under this Agreement on the part of Seller or if a Condition Precedent
cannot be fulfilled because Seller frustrated such fulfillment by some
affirmative act or omission, Buyer may either (a) terminate this Agreement by
delivery of notice of termination to Seller, whereupon Seller shall pay to Buyer
any title, escrow, legal and inspection fees incurred by Buyer and any other
documented expenses incurred by Buyer in connection with the performance of its
due diligence review of the Property, including, without limitation,
environmental and engineering consultants' fees and expenses, and neither party
shall have any further rights or obligations hereunder, or (b) continue this
Agreement pending Buyer's action for specific performance and/or damages
hereunder, including Buyer's costs and expenses incurred hereunder.
6. Closing and Escrow.
(a) Upon mutual execution of this Agreement, the
parties hereto shall deposit an executed counterpart of this Agreement with
Title Company and this Agreement shall serve as instructions to Title Company as
the escrow holder for consummation of the purchase and sale contemplated hereby.
Seller and Buyer agree to execute such additional escrow instructions as may be
appropriate to enable the escrow holder to comply with the terms of this
Agreement; provided, however, that in the event of any conflict between the
provisions of this Agreement and any supplementary escrow instructions, the
terms of this Agreement shall control.
(b) The parties shall endeavor to conduct an
escrow Closing pursuant to Subparagraph 6(a) above. If, however, an escrow
Closing is not practical, the Closing hereunder shall be held and delivery of
all items to be made at the Closing shall be made at the offices of Orrick,
Herrington & Sutcliffe LLP, 666 Fifth Avenue, New York, NY 10103, on or before
September 13, 1996 or on such other date as Seller and Buyer may select upon
three (3) days notice to Seller (the "Closing Date"). In the event the Closing
does not occur on or before the Closing Date, the escrow holder shall, unless it
is notified by both parties to the contrary within five (5) days after the
Closing Date, return to the depositor thereof items which were deposited
hereunder. Any such return shall not, however, relieve either party of any
liability it may have for its wrongful failure to close.
(c) At or before the Closing, Seller shall
deliver or cause to be delivered to Buyer the following:
(i) the duly executed and acknowledged
Deeds;
(ii) the Master Lease, the Short Form
Master Lease, the Guaranty of Master Lease, the Guarantor's Certificate, the
Minnesota Leases, the
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Short Form Minnesota Leases, the Minnesota Lease Guaranties, the Safeway Lease,
the Short Form Safeway Lease and the Safeway Lease Guaranty, each duly executed
and acknowledged (where appropriate) by Tenant and Guarantor (as applicable);
(iii) the Tenant's and Guarantor's
Certificate and the Assignment of Lease required to be executed by Tenant and
Guarantor (as applicable) by Buyer's lenders in connection with Buyer's
acquisition financing;
(iv) [Intentionally Omitted]; (v) an
affidavit pursuant to Section 1445(b)(2) of the Federal Code, and on which Buyer
is entitled to rely, that Seller is not a "foreign person" within the meaning of
Section 1445(f)(3) of the Federal Code, in the form attached hereto as Exhibit
L;
(vi) a properly executed California Form
590 certifying that Seller has a permanent place of business in California or is
qualified to do business in California.
If Seller fails to deliver any such Form 590, certificate or other
evidence, Buyer shall not be excused from its obligation to consummate the
transactions contemplated herein, but rather may deduct and withhold from the
Purchase Price an amount equal to three and one-third percent (3 1/3%) of the
"sales price of the California real property conveyed" in connection with the
transactions contemplated herein, as defined and required by the State
Withholding Provisions. As described in Subparagraph 2(b) above, any amount so
withheld shall be deemed to have been paid by Buyer as a part of the Purchase
Price. Should Seller deliver evidence to Buyer that the California Franchise Tax
Board has authorized a partial or total reduction in the amount required to be
withheld from the Purchase Price pursuant to the State Withholding Provisions,
Buyer may withhold only the amount required by the Franchise Tax Board to be
withheld, if any, and any amount so withheld shall be deemed to have been paid
by Buyer as part of the Purchase Price. Buyer acknowledges and agrees that it
has received written notice of the withholding requirements set forth in the
State Withholding Provisions;
(vii) such resolutions, authorizations,
bylaws or other corporate and/or partnership documents or agreements relating to
Seller and its shareholders as shall be reasonably required by Buyer;
(viii) closing statement in form and
content reasonably satisfactory to Buyer and Seller (the "Closing Statement");
(ix) the certificate certifying as to
Seller's representations and warranties as required by Subparagraph 4(j) above;
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(x) the duly executed opinion from
Seller's and/or Buyer's counsel as required by Subparagraph 4(l) above;
(xi) any other instruments, records or
correspondence called for hereunder which have not previously been
delivered.
Buyer may waive compliance on Seller's part under any of the foregoing items by
an instrument in writing.
(d) At or before the Closing, Buyer shall
deliver or cause to be delivered to Seller the following:
(i) the Master Lease and the Short Form
Master Lease, each duly executed and acknowledged (where appropriate)
by Buyer;
(ii) Minnesota Leases and the Short Form
Minnesota Leases, each duly executed and acknowledged (where
appropriate) by Captec and the Safeway Lease and the Short Form Safeway
Lease, each duly executed and acknowledged (where appropriate) by
Safeway;
(iii) the Closing Statement; and
(iv) the Purchase Price which shall be
disbursed as provided in the Closing Statement approved by Buyer and
Seller.
(e) Seller and Buyer shall each deposit such
other instruments as are reasonably required by the escrow holder or otherwise
required to close the escrow and consummate the purchase of the Property in
accordance with the terms hereof, including, without limitation, an agreement
(the "Designation Agreement") designating Title Company as the "Reporting
Person" for the transaction pursuant to Section 6045(e) of the Federal Code and
the regulations promulgated thereunder, and executed by Seller, Buyer and Title
Company. The Designation Agreement shall be substantially in the form attached
hereto as Exhibit M and, in any event, shall comply with the requirements of
Section 6045(e) of the Federal Code and the regulations promulgated thereunder.
(f) There shall be no apportionment of any real
estate taxes or assessments, utility charges, insurance premiums, amounts
payable under the Assumed Contracts or any other operation and maintenance
expenses or other recurring costs, it being understood that Tenant shall pay all
such costs and expenses under the Master Lease and the Minnesota Leases, and
Buyer shall in no event have any obligation or liability with respect thereto.
(g) If the closing shall occur hereunder, such
shall be deemed a waiver or satisfaction of the conditions precedent to each
parties' obligation to close hereunder.
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7. Representations and Warranties of Seller. Seller
hereby represents and warrants to and covenants with Buyer and any mortgagee or
beneficiary of Buyer as follows:
(a) To the best of Seller's Knowledge (as
defined below) there are now, and at the time of Closing will be, no material
physical or mechanical defects of the Property, including, without limitation,
the structural and load-bearing components of the Property, the roofs, the
parking lots, the plumbing, heating, air conditioning and electrical and life
safety systems, and all such items are in good operating condition and repair
and, to Seller's knowledge, in compliance with applicable building codes,
environmental, zoning and land use laws, and other applicable local, state and
federal laws and regulations (collectively, "Laws"), except where failure to so
comply could not reasonably be expected to have a material adverse effect on the
value or the use or operation of the Property for its intended purpose or the
ability of Seller to perform its obligations under this Agreement (a "Material
Adverse Effect").
(b) To Seller's Knowledge, the use and operation
of the Property now are, and at the time of Closing will be, in compliance with
all Laws, except where noncompliance could not reasonably be expected to have a
Material Adverse Effect. Seller shall not commit or permit to occur, any action
which will result in such a violation between the date hereof and the Closing.
(c) To the best of Seller's Knowledge any
survey, mechanical and structural plans and specifications, soil reports,
certificates of occupancy, operating statements, and income and expense reports,
and all other books and records relating to the Property and all other contracts
or documents delivered to Buyer in connection with this Agreement are and at the
time of Closing will be true, correct and complete copies of such documents, and
are and at the time of Closing will be in full force and effect, without default
by (or notice of default to) any party, except where failure to be in full force
or effect or where such default could not reasonably be expected to have
Material Adverse Effect.
(d) Except as disclosed to Buyer in writing
prior to the date hereof, Seller does not have Knowledge of any condemnation,
environmental, zoning or other land- use regulation proceedings, either
instituted or planned to be instituted, which would detrimentally affect the
use, operation or value of the Property, nor has Seller received notice of any
special assessment proceedings affecting the Property (other than as set forth
in the Preliminary Reports, and other than the pending condemnation proceeding
by the State of California with respect to the widening of the freeway adjacent
to the portion of the Property located in Lake Forest, California (the "Lake
Forest Condemnation Action"). Seller shall notify Buyer promptly of any such
proceedings of which Seller becomes aware.
(e) To the best of Seller's Knowledge, all
water, sewer, gas, electric, telephone, and drainage facilities and all other
utilities required by law or by the normal use and operation of the Property are
and at the time of Closing will be installed to the property lines of the Real
Property, are and at the time of Closing will be connected
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pursuant to valid permits, and are and at the time of Closing will be adequate
to service the Property and to permit compliance with all Laws, except where
noncompliance could not reasonably be expected to have Material Adverse Effect.
(f) Seller has obtained all licenses, permits,
variances, approvals, authorizations, easements and rights of way, including
proof of dedication, required from all governmental authorities having
jurisdiction over the Property or from private parties for the intended use,
operation and occupancy of the Property and to insure vehicular and pedestrian
ingress to and egress from the Property, except where failure to so obtain could
not reasonably be expected to have Material Adverse Effect.
(g) There is no litigation pending or, after due
and diligent inquiry, to the best of Seller's Knowledge threatened, against
Seller or any basis therefor that arises out of the ownership of the Property or
that could reasonably be expected to have Material Adverse Effect. Seller shall
notify Buyer promptly of any such litigation of which Seller becomes aware.
(h) ARGPM is a corporation duly organized and
validly existing and in good standing under the laws of the State of California,
and in good standing under the laws of the States of Arizona, Colorado, Indiana
and Minnesota; Tenant is a corporation duly organized and validly existing and
in good standing under the laws of the State of California and in good standing
under laws of the States of Arizona, Colorado, Indiana and Minnesota; Guarantor
is a corporation duly organized and validly existing and in good standing under
the laws of the State of Delaware, and in good standing under the laws of the
State of Arizona, California, Colorado, Indiana and Minnesota; this Agreement
and all documents executed by Seller, Tenant and Guarantor which are to be
delivered to Buyer at the Closing are and at the time of Closing will be duly
authorized, executed and delivered by Seller, Tenant and Guarantor (as
applicable), are and at the time of Closing will be legal, valid and binding
obligations of ARGPM, Tenant and Guarantor enforceable against Seller in
accordance with their respective terms, subject to the effect of bankruptcy,
insolvency, reorganization, receivership, moratorium and other similar laws
affecting the rights and remedies of creditors generally, and subject, as to
enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law), and do not and at
the time of Closing will not violate any provision of any agreement or judicial
order to which Seller, Tenant or Guarantor or the Property is subject.
(i) Seller shall cause to be discharged all
mechanics' and materialmen's liens arising from any labor or materials furnished
to the Property prior to the time of Closing.
(j) Seller is not a "foreign person" within the
meaning of Section 1445(f)(3) of the Federal Code.
(k) To the best of Seller's Knowledge, except as
set forth in the Reports, the Property is not in violation of any federal,
state, local or administrative agency
10
<PAGE> 11
ordinance, law, rule, regulation, order or requirement relating to environmental
conditions or Hazardous Material ("Environmental Laws"), except where
noncompliance could not reasonably be expected to have a Material Adverse
Effect. Neither Seller, nor to the best of Seller's Knowledge any third party,
has used, manufactured, generated, treated, stored, disposed of, or released any
Hazardous Material on, under or about the Property or real estate in the
vicinity of the Property or transported any Hazardous Material over the
Property. Neither Seller, nor to the best of Seller's Knowledge any third party,
has installed, used or removed any storage tank on, from or in connection with
the Property except in full compliance with all Environmental Laws, and to the
best of Seller's Knowledge there are no storage tanks or wells (whether existing
or abandoned) located on, under or about the Property. To the best of Seller's
Knowledge, except as set forth in the Reports, the Property does not consist of
any building materials that contain Hazardous Material. For the purposes hereof,
"Hazardous Material" shall mean any substance, chemical, waste or other material
which is listed, defined or otherwise identified as "hazardous" or "toxic" under
any federal, state, local or administrative agency ordinance or law, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. SectionSection 9601 et seq.; the Resource Conservation
and Recovery Act, 42 U.S.C. SectionSection 6901 et seq.; the Federal Water
Pollution Control Act, 33 U.S.C. SectionSection 1251 et seq.; the Clean Air Act,
42 U.S.C. SectionSection 7401 et seq.; the Hazardous Materials Transportation
Act, 49 U.S.C. SectionSection 1471 et seq.; Toxic Substances Control Act, 15
U.S.C. SectionSection 2601 et seq.; Refuse Act, 33 U.S.C. SectionSection 407 et
seq.; Emergency Planning and Community Right-To-Know Act, 42 U.S.C.
SectionSection 11001 et seq.; Occupational Safety and Health Act, 29 U.S.C.
SectionSection 65 et seq. to the extent it includes the emission of any
Hazardous Material and includes any Hazardous Material for which hazard
communication standards have been established; California Hazardous Substance
Account Act, California Health & Safety Code SectionSection 25300 et seq.;
California Asbestos Notification Laws, California Health & Safety Code
SectionSection 25915 et seq.; California Hazardous Waste Control Law, California
Health & Safety Code SectionSection 22100 et seq.; California Hazardous
Materials Release Response Plans and Inventory Act, California Health & Safety
Code SectionSection 25500 et seq.; California Clean Air Act, California Health &
Safety Code SectionSection 39608 et seq.; California Toxic Pits Cleanup Act,
California Health & Safety Code SectionSection 25208 et seq.; California
Pipeline Safety Act, California Government Code SectionSection 51010 et seq.;
California Toxic Air Contaminants Law, California Health & Safety Code
SectionSection 39650 et seq.; California Porter-Cologne Water Quality Act,
California Water Code SectionSection 13000 et seq.; California Toxic Injection
Well Control Act, California Health & Safety Code SectionSection 25159.10 et
seq.; California Underground Storage Tank Act, California Health & Safety Code
SectionSection 25280 et seq.; California Occupational Carcinogens Control Act,
California Labor Code SectionSection 9000 et seq.; or any regulation, order,
rule or requirement adopted thereunder, as well as any formaldehyde, urea,
polychlorinated biphenyls, petroleum, petroleum product or by-product, crude
oil, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas
usable for fuel or mixture thereof, radon, asbestos, and "source," "special
nuclear" and "by- product" material as defined in the Atomic Energy Act of 1985,
42 U.S.C. SectionSection 3011 et seq, provided, that notwithstanding the
foregoing, "Hazardous Materials" shall not be deemed to include materials and
substances used and/or incidental to the ordinary course of Seller's business
provided that such materials and substances are used, stored, handled and
disposed of in accordance with
11
<PAGE> 12
Environmental Laws and all other applicable laws, industry standards
and manufacturers specifications.
"Reports" shall mean the environmental and engineering reports
previously delivered by Seller to Buyer and the environmental and engineering
reports prepared for Buyer in connection with the transactions contemplated by
this Agreement.
(l) ARGPM or Tenant, as applicable, is the legal
and equitable owner of the Property, with full right to convey the same, and
without limiting the generality of the foregoing, Seller has not granted any
prior assignment of or security interest that will be effective as of the
Closing in, or option or right of first refusal or first opportunity to any
party to acquire, any interest in any of the Property.
(m) Neither Seller, Tenant nor Guarantor has
either filed or been the subject of any filing of a petition under the Federal
Bankruptcy Law or any federal or state insolvency laws or laws for composition
of indebtedness or for the reorganization of debtors.
(n) "Knowledge" shall mean the actual knowledge
of any executive officer of Seller after due inquiry of the property management.
8. Representations and Warranties of Buyer. Buyer hereby
represents and warrants to Seller as follows: Buyer is a duly organized and
validly existing limited liability company under the laws of the State of
California and is in good standing under the laws of the States of Arizona,
California, Colorado and Indiana; this Agreement and all documents executed by
Buyer which are to be delivered to Seller at the Closing are or at the time of
Closing will be duly authorized, executed and delivered by Buyer, and are or at
the Closing will be legal, valid and binding obligations of Buyer, and do not
and at the time of Closing will not violate any provisions of any agreement or
judicial order to which Buyer is subject.
9. Indemnification. Each party hereby agrees to
indemnify the other party and defend (with counsel reasonably satisfactory to
such other party) and hold it harmless from and against, and Seller hereby
further agrees to indemnify any mortgagee or beneficiary of Seller and defend
(with counsel reasonably satisfactory to such mortgagee or beneficiary) and hold
it harmless from and against, any and all claims, demands, liabilities, costs,
expenses, penalties, damages and losses, including, without limitation,
attorneys' fees, resulting from any misrepresentation or breach of warranty or
breach of covenant made by such party in this Agreement or in any document,
certificate, or exhibit given or delivered to the other pursuant to or in
connection with this Agreement. The indemnification provisions of this Paragraph
9 shall survive beyond the Closing, or, if the Closing does not occur pursuant
to this Agreement, beyond any termination of this Agreement; provided, however,
that any claim based upon any alleged breach or misrepresentation must be
noticed in writing, specifying the scope and nature of such claim in reasonable
detail.
12
<PAGE> 13
10. Risk of Loss.
(a) If, prior to the Closing Date, all or any
portion of any Property is taken by eminent domain or a proceeding seeking
eminent domain is commenced or a written notice from the condemning authority of
a pending taking is received by Seller, Seller or Buyer shall notify the other
party of such fact promptly after obtaining knowledge thereof and if such
threatened or actual taking (i) shall have a materially adverse effect upon the
present use or operation of the affected Property or the profitability thereof
or (ii) results in the elimination of necessary legal ingress and/or egress from
such Property to public roads, Buyer shall have the right to terminate this
Agreement with respect to such Property by giving notice to Seller not later
than thirty (30) days after receipt of Seller's notice. If Buyer elects to
terminate this Agreement as aforesaid, the Purchase Price shall be reduced by
the amount of 105% of the Purchase Price allocable to the affected Property, in
accordance with the amounts set forth on Exhibit B. If Buyer does not elect to
terminate this Agreement as aforesaid, there shall be no abatement of the
Purchase Price and Seller shall assign to Buyer (without recourse) upon the
closing the rights of Seller to portion of the awards, if any, attributable to
the taking of such Property, and Buyer shall be entitled to receive and keep all
awards for the taking of the Property or such portion thereof to the extent not
applied to restoration of such Property. Buyer acknowledges the pending Lake
Forest Condemnation Action and agrees that this Agreement shall not be
terminated as a result thereof nor shall there be any abatement of the Purchase
Price as a result thereof; provided that Seller shall be entitled to keep and
receive any award or compensation now, previously or hereafter received by
Seller or to which Seller or Buyer, whether in their capacities as seller and
buyer hereunder or as tenant and landlord under the Master Lease, or otherwise,
is entitled in connection with the Lake Forest Condemnation Action net of the
actual costs and expenses incurred by Seller and Purchaser in obtaining such
award or compensation.
(b) If, prior to the Closing Date, a material
part (as defined in this subsection 10(b)) of any Property is destroyed or
damaged by fire or other casualty or said fire or other casualty is likely to
result in the ceasing of all or substantially all operations at a particular
Property for a period of ninety (90) consecutive days, Seller shall promptly
notify Buyer of such fact. Buyer shall have the right to terminate this
Agreement with respect to such Property by giving notice to Seller not later
than thirty (30) days after receipt of Seller's notice. For purposes hereof, a
"material part" of the Property shall mean a part of the Property for which the
cost to repair the damage thereto or destruction thereof shall exceed Fifty
Thousand Dollars ($50,000). If Buyer elects to terminate this Agreement as
aforesaid, the Purchase Price shall be reduced by the amount of 105% of the
Purchase Price allocable to the affected Property, in accordance with the
amounts set forth on Exhibit B. If Buyer does not elect to terminate this
Agreement as aforesaid, or if there is damage to or destruction of an
"immaterial part" (i.e., anything other than a material part) of the Property by
fire or other casualty, there shall be no abatement of the Purchase Price
(except as hereinafter set forth) and Seller shall assign to Buyer (without
recourse) upon the Closing the rights of Seller to the proceeds, if any, under
Seller's insurance policies covering the Property with respect to such damage or
destruction, and Buyer shall be entitled to receive and keep any monies received
from such insurance policies to the extent
13
<PAGE> 14
not applied to restoration of the Property and the Purchase Price shall be
abated by the amount of the deductible under Seller's insurance policies
covering the Property with respect to such damage. Any repairs elected to be
made by Seller pursuant to this Paragraph 10(b) shall be made within one hundred
and eighty (180) days following such damage or destruction and the Closing shall
be extended until the repairs are substantially completed. As used in this
Paragraph 10(b), the cost to repair or restore shall include the cost of lost
rental revenue, including additional rent and base rent.
11. Possession. Subject to the Lease Documents,
possession of the Property shall be delivered to Buyer, Captec and/or Safeway,
as applicable, on the Closing Date, provided, however, that prior to the Closing
Date Seller shall afford authorized representatives of Buyer and any mortgagee
or beneficiary of Buyer reasonable access to the Property for purposes of
satisfying Buyer with respect to the representations, warranties and covenants
of Seller contained herein and with respect to satisfaction of any Conditions
Precedent to the Closing contained herein, including, without limitation, the
drilling of test wells and the taking of soil borings; provided, however, that
(i) Seller (or its representatives, agents or designees) shall, at its option,
accompany Buyer and its representatives, agents and designees at all times, (ii)
Buyer's access to the Property shall not materially interfere with (A) the use,
occupancy or operation of the Property by Seller or (B) any guests, tenants or
their employees, contractors or customers. Seller shall in no way be liable or
responsible for any such activities of the Buyer upon the Property, and Buyer
shall not permit or allow any lien or encumbrance to attach against the Property
due to such activity of Buyer, its agents, representatives, or designees. Should
anyone file or attempt to file a lien against the Property or any part thereof
by reason of Buyer's activities, Buyer shall take all steps necessary to have
the same cancelled and discharged of record within ten (10) days after the
filing thereof. Notice is hereby given that Seller shall not be liable for any
acts or works performed by Buyer on the Property nor for any labor or materials
furnished to Buyer, and no mechanic's , materialmen's or other liens shall
attach to, encumber or affect the estate or interest of Seller in and to the
Property, and Buyer shall so inform any parties that entered upon the Property
or performed services for Buyer in connection with the Property. Buyer hereby
indemnifies and agrees to hold Seller harmless from and against any and all
liens which may arise as a result of Buyer's activities on the Property and
against any and all claims for death or injury to persons or properties arising
out of or as a result of Buyer's going upon the Property pursuant to the
provisions of this Paragraph or otherwise, except to the extent caused by and
acts or omissions of Seller or its agents, representatives, employees, invitees
or guests or the condition of the Property. This indemnity shall survive any
termination of this Agreement and shall survive the Closing. Buyer shall cause
the Property to be promptly restored to its condition existing prior to Buyer's
first entry onto the Property to the extent practicable after all such tests or
surveys, with Buyer's obligation so to restore to survive any termination of
this Agreement.
12. Maintenance of the Property. Between Seller's
execution of this Agreement and the Closing, Seller shall maintain the Property
in good order, condition and repair, reasonable wear and tear excepted, and
shall make all repairs, maintenance and replacements of the Improvements and
otherwise operate the Property in the same manner as before the making of this
Agreement, as if Seller were retaining the Property.
14
<PAGE> 15
13. Buyer's Consent to New Contracts Affecting the
Property; Termination of Existing Contracts.
(a) Seller shall not, after the date of Seller's
execution of this Agreement, enter into any lease or contract, or any amendment
thereof, to which Buyer or the Property would be bound or to which Buyer would
be subject.
(b) Seller shall terminate prior to the Closing,
at no cost or expense to Buyer, any and all management agreements, if any, for
the Property.
14. Insurance. Through the Closing Date, Seller shall
maintain or cause to be maintained, at Seller's sole cost and expense, a policy
or policies of insurance in amounts and forms substantially the same as in
effect on the date hereof.
15. Cooperation with Buyer. Seller and Buyer shall
cooperate and do all acts as may be reasonably required or requested by the
other with regard to the fulfillment of any Condition Precedent including
execution of any documents, applications or permits.. Seller hereby irrevocably
authorizes Buyer and its agents to make all reasonable inquiries with and
applications to any third party, including any governmental authority, as Buyer
may reasonably require to complete its due diligence.
16. Miscellaneous.
(a) Allocation of Purchase Price. Buyer and
Seller each agree to file an IRS Form 8594 in compliance with Section 1060 of
the Federal Code, as amended, and applicable regulations. The filings shall be
made on a consistent basis using the Purchase Price allocation set forth in the
attached Exhibit B.
(b) Notices. Any notice, consent or approval
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been given upon (i) hand delivery, (ii) one (1) day
after being deposited with Federal Express or another reliable overnight courier
service or transmitted by facsimile telecopy, or (iii) two (2) days after being
deposited in the United States mail, registered or certified mail, postage
prepaid, return receipt required, and addressed as follows:
If to Seller: c/o American Restaurant Group, Inc.
Suite 201
4410 El Camino Real
Los Altos, California 94022
Att'n: Director of Real Estate
Fax No.: (415) 949-6442
15
<PAGE> 16
With a copy to: American Restaurant Group, Inc.
Suite 201
4410 El Camino Real
Los Altos, California 94022
Att'n: Legal Department
Fax No.: (415) 949-6442
With a copy to: Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Att'n: Philip T. Ruegger, Esq.
Fax No.: (212) 455-2502
If to Buyer: c/o Griffin Capital
Suite 1600
10940 Wilshire Boulevard
Los Angeles, California 90024
Att'n: Kevin A. Shields
Fax No.: (213) 443-4117
With a copy to: Orrick, Herrington & Sutcliffe LLP
Suite 3200
777 South Figueroa Street
Los Angeles, CA 90017
Att'n: Sara H. Reynolds
Fax No.: (213) 612-2499
or such other street address as either party may from time to time specify in
writing to the other.
(c) Brokers and Finders. Neither party has had
any contact or dealings regarding the Property, or any communication in
connection with the subject matter of this transaction, through any real estate
broker or other person who can claim a right to a commission or finder's fee in
connection with the sale contemplated herein, except for (i) Beitler Commercial
Realty Services, whose commission, if any is due, shall be the responsibility of
Seller and (ii) Net Leased Real Properties, Inc., whose commission, if any is
due, shall be the responsibility of Buyer. In the event that any other broker or
finder perfects a claim for a commission or finder's fee based upon any such
contact, dealings or communication, the party through whom the broker or finder
makes its claim shall be responsible for said commission or fee and all costs
and expenses (including reasonable attorneys' fees) incurred by the other party
in defending against the same. The provisions of this paragraph shall survive
the Closing.
(d) Successors and Assigns. This Agreement shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective successors, heirs, administrators and assigns. Buyer shall have the
right, without notice to Seller, to assign its
16
<PAGE> 17
right, title and interest in and to this Agreement (a) to Captec Net Lease
Realty, Inc. with respect to the Properties identified on Exhibits A-12, A-13,
A-19 and A-21 hereto and (b) to Safeway Inc. with respect to the Property
identified on Exhibit A-12 hereto, at any time before the Closing Date, and in
such event, the party originally designated as Buyer shall be relieved of any
and all obligations under this Agreement and any other instruments executed
pursuant hereto, and such assignee(s) shall be substituted in its place.
(e) Amendments. Except as otherwise provided
herein, this Agreement may be amended or modified only by a written instrument
executed by Seller and Buyer.
(f) Continuation and Survival of Representations
and Warranties, Etc. All representations and warranties by the respective
parties contained herein or made in writing pursuant to this Agreement are
intended to and shall remain true and correct as of the time of Closing, shall
be deemed to be material, and, together with all conditions, covenants and
indemnities made by the respective parties contained herein or made in writing
pursuant to this Agreement (except as otherwise expressly limited or expanded by
the terms of this Agreement), shall survive the execution and delivery of this
Agreement and the Closing and shall not merge with the transfer of title to the
Property, or, to the extent the context requires, beyond any termination of this
Agreement.
(g) Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of
California.
(h) Merger of Prior Agreements. This Agreement
and the exhibits hereto and the other documents required to be executed and
delivered hereunder constitute the entire agreement between the parties and
supersede all prior agreements and understandings between the parties relating
to the subject matter hereof.
(i) Enforcement. If either party hereto fails to
perform any of its obligations under this Agreement or if a dispute arises
between the parties hereto concerning the meaning or interpretation of any
provision of this Agreement, then the defaulting party or the party not
prevailing in such dispute shall pay any and all costs and expenses incurred by
the other party on account of such default and/or in enforcing or establishing
its rights hereunder, including, without limitation, court costs and attorneys'
fees and disbursements. Any such attorneys' fees and other expenses incurred by
either party in enforcing a judgment in its favor under this Agreement shall be
recoverable separately from and in addition to any other amount included in such
judgment, and such attorneys' fees obligation is intended to be severable from
the other provisions of this Agreement and to survive and not be merged into any
such judgment.
(j) Time of the Essence. Time is of the essence
of this Agreement.
(k) Severability. If any provision of this
Agreement, or the pplication thereof to any person, place, or circumstance,
shall be held by a court of
17
<PAGE> 18
competent jurisdiction to be invalid, unenforceable or void, the remainder of
this Agreement and such provisions as applied to other persons, places and
circumstances shall remain in full force and effect.
(l) Marketing. Seller agrees not to market or
show the Property to any other prospective purchasers during the term of this
Agreement.
(m) Counterparts. This Agreement may be executed
in any number of counterparts and each shall be deemed an original and all shall
constitute the same agreement. A faxed or other duplicated copy of this
Agreement may be executed as an original and a faxed or other duplicate copy of
the executed Agreement may be accepted and relied upon as if it were an executed
original.
(n) Limited Liability. The obligations of Buyer
are intended to be binding only on the property of Buyer and shall not be
personally binding upon, nor shall any resort be had to, the private properties
of any of its officers, directors, shareholders, partners, members or other
principals, or any employees or agents thereof.
17. Acceptance of Agreement by Seller. This Agreement
shall be null and void unless it is accepted by Seller and two fully executed
copies hereof are returned to Buyer on or before 5:00 p.m. (P.S.T.) on
September 13, 1996.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
Buyer:
ARG PROPERTIES I, LLC, a California limited
liability company
By: Net Lease Holdings Corporation, Manager
_________________________________________
By: Kevin A. Shields
Its: President
18
<PAGE> 19
Seller:
ARG PROPERTY MANAGEMENT
CORPORATION, a California corporation
By______________________________________________
Its_____________________________________
ARG ENTERPRISES, INC., a California
corporation
By______________________________________________
Its_____________________________________
Title Company agrees to act as escrow holder in accordance with the terms of
this Agreement and to execute the Designation Agreement (attached hereto as
Exhibit M) and act as the Reporting Person (as such term is defined in the
Designation Agreement).
CHICAGO TITLE INSURANCE COMPANY
By______________________________________________
Its_____________________________________
Dated: September __, 1996
19
<PAGE> 20
LIST OF EXHIBITS
Exhibit A - Descriptions of Real Property
Exhibit B - Purchase Price Allocation
Exhibit C - Forms of Deeds
Exhibit D - [INTENTIONALLY OMITTED]
Exhibit E - Master Lease
Exhibit E-1 - Short Form Memorandum of Master Lease and Notice of
Non-Responsibility
Exhibit F - Guaranty of Master Lease
Exhibit G - Form of Certificate of Guarantor
Exhibit G-1 - Form of Certificate of Tenant
Exhibit H - Form of Minnesota Lease
Exhibit H-1 - Form of Short Form Memorandum of Captec Lease
Exhibit I - Form of Guaranty of Minnesota Lease
Exhibit J - Form of Safeway Lease
Exhibit J-1 - Short Form Memorandum of Safeway Lease
Exhibit K - Form of Guaranty of Safeway Lease
Exhibit L - Certificate of Transferor Other Than an Individual
(FIRPTA Affidavit)
Exhibit M - Designation Agreement
20
<PAGE> 21
EXHIBIT B
PURCHASE PRICE ALLOCATIONS
<PAGE> 22
EXHIBIT B
Date: 12-Sep-96
ALLOCATION OF PURCHASE PRICE
<TABLE>
<CAPTION>
PROP. ALLOCATED ALLOCATED ALLOCATED
NUM. PROPERTY ADDRESS STATE PURCH. PRICE LAND VALUE IMPR. VALUE
- ----- ---------------- ----- ------------ ---------- -----------
<S> <C> <C> <C> <C> <C>
1014 6601 Florin Road, Sacramento CA 1,413,858 639,566 1,202,664
1015 1000 Graves Avenue, El Cajon CA 2,040,358 922,966 1,735,581
1019 507 West Broadway, Tempe AZ 1,253,000 566,801 1,065,834
1025 707 E Street, Chula Vista CA 2,031,892 919,137 1,728,380
1059 5259 West Indian School Road, Phoenix AZ 1,337,662 605,098 1,137,850
1065 1616 Sisk Road, Modesto CA 2,129,253 963,179 1,811,198
1066 6875 South Broadway, Littleton CO 1,418,091 641,481 1,206,265
1067 3610 Park Sierra Boulevard, Riverside CA 2,053,057 928,711 1,746,384
1069 7111 Beach Boulevard, Buena Park CA 1,993,794 901,903 1,695,973
1070 1625 Watt Avenue, Sacramento CA 1,959,929 886,584 1,667,166
1071 5930 Stoneridge Mall Road, Pleasanton CA 2,400,000 346,293 2,053,707
1072 5696 University Avenue NE, Fridley MN 1,840,000 450,000 1,390,000
1074 10600 Wayzata, Minnetonka MN 2,130,000 700,000 1,430,000
1075 23221 Lake Center Drive, Lake Forest CA 2,061,523 932,541 1,753,585
1076 101 East Bay Street, Alhambra CA 2,095,388 947,860 1,782,392
1077 1299 Chess Drive, Foster City CA 2,040,358 922,966 1,735,581
1078 235 South First Street, Burbank CA 2,908,145 1,315,514 2,473,743
1080 1704 Shadeland Avenue, Indianapolis IN 1,638,213 741,054 1,393,506
1082 2750 North Snelling Avenue, Roseville MN 2,240,000 997,773 1,242,227
1083 1011 Blossom Hill Road, San Jose CA 2,290,111 1,035,944 1,948,028
1084 4470 West 78th Circle, Bloomington MN 2,570,000 998,058 1,571,942
1085 7853 South U.S. 31, Indianapolis IN 1,553,551 702,757 1,321,490
1087 3601 Rosedale Highway, Bakersfield CA 2,226,615 1,007,221 1,894,016
1090 139 W. Thousand Oaks Blvd., Thousand Oaks CA 2,455,202 1,110,624 2,088,459
---------- ---------- ----------
Totals 48,080,000 16,691,906 31,388,094
</TABLE>
<PAGE> 23
EXHIBIT C
FORM OF GRANT DEED
See attached
<PAGE> 24
Recorded at ____________ o'clock ______ M., ___________________________
Reception No. ____________________ ___________________________Recorder
================================================================================
SPECIAL WARRANTY DEED
THIS DEED, Made this day of , 19 ,
between ARG Property Management Corporation, A California
Corporation, Formerly known as SAGA Property Management of
the *
County of , State of Colorado, grantor(s) and
whose legal address is
of the County of , State of Colorado, grantee(s):
WITNESSETH, That the grantor(s), for and in
consideration of the sum of
DOLLARS.
the receipt and sufficiency of which is hereby acknowledged, ha
granted, bargained, sold and conveyed, and by these presents do grant,
bargain, sell, convey, and confirm, unto the grantee(s) heirs
and assigns forever, all the real property, together with improvements, if any,
situate, lying and being in the County of , State
of Colorado, described as follows:
SEE EXHIBIT "A"
ATTACHED AND MADE
A PART HEREOF
also known by street and number as:
assessor's schedule or parcel number:
TOGETHER with all and singular the hereditaments and appurtenances
thereto belonging, or in anywise appertaining, and the reversion and reversions,
remainder and remainders, rents, issues and profits thereof; and all the
estate, right, title, interest, claim and demand whatsoever of the grantor(s),
either in law or equity, of, in and to the above bargained premises, with the
hereditaments and appurtenances;
TO HAVE AND TO HOLD the said premises above bargained and described
with the appurtenances, unto the grantee(s), heirs and assigns
forever. The grantor(s), for sell , heirs
and personal representatives or successors, do covenant and agree
that shall and will WARRANT AND FOREVER DEFEND the above-bargained
premises in the quiet and peaceable possession of the grantee(s),
heirs and assigns, against all and every person or persons claiming the whole
or any part thereof, by, through or under the grantor(s).
IN WITNESS WHEREOF, the grantor(s) ha executed this deed on
the date set forth above.
___________________________________ ARG Property Management Corporation,
___________________________________ formerly known as SAGA Property
___________________________________ Management
STATE OF COLORADO )
) ss.
County Of )
The foregoing instrument was acknowledged before me this day
of , 19 , by,
Witness my hand and official seal
My commission expires
------------------------------------
Notary Public
*If in Denver, insert "City and",
- --------------------------------------------------------------------------------
Name and Address of Person Creating Newly Created Legal Description
(Sec. 38-35-106.5, C.R.S.)
================================================================================
No. 16, Rev. 4-94. SPECIAL WARRANTY DEED
Bradford Publishing, 1743 Wazec St., Denver, CO 80202 -- (303) 292-2500 -- 9/95
<PAGE> 25
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL THIS DEED AND, UNLESS OTHERWISE
SHOWN BELOW, MAIL TAX STATEMENT TO:
Name
Street
Address
City &
State
Zip
Title Order No. ________________ Escrow No. __________
- --------------------------------------------------------------------------------
SPACE ABOVE THIS LINE FOR RECORDER'S USE
T 355 Legal (2-94)
GRANT DEED
- --------------------------------------------------------------------------------
THE UNDERSIGNED GRANTOR(s) DECLARE(s)
DOCUMENTARY TRANSFER TAX IS $__________________________
/ / ______ unincorporated area / / City of ___________
Parcel No. _______________________
/ / computed on full value of interest or property conveyed, or
/ / computed on full value less value of liens or encumbrances
remaining at time of sale, and
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
hereby GRANT(S) to
the following described real property in the
county of , state of California:
Dated ______________________________
STATE OF CALIFORNIA )
COUNTY OF _____________________________________________________________) S.S.
On _______________________________________________________________ before me,
_____________________________________________________________________________
a Notary Public in and for said County and State, personally appeared
_____________________________________________________________________________
_____________________________________________________________________________
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal
Signature ___________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
(This area for official notarial seal)
- --------------------------------------------------------------------------------
MAIL TAX STATEMENTS TO PARTY SHOWN ON FOLLOWING LINE: IF NO PARTY SHOWN, MAIL
AS DIRECTED ABOVE
- --------------------------------------------------------------------------------
Name Street Address City & State
<PAGE> 26
Recorded at the Request of:
When Recorded, mail to:
================================================================================
Order No:
SPECIAL WARRANTY DEED
For the consideration of Ten Dollars, and other valuable consideration, I or we,
do hereby convey to
the following real property located in County, Arizona:
Subject to current taxes and other assessments, reservations in patents and all
easements, rights-of-way, encumbrances, liens, covenants, conditions,
restrictions, obligations and liabilities as may appear of record, the Grantor
hereby binds itself to warrant and defend the title as against all acts of the
Grantor herein and no other.
Dated: ____________________________
___________________________________ ______________________________________
___________________________________ ______________________________________
________________________________________________________________________________
State of ____________________ )
) ss.
County of ___________________ ) Date of Acknowledgement ______________
Acknowledgement of
This instrument was acknowledged before me this date by the persons
above-subscribed and if subscribed in a representative capacity, then for the
principal named and in the capacity indicated.
______________________________________
Notary Public
My commission expires:
________________________________________________________________________________
State of ____________________ )
) ss.
County of ___________________ ) Date of Acknowledgement ______________
Acknowledgement of
This instrument was acknowledged before me this date by the persons
above-subscribed and if subscribed in a representative capacity, then for the
principal named and in the capacity indicated.
______________________________________
Notary Public
My commission expires:
================================================================================
NOTE: THE PARTIES ARE CAUTIONED THAT BY COMPLETING AND EXECUTING THIS DOCUMENT,
LEGAL RIGHTS, DUTIES AND OBLIGATIONS ARE CREATED. BY SIGNING, THE PARTIES
ACKNOWLEDGE THAT THEY HAVE BEEN ADVISED TO SEEK AND OBTAIN INDEPENDENT LEGAL
COUNSEL AS TO ALL MATTERS CONTAINED IN THE WITHIN DOCUMENT PRIOR TO SIGNING
SAME AND THAT SAID PARTIES HAVE OBTAINED ADVICE OR CHOOSE TO PROCEED WITHOUT
SAME.
<PAGE> 27
CORPORATE WARRANTY DEED
THIS INDENTURE WITNESSETH, That _________________________ ("Grantor"),
a corporation
organized and existing under the laws of the State of _________________,
CONVEYS AND WARRANTS to _________________________ of ______________ County, in
the State of ____________________, for the sum of Ten Dollars (10.00) and other
valuable consideration,
the receipt of which is hereby acknowledged, the following
described real estate in County, in the State of Indiana:
The undersigned persons executing this deed on behalf of Grantor
represent and certify that they are duly elected officers of Grantor and
have been fully empowered, by proper resolution of the Board of Directors of
Grantor, to execute and deliver this deed; that Grantor has full corporate
capacity to convey the real estate described herein; and that all necessary
corporate action for the making of such conveyance has been taken and done.
IN WITNESS WHEREOF, Grantor has caused this deed to be executed this __
day of __________________________, 19__.
-----------------------------------
(Name of Corporation)
(SEAL) ATTEST:
By By
------------------------------- ---------------------------------
Signature Signature
------------------------------- ---------------------------------
Printed Name, and Office Printed Name, and Office
STATE OF )
) SS:
COUNTY OF )
Before me, a Notary Public in and for said County and State, personally
appeared and
the and respectively of ,
who acknowledged execution of the foregoing Deed for and on behalf of said
Grantor, and who, having been duly sworn, stated that the representations
therein contained are true.
Witness my hand and Notarial Seal this __ day of __________________,
19__.
My Commission Expires Signature
---------------------------------
- --------------------- Printed , Notary Public
--------------------
This instrument was prepared by attorney
------------------------------
at law.
c-forms/cdeed
<PAGE> 28
Corporation or Partnership
- --------------------------------------------
No delinquent taxes and transfer entered;
Certificate of Real Estate Value ( ) filed
( ) not required
Certificate of Real Estate Value No.
____________________________________________
____________________________, 19____
____________________________________________
County Auditor
by _________________________________________
Deputy
- --------------------------------------------
STATE DEED TAX DUE HEREON: $ _______________
Date: ____________________________ , 19 ____
(reserved for recording data)
----------------------------------
FOR VALUABLE CONSIDERATION, ____________________________________________________
_________________________________________, a __________________under the laws of
____________________, Grantor, hereby conveys and warrants to __________________
____________________________________________________________________, Grantee, a
________________________ under the laws of ___________________, real property in
______________________________ County, Minnesota, described as follows:
(if more space is needed, continue on back)
together with all hereditaments and appurtenances belonging thereto, subject to
the following exceptions:
_______________________________________
Affix Deed Tax Stamp Here
By ____________________________________
Its ________________________________
By ____________________________________
Its ________________________________
STATE OF MINNESOTA )
) ss.
COUNTY OF _____________ )
The foregoing was acknowledged before me this _______ day of _______, 19 ___,
by _________________________________ and _____________________________________,
the ________________________________ and ______________________________________
of _______________________________________________, a _________________________
under the laws of _______________________, on behalf of the __________________.
- ------------------------------
NOTARIAL STAMP OR SEAL
(OR OTHER TITLE OR RANK) ______________________________________________
SIGNATURE OF PERSON TAKING ACKNOWLEDGMENT
Tax Statements for the real property described
in this Instrument should be sent to (include
- ------------------------------ name and address of Grantee):
- ------------------------------
THIS INSTRUMENT WAS DRAFTED BY
(NAME AND ADDRESS)
- ------------------------------
<PAGE> 29
EXHIBIT E-1
Location: ___________
State: ______________
Recording Requested By and
When Recorded, Return to:
Orrick, Herrington & Sutcliffe LLP
777 South Figueroa Street
Suite 3200
Los Angeles, California 90017
Attention: Sara H. Reynolds, Esq.
SHORT-FORM MEMORANDUM OF LEASE
AND NOTICE OF NON-RESPONSIBILITY
This Memorandum of Lease and Notice of Non-Responsibility made as of
the 11th day of September, 1996, between ARG PROPERTIES I, LLC, a California
limited liability company, having an office at c/o Griffin Capital, 10940
Wilshire Boulevard, Suite 1600, Los Angeles, California 90024 ("Landlord"), and
ARG ENTERPRISES, INC., a California corporation, having an office at 450 Newport
Center Drive, 6th Floor, Newport Beach, California 92660 ("Tenant").
W I T N E S S E T H:
1. Landlord and Tenant have entered into a Master Lease ("Lease") dated
of even date herewith of certain premises described therein, including the
premises located at _____________________ in the City of _______________, County
of __________________, and State of ________________, as further described on
Schedule A attached hereto (the "Property").
2. The Lease sets forth the above names and addresses of the parties
thereto.
3. The term of the Lease is less than thirty-five (35) years. The
initial term of the Lease is twenty-five (25) years beginning on the date hereof
and ending on September 11, 2021. Tenant has a right to extend the term for
three (3) successive periods of five (5) years each. The maximum date to which
the Lease may be extended is midnight on September 11, 2036. The rights of
extension are exercisable as set forth in the Lease.
4. The terms and conditions of the Lease are incorporated herein as if
set forth in full herein. This memorandum does not in any manner enlarge or
diminish the respective rights, privileges, liabilities or obligations of
Landlord and Tenant under the Lease.
E-1-1
<PAGE> 30
5. In accordance with Article 3 of the Lease, from time to time as
provided therein, the Lease is to be replaced by one or more individual leases
for the properties still subject to the Lease, for the remaining term of the
Lease, and substantially on the other terms and conditions set forth in Article
3 of the Lease and in Exhibit B to the Lease. If any such individual lease is
entered into with respect to the Property, this memorandum shall serve as notice
of such individual lease without the necessity for recording any other
instrument, and such individual lease shall be entitled to the same priority as
the Lease.
6. Notice is hereby given that neither Landlord nor any mortgagee or
beneficiary of Landlord will be liable or responsible for any labor, services or
materials furnished or to be furnished at any time to Tenant in connection with
the Property or any portion thereof, or to anyone holding an interest in the
Property or any part thereof through or under Tenant, and that no mechanic's or
other liens for any such labor, services or materials shall attach to or affect
the interest of Landlord or any mortgagee or beneficiary of Landlord in and to
the Property or any portion thereof.
E-1-2
<PAGE> 31
Landlord and Tenant have caused this memorandum to be duly executed and
delivered as of the day and year first written above, for the purpose of
providing an instrument for recording.
WITNESSES: LANDLORD:
ARG PROPERTIES I, LLC, a California
limited liability company
By: Net Lease Holdings Corporation,
Manager
_________________________________ _______________________________
By: Kevin A. Shields
_________________________________ Its: President
TENANT:
ARG ENTERPRISES, INC.,
a California corporation
__________________________________ By______________________________________
__________________________________ Its__________________________________
E-1-3
<PAGE> 32
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF __________ )
On _______________, 1996, before me, the undersigned notary public in and for
said County and State, personally appeared _____________________.
|_| personally known to me [or]
|_| proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) _________________ subscribed to the within
instrument and acknowledged to me that ___________ executed the same in
___________ authorized capacity(ies) and that, by __________ signature(s) on the
instrument, the person(s) or the entity(ies) upon behalf of which the person(s)
acted executed the instrument.
WITNESS my hand and official seal.
___________________________________________
My commission expires on___________________
_______________________________________________________________________________
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER
|_| Individual DESCRIPTION OF ATTACHED DOCUMENT
|_| Corporate Officer ________________________________
Title(s)________________________ Title or Type of Document
|_| Partner(s)
__Limited __General ________________________________
|_| Attorney-In-Fact Signer(s) Other Than Named Above
|_| Trustee(s)
|_| Guardian/Conservator Date of Document________________
|_| Other:____________________________ Number of Pages_________________
__________________________________
SIGNER IS REPRESENTING:
________________________________
________________________________
E-1-4
<PAGE> 33
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF __________ )
On _______________, 1996, before me, the undersigned notary public in and for
said County and State, personally appeared _____________________.
|_| personally known to me [or]
|_| proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) _________________ subscribed to the within
instrument and acknowledged to me that ___________ executed the same in
___________ authorized capacity(ies) and that, by __________ signature(s) on the
instrument, the person(s) or the entity(ies) upon behalf of which the person(s)
acted executed the instrument.
WITNESS my hand and official seal.
___________________________________________
My commission expires on___________________
_______________________________________________________________________________
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER
|_| Individual DESCRIPTION OF ATTACHED DOCUMENT
|_| Corporate Officer ________________________________
Title(s)________________________ Title or Type of Document
|_| Partner(s)
__Limited __General ________________________________
|_| Attorney-In-Fact Signer(s) Other Than Named Above
|_| Trustee(s)
|_| Guardian/Conservator Date of Document________________
|_| Other:____________________________ Number of Pages_________________
__________________________________
SIGNER IS REPRESENTING:
________________________________
________________________________
E-1-5
<PAGE> 34
SCHEDULE A TO
MEMORANDUM OF LEASE AND NOTICE OF NON-RESPONSIBILITY
Land situated in the ________________ of ____________________, County
of __________________, State of _____________________________________, and more
particularly described as follows:
E-1-6
<PAGE> 35
EXHIBIT H-1
Lease No. 06152
4470 West 78th Circle
Bloomington, Minnesota
MEMORANDUM OF LEASE
AND
NOTICE OF NON-RESPONSIBILITY
This Memorandum of Lease made this 11th day of September, 1996, between
CAPTEC NET LEASE REALTY, INC., a Michigan corporation, having an office at 24
Frank Lloyd Wright Drive, Lobby L, Ann Arbor, Michigan 48106 ("Landlord"), and
ARG ENTERPRISES, INC., a California corporation, having an office at 4410 El
Camino Real, Suite 201, Los Altos, California 94022 ("Tenant"). This instrument
shall be effective on September 13, 1996.
WITNESSETH:
1. Landlord and Tenant have entered into a lease ("Lease") of the
following described premises in the County of Hennepin, State of Minnesota as
further described on Schedule A attached hereto (the "Property").
2. The Lease sets forth the above names and addresses of the
parties thereto.
3. The term of the Lease is twenty-five (25) years beginning on
the date hereof and ending on or about September 30, 2021.
4. Tenant has a right to extend the term for three (3) successive
periods of five (5) years each. The maximum date to which the Lease may be
extended is midnight on September 30, 2036. The rights of extension are
exercisable as set forth in the Lease.
5. The terms and conditions of the Lease are incorporated into
this Memorandum of Lease as if set forth in full herein. This Memorandum of
Lease does not in any manner enlarge or diminish the respective rights,
privileges, liabilities or obligations of Landlord and Tenant under the Lease.
6. Notice is hereby given that neither Landlord nor any mortgagee
or beneficiary of Landlord will be responsible for any labor, services or
materials furnished or to be furnished at anytime to Tenant in connection with
the Property or any portion thereof, or to anyone holding an interest in the
Property or any part thereof through or under Tenant and that no mechanic's or
other liens for any labor, services or materials shall attach to or affect the
interest of Landlord or any mortgagee or beneficiary of Landlord in and to the
Property or any portion thereof.
7. This Memorandum of Lease may be executed in one or more
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same instrument.
Landlord and Tenant have caused this Memorandum of Lease to be duly
executed and delivered as of the day and year first written above, for the
purpose of providing an instrument for recording.
[SIGNATURE PAGE FOLLOWS]
<PAGE> 36
WITNESSES: CAPTEC NET LEASE REALTY, INC.
/s/ Linda Foster /s/ Gary A. Bruder
- ------------------------------ --------------------------------
Print Name: Linda Foster Gary A. Bruder
Its Vice President
/s/ Joanna Milne
- ------------------------------
Print Name: Joanna Milne
ARG ENERPRISES, INC.
/s/ Mardi R. Merjian By: /s/ William J. McCaffrey, Jr.
- ------------------------------ -----------------------------
Print Name: Mardi R. Merjian William J. McCaffrey, Jr.
Its Vice President & Chief
/s/ Patrick J. Kelvie Financial Officer
- ------------------------------
Print Name: Patrick J. Kelvie
STATE OF MICHIGAN )
) ss.
COUNTY OF WASHTENAW )
The foregoing instrument was acknowledged before me this 11th day of
September, 1996, by Gary A. Bruder, as Vice President of Captec Net Lease
Realty, Inc., a Michigan corporation, on behalf of the corporation.
LIGGIE V. PERKINS /s/ Liggie V. Perkins
NOTARY PUBLIC ---------------------------------
LIVINGSTON COUNTY, MI Notary Public
ACTING IN WASHTENAW COUNTY Washtenaw County, Michigan
MY COMMISSION EXPIRES 2-18-98 My Commission Expires: __________
[Notary Public's Seal]
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me, a notary public,
this 12th day of September, 1996, by William J. McCaffrey, Jr. the Vice
President of ARG Enterprises, Inc., a California corporation, on behalf of the
corporation.
LORIANN LUBELLI /s/ Loriann Lubelli
Notary Public ---------------------------------
State of New York Notary Public
No. 60-5006879 Bronx County, New York
Qualified in Bronx County My Commission Expires: __________
Commission Expires Jan. 4, 1997 [Notary Public's Seal]
Drafted By: When Recorded Return To:
Diane B. Cabbell, Esq. Captec Financial Group, Inc.
Miller, Canfield, Paddock & Attn: Liggie V. Perkins
Stone, P.L.C. 24 Frank Lloyd Wright Drive
101 North Main, 7th Floor Fourth Floor, Lobby L
P.O. Box 544 P.O. Box 544
Ann Arbor, MI 48104 Ann Arbor, MI 48106-0544
-2-
<PAGE> 37
SCHEDULE A
TO
MEMORANDUM OF LEASE
Land situated in the County of Hennepin, State of Minnesota, and more
particularly described as follows:
Lot 1, Block 1, Normandale Center 2nd Addition, according to the plat
thereof on file or of record in the office of the Registrar of Titles,
Hennepin County, Minnesota.
<PAGE> 38
EXHIBIT J-1
Recording Requested By and
When Recorded, Return to:
Safeway Inc.
5918 Stoneridge Mall Road
Pleasanton, California 94588-3229
Attention: Donald Shaw, Esq.
SHORT-FORM MEMORANDUM OF LEASE
AND NOTICE OF NON-RESPONSIBILITY
This Memorandum of Lease and Notice of Non-Responsibility made as of
the 11th day of September, 1996, between SAFEWAY INC., a Delaware corporation,
having an office at 5918 Stoneridge Mall Road, Pleasanton, California 94588-3229
("Landlord"), and ARG ENTERPRISES, INC., a California corporation, having an
office at 450 Newport Center Drive, 6th Floor, Newport Beach, California 92660
("Tenant").
W I T N E S S E T H:
1. Landlord and Tenant have entered into a Lease ("Lease")
dated of even date herewith of certain premises located at 5930 Stoneridge Mall
Road, in the City of Pleasanton, County of Alameda, and State of California, as
further described on Schedule A attached hereto (the "Property").
2. The Lease sets forth the above names and addresses of the
parties thereto.
3. The term of the Lease is three (3) years beginning on the
date hereof and ending on September 13, 1999.
4. The terms and conditions of the Lease are incorporated
herein as if set forth in full herein. This memorandum does not in any manner
enlarge or diminish the respective rights, privileges, liabilities or
obligations of Landlord and Tenant under the Lease.
5. Notice is hereby given that neither Landlord nor any
mortgagee or beneficiary of Landlord will be liable or responsible for any
labor, services or materials furnished or to be furnished at any time to Tenant
in connection with the Property or any portion thereof, or to anyone holding an
interest in the Property or any part thereof through or under Tenant, and that
no mechanic's or other liens for any such labor, services or materials shall
attach to or affect the interest of Landlord or any mortgagee or beneficiary of
Landlord in and to the Property or any portion thereof.
J-1-1
<PAGE> 39
6. This memorandum may be executed in any number of
counterparts and each shall be deemed an original and all shall constitute the
same agreement.
Landlord and Tenant have caused this memorandum to be duly
executed and delivered as of the day and year first written above, for the
purpose of providing an instrument for recording.
WITNESSES: LANDLORD:
SAFEWAY INC., a Delaware corporation
______________________________ By___________________________________
______________________________ Its_______________________________
TENANT:
ARG ENTERPRISES, INC.,
a California corporation
______________________________ By___________________________________
______________________________ Its_______________________________
J-1-2
<PAGE> 40
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF __________ )
On _______________, 1996, before me, the undersigned notary public in and for
said County and State, personally appeared _____________________.
|_| personally known to me [or]
|_| proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) _________________ subscribed to the within
instrument and acknowledged to me that ___________ executed the same in
___________ authorized capacity(ies) and that, by __________ signature(s) on the
instrument, the person(s) or the entity(ies) upon behalf of which the person(s)
acted executed the instrument.
WITNESS my hand and official seal.
____________________________________________
My commission expires on___________________
_______________________________________________________________________________
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
|_| Individual ________________________________
|_| Corporate Officer Title or Type of Document
Title(s)
|_| Partner(s) ________________________________
__Limited __General Signer(s) Other Than Named Above
|_| Attorney-In-Fact
|_| Trustee(s) Date of Document________________
|_| Guardian/Conservator Number of Pages_________________
|_| Other:
SIGNER IS REPRESENTING:
________________________________
________________________________
J-1-3
<PAGE> 41
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF __________ )
On _______________, 1996, before me, the undersigned notary public in and for
said County and State, personally appeared _____________________.
|_| personally known to me [or]
|_| proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) _________________ subscribed to the within
instrument and acknowledged to me that ___________ executed the same in
___________ authorized capacity(ies) and that, by __________ signature(s) on the
instrument, the person(s) or the entity(ies) upon behalf of which the person(s)
acted executed the instrument.
WITNESS my hand and official seal.
___________________________________________
My commission expires on
_______________________________________________________________________________
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
|_| Individual ________________________________
|_| Corporate Officer Title or Type of Document
Title(s)
|_| Partner(s) ________________________________
__Limited __General Signer(s) Other Than Named Above
|_| Attorney-In-Fact
|_| Trustee(s) Date of Document________________
|_| Guardian/Conservator Number of Pages_________________
|_| Other:
SIGNER IS REPRESENTING:
________________________________
________________________________
J-1-4
<PAGE> 42
SCHEDULE A TO
MEMORANDUM OF LEASE AND NOTICE OF NON-RESPONSIBILITY
Land situated in the City of Pleasanton, County of Alameda,
State of California, and more particularly described as follows:
J-1-5
<PAGE> 43
EXHIBIT L
Seller's FIRPTA Affidavit
CERTIFICATION OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code provides that a
transferee of a U.S. real property interest must withhold tax if the transferor
is a foreign person. To inform the transferee that withholding of tax is not
required upon the disposition of a U.S. real property interest by ARG PROPERTY
MANAGEMENT CORPORATION ("ARGPM") or ARG ENTERPRISES, INC. ("Enterprises")
(collectively, "Transferor"), the undersigned hereby certifies the following on
behalf of Transferor:
1. Transferor is not a foreign corporation, foreign
partnership, foreign trust and foreign estate (as those terms are defined in the
Internal Revenue Code and Income Tax Regulations);
2. ARGPM's federal employer identification number is
94-1724251, and Enterprises' federal employer identification number is
94-1642296; and
3. Transferor's office address is 4410 El Camino Real, Suite
201, Los Altos, California 94022.
Transferor understands that this certification may be
disclosed to the Internal Revenue Service by transferee and that any false
statement contained herein could be punished by fine, imprisonment or both.
Under penalty of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct and
complete, and I further declare that I have authority to sign the document on
behalf of the Transferor.
ARG PROPERTY MANAGEMENT
CORPORATION, a California corporation
By:_____________________________________
Title:____________________________________
ARG ENTERPRISES, INC., a California
corporation
By:_____________________________________
Title:____________________________________
L-1
<PAGE> 44
EXHIBIT M
DESIGNATION AGREEMENT
This DESIGNATION AGREEMENT (the "Agreement") is entered into
as of September 11, 1996 by and between ARG PROPERTY MANAGEMENT CORPORATION, a
California corporation, and ARG ENTERPRISES, INC., a California corporation
(collectively, "Seller"), ARG PROPERTIES I, LLC, a California limited liability
company ("Buyer"), and CHICAGO TITLE INSURANCE COMPANY ("Title Company").
I. RECITALS
A. Pursuant to that certain Purchase Agreement entered into by
and between Seller and Buyer, dated September 11, 1996 (the "Purchase
Agreement"), Seller has agreed to sell to Buyer, and Buyer has agreed to buy
from Seller, that certain real property and described more fully on Exhibits A-1
- - A-24 attached to the Purchase Agreement (the "Property") (The purchase and
sale of the Property pursuant to the Purchase Agreement is sometimes referred to
below as the "Transaction").
B. Section 6045(e) of the United States Internal Revenue Code
and the regulations promulgated thereunder (collectively, the "Reporting
Requirements") require an information return to be made to the United States
Internal Revenue Service, and a statement to be furnished to Seller, in
connection with the Transaction.
C. Pursuant to Paragraph 6 of the Purchase Agreement, an
escrow has been opened with Title Company Escrow No. 6145234-X40 through which
the Transaction will be or is being accomplished. Title Company is either (i)
the person responsible for closing the Transaction (as described in the
Reporting Requirements) or (ii) the disbursing title or escrow company that is
most significant in terms of gross proceeds disbursed in connection with the
Transaction (as described in the Reporting Requirements).
D. Seller, Buyer and Title Company desire to designate Title
Company as the "Reporting Person" (as defined in the Reporting Requirements)
with respect to the Transaction.
II. AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Seller, Buyer and Title
Company agree as follows:
1. Title Company is hereby designated as the Reporting Person
for the Transaction. Title Company shall perform all duties that are required by
the Reporting Requirements to be performed by the Reporting Person for the
Transaction.
M-1
<PAGE> 45
2. Seller and Buyer shall furnish to Title Company, in a
timely manner, any information requested by Title Company and necessary for
Title Company to perform its duties as Reporting Person for the transaction.
3. Title Company hereby requests Seller to furnish to Title
Company Seller's correct taxpayer identification number. Seller acknowledges
that any failure by Seller to provide Title Company with Seller's correct
taxpayer identification number may subject Seller to civil or criminal penalties
imposed by law. Accordingly, ARG Property Management Corporation hereby
certifies to Title Company, under penalties of perjury, that its correct
taxpayer identification number is 94-1724251. ARG Enterprises, Inc. hereby
certifies to Title Company, under penalties of perjury, that its correct
taxpayer identification number is 94-1642296.
4. The names and addresses of the parties hereto are as
follows:
SELLER: c/o American Restaurant Group, Inc.
Suite 201
4410 El Camino Real
Los Altos, California 94022
Att'n: Director of Real Estate
Fax No.: (415) 949-6442
BUYER: c/o Griffin Capital
Suite 1600
10940 Wilshire Boulevard
Los Angeles, California 90024
Att'n: Kevin A. Shields
Fax No.: (213) 443-4117
TITLE COMPANY: CHICAGO TITLE INSURANCE COMPANY
700 South Flower Street
Suite 900
Los Angeles, California 90017
Att'n: Maggie G. Watson
Fax No.: (213) 488-4388
5. Each of the parties hereto shall retain this Agreement for
a period of four years following the calendar year during which the date of
closing of the Transaction occurs.
M-2
<PAGE> 46
IN WITNESS WHEREOF, the parties have entered into this
Agreement as of the date and year first above written.
SELLER: ARG PROPERTY MANAGEMENT
CORPORATION, a California corporation
By:_____________________________________
Name:___________________________________
Its:____________________________________
ARG ENTERPRISES, INC., a California
corporation
By:_____________________________________
Name:___________________________________
Its:____________________________________
BUYER: ARG PROPERTIES, I, LLC, a California
limited liability company
By: Net Lease Holdings Corporation,
Manager
By:_____________________________________
Kevin A. Shields
Its: President
TITLE COMPANY: CHICAGO TITLE INSURANCE
COMPANY
By:_____________________________________
Name:___________________________________
Its:____________________________________
M-3
<PAGE> 1
EXHIBIT 2.2
MASTER
LEASE
BETWEEN
ARG PROPERTIES I, LLC, AS LANDLORD
AND
ARG ENTERPRISES, INC.,
AS TENANT
DATED: SEPTEMBER 11, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
<S> <C>
ARTICLE 1 FUNDAMENTAL LEASE PROVISIONS...................................... 1
ARTICLE 2 EXHIBITS.......................................................... 3
ARTICLE 3 PREMISES.......................................................... 3
ARTICLE 4 TERM.............................................................. 5
4.01 Term.............................................................. 5
4.02 Option to Extend Lease Term....................................... 5
ARTICLE 5 LIENS............................................................. 5
ARTICLE 6 RENT.............................................................. 7
6.01 Rent.............................................................. 7
6.02 Rental Adjustments................................................ 7
6.03 Net Lease; Impositions............................................ 8
ARTICLE 7 USE OF THE PREMISES............................................... 9
7.01 Use............................................................... 10
7.02 Compliance With Laws.............................................. 10
7.03 Permits and Licenses.............................................. 11
ARTICLE 8 UTILITIES......................................................... 11
8.01 Payment........................................................... 11
8.02 Interruption in Service........................................... 11
ARTICLE 9 TAXES............................................................. 11
9.01 Payment of Taxes.................................................. 11
9.02 Definition of "Real Property Taxes"............................... 12
9.03 Personal Property Taxes........................................... 12
9.04 Tenant's Right to Contest Taxes................................... 12
9.05 Survival of Tenant's Tax Obligations.............................. 13
9.06 Compliance with Financing Documents............................... 14
ARTICLE 10 MAINTENANCE AND REPAIRS........................................... 14
10.01 Tenant's Obligations.............................................. 14
10.02 Landlord's Obligations............................................ 15
10.03 Landlord's Rights................................................. 15
ARTICLE 11 INSURANCE AND INDEMNIFICATION..................................... 15
11.01 Tenant's Insurance Obligation..................................... 15
11.02 Subrogation Waiver................................................ 17
11.03 Insurance Use Restrictions........................................ 17
11.04 Indemnification................................................... 17
11.05 Payment of Insurance.............................................. 18
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Section Page
<S> <C>
ARTICLE 12 ALTERATIONS....................................................... 19
12.01 Permitted Improvements............................................ 19
12.02 Liens............................................................. 19
12.03 Structural Alterations............................................ 19
12.04 Removal of Alterations............................................ 19
12.05 Alterations Required by Law; Compliance with Financing Documents.. 20
12.06 General Conditions Relating to Alterations........................ 20
ARTICLE 13 SIGNS............................................................. 21
ARTICLE 14 DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD........................ 21
14.01 Obligation to Rebuild............................................. 21
14.02 No Abatement of Rent.............................................. 21
ARTICLE 15 EMINENT DOMAIN.................................................... 22
15.01 Total Taking...................................................... 22
15.02 Partial Taking.................................................... 23
15.03 Temporary Taking.................................................. 23
15.04 Waiver of Statutory Rights of Termination......................... 24
15.05 Award............................................................. 24
15.06 Transfer Under Threat of Taking................................... 25
ARTICLE 16 ASSIGNMENT AND SUBLETTING......................................... 25
16.01 Landlord's Consent Required....................................... 25
16.02 Assumption of Obligations......................................... 25
16.03 Assignment to Affiliate........................................... 25
16.04 No Release of Tenant or Guarantor................................. 26
16.05 Corporate/Partnership/Limited Liability Company Restrictions...... 26
ARTICLE 17 DEFAULT; REMEDIES................................................. 27
17.01 Default........................................................... 27
17.02 Remedies.......................................................... 28
17.03 Administrative Fee................................................ 35
17.04 Default by Landlord............................................... 35
17.05 Mitigation........................................................ 35
17.06 Lender's Right to Cure............................................ 35
17.07 Certain Waivers................................................... 36
ARTICLE 18 SUBORDINATION..................................................... 37
ARTICLE 19 QUIET ENJOYMENT................................................... 38
ARTICLE 20 REPRESENTATIONS AND WARRANTIES.................................... 38
20.01 Representations and Warranties.................................... 38
20.02 Financial Statements.............................................. 39
ARTICLE 21 SURRENDER OF PREMISES............................................. 40
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Section Page
<S> <C>
ARTICLE 22 BANKRUPTCY OR INSOLVENCY.......................................... 40
22.01 Bankruptcy or Insolvency.......................................... 40
ARTICLE 23 HAZARDOUS MATERIALS............................................... 43
23.01 Representations and Warranties.................................... 43
23.02 Definitions....................................................... 45
23.03 Tenant's Obligation............................................... 46
23.04 Landlord Options.................................................. 46
23.05 Indemnity......................................................... 46
23.06 Survival.......................................................... 46
ARTICLE 24 GENERAL PROVISIONS................................................ 47
24.01 Estoppel Certificates............................................. 47
24.02 Severability...................................................... 47
24.03 Entire Agreement.................................................. 47
24.04 Notices........................................................... 47
24.05 Waivers........................................................... 47
24.06 Recording......................................................... 48
24.07 Holding Over...................................................... 48
24.08 Cumulative Remedies............................................... 48
24.09 Choice of Law; Venue.............................................. 48
24.10 Attorneys' Fees................................................... 48
24.11 Force Majeure..................................................... 49
24.12 Uneconomic Conditions............................................. 49
24.13 Consent........................................................... 49
24.14 Liability of Landlord............................................. 49
24.15 No Merger......................................................... 50
24.16 Reports........................................................... 50
24.17 Definition of Rent................................................ 50
24.18 Interpretation.................................................... 50
24.19 Relationship of the Parties....................................... 50
24.20 Successors........................................................ 50
24.21 Modifications..................................................... 50
24.22 Brokerage Fees.................................................... 51
24.23 [Intentionally Omitted]........................................... 51
24.24 Procedure Upon Purchase By Tenant................................. 51
24.25 Lease as Security for Landlord's Obligations Under Financing
Documents; Rights of Servicer and Other Lenders................... 52
24.26 Not Binding Until Executed........................................ 53
</TABLE>
iii
<PAGE> 5
MASTER LEASE
In consideration of the rents and covenants set forth below, Landlord
(as hereinafter defined) hereby leases to Tenant (as hereinafter defined), and
Tenant hereby leases from Landlord, the following Premises (as hereinafter
defined) upon the following terms and conditions:
ARTICLE 1
FUNDAMENTAL LEASE PROVISIONS
Date: September 11, 1996
Commencement
Date: September 13, 1996
Landlord: ARG Properties I, LLC, a California limited liability
company
Tenant: ARG Enterprises, Inc., a California corporation
Tenant's
Trade Name: Stuart Anderson's Black Angus and Stuart Anderson's
Cattle Company restaurants
Guarantor: American Restaurant Group, Inc., a Delaware corporation
Guaranty: Guaranty of Lease dated September 11, 1996 by Guarantor
in favor of Landlord
Lease Term: Twenty-Five (25) years, commencing on the
Commencement Date and ending on September 13, 2021,
with three (3) renewal options of five (5) years each,
subject to the provisions of Article 3 hereof.
(Article 4)
Annual
Rent: Four Million Five Hundred Sixty-Seven Thousand Nine
Hundred Twenty Dollars ($4,567,920.00), subject to
adjustment as hereinafter provided. (Article 6,
Section 6.01)
The Annual Rent shall be payable on the first day of
each month, commencing on October 1, 1996, in twelve
(12) equal installments each in the amount of Three
Hundred Eighty Thousand Six Hundred Sixty Dollars
($380,660.00) during each year of the term
<PAGE> 6
of this Lease subject to proration or adjustment as
hereinafter provided.
Addresses for
Notices: To Landlord: ARG Properties I, LLC
c/o Griffin Capital
10940 Wilshire Blvd., Suite 1600
Los Angeles, CA 90024
Attn: Kevin A. Shields
Fax: (310) 443-4117
To Tenant: ARG Enterprises, Inc.
6th Floor
450 Newport Center Drive
Newport Beach, CA 92660
Attn: Chief Financial Officer
Fax: (714) 721-8941
With a copy to: American Restaurant Group, Inc.
Suite 201
4410 El Camino Real
Los Altos, CA 94022
Attn: Legal Department
Fax: (415) 949-6420
Premises: That certain real property described in Exhibit A
attached hereto, and all appurtenances, easements and
rights of way now or subsequently pertaining thereto,
together with all improvements now or hereafter
located thereon, consisting initially of nineteen (19)
restaurants known as either Stuart Anderson's Black
Angus or Stuart Anderson's Cattle Company restaurants,
subject to the sale and removal of restaurants from
time to time in accordance with the provisions of
Article 3 hereof and otherwise. References to the
"Premises" shall refer to one location, or to all
locations, as the context shall require.
References in this Article 1 to other Articles are for convenience and
designate some of the other Articles where references to the Fundamental Lease
Provisions appear. Each reference in this Lease to any of the Fundamental Lease
Provisions contained in this Article 1 shall be construed to incorporate all of
the terms provided under such Fundamental Lease Provisions. In the event of any
conflict between any Fundamental Lease Provision and the balance of this Lease,
the latter shall control.
2
<PAGE> 7
ARTICLE 2
EXHIBITS
The following are attached hereto as Exhibits and made a part of this
Lease:
EXHIBIT A -- Description of the Premises
EXHIBIT B -- Form of Individual Lease
EXHIBIT C -- Form of Individual Lease Guaranty
EXHIBIT D -- Form of Amendment of Lease for Removal of a Property
EXHIBIT E -- Form of Notice of Non-Responsibility
EXHIBIT F -- Form of Subordination, Non-Disturbance and Attornment
Agreement and Notice of Non-Responsibility
Exhibit G -- List of Financing Documents
ADDENDUM NO. 1 -- State Law Provisions
In the event of any conflict between any of the above-referenced
Exhibits and the balance of this Lease, the Exhibit shall control.
ARTICLE 3
PREMISES
Landlord hereby leases and demises unto Tenant and Tenant hereby leases
and takes from Landlord, for the term, at the rental, and upon the terms,
covenants, and conditions hereinafter set forth, the property referred to in
Article 1 as the Premises and described on Exhibit A attached hereto.
Concurrently herewith, Landlord is purchasing the Premises from ARG
Property Management Corporation, a California corporation, an affiliate of
Tenant, and Tenant (collectively, "Seller"), pursuant to that certain Purchase
Agreement dated as of September 11, 1996 between Landlord and Seller (the
"Purchase Agreement"). Landlord has informed Tenant that, from and after the
date hereof, Landlord will attempt to sell the properties comprising the
Premises (each, a "Property") to individual purchasers (each, a "Purchaser")
selected by Landlord and on terms and conditions acceptable to Landlord in its
sole discretion (subject to the terms and conditions of the Financing Documents,
as defined in Section 24.25). Tenant
3
<PAGE> 8
agrees that concurrently with each sale of a Property by Landlord to a
Purchaser, Tenant will execute and deliver to such Purchaser, through the escrow
established for the sale of such Property, a new lease for such Property with
such Purchaser, which new lease shall be for the remaining term of this Lease
and shall be substantially in the form attached hereto as Exhibit B (each, an
"Individual Lease"), and Tenant shall cause Guarantor to execute and deliver to
such Purchaser, through such escrow, a guaranty of such Individual Lease in
favor of such Purchaser, which guaranty shall be substantially in the form
attached hereto as Exhibit C (each, an "Individual Lease Guaranty"). The Annual
Rent payable by Tenant under each Individual Lease shall be an allocable portion
of the Annual Rent payable by Tenant under this Lease, as determined by Landlord
in its sole discretion. Landlord shall provide Tenant with no less than thirty
(30) days' prior written notice of the anticipated closing date of the sale of a
Property, which notice shall be accompanied by a draft of the Individual Lease
and the Individual Lease Guaranty for such Property. Subject to such notice
requirements, Tenant agrees to use all commercially reasonable efforts to
cooperate as reasonably requested by Landlord to effectuate the timely sale of
each Property and the simultaneous execution and delivery by Tenant and
Guarantor of the Individual Lease and Individual Lease Guaranty, respectively,
for such Property.
Subject to and effective immediately upon the transfer of title to any
Property to a Purchaser and the execution and delivery by such Purchaser and
Tenant of the Individual Lease and by Guarantor of the Individual Lease Guaranty
for such Property, such Property shall thereafter no longer be part of the
Premises demised under this Lease or be governed by this Lease, the Annual Rent
payable under this Lease shall be reduced by an amount equal to the Annual Rent
payable by Tenant under the Individual Lease for such Property, and Landlord and
Tenant shall have no further liability under this Lease with respect to such
Property, provided that Tenant shall have paid to Landlord all Annual Rent,
Impositions (as defined below) and additional rent accruing under this Lease
through the effective date of the sale of such Property, and except for
obligations under this Lease which expressly survive any expiration or earlier
termination of this Lease.
Concurrently with the sale of each Property and the execution of an
Individual Lease and Individual Lease Guaranty for such Property, the parties
shall enter into an amendment to this Lease substantially in the form attached
hereto as Exhibit D (each, an "Amendment") evidencing the removal of such
Property from the Premises demised hereunder and the corresponding reduction of
the Annual Rent payable hereunder, as provided in this Article 3.
In the event Tenant or Guarantor defaults in its obligations to execute
and deliver the Individual Lease and the Individual Lease Guaranty,
respectively, for any Property in accordance with this Article 3, if such
default is not cured within ten (10) days after written notice thereof by
Landlord to Tenant, in addition to all other rights and remedies of Landlord
under this Lease, at law or in equity, Landlord shall be entitled to specific
performance of such obligations of Tenant and Guarantor, and at Landlord's sole
option, the Annual Rent payable hereunder shall thereafter be payable annually,
in advance, and all remaining monthly payments of Annual Rent payable hereunder
with respect to the calendar year in which such a default occurs shall
immediately be paid to Landlord.
4
<PAGE> 9
Notwithstanding the foregoing, or anything to the contrary contained
herein, on or after the fifth (5th) anniversary of the Commencement Date,
provided no default by Tenant has occurred and is continuing hereunder, Landlord
and Tenant agree to execute and deliver an individual lease for each of the
Properties still remaining subject to this Lease in replacement of this Lease,
for the remaining term of this Lease and in substantially the form attached
hereto as Exhibit B, and Tenant shall cause Guarantor to execute and deliver an
individual guaranty in substantially the form attached hereto as Exhibit C with
respect to each such individual lease; provided that each such individual lease
shall provide that a default under any such individual lease shall constitute a
default under all other such individual leases except with respect to any such
Properties that are subsequently transferred to an entity or person that is not
affiliated with Landlord (other than Lenders). The Annual Rent then payable
under this Lease shall be allocated among all such individual leases as Landlord
and Tenant shall determine in good faith.
Any individual lease entered into in accordance with this Article 3
pertaining to the property located in Lake Forest, California will state that
such Property is subject to the Lake Forest Condemnation Action (as defined in
the Purchase Agreement), if still pending at that time, and that any award or
compensation in connection therewith shall belong to Tenant.
ARTICLE 4
TERM
4.01 Term. The term of this Lease shall be the term specified in
Article 1 hereof (the initial term and any extensions exercised by Tenant
thereof are hereinafter referred to as the "Lease Term") and shall commence on
the Commencement Date.
4.02 Option to Extend Lease Term. Tenant shall have the option to
extend the initial term of this Lease for three (3) additional, successive
periods of five (5) years each (each, an "Extension Period") on the same terms,
covenants and conditions of this Lease. In the event Tenant elects to exercise
the option(s), Tenant shall provide Landlord written notice of Tenant's exercise
of the option(s) not less than ninety (90) days prior to the end of the
then-current term, such notice to be given in the manner provided in Section
24.04 of this Lease. Tenant's right to exercise the foregoing option(s) is
conditioned upon Tenant's performance of all of the duties and obligations on
its part to be performed under this Lease so that, at the time of the exercise
of such options, Tenant shall not be in default hereunder. In the event that
Tenant elects to extend the initial term of this Lease, the Annual Rent shall
continue to be adjusted as provided in Section 6.02 of this Lease. In the event
of Tenant's exercise of any such option(s), the Lease Term shall be extended as
to all Properties that are then still subject to this Lease.
5
<PAGE> 10
ARTICLE 5
LIENS
Tenant shall do all things necessary to prevent the filing of any
mechanics' or other liens or encumbrances against the Premises, or any part
thereof, or upon any interest of Landlord or any mortgagee or beneficiary under
a deed of trust or any ground or underlying lessor in any portion of the
Premises, by reason of work, labor, services, or materials supplied or claimed
to have been supplied to Tenant, or anyone holding the Premises, or any part
thereof, through or under Tenant. If any such lien or encumbrance shall at any
time be filed against the Premises, or any portion thereof, Tenant shall either
cause same to be discharged of record within thirty (30) days after the date of
filing of same or, if Tenant in good faith determines that such lien should be
contested, Tenant will give Landlord prior notice of Tenant's intention to
contest any such lien and will procure and record a lien release bond under
applicable law in the amount prescribed by applicable law or if no amount is
prescribed by applicable law in an amount equal to 150% of the lien amount. If a
final judgment is rendered against Tenant by a court of competent jurisdiction,
or if the Premises or any portion thereof are in danger of being foreclosed upon
as a result of any such lien or if such contest will otherwise have a material
adverse effect on the Premises, Tenant will satisfy such judgment or lien at
once. If Tenant does not post the release bond or fails to pay any such adverse
judgment or to discharge any lien in the event of any imminent foreclosure, then
Landlord may post the bond or pay the judgment or discharge the lien, as
applicable, and Tenant will promptly reimburse Landlord for all sums paid by it
in connection therewith, together with the applicable Administrative Fee (as
hereinafter defined). Tenant shall give Landlord notice of the intended
commencement date of any work, labor, services or material to be performed or
provided to the Premises or any portion thereof involving expenditures in excess
of $50,000 for any individual project or materials to be performed or provided
to any of the Premises, or $200,000 in the aggregate for multiple projects or
materials to be performed or provided to any of the Premises in any calendar
year (as such dollar amounts shall be increased pursuant to the provisions of
Section 6.02 hereof), at least ten (10) days before said date, and in connection
with the performance or provision of any such work, labor, services or
materials, Tenant shall file and post on the applicable Premises a notice of
nonresponsibility on behalf of Landlord in the form attached hereto as Exhibit E
within any time period and in the manner prescribed under the laws of the
state(s) in which the Premises or applicable portion thereof is located in order
to protect Landlord from responsibility for, and evidencing Tenant's obligations
with respect to, any of the matters covered by this Article, and shall provide
Landlord with a copy thereof. Landlord shall also have the right and
opportunity, to post and maintain on the Premises such notices, including
notices of nonresponsibility and other similar notices, as are provided for
under the Laws of the state(s) in which the Premises or applicable portion
thereof are located, evidencing Tenant's obligations with respect to any of the
matters covered by this Article and Landlord shall have the right to enter the
Premises or applicable portion thereof and post such notices at any reasonable
time. In connection with the matters covered by this Article 5, Tenant shall at
all times comply at Tenant's sole expense with the provisions of applicable Laws
(as defined below) and of the Financing Documents regarding any such matters
that are more stringent than the provisions of this Lease, including, without
limitation, in connection with the contest of any lien or encumbrance.
6
<PAGE> 11
ARTICLE 6
RENT
6.01 Rent. Tenant covenants and agrees to pay for the use and occupancy
of the Premises, the Annual Rent specified in Article 1 hereof, subject to
reduction as provided in Article 3 and Sections 7.02(d), 14.01 and 15.01 hereof,
and to increase pursuant to the provisions of Section 6.02 hereof, in twelve
(12) equal monthly installments during each year of the Lease Term, in advance,
on the first day of each calendar month, without any offset or deduction. Should
the Lease Term commence on a day other than the first day of a calendar month,
then the rental for such first fractional month shall be computed on a daily
basis for the period from the Commencement Date to the end of such calendar
month at an amount equal to one three hundred sixty-fifth (1/365) of the Annual
Rent for each day, which rent for such fractionalized month shall be payable in
advance on the Commencement Date. Should the Lease Term end on a day other than
the last day of a calendar month, then the rental for such fractional month
shall be computed on a daily basis at an amount equal to one three hundred
sixty-fifth (1/365) of the Annual Rent for each day. Rent shall be paid in
lawful money of the United States to the Lock-Box Account (as defined in Section
24.25) in accordance with the wiring instructions specified in Section 24.25, or
to such other persons or at such other places as Landlord or any Lender may
designate in writing to Tenant.
6.02 Rental Adjustments. The Annual Rent payable under this Lease and
the dollar amounts specified in Article 5 shall be increased on October 1, 2001
and every five (5) years thereafter (each, an "Increase Date") during the Lease
Term as follows:
(a) The basis for computing the increase shall be the Consumer
Price Index for all Urban Consumers - All Items, published monthly by the Bureau
of Labor Statistics of the United States Department of Labor (Base Period
1982-1984=100) ("Index"), published for the date nearest the Commencement Date
(the "Beginning Index").
(b) If the Index published for the date nearest the applicable
Increase Date (the "Extension Index") has increased over the Beginning Index,
the Annual Rent (or the dollar amounts under Article 5 or Section 12.06, as
applicable) will be calculated by multiplying the then Annual Rent (or dollar
amounts under Article 5 or Section 12.06, as applicable) by a fraction, the
numerator of which is the Extension Index and the denominator of which is the
Beginning Index, not to exceed an increase equal to 10% of the Annual Rent (or
dollar amounts under Article 5 or Section 12.06, as applicable) in effect during
the five-year period immediately preceding the applicable Increase Date.
(c) In the event the Extension Index is not available on the
applicable Increase Date, Tenant will continue to pay the Annual Rent in effect
immediately prior to the Increase Date, and the applicable dollar amounts under
Article 5 or Section 12.06 shall be those in effect immediately prior to the
Increase Date. As soon as practicable, Landlord will furnish Tenant with a true
copy of the Extension Index figure together with a computation of the increase
in the
7
<PAGE> 12
Annual Rent for the ensuing five-year period, if any, and an appropriate
adjustment will be paid within 30 days of Tenant's receipt of Landlord's
statement.
(d) If the Index is changed so that the base year differs from
that in effect on the Commencement Date, the Index shall be converted in
accordance with the conversion factor published by the Bureau of Labor
Statistics. If the Index is discontinued or revised during the Lease Term, such
other governmental index or computation with which it is replaced will be used
in order to obtain substantially the same result as would be obtained if the
Index had not been discontinued or revised.
6.03 Net Lease; Impositions. This Lease is what is commonly called a
"triple net lease," it being understood that Landlord shall receive the Annual
Rent set forth in Article 1 hereof, as it may be reduced as provided in Article
3 and Sections 7.02(d), 14.01 and 15.01 hereof and as increased pursuant to
Section 6.02, free and clear of any and all other impositions, taxes, liens,
charges, or expenses of any nature whatsoever incurred in connection with the
ownership, use, occupancy, maintenance, repair, construction, and operation of
any of the Premises, whether foreseen or unforeseen, ordinary or extraordinary
or structural or nonstructural. In addition to the Annual Rent reserved by
Article 1 hereof, as it may be reduced as provided in Article 3 and Sections
7.02(d), 14.01 and 15.01 hereof and as increased pursuant to Section 6.02,
Tenant shall pay to the appropriate parties all impositions, insurance premiums,
Real Property Taxes (as defined below), personal property taxes, utility
charges, water, sewer and vault charges, operating charges, repair and
maintenance charges, construction costs, accounting and legal fees, and any
other charges, costs and expenses which arise or may be contemplated under any
provision of this Lease prior to or during the Lease Term or which may accrue or
become payable prior to or during the Lease Term relating to any of the Premises
or any buildings, improvements, fixtures, machinery, equipment or personal
property now or hereafter located on any of the Premises or arising from the
ownership, use, occupancy, maintenance, repair, construction or operation of any
thereof, and any interest, costs or penalties with respect to any of the
foregoing (collectively "Impositions"). All of such Impositions shall constitute
additional rent, and upon the failure of Tenant to pay any of such Impositions,
Landlord shall have the same rights and remedies as otherwise provided in this
Lease for the failure of Tenant to pay rent. Tenant shall furnish to Landlord,
promptly upon the reasonable request of Landlord, or the request of any Lender,
official receipts or other satisfactory proof evidencing payment of any such
Impositions. Upon Tenant's failure to pay any Real Property Taxes as provided
herein, Landlord shall have the right, at Landlord's option, to require Tenant
to (a) promptly deposit with Landlord funds sufficient for the payment of the
current Real Property Taxes required to be paid by Tenant hereunder; and (b)
also deposit one-twelfth of the current annual or annualized Real Property Taxes
(or those of the preceding years if the current amounts thereof have not been
fixed), on the first day of each month in advance. In addition to the foregoing,
if Landlord shall at any time be obligated under any Financing Documents to
deposit any amount in respect of any Real Property Taxes or insurance premiums,
Tenant shall promptly cause such amount to be deposited with the Servicer at the
address specified in Section 24.25. It is the intention of the parties hereto
that this Lease shall not be terminable for any reason by Tenant, and that
Tenant shall in no event be entitled to any abatement of, deductions of any
kind, offset or reduction in rent payable under this Lease, except as otherwise
expressly set forth in this Lease. Without limiting the foregoing, no abatement,
diminution or
8
<PAGE> 13
reduction in rent or any other charges required to be paid by Tenant pursuant
hereto shall be claimed by or allowed to Tenant for any inconvenience or
interruption, cessation, or loss of business caused directly or indirectly, by
any present or future Laws, or by priorities, rationing or curtailment of labor
or materials, or by war, civil commotion, strikes or riots, or any manner or
thing resulting therefrom, or by any other cause or causes beyond the control of
Landlord or Tenant, nor shall this Lease be affected by any such causes. In
addition, except as otherwise expressly provided herein, the obligations and
liabilities of Tenant hereunder shall in no way be released, discharged or
otherwise affected for any reason, including, without limitation: (a) any defect
in the condition, quality or fitness for use of any of the Premises or any
portion thereof; (b) any damage to, removal, abandonment, salvage, loss or
destruction of or any requisition or taking of the Premises or any portion
thereof, except as otherwise expressly provided herein; (c) any restriction,
prevention or curtailment of or interference with any use of any of the Premises
or any part thereof, whether as a result of force majeure or otherwise; (d) any
defect in or any lien on the title to any of the Premises or any part thereof;
(e) any change, waiver, extension, indulgence, novation or other action or
omission in respect of any obligation or liability of Tenant or Landlord except
to the extent thereof; (f) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to Tenant, Landlord or any other person, or any action taken with
respect to this Lease by any trustee or receiver of Tenant, Landlord or any
other person, or by any court; (g) any claim that Tenant has or may have against
Landlord or any other person (including the Servicer or other Lenders (as
defined in Section 24.25)); (h) any failure on the part of Landlord to perform
or comply with any of the terms hereof or of any other agreement; (i) any
invalidity or unenforceability or disaffirmance of this Lease or any provision
hereof or any of the other Transaction Documents (as defined in Section 24.25)
or any provision of any thereof, in each case whether against or by Tenant or
otherwise; (j) any change in the tax or other laws of the United States, any of
the states in which any of the Premises is located or any political subdivision
of any thereof, or any failure of the Servicer or any other Lenders to perform
and observe any agreement or covenant, whether expressed or implied, or any
duty, liability or obligation arising out of or connected with any of the
Financing Documents or any other Transaction Document; or (k) any assignment,
merger, consolidation, sale or transfer of assets, leasing or other similar
transaction of or affecting Tenant, whether with or without the approval of
Landlord or the Lenders, whether or not Tenant shall have notice or knowledge of
any of the foregoing. This Lease shall be noncancellable by Tenant and Tenant,
to the extent permitted by Law, waives all rights now or hereafter conferred by
statute or otherwise to quit, terminate or surrender this Lease or to any
diminution or reduction of Annual Rent or additional rent payable by Tenant
hereunder, except as otherwise expressly provided herein. All payments by Tenant
shall be final and Tenant shall not seek to recover any such payment or any part
thereof for any reason whatsoever. Any present or future Law to the contrary
shall not alter this agreement of the parties.
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ARTICLE 7
USE OF THE PREMISES
7.01 Use. Prior to the fifth (5th) anniversary of the Commencement
Date, Tenant shall occupy and use each of the Premises solely for the operation
of a Stuart Anderson's Black Angus or Cattle Company restaurant. Thereafter,
Tenant shall use and occupy each of the Premises for such purpose or for any
other lawful use, provided such other use does not decrease the market value of
the Premises. Tenant may not use the Premises for any other purpose without
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld.
7.02 Compliance With Laws.
(a) Tenant accepts each of the Premises in its "AS IS" condition.
Tenant accepts each of the Premises "AS IS" in reliance upon Tenant's own
knowledge as owner and/or occupier of the Premises immediately prior to
commencement of this Lease. Landlord makes no representations or warranties of
any type whatsoever, including without limitation, whether there has been or are
currently any violations of any covenants or restrictions of record, or any
applicable Laws in effect regarding any of the Premises on the Commencement
Date.
(b) Tenant shall, at Tenant's sole expense, comply in all material
respects with all applicable laws, ordinances, building codes, zoning
ordinances, orders, rules, and regulations of any governmental authorities and
with any directive of any public officer which shall impose any order or duty
upon Landlord or Tenant with respect to any of the Premises or the use or
occupation thereof or relating to the environment, health or safety with respect
to any of the Premises or the use or occupation thereof (including, without
limitation, any rule of common law and judicial decisions and The Americans With
Disabilities Act), and any covenants, conditions or restrictions of record
relating to any of the Premises or the use or occupation thereof, in each case
as now or hereafter in effect (collectively, "Laws").
(c) Notwithstanding any other provision of this Lease, Tenant
shall not use or permit any of the Premises to be used in any manner which will
result in waste or the creation of a nuisance, and Tenant shall maintain each of
the Premises free of any objectionable noises, odors, or disturbances; provided
that, as between Landlord and Tenant only, odors and exhaust incidental to a
restaurant, excluding odors of deteriorating food, will not be deemed a nuisance
or objectionable provided the same do not violate applicable Laws and do not
subject Landlord to any civil liability.
(d) Notwithstanding any other provision of this Lease, in the
event that any new Law which goes into effect during any Extension Period
requires an investment in any of the Premises in excess of 30% of the
replacement cost of such Premises (exclusive of land, foundations and footings),
and which has an economic life in excess of five (5) years, Tenant, at its
option, may elect to terminate this Lease as to such Premises only at any time
during such Extension Period upon at least thirty (30) days' prior written
notice to Landlord and payment
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to Landlord of all accrued rent and other obligations hereunder with respect to
such Premises through the date of such termination, except as to obligations
hereunder which expressly survive any termination of this Lease. In the event of
any such termination, the Annual Rent payable hereunder shall be reduced
proportionately as determined by Landlord and Tenant in good faith.
(e) Tenant shall at all times comply at Tenant's sole expense with
the provisions of the Financing Documents regarding use of the Premises and
compliance with applicable laws that are more stringent than the provisions of
this Article 7.
7.03 Permits and Licenses. As between Landlord and Tenant, Tenant shall
be solely responsible to apply for and secure any building permit or permission
of any duly constituted authority for the purpose of doing any of the things
which Tenant is required or permitted to do under the provisions of this Lease.
Landlord shall cooperate as reasonably requested by Tenant to facilitate
Tenant's compliance with this obligation but at no cost to Landlord.
ARTICLE 8
UTILITIES
8.01 Payment. Tenant shall pay to the utility companies or other
parties entitled to payment the cost of all water, sewer, heat, air
conditioning, gas, electricity, garbage collection, telephone, and other
utilities and services provided to or for any of the Premises during the Lease
Term, including connection fees and taxes thereon. Tenant acknowledges that
Landlord shall have no responsibility to provide any such utilities or services
to or for any of the Premises. The provisions of this Section 8.01 shall survive
the expiration or any earlier termination of this Lease with respect to any of
the Premises.
8.02 Interruption in Service. Landlord shall not be liable in damages
or otherwise for any failure or interruption of any utility or other service
being furnished to any of the Premises subject to the provisions of Section
11.04(b) hereof, and no such failure or interruption shall entitle Tenant to any
abatement of, setoff of or reduction in the amounts payable to Landlord
hereunder or otherwise entitle Tenant to terminate this Lease.
ARTICLE 9
TAXES
9.01 Payment of Taxes. Tenant shall pay the Real Property Taxes (as
defined in Section 9.02) applicable to each of the Premises during the Lease
Term. Landlord and Tenant agree to cooperate to ensure that all tax bills
applicable to each of the Premises are sent directly to Tenant by the taxing
authority. All such payments shall be made prior to delinquency. Upon Landlord's
request, Tenant shall promptly furnish Landlord with satisfactory evidence that
such Real Property Taxes have been paid. If any such Real Property Taxes paid by
Tenant shall cover any period of time after the expiration of the Lease Term,
Landlord shall promptly
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reimburse Tenant to the extent required. If Tenant shall fail to pay any such
Real Property Taxes, Landlord and any mortgagee or beneficiary of Landlord shall
have the right but not the obligation to pay the same in which case Tenant shall
repay such amount plus any penalties and interest resulting therefrom to
Landlord or such mortgagees or beneficiaries with Tenant's next Annual Rental
installment together with the applicable Administrative Fee.
9.02 Definition of "Real Property Taxes". As used herein, the term
"Real Property Taxes" shall mean any form of real estate tax or assessment, ad
valorem or value-added tax or occupancy or gross receipts tax, fee, levy,
penalty, interest or other charge, imposed by any authority having the direct or
indirect power to tax, including any city, county, state, or federal government,
or any school, agricultural, sanitary, fire, street, drainage, or other
improvement district thereof, on, against or with respect to any of the
Premises, this Lease, any legal or equitable interest of Landlord or any
superior landlord or any mortgagee or beneficiary under a mortgage or deed of
trust of any of the Premises or in the real property of which any of the
Premises are a part, and Landlord's right to rent. The term "Real Property
Taxes" shall also include any tax, fee, levy, assessment, penalty, interest or
other charge (i) in substitution of, partially or totally, any tax, fee, levy,
assessment, or charge included within the foregoing definition of Real Property
Taxes, (ii) the nature of which was included within the foregoing definition of
Real Property Taxes, or (iii) any tax or increase in any tax which is imposed as
a result of a transfer, either partial or total, of Landlord's interest in any
of the Premises or which is added to a tax or charge hereinbefore included
within the definition of Real Property Taxes by reason of such transfer (other
than documentary, stamp or other transfer taxes resulting from any such transfer
but including any increase in any Real Property Taxes attributable to any such
transfer), or which is imposed by reason of the transfer of any of the Premises
to Landlord or otherwise in connection with this transaction, any modifications
or changes hereto, or any other transfers hereof. Notwithstanding the foregoing,
the term "Real Property Taxes" shall not include any general income taxes,
inheritance taxes, and estate taxes imposed upon Landlord or any superior
landlord or any mortgagee or beneficiary of Landlord or any taxes attributable
to the recording of any mortgage or deed of trust on Landlord's interest in the
Premises.
9.03 Personal Property Taxes. Tenant shall pay, prior to delinquency,
all sales taxes and all taxes assessed against and levied upon trade fixtures,
furnishings, equipment, and all other personal property of Tenant contained in
any of the Premises or elsewhere. Tenant shall seek to cause said trade
fixtures, furnishings, equipment, and all other personal property to be assessed
and billed separately from the real property of Landlord.
9.04 Tenant's Right to Contest Taxes.
(a) Tenant shall have the right, at its cost and expense, to
contest the amount or validity, in whole or in part, of any Real Property Taxes
of any kind by appropriate proceedings diligently conducted in good faith, but
no such contest shall be carried on or maintained by Tenant after the time limit
for the payment of any Real Property Taxes unless Tenant, at its option: (i)
shall pay the amount involved under protest; or (ii) shall procure and maintain
a stay of all proceedings to enforce any collection of any Real Property Taxes,
together with all penalties, interest, costs and expenses, by a deposit of a
sufficient sum of money, or by such undertaking, as may be required or permitted
by law to accomplish such stay; or (iii) shall
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deposit with Landlord, as security for the performance by Tenant of its
obligations hereunder with respect to such Real Property Taxes, security in the
amount, if any, prescribed by applicable law, or if no amount is prescribed by
applicable law, in amounts equal to one hundred fifty percent (150%) of the
contested amount or such other reasonable security as may be demanded by
Landlord to ensure payment of such contested Real Property Taxes and all
penalties, interest, costs and expenses which may accrue during the period of
the contest. Upon the termination of any such proceedings, it shall be the
obligation of Tenant to pay the amount of such Real Property Taxes or part
thereof, as finally determined in such proceedings, together with any costs,
fees (including attorneys' fees and expenses), penalties or other liabilities in
connection therewith; provided, however, that if Tenant has deposited cash or
cash equivalents with Landlord as security under clause (iii) above, then, so
long as no material default exists under this Lease, Landlord shall pay such
Real Property Taxes (or part thereof) together with the applicable costs, fees
and liabilities as described above out of such cash or cash equivalents and
return any unused balance, if any, to Tenant. Otherwise, Landlord shall return
or cause to have returned to Tenant all amounts, if any, held by or on behalf of
Landlord which were deposited by Tenant in accordance with the provisions
hereof. In connection with any such contest of any Real Property Taxes, Tenant
shall at all times comply at Tenant's sole expense with the provisions of
applicable Laws and of the Financing Documents regarding any such contest that
are more stringent than the foregoing provisions.
(b) Tenant shall have the right, at its cost and expense, to seek
a reduction in the valuation of any of the Premises as assessed for tax purposes
and to prosecute any action or proceeding in connection therewith. Provided
Tenant is not in material default hereunder, Tenant shall be authorized to
collect any tax refund of any tax paid by Tenant obtained by reason thereof and
to retain the same.
(c) Landlord agrees that whenever Landlord's cooperation is
required in any of the proceedings brought by Tenant as aforesaid, Landlord will
reasonably cooperate therein, provided same shall not entail any cost, liability
or expense to Landlord, and Tenant will pay, indemnify, defend (with counsel
reasonably satisfactory to Landlord) and save Landlord, the Servicer, each
Lender, and their respective representatives, agents, directors, officers,
shareholders, members, employees, affiliates, successors and assigns
(collectively, "Indemnitees," and each, individually, an "Indemnitee") harmless
of and from, any and all liabilities, losses, judgments, decrees, costs and
expenses (including all reasonable attorneys' fees and expenses) in connection
with any such contest and will, promptly after the final settlement, fully pay
and discharge the amounts which shall be levied, assessed, charged or imposed or
be determined to be payable therein or in connection therewith, and Tenant shall
perform and observe all acts and obligations, the performance of which shall be
ordered or decreed as a result thereof. No such contest shall subject Landlord
or any other Indemnitee to the risk of any civil liability or the risk of any
criminal liability, and Tenant shall give such reasonable indemnity or security
to Landlord and the other Indemnitees, as may reasonably be demanded by Landlord
or any other Indemnitee, to ensure compliance with the foregoing provisions of
this Section 9.04.
9.05 Survival of Tenant's Tax Obligations. Tenant's obligations
pursuant to this Article 9 shall survive the termination or expiration of this
Lease, in whole or in part, such that,
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notwithstanding such termination or expiration of this Lease, Tenant shall
continue to be responsible for that portion of the Real Property Taxes and/or
personal property taxes which pertain to the period prior to the date of such
termination or expiration of this Lease.
9.06 Compliance with Financing Documents. Tenant shall at all times
comply at Tenant's sole expense with the provisions of the Financing Documents
regarding payment of real property taxes applicable to the Premises or personal
property taxes applicable to the Tenant that are more stringent than the
provisions of this Article 9.
ARTICLE 10
MAINTENANCE AND REPAIRS
10.01 Tenant's Obligations.
(a) Tenant shall, at Tenant's expense, maintain in good repair,
order, and serviceable condition, reasonable wear and tear excepted, the
Premises and every part thereof, including but not limited to all plumbing,
ventilation, heating, air conditioning, and electrical systems and equipment in,
on, or exclusively serving any of the Premises, and windows, doors, storefronts,
plate glass, interior walls, and ceilings which are part of any of the Premises.
(b) Tenant shall not commit or suffer to be committed any waste
upon or about any of the Premises, and shall promptly at Tenant's cost and
expense, make all necessary replacements, restorations, renewals and repairs to
each of the Premises and all appurtenances thereto which are material to the
operation of any of the Premises, whether interior or exterior, structural or
non-structural, ordinary or extraordinary, and foreseen or unforeseen; provided
that with respect to appurtenances to any of the Premises which are material to
the operation of the Premises, if third parties are obligated to repair or
maintain such appurtenances, Tenant shall use commercially reasonable efforts to
enforce such obligations of third parties or, if such third parties fail to
perform such obligations, Tenant shall perform such obligations to the extent
Tenant has the legal right to do so. Tenant shall pay to the appropriate parties
Tenant's pro rata share of any maintenance, repair or other costs to the extent
required under or in connection with any appurtenances to any of the Premises.
Repairs, restorations, renewals and replacements shall be at least equivalent in
quality to the original work or the property replaced, as the case may be.
Tenant shall not make any claim or demand upon or bring any action against
Landlord or any mortgagee or beneficiary of Landlord for any loss, cost, injury,
damage or other expense caused by any failure or defect, structural or
non-structural, of the Premises or any part thereof.
(c) Upon the expiration or earlier termination of this Lease,
Tenant shall return each of the Premises to Landlord in good and clean condition
and repair, reasonable wear and tear excepted. Any damage to any of the
Premises, including any structural damage, resulting from Tenant's use or from
the removal of Tenant's fixtures, furnishings, and equipment pursuant to Section
12.04 hereof, shall be repaired by Tenant at Tenant's expense. The provisions of
this Section 10.01(c) shall survive the expiration or any earlier termination of
this Lease with respect to any of the Premises.
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(d) Tenant shall at all times comply at Tenant's sole expense
with the provisions of the Financing Documents regarding maintenance and repair
of the Premises that are more stringent than the foregoing provisions.
10.02 Landlord's Obligations. Except for the obligations of Landlord
under Article 14 hereof (relating to destruction of the Premises), and under
Article 15 hereof (relating to the condemnation of the Premises) with respect to
disposition of insurance proceeds and condemnation awards, it is intended by the
parties hereto that Landlord have no obligation, in any manner whatsoever, to
repair and maintain any of the Premises nor any building located thereon nor any
fixtures thereon or equipment or personal property therein, whether interior or
exterior, structural or nonstructural, ordinary or extraordinary, or to pay any
costs or expenses associated therewith, all of which obligations are that of
Tenant under Section 10.01 hereof. Tenant expressly waives the benefit of any
statute or law now or hereafter in effect which would otherwise afford Tenant
the right to terminate this Lease because of Landlord's failure to keep the
Premises or any part thereof or any building located thereon or any fixtures
thereon or equipment or personal property therein in good order, condition, and
repair, or the right to repair and offset the cost related thereto against rent.
10.03 Landlord's Rights. If Tenant refuses or neglects to make repairs
or maintain the Premises, or any part thereof, or any appurtenances thereto
material to the operation of the Premises or to enforce maintenance or repair
obligations of third parties with respect to any such appurtenances, as provided
above, in a manner reasonably satisfactory to Landlord, without prejudice to any
other remedy Landlord may have hereunder, upon giving Tenant ten (10) days'
prior written notice, Landlord or any Lender shall have the right (but not the
obligation) to enter such Premises and perform such maintenance or make such
repairs on behalf of and for the account of Tenant. In the event Landlord or any
Lender so elects, Tenant shall pay the cost of such repairs, maintenance, or
replacements promptly following Tenant's receipt of a bill therefor, together
with the applicable Administrative Fee. Tenant agrees to permit Landlord and any
mortgagee or beneficiary of Landlord or their agents to enter the Premises, upon
reasonable notice by Landlord, during normal business hours for the purpose of
inspecting the Premises.
ARTICLE 11
INSURANCE AND INDEMNIFICATION
11.01 Tenant's Insurance Obligation. Tenant covenants and agrees that
Tenant will carry and maintain, at its sole cost and expense, the following
types of insurance with respect to each of the Premises, in the amounts
specified and in the form hereinafter provided for:
(a) COMMERCIAL GENERAL LIABILITY. Commercial general liability
insurance (including liquor liability insurance) against any loss, liability or
damage on or relating to any of the Premises, with limits of not less than Two
Million Dollars ($2,000,000) in any one occurrence for death or injuries to one
or more persons and/or for damage to property.
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(b) BUSINESS INTERRUPTION. Tenant shall purchase at Tenant's
option either a policy of business interruption insurance to protect Tenant and
Landlord and each Lender (as their interests may appear) against loss of
earnings in the event of interruption of Tenant's business through destruction
of real or personal property with respect to any of the Premises, or a policy of
rental loss protection to protect Landlord and each Lender (as their interests
may appear) against loss of rental income as a result of destruction of real or
personal property with respect to any of the Premises. Such policy shall be
written in an amount equal to not less than six (6) monthly installments of
Annual Rent. Such policy shall insure against loss of earnings or rental income
(as applicable) caused by at least the perils of fire and lightning, extended
coverage, vandalism, malicious mischief and, where pertinent, sprinkler leakage.
(c) WORKERS' COMPENSATION. Worker's compensation insurance or
self insurance as required by the jurisdiction in which each of the Premises is
located.
(d) PROPERTY DAMAGE. Insurance covering all improvements located
on each of the Premises and all of Tenant's fixtures, merchandise, and personal
property from time to time in, on or upon each of the Premises, in an amount not
less than one hundred percent (100%) of their full replacement value providing
protection against perils commonly included within the classification "All
Risk", and insurance against sprinkler damage (if applicable and to the extent
not otherwise covered by such "All Risk" policy). Any policy proceeds shall be
used for the repair or replacement of the property damaged or destroyed to the
extent necessary to maintain the standard of operation of the Premises and the
business operated thereon existing prior to the damage or destruction.
(e) ADDITIONAL COVERAGE. Such other insurance and in such amounts
as may be reasonably required under the Financing Documents from time to time.
In addition, Tenant shall at all times comply with any provisions of applicable
Laws and of the Financing Documents regarding insurance that are more stringent
than the provisions of this Article 11.
(f) POLICY FORM.
(i) All policies of insurance provided for herein shall be
issued by reputable and financially sound insurance companies reasonably
satisfactory to Landlord and the Lenders, and such insurance companies shall be
qualified to do business in the jurisdiction where the applicable Premises are
situated. All such policies shall be issued in Tenant's name, with Landlord
named as an additional insured and/or loss payee as applicable, and name any
superior landlord and each Lender as an additional insured and/or loss payee, as
applicable, as their interests may appear. The policies shall be for the mutual
and joint benefit and protection of Landlord, Tenant, any superior landlord and
each Lender as their interests may appear. Certificates of insurance shall be
delivered to Landlord prior to Landlord's execution of this Lease, and
thereafter certificates or other evidence of renewal coverage shall be delivered
to Landlord within five (5) days prior to the expiration of the term of each
such policy. As often as any such policy shall expire or terminate, renewal or
additional policies shall be procured and maintained by Tenant in like manner
and to like extent. All certificates of insurance delivered to Landlord must
contain a provision giving Landlord, any superior landlord, and Lenders thirty
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(30) days' notice in writing in advance of any expiration, non-renewal,
cancellation or lapse, except only ten (10) days' notice will be provided for
cancellation due to premium non-payment. All public liability, property damage,
and other casualty policies shall be written on an occurrence basis as primary
policies, not contributing with or in excess of coverage which Landlord or any
Lender may carry. The Commercial General Liability policy shall contain a
severability of interests clause providing that each entity insured under the
policy will be protected as if it were the only Insured; however, this provision
will not increase the coverage limits. The insurance for property damage shall
provide that any losses otherwise recoverable under the insurance shall not be
invalidated notwithstanding (A) any act, failure to act or negligence by Tenant
or violation of warranties, declarations, or conditions contained in such policy
by Tenant, (B) the occupation or use of any of the Premises for purposes more
hazardous than permitted by the terms thereof, (C) any foreclosure or other
action or proceeding or notice of sale relating to any of the Premises or (D)
any change in title or ownership of any of the Premises.
(ii) Tenant's obligations to carry the insurance provided
for above may be brought within the coverage of a so-called blanket policy or
policies of insurance carried and maintained by Tenant; provided, however, that
such policy or policies must have limits of not less than Five Million and
00/100 Dollars ($5,000,000) for any one occurrence and that Landlord, any
superior landlord and each Lender shall be named as an additional insured and/or
loss payee, as applicable, thereunder as their interests may appear and that the
coverage afforded Landlord will not be reduced or diminished by reason of the
use of such blanket policies and the requirements set forth herein are otherwise
satisfied. Tenant agrees to permit Landlord and any Lender, in each case not
more often than annually, to examine Tenant's original insurance policies
required in this Lease, and to make copies of the sections of such policies
evidencing satisfaction of the requirements of this Lease, provided such
examination shall be conducted in the offices of Tenant or Tenant's insurance
broker and in the presence of a representative of Tenant or Tenant's insurance
broker.
11.02 Subrogation Waiver. Landlord (for itself and its insurer) hereby
waives any rights, including rights of subrogation, and Tenant (for itself and
its insurer) hereby waives any rights, including rights of subrogation, each may
have against the other on account of any loss or damage occasioned to Landlord
or Tenant, as the case may be, to their respective property, any of the Premises
or their respective contents that are caused by or result from risks insured
against under any property insurance policies carried by the parties hereto and
in force at the time of any such damage. The foregoing waivers of subrogation
shall be operative only so long as available in the jurisdiction where any of
the Premises is located and so long as no policy of insurance is invalidated
thereby.
11.03 Insurance Use Restrictions. Tenant agrees that it will not carry
any stock or goods or do anything in, on, or about any of the Premises outside
the ordinary course of Tenant's business which will substantially increase the
insurance rates upon the building of which any of the Premises are a part.
11.04 Indemnification. (a) Tenant shall at all times indemnify, defend
(with counsel reasonably satisfactory to Landlord), and save harmless Landlord
and each other Indemnitee for,
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against, and from, any liability, loss, cost, injury, damage or other expense or
risk (including without limitation reasonable attorneys' fees and expenses)
whatsoever that may occur or be claimed by or with respect to any person(s) or
property on or relating to any of the Premises and resulting directly or
indirectly from the operation, maintenance, use, misuse, occupancy, possession
or disuse of any of the Premises by Tenant or other persons claiming through or
under Tenant, or their respective agents, employees, licensees, invitees, guests
or other such persons, or from the condition of any of the Premises. Tenant
shall, at its cost and expense, defend (with counsel reasonably satisfactory to
Landlord) against any and all such actions, claims and demands and shall
indemnify Landlord and each other Indemnitee for all costs, expenses and
liabilities (including, without limitation, reasonable attorneys' fees and
expenses) they may incur in connection therewith. Neither Landlord nor any other
Indemnitee shall in any event whatsoever be liable for any injury or damage to
any of the Premises or to Tenant or to any other persons claiming through or
under Tenant, or their respective agents, employees, licensees, invitees, guests
or other such persons or to any property of any such persons except as expressly
provided in subparagraph (b) below. Tenant shall not make any claim or demand
upon or institute any action against Landlord or any other Indemnitee as a
result of such injury or damage except as expressly provided in subparagraph (b)
below. Tenant covenants and agrees during the Lease Term hereof to pay when due
or reimburse and indemnify and hold Landlord and each other Indemnitee harmless
from and against all inspection fees, taxes, bonds, permits, certificates,
assessments and sales, use, property or other taxes, fees or tolls of any nature
whatsoever (together with any related interest or penalties) now or hereafter
imposed against Landlord, any superior landlord or any other Indemnitee or
Tenant by any federal, state, county or local governmental authority upon or
with respect to any of the Premises or the use thereof or upon the possession,
leasing, use, operation or other disposition of any thereof or upon the rents,
receipts or earnings arising therefrom or upon or with respect to this Lease
(excepting only federal, state, and local net income taxes on the income of
Landlord or any superior landlord or any mortgagee or beneficiary of Landlord,
or any taxes attributable to the recording of any mortgage or deed of trust on
Landlord's interest in the Premises and documentary, stamp or other transfer
taxes resulting from the transfer of Landlord's interest in any of the Premises,
but including increases in Real Property Taxes resulting from any such
transfer).
(b) Landlord shall indemnify, defend (with counsel reasonably
satisfactory to Tenant), and save harmless Tenant from and against any
liability, loss, cost, injury, damage or other expense or risk (including,
without limitation, reasonable attorneys' fees and expenses) whatsoever to the
extent arising out of the negligence or willful misconduct of Landlord or its
representatives in connection with any entry by Landlord or its representatives
on any of the Premises, except to the extent arising from the negligence or
willful misconduct of Tenant, its representatives, or their respective agents,
employees, licensees, invitees or guests or other such persons, or from the
condition of any of the Premises. Notwithstanding the provisions of this Section
11.04(b), there shall be no abatement or reduction of rent or any other
obligation of Tenant hereunder by reason of the occurrence of any matters for
which Landlord is required to indemnify Tenant hereunder.
11.05 Payment of Insurance. In the event that Tenant shall fail to
obtain the insurance policies required hereunder, Landlord or any Lender shall
have the right, but not the obligation, to purchase the same in which case
Tenant shall repay the cost thereof to Landlord or such
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Lender with Tenant's next Annual Rent installment together with the applicable
Administrative Fee.
ARTICLE 12
ALTERATIONS
12.01 Permitted Improvements. Except as provided in Section 12.03
hereof, and subject to the provisions of this Article 12, at Tenant's own
expense and after giving Landlord notice in writing of its intention to do so as
required under Article 5, Tenant may from time to time make alterations,
replacements, additions, changes, and improvements (collectively referred to in
this Article 12 as "Alterations") in and to any of the Premises as it may find
necessary or convenient for its purposes; provided, however, that no such
Alterations shall decrease the value of any of the Premises.
12.02 Liens. Tenant shall pay the costs of any Alterations done on any
of the Premises pursuant to Section 12.01, and shall keep each of the Premises
free and clear of liens of any kind as required under Article 5. Tenant shall
indemnify and defend (with counsel reasonably satisfactory to Landlord) Landlord
and each other Indemnitee from and against any liability, loss, damage, costs,
attorneys' fees and expenses, and any other expense incurred as a result of
claims of lien by any person performing work or furnishing materials or supplies
for Tenant or any person claiming through or under Tenant.
12.03 Structural Alterations. Tenant shall not make any Alterations to
any of the foundations, perimeter or load-bearing walls, or roof structure
involving expenditures in excess of the amounts specified in Article 5, other
than minor repairs made in the ordinary course of Tenant's business which do not
decrease the value of the Premises, without obtaining the prior written consent
of Landlord, which consent shall not be unreasonably withheld. All work with
respect to any Alteration shall be done in a good and workmanlike manner by
properly qualified and licensed personnel, and such work shall be diligently
prosecuted to completion.
12.04 Removal of Alterations. All Alterations made on any of the
Premises (including without limitation any signs erected by Tenant) shall become
the property of Landlord at the expiration or termination of the Lease Term and
shall be surrendered with such Premises; provided, however, that if Tenant is
not in default at the time of such expiration or termination, (i) Tenant shall
have the right to remove any permitted Alterations made in accordance with this
Article 12 provided the removal thereof does not decrease the value of any of
the Premises as reasonably determined by Landlord and provided Tenant repairs
any damage to any of the Premises caused by such removal, and (ii) Tenant's
equipment, machinery, and trade fixtures shall remain the property of Tenant and
may be removed by Tenant, provided Tenant shall repair any damage caused by its
removal of any such equipment, machinery, and trade fixtures. The provisions of
this Section 12.04 shall survive the expiration or any earlier termination of
this Lease with respect to any or all of the Premises.
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Landlord agrees from time to time during the Lease Term, upon
written request from Tenant, at Tenant's sole cost and expense, to execute and
deliver any instrument, release, or other document that may be reasonably
required by any equipment supplier or vendor providing equipment or trade
fixtures to Tenant for any of the Premises and in form and substance reasonably
satisfactory to Landlord whereby Landlord waives and/or releases any rights it
may have or acquire with respect to any such equipment or trade fixtures which
may be affixed to any of the Premises and which is subject to a security
interest or equipment lease in favor of such supplier or vendor and agrees that
the same do not constitute realty regardless of the manner same are attached.
Tenant shall reimburse Landlord for all reasonable costs and expenses incurred
by Landlord in connection therewith (including, without limitation, reasonable
attorneys' fees and costs).
12.05 Alterations Required by Law; Compliance with Financing Documents.
Any Alteration, structural or otherwise, to or on any of the Premises, or any
part thereof, which may be necessary or required by reason of any applicable
Laws, shall be made by and at the sole cost and expense of Tenant, subject to
the provisions of Section 7.02(d). In addition, Tenant shall at all times comply
at Tenant's sole expense with the provisions of the Financing Documents
regarding alterations to any of the Premises or the removal thereof that are
more stringent than the provisions of this Article 12.
12.06 General Conditions Relating to Alterations. Any Alteration,
structural or otherwise, to or on any of the Premises, shall be subject to the
following conditions:
(a) No Alteration shall be undertaken until Tenant shall have
procured and paid for all required permits and authorizations of all municipal
departments and governmental subdivisions having jurisdiction.
(b) Any structural Alteration involving an estimated cost of more
than One Hundred Thousand and 00/100 Dollars ($100,000) (as such dollar amount
shall be increased pursuant to the provisions of Section 6.02 hereof) shall, at
Landlord's reasonable request, be conducted under the supervision of a licensed
architect or engineer selected by Tenant and satisfactory to Landlord and shall
be made in accordance with detailed plans and specifications (the "Plans and
Specifications") and cost estimates prepared by such architect or engineer and
approved in writing in advance by Landlord.
(c) Any Alteration shall be made promptly and in a good
workmanlike manner and in compliance with all applicable Laws.
(d) No Alteration shall tie-in or connect any of the Premises or
any improvements thereon with any property outside such Premises without the
prior written consent of Landlord and any mortgagee or beneficiary of Landlord.
(e) No Alteration shall reduce the value of any of the Premises
or impair the structural integrity of any building comprising a part of any of
the Premises.
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ARTICLE 13
SIGNS
In addition to those signs already existing at the Premises, Tenant
shall have the right at Tenant's sole cost and expense to erect or affix signs
on the Premises of such sizes, colors, and designs as required by Tenant. All
signs on the Premises shall fully comply with all applicable Laws.
ARTICLE 14
DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD
14.01 Obligation to Rebuild. If any portion of the Premises is damaged
or destroyed by fire or other casualty, Tenant shall forthwith give notice
thereof to Landlord. Tenant shall, at its sole cost and expense, promptly
commence and diligently proceed to rebuild, replace and repair the damaged or
destroyed improvements, fixtures or equipment, and diligently complete the same
as soon as reasonably possible in conformity with the requirements of Article 12
so as to restore such improvements, fixtures or equipment, as nearly as
practicable, taking into account changes in construction techniques, to the
condition they were in immediately prior to such damage or destruction, except
for permitted Alterations and such changes in design or materials as may then be
required by applicable Laws. In such event, and so long as no default by Tenant
has occurred and is continuing hereunder, Landlord shall, to the extent and at
the times the proceeds of the insurance are made available to Landlord,
reimburse Tenant for the costs of making such repairs, restoration, rebuilding
and replacements, net of all reasonable out-of-pocket expenses (including
without limitation reasonable attorneys' fees and expenses) incurred by Landlord
or any Lender in connection with the collection of such proceeds and the
administration thereof, on such terms and conditions as Landlord or any Lender
may reasonably require. To the extent that available proceeds of insurance are
insufficient to pay the entire cost of making such repairs, restoration,
rebuilding and replacements, and notwithstanding the expiration or termination
of the Lease Term of this Lease, Tenant shall pay the amount by which such costs
exceed the available insurance proceeds. Any surplus of insurance proceeds over
the cost of restoration, net of all reasonable out-of-pocket expenses (including
without limitation reasonable attorneys' fees and expenses) incurred by Landlord
or any Lender in connection with the collection of such proceeds and the
administration thereof, shall be promptly paid over to Tenant upon completion of
such restoration in a manner reasonably satisfactory to Landlord and the Lenders
so long as no default by Tenant has occurred and is continuing hereunder, and
subject to such other terms and conditions as Landlord or any Lender may
reasonably require or as set forth in the Financing Documents. Tenant shall at
all times comply, at Tenant's sole expense, with the provisions of the Financing
Documents regarding damage or destruction to the Premises that are more
stringent than the provisions of this Article 14.
14.02 No Abatement of Rent. Notwithstanding the partial or total
destruction of any of the Premises, there shall be no abatement of rent or of
any other obligation of Tenant hereunder
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by reason of such damage or destruction (except as otherwise expressly provided
in the immediately preceding paragraph).
ARTICLE 15
EMINENT DOMAIN
15.01 Total Taking. Upon the occurrence of any taking under the power
of eminent domain (a) of twenty-five percent (25%) or more of the floor area of
the building located on any Property comprising the Premises, or (b) of any
appurtenances material to the operation of a Property or of parking or access
rights necessary to the lawful operation of a Property, or which results in such
Premises no longer being one undivided parcel of property, or (c) which,
regardless of the amount so taken, renders the remainder of such Property
unsuitable for the continued operation of Tenant's business at such Property or
renders it unmarketable as determined by Landlord or Tenant in good faith and
based on commercially reasonable standards and criteria (each a "Total Taking"),
Tenant shall promptly, by delivery of written notice to Landlord within thirty
(30) days after the date Tenant receives notice of the Total Taking, offer to
purchase such Property on a date not more than sixty (60) days after delivery of
such notice in accordance with the provisions of Section 24.24 hereof (the date
specified in such notice or such other date, subject to Landlord's prior written
consent to the extension of such date, on which Tenant's purchase of such
Property is consummated in accordance with Section 24.24, is referred to herein
as the "Taking Termination Date") at a price (the "Taking Offer Price") equal to
the portion of the Purchase Price payable under (and as defined in) the Purchase
Agreement which is allocable to such Property (as set forth in Exhibit B to the
Purchase Agreement), plus the actual allocable costs and expenses incurred by
Landlord in connection with the acquisition (including the financing thereof) of
such Premises by Landlord as reasonably determined by Landlord but not to exceed
105% of such portion of the Purchase Price. If Landlord fails to respond to such
offer within thirty (30) days after receipt of such notice, Landlord shall be
deemed to have accepted such offer. Notwithstanding anything to the contrary
contained herein, Tenant shall continue to pay Annual Rent and all other amounts
accruing hereunder and to observe all other obligations of Tenant under this
Lease, including without limitation with respect to the portion of the Premises
so taken, through the Taking Termination Date.
In the event Landlord accepts (or is deemed to have accepted) such
offer, Tenant shall deposit with Lenders until the indebtedness evidenced by the
Financing Documents is discharged, and thereafter Landlord, an amount equal to
the Taking Offer Price plus all rent and other amounts accrued and unpaid
hereunder through the Taking Termination Date, in each case in immediately
available funds on or before the Taking Termination Date. In such event, upon
and subject to payment of such amounts by Tenant, Landlord shall quitclaim title
to such Property to Tenant in accordance with the provisions of Section 24.24,
and provided no default by Tenant has occurred and is continuing under this
Lease, Tenant shall be entitled to receive the proceeds of any award made by any
condemning authority or as a result of any judicial proceedings in connection
with such taking, less out-of-pocket expenses (including without limitation
attorneys' fees and expenses) reasonably incurred by Landlord or any Lender in
the collection of such
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award (the "Net Taking Proceeds"), on such terms and conditions as Landlord or
any Lender may reasonably require or as set forth in the Financing Documents. In
the event Landlord rejects such offer in writing, Tenant shall deposit with the
Lenders until the indebtedness evidenced by the Financing Documents is
discharged, and thereafter Landlord, all rent and other amounts accrued and
unpaid hereunder through the Taking Termination Date in immediately available
funds, in each case on or before the Taking Termination Date, and Landlord shall
be entitled to receive the Net Taking Proceeds with respect to the Total Taking,
subject to the rights of any mortgagee or beneficiary of Landlord. This Lease
shall terminate as to such Property only (other than obligations which expressly
survive the expiration or any earlier termination hereof) on the Taking
Termination Date, and the Annual Rent payable hereunder shall be reduced by an
amount equal to the product of the Taking Offer Price multiplied by Landlord's
then weighted average cost of capital with respect to the indebtedness evidenced
by the Financing Documents which indebtedness constitutes Landlord's acquisition
indebtedness, provided Tenant has duly paid to the Lenders in accordance with
Section 24.25 hereof until the indebtedness evidenced by the Financing Documents
is discharged, and thereafter Landlord, all amounts required to be paid by
Tenant pursuant to this Section 15.01. Landlord's "weighted average cost of
capital" shall mean a fraction the numerator of which shall be the sum of (A)
the annual interest rate then in effect under the Senior Loan (as defined below)
(LIBOR plus 3.50%) multiplied by the then outstanding principal balance of the
Senior Loan, plus (B) the then outstanding principal balance of the Mezzanine
Loan (as defined below) multiplied by 12.5%, plus (C) $32,500, and the
denominator of which shall be (x) the then outstanding principal balance of the
Senior Loan, plus (y) the then outstanding principal balance of the Mezzanine
Loan, plus (z) $250,000.
15.02 Partial Taking. Upon the occurrence of any taking under the power
of eminent domain which is not a Total Taking or a Temporary Taking as defined
below (a "Partial Taking"), this Lease shall continue in full force and effect
and Tenant shall, at its sole cost and expense, promptly commence and diligently
proceed to rebuild, replace and repair any damage to such Property caused by
such taking, and diligently complete the same as soon as reasonably possible, in
conformity with the requirements of Article 12 so as to restore such Property
and the building and other improvements thereon and appurtenances thereto, as
nearly as practicable, taking into account changes in construction techniques,
to the condition thereof immediately prior to such taking, except for permitted
Alterations and such changes in design or materials as may then be required by
applicable Laws. The cost of such restoration shall be paid first out of
Tenant's own funds. So long as no default by Tenant has occurred and is
continuing under this Lease, Tenant shall be entitled to receive the Net Taking
Proceeds with respect to the Partial Taking, on such terms and conditions as
Landlord or any Lender may reasonably require or as set forth in the Financing
Documents. If the cost of such restoration exceeds the amount of the Net Taking
Proceeds, the deficiency shall be paid by Tenant. Notwithstanding a Partial
Taking of any of the Premises, there shall be no abatement or reduction of rent
or any other obligation of Tenant hereunder by reason of such taking.
15.03 Temporary Taking. In the event of a taking under the power of
eminent domain of all or a portion of any Property comprising the Premises for a
temporary use (a "Temporary Taking"), this Lease shall continue in full force
and effect and there shall be no abatement or reduction of rent or any other
obligation of Tenant hereunder by reason of such taking. Tenant
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shall continue for the duration of any Temporary Taking to perform and observe
all of the terms and conditions of this Lease, and Landlord shall be entitled to
receive the Net Taking Proceeds with respect to the Temporary Taking subject to
the rights of any mortgagee or beneficiary of Landlord. So long as no default by
Tenant has occurred and is continuing under this Lease, and provided Tenant has
restored such Property to the condition thereof immediately prior to such
taking, in accordance with the requirements of Article 12, at Tenant's sole cost
and expense, Tenant shall be entitled to receive the Net Taking Proceeds with
respect to the Temporary Taking on such terms and conditions as Landlord or any
Lender may reasonably require or as set forth in the Financing Documents. If the
cost of such restoration exceeds the amount of the Net Taking Proceeds with
respect to the Temporary Taking, the deficiency shall be paid by Tenant.
15.04 Waiver of Statutory Rights of Termination. Tenant hereby waives
any statutory rights of termination which may arise by reason of any taking,
whether total or partial, temporary or permanent, of any of the Premises under
the power of eminent domain.
15.05 Award. Upon any taking, Tenant shall give written notice thereof
to Landlord within fifteen (15) days following such taking. Tenant shall appear
on its own behalf and in the name and on behalf of Landlord and each Lender
until the indebtedness evidenced by the Financing Documents is discharged, in
any proceeding or action to negotiate, prosecute and adjust any claim for any
award or on account of any taking, requisition or sale, and to collect any such
award or compensation. Tenant hereby irrevocably assigns to each Lender until
the indebtedness evidenced by the Financing Documents is discharged, and
thereafter to Landlord (subject to the rights of any mortgagee or beneficiary of
Landlord), all Net Taking Proceeds to which Tenant may be entitled by reason of
its interest in any of the Premises, all of which shall be applied in accordance
with this Lease and the Financing Documents. Tenant shall take all appropriate
action in connection with each such proceeding, action, negotiation, prosecution
and adjustment and shall pay all expenses thereof. In the event of any taking,
whether total or partial, temporary or permanent, the entire award or
compensation in any eminent domain proceeding affecting any of the Premises
shall be distributed to the Lenders until the indebtedness evidenced by the
Financing Documents is discharged, and thereafter to Landlord subject to the
rights of any mortgagee or beneficiary of Landlord, provided, however, that
Tenant will be entitled to receive, and Landlord will have no right to pursue
for itself, any award for claims based on (a) the value of Tenant's Alterations
to the Premises which Tenant has the right to remove pursuant to the provisions
of this Lease but elects not to remove, (b) loss of or damage to Tenant's
personal property, (c) loss to Tenant because of interruption of business, (d)
Tenant's loss of goodwill, and (e) Tenant's cost of removal and relocation and
any rent differential payable by Tenant for replacement premises as a result of
any relocation necessitated by the taking. Landlord and Tenant may separately
pursue their claims against the condemning authority, provided, however, that
notwithstanding anything to the contrary contained in this Lease, Tenant will
have no right to pursue a claim based upon the residual value of the real
property comprising any of the Premises after expiration of the Lease Term or
pursue claims or retain any award to which Landlord or any Lender is entitled so
as inequitably to diminish Landlord's or any Lender's award. Landlord and Tenant
shall cooperate to maximize the award payable by the condemning authority or in
any judicial proceedings. Tenant
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shall at all times comply, at Tenant's sole expense, with the provisions of the
Financing Documents regarding eminent domain that are more stringent than the
foregoing provisions.
15.06 Transfer Under Threat of Taking. For the purposes of this Article
only, a voluntary sale or conveyance under threat and in lieu of condemnation
shall be deemed an appropriation or taking under the power of eminent domain.
ARTICLE 16
ASSIGNMENT AND SUBLETTING
16.01 Landlord's Consent Required. For purposes of this Article 16, the
terms "assign" and "assignment" shall include and mean any act attempting to, or
document purporting to, assign, transfer, sublet or change ownership of Tenant's
interest in and to any of the Premises or any part thereof, or enter into
license or concession agreements for a material portion of any of the Premises
or any part thereof. Tenant shall not assign this Lease or Tenant's interest in
and to the Premises without obtaining the prior written consent of Landlord,
such consent not to be unreasonably withheld. Any attempted assignment without
such consent shall be void, and shall constitute a breach of this Lease.
Notwithstanding the foregoing but subject to any prohibitions contained in the
Financing Documents, Tenant may at any time encumber its leasehold interest, but
not its interest in any leasehold improvements constructed by Tenant or
comprising part of the Premises, by deed of trust, mortgage, assignment, or
other security agreement, without the consent of Landlord, but no such
encumbrance will constitute a lien on Landlord's or any Lender's estate.
16.02 Assumption of Obligations. Any assignment to which Landlord has
consented shall be evidenced by an instrument in writing and any assignee or
transferee shall agree for the benefit of Landlord to be bound by, assume, and
perform all of the terms, covenants, and conditions of this Lease. Consent by
Landlord to any assignment shall not constitute consent to any subsequent
assignment.
16.03 Assignment to Affiliate. Notwithstanding anything to the contrary
contained in this Article 16, Tenant shall have the right to assign this Lease,
or sublet the Premises or any portion thereof, without the consent of, but with
notice to, Landlord to any corporation (a) with which Tenant may merge or
consolidate, (b) which is a parent or subsidiary of Tenant at any tier, (c)
which is the successor corporation to Tenant in the event of a corporate
reorganization, or (d) which acquires all or substantially all of the voting
stock of Tenant or all or substantially all of the assets of Tenant, provided
that none of the foregoing is reasonably expected to have a material adverse
effect on the net worth of the Tenant hereunder and provided that said assignee
assumes, in full, the obligations of Tenant under this Lease and Tenant remains
primarily liable under this Lease. In addition, nothing contained herein shall
prohibit the public offering or subsequent sale of shares of stock in Tenant in
the public markets provided that the same is not reasonably expected to have a
material adverse effect on the financial condition of the Tenant hereunder.
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16.04 No Release of Tenant or Guarantor. Regardless of Landlord's
consent, no assignment shall release Tenant of Tenant's obligation or alter the
primary liability of Tenant to pay the rent and to perform all other obligations
to be performed by Tenant hereunder or relieve Guarantor or any other guarantor
hereof from any liability under its guarantee. The acceptance of rent by
Landlord from any other person shall not be deemed to be a waiver by Landlord of
any provision hereof. Consent to one assignment shall not be deemed consent to
any subsequent assignment. In the event of default by any assignee of Tenant or
any successor to Tenant, in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting remedies
against said assignee. Landlord may consent to subsequent assignments of this
Lease or amendments or modifications to this Lease with assignees of Tenant,
without notifying Tenant, or any successor of Tenant, and without obtaining its
or their consent thereto and such action shall not relieve Tenant of liability
under this Lease or of Guarantor or any other guarantor hereof under its
guarantee, provided that neither Tenant nor Guarantor shall be liable to the
extent of amendments or modifications made to this Lease after the fifth (5th)
anniversary of the Commencement Date with assignees not affiliated with Tenant
or Guarantor without Tenant's consent, which consent shall not be unreasonably
withheld, which materially increase Tenant's monetary obligations under this
Lease (such as an increase in the Annual Rent payable hereunder or extension of
the Lease Term beyond the original term hereof and any renewal options
hereunder).
16.05 Corporate/Partnership/Limited Liability Company Restrictions.
Prior to the fifth (5th) anniversary of the Commencement Date:
(a) in the event that Tenant shall, at any time, be a
corporation, no change shall occur in one or a series of related transactions in
the majority ownership of and/or the power to vote the majority of the
outstanding capital stock of Tenant, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld; provided that
nothing contained herein shall require Landlord's consent for a public offering
or subsequent sale of stock in Tenant in the public markets, provided the same
is not reasonably expected to have a material adverse effect on the financial
condition of Tenant hereunder;
(b) in the event that Tenant shall, at any time, be a
partnership, no change shall occur in any one or more of the general partners of
the partnership or in the control of any general partner, without the prior
written consent of Landlord, which consent shall not be unreasonably withheld;
and
(c) in the event that Tenant shall, at any time, be a limited
liability company, no change shall occur in any member of the limited liability
company or in the control of any member, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld.
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ARTICLE 17
DEFAULT; REMEDIES
17.01 Default. The occurrence of any one or more of the following
events shall constitute a material default under this Lease by Tenant:
(a) The vacating or abandonment of the Premises by Tenant.
(b) The failure by Tenant to make any payment when due of Annual
Rent, Impositions or any other payment required to be made by Tenant hereunder,
where such failure shall continue for a period of five (5) days after written
notice from Landlord, provided that no notice shall be required after three (3)
defaults by Tenant in such payments in any calendar year.
(c) Except as otherwise provided in this Lease, the failure by
Tenant to observe or perform any of the covenants, conditions, or provisions of
this Lease to be observed or performed by Tenant, other than described in
subparagraph (b) above, where such failure shall continue for a period of thirty
(30) days after written notice thereof from Landlord to Tenant; provided,
however, that if the nature of Tenant's noncompliance is such that the default
is capable of being cured by action on the part of Tenant but more than thirty
(30) days are reasonably required for its cure, then Tenant shall not be deemed
to be in default so long as (i) Tenant commences such cure within said thirty
(30)-day period and thereafter diligently and in good faith prosecutes such cure
to completion, (ii) no part of the Premises is in material risk of sale or
forfeiture due to the default, (iii) the default does not materially impair the
value of the collateral for the indebtedness evidenced by the Financing
Documents, or the liens created thereby, and (iv) the default does not cause a
default under any of the Financing Documents which is not cured within any
applicable time period thereunder.
(d) (i) The making by Tenant of any general arrangement or
general assignment for the benefit of creditors; (ii) Tenant becomes a "debtor"
as defined in 11 U.S.C. Section 101 or any successor statute thereto (unless, in
the case of a petition filed against Tenant, the same is dismissed within sixty
(60) days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets or of Tenant's interest in this Lease,
where possession is not restored to Tenant within sixty (60) days; (iv) the
attachment, execution, or other judicial seizure of substantially all of
Tenant's assets or of Tenant's interest in this Lease, where such seizure is not
discharged within sixty (60) days; or (v) Tenant shall be unable or shall admit
in writing its inability to pay its debts as they become due. In the event that
any provision of this Section 17.01(d) is contrary to any applicable Law, such
provision shall be of no force or effect.
(e) The breach in any material respect of any representation or
warranty by Tenant hereunder or under any agreement, instrument, certificate,
statement or other writing furnished in connection herewith or under any other
Transaction Document.
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(f) The default, breach or insolvency of any guarantor of this
Lease beyond any applicable notice and/or grace period under its guarantee or if
any such guarantor shall repudiate its guarantee, or if Guarantor defaults on
any of its outstanding corporate bonds beyond any applicable grace and cure
period.
(g) Tenant fails to comply with, or cause Guarantor or the
Premises to comply with, the covenants, representations, warranties or other
requirements of the following provisions of the Financing Documents to the
extent relating to Tenant, Guarantor or the Properties, and regardless of
whether the same are more stringent than the representations, warranties,
covenants and requirements set forth in this Lease, all as if Tenant were the
Borrower or Trustor (as applicable) making such covenants, representations or
warranties or were required to fulfill such requirements if the context
requires, and at Tenant's sole cost and expense, to the extent such failure
constitutes a default under the Financing Documents if such default is not cured
by Tenant within any applicable time period provided under the Financing
Documents and applicable to such default: Section 4.1(d), the last sentence of
Section 4.1(f), Sections 4.1(h), (j) and (k), the first sentence of Section 4.1
(l), and Sections 4.1(m), (n), (p), (q), (t), (u), (v), (w) and (x); Section 4.2
as it applies to the foregoing representations and warranties; Sections 5.1(a),
(b), (c), (d), (e), (f), (g), Section 5.1(h) (to the extent applicable to Tenant
or Guarantor), (j) (other than with respect to Liens, as defined therein,
created or caused by Landlord), and Sections 5.1(p) and (q); Sections 6.1(a) and
(f) and Section 7.3 of the loan agreements described on Exhibit G hereto for
each of the Senior Loan and the Mezzanine Loan (as such terms are defined in
Section 24.25); Sections 3.1(c), 4.2, 4.3(a), 4.4, 4.6, 4.10(a)(iii) through
(vii), 4.10(b), 5.1, 5.2, 5.3, 5.6 and 8.1(a)(xii) of the deeds of trust or
mortgages referred to on Exhibit G securing the Senior Loan or the Mezzanine
Loan; any obligations of Tenant contained in the Assignment of Lease referred to
in Exhibit G with respect to each of the Senior Loan and the Mezzanine Loan; and
the obligations of Tenant and Guarantor under the Tenant's and Guarantor's
Certificate referred to on Exhibit G with respect to each of the Senior Loan and
the Mezzanine Loan; in each case except to the extent any of the matters
referred to in such provisions are created or caused by Landlord.
17.02 Remedies. In the event of any such material default by Tenant,
Landlord may at any time thereafter, with or without notice or demand and
without limiting Landlord in the exercise of any right or remedy which Landlord
may have by reason of such default:
(a) Terminate Tenant's right to possession of any of the Premises
by any lawful means, in which case this Lease shall terminate as to such
Premises and Tenant shall immediately surrender possession of such Premises to
Landlord.
(b) [Intentionally Omitted.]
(c) [Intentionally Omitted.]
(d) Maintain Tenant's right to possession of any of the Premises
by any lawful means, in which case this Lease and the term hereof shall continue
in effect with respect to such Premises whether or not Tenant shall have vacated
or abandoned such Premises. In such event
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Landlord shall be entitled to enforce all of Landlord's rights and remedies
under the Lease with respect to such Premises, including the right to recover
the rent as it becomes due hereunder.
(e) Pursue any other remedy now or hereafter available to
Landlord under the Laws of the jurisdiction where any of the Premises are
located, including without limitation, any rights or remedies set forth in
Addendum No. 1 attached hereto for a particular jurisdiction.
(f) To the extent permitted by applicable Law, the rights and
remedies provided under this Lease shall be cumulative, and the exercise of any
one right or remedy shall not preclude the exercise of or act as a waiver of any
other right or remedy of Landlord hereunder, or which may be existing at law, or
in equity or by statute or otherwise.
(g) No termination of the Lease Term in whole or in part pursuant
to subparagraph (a), by operation of law or otherwise, and no reentry,
repossession or removal pursuant to subparagraph (b) or otherwise, and no
reletting of any of the Premises pursuant to subparagraph (c) or otherwise,
shall relieve Tenant of its liabilities and obligations hereunder, all of which
shall survive such termination, reentry, repossession, removal or reletting.
(h) In the event of any termination of the Lease Term in whole or
in part pursuant to subparagraph (a) or as permitted by Law, Tenant shall quit
and surrender the applicable Premises to Landlord, and Landlord may without
further notice enter upon, reenter, possess and repossess the same by summary
proceedings, ejectment or otherwise, and again have, repossess and enjoy the
same as if this Lease had not been made, and in any such event neither Tenant
nor any person claiming through or under Tenant by virtue of any law or an order
of any court shall be entitled to possession or to remain in possession of the
applicable Premises but shall forthwith quit and surrender the applicable
Premises, and Landlord shall, notwithstanding any other provision of this Lease
and in lieu of all other claims for damages on account of such termination, be
entitled to recover from Tenant the aggregate of all amounts Landlord is
permitted to recover from Tenant, including without limitation:
(i) the worth at the time of award, as computed below, of
the unpaid rent (including, without limitation, Impositions and
additional rent) which had been earned at the time of termination of
this Lease with respect to the applicable Premises;
(ii) the worth at the time of award of the amount by which
the unpaid rent (including, without limitation, Impositions and
additional rent) which would have been earned after the time of
termination of this Lease with respect to the applicable Premises until
the time of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided;
(iii) the worth at the time of award of the amount by which
the unpaid rent (including, without limitation, Impositions and
additional rent) with respect to the applicable Premises for the
balance of the term after the time of award exceeds the amount of such
rental loss for said balance of the term that Tenant proves could be
reasonably avoided; and
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(iv) any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom; including without limitation any
loss or damage arising out of the failure of Landlord to receive the
benefit of the performance by Tenant of any obligation to purchase any
of the Premises as required under the provisions of this Lease. Tenant
acknowledges and agrees that, in reliance upon this Lease and Tenant's
covenants and agreements hereunder and the creditworthiness and
financial condition of Tenant, Landlord has entered into certain
special transactions to finance the costs of acquiring the Premises
and, in connection with such financing transactions, Landlord has
incurred and will continue to incur indebtedness and liabilities under
and pursuant to the Financing Documents and other Transaction
Documents. Tenant acknowledges and agrees that a default by Tenant
under this Lease may cause Landlord substantial damage and detriment
due to its obligations and liabilities under the Financing Documents
and the other Transaction Documents and that such obligations and
liabilities of Landlord may be accelerated and materially altered and
increased as a result of a default by Tenant under this Lease.
Accordingly, in order to compensate Landlord for all detriment
proximately and to the extent caused (directly or indirectly) by any
failure by Tenant to perform its obligations under this Lease, Tenant
shall pay promptly upon demand, and Landlord shall be permitted to
recover from Tenant if not paid directly by Tenant, all amounts payable
by Landlord under or pursuant to any of the Financing Documents to the
extent that such obligations and liabilities of Landlord are incurred,
accelerated, altered or increased on account of any default by Tenant
under this Lease, including, without limitation, any increase in the
interest rate(s) payable under any of the Financing Documents, late
charges, default interest, prepayment fees, penalties, attorneys' fees
and expenses, or other charges, expenses or fees incurred by Landlord
under any of the Financing Documents on account of any default by
Tenant. Without limiting the foregoing, Tenant acknowledges for example
that any failure of Tenant to pay any rent (including without
limitation Impositions) hereunder will cause Landlord to be in default
under the Financing Documents upon the expiration of the applicable
cure period, if any, for such a default contained therein.
The "worth at the time of award" of the amounts referred to in the
foregoing subparagraphs (h)(i) and (ii) shall be computed by allowing interest
at the interest rate set forth in Section 17.03 or the highest rate permitted by
applicable Law, whichever is less, on each rental installment from the date the
same was due hereunder to the time of award. The "worth at the time of award" of
the amount referred to in the foregoing subparagraph (h)(iii) shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of the award plus one percent (1%). As used herein,
the term "time of award" shall mean either (A) the date upon which Tenant pays
to Landlord the amount recoverable by Landlord as hereinabove set forth or (B)
the date of entry of any determination, order or judgment of any court, other
legally constituted body, or any arbitrator(s), determining the amount
recoverable, whichever first occurs. If the time of award is determined under
clause (B), above, then the amount recoverable by Landlord hereunder shall bear
interest from the time of award until paid at the interest rate set forth in
Section 17.03 or the highest rate permitted by applicable Law, whichever is
less. Nothing herein contained shall limit or prejudice the right
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of Landlord, and Landlord is hereby expressly granted the right, in any
bankruptcy or reorganization or insolvency proceedings, to prove for and obtain
as damages by reason of such termination, an amount equal to the maximum allowed
by any statute or rule of law whether such amount shall be greater or less than
the amounts referred to above.
LANDLORD AND TENANT AGREE AND ACKNOWLEDGE THAT IT WOULD BE
IMPRACTICAL AND EXTREMELY DIFFICULT TO FIX THE ACTUAL AMOUNT OF ALL DAMAGES
WHICH LANDLORD WOULD SUFFER IN THE EVENT OF TENANT'S DEFAULT AND FAILURE TO
PERFORM ITS OBLIGATIONS IN ACCORDANCE WITH THE TERMS OF THIS LEASE. THE PARTIES
HEREBY AGREE THAT A REASONABLE ESTIMATE OF THE AMOUNTS NECESSARY TO COMPENSATE
LANDLORD FOR ALL THE DETRIMENT THAT LANDLORD WOULD SUFFER PROXIMATELY AND TO THE
EXTENT CAUSED BY TENANT'S DEFAULT IS AN AMOUNT DETERMINED AT THE TIME OF THE
AWARD EQUAL TO THE SUM OF (A) THE AGGREGATE PRINCIPAL AMOUNT OF THE THEN
OUTSTANDING INDEBTEDNESS EVIDENCED BY THE FINANCING DOCUMENTS PLUS (B) INTEREST
ACCRUED ON SUCH INDEBTEDNESS TO THE DATE OF ACTUAL PAYMENT PLUS (C) THE SUM OF
THE AMOUNTS REFERRED TO IN CLAUSE (iv) OF THIS SUBPARAGRAPH (h) LESS THE SUM OF
THE AMOUNTS AWARDED TO LANDLORD UNDER CLAUSES (i), (ii) AND (iii) OF THIS
SUBPARAGRAPH (h), AND TENANT SHALL PAY TO LANDLORD AND LANDLORD SHALL BE
ENTITLED TO RECOVER FROM TENANT SUCH AMOUNT AS LIQUIDATED DAMAGES AND NOT AS A
PENALTY.
(i) Landlord may demand, by written notice to Tenant specifying a
purchase date, that Tenant purchase one or more of the Premises from Landlord,
and Tenant shall purchase such Premises from Landlord, in accordance with the
provisions of Section 24.24, on the purchase date specified in such notice, as
liquidated damages for loss of bargain and not as a penalty (in lieu of the rent
due after the payment date specified in such notice), for a price equal to (x)
any unpaid rent accrued and unpaid through the payment date specified in such
notice (together with interest thereon at the rate set forth in Section 17.03 or
the highest rate permitted by applicable Law, whichever is less, from the
payment date specified in such notice to the date of actual payment), or the
portion thereof allocable to the applicable Premises as determined by Landlord
in its sole discretion plus (y) an amount equal to the aggregate principal
amount of the then outstanding indebtedness evidenced by the Financing Documents
plus interest accrued on the amount then outstanding on such purchase date to
the date of actual payment, or the portion thereof allocable to the applicable
Premises as determined by Landlord in its sole discretion.
(j) Subject to subparagraph (i) above, Landlord may, if Tenant
defaults under subparagraph (i) upon fifteen (15) days' notice to Tenant of the
date, time and place of any proposed sale (which notice Tenant agrees is
reasonable) and subject to any requirements of applicable Law, sell in good
faith and in a commercially reasonable manner, all or any part of the Premises
or Landlord's interest therein, at public or private sale, as Landlord may
determine, or otherwise dispose of, in good faith and in a commercially
reasonable manner, all or any part of the Premises or its interest therein, as
Landlord may determine, in each case free
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and clear of any rights of Tenant and without any duty to account to Tenant with
respect to such action or inaction or for any proceeds with respect thereto, in
which event Tenant's obligation to pay rent hereunder for periods commencing
after the date of such sale shall be terminated or proportionately reduced, as
the case may be (except to the extent that rent is to be included in the
computation under subparagraph (i) or (k), if Landlord shall elect to exercise
its right thereunder).
(k) If Landlord shall have sold the entire Premises or its entire
interest therein pursuant to subparagraph (j), Landlord may demand that Tenant
pay to Landlord and Tenant shall pay to Landlord on the date of such sale, as
liquidated damages for loss of a bargain and not a penalty (in lieu of rent due
for any period commencing after the date of such sale), any accrued and unpaid
rent and other amounts accrued and unpaid hereunder through the date of such
sale, plus the amount by which the amount required to be paid by Tenant under
subparagraph (i) determined as of such purchase date exceeds the amount obtained
pursuant to subparagraph (j) and applied to the payment of the then outstanding
indebtedness evidenced by the Financing Documents as of the date of actual
payment and any unpaid and other amounts rent accrued and unpaid through the
payment date specified in such notice (together with interest thereon at the
rate specified in Section 17.03 or the highest rate permitted by applicable Law,
whichever is less from the payment date specified in such notice to the date of
actual payment).
(l) LANDLORD AND TENANT AGREE AND ACKNOWLEDGE THAT IT WOULD BE
IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE ACTUAL DAMAGES WHICH
LANDLORD WOULD SUFFER IN THE EVENT OF TENANT'S DEFAULT AND FAILURE TO COMPLETE
THE PURCHASE OF ANY PROPERTY IN ACCORDANCE WITH THE TERMS OF THIS LEASE
INCLUDING SUBPARAGRAPHS (i) AND (k) ABOVE. THE PARTIES HEREBY AGREE THAT A
REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT THAT LANDLORD WOULD SUFFER IN THE
EVENT OF TENANT'S DEFAULT AND FAILURE TO COMPLETE THE PURCHASE OF ANY PROPERTY
IS AND SHALL BE AN AMOUNT EQUAL TO THE DAMAGES SET FORTH IN CONFORMANCE WITH
SUBPARAGRAPHS (i) AND (k) ABOVE.
(m) In addition to the other rights and remedies set forth herein,
Landlord shall have the right to continue this Lease in effect with respect to
any of the Premises and, as permitted by Section 1951.4 of the California Civil
Code, to enforce, by suit or otherwise, all covenants and conditions hereof to
be performed or complied with by Tenant and exercise all of Landlord's rights
and remedies under this Lease, including, without limitation, the right to
recover rent from Tenant as it becomes due under this Lease, even though Tenant
has breached this Lease and abandoned any of the Premises. Acts of maintenance
or preservation, or efforts by Landlord or on Landlord's behalf to relet any of
the Premises, or the appointment of a receiver upon the initiative of Landlord
to protect Landlord's interest under this Lease shall not constitute a
termination of Tenant's right to possession of any of the Premises; provided,
however, that the foregoing enumeration shall not be construed as in any way
limiting the actions Landlord may take without terminating Tenant's right to
possession. In furtherance of the rights hereby granted to Landlord, and to the
extent, permitted by law, Tenant hereby appoints Landlord its agent and
attorney-in-fact, which appointment shall be deemed to be
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coupled with an interest and is irrevocable, with power of substitution, but
without any obligation on the part of Landlord, to enter any of the Premises
upon a material default hereunder and remove therefrom all persons and property
(with the right to store such property on such Premises in a public warehouse or
elsewhere at the cost and risk and for the account of Tenant) and to alter such
Premises in such manner as Landlord may deem necessary or advisable so as to put
such Premises in good order and to make the same rentable and from time to time
sublet such Premises or any part thereof for such term or terms whether or not
extending beyond the then current term of this Lease (but such sublease may
provide for a new and successive lease to commence immediately upon the
termination of this Lease), at such rentals and upon such other terms as
Landlord in its sole discretion may deem advisable, and with the right (but not
the obligation) to make alterations and repairs to such Premises; and Tenant
agrees to pay to Landlord on demand all reasonable expenses incurred by Landlord
in such subletting, and in altering, repairing and putting such Premises in good
order and condition, and in reletting the same, including fees and expenses of
attorneys and architects, and all other reasonable expenses or commissions;
provided that Landlord will not sublet such Premises without first giving Tenant
thirty (30) days after the occurrence of the default to sublet the applicable
Premises or assign this Lease on Tenant's own initiative in accordance with the
provisions of this Lease governing assignment and subletting. Landlord shall be
Tenant's agent and representative on the applicable Premises in respect of all
matters arising under or in connection with any such sublease made for Tenant by
Landlord. Under each such sublease, Tenant shall retain the right to enter upon
and use the Leased Premises, subject to the terms and conditions of such
sublease and the rights of the sublessee thereunder. Tenant further agrees to
pay to Landlord, following the date of such subletting, to and including the
date provided in this Lease for the expiration of the Lease Term, the sums of
money which would have been payable by Tenant as rent, deducting only the net
amount of rent, if any, which Landlord shall actually receive (after deducting
from the gross receipts the expenses, costs and payments of Landlord which in
accordance with the terms of this Lease would have been borne by Tenant) in the
meantime from and by any such subletting of the applicable Premises, and Tenant
hereby agrees to remain liable for all sums otherwise payable by Tenant under
this Lease, including, but not limited to, the expenses of Landlord aforesaid,
as well as for any deficiency aforesaid. Landlord shall have the right from time
to time to begin and maintain successive actions or other legal proceedings
against Tenant for the recovery of such deficiency, expenses or damages or for a
sum equal to any installments of rent and other sums payable hereunder, and to
recover the same upon the liability of Tenant herein provided, which liability
it is expressly covenanted shall survive the commencement or determination of
any action to secure possession of any of the Premises. Nothing herein contained
shall be deemed to require Landlord to wait to begin such action or other legal
proceedings until the date when this Lease would have expired by limitation had
there been no such default. Notwithstanding any such subletting without
termination, pursuant to the terms hereof, Landlord shall retain the right to
and may at any time thereafter elect to terminate this Lease or Tenant's right
to possession of the applicable Premises for any previous breach which remains
uncured or for any subsequent breach by giving Tenant written notice thereof as
herein provided, and in such event Tenant shall forfeit any rights or interest
under any such sublease and thereafter the obligations of any such sublessee
shall run directly to Landlord for its own account. Upon application by
Landlord, a receiver may be appointed to take possession of any of the Premises,
exercise all rights granted to Landlord as agent and attorney-in-fact for Tenant
set forth in this subparagraph (m) and apply any rentals collected
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from any of the Premises as hereinabove provided. No taking of possession of any
of the Premises or other act by Landlord as the agent and attorney-in-fact for
Tenant pursuant to the foregoing provisions, nor any subletting by Landlord for
Tenant pursuant to the foregoing provisions, nor any such appointment of a
receiver shall constitute or be construed as an election by Landlord to
terminate this Lease or Tenant's right to possession of any of the Premises
unless a written notice of such intention be given to Tenant.
(n) In addition to the foregoing, Tenant, and its successors and
assigns, shall at all times indemnify Landlord and each other Indemnitee for,
defend (with counsel reasonably satisfactory to Landlord) Landlord and each
other Indemnitee against and save Landlord and each other Indemnitee harmless
from any liability, loss, cost, injury, damage or other expense or risk
(including, without limitation, any increase in the interest rate(s) payable
under any of the Financing Documents, late charges, default interest or other
penalties, and attorneys' fees and expenses, and including any loss by Landlord
of any management fee payable to Landlord out of Net Cash Flow and Net Sales
Proceeds (as such terms are defined in the Financing Documents) as provided in
the Financing Documents) whatsoever, to the extent proximately and to the extent
caused (directly or indirectly) by (i) the failure for any reason on the part of
Tenant to perform, observe or comply with any of the covenants, conditions and
obligations under this Lease to be performed, observed or complied with by
Tenant, and/or (ii) the failure for any reason of any representation, warranty
or covenant given by Tenant in connection with the execution of this Lease or
any other Transaction Document to be materially true, complete and accurate,
including, without limitation, to the extent any of the foregoing causes
Landlord to be unable to perform, observe or comply with any of the covenants,
conditions, obligations, representations or warranties of any of the Financing
Documents or otherwise constitutes a default thereunder.
(o) If Tenant shall be in default in the observance or performance
of any term or covenant on Tenant's part to be observed or performed under any
of the provisions of this Lease then, without thereby waiving such default,
Landlord or any Lender may, but shall be under no obligation to, take all
action, including, without limitation, entry upon the Premises or any part
thereof, to perform the obligation of Tenant hereunder immediately and without
notice in the case of any emergency or failure to provide insurance and upon
five (5) days notice to Tenant in other cases. All reasonable expenses incurred
by Landlord or any Lender in connection therewith, including, without
limitation, attorneys' fees and expenses (including, without limitation, those
incurred in connection with any appellate proceedings) shall constitute
additional rent and shall be paid by Tenant to Landlord or such Lender as the
case may be promptly upon demand.
(p) If Tenant shall be in default in the performance of any of its
obligations hereunder, Tenant shall pay to Landlord or any Lender, promptly on
demand, all reasonable expenses incurred by Landlord or such Lender as a result
thereof, including, without limitation, reasonable attorneys' fees and expenses
(including, without limitation, those incurred in connection with any appellate
proceedings). If Landlord or any other Indemnitee shall be made a party to any
litigation, except as a result of the negligence or misconduct of Landlord or
the gross negligence or willful misconduct of Landlord, or such other
Indemnitee, commenced against Tenant and Tenant shall fail to provide Landlord
or any other Indemnitee, with counsel
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reasonably approved by Landlord or such other Indemnitee and pay the expenses
thereof, Tenant shall pay all reasonable costs and reasonable attorneys' fees
and expenses in connection with such litigation (including, without limitation,
fees and expenses incurred in connection with any appellate proceedings).
17.03 Administrative Fee. Tenant hereby acknowledges that late payment
by Tenant to Landlord of rent and other sums due hereunder may cause Landlord to
incur administrative costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Such administrative costs may
include, but are not limited to, processing and accounting charges, late charges
and attorneys' fees and expenses which may be imposed on Landlord by the terms
of any superior lease, or under any Financing Documents. Accordingly, if any
installment of rent or any other sum due from Tenant is not received by Landlord
or Landlord's designee within ten (10) days after written notice from Landlord,
then, without any requirement for further notice to Tenant, Tenant shall pay to
Landlord an administrative fee consisting of (a) default interest equal to the
reference rate announced publicly from time to time by Bank of America, N.T. &
S.A., or any successor thereto, plus six percent (6%) per annum (but in no event
higher than the maximum rate permitted by Law) multiplied by such overdue amount
from the date such overdue amount was due until paid plus (b) a late charge
equal to two percent (2%) of such overdue amount (the "Administrative Fee"), in
addition to (but without duplication of) all other amounts referred to in clause
(iv) of Section 17.02(h). The parties hereby agree that such Administrative Fee
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of late payment by Tenant. Acceptance of such Administrative Fee by
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder.
17.04 Default by Landlord. Landlord will commit a default if Landlord
fails to perform any provision of this Lease required of it and the failure is
not cured within 30 days after notice has been given to Landlord. If, however,
the failure cannot reasonably be cured within the cure period, Landlord will not
be in default of this Lease if Landlord commences to cure the failure within the
cure period and diligently and in good faith continues to cure the failure.
Notices given under this Section 17.04 will specify the alleged breach and the
applicable Lease provisions. From and after the repayment in full of the
indebtedness evidenced by the Financing Documents, Tenant may, after expiration
of the cure period unless there is an emergency, correct or remedy any failure
of Landlord not timely cured and deduct the reasonable cost paid by Tenant from
future rent as it becomes due.
17.05 Mitigation. Landlord and Tenant will each exercise best efforts
to mitigate the damages caused by the other party's breach of this Lease.
Efforts to mitigate damages will not be construed as a waiver of the
nonbreaching party's right to recover damages.
17.06 Lender's Right to Cure. The respective lenders of each party will
have the right, in the party's behalf, to cure the party's alleged breach within
the same time period allocated under this Lease. Landlord shall upon written
request from Tenant provide copies of any notices of default given to Tenant
hereunder to lenders of Tenant as specified in such written request, provided,
however, that Landlord shall not be deemed to be in default hereunder if
Landlord
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fails to provide any such notices to any of Tenant's lenders nor shall any such
failure relieve Tenant from any liability hereunder or affect any of Landlord's
rights or remedies hereunder.
17.07 Certain Waivers. To the extent (if any) that this Lease may be
interpreted to be a guarantee of the indebtedness evidenced by any of the
Financing Documents, Tenant hereby expressly waives:
(i) notice of the acceptance by Tenant of this Lease and
the other Transaction Documents;
(ii) notice of the existence or creation or non-payment of
all or any of the obligations under this Lease or the other Transaction
Documents;
(iii) presentment, demand, notice of dishonor, protest,
notice of protest and all other notices whatsoever;
(iv) all diligence in collection or protection of or
realization upon the obligations under this Lease or the other Transaction
Documents or any thereof, any obligation hereunder or any security for or
guaranty of any of the foregoing;
(v) any right to direct or affect the manner or timing of
any Lender's enforcement of its rights or remedies;
(vi) any defense, right of set-off or other claim
whatsoever (other than payment in full and performance in full of all of the
obligations under this Lease or under any other Transaction Documents in
accordance with the terms hereof or thereof) that Landlord or any third party
may or might have to the payment or performance of the obligations under the
Transaction Documents;
(vii) any and all benefits and defenses to or discharges of
liability that may arise from any insolvency, bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution, liquidation, or similar
proceeding with respect to Landlord or Tenant;
(viii) any and all defenses which would otherwise arise upon
the occurrence of any default hereunder or under any other Transaction Document,
or upon the taking of any action by any other Lender permitted hereunder or
thereunder;
(ix) any defense, right of set-off, claim or counterclaim
whatsoever (other than payment and performance in full of all of the obligations
under this Lease or the other Transaction Documents in accordance with the terms
hereof or thereof and the documents securing those obligations), and any and all
other rights, benefits, protections and other defenses which Tenant may have,
now or at any time hereafter, to full payment or performance of the obligations
pursuant to the terms of this Lease and the other Transaction Documents,
including, without limitation, under California Civil Code Sections 2809, 2810,
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2819, 2821, 2845, 2849, 2850 and 2855, and California Code of Civil Procedure
Sections 580a, 580b and 580d, and all successor sections;
(x) any and all defenses against any claim by any Lender
following any Lender's nonjudicial foreclosure of any of the Financing Documents
securing the obligations under this Lease or the other Transaction Documents,
including, but not limited to, the defense that would otherwise have been
available to Tenant by virtue of any Lender's nonjudicial foreclosure having
destroyed the right to pursue a deficiency against Landlord, to which Tenant
would have otherwise been subrogated, in accordance with California Civil Code
Section 580d, or any subsequent enactments, modifications, and recodifications
thereof; and
(xi) all other principles or provisions of law, if any,
that conflict with the terms of this Lease or the other Transaction Documents,
including, without limitation, the effect of any circumstances that may or might
constitute a legal or equitable discharge of a guarantor or surety.
In addition to the specific waivers set forth in this Section
17.07 above, Tenant hereby waives and shall have no right of subrogation,
reimbursement, exoneration, contribution or indemnity against Landlord or any
guarantor for any reason, including but not limited to, by reason of any
payments made or acts performed by Tenant in compliance with the obligations of
Tenant hereunder or any actions taken by any Lender pursuant to this Lease or
pursuant to the other Transaction Documents.
Tenant agrees that nothing contained in this Lease or the other
Transaction Documents shall prevent any Lender from suing to collect on the
obligations under this Lease or the other Transaction Documents or from
exercising concurrently or successively any rights available to it at law and/or
in equity or under any of the Transaction Documents, and that the exercise of
any of the aforesaid rights shall not constitute a legal or equitable discharge
of Tenant. Tenant hereby authorizes and empowers any Lender to exercise, in its
sole discretion, any rights and remedies, or any combination thereof, which may
then be available, since it is the intent and purpose of Tenant that the
obligations hereunder shall be absolute, independent, and unconditional under
any and all circumstances. Notwithstanding any foreclosure of the lien of any
Financing Document with respect to any or all of any real or personal property
secured thereby, whether by the exercise of the power of sale contained therein,
by an action for judicial foreclosure, or by the acceptance of a deed or
possession of any other collateral in lieu of foreclosure, Tenant shall remain
bound under this Lease and the other Transaction Documents.
ARTICLE 18
SUBORDINATION
At Landlord's option, this Lease shall be subordinate to any superior
lease, mortgage, deed of trust, or any other hypothecation or security now or
hereafter placed upon any of the Premises and to any and all advances made on
the security thereof and to all renewals, modifications, consolidations,
replacements, and extensions thereof provided that Landlord and
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any mortgagee or beneficiary of Landlord shall execute the Subordination
Agreement (as defined below) with Tenant. In furtherance thereof, Tenant hereby
agrees, upon request by Landlord, to execute and deliver a subordination,
non-disturbance and attornment agreement substantially in the form attached
hereto as Exhibit F (a "Subordination Agreement") with respect to any such
superior lease, the Financing Documents, and any other mortgage, deed of trust,
hypothecation, or security.
ARTICLE 19
QUIET ENJOYMENT
Subject to the terms and conditions of this Lease and conditional upon
the performance of all of the provisions to be performed by Tenant hereunder,
Landlord agrees to secure to Tenant during the Lease Term and any and all
extensions thereof, the quiet and peaceful possession of each of the Premises
and all rights and privileges appertaining thereto and under this Lease.
ARTICLE 20
REPRESENTATIONS AND WARRANTIES
20.01 Representations and Warranties. To induce Landlord to enter into
this Lease, Tenant represents and warrants to Landlord and each Lender as
follows:
(a) It is a corporation duly organized and validly existing, in
good standing under the laws of California, has stock outstanding which has been
duly and validly issued, and is qualified to do business and is in good standing
in the jurisdiction in which each of the Premises is located with full power and
authority to consummate the transactions contemplated hereby.
(b) The execution and delivery of this Lease has been duly
authorized by all action as may be required under the terms and provisions of
its governing instruments and the laws of the jurisdiction where each of the
Premises is located; this Lease will not violate or result in any breach of, or
constitute a default under, or result in the creation of any lien, encumbrance,
attachment, charge or other right or claim of any other party upon any assets of
Tenant or upon Tenant's beneficiary interest under the terms of this Lease
pursuant to any instrument or applicable Laws to which Tenant is a party or by
which it may be bound or create in favor of or grant to any third party any
interest whatsoever in Tenant's interest under the terms of this Lease; this
Lease is valid and enforceable in accordance with its terms, and the execution
and delivery of this Lease, and the consummation of the transactions
contemplated hereby, do not require the approval or consent of any governmental
authority having jurisdiction over Tenant or its property, or if such approval
or consent is required, it has been obtained.
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(c) The financial statements heretofore delivered to Landlord
with respect to Tenant, Guarantor and the Premises are true and correct in all
material respects, have been prepared in accordance with generally accepted
accounting principles, and fairly present the respective financial conditions of
the subjects thereof as of the respective dates thereof. No materially adverse
change has occurred in the financial conditions reflected therein since the
respective dates thereof.
(d) There are no actions, suits or proceedings pending, or to the
best of Tenant's knowledge, threatened, against or affecting it or any of the
Premises or any guarantor of this Lease, or involving the validity or
enforceability of this Lease, at law or in equity, or before or by any
governmental authority except actions, suits and proceedings fully covered by
insurance or which, if adversely determined, would not materially impair the
ability of Tenant or any guarantor of this Lease to satisfy their obligations
under this Lease or any guarantee of this Lease, and except the Lake Forest
Condemnation Action.
(e) Tenant is not in default under any obligation for the payment
of borrowed money, for the deferred purchase price of property or for the
payment of any rent under any lease agreement, which, either individually or in
the aggregate, would adversely affect the financial condition of Tenant, or the
ability of Tenant to perform its obligations hereunder, or comply with the terms
of this Lease.
In addition, without limitation of the foregoing, the representations and
warranties of Tenant contained in the Purchase Agreement are hereby incorporated
herein by this reference.
All representations and warranties contained herein or made in
writing by or on behalf of Tenant in connection with the transactions
contemplated hereby shall survive the execution and delivery of this Lease and
each other document and instrument delivered in connection with the consummation
of the transactions contemplated hereby. All statements contained in any other
instrument delivered by or on behalf of Tenant pursuant hereto or in connection
with the transactions contemplated hereby shall be deemed representations and
warranties by Tenant hereunder.
20.02 Financial Statements. Tenant hereby covenants and agrees to
deliver audited annual financial statements for Tenant and any guarantor of this
Lease to Landlord within ninety (90) days after the end of Tenant's and any such
guarantor's respective fiscal years, and management prepared and certified
quarterly financial statements, to the extent such statements are otherwise
prepared for other reasons, for Tenant and any such guarantor within sixty (60)
days after the end of Tenant's and any such guarantor's respective fiscal
quarters. Tenant shall deliver to Landlord such other financial and operating
statements of Tenant and Guarantor and each of the Premises as the Lenders may
require under the Financing Documents. Tenant agrees to assist Landlord in
obtaining consent from Tenant's auditors in the event that the audit report is
required to be included in a regulatory report to be filed by Landlord. Such
financial statements shall be true and correct in all material respects, be
prepared in accordance with generally accepted accounting principles, and fairly
present the respective financial conditions of the subjects thereof as of the
respective dates thereof. If Tenant's financial statements are prepared on a
consolidated basis, Tenant hereby covenants and agrees to prepare financial
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statements specifically relating to the operation of each of the Premises.
Tenant further agrees to deliver unit level profit and loss statements on the
operation of each of the Premises within forty-five (45) days after the end of
Tenant's and any guarantor's respective fiscal quarters. Landlord will maintain
confidential and not disclose to third parties the financial information
furnished or revealed pursuant to this Lease except as may be required, in
Landlord's reasonable judgment, for the exercise of Landlord's rights under this
Lease, as may be required by Law or compelled by legal proceedings, for
disclosure in confidence to the Lenders or prospective or actual lenders,
investors or purchasers, or to third parties in connection with the closing of
this transaction.
ARTICLE 21
SURRENDER OF PREMISES
Except for changes resulting from eminent domain proceedings, at the
expiration or sooner termination of the Lease Term, Tenant shall surrender each
of the Premises in good and clean condition, reasonable wear and tear excepted,
and shall surrender all keys for each of the Premises to Landlord at the place
then fixed for the payment of rent and shall inform Landlord of all combinations
on locks, safes and vaults, if any, in each of the Premises. Tenant shall at
such time remove all of Tenant's property, as well as any alterations or
improvements other than permitted Alterations made in accordance with Article
12, if requested to do so by Landlord, and shall repair any damage to any of the
Premises caused thereby, and any or all of such property not so removed shall,
at Landlord's option, become the exclusive property of Landlord or be disposed
of by Landlord, at Tenant's cost and expense, without further notice to or
demand upon Tenant. If any of the Premises are not so surrendered, Tenant shall
indemnify Landlord and any mortgagee or beneficiary of Landlord against loss or
liability resulting from the delay by Tenant in so surrendering such Premises
including, without limitation, any claims made by any succeeding occupant
founded on such delay. Tenant's obligation to observe or perform this covenant
shall survive the expiration or other termination of the Lease Term with respect
to all or any of the Premises.
ARTICLE 22
BANKRUPTCY OR INSOLVENCY
22.01 Bankruptcy or Insolvency. Subject to applicable Law, Landlord and
Tenant acknowledge and agree that the provisions of this Section 22.01 shall
control notwithstanding anything to the contrary contained in this Lease:
(a) In the event that Tenant shall become a debtor under Chapter
7 of the Bankruptcy Reform Act of 1978, 11 U.S.C. 1 et seq ("Bankruptcy Code"),
and Tenant's trustee or Tenant shall elect to assume this Lease for the purpose
of assigning the same or otherwise, such election and assignment may be made
only if the provisions of this Section 22.01 are satisfied. If Tenant or
Tenant's trustee shall fail to assume this Lease in its entirety (and as to
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all but not some of the Properties) within sixty (60) days after the entry of an
order for relief, this Lease shall be deemed to have been rejected in its
entirety. Immediately thereupon Landlord shall be entitled to possession of each
of the Premises without further obligation to Tenant or Tenant's trustee and
this Lease, upon the election of Landlord, shall terminate, but Landlord's right
to be compensated for damages shall survive, whether or not this Lease shall be
terminated.
(b) In the event that a voluntary petition for reorganization is
filed by Tenant, or an involuntary petition is filed against Tenant under
Chapter 11 of the Bankruptcy Code, or in the event of the entry of an order for
relief under Chapter 7 in a case which is then transferred to Chapter 11,
Tenant's trustee or Tenant, as debtor-in-possession, must elect to assume this
Lease in its entirety (and as to all but not some of the Properties) within
sixty (60) days from the date of the filing of the petition under Chapter 11 or
the transfer thereto, or Tenant's trustee or the debtor-in-possession shall be
deemed to have rejected this Lease in its entirety. Immediately thereupon
Landlord shall be entitled to possession of each of the Premises without further
obligation to Tenant or Tenant's trustee and this Lease, upon the election of
Landlord, shall terminate, but Landlord's right to be compensated for damages,
shall survive, whether or not this Lease shall be terminated.
(c) No election by Tenant's trustee or the debtor-in-possession
to assume this Lease, whether under Chapter 7 or Chapter 11, shall be effective
unless each of the following conditions has been satisfied:
(i) Tenant's trustee or the debtor-in-possession has cured
all defaults under this Lease, or has provided Landlord with evidence
satisfactory to Landlord that it will cure all defaults susceptible of
being cured by the payment of money within ten (10) days from the date
of such assumption and that it will cure all other defaults under this
Lease which are susceptible of being cured by the performance of any
act within thirty (30) days after the date of such assumption.
(ii) Tenant's trustee or the debtor-in-possession has
compensated, or has provided Landlord with evidence satisfactory to
Landlord that, within ten (10) days from the date of such assumption,
that it will compensate Landlord for any actual pecuniary loss incurred
by Landlord arising from the default of Tenant, Tenant's trustee, or
the debtor-in-possession as indicated in any statement of actual
pecuniary loss sent by Landlord to Tenant's trustee or the
debtor-in-possession.
(iii) Tenant's trustee or the debtor-in-possession (A) has
provided Landlord with "Assurance", as hereinbelow defined, of the
future performance of each of the obligations under this Lease of
Tenant, Tenant's trustee, or the debtor-in- possession, and (B) shall,
in addition to any other security deposits held by Landlord, deposit
with Landlord, as security for the timely payment of Annual Rent and
for the performance of all other obligations of Tenant under this
Lease, an amount equal to three (3) monthly installments of Annual Rent
(at the rate then payable), and (C) pay in advance to Landlord on the
date each installment of Annual Rent is due and payable, one-twelfth of
Tenant's annual obligations for Impositions to be made by Tenant
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pursuant to this Lease. The obligations imposed upon Tenant's trustee
or the debtor-in- possession by this Section 22.01 shall continue with
respect to Tenant or any assignee of this Lease, after the conclusion
of proceedings under the Bankruptcy Code.
(iv) Such assumption will not breach or cause a default under
any provision of any other lease, mortgage, financing agreement or
other agreement by which Landlord is bound, relating to the Premises.
(v) Such assumption shall be with respect to all of the
Properties still subject to this Lease, and may not be made only as to
particular sites but not others.
(d) For purposes of Section 22.01(c)(iii) hereof, Landlord and
Tenant shall acknowledge that "Assurance" shall mean no less than:
(i) Tenant's trustee or the debtor-in-possession has and
will continue to have sufficient unencumbered assets after the payment
of all secured obligations and administrative expenses to assure
Landlord that sufficient funds will be available to fulfill the
obligations of Tenant under this Lease; and
(ii) To secure to Landlord the obligations of Tenant,
Tenant's trustee or the debtor-in-possession and to assure the ability
of Tenant, Tenant's trustee or the debtor-in-possession to cure the
defaults under this Lease, monetary and/or nonmonetary, there shall
have been: (A) sufficient cash deposited with Landlord, or (B) the
bankruptcy court shall have entered an order segregating sufficient
cash payable to Landlord, and/or (C) Tenant's trustee or the
debtor-in-possession shall have granted to Landlord a valid and
perfected first lien and security interest and/or mortgage in property
of Tenant, Tenant's trustee or the debtor-in-possession, acceptable as
to value and kind to Landlord.
(e) In the event that this Lease is assumed in accordance with
Section 22.01(b) hereof and thereafter Tenant is liquidated or files, or has
filed against it, a subsequent petition under any provision of the Bankruptcy
Code or any similar statute for relief of debtors, Landlord may, at its option,
terminate this Lease and all rights of Tenant hereunder, by giving Tenant notice
of its election to so terminate within thirty (30) days after the occurrence of
either of such events.
(f) If Tenant's trustee or the debtor-in-possession has assumed
this Lease pursuant to the terms and provisions of this Section 22.01 for the
purpose of assigning (or elects to assign) this Lease, this Lease may be so
assigned only if the proposed assignee has provided adequate assurance of future
performance of all of the terms, covenants and conditions of this Lease to be
performed by Tenant. Landlord shall be entitled to receive all consideration for
such assignment, whether cash or otherwise. As used in this Section 22.01(f)
"adequate assurance of future performance" shall mean at least that clauses (B)
and (C) of Section 22.01(c)(iii)hereof and each of the following conditions, has
been satisfied:
(i) The proposed assignee has furnished Landlord with a
current financial statement audited by a certified public accountant
determined in accordance with
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generally accepted accounting principles consistently applied
indicating a credit rating, net worth and working capital in amounts
which Landlord reasonably determines to be sufficient to assure the
future performance of such assignee of Tenant's obligations under this
Lease, but in no event indicating a net worth less than the net worth
of the Tenant and any guarantors of this Lease, on the date of
execution hereof.
(ii) Such assignment will not breach or cause a default
under any provision of any other lease, mortgage, financing agreement
or other agreement by which Landlord is bound, relating to the
Premises.
(iii) The proposed assignment will not release or impair any
guarantee under this Lease.
(g) When, pursuant to the Bankruptcy Code, Tenant's trustee or
the debtor-in- possession shall be obligated to pay reasonable use and occupancy
charges for the use of the Premises, such charges shall not be less than the
Annual Rent and all additional rent payable by Tenant under this Lease and shall
be paid at the times and when due as though such charges were Annual Rent and
additional rent.
(h) Anything in this Lease to the contrary notwithstanding,
neither the whole nor any portion of Tenant's interest in this Lease or its
estate in the Premises shall pass to any trustee, receiver, assignee for the
benefit of creditors, or any other similar person or entity, or otherwise by
operation of law under the Bankruptcy Code or any similar federal statute now or
hereinafter enacted, or under the laws of any state, district or municipality
having jurisdiction of the person or property of Tenant unless Landlord shall
have consented to such transfer in writing. No acceptance by Landlord of rent or
any other payments from any such trustee, receiver, assignee, person or other
entity shall be deemed to constitute such consent by Landlord nor shall it be
deemed a waiver of Landlord's right to terminate this Lease for any transfer of
Tenant's interest under this Lease without such consent.
ARTICLE 23
HAZARDOUS MATERIALS
23.01 Representations and Warranties. Notwithstanding anything to the
contrary which may be contained in this Lease, and in addition to the
representation and warranties contained in the Purchase Agreement, Tenant
represents, warrants and covenants to Landlord and each other Indemnitee as
follows:
(a) To the best of Tenant's Knowledge (as defined below), except
as set forth in the environmental and engineering reports for the Premises
previously delivered by Tenant or its affiliates to Landlord and the
environmental and engineering reports for the Premises prepared by Landlord in
connection herewith (collectively, the "Reports), there are no and have been no
violations of the Relevant Environmental Laws (as hereinafter defined)
respecting any of the Premises and no consent orders have been entered with
respect thereto, except where
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noncompliance could not reasonably be expected to have a materially adverse
effect on the value or the use or operation of the Premises for its intended
purpose or the ability of Tenant to perform its obligations under this Lease (a
"Material Adverse Effect").
(b) To the best of Tenant's Knowledge and except as set forth in
the Reports, there are no and have been no Hazardous Wastes (as hereinafter
defined) or Asbestos (as hereinafter defined) either at, upon, under or within,
or discharged or emitted at or from, any of the Premises, including, but not
limited to, the air, soil, surface, and ground water; no Hazardous Wastes or
Asbestos have flowed, blown or otherwise become present at any of the Premises
from neighboring land; and no Hazardous Wastes or Asbestos have been removed
from any of the Premises other than those Hazardous Wastes or Asbestos which are
used and/or incidental to the ordinary course of Tenant's business provided that
the same are used, stored, handled and disposed of in accordance with all
Relevant Environmental Laws and all other applicable Laws, industry standards
and manufacturers specifications.
(c) None of the Premises will be used for the purpose of storing
Hazardous Wastes, and no such storage or use will otherwise be allowed on any of
the Premises which will cause or increase the likelihood of causing the release
of Hazardous Wastes onto any of the Premises other than those Hazardous Wastes
which are used and/or incidental to the ordinary course of Tenant's business
provided that the same are used, stored, handled and disposed of in accordance
with all Relevant Environmental Laws and all other applicable Laws, industry
standards and manufacturers specifications. Neither Tenant, nor to the best of
Tenant's Knowledge and except as set forth in the Reports any third party, has
installed, used or removed any storage tanks on, from or in connection with the
Premises except in full compliance with all Relevant Environmental Laws, and to
the best of Tenant's Knowledge, there are no storage tanks or wells (whether
existing or abandoned) located on, under or about the Premises. To the best of
Tenant's Knowledge, except as set forth in the Reports, the Property does not
consist of any building materials that contain Hazardous Wastes or Asbestos.
(d) Tenant is not aware of any claims or litigation, and has not
received any communication from any person (including any governmental
authority), concerning the presence or possible presence of Hazardous Wastes or
Asbestos at or adjacent to any of the Premises or concerning any violation or
alleged violation of the Relevant Environmental Laws respecting any of the
Premises. Tenant shall promptly notify Landlord of any such claims and shall
furnish Landlord with a copy of any such communications received by Tenant.
(e) Tenant shall notify Landlord promptly and in reasonable detail
in the event that Tenant becomes aware of or suspects the presence of Hazardous
Wastes (other than those Hazardous Wastes which are used and/or incidental to
the ordinary course of Tenant's business provided that the same are used,
stored, handled and disposed of in accordance with all Relevant Environmental
Laws and all other applicable Laws, industry standards and manufacturers
specifications) or a violation of the Relevant Environmental Laws, at or
adjacent to any of the Premises.
(f) Tenant shall ensure that the Premises complies and continues
to comply in all respects with all Relevant Environmental Laws.
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(g) If the Premises or any part thereof are used or maintained so
as to subject Tenant, Landlord or any Lender or any other mortgagee or
beneficiary of Landlord or the user of any of the Premises to a claim of
violation of the Relevant Environmental Laws (unless contested in good faith by
appropriate proceedings), Tenant shall immediately cease or cause a cessation of
such use or operations and shall remedy and fully cure any conditions arising
therefrom, at its own cost and expense.
(h) Upon Landlord's or any Lender's reasonable belief that there
is a material breach of one of the environmental representations or warranties
set forth above, Tenant shall permit Landlord or such Lender, at its option, at
any time upon five (5) days prior written notice to Tenant, to cause or conduct
a complete environmental audit to be performed. The audit shall be at Tenant's
sole cost and expense.
23.02 Definitions.
(a) The "Relevant Environmental Laws," as referred to herein,
shall mean all applicable federal, state and local laws, rules, regulations,
orders, judicial determinations, and decisions or determinations by any
judicial, legislative or executive body of any governmental or
quasi-governmental entity, whether in the past, the present or the future, with
respect to: (A) the installation, existence, or removal of, or exposure to,
Asbestos on any of the Premises; (B) the existence on, discharge from, or
removal from any of the Premises of Hazardous Wastes; or (C) the effects on the
environment, health or safety of any of the Premises or of any activity now,
previously, or hereafter conducted on any of the Premises. The Relevant
Environmental Laws shall include, but not be limited to, the following: (1) the
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
Sections 9601 et seq.; the Superfund Amendments and Reauthorization Act, Public
Law 99-499, 100 Stat. 1613; the Resource Conservation and Recovery Act, 42
U.S.C. Sections 6901 et seq.; the National Environmental Policy Act, 42 U.S.C.
Section 4321; the Safe Drinking Water Act, 42 U.S.C. Sections 300F et seq.; the
Toxic Substances Control Act, 15 U.S.C. Section 2601; the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801; the Federal Water Pollution Control
Act, 33 U.S.C. Sections 1251 et seq.; the Clean Air Act, 42 U.S.C. Sections 7401
et seq.; and the regulations promulgated in connection therewith; (2)
Environmental Protection Agency regulations pertaining to Asbestos (including 40
C.F.R. Part 61, Subpart M); Occupational Safety and Health Administration
regulations pertaining to Asbestos (including 29 C.F.R. Sections 1910. 1001 and
1926.58); as each may now or hereafter be amended; and (3) any other federal,
state and local laws and regulations pertaining to Hazardous Wastes and/or
Asbestos;
(b) "Asbestos," as referred to herein, shall have the meanings
provided under the Relevant Environmental Laws, and shall include, but not be
limited to, asbestos fibers and friable asbestos, as such terms are defined
under the, Relevant Environmental Laws; and
(c) "Hazardous Wastes," as referred to herein, shall mean any of
the following as defined by the Relevant Environmental Laws: solid wastes;
petroleum and petroleum derivatives; natural or synthetic gas; radon gas; toxic
or hazardous substances, wastes, pollutants or contaminants (including, but not
limited to, polychlorinated biphenyls ("PCB's", paint containing lead, and urea
formaldehyde); and discharges of sewage or effluent.
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(d) "Knowledge" shall mean the actual knowledge of any executive
officer after due inquiry of the property management.
23.03 Tenant's Obligation. At its sole cost and expense, Tenant shall:
(a) Pay immediately when due the cost of compliance with the
Relevant Environmental Laws.
(b) Keep each of the Premises free of any lien imposed pursuant
to the Relevant Environmental Laws.
(c) Comply at all times, at Tenant's sole expense, with the
provisions of the Financing Documents regarding hazardous wastes or asbestos
that are more stringent than the provisions of this Article 23.
23.04 Landlord Options. In the event that Tenant fails to comply with
the requirements of this Article 23, after notice to Tenant and the earlier of
the expiration of any applicable cure period hereunder, or the expiration of the
cure period permitted under the Relevant Environmental Laws, if any, or such
earlier time if Landlord or any Lender determines that life, person or property
is in jeopardy, Landlord or any Lender may, but shall not be obligated to,
exercise its right to do one or more of the following: (a) declare that such
failure constitutes a material default hereunder; and/or (b) take any and all
actions, at Tenant's expense, that Landlord or any Lender reasonably deems
necessary or desirable to cure said failure of compliance. Any costs incurred
pursuant to this Section 23.04 shall become immediately due and payable by
Tenant together with the applicable Administrative Fee, and shall be paid or
reimbursed to Landlord or any Lender promptly upon written notice from Landlord
or any Lender.
23.05 Indemnity. Neither Landlord nor any Indemnitee shall be liable
for and Tenant shall immediately pay to Landlord and each other Indemnitee when
incurred and shall indemnify, defend and hold Landlord and each other Indemnitee
harmless from and against, all loss, cost, liability, damage and expense
(including, but not limited to, attorneys' fees and expenses incurred in the
investigation, defense and settlement of claims) that Landlord or any other
Indemnitee may suffer or incur as a result of or in connection in any way with
any Asbestos or Hazardous Wastes now or hereafter present, discharged, released,
generated, disposed, transported or emitted to, from, in on or under any of the
Premises or in connection with any violation of any of the Relevant
Environmental Laws, or any environmental assessment or study from time to time
undertaken or requested by Tenant, Landlord or any Lender, or any breach of any
representation, covenant or undertaking by Tenant herein.
23.06 Survival. The provisions of this Article 23 shall survive the
expiration or termination of the Lease Term with respect to all or any of the
Premises.
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ARTICLE 24
GENERAL PROVISIONS
24.01 Estoppel Certificates. Each party ("Responding Party") shall at
any time upon not less than fifteen (15) business days' prior written notice
from the other party ("Requesting Party") execute, acknowledge, and deliver to
the Requesting Party a statement reasonably satisfactory to Landlord certifying
and acknowledging the following: (i) that this Lease represents the entire
agreement between Landlord and Tenant, and is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect) and the date to
which the Annual Rent and other charges are paid in advance, if any; and (ii)
that there are not, to the Responding Party's knowledge, any uncured defaults on
the part of the Requesting Party, or specifying such defaults if any are
claimed. Any such statement may be conclusively relied upon by any prospective
purchaser, mortgagee or encumbrancer of any of the Premises or of the business
of the Requesting Party.
24.02 Severability. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.
24.03 Entire Agreement. It is understood that there are no oral or
written agreements or representations between the parties hereto concerning the
subject matter of this Lease, except as set forth herein and in the other
Transaction Documents, and that this Lease and the other Transaction Documents
and the Exhibits hereto and thereto supersede and cancel any and all previous
negotiations, arrangements, representations, brochures, displays, projections,
estimates, agreements, and understandings, if any, made by Landlord or Tenant
with respect to the subject matter hereof, and none thereof shall be used to
interpret, construe, supplement, or contradict this Lease. This Lease and the
other Transaction Documents, and the Exhibits hereto and thereto, and all
amendments hereto, constitute and shall be considered to be the only agreement
between the parties hereto and their representatives and agents. All
negotiations and oral agreements acceptable to both parties have been merged
into and are included herein and therein and in the Exhibits hereto and thereto.
24.04 Notices. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal delivery, certified mail,
return-receipt requested or by nationally recognized overnight courier service
and, if given by mail or courier service, shall be deemed sufficiently given if
addressed to Tenant or to Landlord, as the case may be, at the addresses noted
in Article 1 hereof. Delivery by courier will be deemed given on the date
indicated in the courier's records; delivery by certified mail will be deemed
given on the date indicated on the return receipt. Either party may by notice to
the other specify a different street address for notice purposes. A copy of all
notices required or permitted to be given hereunder shall be concurrently
transmitted to such party or parties at such addresses as may from time to time
hereafter be designated by notice.
24.05 Waivers. No waiver by a party of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by the
other party of the same of any
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other provision. Landlord's consent to, or approval of, any act shall not be
deemed to render unnecessary the obtaining of Landlord's consent to or approval
of any subsequent act by Tenant. The acceptance of rent hereunder by Landlord
shall not be a waiver of any preceding breach by Tenant of any provision hereof,
other than the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent.
24.06 Recording. Either Landlord or Tenant shall, upon request of the
other, execute, acknowledge, and deliver to the other one or more "short form"
memoranda of this Lease for recording purposes in each county where any of the
Premises is located. Such memoranda shall be in a form reasonably acceptable to
Landlord and sufficient for Tenant to obtain a leasehold policy of title
insurance based thereon. In the event of any termination of this Lease, Tenant
agrees to execute and deliver to Landlord one or more termination agreements
satisfactory to Landlord, which termination agreement shall be similarly
recorded.
24.07 Holding Over. If Tenant remains in possession of the Premises or
any part thereof after the expiration or termination of the Lease Term, such
occupancy shall be a tenancy from month-to-month upon all the provisions of this
Lease pertaining to the obligations of Tenant and Tenant shall thereby waive its
rights of notice to quit, but all options, if any, granted under the terms of
this Lease shall be deemed terminated and be of no further force or effect. The
monthly rental during such hold-over period shall be equal to one hundred fifty
percent (150%) of the monthly installment of Annual Rent payable immediately
prior to expiration or termination of the Lease Term. In addition, Tenant shall
continue to be obligated to pay all Impositions and other amounts required to be
paid by the terms of this Lease.
24.08 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
24.09 Choice of Law; Venue. This Lease shall be governed by the laws of
the State of California without regard to conflicts of laws, provided that the
laws of the jurisdiction in which a particular Premises is located shall, to the
extent mandated by the Laws of such jurisdiction, govern the exercise by
Landlord of its remedies under this Lease with respect to such Premises. Except
as may otherwise be required by the Laws of the jurisdiction in which any of the
Premises is located, the parties hereto (i) submit and consent in advance to the
exclusive and in personam jurisdiction of any state or federal court located
within Los Angeles County, California, in any action or suit pertaining to this
Lease or to any matter arising out of or related to this Lease, (ii) waives any
right to transfer or change the venue of litigation brought under this Lease,
and (iii) agrees to service of process, to the extent permitted by law, by mail.
24.10 Attorneys' Fees. Should either party institute any action or
proceeding to enforce any provision hereof or for a declaration of such party's
rights or obligations hereunder, the prevailing party shall be entitled to
receive from the losing party such amounts as the court may adjudge to be
reasonable attorneys' fees (including expenses) for services rendered to the
party prevailing in any such action or proceeding, and such fees shall be deemed
to have accrued upon the commencement of such action or proceeding.
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24.11 Force Majeure. Except for payment obligations imposed pursuant to
this Lease, if there is any prevention, delay, or stoppage of an act required of
a party pursuant to this Lease because of strikes, lockouts, other labor
disputes, material shortages, embargoes, civil unrest, governmental regulations,
governmental controls, enemy or hostile governmental action, judicial order,
public emergency, fire, earthquake, other Acts of God, and other causes (other
than financial condition) beyond the reasonable control of the party obligated
to perform, performance of the act will be excused for the period of the delay.
24.12 Uneconomic Conditions. Landlord acknowledges that during the
course of a long-term lease such as this Lease, and considering the number of
sites involved, it is possible that any particular location could become an
under-performing asset due to a number of causes, including, the discovery of an
unexpected adverse site or environmental condition or occurrence, the entry of a
detrimental governmental law or determination, or the occurrence of some other
matter beyond the reasonable control of Tenant, such that Tenant's continued
operation at the location in compliance with this Lease would be uneconomic in a
material adverse manner as determined by Landlord and Tenant in good faith and
based on commercially reasonable standards and criteria. In such event, Landlord
shall negotiate in good faith with Tenant to attempt to develop a mutually
acceptable resolution of such a situation, which may include, without
limitation, a sale of the affected Premises, the purchase of the affected
Premises by Tenant or the substitution of another property acceptable to
Landlord in its sole discretion for such Premises, in each case without cost or
expense to Landlord, on such terms and conditions as Landlord or any Lender may
require, and subject to (a) the written consent of the Lenders and (b) the
payment or prepayment (to the extent permitted) by Tenant of the indebtedness
evidenced by the Financing Documents (or the portion of such indebtedness
allocable to the affected Premises as determined by Landlord in its sole
discretion) unless the applicable Premises are purchased by Tenant as provided
herein, and (c) the payment by Tenant of any prepayment fees or premiums,
breakage costs or other fees, costs, expenses or charges incurred and payable
under any of the Financing Documents as a result of any prepayment of any such
indebtedness. Tenant shall reimburse Landlord promptly upon demand for all such
costs and expenses incurred by Landlord in connection with any such negotiation
or resolution, including without limitation reasonable attorneys' fees and
expenses.
24.13 Consent. Whenever the consent or approval of either party is
required pursuant to this Lease, such consent or approval will not be
unreasonably withheld or delayed except as otherwise expressly provided herein.
24.14 Liability of Landlord.
(a) In the event of any sale or other transfer of Landlord's
interest in any of the Premises, Landlord shall be and hereby is entirely freed
and relieved of all liabilities and obligations of Landlord hereunder with
respect to such Premises to the extent accruing after the date of such transfer.
(b) Notwithstanding anything contained herein to the contrary, it
is specifically understood and agreed that there shall be no personal liability
of Landlord or any of its shareholders, members, officers or directors in
respect of any of the terms, covenants,
49
<PAGE> 54
conditions or provisions of this Lease, and in the event of a breach or default
by Landlord of any of its liabilities and obligations under this Lease, Tenant
and any persons claiming by, through or under Tenant shall look solely to the
equity of Landlord in the Premises for the satisfaction of Tenant's and/or such
persons' remedies and claims for damages.
24.15 No Merger. There shall be no merger of this Lease, or the
leasehold estate created by this Lease, with any other estate or interest in the
Premises, or any part thereof, by reason of the fact that the same person, firm,
corporation or other entity may acquire or own or hold, directly or indirectly,
(a) this Lease or the leasehold estate created by this Lease, or any interest in
this Lease or in any such leasehold estate, and (b) any such other estate or
interest in the Premises or any part thereof, and no such merger shall occur
unless and until all persons, corporations, firms, and other entities having an
interest (including a security interest) in (i) this Lease or the leasehold
estate created by this Lease; and (ii) any such other estate or interest in the
Premises, or any part thereof, shall join in a written instrument effecting such
merger and shall duly record the same.
24.16 Reports. Tenant agrees to furnish to Landlord, with reasonable
promptness: financial statements, reports and documents which Tenant and each
guarantor of this Lease sends to or makes available to its shareholders,
noteholders or bondholders. In addition to the foregoing, Tenant shall obtain
and deliver to Landlord, with reasonable promptness, such other information
respecting the operation of each of the Premises or the financial condition and
affairs of Tenant or any guarantor of this Lease, as Landlord may from time to
time reasonably request.
24.17 Definition of Rent. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, without limitation, all
Impositions, Real Property Taxes and insurance premiums payable hereunder, shall
be deemed to be "rent".
24.18 Interpretation. The captions by which the Articles and Sections
of this Lease are identified are for convenience only and shall have no effect
upon the interpretation of this Lease. Whenever the context so requires,
singular numbers shall include the plural, the plural shall refer to the
singular, the neuter gender shall include the masculine and feminine genders,
and the words "Landlord" and "Tenant" and "person" shall include corporations,
partnerships, associations, other legal entities, and individuals.
24.19 Relationship of the Parties. Nothing in this Lease shall create a
partnership, joint venture, employment relationship, borrower and lender
relationship, or any other relationship between Landlord and Tenant other than
the relationship of landlord and tenant.
24.20 Successors. This Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective personal and legal
representatives, heirs, successors, and assigns.
24.21 Modifications. This Lease may not be altered, amended, changed,
terminated, or modified in any manner unless the same shall be in writing and
signed by or on behalf of the party to be bound. No waiver of any provision of
this Lease of any right of Landlord hereunder shall be effective unless in
writing signed by or on behalf of the person to be bound and, so long
50
<PAGE> 55
as the indebtedness evidenced by the Financing Documents has not been
discharged, with the consent of the Lenders to the extent required under the
Loan Documents.
24.22 Brokerage Fees. Landlord and Tenant each represent and warrant
that they have not employed a broker in connection with the execution of this
Lease except for Beitler Commercial Realty Services, whose commission, if any is
due, shall be the responsibility of Seller, and Net Leased Real Properties,
Inc., whose commission, if any is due, shall be the responsibility of Landlord.
Landlord and Tenant shall each indemnify and hold the other harmless from and
against any claim or claims for brokerage or other commissions arising from such
party having employed a broker contrary to its representation in this Section
24.22.
24.23 [Intentionally Omitted]
24.24 Procedure Upon Purchase By Tenant. (a) If Tenant purchases
Landlord's interest in any of the Premises or any portion thereof pursuant to
any provision of this Lease, Landlord need not convey any better title thereto
than existed on the date of the commencement of the Lease Term, and Tenant shall
accept such title to the applicable Premises, but free of all monetary charges,
liens, security interests and encumbrances incurred by Landlord and all other
charges, liens, security interests and encumbrances resulting from acts of
Landlord taken without the written consent of Tenant, which consent shall not be
unreasonably withheld.
(b) Upon the date fixed for any purchase by Tenant of Landlord's
interest in any of the Premises hereunder, Tenant shall pay to Landlord, in
lawful money of the United States, by wire transfer of immediately available
funds or as otherwise directed by Landlord, the purchase price therefor
specified herein together with all rent, including additional rent and other
sums then accrued and unpaid hereunder to and including such date of purchase,
and Landlord shall deliver to Tenant a quitclaim deed and/or assignment, both
without recourse, covenants, representation or warranty, as appropriate, to the
interest then being sold to Tenant and any other instruments reasonably
necessary to convey the title thereto described in this Section 24.24 and to
assign any other property then required to be assigned pursuant hereto. Tenant
shall pay all charges incident to such conveyance and assignment, including
reasonable counsel fees and expenses, escrow fees, recording fees, title
insurance premiums and all applicable taxes (other than any income or franchise
taxes of Landlord, except as otherwise provided in this Lease) that may be
imposed by reason of such conveyance and assignment and the delivery of said
deed and other instruments. Upon the completion of any purchase of Landlord's
interest in the applicable Premises (but not of any lesser interest than
Landlord's entire interest) by Tenant, but not prior thereto (whether or not any
delay or failure in the completion of such purchase is the fault of Landlord),
this Lease shall terminate as to such Premises, except with respect to
obligations and liabilities of Tenant hereunder, actual or contingent, that have
arisen on or prior to such date of purchase or which expressly survive any
termination of this Lease.
51
<PAGE> 56
24.25 Lease as Security for Landlord's Obligations Under Financing
Documents; Rights of Servicer and Other Lenders.
Concurrently herewith, Landlord is obtaining financing for
purposes of acquiring the Premises as follows: (a) a senior loan in the
principal amount of up to $30,600,000 (the "Senior Loan") from CS First Boston
Mortgage Capital Corporation ("CS First Boston"), and (b) a mezzanine loan in
the principal amount of up to $8,250,000 (the "Mezzanine Loan") from Captec
Financial Group, Inc., in its individual capacity and as agent (in such
capacity, "Agent"), CS First Boston, Safeway Inc., BT Securities Corporation and
Net Leased Real Properties, Inc. (collectively, together with any subsequent
holders of the Senior Loan or the Mezzanine Loan, the "Lenders"). The Senior
Loan and the Mezzanine Loan are evidenced and secured by the documents and
instruments listed on Exhibit G attached hereto. As used herein, the term
"Financing Documents" shall mean, collectively, the documents and instruments
listed on Exhibit G, as the same may be amended from time to time, provided that
the written consent of Tenant shall be required for any such amendment to be
binding on Tenant which consent may be given or withheld in the sole and
absolute discretion of the Tenant. The Financing Documents together with the
Purchase Agreement, this Lease, the Guaranty, and all of the other certificates,
documents and instruments delivered in connection herewith or therewith are
referred to herein collectively as the "Transaction Documents."
In order to secure the indebtedness evidenced by the Financing
Documents, the Financing Documents provide among other things for the assignment
by Landlord to the Lenders of this Lease and the Guaranty to the extent set
forth therein and for the creation of liens on and security interests in each of
the Premises in favor of and for the benefit of the Lenders. Tenant hereby
consents to such assignment and the creation of such liens and security
interests and acknowledges that it has reviewed and approved copies of the
Financing Documents listed on Exhibit G, and consents to the terms and
provisions thereof, and Tenant agrees that until it receives notice from the
Lenders stating that the Senior Loan and the Mezzanine Loan have been discharged
in full, it will make all payments of rent and all other amounts payable
hereunder by wire transfer to the Servicer (as defined in the Financing
Documents) at _______________________________, ABA # _________, for credit to
Account No. _______________, Attention: ________________, Reference:
________________ (the "Lock-Box Account"), or such other account or address as
the Servicer may specify from time to time by notice to Tenant and Landlord.
Tenant acknowledges that the Financing Documents may provide for the exercise by
the Lenders and Landlord jointly, until an Event of Default (as defined in the
Financing Documents) occurs, and thereafter, solely by the Lenders, of all
rights of Landlord hereunder to give any consents, approvals, waivers, notices
or the like, to make elections, demands or to take any other discretionary
action hereunder except as specifically set forth in the Financing Documents.
Tenant will furnish to the Lenders counterparts of all notices, certificates,
opinions or other documents of any kind required to be delivered hereunder by
Tenant to Landlord as required under the Financing Documents. Notwithstanding
the foregoing, neither the Servicer nor any Lender shall have any obligation or
liability under this Lease except as may be expressly set forth in the Financing
Documents.
In addition to any benefits, rights or privileges afforded the
Servicer and the Lenders under the Financing Documents, Tenant agrees that the
Servicer and the Lenders are
52
<PAGE> 57
intended to be and shall be beneficiaries of the provisions of this Lease as if
they were the "Landlord" under such provisions and shall be entitled to exercise
any and all rights and remedies that Landlord shall be entitled to exercise
pursuant to or in respect of such provisions in accordance with the Financing
Documents. Tenant further agrees that the representations and warranties
contained in Article 20 and any other Transaction Documents are intended to be
for the benefit of the Servicer and the Lenders (as well as Landlord) and Tenant
acknowledges that the Servicer and the Lenders have relied upon such
representations and warranties in entering into the Financing Documents and the
other Transaction Documents, as the case may be. In addition, Tenant
acknowledges that Landlord is relying on (and is an intended third party
beneficiary of, as applicable) the representations and warranties of Tenant and
Guarantor contained in the Financing Documents and in the other Transaction
Documents.
24.26 Not Binding Until Executed. This Lease does not constitute an
"offer" and is not binding until fully executed and delivered by Landlord.
LANDLORD:
ARG PROPERTIES I, LLC, A CALIFORNIA LIMITED
LIABILITY COMPANY
By: Net Lease Holdings Corporation, Manager
/s/ Kevin A. Shields
__________________________________________
By: Kevin A. Shields
Its: President
Date: 9/11/96
TENANT:
ARG ENTERPRISES, INC., A CALIFORNIA CORPORATION
By illegible
_________________________________________
Its Secretary
Date: September 12, 1996
53
<PAGE> 58
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
On this 12th day of September, 1996, before me personally came Patrick
J. Kelvie, to me known to be the person who executed the foregoing instrument,
and who, being duly sworn by me, did depose and say that he resides at 36
Jennings Lane, Atherton, California; that he is the Secretary of ARG
ENTERPRISES, INC., the corporation described in and which executed the
foregoing instrument; that he signed his name thereto by authority of the board
of directors of said corporation and that he executed the same as the act and
deed of said firm for the uses and purposes therein mentioned.
/s/ LORIANN LUBELLI
-------------------------------------
LORIANN LUBELLI
Notary Public, State of New York
No. 60-5006879
Qualified in Bronx County
Commission Expires Jan. 4, 1997
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
On this 12th day of September, 1996, before me personally came Kevin A.
Shields, to me known to be the person who executed the foregoing instrument,
and who, being duly sworn by me, did depose and say that he resides at 3421
Manhattan Avenue, Manhattan Beach, California; that he is the President of Net
Lease Holdings Corporation, the manager of ARG PROPERTIES I, LLC, the limited
liability company described in and which executed the foregoing instrument;
that he signed his name thereto by authority of the board of directors of said
corporation on behalf of said limited liability company and that he executed
the same as the act and deed of said firm for the uses and purposes therein
mentioned.
/s/ LORIANN LUBELLI
-------------------------------------
LORIANN LUBELLI
Notary Public, State of New York
No. 60-5006879
Qualified in Bronx County
Commission Expires Jan. 4, 1997
<PAGE> 59
EXHIBIT A
TO
LEASE
[Insert legal description of Premises]
1
<PAGE> 60
Loan #1014
6601 Florin Rd
EXHIBIT A
The land referred to in this report is situated in the State of
California, County of SACRAMENTO and is described as follows:
PARCEL NO. 1, AS SHOWN ON "PARCEL MAP OF A PORTION OF THE SOUTHWEST QUARTER
(SW-1/4) OF SECTION 34, TOWNSHIP 8 NORTH, RANGE 5 EAST, M.D.B. & M.", RECORDED
IN THE OFFICE OF THE COUNTY RECORDER OF SACRAMENTO COUNTY, BOOK 17 OF PARCEL
MAPS, PAGE 1, RECORDS OF SAID COUNTY.
SAID PARCEL MAP WAS CORRECTED BY AN INSTRUMENT RECORDED IN BOOK 7609-28, PAGE
802, OFFICIAL RECORDS.
ASSESSOR'S PARCEL NUMBER 043-0220-001-0000
<PAGE> 61
Loan #1015
100 Graves Ave
El Cajon, CA
EXHIBIT A
PARCEL A:
THOSE PORTIONS OF LOTS 15 AND 16 OF MAGNOLIA RANCH TRACT, IN THE CITY OF EL
CAJON, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO THE MAP THEREOF
NO. 1674, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY,
SEPTEMBER 29, 1915, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHWEST CORNER OF SAID LOT 16; THENCE NORTH 89 DEGREES 57'
39" EAST ALONG THE NORTHERLY LINE OF SAID LOT, 208.09 FEET; THENCE SOUTH 1
DEGREE 37' 19" EAST, 228.54 FEET TO THE BEGINNING OF A TANGENT 240.00 FOOT
RADIUS CURVE, CONCAVE NORTHEASTERLY; THENCE SOUTHERLY ALONG THE ARC OF SAID
CURVE THROUGH A CENTRAL ANGLE OF 2 DEGREES 37' 44", 11.01 FEET TO THE TRUE POINT
OF BEGINNING; THENCE CONTINUING SOUTHERLY ALONG THE ARC OF SAID CURVE THROUGH A
CENTRAL ANGLE OF 43 DEGREES 43' 30" A DISTANCE OF 183.16 FEET TO A POINT ON THE
SOUTHERLY LINE OF SAID LOT 16, BEING THE NORTHWEST CORNER OF THE LAND DESCRIBED
IN DEED TO DOUGLAS R. MORRIS, ET UX, RECORDED MARCH 3, 1967 AS FILE NO. 64587 OF
OFFICIAL RECORDS; THENCE ALONG THE BOUNDARY LINE OF SAID LAND CONTINUING
SOUTHEASTERLY ALONG SAID CURVE 176.19 FEET THROUGH A CENTRAL ANGLE OF 42 DEGREES
03' 45"; THENCE TANGENT TO SAID CURVE NORTH 89 DEGREES 57' 39" EAST, 79.64,
FEET; THENCE NORTH 0 DEGREE 02' 20" WEST, 61.82 FEET TO THE NORTH LINE OF SAID
LOT 15; THENCE NORTH 0 DEGREE 02' 20" WEST, 19.46 FEET TO A TANGENT 358 FOOT
RADIUS CURVE, CONCAVE WESTERLY; THENCE NORTHERLY ALONG SAID CURVE THROUGH A
CENTRAL ANGLE OF 23 DEGREES 12' 40" AN ARC DISTANCE OF 145.03 FEET TO A POINT
BEARING NORTH 89 DEGREES 57' 40" EAST FROM THE TRUE POINT OF BEGINNING; THENCE
SOUTH 89 DEGREES 57' 40" WEST, 290.01 FEET TO THE TRUE POINT OF BEGINNING.
PARCEL B:
AN EASEMENT FOR UTILITY PURPOSES LYING WITHIN THOSE PORTIONS OF LOTS 15 AND 16
OF MAGNOLIA RANCH TRACT, IN THE CITY OF EL CAJON, COUNTY OF SAN DIEGO, STATE OF
CALIFORNIA, ACCORDING TO MAP THEREOF NO. 1674, FILED IN THE OFFICE OF THE
COUNTY RECORDER OF SAN DIEGO COUNTY, SEPTEMBER 29, 1915, OVER, ALONG AND ACROSS
A STRIP OF LAND 20 FEET IN WIDTH, DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHWEST CORNER OF SAID LOT 16; THENCE NORTH 89 DEGREES 57'
39" EAST, 208.09 FEET; THENCE SOUTH 1 DEGREE 37' 19" EAST, 139.54 FEET TO THE
TRUE POINT OF BEGINNING; THENCE CONTINUING SOUTH 1 DEGREE 37' 19" EAST, 89.00
FEET TO THE BEGINNING OF A TANGENT 240.00 FOOT RADIUS CURVE, CONCAVE
NORTHEASTERLY; THENCE ALONG THE ARC OF SAID CURVE THROUGH A CENTRAL ANGLE OF 2
DEGREES 37' 44", 11.01 FEET; THENCE NORTH 89 DEGREES 57' 40" EAST, 19.75 FEET;
THENCE NORTH 1 DEGREE 37' 19" WEST, 100.00 FEET; THENCE SOUTH 89 DEGREES 57'
40", WEST, 20.00 FEET TO THE TRUE POINT OF BEGINNING.
<PAGE> 62
Loan # 1019
507 West Broadway
Tempe, AZ
EXHIBIT A
That portion of Tract A, Broadway Industrial Park Unit Two, a subdivision
recorded in Book 168 of Maps, Page 5, records of Maricopa County, Arizona, and
being a part of Section 28, Township 1 North, Range 4 East of the Gila and Salt
River Base and Meridian, Maricopa, County, Arizona, described as follows:
The East 250 feet of the West 607 feet of the South 285 feet of the North 325
feet of the Northeast quarter of the Northeast quarter of said Section 28;
EXCEPT an undivided 1/2 interest in and to any oil and minerals as reserved in
Agreement recorded in Docket 1785, page 185 and modified by instrument recorded
in Docket 7791, page 51, Maricopa County, Arizona; and
EXCEPT that portion of said property lying below a depth of 500 feet measured
vertically from the contour of the surface thereof, as reserved in Deed
recorded in Docket 10928, page 220, records of Maricopa County, Arizona.
<PAGE> 63
Loan #1025
707 E Street
EXHIBIT A
PARCEL A:
PARCEL 4 OF PARCEL MAP NO. 4459, IN THE CITY OF CHULA VISTA, COUNTY OF SAN
DIEGO, STATE OF CALIFORNIA, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN
DIEGO COUNTY, FEBRUARY 13, 1976 AS FILE NO. 76-043449 OF OFFICIAL RECORDS.
PARCEL B:
AN EASEMENT FOR INGRESS AND EGRESS OF VEHICULAR AND PEDESTRIAN TRAFFIC, AND FOR
SURFACE DRAINAGE, OVER AND ACROSS THE SOUTHERLY 228.00 FEET OF THE WESTERLY
16.00 FEET OF THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 161 OF
RANCHO DE LA NACION, IN THE CITY OF CHULA VISTA, ACCORDING TO MAP MADE BY
MORRILL NO, 166, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO
COUNTY, STATE OF CALIFORNIA.
PARCEL C:
A NON-EXCLUSIVE EASEMENT FOR AUTOMOBILE AND PEDESTRIAN INGRESS AND EGRESS,
OVER, UPON AND ACROSS THE PARKING AREAS AND SPACES, DRIVEWAY AND ACCESS WAYS,
SIDEWALKS AND WALKWAYS, EXITS AND ENTRANCES, AND OTHER COMMON AREAS AS THESE
AREAS NOW EXIST ON FOLLOWING DESCRIBED LAND:
COMMENCING AT THE EASTERLY CORNER OF SAID PARCEL 4 OF PARCEL MAP NO. 4459, BEING
THE TRUE POINT OF BEGINNING OF THE HEREIN DESCRIBED EASEMENT; THENCE PROCEEDING
SOUTHWESTERLY ALONG THE SOUTHEASTERLY BOUNDARY OF PARCEL 4, SOUTH 71 DEGREES 00'
04" WEST, 20.00 FEET; THENCE LEAVING SAID BOUNDARY NORTH 18 DEGREES 49' 42"
WEST, 34.00 FEET; THENCE SOUTH 71 DEGREES 00' 04" WEST, 128.5O FEET; THENCE
SOUTH 18 DEGREES 49' 42" EAST, 34.00 FEET, MORE OR LESS, TO INTERSECTION WITH
THE SOUTHEASTERLY BOUNDARY OF SAID PARCEL 4; THENCE PROCEEDING SOUTHWESTERLY
ALONG THE SOUTHEASTERLY BOUNDARY OF SAID PARCEL 4, SOUTH 71 DEGREES 00' 04"
WEST, 25.00 FEET TO A POINT ON THE MOST SOUTHEASTERLY BOUNDARY OF PARCEL 2;
THENCE LEAVING SAID BOUNDARY NORTH 18 DEGREES 49' 42" WEST, 265.17 FEET; THENCE
SOUTH 71 DEGREES 00' 04" WEST, 137.43 FEET; THENCE SOUTH 18 DEGREES 49' 02"
EAST, 186.20 FEET; THENCE SOUTH 48 DEGREES 49' 02" EAST, 38.00 FEET; THENCE
SOUTH 18 DEGREES 49' 02" EAST, 46.00 FEET, MORE OR LESS, TO INTERSECTION WITH
THE MOST SOUTHEASTERLY BOUNDARY OF PARCEL 2; THENCE SOUTHWESTERLY ALONG THE MOST
SOUTHEASTERLY BOUNDARY, SOUTH 71 DEGREES 00' 04", 35.00 FEET; THENCE LEAVING
SAID BOUNDARY NORTH 18 DEGREES 49' 02" WEST, 46.00 FEET; THENCE NORTH 48 DEGREES
49' 02" WEST, 18.00 FEET; NORTH 18 DEGREES 49' 02" WEST 228.55 FEET; THENCE
NORTH 71 DEGREES 00' 04" EAST 187.42 FEET; THENCE SOUTH 18 DEGREES 49' 42" EAST
236.17 FEET; THENCE NORTH 71 DEGREES 00' 04" EAST 148.50 FEET, MORE OR LESS, TO
INTERSECTION WITH THE NORTHEASTERLY BOUNDARY OF SAID PARCEL 4; THENCE
SOUTHEASTERLY ALONG THE NORTHEASTERLY BOUNDARY OF SAID PARCEL, SOUTH 18 DEGREES
49' 42" EAST, 54.00 FEET TO THE TRUE POINT OF BEGINNING OF THE HEREIN DESCRIBED
PROPERTY.
EXCEPTING THEREFROM ANY PORTION THEREOF LYING WITHIN PARCEL A HEREIN DESCRIBED.
<PAGE> 64
Loan #1065
1616 Sisk Road
EXHIBIT A
The land referred to in this report is situated in the State of
California, County of Stanislaus and is described as follows:
PARCEL NO. 1:
Parcel A as shown upon that certain Parcel Map filed May 3, 1982 in Volume 32
of Parcel Maps, at Page 135, Stanislaus County Records; being a portion of the
Southeast quarter of Section 13, Township 3 South, Range 8 East, Mount Diablo
Base and Meridian.
PARCEL NO. 2:
A perpetual, non-exclusive right and easement to use the parking area of Parcel
B as shown upon that certain Parcel Map filed May 3, 1982 in Book 32 of Parcel
Maps, Page 135, Stanislaus County Records, in common with the owner(s) of said
Parcel B, said right and easement being appurtenant to Parcel A above
described, as created by, and subject to the terms and conditions contained in
that certain "Parking Area Agreement", dated June 4, 1982, by and between
Liljenquist Modesto Co., A Limited Partnership, and Saga Management
Corporation, a California corporation, recorded June 8, 1982, in Liber 3564,
Page 544, Official Records of Stanislaus County, California.
<PAGE> 65
Loan 1067 - Riverside, CA
EXHIBIT A
PARCEL 2 OF PARCEL MAP NO. 18671, AS SHOWN BY MAP ON FILE IN BOOK 107 PAGES 41
AND 42 OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA;
TOGETHER WITH THAT PORTION OF PARCEL 7 OF SAID PARCEL MAP NO. 18671, DESCRIBED
AS FOLLOWS:
COMMENCING AT THE MOST SOUTHERLY CORNER OF PARCEL 10 OF SAID PARCEL MAP 15817;
THENCE NORTH 33 DEGREES 38' 10" WEST ALONG THE BOUNDARY LINE OF SAID PARCEL 7, A
DISTANCE OF 139.09 FEET TO A POINT THEREIN FOR THE TRUE POINT OF BEGINNING;
THENCE CONTINUING NORTH 33 DEGREES 38' 10" WEST ALONG SAID BOUNDARY LINE, A
DISTANCE OF 147.99 FEET TO THE MOST WESTERLY CORNER OF PARCEL 2 OF PARCEL MAP
NO. 18671, AS SHOWN BY MAP ON FILE IN BOOK 107 PAGES 41 AND 42 THEREOF OF PARCEL
MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA, SAID POINT ALSO BEING AN ANGLE
POINT IN THE BOUNDARY LINE OF SAID PARCEL 7; THENCE SOUTH 56 DEGREES 21' 50"
WEST ALONG SAID BOUNDARY LINE OF PARCEL 7, A DISTANCE OF 8.78 FEET TO A POINT
THEREIN; THENCE SOUTH 33 DEGREES 38' 10" EAST, A DISTANCE OF 147.99 FEET; THENCE
NORTH 56 DEGREES 21' 50" EAST, A DISTANCE OF 8.78 FEET TO THE TRUE POINT OF
BEGINNING;
EXCEPTING THEREFROM SAID PARCEL 2, THAT PORTION DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST SOUTHERLY CORNER OF SAID PARCEL 2; THENCE NORTH 33 DEGREES
38' 10" WEST ALONG THE SOUTHWEST LINE OF SAID PARCEL 2, A DISTANCE OF 139.09
FEET TO A POINT THEREIN; THENCE NORTH 56 DEGREES 21' 50" EAST, A DISTANCE OF
9.34 FEET; THENCE SOUTH 33 DEGREES 38' 10" EAST, A DISTANCE OF 139.09 FEET TO A
POINT IN THE SOUTHEAST LINE OF SAID PARCEL 2; THENCE SOUTH 56 DEGREES 21' 00"
WEST ALONG SAID SOUTHEAST LINE, A DISTANCE OF 9.34 FEET TO THE POINT OF
BEGINNING.
A CERTIFICATE OF LOT LINE ADJUSTMENT WAS RECORDED OCTOBER 26, 1982 AS
INSTRUMENT NO. 185423 OFFICIAL RECORDS.
<PAGE> 66
Loan #1069
7111 Beach Blvd.
EXHIBIT A
The land referred to in this report is situated in the State of
California, County of ORANGE and is described as follows:
PARCEL A:
PARCEL 1, IN THE CITY OF BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS
SHOWN ON PARCEL MAP NO. 81-334, FILED IN BOOK 171, PAGES 38 AND 39 OF PARCEL
MAPS, IN THE OFFICE OF THE RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM ALL OIL, GAS, PETROLEUM AND OTHER HYDROCARBON SUBSTANCES
WHICH LIE BELOW A PLANE PARALLEL TO AND 500 FEET BELOW THE NATURAL SURFACE OF
SAID LAND, WITHOUT, HOWEVER, ANY RIGHT TO ENTER UPON THE SURFACE OF SAID LAND
TO EXPLORE FOR, DEVELOP OR REMOVE SAID SUBSTANCES, AS RESERVED BY PACIFIC
THEATERS DEVELOPMENT CO. IN THE DEED IN BOOK 8800 PAGE 761 OF OFFICIAL
RECORDS.
PARCEL B:
NON-EXCLUSIVE EASEMENTS FOR INGRESS AND EGRESS AND UTILITY PURPOSES, AS
DESCRIBED AS PARCELS 2, 3 AND 4 IN THAT CERTAIN CORPORATION GRANT DEED RECORDED
FEBRUARY 16, 1979 IN BOOK 13037, PAGE 979 ET SEQ., IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY.
<PAGE> 67
Loan #1070
1625 Watt Avenue
EXHIBIT A
PARCEL NO. 1:
PARCEL B, AS SHOWN ON THAT CERTAIN PARCEL MAP ENTITLED "PORTION OF THE
NORTHEAST ONE-QUARTER OF SECTION 62 RANCHO DEL PASO", RECORDED IN BOOK 29 OF
PARCEL MAPS, PAGE NO. 42, RECORDS OF SAID COUNTY.
PARCEL NO. 2:
EASEMENTS APPURTENANT TO THE PROPERTY DESCRIBED AS PARCEL ONE, ABOVE FOR
INGRESS, EGRESS AND PARKING AS CREATED BY THAT CERTAIN AGREEMENT WHICH WAS
RECORDED MAY 1, 1980 IN BOOK 80-05-01, PAGE 340, INSTRUMENT NO. 67011, OFFICIAL
RECORDS OF SACRAMENTO COUNTY.
ASSESSOR'S PARCEL NUMBER: 286-0040-011-0000
<PAGE> 68
Loan #1075
23221 Lake Center Drive
EXHIBIT A
The land referred to in this report is situated in the State of
California, County of ORANGE and is described as follows:
PARCEL 20, IN THE CITY OF LAKE FOREST, COUNTY OF ORANGE, STATE OF CALIFORNIA,
AS SHOWN ON A MAP FILED IN BOOK 129, PAGES 39, 40 AND 41 OF PARCEL MAPS, IN THE
OFFICE OF THE RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM, ALL MINERAL RIGHTS, INCLUDING WITHOUT LIMITATION ALL OIL,
GAS, HYDROCARBON AND SIMILAR RIGHTS, AND ALL WATER, WATER RIGHTS, GEOTHERMAL
STEAM AND STEAM POWER, WITHIN OR UNDERLYING THE REAL PROPERTY HEREIN CONVEYED,
TOGETHER WITH THE PERPETUAL RIGHT OF DEVELOPMENT THEREOF; PROVIDED, HOWEVER,
THAT THE RIGHTS HEREIN RESERVED AND EXCEPTED DO NOT INCLUDE THE RIGHT TO ENTER
UPON THE SURFACE AND THE TOP 500 FEET OF SAID LAND, AS RESERVED IN THE DEED
FROM OCCIDENTAL LAND, INC., FORMERLY OCCIDENTAL PETROLEUM LAND AND DEVELOPMENT
CORPORATION, A CALIFORNIA CORPORATION, RECORDED JULY 31, 1978 IN BOOK 12778,
PAGE 1888 OF OFFICIAL RECORDS.
<PAGE> 69
Loan #1059
5259 West Indian
School Rd
EXHIBIT A
PARCEL NO. 1:
That part of the Northeast quarter of Section 29, Township 1 North, Range 2
East of the Gila and Salt River Base and Meridian, Maricopa County, Arizona,
described as follows;
BEGINNING at the Northeast corner of the said Northeast quarter of Section 29;
thence North 89 degrees 59 minutes 50 seconds West, along the North line of the
said Northeast quarter of Section 29, a distance of 1080.30 feet;
thence South 00 degrees 00 minutes 10 seconds West perpendicular to the said
North line of the Northeast quarter of Section 29, a distance Of 40.00 feet to
the POINT OF BEGINNING;
thence continuing South 00 degrees 00 minutes 10 seconds West, 333.00 feet;
thence North 89 degrees 59 minutes 50 seconds West parallel to the said North
line of the Northeast quarter of Section 29, a distance of 225.00 feet;
thence North 00 degrees 00 minutes 10 seconds East, 318.00 feet to a point 55.00
feet Southerly from the said North line of the Northeast quarter of Section 29;
thence North 45 degrees 00 minutes 10 seconds East, 21.21 feet to a point 40.00
feet Southerly from the said North line of the Northeast quarter of Section 29;
thence South 89 degrees 59 minutes 50 seconds East parallel to the said North
line, a distance of 210.00 feet to the POINT OF BEGINNING.
PARCEL NO. 2:
An Easement for ingress and egress by vehicular and pedestrian traffic, and
vehicular parking as set forth in Grant of Reciprocal Easements for use of
parking areas recorded in Docket 15239, page 480.
<PAGE> 70
Loan #1076
101 East Bay Street
EXHIBIT A
The land referred to in this report is situated in the State of
California, County of LOS ANGELES and is described as follows:
LOT 6 OF TRACT NO. 33509, IN THE CITY OF ALHAMBRA, COUNTY OF LOS ANGELES, STATE
OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 1017 PAGES 17 TO 19 INCLUSIVE OF
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, AS AMENDED BY
CERTIFICATE OF CORRECTION RECORDED OCTOBER 17, 1983 AS INSTRUMENT NO.
83-1224031, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM ALL OIL, GAS AND OTHER HYDROCARBON SUBSTANCES IN AND UNDER ALL
OF SAID LAND, BUT WITHOUT ANY RIGHT TO PENETRATE, USE OR DISTURB THE SURFACE OF
SAID LAND OR ANY PORTION OF SAID LAND WITHIN 500 FEET OF THE SURFACE THEREOF,
AS RESERVED IN VARIOUS DEEDS OF RECORD, AMONG THEM BEING DEED RECORDED MAY 27,
1981 AS INSTRUMENT NO. 81-522896.
<PAGE> 71
Loan 1077 - Foster City
EXHIBIT A
PARCEL I:
PARCEL "B" AS SHOWN ON THAT CERTAIN PARCEL MAP ENTITLED "PARCEL MAP NO. 48-83
BEING A RESUBDIVISION OF LOT 4, TRACT 81-82, THE MAP FOR WHICH WAS FILED MAY 23,
1983, IN BOOK 109 OF MAPS AT PAGE 98 THROUGH 101, SAN MATEO COUNTY RECORDS",
FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN MATEO COUNTY, STATE OF
CALIFORNIA, ON NOVEMBER 30, 1983 IN BOOK 54 OF PARCEL MAPS AT PAGES 12 AND 13.
EXCEPTING THEREFROM THAT PORTION CONVEYED TO FOSTER CITY, A MUNICIPAL
CORPORATION BY INSTRUMENT RECORDED FEBRUARY 7, 1990 UNDER RECORDERS SERIAL NO.
90018594, OFFICIAL RECORDS OF SAN MATEO COUNTY, CALIFORNIA.
PARCEL II:
A NON-EXCLUSIVE EASEMENT FOR INGRESS AND EGRESS OVER PARCEL A, AS SHOWN ON THE
PARCEL MAP, RECORDED IN VOLUME 54 OF PARCEL MAPS AT PAGE 13 BEING DESCRIBED AS
FOLLOWS:
BEING A STRIP OF LAND 25.00 FEET WIDE FOR RECIPROCAL INGRESS AND EGRESS
EASEMENT PURPOSES ON, OVER AND ACROSS PARCEL A OF LOT 4 FOR THE BENEFIT OF SAID
PARCEL A AND PARCEL B OF SAID LOT 4.
SAID STRIP BEING A PORTION OF SAID PARCEL A OF LOT 4 OF TRACT NO. 81-82 AS
RECORDED IN BOOK 109 OF MAPS AT PAGES 98 THROUGH 101 IN THE OFFICIAL RECORDS OF
THE COUNTY OF SAN MATEO, SAID LOT 4 BEING SITUATE IN THE CITY OF FOSTER CITY,
COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND MORE PARTICULARLY DESCRIBED AS
FOLLOWS:
BEGINNING AT THE NORTHWESTERLY CORNER OF SAID LOT 4, BEING ALSO THE
NORTHWESTERLY CORNER OF SAID PARCEL A, BEING ALSO A POINT IN THE EASTERLY
BOUNDARY LINE OF THE LANDS OF ESTERO MUNICIPAL IMPROVEMENT DISTRICT AS RECORDED
IN 6082 O.R. 265 AND BEING ALSO A POINT IN THE SOUTHERLY BOUNDARY LINE OF CHESS
DRIVE AND RUNNING BY BEARING BASED ON THE CALIFORNIA COORDINATE SYSTEM, ZONE
III, AND BY GRID DISTANCES MEASURED IN GRID FEED AND DECIMALS THEREOF; THENCE,
1. SOUTH 00 DEGREES 52' 40" WEST 239.SO FEET, ALONG THE WESTERLY BOUNDARY
LINE OF SAID LOT 4, BEING ALSO THE WESTERLY LINE OF SAID PARCEL A, TO A POINT AT
THE SOUTHWESTERLY CORNER OF SAID PARCEL A, BEING ALSO THE NORTHWESTERLY CORNER
OF PARCEL B OF SAID LOT 4; THENCE,
2. SOUTH 89 DEGREES 07' 20" EAST 21.00 FEET, ALONG THE SOUTHERLY BOUNDARY
LINE OF SAID PARCEL A, BEING ALSO ALONG THE NORTHERLY LINE OF SAID PARCEL B, TO
THE TRUE POINT OF BEGINNING OF THE SOUTHWESTERLY CORNER OF THIS EASEMENT;
THENCE,
3. NORTH 00 DEGREES 52' 40" EAST 237.04 FEET, ON, OVER AND ACROSS SAID
PARCEL A, TO A POINT OF CURVATURE; THENCE,
4. ALONG A TANGENT CURVE TO THE LEFT, ON, OVER AND ACROSS SAID PARCEL A,
SAID CURVE HAVING A RADIUS OF 12.00 FEET, THROUGH A CENTRAL ANGLE OF 56 DEGREES
02' 10" AND ALONG AN ARC LENGTH OF 11.74 FEET, TO A POINT ON THE CURVE ON THE
NORTHERLY BOUNDARY LIKE OF SAID PARCEL A, BEING ALSO A POINT IN THE SOUTHERLY
LINE OF CHESS DRIVE; THENCE,
<PAGE> 72
5. NORTHWESTERLY ALONG A CURVE LEFT ALONG SAID SOUTHERLY LINE OF CHESS
DRIVE, THE RADIUS POINT OF LAST SAID CURVE BEARS NORTH 25 DEGREES 58' 08" WEST
FOR 366.00 FEET, THROUGH A CENTRAL ANGLE OF 05 DEGREES 31' 23" AND ALONG AN ARC
LENGTH OF 35.28 FEET, TO A POINT ON THE CURVE; THENCE,
6. SOUTHWESTERLY ALONG A CURVE TO THE LEFT, ON, OVER AND ACROSS SAID
PARCEL A, THE RADIUS POINT OF LAST SAID CURVE BEARS SOUTH 78 DEGREES 08' 09"
EAST FOR 20.00 FEET, THROUGH A CENTRAL ANGLE OF 10 DEGREES 59' 11" AND ALONG AN
ARC LENGTH OF 3.84 FEET, To A POINT OF TANGENCY; THENCE,
7. SOUTH 00 DEGREES 52' 40" WEST 260.60 FEET, ON, OVER AND ACROSS SAID
PARCEL A, TO A POINT ON THE SOUTHERLY BOUNDARY OF SAID PARCEL A, BEING ALSO THE
NORTHERLY BOUNDARY OF SAID PARCEL B; THENCE,
8. NORTH 89 DEGREES 07' 20" WEST 25.00 FEET, ALONG LAST SAID SOUTHERLY
AND LAST SAID NORTHERLY BOUNDARY TO THE TRUE POINT OF BEGINNING.
PARCEL III:
A NON-EXCLUSIVE EASEMENT FOR THE PURPOSES OF INSTALLATION OF UTILITY LINES
INCLUDING SANITARY AND STORM SEWER, WATER, GAS, TELEPHONE AND ELECTRICITY, OVER
PARCEL A, AS SHOWN ON THE PARCEL MAP, RECORDED IN VOLUME 54 OF PARCEL MAPS AT
PAGE 13, BE DESCRIBED AS FOLLOWS:
BEING A STRIP OF LAND 5.00 FEET WIDE FOR PUBLIC UTILITIES EASEMENT PURPOSES ON,
OVER AND ACROSS A PORTION OF PARCEL A OF LOT 4 FOR THE BENEFIT OF PARCEL B OF
SAID LOT 4.
SAID STRIP BEING A PORTION OF SAID PARCEL A OF LOT 4 OF TRACT NO. 81-82 AS
RECORDED IN BOOK 109 OF MAPS AT PAGES 98 THROUGH 101 IN THE OFFICIAL RECORDS OF
THE COUNTY OF SAN MATEO, SAID LOT 4 BEING SITUATE IN THE CITY OF FOSTER CITY,
COUNTY OF SAN MATEO, STATE OF CALIFORNIA, AND MORE PARTICULARLY DESCRIBED AS
FOLLOWS:
BEGINNING AT THE NORTHWESTERLY CORNER OF SAID LOT 4, BEING ALSO THE
NORTHWESTERLY CORNER OF SAID PARCEL A, BEING ALSO A POINT IN THE EASTERLY
BOUNDARY LINE OF THE LANDS OF ESTERO MUNICIPAL IMPROVEMENT DISTRICT AS RECORDED
IN 6082 O.R. 265 AND BEING ALSO A POINT IN THE SOUTHERLY BOUNDARY LINE OF CHESS
DRIVE AND RUNNING BY BEARINGS BASED ON THE CALIFORNIA COORDINATE SYSTEM, ZONE
III, AND BY GRID DISTANCES MEASURED IN GRID FEET AND DECIMALS THEREOF; THENCE,
1. SOUTH 00 DEGREES 52' 40" WEST 239.50 FEET, ALONG THE WESTERLY BOUNDARY
LINE OF SAID LOT 4, BEING ALSO THE WESTERLY LINE OF SAID PARCEL A, TO A POINT
AT THE SOUTHWESTERLY CORNER OF SAID PARCEL A, BEING ALSO THE NORTHWESTERLY
CORNER OF PARCEL B OF SAID LOT 4; THENCE,
2. SOUTH 89 DEGREES 07' 20" EAST 41.00 FEET, ALONG THE SOUTHERLY BOUNDARY
LINE OF SAID PARCEL A, BEING ALSO ALONG THE NORTHERLY LINE OF SAID PARCEL B, TO
THE TRUE POINT OF BEGINNING AT THE SOUTHWESTERLY CORNER OF THIS EASEMENT;
THENCE,
3. NORTH 00 DEGREES 52' 40" EAST 247-10 FEET, ON, OVER AND ACROSS A
PORTION OF SAID PARCEL A, TO A POINT IN THE SOUTHERLY LINE OF AN EXISTING 12.00
FEET WIDE PUBLIC UTILITIES EASEMENT AS RECORDED IN 109 MAPS 98-101; THENCE,
4. ALONG A CURVE TO THE LEFT ALONG SAID SOUTHERLY EASEMENT LINE, THE
POINT OF
<PAGE> 73
SAID CURVE BEARS NORTH 29 DEGREES 23' 59" WEST FOR 378.00 FEET, THROUGH A
CENTRAL ANGLE OF 00 DEGREES 52' 54" AND ALONG AN ARC LENGTH OF 5.82 FEET, TO A
POINT ON THE CURVE; THENCE,
5. SOUTH 00 DEGREES 52' 40" WEST 250.07 FEET, ON, OVER AND ACROSS SAID
PARCEL A, BEING ALSO ALONG THE EASTERLY LINE OF A 25.00 FEET WIDE ACCESS
EASEMENT, TO A POINT ON THE SOUTHERLY BOUNDARY OF SAID PARCEL A, BEING ALSO THE
NORTHERLY BOUNDARY OF SAID PARCEL B; THENCE,
6. NORTH 89 DEGREES 07' 20" WEST 5.00 FEET, ALONG LAST SAID SOUTHERLY AND
LAST SAID NORTHERLY BOUNDARY TO THE TRUE POINT OF BEGINNING.
PARCEL IV:
A NON-EXCLUSIVE EASEMENT FOR INGRESS, EGRESS AND PARKING OF VEHICULAR TRAFFIC
ON, OVER AND ACROSS AND TRAFFIC LANES, CURBCUTS AND PARKING STALLS, AND FOR
PEDESTRIAN TRAFFIC ON, OVER AND ACROSS ALL SUCH AREAS AND PEDESTRIAN WALKWAYS,
AS SUCH TRAFFIC LANES, CURBCUTS, PARKING STALLS AND WALKWAYS ARE FROM TIME TO
TIME ESTABLISHED ON PARCEL A, AS SHOWN ON THE PARCEL MAP, RECORDED IN VOLUME 54
OF PARCEL MAPS AT PAGE 13.
JOINT PLANT NO. 109-098-000-0015T
<PAGE> 74
Loan 1078-Burbank, CA
EXHIBIT A
LOTS 3, 4, 5, 6 AND 7 AND PORTIONS OF LOTS 1, 2, 8, 9 AND 10, BLOCK 69 OF TOWN
OF BURBANK, IN THE CITY OF BURBANK, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA,
AS PER MAP RECORDED IN BOOK 17 PAGES 19 THROUGH 22 INCLUSIVE OF MISCELLANEOUS
RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, TOGETHER WITH
THOSE ALLEYS IN SAID BLOCK 69 VACATED BY THE COUNCIL OF THE CITY OF BURBANK BY
RESOLUTION NO. 20,122, RECORDED APRIL 13, 1982 AS INSTRUMENT NO. 82-381548,
ALSO TOGETHER WITH THOSE PORTIONS OF ANGELENO AVENUE AND TUJUNGA AVENUE AS
SHOWN ON SAID MAP AND VACATED BY THE COUNCIL OF THE CITY OF BURBANK BY
RESOLUTION NO. 20,859, RECORDED ON JANUARY 19, 1984 AS INSTRUMENT NO. 84-75769,
DESCRIBED AS WHOLE AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE SOUTHEASTERLY LINE OF SAID LOT 1 WITH A
LINE THAT IS. PARALLEL WITH AND 6.00 FEET SOUTHWESTERLY OF THE NORTHEASTERLY
LINE OF SAID LOT 1; THENCE SOUTH 48 DEGREES 42 MINUTES 30 SECONDS EAST ALONG
THE PROLONGATION OF SAID PARALLEL LINE 30.00 FEET TO THE CENTERLINE OF TUJUNGA
AVENUE, 60 FEET WIDE, AS SHOWN ON SAID MAP; THENCE SOUTH 41 DEGREES 15 MINUTES
28 SECONDS WEST ALONG SAID LINE 209.11 FEET TO THE SOUTHWESTERLY LINE OF PARCEL
3 OF RELINQUISHMENT NO. 226 OF HIGHWAY RIGHT OF WAY, RECORDED IN BOOK D-2050
PAGE 565, OFFICIAL RECORDS; THENCE NORTH 67 DEGREES 40 MINUTES 21 SECONDS WEST
31.72 FEET ALONG SAID SOUTHWESTERLY LINE; THENCE CONTINUING ALONG SAID
SOUTHWESTERLY LINE NORTH 48 DEGREES 40 MINUTES 43 SECONDS WEST 170.18 FEET TO
THE NORTHWESTERLY LINE OF SAID ALLEY; THENCE NORTH 1 DEGREE 17 MINUTES 37
SECONDS WEST 13.94 FEET ALONG THE NORTHEASTERLY LINE OF THE I-5 FREEWAY AS
DEFINED IN DIRECTOR'S DEED RECORDED ON NOVEMBER 16, 1961 AS INSTRUMENT NO.
4800; THENCE NORTH 48 DEGREES 40 MINUTES 43 SECONDS WEST 124.99 FEET TO THE
BEGINNING OF A NON-TANGENT CURVE CONCAVE EASTERLY AND HAVING A RADIUS OF 75.00
FEET, A RADIAL LINE TO SAID POINT BEARS SOUTH 82 DEGREES 17 MINUTES 52 SECONDS
WEST; THENCE LEAVING SAID NORTHEASTERLY RIGHT OF WAY LINE AND NORTHERLY ALONG
SAID NON-TANGENT CURVE, 64.11 FEET TO A POINT OF TANGENCY IN LINE THAT IS
PARALLEL WITH AND 5.00 FEET NORTHWESTERLY OF THE SOUTHEASTERLY LINE OF SAID
ANGELENO AVENUE; THENCE NORTH 41 DEGREES 16 MINUTES 08 SECONDS EAST ALONG SAID
PARALLEL LINE 131.32 FEET TO THE BEGINNING OF A TANGENT CURVE CONCAVE SOUTHERLY
AND HAVING A RADIUS OF 20.00 FEET; THENCE NORTHEASTERLY, EASTERLY AND
SOUTHEASTERLY ALONG SAID CURVE, 31.42 FEET TO A POINT OF TANGENCY IN A LINE
THAT IS PARALLEL WITH AND 6.00 FEET SOUTHWESTERLY OF THE SOUTHWESTERLY LINE OF
FIRST STREET, 80.00 FEET WIDE, AS SHOWN ON SAID MAP; THENCE SOUTH 48 FEET 42
MINUTES 30 SECONDS EAST ALONG THE LAST SAID PARALLEL LINE, 310.32 FEET TO THE
POINT OF BEGINNING.
EXCEPT THEREFROM ALL MINERALS, OILS, GASES AND OTHER HYDROCARBONS BY WHATSOEVER
NAME KNOWN THAT MAY BE WITHIN OR UNDER PARCEL OF LAND HEREINABOVE DESCRIBED,
WITHOUT, HOWEVER, THE RIGHT TO DRILL OR MINE THROUGH THE SURFACE THEREOF AND
RESERVED BY THE STATE OF CALIFORNIA, DEPARTMENT OF PUBLIC WORKS, IN DEED
RECORDED JULY 14, 1960 AS INSTRUMENT NO. 3995 IN BOOK D-910 PAGE 717, OFFICIAL
RECORDS.
ALSO EXCEPT THEREFROM ALL MINERALS, OILS, GASES AND OTHER HYDROCARBONS BY
WHATSOEVER NAME KNOWN THAT MAY BE WITHIN OR UNDER THE PARCEL OF LAND
HEREINABOVE DESCRIBED, WITHOUT, HOWEVER, THE RIGHT TO DRILL, DIG OR MINE
THROUGH THE SURFACE THEREOF, AS RESERVED IN DEED RECORDED NOVEMBER 16, 1961 AS
INSTRUMENT NO. 4800.
<PAGE> 75
Loan 1083
1011 Blossom Hill Rd.
EXHIBIT A
All that certain Real Property in the City of San Jose, County of Santa
Clara, State of California, described as follows:
PARCEL ONE
All of Parcel 3, as shown upon that certain Map entitled, "Parcel Map being all
of Parcels 1 and 2 shown on that certain Parcel Map filed for record in Book
501 of Maps, at Page 30, Santa Clara County Records", which Map was filed for
record in the Office of the Recorder of the County of Santa Clara, State of
California, on August 29, 1984 in Book 533 of Maps, at Page 26.
PARCEL TWO
A non-exclusive easement and right of ingress, egress and use for vehicular and
pedestrian passage, and parking and across all roads, parking areas and access
entries to and from public thoroughfares as such roads, parking areas and
entries are located and exist from time to time on said Parcels 1, 2, 4 and 5
as shown on the Map hereinabove referred to.
<PAGE> 76
Loan #1087
3601 Rosedale Highway
EXHIBIT A
PARCEL 1:
PARCEL 6 OF PARCEL MAP NO. 7481, IN THE CITY OF BAKERSFIELD, COUNTY OF KERN
STATE OF CALIFORNIA, AS PER MAP FILED APRIL 15, 1985 IN BOOK 31, PAGE 193 OF
PARCEL MAPS, AND AS CORRECTED BY CERTIFICATE OF CORRECTION RECORDED OCTOBER 3,
1985 IN BOOK 5803, PAGE 2012, OF OFFICIAL RECORDS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY.
THE FOLLOWING EXCEPTIONS ARE FOR MINERALS:
EXCEPTING THEREFROM ALL MINERALS FROM THOSE PORTIONS OF THE NORTHWEST QUARTER
OF SECTION 26, TOWNSHIP 29 SOUTH, RANGE 27 EAST, MOUNT DIABLO MERIDIAN,
DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT WHICH BEARS SOUTH 0 DEGREES 18' WEST, 30 FEET FROM THE
NORTH QUARTER SECTION CORNER OF SAID SECTION; THENCE ALONG THE NORTH AND SOUTH
QUARTER SECTION OF SAID SECTION 26, SOUTH 0 DEGREES 18' WEST, 933.40 FEET;
THENCE NORTH 89 DEGREES 50' WEST, 466.7 FEET; THENCE NORTH 0 DEGREES 18' EAST,
933.40 FEET; THENCE ALONG THE SOUTH LINE OF COUNTY ROAD SOUTH 90 DEGREES 50'
EAST 466.7 FEET; TO THE POINT OF BEGINNING; EXCLUSIVE OF THAT PORTION DESCRIBED
AS FOLLOWS:
BEGINNING AT A POINT IN THE EAST LINE OF THE NORTHWEST QUARTER OF SAID SECTION,
SAID POINT BEARS SOUTH 0 DEGREES 19' 08" WEST, 30.00 FEET FROM THE NORTHEAST
CORNER OF THE NORTHWEST QUARTER OF SAID SECTION; THENCE (1) ALONG SAID EAST
LINE, SOUTH 0 DEGREES 19' 08" WEST, 18.88 FEET; THENCE (2) NORTH 88 DEGREES 35'
46" WEST, 466.78 FEET TO THE EAST LINE OF THE LAND DESCRIBED IN PARCEL 1 IN THE
DEED TO FRASCH LAND COMPANY RECORDED JUNE 18, 1964 IN BOOK 3736, PAGE 508, OF
OFFICIAL RECORDS; THENCE (3) ALONG LAST SAID EAST LINE, NORTH 0 DEGREES 19' 08"
EAST, 9.34 FEET; THENCE (4) ALONG THE SOUTH LINE OF THE NORTH 30 FEET OF SAID
SECTION, SOUTH 89 DEGREES 46' 00" EAST, 466.70 FEET TO THE POINT OF BEGINNING;
AND FROM THAT PORTION DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE NORTH AND SOUTH QUARTER SECTION LINE, WHICH BEARS
SOUTH 0 DEGREES 18' WEST, 963.40 FEET FROM THE NORTH QUARTER CORNER OF SAID
SECTION; THENCE SOUTH 0 DEGREES 18' WEST, 658.60 FEET TO THE CENTER OF A 40
FOOT ROAD; THENCE ALONG THE CENTER LINE OF SAID 40 FOOT ROAD NORTH 89 DEGREES
50' WEST, 661.48 FEET; THENCE NORTH 0 DEGREES 17 1/2' EAST, 658.60 FEET; THENCE
NORTH 89 DEGREES 50' EAST, 661.535 FEET TO THE POINT OF BEGINNING; EXCLUSIVE OF
THAT PORTION DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT ON THE NORTH AND SOUTH QUARTER SECTION LINE WHICH BEARS
SOUTH 0 DEGREES 18' WEST 1292.70 FEET FROM THE NORTH QUARTER CORNER OF SAID
SECTION; THENCE SOUTH 0 DEGREES 18' WEST 329.30 FEET TO THE CENTER OF A 40 FOOT
ROAD; THENCE ALONG THE CENTER OF SAID 40 FOOT ROAD NORTH 89 DEGREES 50' WEST 200
FEET; THENCE NORTH 0 DEGREES 18' EAST 329.30 FEET TO A POINT; THENCE SOUTH 89
DEGREES 50' EAST 200 FEET TO THE POINT OF BEGINNING.
ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON SUBSTANCES WITHIN OR
UNDERLYING SAID LAND BELOW A DEPTH OF 500 FEET FOR THE PURPOSE OF DRILLING FOR
OR DEVELOPING ALL MINERALS, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES WITHIN OR
UNDERLYING SAID LAND, PROVIDED, HOWEVER, THAT THE GRANTORS, THEIR HEIRS OR
ASSIGNS, SHALL HAVE THE RIGHT TO DEVELOP SUCH SUBSTANCES BY SLANT DRILLING FROM
LOCATIONS ON ADJACENT LANDS AT DEPTH OF MORE THAN 500 FEET AND IN SUCH A MANNER
AS NOT TO DISTURB THE SURFACE OF SAID LAND OR ANY IMPROVEMENTS THEREOF, AS
EXCEPTED AND RESERVED BY LOUISE B. STRATTON, A MARRIED WOMAN, IN DEED RECORDED
OCTOBER 5, 1972 IN BOOK 4731, PAGE 672, OF OFFICIAL RECORDS.
<PAGE> 77
BEGINNING AT A POINT ON THE NORTH AND SOUTH QUARTER SECTION LINE WHICH BEARS
SOUTH 0 DEGREES 18' WEST 1292.70 FEET FROM THE NORTH QUARTER CORNER OF SAID
SECTION; THENCE SOUTH 0 DEGREES 18' WEST 329.30 FEET TO THE CENTER OF A 40 FOOT
ROAD; THENCE ALONG THE CENTER OF SAID 40 FOOT ROAD NORTH 89 DEGREES 50' WEST 200
FEET; THENCE NORTH 0 DEGREES 18' EAST 329.30 FEET TO A POINT; THENCE SOUTH 89
DEGREES 50' EAST 200 FEET TO THE POINT OF BEGINNING; EXCLUSIVE OF THE INTEREST
IN THE SOUTH 20 FEET OF SAID LAND RESERVED FOR USE AS PUBLIC ROAD IN DEED FROM
MILLER AND LUX INC., A CORPORATION, RECORDED IN BOOK 276, PAGE 151 OF OFFICIAL
RECORDS.
ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON SUBSTANCES WITHIN OR
UNDERLYING SAID LAND BELOW A DEPTH OF 500 FEET FOR THE PURPOSE OF DRILLING FOR
OR DEVELOPING ALL MINERALS, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES WITHIN OR
UNDERLYING SAID LAND, PROVIDED, HOWEVER, THAT THE GRANTORS, THEIR HEIRS OR
ASSIGNS, SHALL HAVE THE RIGHT TO DEVELOP SUCH SUBSTANCES BY SLANT DRILLING FROM
LOCATIONS ON ADJACENT LANDS AT DEPTH OF MORE THAN 500 FEET AND IN SUCH A MANNER
AS NOT TO DISTURB THE SURFACE OF SAID LAND OR ANY IMPROVEMENTS THEREON, AS
EXCEPTED AND RESERVED BY SIDNEY J. PETERS, A SINGLE MAN, IN DEED RECORDED
OCTOBER 5, 1972 IN BOOK 4731, PAGE 674 OF OFFICIAL RECORDS.
ALSO EXCEPTING THEREFROM ALL MINERALS FROM THOSE PORTIONS OF THE NORTHWEST
QUARTER OF SECTION 26, TOWNSHIP 29 SOUTH, RANGE 27 EAST, MOUNT DIABLO MERIDIAN,
DESCRIBED AS FOLLOWS:
BEGINNING AT A POINT SOUTH 0 DEGREES 18' WEST, 1622 FEET AND NORTH 89 DEGREES
50' WEST, 661.48 FEET FROM THE NORTHEAST CORNER OF THE NORTHWEST QUARTER OF SAID
SECTION, WHICH POINT IS ALSO THE SOUTHWEST CORNER OF PARCEL OF LAND CONVEYED TO
WALTER J. ARMSTRONG AND WIFE, BY DEED RECORDED APRIL 22, 1948 AS DOCUMENT NO.
15785; THENCE NORTH 89 DEGREES 50' WEST, 661.48 FEET TO THE CENTER LINE OF A 40
FOOT ROAD; THENCE ALONG THE CENTERLINE OF SAID LAST MENTIONED ROAD NORTH 0
DEGREES 17 1/2' EAST, 658.60 FEET; THENCE SOUTH 89 DEGREES 50' EAST, 661.535
FEET TO THE NORTHWEST CORNER OF THE PARCEL OF LAND CONVEYED TO WALTER J.
ARMSTRONG AND WIFE, AFORESAID; AND THENCE SOUTH ALONG THE WEST LINE OF SAID
PARCEL, 658.6 FEET TO THE POINT OF BEGINNING; EXCLUSIVE OF THE NORTH 263.40 FEET
THEREOF, AS CONVEYED TO DON M. BLAIR, ET UX, BY DEED RECORDED AUGUST 10, 1962:
AN UNDIVIDED 2/3RDS OF ALL OIL, GAS, PETROLEUM, HYDROCARBON SUBSTANCES AND
MINERALS WITHIN OR UNDERLYING SAID LAND OR THAT MAY BE PRODUCED AND SAVED
THEREFROM, PROVIDED, HOWEVER, GRANTOR, HIS SUCCESSORS AND ASSIGNS, SHALL NOT
CONDUCT DRILLING OR OTHER OPERATIONS UPON THE SURFACE OF SAID LAND, BUT NOTHING
HEREIN CONTAINED SHALL BE DEEMED TO PREVENT GRANTOR, HIS SUCCESSORS AND
ASSIGNS, FROM EXTRACTING OR CAPTURING SAID MINERALS BY DRILLING ON ADJACENT OR
NEIGHBORING LANDS, AND/OR FROM CONDUCTING SUBSURFACE DRILLING OPERATIONS UNDER
SAID LANDS, AT A DEPTH OF 200 FEET BELOW THE SURFACE OF SAID LAND, AS RESERVED
BY WALTER J. ARMSTRONG AND LOUISE B. ARMSTRONG, HUSBAND AND WIFE IN DEED DATED
MARCH 19, 1954, RECORDED APRIL 1, 1954 IN BOOK 2211, PAGE 478 OF OFFICIAL.
RECORDS.
AND ALSO 1/3RD OF ALL OIL, GAS, PETROLEUM, HYDROCARBON SUBSTANCES AND MINERALS
WITHIN OR UNDERLYING SAID LAND OR THAT MAY BE PRODUCED AND SAVED THEREFROM,
PROVIDED, HOWEVER, GRANTOR, THEIR SUCCESSORS AND ASSIGNS, SHALL NOT CONDUCT
DRILLING OR OTHER OPERATIONS UPON THE SURFACE OF SAID LAND, BUT NOTHING HEREIN
CONTAINED SHALL BE DEEMED TO PREVENT GRANTORS, THEIR SUCCESSORS AND ASSIGNS,
FROM EXTRACTING OR CAPTURING SAID MINERALS BY DRILLING ON ADJACENT OR
NEIGHBORING LANDS, AND/OR FROM CONDUCTING SUBSURFACE DRILLING OPERATIONS UNDER
SAID LAND, AT A DEPTH OF 200 FEET BELOW THE SURFACE OF SAID LAND, AS EXCEPTED
BY
<PAGE> 78
CHARLES T. WHITNEY, JR., AN UNMARRIED MAN, AND OSCAR W. LOVELESS AND OPAL L.
LOVELESS, HUSBAND AND WIFE, IN DEED RECORDED OCTOBER 5, 1972 IN BOOK 4731, PAGE
680 OF OFFICIAL RECORDS.
ALSO EXCEPTING THEREFROM ALL MINERALS FROM THOSE PORTIONS OF THE NORTH HALF OF
SECTION 26, TOWNSHIP 29 SOUTH, RANGE 27 EAST, MOUNT DIABLO MERIDIAN, DESCRIBED
AS FOLLOWS:
BEGINNING AT A POINT WHICH BEARS SOUTH 0 DEGREES 18, WEST, 30 FEET FROM THE
NORTH QUARTER SECTION CORNER OF SECTION 26, TOWNSHIP 29 SOUTH, RANGE 27 EAST,
MOUNT DIABLO MERIDIAN, IN THE UNINCORPORATED AREA OF THE COUNTY OF KERN, STATE
OF CALIFORNIA; THENCE ALONG THE NORTH AND SOUTH QUARTER SECTION LINE OF SAID
SECTION 26, SOUTH 0 DEGREES 18' WEST, 933.40 FEET; THENCE NORTH 89 DEGREES 50'
WEST, 933.40 FEET; THENCE NORTH 0 DEGREES 18' EAST 933.40 FEET; THENCE ALONG THE
SOUTH LINE OF SAID COUNTY ROAD SOUTH 90 DEGREES 50' EAST, 933.40 FEET TO THE
POINT OF BEGINNING; EXCLUSIVE OF THE EAST 466.70 FEET THEREOF; AND EXCLUSIVE OF
ALL THAT PORTION OF THE WEST HALF OF THE WEST HALF OF THE EAST 933.40 FEET OF
THE NORTH 963.40 FEET OF THE NORTHWEST QUARTER OF SECTION 26, TOWNSHIP 29 SOUTH,
RANGE 27 EAST, MOUNT DIABLO MERIDIAN, IN THE UNINCORPORATED AREA OF THE COUNTY
OF KERN, STATE OF CALIFORNIA AS PER THE OFFICIAL PLAT THEREOF ON FILE IN THE
OFFICE OF THE SURVEYOR GENERAL, DESCRIBED AS FOLLOWS:
BEGINNING AT INTERSECTION OF THE WEST LINE OF THE SAID EAST 933.40 FEET OF SAID
NORTHWEST QUARTER WITH THE SOUTH LINE OF ROSEDALE HIGHWAY, SAID POINT BEING
30.00 FEET SOUTH OF THE NORTH LINE OF SAID NORTHWEST QUARTER OF SECTION 26;
THENCE ALONG SAID SOUTH LINE OF ROSEDALE HIGHWAY, SOUTH 89 DEGREES 46' 00"
EAST, 9.60 FEET AND SOUTH 88 DEGREES 35' 46" EAST, 126.92 FEET; THENCE
DEPARTING FROM SAID SOUTH LINE OF ROSEDALE HIGHWAY, SOUTH 00 DEGREES 18' 24"
WEST 635.35 FEET; THENCE NORTH 89 DEGREES 46' 00" WEST, PARALLEL WITH THE NORTH
LINE OF SAID NORTHWEST QUARTER OF SECTION 26, 136.50 FEET TO A POINT IN SAID
WEST LINE OF THE EAST 933.40 FEET; THENCE NORTH 00 DEGREES 18' 24" EAST, ALONG
SAID WEST LINE, 638.24 FEET TO THE POINT OF BEGINNING; AND EXCLUSIVE OF THAT
PORTION OF SAID LAND DESCRIBED IN DEED TO THE STATE OF CALIFORNIA, RECORDED
MARCH 25, 1968 IN BOOK 4144, PAGE 211 OF OFFICIAL RECORDS; AND FROM ALL THAT
PORTION OF THE WEST HALF OF THE WEST HALF OF THE EAST 933.40 FEET OF THE NORTH
963.40 FEET OF THE NORTHWEST QUARTER OF SECTION 26, TOWNSHIP 29 SOUTH, RANGE 27
EAST, MOUNT DIABLO MERIDIAN, DESCRIBED AS FOLLOWS:
BEGINNING AT INTERSECTION OF THE WEST LINE OF THE SAID EAST 933.40 FEET OF SAID
NORTHWEST QUARTER, WITH THE SOUTH LINE OF ROSEDALE HIGHWAY, SAID POINT BEING
30.00 FEET SOUTH OF THE NORTH LINE OF SAID NORTHWEST QUARTER OF SECTION 26;
THENCE ALONG SAID SOUTH LINE OF ROSEDALE HIGHWAY, SOUTH 89 DEGREES 46' 00"
EAST, 9.60 FEET AND SOUTH 88 DEGREES 35' 46" EAST, 126.92 FEET; THENCE
DEPARTING FROM SAID SOUTH LINE OF ROSEDALE HIGHWAY, SOUTH 00 DEGREES 18' 24"
WEST 635.35 FEET; THENCE 89 DEGREES 46' 00' WEST PARALLEL WITH THE NORTH LINE
OF SAID NORTHWEST QUARTER OF SECTION 26, 136.50 FEET TO A POINT IN SAID WEST
LINE OF THE EAST 933.40 FEET; THENCE NORTH 00 DEGREES 18' 24" EAST, ALONG SAID
WEST LINE, 638.24 FEET TO THE POINT OF BEGINNING; EXCLUSIVE OF THAT PORTION OF
SAID LAND DESCRIBED IN DEED TO THE STATE OF CALIFORNIA, RECORDED MARCH 25, 1968
IN BOOK 4144, PAGE 211, OF OFFICIAL RECORDS.
ALL OIL, GAS, PETROLEUM, MINERALS AND OTHER HYDROCARBON SUBSTANCES WITHIN OR
UNDERLYING SAID LAND BELOW A DEPTH OF 500 FEET FOR THE PURPOSE OF DRILLING FOR
OR DEVELOPING ALL MINERALS, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES WITHIN OR
UNDERLYING SAID LAND, PROVIDED, HOWEVER, THAT THE GRANTORS, THEIR HEIRS OR
ASSIGNS, SHALL HAVE THE RIGHT TO DEVELOP SUCH SUBSTANCES BY SLANT DRILLING FROM
<PAGE> 79
LOCATIONS ON ADJACENT LANDS AT DEPTH OF MORE THAN 500 FEET AND IN SUCH A MANNER
AS NOT TO DISTURB THE SURFACE OF SAID LAND OR ANY IMPROVEMENTS THEREOF AS
EXCEPTED AND RESERVED BY RICHARD E. FRASCH, JR. AND CONSTANCE J. FRASCH,
HUSBAND AND WIFE, IN DEED RECORDED MARCH 2, 1973 IN BOOK 4773, PAGE 211 OF
OFFICIAL RECORDS.
ALSO EXCEPTING THEREFROM ALL MINERALS FROM THOSE PORTIONS OF THE NORTHWEST
QUARTER OF SECTION 26, TOWNSHIP 29 SOUTH, RANGE 27 EAST, MOUNT DIABLO MERIDIAN,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHWEST CORNER OF THAT CERTAIN PARCEL OF LAND CONVEYED TO
WALTER J. ARMSTRONG, BY DEED RECORDED IN BOOK 1396, PAGE 109 OF OFFICIAL
RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF KERN COUNTY; THENCE SOUTHERLY
ALONG THE WESTERLY LINE OF SAID PARCEL SO CONVEYED, A DISTANCE OF 263.40 FEET;
THENCE NORTH 89 DEGREES 50' 00" WEST, PARALLEL WITH THE SOUTHERLY LINE OF SAID
PARCEL SO CONVEYED, A DISTANCE OF 661.56 FEET TO A POINT IN THE CENTER RIGHT OF
WAY LINE OF COUNTY ROAD NO. 1270; THENCE NORTH 00 DEGREES 17' 30" EAST, ALONG
SAID CENTER RIGHT OF WAY, A DISTANCE OF 263.40 FEET TO THE NORTHWEST CORNER OF
THAT CERTAIN PARCEL OF LAND CONVEYED TO CASEY AND MONTGOMERY, A CO-PARTNERSHIP,
BY DEED RECORDED APRIL 1, 1954 IN BOOK 2211, PAGE 478 OF OFFICIAL RECORDS;
THENCE SOUTH 89 DEGREES 50' 00" EAST PARALLEL WITH THE SOUTHERLY LINE OF SAID
PARCEL SO CONVEYED, A DISTANCE OF 661.54 FEET TO THE POINT OF BEGINNING.
AN UNDIVIDED 2/3RDS OF ALL OIL, GAS, PETROLEUM, HYDROCARBON SUBSTANCES AND
MINERALS WITHIN OR UNDERLYING SAID LAND OR THAT MAY BE PRODUCED AND SAVED
THEREFROM, PROVIDED, HOWEVER, GRANTOR, HIS SUCCESSORS AND ASSIGNS, SHALL NOT
CONDUCT DRILLING OR OTHER OPERATIONS UPON THE SURFACE OF SAID LAND, BUT NOTHING
HEREIN CONTAINED SHALL BE DEEMED TO PREVENT GRANTOR, HIS SUCCESSORS AND
ASSIGNS, FROM EXTRACTING OR CAPTURING SAID MINERALS BY DRILLING ON ADJACENT OR
NEIGHBORING LANDS, AND/OR FROM CONDUCTING SUBSURFACE DRILLING OPERATIONS UNDER
SAID LANDS, AT A DEPTH OF 200 FEET BELOW THE SURFACE OF SAID LAND, AS RESERVED
BY WALTER J. ARMSTRONG AND LOUISE B. ARMSTRONG, HUSBAND AND WIFE IN DEED DATED
MARCH 19, 1954, RECORDED APRIL 1, 1954 IN BOOK 2211, PAGE 478 OF OFFICIAL
RECORDS.
ALSO EXCEPTING THEREFROM AN UNDIVIDED 1/3RD INTEREST IN AND TO ALL OIL GAS, AND
OTHER HYDROCARBON SUBSTANCES AND MINERALS WITHIN OR UNDERLYING SAID LAND OR
THAT MAY BE PRODUCED AND SAVED THEREFROM, PROVIDED, HOWEVER GRANTOR HEREIN,
THEIR SUCCESSORS AND ASSIGNS, SHALL NOT CONDUCT DRILLING OR OTHER OPERATIONS
ABOVE A DEPTH OF 500 FEET BELOW THE SURFACE OF SAID LAND, BUT NOTHING HEREIN
CONTAINED SHALL BE DEEMED TO PREVENT GRANTOR, THEIR SUCCESSORS AND ASSIGNS,
FROM EXTRACTING OR CAPTURING SAID MINERALS, OIL, GAS AND HYDROCARBONS BY
DRILLING ON ADJACENT OR NEIGHBORING LANDS, AT A DEPTH OF 500 FEET OR MORE BELOW
THE SURFACE OF SAID LAND, SO AS NOT TO DISTURB THE SURFACE THEREOF OR ANY
IMPROVEMENTS THEREON, AS RESERVED BY SIPPRELLE INVESTMENT COMPANY, A
CORPORATION, IN DEED RECORDED MARCH 2, 1973 IN BOOK 4773, PAGE 207 OF OFFICIAL
RECORDS.
PARCEL 2:
EASEMENTS FOR INGRESS AND EGRESS, AUTOMOBILE PARKING, PEDESTRIAN USES,
INSTALLATION, OPERATION AND MAINTENANCE OF SEPARATE AND COMMON UTILITY LINES,
STRUCTURE SUPPORT, SIGNS AND OTHER USES; ALONG WITH A PERPETUAL EASEMENT IN, TO,
OVER AND ACROSS THAT CERTAIN PROPERTY DESCRIBED AS "THE DRAINAGE BASIN" OR
"DRAINAGE BASIN PROPERTY", ALL AS MORE PARTICULARLY DEFINED AND DESCRIBED IN
THAT CERTAIN DOCUMENT ENTITLED:
<PAGE> 80
"CONSTRUCTION, OPERATION AND RECIPROCAL EASEMENT AGREEMNT:, BY AND BETWEEN
FEDERATED DEPARTMENT STORES, INC., A DELAWARE CORPORATION, AND DSL/GRIFFITH II,
A CALIFORNIA GENERAL PARTNERSHIP, RECORDED ON APRIL 19, 1985 IN BOOK 5753 PAGE
148, OF OFFICIAL RECORDS, IN, OVER AND UPON PARCELS 2, 3, 4, 5, 6, 7, 8 AND 9
OF PARCEL MAP 7481, IN THE CITY OF BAKERSFIELD, COUNTY OF KERN, STATE OF
CALIFORNIA, AS PER MAP RECORDED APRIL 15, 1985 IN BOOK 31 PAGE 193 OF PARCEL
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF KERN COUNTY, CALIFORNIA,
DESCRIBED IN EXHIBIT "A" ATTACHED THERETO."
<PAGE> 81
Loan #1090
139 W. Thousand Oaks Blvd
EXHIBIT A
Parcel 1:
Lot 8, Tract No. 1229, in the City of Thousand Oaks, County of Ventura, State
of California, according to the map thereof recorded in Book 28, Page 57 of
Miscellaneous Records (Maps), in the office of the County Recorder of said
County.
EXCEPT therefrom the Easterly 300 feet thereof.
ALSO EXCEPT therefrom that portion of said Lot 8 which lies Westerly of the
following described line:
Beginning at a point in that certain course on the Northerly line of said Lot
8, shown as having a bearing and length on North 74 degrees 10' West, 281.00
feet on the map of said tract, distant thereon North 74 degrees 10' 00" West
149.67 feet from the Easterly terminus of said course; thence,
lst: South 13 degrees 51' 01" East, 7.27 feet; thence,
2nd: South 27 degrees 18' 30" East, 25.82 feet; thence,
3rd: South 8 degrees 22' 17" West, 37.06 feet; thence,
4th: South 5 degrees 38' 24" West, 29.90 feet; thence,
5th: South 16 degrees 18' 53" West 34.25 feet; thence,
6th: South 21 degrees 07' 35" West, 112.59 feet to a point on the South line of
said Lot 8.
ALSO EXCEPT an undivided one-half interest in all oil, gas and other
hydrocarbon substances and other minerals of all kinds whether like or unlike
hydrocarbons below a depth of 500 feet of the surface of the real property
described in Exhibit "A" hereto, without, however, the right to enter upon the
surface of such property, as reserved by Janos Development Co., a partnership,
in deed recorded December 28, 1971 in Book 3901, Page 380 of Official Records.
Parcel 2:
That portion of Section 9, Township 1 North, Range 19 West, Rancho El Conejo,
in the City of Thousand Oaks, County of Ventura, State of California, as per
partition, recorded in Book 1, Page 746 of Deeds, in the office of the County
Recorder of said County; described as follows:
Beginning at the Southerly terminus of that certain course shown as having a
bearing and distance of North 8 degrees 30' 32" East 19.97 feet to the
Southerly line of Lot 8, Tract No. 1229, in the City of Thousand Oaks, County
of Ventura, State of California, as per Map recorded in Book 28, Page 57 of
Miscellaneous Records (Maps), in the office of the County Recorder of said
County; said beginning being the intersection of said tract line with a curve
concave to the South and having a radius of 330 feet, a radial line of said 330
foot radius curve to said intersection bearing North 21 degrees 20' 25" East;
thence leaving the boundary of said Tract No. 1229,
1st: Northwesterly along said curve through a central angle of 8 degrees 33'
35" an
<PAGE> 82
arc distance of 49.30 feet to a point of compound curve concave to the
Southeast and having a radius of 50.00 feet a common radial of last said two
curves bears South 12 degrees 46' 50" West; thence,
2nd: Southwesterly along said curve through a central angle of 141 degrees 04'
23" an arc distance of 123.10 feet to the Northerly right of way line of
Ventura Freeway as described in deed recorded in Book 2093, Page 166 of said
records; thence Northwesterly along said right of way line,
3rd: North 61 degrees 19' 15" West 24.01 feet; thence,
4th: North 59 degrees 15' 23" West 167.92 feet; thence leaving said right of
way line,
5th: North 30 degrees 44' 37" East 46.30 feet to a point on the Southerly line
of Tract No. 1229, said tract line being a nontangent curve concave to the
North and having a radius of 1950 feet, a radial line of said 1950 foot radius
curve to said point bearing South 15 degrees 47' 21" West; thence,
6th: Southeasterly along said Southerly line through a central angle of 7
degrees 16' 49" an arc distance of 247.78 feet; thence,
7th: South 8 degrees 30' 32" West 19.97 feet to the point of beginning.
EXCEPT that portion of said land described in deed recorded April 12, 1990 as
Document No. 90-055080 of Official Records.
ALSO EXCEPT all minerals, oils, gases and other hydrocarbons by whatsoever name
known that may be within or under said land without, however, the right to
drill, dig or mine through the surface thereof.
<PAGE> 83
Loan #1080
1704 Shadeland Avenue
EXHIBIT A
A part of the Northeast Quarter of Section 35, Township 16 North, Range 4 East
of the Second Principal Meridian in Marion County, Indiana, described as
follows:
Commencing at the Southeast corner of said Northeast Quarter; thence North 00
degrees 00 minutes 00 seconds East (assumed bearing) along the East line of said
Northeast Quarter and the centerline of Shadeland Avenue, 595.00 feet; thence
parallel with the South line of said Northeast Quarter North 89 degrees 53
minutes 49 seconds West 87.87 feet to a point on the West right-of-way line of
Shadeland Avenue and the point of beginning; thence continuing parallel with
said South line North 89 degrees 53 minutes 49 seconds West 416.49 feet; thence
parallel with said East line North 00 degrees 00 minutes 00 seconds East 240.00
feet; thence parallel with said South line, South 89 degrees 53 minutes 49
seconds East 416.85 feet to said right-of-way; thence along said right-of-way
South 00 degrees 05 minutes 06 seconds West 240.00 feet to the point of
beginning.
<PAGE> 84
Loan #1085
7853 South U.S. 31
EXHIBIT A
A part of the West Half of the Southwest Quarter of Section 18, Township 14
North, Range 4 East, Marion County, Indiana, described as follows:
Commencing at the Northeast corner of said Half Quarter Section; thence South 00
degrees 13 minutes 26 seconds East 2371.23 feet along the East line of said Half
Quarter Section; thence South 68 degrees 43 minutes 24 seconds West 10.72 feet;
thence South 00 degrees 13 minutes 26 seconds East 4.68 feet parallel to the
East line of said Half Quarter Section to a point of curvature; thence
Southwesterly 48.13 feet along an arc to the right and having a radius of 40.00
feet and subtended by a long chord having a bearing of South 34 degrees ?4
minutes 59 seconds West and a length of 45.28 feet; thence South 68 degrees 43
minutes ?4 seconds West 169.33 feet; thence South 69 degrees 25 minutes 23
seconds West 96.33 feet to a point of curvature; thence Southwesterly 47.69 feet
along an arc to the right and having a radius of 130.00 feet and subtended by a
long chord having a bearing of South 86 degrees 56 minutes 44 seconds West and a
length of 47.42 feet to a point of compound curve; thence Northwesterly 189.35
feet along an arc to the right and having a radius of 480.00 feet and subtended
by a long chord having a bearing of North 71 degrees 14 minutes 42 seconds West
and a length of 188.12 feet to a point of compound curve; thence Northwesterly
?0.94 feet along an arc to the right and having a radius of 130.00 feet and
subtended by a long chord having a bearing of North 44 degrees 18 minutes 43
seconds West and a length of ?0.06 feet; thence North 28 degrees 40 minutes 48
seconds West 783.22 feet to the point of beginning of this description; thence
South 61 degrees 19 minutes 12 seconds West 199.62 feet to the Northeastern
right-of-way of U.S. Road 31 (as per Indiana State Highway Plans for F.A.
Project No. 734, F.Y. 1941); thence North 27 degrees 17 minutes 45 seconds West
?70.05 feet along said right-of-way; thence North 61 degrees 19 minutes 12
seconds East ?95.51 feet; thence South 28 degrees 40 minutes 48 seconds East
170.00 feet to the Point of Beginning.
Together with a non-exclusive easement for vehicular parking and driveways,
pedestrian walkways and underground utilities over the following:
A part of the West Half of the Southwest Quarter of Section 18, Township 14
North, Range 4 East, Marion County, Indiana, described as follows:
Commencing at the Northeast corner of said Half Quarter Section; thence South
00 degrees 13 minutes 26 seconds East 2371.23 feet along the East line of said
Half Quarter Section; thence South 68 degrees 43 minutes 24 seconds West 10.72
feet; thence South 00 degrees 13 minutes 26 seconds East 4.68 feet parallel to
the East line of said Half Quarter Section to a point of curvature; thence
Southwesterly 48.13 feet along an arc to the right and having a radius of 40.00
feet and subtended by a long chord having a bearing of South 34 degrees 14
minutes 59 seconds West and a length of 45.28 feet; thence South 68 degrees 43
minutes 24 seconds West 169.33 feet; thence South 69 degrees 25 minutes 23
seconds West 96.33 feet to a point of curvature; thence Southwesterly 47.69
feet along an arc to the right and having a radius of 130.00 feet and subtended
by a long chord having a bearing of South 86 degrees 56 minutes 44 seconds West
and a length of 47.42 feet to a point of compound curve; thence Northwesterly
189.35 feet along an arc to the right and having a radius of 480.00 feet and
subtended by a long chord having a bearing of North 71 degrees 14 minutes 42
seconds West and a length of 188.12 feet to a point of compound curve; thence
Northwesterly 70.94 feet along an arc to the right and having a radius of
130.00 feet and subtended by a
(Continued)
<PAGE> 85
long chord having a bearing of North 44 degrees 18 minutes 43 seconds West and
a length of 70.06 feet; thence North 28 degrees 40 minutes 48 seconds West
634.22 feet to the point of beginning of this description; thence South 61
degrees 19 minutes 12 seconds West 200.00 feet to the Northeasterly
right-of-way of U.S. Road 31 (as per Indiana State Highway Plans for F.A.
Project No. 734, F.Y. 1941); thence North 28 degrees 40 minutes 48 seconds West
133.12 feet along said right of way; thence North 27 degrees 17 minutes 45
seconds West 15.88 feet along said right of way; thence North 61 degrees 19
minutes 12 seconds East 199.62 feet; thence South 28 degrees 40 minutes 48
seconds East 149.00 feet to the point of beginning.
AND:
A part of the West Half of the Southwest Quarter of Section 18, Township 14
North, Range 4 East, Marion County, Indiana, described as follows:
Commencing at the Northeast corner of said Half Quarter Section; thence South 00
degrees 13 minutes 26 seconds East 2371.23 feet along the East line of said Half
Quarter Section; thence South 68 degrees 43 minutes 24 seconds West 10.72 feet;
thence South 00 degrees 13 minutes 26 seconds East 4.68 feet parallel to the
East line of said Half Quarter Section to a point of curvature; thence
Southwesterly 48.13 feet along an arc to the right and having a radius of 40.00
feet and subtended by a long chord having a bearing of South 34 degrees 14
minutes 59 seconds West and a length of 45.28 feet; thence South 68 degrees 43
minutes 24 seconds West 169.33 feet; thence South 69 degrees 25 minutes 23
seconds West 96.33 feet to a point of curvature; thence Southwesterly 47.69 feet
along an arc to the right and having a radius of 130.00 feet and subtended by a
long chord having a bearing of South 86 degrees 56 minutes 44 seconds West and a
length of 47.42 feet to a point of compound curve; thence Northwesterly 189.35
feet along an arc to the right and having a radius of 480.00 feet and subtended
by a long chord having a bearing of North 71 degrees 14 minutes 42 seconds West
and a length of 188.12 feet to a point of compound curve; thence Northwesterly
70.94 feet along an arc to the right and having a radius of 130.00 feet and
subtended by a long chord having a bearing of North 44 degrees 18 minutes 43
seconds West and a length of 70.06 feet; thence North 28 degrees 40 minutes 48
seconds West 953.22 feet to the point of beginning of this description; thence
South 61 degrees 19 minutes 12 seconds West 195.51 feet to the Northeastern
right-of-way of U.S. Road 31 (as per Indiana State Highway Plans for F.A.
Project No. 734, F.Y. 1941); thence North 27 degrees 17 minutes 45 seconds West
169.05 feet along said right of way; thence North 61 degrees 19 minutes 12
seconds East 191.43 feet; thence South 28 degrees 40 minutes 48 seconds East
169.00 feet to the point of beginning.
Also together with a non-exclusive easement for ingress and egress as set out in
a Declaration And Grant Of Easements recorded January 30, 1984 as Instrument
#84-7173,
(Continued)
<PAGE> 86
as modified by an amendment recorded July 24, 1985 as Instrument #85-61053, in
the Office of the Recorder of Marion County, Indiana.
<PAGE> 87
Loan #1066
6875 South Broadway
EXHIBIT A
PARCEL 1:
THAT PART OF LOT 2, BLOCK 5, BROADRIDGE PLAZA FILING NO. 2, MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHEAST CORNER OF LOT 2, BLOCK 5, BROADRIDGE PLAZA FILING
NO. 2;
THENCE SOUTH 89 DEGREES 58 MINUTES WEST ALONG THE SOUTH LINE OF SAID LOT 2,
BLOCK 5, 275.141 FEET;
THENCE NORTH 00 DEGREES 02 MINUTES WEST, 218.15 FEET TO A POINT ON THE SOUTH
LOT LINE EXTENDED WESTERLY OF THAT PARCEL OF LAND DESCRIBED IN BOOK 1551 AT
PAGE 332;
THENCE EAST ALONG SAID SOUTH LINE EXTENDED WESTERLY AND ALONG THE SOUTH LINE OF
THAT PARCEL DESCRIBED IN BOOK 1551 AT PAGE 332, 275.141 FEET TO THE EAST LINE
OF SAID LOT 2, BLOCK 5;
THENCE SOUTH 00 DEGREES 02 MINUTES EAST, 217.99 FEET TO THE POINT OF BEGINNING,
COUNTY OF ARAPAHOE,
STATE OF COLORADO.
PARCEL 2:
A NON-EXCLUSIVE EASEMENT FOR INGRESS AND EGRESS AND SANITARY SEWER RIGHTS AS
SET FORTH IN THAT CERTAIN GRANT OF EASEMENT RECORDED MAY 20, 1982 IN BOOK 3628
AT PACE 237,
COUNTY OF ARAPAHOE,
STATE OF COLORADO.
PARCEL 3:.
A NON-EXCLUSIVE EASEMENT FOR VEHICULAR PARKING AS SET FORTH IN GRANT OF
RECIPROCAL EASEMENTS FOR USE OF PARKING AREAS RECORDED JULY 28, 1983 IN BOOK
3926 AT PAGE 390,
COUNTY OF ARAPAHOE,
STATE OF COLORADO.
<PAGE> 88
EXHIBIT B
LEASE
(INDIVIDUAL)
BETWEEN
________________________, AS LANDLORD
AND
ARG ENTERPRISES, INC.,
AS TENANT
DATED: ___, 1996
<PAGE> 89
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
------- ----
<S> <C> <C>
ARTICLE 1 FUNDAMENTAL LEASE PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 3 PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 4 TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.01 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4.02 Option to Extend Lease Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 5 LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 6 RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6.01 Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6.02 Rental Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
6.03 Net Lease; Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 7 USE OF THE PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.01 Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.02 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7.03 Permits and Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 8 UTILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8.01 Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8.02 Interruption in Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 9 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
9.01 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
9.02 Definition of "Real Property Taxes" . . . . . . . . . . . . . . . . . . . . . . . . . 7
9.03 Personal Property Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
9.04 Tenant's Right to Contest Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 10 MAINTENANCE AND REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10.01 Tenant's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10.02 Landlord's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
10.03 Landlord's Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE 11 INSURANCE AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
11.01 Tenant's Insurance Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
11.02 Subrogation Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
11.03 Insurance Use Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
11.04 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
11.05 Payment of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
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<TABLE>
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ARTICLE 12 ALTERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12.01 Permitted Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12.02 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
12.03 Structural Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
12.04 Removal of Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
12.05 Alterations Required by Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
12.06 General Conditions Relating to Alterations . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 13 SIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 14 DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD . . . . . . . . . . . . . . . . . . . . . 15
14.01 Obligation to Rebuild . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
14.02 No Abatement of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 15 EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
15.01 Total Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
15.02 Partial Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
15.03 Award . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
15.04 Transfer Under Threat of Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 16 ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
16.01 Landlord's Consent Required . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
16.02 Assumption of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
16.03 Assignment to Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
16.04 No Release of Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 17 DEFAULT; REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
17.01 Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
17.02 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
17.03 Administrative Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
17.04 Default by Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
17.05 Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
17.06 Lender's Right to Cure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 18 SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 19 QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 20 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 21 SURRENDER OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 22 BANKRUPTCY OR INSOLVENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
22.01 Bankruptcy or Insolvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
</TABLE>
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<PAGE> 91
<TABLE>
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ARTICLE 23 HAZARDOUS MATERIALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
23.01 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
23.02 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
23.03 Tenant's Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
23.04 Landlord Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
23.05 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
23.06 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 24 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
24.01 Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
24.02 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
24.03 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
24.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
24.05 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
24.06 Recording . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
24.07 Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
24.08 Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
24.09 Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
24.10 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
24.11 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
24.12 Uneconomic Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
24.13 Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
24.14 Liability of Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
24.15 No Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
24.16 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
24.17 Definition of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
24.18 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
24.19 Relationship of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
24.20 Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
24.21 Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
24.22 Brokerage Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
24.23 Not Binding Until Executed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
</TABLE>
iii
<PAGE> 92
LEASE
In consideration of the rents and covenants set forth below, Landlord (as
hereinafter defined) hereby leases to Tenant (as hereinafter defined), and
Tenant hereby leases from Landlord, the following Premises (as hereinafter
defined) upon the following terms and conditions:
ARTICLE I
FUNDAMENTAL LEASE PROVISIONS
Date: _____________________, 1996
Commencement
Date: _____________________, 1996
Landlord: ___________________________
Tenant: ARG Enterprises, Inc., a California corporation
Tenant's
Trade Name: Stuart Anderson's Black Angus or Stuart Anderson's
Cattle Company restaurants
Guarantor: American Restaurant Group, Inc., a Delaware
corporation
Lease Term: ________________(___) years, commencing on the
Commencement Date and ending on September 11, 2021,
with three (3) renewal options of five (5) years
each. (Article 4)
Annual
Rent: Dollars ($ ) subject to adjustment as hereinafter
provided. (Article 6, Section 6.01)
The Annual Rent shall be payable on the first day of
each month, commencing on _________ 1, 1996, in
twelve (12) equal installments each in the amount of
____________ Dollars ($_____) during each year of
the term of this lease subject to proration or
adjustment as hereinafter provided.
<PAGE> 93
Addresses for
Notices: To Landlord: _______________________________
Attn: _________________________
Fax: _________________________
To Tenant: ARG Enterprises, Inc.
6th Floor
450 Newport Center Drive
Newport Beach, CA 92660
Attn: Chief Financial Officer
Fax: (714) 721-8941
With a copy to: American Restaurant Group, Inc.
Suite 201
4410 El Camino Real
Los Altos, CA 94022
Attn: Legal Department
Fax: (415) 949-6420
Premises: That certain real property described in Exhibit A attached
hereto, and all appurtenances, easements and rights of way
now or subsequently pertaining thereto, together with all
improvements located thereon, consisting of a restaurant
located at _____________, and known as either Stuart
Anderson's Black Angus or Stuart Anderson's Cattle Company
restaurant.
References in this Article 1 to other Articles are for convenience and
designate some of the other Articles where references to the Fundamental Lease
Provisions appear. Each reference in this Lease to any of the Fundamental
Lease Provisions contained in this Article 1 shall be construed to incorporate
all of the terms provided under such Fundamental Lease Provisions. In the
event of any conflict between any Fundamental. Lease Provision and the balance
of this Lease, the latter shall control.
ARTICLE 2
EXHIBITS
The following are attached hereto as Exhibits and made a part of this
Lease:
EXHIBIT A--Description of the Premises
EXHIBIT B--Form of Subordination, Non-Disturbance and Attornment
Agreement
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<PAGE> 94
In the event of any conflict between any of the above-referenced
Exhibits and the balance of this Lease, the Exhibit shall control.
ARTICLE 3
PREMISES
Landlord hereby leases and demises unto Tenant and Tenant hereby
leases and takes from Landlord, for the term, at the rental, and upon the
terms, covenants, and conditions hereinafter set forth, the property referred
to in Article 1 as the Premises and described on Exhibit A attached hereto.
ARTICLE 4
TERM
4.01 Term. The term of this Lease shall be the term specified in
Article 1 hereof (the initial term and any extensions exercised by Tenant
thereof are hereinafter referred to as the "Lease Term") and shall commence on
the Commencement Date.
4.02 Option to Extend Lease Term. Tenant shall have the option to
extend the initial term of this Lease for three (3) additional, successive
periods of five (5) years each (each, an "Extension Period") on the same terms,
covenants and conditions of this Lease. In the event Tenant elects to exercise
the option(s), Tenant shall provide Landlord written notice of Tenant's
exercise of the option(s) not less than ninety (90) days prior to the end of
the then-current term, such notice to be given in the manner provided in
Section 24.04 of this Lease. Tenant's right to exercise the foregoing
option(s) is conditioned upon Tenant's performance of all of the duties and
obligations on its part to be performed under this Lease so that, at the time
of the exercise of such options, Tenant shall not be in default hereunder. In
the event that Tenant elects to extend the initial term of this Lease, the
Annual Rent shall continue to be adjusted as provided in Section 6.02 of this
Lease.
ARTICLE 5
LIENS
Tenant shall do all things necessary to prevent the filing of any
mechanics' or other liens or encumbrances against the Premises, or any part
thereof, or upon any interest of Landlord or any mortgagee or beneficiary under
a deed of trust or any ground or underlying lessor in any portion of the
Premises, by reason of work, labor, services, or materials supplied or claimed
to have been supplied to Tenant, or anyone holding the Premises, or any part
thereof, through or under Tenant. If any such lien or encumbrance shall at any
time be filed against the Premises, or any portion thereof, Tenant shall either
cause same to be discharged of record within thirty
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<PAGE> 95
(30) days after the date of filing of same or, if Tenant in good faith
determines that such lien should be contested, Tenant will give Landlord prior
notice of Tenant's intention to contest any such lien and, upon demand by
Landlord, will procure and record a lien release bond under applicable law in
the amount prescribed by applicable law or if no amount is prescribed by
applicable law in an amount equal to 150% of the lien amount. If a final
judgment is rendered against Tenant by a court of competent jurisdiction, or if
the Premises or any portion thereof are in danger of being foreclosed upon as a
result of any such lien, Tenant will satisfy such judgment or lien at once. If
Tenant does not post the release bond or fails to pay any such adverse judgment
or to discharge any lien in the event of any imminent foreclosure, then
Landlord may post the bond or pay the judgment or discharge the lien, as
applicable, and Tenant will promptly reimburse Landlord for all sums paid by it
in connection therewith, together with the applicable Administrative Fee (as
hereinafter defined). Tenant shall give Landlord notice of the intended
commencement date of any work, labor, services or material to be performed or
provided to the Premises or any portion thereof involving total expenditures
for any project in excess of twenty percent (20%) of the Annual Rent, as it may
be adjusted as provided herein, at least ten (10) days before said date, and in
connection with the performance or provision of any such work, labor, services
or materials, Landlord shall also have the right and opportunity, to post and
maintain on the Premises such notices, including notices of nonresponsibility
and other similar notices, as are provided for under the laws of the state(s)
in which the Premises are located, evidencing Tenant's obligations with respect
to any of the matters covered by this Article and Landlord shall have the right
to enter the Premises and post such notices at any reasonable time.
ARTICLE 6
RENT
6.01 Rent. Tenant covenants and agrees to pay for the use and
occupancy of the Premises, the Annual Rent specified in Article 1 hereof,
subject to increase pursuant to the provisions of Section 6.02 hereof, in
twelve (12) equal monthly installments during each year of the Lease Term, in
advance, on the first day of each calendar month, without any offset or
deduction. Should the Lease Term commence on a day other than the first day of
a calendar month, then the rental for such first fractional month shall be
computed on a daily basis for the period from the Commencement Date to the end
of such calendar month at an amount equal to one three hundred sixty-fifth
(1/365) of the Annual Rent for each day. Should the Lease Term end on a day
other than the last day of a calendar month, then the rental for such
fractional month shall be computed on a daily basis at an amount equal to one
three hundred sixty-fifth (1/365) of the Annual Rent for each day. Rent shall
be paid in lawful money of the United States to Landlord at the address stated
in Article 1 or to such other persons or at such other places as Landlord may
designate in writing to Tenant.
6.02 Rental Adjustments. The Annual Rent payable under this Lease
shall be increased on October 1, 2001 and every five (5) years thereafter
(each, an "Increase Date") during the Lease Term as follows:
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<PAGE> 96
(a) The basis for computing the increase shall be the
Consumer Price Index for all Urban Consumers - All Items, published monthly by
the Bureau of Labor Statistics of the United States Department of Labor (Base
Period 1982-1984 = 100) ("Index"). The beginning Index for purposes of this
Lease shall be _______________ (the "Beginning Index").
(b) If the Index published for the date nearest the
applicable Increase Date (the "Extension Index") has increased over the
Beginning Index, the Annual Rent will be calculated by multiplying the then
Annual Rent by a fraction, the numerator of which is the Extension Index and
the denominator of which is the Beginning Index, not to exceed an increase
equal to 10% of the Annual Rent in effect during the five-year period
immediately preceding the applicable Increase Date.
(c) In the event the Extension Index is not available on
the applicable Increase Date, Tenant will continue to pay the Annual Rent in
effect immediately prior to the Increase Date. As soon as practicable,
Landlord will furnish Tenant with a true copy of the Extension Index figure
together with a computation of the increase in the Annual Rent for the ensuing
five year period, if any, and an appropriate adjustment will be paid within 30
days of Tenant's receipt of Landlord's statement.
(d) If the Index is changed so that the base year differs
from that in effect on the Commencement Date, the Index shall be converted in
accordance with the conversion factor published by the Bureau of Labor
Statistics. If the Index is discontinued or revised during the Lease Term,
such other governmental index or computation with which it is replaced will be
used in order to obtain substantially the same result as would be obtained if
the Index had not been discontinued or revised.
6.03 Net Lease; Impositions. This Lease is what is commonly called
a "triple net lease," it being understood that Landlord shall receive the
Annual Rent set forth in Article 1 hereof, as increased pursuant to Section
6.02, free and clear of any and all other impositions, taxes, liens, charges,
or expenses of any nature whatsoever incurred in connection with the ownership
and operation of the Premises. In addition to the Annual Rent reserved by
Article 1 hereof, as increased pursuant to Section 6.02, Tenant shall pay to
the appropriate parties all impositions, insurance premiums, Real Property
Taxes (as defined below), operating charges, maintenance charges, construction
costs, accounting and legal fees, and any other charges, costs and expenses
which arise or may be contemplated under any provision of this Lease during the
Lease Term (collectively "Impositions"), All of such Impositions shall
constitute additional rent, and upon the failure of Tenant to pay any of such
Impositions, Landlord shall have the same rights and remedies as otherwise
provided in this Lease for the failure of Tenant to pay rent. Tenant shall
furnish to Landlord, promptly upon the reasonable request of Landlord, official
receipts or other satisfactory proof evidencing payment of any such
Impositions. Upon Tenant's failure to pay any Real Property Taxes as provided
herein, Landlord shall have the right, at Landlord's option, to require Tenant
to (a) promptly deposit with Landlord funds sufficient for the payment of the
current Real Property Taxes required to be paid by Tenant hereunder; and (b)
also deposit one-twelfth of the current annual or annualized Real Property
Taxes (or those of the preceding years if the current amounts thereof have not
been fixed), on the first day of each month in advance. It is the intention of
the parties hereto that this Lease shall not be
5
<PAGE> 97
terminable for any reason by Tenant, and that Tenant shall in no event be
entitled to any abatement of, deductions of any kind, offset or reduction in
rent payable under this Lease, except as may otherwise be expressly set forth
in this Lease. Any present or future Law to the contrary shall not alter this
agreement of the parties.
ARTICLE 7
USE OF THE PREMISES
7.01 Use. Tenant shall occupy and use the Premises solely for the
operation of a Stuart Anderson's Black Angus or Cattle Company restaurant or
any other lawful use, provided such other use does not decrease the market
value of the Premises.
7.02 Compliance With Laws.
(a) Tenant accepts the Premises in its "AS IS" condition.
Tenant accepts the Premises "AS IS" in reliance upon Tenant's own knowledge as
owner and/or occupier of the Premises prior to commencement of this Lease.
Landlord makes no representations or warranties of any type whatsoever,
including without limitation, whether there has been or are currently any
violations of any covenants or restrictions of record, or any applicable Laws
in effect regarding the Premises on the Commencement Date.
(b) Tenant shall, at Tenant's sole expense, comply in all
material respects with all applicable laws, ordinances, building codes, orders,
zoning ordinances, rules, and regulations of any governmental authorities and
with any directive of any public officer which shall impose any order or duty
upon Landlord or Tenant with respect to the Premises or the use or occupation
thereof or relating to the environment, health or safety with respect to the
Premises or the use or occupation thereof (including, without limitation, any
rule of common law and judicial decisions and The Americans With Disabilities
Act), and any covenants, conditions or restrictions of record relating to the
Premises or the use or occupation thereof, in each case as now or hereafter in
effect (collectively, "Laws").
(c) Notwithstanding any other provision of this Lease,
Tenant shall not use or permit the Premises to be used in any manner which will
result in waste or the creation of a nuisance, and Tenant shall maintain the
Premises free of any objectionable noises, odors, or disturbances; provided
that, as between Landlord and Tenant only, odors and exhaust incidental to a
restaurant, excluding odors of deteriorating food, will not be deemed a
nuisance or objectionable provided the same do not violate applicable Laws and
do not subject Landlord to any civil liability.
(d) Notwithstanding any other provision of this Lease, in
the event that any new Law which goes into effect during any Extension Period
requires an investment in any Premises in excess of 30% of the replacement cost
of such Premises (exclusive of land, foundations and footings), and which has
an economic life in excess of five (5) years, Tenant, at its option, may elect
to terminate this Lease as to such Premises only at any time during such
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<PAGE> 98
renewal period upon written notice to Landlord and payment to Landlord of all
accrued rent and other obligations hereunder with respect to such Premises
through the date of such termination, except as to obligations hereunder which
expressly survive any termination of this Lease.
7.03 Permits and Licenses. As between Landlord and Tenant, Tenant
shall be solely responsible to apply for and secure any building permit or
permission of any duty constituted authority for the purpose of doing any of
the things which Tenant is required or permitted to do under the provisions of
this Lease. Landlord shall cooperate as reasonably requested by Tenant to
facilitate Tenant's compliance with this obligation but at no cost to Landlord.
ARTICLE 8
UTILITIES
8.01 Payment. Tenant shall pay to the utility companies or other
parties entitled to payment the cost of all water, sewer, heat, air
conditioning, gas, electricity, garbage collection, telephone, and other
utilities and services provided to or for the Premises, including connection
fees and taxes thereon.
8.02 Interruption in Service. Landlord shall not be liable in
damages or otherwise for any failure or interruption of any utility or other
service being furnished to the Premises subject to the provisions of Section
11.04(b) hereof, and no such failure or interruption shall entitle Tenant to
any abatement of, setoff of or reduction in the amounts payable to Landlord
hereunder or otherwise entitle Tenant to terminate this Lease.
ARTICLE 9
TAXES
9.01 Payment of Taxes. Tenant shall pay the Real Property Taxes
(as defined in Section 9.02) applicable to the Premises during the Lease Term.
Landlord and Tenant agree to cooperate to ensure that all tax bills applicable
to the Premises are sent directly to Tenant by the taxing authority. All such
payments shall be made prior to delinquency. Upon Landlord's request, Tenant
shall promptly furnish Landlord with satisfactory evidence that such Real
Property Taxes have been paid. If any such Real Property Taxes paid by Tenant
shall cover any period of time prior to or after the expiration of the Lease
Term, Landlord shall promptly reimburse Tenant to the extent required. If
Tenant shall fail to pay any such Real Property Taxes, Landlord shall have the
right but not the obligation to pay the same in which case Tenant shall repay
such amount plus any penalties and interest resulting therefrom to Landlord
with Tenant's next Annual Rental installment together with the applicable
Administrative Fee.
9.02 Definition of "Real Property Taxes". As used herein, the term
"Real Property Taxes" shall mean any form of real estate tax or assessment, ad
valorem tax or gross receipts tax, fee, levy, penalty, interest or other
charge, imposed by any authority having the direct or
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indirect power to tax, including any city, county, state, or federal
government, or any school, agricultural, sanitary, fire, street, drainage, or
other improvement district thereof, on, against or with respect to
the Premises, this Lease, any legal or equitable interest of Landlord or any
superior landlord or any mortgagee of Landlord in the Premises or in the real
property of which the Premises are a part, and Landlord's right to rent. The
term "Real Property Taxes" shall also include any tax, fee, levy, assessment,
penalty, interest or other charge (i) in substitution of, partially or totally,
any tax, fee, levy, assessment, or charge included within the foregoing
definition of Real Property Taxes, (ii) the nature of which was included within
the foregoing definition of Real Property Taxes, or (iii) any tax or increase
in any tax which is imposed as a result of a transfer, either partial or total,
of Landlord's interest in the Premises or which is added to a tax or charge
hereinbefore included within the definition of Real Property Taxes by reason of
such transfer (other than documentary, stamp or other transfer taxes resulting
from any such transfer but including any increase in any Real Property Taxes
attributable to any such transfer), or which is imposed by reason of the
transfer of the Premises to Landlord or this transaction, any modifications or
changes hereto, or any other transfers hereof. Notwithstanding the foregoing,
the term "Real Property Taxes" shall not include any general income taxes,
inheritance taxes, and estate taxes imposed upon Landlord or any superior
landlord or any mortgagee or beneficiary of Landlord or any taxes attributable
to the recording of any mortgage or deed of trust on Landlord's interest in the
Premises.
9.03 Personal Property Taxes. Tenant shall pay, prior to
delinquency, all taxes assessed against and levied upon trade fixtures,
furnishings, equipment, and all other personal property of Tenant contained in
the Premises or elsewhere. Tenant shall seek to cause said trade fixtures,
furnishings, equipment, and all other personal property to be assessed and
billed separately from the real property of Landlord.
9.04 Tenant's Right to Contest Taxes.
(a) Tenant shall have the right, at its cost and expense,
to contest the amount or validity, in whole or in part, of any Real Property
Taxes of any kind by appropriate proceedings diligently conducted in good
faith, but no such contest shall be carried on or maintained by Tenant after
the time limit for the payment of any Real Property Taxes unless Tenant, at its
option: (i) shall pay the amount involved under protest; or (ii) shall procure
and maintain a stay of all proceedings to enforce any collection of any Real
Property Taxes, together with all penalties, interest, costs and expenses, by a
deposit of a sufficient sum of money, or by such undertaking, as may be
required or permitted by law to accomplish such stay; or (iii) shall deposit
with Landlord, as security for the performance by Tenant of its obligations
hereunder with respect to such Real Property Taxes, security in the amount, if
any, prescribed by applicable law, or if no amount is prescribed by applicable
law, in amounts equal to one hundred fifty percent (150%) of the contested
amount or such other reasonable security as may be demanded by Landlord to
ensure payment of such contested Real Property Taxes and all penalties,
interest, costs and expenses which may accrue during the period of the contest.
Upon the termination of any such proceedings, it shall be the obligation of
Tenant to pay the amount of such Real Property Taxes or part thereof, as
finally determined in such proceedings, together with any costs, fees
(including attorneys' fees), penalties or other liabilities in connection
therewith; provided, however, that if Tenant has deposited cash or cash
equivalents with
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Landlord as security under clause (iii) above, then, so long as no material
default exists under this Lease, Landlord shall pay such Real Property Taxes
(or part thereof) together with the applicable costs, fees and liabilities as
described above out of such cash or cash equivalents and return any unused
balance, if any, to Tenant. Otherwise, Landlord shall return or cause to have
returned to Tenant all amounts, if any, held by or on behalf of Landlord which
were deposited by Tenant in accordance with the provisions hereof.
(b) Tenant shall have the right, at its cost and expense,
to seek a reduction in the valuation of the Premises as assessed for tax
purposes and to prosecute any action or proceeding in connection therewith.
Provided Tenant is not in material default hereunder, Tenant shall be
authorized to collect any tax refund of any tax paid by Tenant obtained by
reason thereof and to retain the same.
(c) Landlord agrees that whenever Landlord's cooperation
is required in any of the proceedings brought by Tenant as aforesaid, Landlord
will reasonably cooperate therein, provided same shall not entail any cost,
liability or expense to Landlord, and Tenant will pay, indemnify and save
Landlord harmless of and from, any and all liabilities, losses, judgments,
decrees, costs and expenses (including all reasonable attorneys' fees and
expenses) in connection with any such contest and will, promptly after the
final settlement, fully pay and discharge the amounts which shall be levied,
assessed, charged or imposed or be determined to be payable therein or in
connection therewith, and Tenant shall perform and observe all acts and
obligations, the performance of which shall be ordered or decreed as a result
thereof. No such contest shall subject Landlord to the risk of any civil
liability or the risk of any criminal liability, and Tenant shall give such
reasonable indemnity or security to Landlord, as may reasonably be demanded by
Landlord, to ensure compliance with the foregoing provisions of this Section
9.04.
ARTICLE 10
MAINTENANCE AND REPAIRS
10.01 Tenant's Obligations.
(a) Tenant shall, at Tenant's expense, maintain in good
repair, order, and serviceable condition, reasonable wear and tear excepted,
the Premises and every part thereof, including but not limited to all plumbing,
ventilation, heating, air conditioning, and electrical systems and equipment
in, on, or exclusively serving the Premises, and windows, doors, storefronts,
plate glass, interior walls, and ceilings which are part of the Premises.
(b) Tenant shall not commit or suffer to be committed any
waste upon or about the Premises, and shall promptly at Tenant's cost and
expense, make all necessary replacements, restorations, renewals and repairs to
the Premises and appurtenances thereto which are material to the operation of
the Premises, whether interior or exterior, structural or nonstructural,
ordinary or extraordinary, and foreseen or unforeseen; provided that with
respect to appurtenances to the Premises which are material to the operation of
the Premises, if third parties are obligated to repair or maintain such
appurtenances, Tenant shall use commercially
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reasonable efforts to enforce such obligations of third parties or, if such
third parties fail to perform such obligations, Tenant shall perform such
obligations to the extent Tenant has the legal right to do so. Tenant shall
pay to the appropriate parties Tenant's pro rata share of any maintenance,
repair or other costs to the extent required under any appurtenances to the
Premises. Repairs, restorations, renewals and replacements shall be at least
equivalent in quality to the original work or the property replaced, as the
case may be. Tenant shall not make any claim or demand upon or bring any
action against Landlord for any loss, cost, injury, damage or other expense
caused by any failure or defect, structural or non-structural, of the Premises
or any part thereof.
(c) Upon the expiration or earlier termination of this
Lease, Tenant shall return the Premises to Landlord in good and clean condition
and repair, reasonable wear and tear excepted. Any damage to the Premises,
including any structural damage, resulting from Tenant's use or from the
removal of Tenant's fixtures, furnishings, and equipment pursuant to Section
12.04 hereof, shall be repaired by Tenant at Tenant's expense.
10.02 Landlord's Obligations. Except for the obligations of
Landlord under Article 14 hereof (relating to destruction of the Premises), and
under Article 15 hereof (relating to the condemnation of the Premises), it is
intended by the parties hereto that Landlord have no obligation, in any manner
whatsoever, to repair and maintain the Premises nor the building located
thereon nor the fixtures thereon or equipment or personal property therein,
whether interior or exterior, structural or nonstructural, ordinary or
extraordinary, all of which obligations are that of Tenant under Section 10.01
hereof. Tenant expressly waives the benefit of any statute or law now or
hereafter in effect which would otherwise afford Tenant the right to terminate
this Lease because of Landlord's failure to keep the Premises or any part
thereof or the building located thereon or fixtures thereon or equipment or
personal property therein in good order, condition, and repair, or the right to
repair and offset the cost related thereto against rent.
10.03 Landlord's Rights. If Tenant refuses or neglects to make
repairs or maintain the Premises, or any part thereof, or any appurtenances
thereto material to the operation of the Premises or to enforce maintenance or
repair obligations of third parties with respect to any such appurtenances, as
provided above, in a manner reasonably satisfactory to Landlord, without
prejudice to any other remedy Landlord may have hereunder, upon giving Tenant
ten (10) days' prior written notice, Landlord shall have the right to enter the
Premises and perform such maintenance or make such repairs on behalf of and for
the account of Tenant. In the event Landlord so elects, Tenant shall pay the
cost of such repairs, maintenance, or replacements promptly following Tenant's
receipt of a bill therefor, together with the applicable Administrative Fee.
Tenant agrees to permit Landlord or its agent to enter the Premises, upon
reasonable notice by Landlord, during normal business hours for the purpose of
inspecting the Premises.
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ARTICLE 11
INSURANCE AND INDEMNIFICATION
11.01 Tenant's Insurance Obligation. Tenant covenants and agrees
that Tenant will carry and maintain, at its sole cost and expense, the
following types of insurance, in the amounts specified and in the form
hereinafter provided for:
(a) COMMERCIAL GENERAL LIABILITY. Commercial general
liability insurance (including liquor liability insurance) against any loss,
liability or damage on or relating to the Premises, with limits of not less
than Two Million Dollars ($2,000,000) in any one occurrence for death or
injuries to one or more persons and/or for damage to property.
(b) WORKERS' COMPENSATION. Worker's compensation
insurance or self insurance as required by the jurisdiction in which the
Premises are located.
(c) PROPERTY DAMAGE. Insurance covering all improvements
located on the Premises and all of Tenant's fixtures, merchandise, and personal
property from time to time in, on or upon the Premises, in an amount not less
than one hundred percent (100%) of their full replacement value providing
protection against perils commonly included within the classification "All
Risk". Any policy proceeds shall be used for the repair or replacement of the
property damaged or destroyed to the extent necessary to maintain the standard
of operation of the Premises and the business operated thereon existing prior
to the damage or destruction except as provided in Article 14.
(d) POLICY FORM.
(i) All policies of insurance provided for herein
shall be issued by reputable and financially sound insurance companies
reasonably satisfactory to Landlord, and such insurance companies shall be
qualified to do business in the jurisdiction where the applicable Premises are
situated. All such policies shall be issued in Tenant's name, with Landlord
named as an additional insured and/or loss payee as applicable, and, if
requested by Landlord, name any superior landlord and any mortgagee or
beneficiary of Landlord as an additional insured or loss payee. The policies
shall be for the mutual and joint benefit and protection of Landlord, Tenant,
any superior landlord and any mortgagee or beneficiary of Landlord.
Certificates of insurance shall be delivered to Landlord prior to Landlord's
execution of this Lease, and thereafter certificates or other evidence of
renewal or replacement coverage shall be delivered to Landlord within five (5)
days prior to the expiration of the term of each such policy. As often as any
such policy shall expire or terminate, renewal or additional policies shall be
procured and maintained by Tenant in like manner and to like extent. All
certificates of insurance delivered to Landlord must contain a provision giving
Landlord, any superior landlord, and any mortgagee or beneficiary of Landlord
thirty (30) days' notice in writing in advance of any cancellation or lapse,
except only ten (10) days' notice will be provided for cancellation due to
premium non-payment, of insurance. All public liability, property damage,
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and other casualty policies shall be written on an occurrence basis as primary
policies, not contributing with or in excess of coverage which Landlord may
carry.
(ii) Tenant's obligations to carry the insurance
provided for above may be brought within the coverage of a so-called blanket
policy or policies of insurance carried and maintained by Tenant; provided,
however, that such policy or policies must have limits of not less than Five
Million and 00/100 Dollars ($5,000,000) and that Landlord, any superior
landlord and any mortgagee or beneficiary of Landlord shall be named as an
additional insured thereunder as their interests may appear and that the
coverage afforded Landlord will not be reduced or diminished by reason of the
use of such blanket policies and the requirements set forth herein are
otherwise satisfied.
11.02 Subrogation Waiver. Landlord (for itself and its insurer)
hereby waives any rights, including rights of subrogation, and Tenant (for
itself and its insurer) hereby waives any rights, including rights of
subrogation, each may have against the other on account of any loss or damage
occasioned to Landlord or Tenant, as the case may be, to their respective
property, the Premises or its contents that are caused by or result from risks
insured against under any property insurance policies carried by the parties
hereto and in force at the time of any such damage. The foregoing waivers of
subrogation shall be operative only so long as available in the jurisdiction
where the Premises are located and so long as no policy of insurance is
invalidated thereby.
11.03 Insurance Use Restrictions. Tenant agrees that it will not
carry any stock or goods or do anything in, on, or about the Premises outside
of the ordinary course of Tenant's business which will substantially increase
the insurance rates upon the building of which the Premises are a part.
11.04 Indemnification. (a) Tenant shall at all times indemnify
Landlord and any mortgagee or beneficiary of Landlord for, defend (with counsel
reasonably satisfactory to Landlord) Landlord against, and save Landlord and
any mortgagee or beneficiary of Landlord harmless from, any liability, loss,
cost, injury, damage or other expense or risk (including without limitation
reasonable attorneys' fees) whatsoever that may occur or be claimed by or with
respect to any person(s) or property on or relating to any of the Premises and
resulting directly or indirectly from the use, misuse, occupancy, possession or
disuse of any of the Premises by Tenant or other persons claiming through or
under Tenant, or their respective agents, employees, licensees, invitees,
guests or other such persons, or from the condition of any of the Premises.
Tenant shall, at its cost and expense, defend against any and all such actions,
claims and demands and shall indemnify Landlord and any mortgage or beneficiary
of Landlord for all costs, expenses and liabilities (including, without
limitation, reasonable attorneys' fees) it may incur in connection therewith.
Neither Landlord nor any mortgagee or beneficiary of Landlord shall in any
event whatsoever be liable for any injury or damage to any of the Premises or
to the Tenant or to any other persons claiming through or under Tenant, or
their respective agents, employees, licensees, invitees, guests or other such
persons or to any property of any such persons except as provided in
subparagraph (b) below. Tenant shall not make any claim or demand upon or
institute any action against Landlord as a result of such injury or damage
except as provided in subparagraph (b) below. Tenant covenants and agrees
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during the Lease Term hereof to pay when due or reimburse and indemnify and
hold Landlord and any mortgagee or beneficiary of Landlord harmless from and
against all inspection fees, taxes, bonds, permits, certificates, assessments
and sales, use, property or other taxes, fees or tolls of any nature whatsoever
(together with any related interest or penalties) now or hereafter imposed
against Landlord, any superior landlord or any mortgagee or beneficiary of
Landlord or Tenant by any federal, state, county or local governmental
authority upon or with respect to any of the Premises or the use thereof or
upon the possession, leasing, use, operation or other disposition thereof or
upon the rents, receipts or earnings arising therefrom or upon or with respect
to this Lease (excepting only federal, state, and local net income taxes on the
income of Landlord or any superior landlord or any mortgagee or beneficiary of
Landlord or any taxes attributable to the recording of any mortgage or deed of
trust on Landlord's interest in the Premises).
(b) Notwithstanding the waiver of subrogation under
Section 11.02, Landlord shall indemnify, hold harmless and defend (with counsel
reasonably satisfactory to Tenant) Tenant from and against any liability, loss,
cost, injury, damage or other expense or risk (including, without limitation,
reasonable attorneys' fees) whatsoever to the extent arising out of the
negligence or willful misconduct of Landlord or its representatives in
connection with any entry by Landlord or its representatives on the Premises or
in connection with any maintenance, construction, or other activity of Landlord
on any adjacent property, except to the extent arising from the negligence or
willful misconduct of Tenant, its representatives, or their respective agents,
employees, licensees, invitees or guests, or from the condition of any of the
Premises.
11.05 Payment of Insurance. In the event that Tenant shall fail to
obtain the insurance policies required hereunder, Landlord shall have the
right, but not the obligation, to purchase the same in which case Tenant shall
repay the cost thereof to Landlord with Tenant's next Annual Rent installment
together with the applicable Administrative Fee.
ARTICLE 12
ALTERATIONS
12.01 Permitted Improvements. Except as provided in Section 12.03
hereof, and subject to the provisions of this Article 12, at Tenant's own
expense and after giving Landlord notice in writing of its intention to do so
as required under Article 5, Tenant may from time to time make alterations,
replacements, additions, changes, and improvements (collectively referred to in
this Article 12 as "Alterations") in and to the Premises as it may find
necessary or convenient for its purposes; provided, however, that no such
Alterations shall decrease the value of the Premises.
12.02 Liens. Tenant shall pay the costs of any Alterations done on
the Premises pursuant to Section 12.01, and shall keep the Premises free and
clear of liens of any kind as required under Article 5. Tenant shall indemnify
and defend Landlord from and against any liability, loss, damage, costs,
attorneys' fees, and any other expense incurred as a result of
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claims of lien by any person performing work or furnishing materials or
supplies for Tenant or any person claiming under Tenant.
12.03 Structural Alterations. Tenant shall not make any Alterations
to any of the foundations, perimeter or load bearing walls, or roof structure
involving expenditures in excess of the amounts specified in Article 5, other
than minor repairs made in the ordinary course of Tenant's business which do
not decrease the value of any of the Premises, without obtaining the prior
written consent of Landlord, which consent shall not be unreasonably withheld.
All work with respect to any Alteration shall be done in a good and workmanlike
manner by properly qualified and licensed personnel, and such work shall be
diligently prosecuted to completion.
12.04 Removal of Alterations. All Alterations made on the Premises
shall become the property of Landlord at the expiration or termination of the
Lease Term and shall be surrendered with the Premises; provided, however, that
if Tenant is not in default at the time of such expiration or termination, (i)
Tenant shall have the right to remove any Alterations made in accordance with
this Article 12 provided the removal thereof does not decrease the value of any
of the Premises as reasonably determined by Landlord and provided Tenant
repairs any damage to any of the Premises caused by such removal, and (ii)
Tenant's equipment, machinery, and trade fixtures shall remain the property of
Tenant and may be removed by Tenant, provided Tenant shall repair any damage
caused by its removal of any such equipment, machinery, and trade fixtures.
Landlord agrees from time to time during the term, upon written
request from Tenant, to execute and deliver any instrument, release, or other
document that may be reasonably required by any equipment supplier or vendor
and in form and substance reasonably satisfactory to Landlord whereby Landlord
waives and/or releases any rights it may have or acquire with respect to any
equipment or trade fixtures which may be affixed to any of the Premises and
which is subject to a security interest or equipment lease in favor of such
supplier or vendor and agrees that the same do not constitute realty regardless
of the manner same are attached.
12.05 Alterations Required by Law. Any Alteration, structural or
otherwise, to or on the Premises, or any part thereof, which may be necessary
or required by reason of any applicable Laws, shall be made by and at the sole
cost and expense of Tenant, subject to the provisions of Section 7.02(d).
12.06 General Conditions Relating to Alterations. Any Alteration,
structural or otherwise, to or on the Premises, shall be subject to the
following conditions:
(a) No Alteration shall be undertaken until Tenant shall
have procured and paid for all required permits and authorizations of all
municipal departments and governmental subdivisions having jurisdiction.
(b) Any structural Alteration involving an estimated cost
of more than One Hundred Thousand and 00/100 Dollars ($100,000) (which amount
shall be subject to periodic increase in the same manner as Annual Rent under
Section 6.02) shall, at Landlord's reasonable
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request, be conducted under the supervision of a licensed architect or engineer
selected by Tenant and satisfactory to Landlord and shall be made in accordance
with detailed plans and specifications (the "Plans and Specifications") and
cost estimates prepared by such architect or engineer and approved in writing
in advance by Landlord.
(c) Any Alteration shall be made promptly and in a good
workmanlike manner and in compliance with all applicable Laws.
(d) No Alteration shall tie-in or connect the Premises or
any improvements thereon with any property outside the Premises without the
prior written consent of Landlord.
(e) No Alteration shall reduce the value of the Premises
or impair the structural integrity of any building comprising a part of the
Premises.
ARTICLE 13
SIGNS
In addition to those signs already existing at the Premises, Tenant
shall have the right to erect or affix signs on the Premises of such sizes,
colors, and designs as required by Tenant. All signs on the Premises shall
fully comply with all applicable Laws.
ARTICLE 14
DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD
14.01 Obligation to Rebuild. If any portion of the Premises is
damaged or destroyed by fire or other casualty, Tenant shall forthwith give
notice thereof to Landlord. Tenant shall, at its sole cost and expense,
diligently repair, restore, rebuild or replace the damaged or destroyed
improvements, fixtures or equipment, and diligently complete the same as soon
as reasonably possible, to the condition they were in prior to such damage or
destruction, except for permitted Alterations and such changes in design or
materials as may then be required by applicable Laws. Landlord, in such event,
shall, to the extent and at the times the proceeds of the insurance are made
available to Landlord, reimburse Tenant for the costs of making such repairs,
restoration, rebuilding and replacements on such terms as Landlord may
reasonably require. To the extent that available proceeds of insurance are
insufficient to pay the entire cost of making such repairs, restoration,
rebuilding and replacements, and notwithstanding the expiration or termination
of the Lease Term of this Lease, Tenant shall pay the amount by which such
costs exceed the available insurance proceeds. Any surplus of insurance
proceeds over the cost of restoration, net of all reasonable out-of-pocket
expenses incurred by Landlord in connection with the administration thereof,
shall be promptly paid over to Tenant.
Notwithstanding the foregoing, if any such damage or
destruction occurs during the last two (2) years of the initial term hereof or
during any Extension Period, Tenant may elect
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to terminate this Lease upon written notice to Landlord within sixty (60) days
after the occurrence of such damage or destruction provided Tenant pays to
Landlord all rent and other amounts accruing under this Lease through the date
of termination, and except as to obligations hereunder which expressly survive
any termination of this Lease. In the event of any such termination of this
Lease, Landlord shall be entitled to retain all proceeds of insurance relating
to such damage and destruction, and Tenant shall promptly pay to Landlord any
such insurance proceeds received by Tenant and hereby assigns to Landlord all
rights of Tenant to receive such insurance proceeds.
14.02 No Abatement of Rent. Notwithstanding the partial or total
destruction of any of the Premises, there shall be no abatement of rent or of
any other obligation of Tenant hereunder by reason of such damage or
destruction.
ARTICLE 15
EMINENT DOMAIN
15.01 Total Taking. If the Premises are taken in their entirety
under the power of eminent domain, this Lease shall terminate as of the date of
such taking, and upon Tenant's payment to Landlord of all rents and other
amounts accruing hereunder through such date, Landlord and Tenant shall each
thereafter be released from accruing any further liability under this Lease
subject to the rights of Landlord and Tenant to receive condemnation awards to
which each is entitled as provided in Section 15.03, and except as to
obligations under this Lease which survive the termination hereof.
15.02 Partial Taking. In the event that (a) more than twenty-five
percent (25 %) of the floor area of the Premises is taken under the power of
eminent domain; or (b) by reason of any appropriation or taking, regardless of
the amount so taken, the remainder of the Premises is not one undivided parcel
of property; or (c) as a result of any taking, regardless of the amount so
taken, the remainder of the Premises is rendered unsuitable for the continued
operation of Tenant's business as determined by Tenant in good faith and based
on commercially reasonable standards and criteria, Tenant shall have the right
to terminate this Lease, upon giving notice in writing of such election within
sixty (60) days after receipt by Tenant from Landlord of written notice that
said Premises have been so appropriated or taken (with the understanding that
such period of time may be extended as reasonably necessary for Tenant to
assess the effect of such partial taking on Tenant's continued operation of its
business at the Premises, subject to Landlord's prior written consent, which
consent shall not be unreasonably withheld) provided Tenant shall continue to
pay Annual Rent and other amounts accruing hereunder through the date of
termination. In the event of such termination, upon Tenant's payment to
Landlord of all rents and other amounts accruing hereunder through such date,
both Landlord and Tenant shall thereupon be released from any liability
thereafter accruing hereunder, except as to obligations hereunder which survive
the termination hereof. Each Party agrees immediately after learning of any
actual or contemplated appropriation or taking to give to the other party
notice in writing thereof. If this Lease is not terminated, Tenant shall
remain in that portion of the Premises not so taken and Tenant, at Tenant's
sole cost and expense, shall restore the remaining portion of
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the Premises as soon as possible to a complete unit of the quality and
character as existed prior to such taking. Landlord agrees to reimburse Tenant
for the cost of restoration, but in no event shall Landlord's obligation to
reimburse Tenant for the cost of restoring the remaining portion of the
Premises exceed the amount of award of compensation that Landlord receives for
a partial taking of that portion of the Premises resulting in the need for
restoration. So long as this Lease is not terminated in the manner provided
above, there shall be an equitable adjustment of the rent payable by Tenant
hereunder for the Premises by reason of any partial taking. Tenant hereby
waives any statutory rights of termination which may arise by reason of any
partial taking of any of the Premises under the power of eminent domain.
15.03 Award. In the event of any taking, the entire award or
compensation in any eminent domain proceeding affecting the Premises, whether
for a total or partial taking, shall be distributed to Landlord, provided,
however, that Tenant will be entitled to receive, and Landlord will have no
right to pursue for itself, any award for claims based on (a) the value of
Tenant's Alterations to the Premises which Tenant has the right to remove
pursuant to the provisions of this Lease but elects not to remove, (b) loss of
or damage to Tenant's personal property, (c) loss to Tenant because of
interruption of business, (d) Tenant's loss of goodwill, and (e) Tenant's cost
of removal and relocation and any rent differential payable by Tenant for
replacement premises as a result of any relocation necessitated by the taking.
Landlord and Tenant may separately pursue their claims against the condemning
authority, provided, however, that notwithstanding anything to the contrary
contained in this Lease, Tenant will have no right to pursue a claim based upon
the residual value of the real property comprising the Premises after
expiration of the Lease Term or pursue claims or retain any award to which
Landlord is entitled so as inequitably to diminish Landlord's award. Landlord
and Tenant shall cooperate to maximize the award payable by the condemning
authority. Tenant hereby assigns to Landlord all rights of Tenant to receive
any award of compensation as a result of any taking except the awards to which
Tenant is entitled under this Section 15.03.
15.04 Transfer Under Threat of Taking. For the purposes of this
Article only, a voluntary sale or conveyance under threat and in lieu of
condemnation shall be deemed an appropriation or taking under the power of
eminent domain.
ARTICLE 16.
ASSIGNMENT AND SUBLETTING
16.01 Landlord's Consent Required. For purposes of this Article 16,
the terms "assign" and "assignment" shall include and mean any act attempting
to, or document purporting to, assign, transfer, sublet, change ownership of
Tenant's interest in and to any of the Premises or any part thereof, or enter
into license or concession agreements for a material portion of any of the
Premises or any part thereof. Tenant shall not assign this Lease or Tenant's
interest in and to the Premises without obtaining the prior written consent of
Landlord, such consent not to be unreasonably withheld. Any attempted
assignment without such consent shall be void, and shall constitute a breach of
this Lease. Notwithstanding the foregoing, Tenant may at any time encumber its
leasehold interest by deed of trust, mortgage, assignment, or other security
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agreement, without the consent of Landlord, but no such encumbrance will
constitute a lien on Landlord's estate.
16.02 Assumption of Obligations. Any assignment to which Landlord
has consented shall be evidenced by an instrument in writing and any assignee
or transferee shall agree for the benefit of Landlord to be bound by, assume,
and perform all of the terms, covenants, and conditions of this Lease. Consent
by Landlord to any assignment shall not constitute consent to any subsequent
assignment.
16.03 Assignment to Affiliate. Notwithstanding anything to the
contrary contained in this Article 16, Tenant shall have the right to assign
this Lease, or sublet the Premises or any portion thereof, without the consent
of, but with notice to, Landlord, to any corporation (a) with which Tenant may
merge or consolidate, (b) which is a parent or subsidiary of Tenant at any
tier, (c) which is the successor corporation to Tenant in the event of a
corporate reorganization, or (d) which acquires all or substantially all of the
voting stock of Tenant or all or substantially all of the assets of Tenant,
provided that said assignee assumes, in full, the obligations of Tenant under
this Lease and Tenant remains primarily liable under this Lease. In addition,
nothing contained herein shall prohibit the public offering of or subsequent
sale of shares of stock in Tenant in the public markets.
16.04 No Release of Tenant. Regardless of Landlord's consent, no
assignment shall release Tenant of Tenant's obligation or alter the primary
liability of Tenant to pay the rent and to perform all other obligations to be
performed by Tenant hereunder. The acceptance of rent by Landlord from any
other person shall not be deemed to be a waiver by Landlord of any provision
hereof. Consent to one assignment shall not be deemed consent to any
subsequent assignment. In the event of default by any assignee of Tenant or
any successor to Tenant, in the performance of any of the terms hereof,
Landlord may proceed directly against Tenant without the necessity of
exhausting remedies against said assignee. Landlord may consent to subsequent
assignments of this Lease or amendments or modifications to this Lease with
assignees of Tenant, without notifying Tenant, or any successor of Tenant, and
without obtaining its or their consent thereto and such action shall not
relieve Tenant of liability under this Lease, provided that Tenant shall not be
liable to the extent of amendments or modifications made to this Lease with
assignees not affiliated with Tenant without Tenant's consent, which consent
shall not be unreasonably withheld, which materially increase Tenant's monetary
obligations under this Lease (such as an increase in the Annual Rent payable
hereunder or extension of the Lease Term beyond the original term hereof and
any renewal options hereunder).
ARTICLE 17
DEFAULT; REMEDIES
17.01 Default. The occurrence of any one or more of the following
events shall constitute a material default under this Lease by Tenant:
(a) The vacating or abandonment of the Premises by Tenant.
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(b) The failure by Tenant to make any payment
when due of Annual Rent, Impositions or any other payment required to be made
by Tenant hereunder, where such failure shall continue for a period of ten (10)
days after written notice from Landlord.
(c) Except as otherwise provided in this Lease,
the failure by Tenant to observe or perform any of the covenants, conditions,
or provisions of this Lease to be observed or performed by Tenant, other than
described in Paragraph (b) above, where such failure shall continue for a
period of thirty (30) days after written notice thereof from Landlord to
Tenant; provided, however, that if the nature of Tenant's noncompliance is such
that more than thirty (30) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default if Tenant commences such cure
within said thirty (30)-day period and thereafter diligently and in good faith
prosecutes such cure to completion.
(d) (i) The making by Tenant of any general
arrangement or general assignment for the benefit of creditors; (ii) Tenant
becomes a "debtor" as defined in 11 U.S.C. Section 101 or any successor
statute thereto (unless, in the case of a petition filed against Tenant, the
same is dismissed within sixty (60) days); (iii) the appointment of a trustee
or receiver to take possession of substantially all of Tenant's assets located
at the Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within sixty (60) days; or (iv) the attachment, execution,
or other judicial seizure of substantially all of Tenant's assets located at
the Premises or of Tenant's interest in this Lease, where such seizure is not
discharged within sixty (60) days. In the event that any provision of this
Section 17.01(d) is contrary to any applicable law, such provision shall be of
no force or effect.
(e) The breach of any representation or
warranty by Tenant hereunder in any material respect.
(f) The default, breach or insolvency of any
guarantor of this Lease beyond any applicable notice and/or grace period under
its guarantee.
17.02 Remedies. In the event of any such material default by
Tenant, Landlord may at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have by reason of such default:
(a) Terminate Tenant's right to possession of
the Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. In
such event, Landlord shall be entitled to recover from Tenant all damages
incurred by Landlord by reason of Tenant's default including, but not limited
to, the cost of recovering possession of the Premises, expenses of reletting,
including reasonable and necessary renovation and alteration of the Premises,
reasonable attorneys' fees, and any real estate commission actually paid; and
the worth at the time of award by the court having jurisdiction thereof of the
amount by which the unpaid rent for the balance of the term after the time of
such award exceeds the amount of such unpaid rent for the same period that
Tenant proves could be reasonably avoided.
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(b) Maintain Tenant's right to possession of
the Premises by any lawful means, in which case this Lease and the term hereof
shall continue in effect whether or not Tenant shall have vacated or abandoned
the Premises. In such event Landlord shall be entitled to enforce all of
Landlord's rights and remedies under the Lease, including the right to recover
the rent as it becomes due hereunder.
(c) Pursue any other remedy now or hereafter
available to Landlord under the Laws of the jurisdiction where the Premises are
located.
(d) To the extent permitted by Law, the rights
and remedies under this Lease provided shall be cumulative, and the exercise of
any one right or remedy shall not preclude the exercise of or act as a waiver
of any other right or remedy of Landlord hereunder, or which may be existing at
law, or in equity or by statute or otherwise.
(e) In addition to the foregoing, Tenant, and
its successors and assigns, shall at all times indemnify Landlord for, defend
Landlord against and save Landlord harmless from any liability, loss, cost,
injury, damage or other expense or risk (including, without limitation,
reasonable attorneys' fees) whatsoever, directly or indirectly, arising out of,
resulting from or otherwise in connection with (i) the failure for any reason
on the part of Tenant to perform, observe or comply with any of the covenants,
conditions and obligations under this Lease to be performed, observed or
complied with by Tenant, and/or (ii) the failure for any reason of any
representation or warranty given by Tenant in connection with the execution of
this Lease by Landlord to be materially true, complete and accurate.
17.03 Administrative Fee. Tenant hereby acknowledges that late
payment by Tenant to Landlord of rent and other sums due hereunder may cause
Landlord to incur administrative costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such
administrative costs may include, but are not limited to, processing and
accounting charges, and late charges which may be imposed on Landlord by the
terms of any superior lease, mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Tenant is not
received by Landlord or Landlord's designee within ten (10) days after written
notice from Landlord, then, without any requirement for further notice to
Tenant, Tenant shall pay to Landlord an administrative fee equal to the Bank of
America, NT & SA, reference rate plus four percent (4%) per annum (but in no
event higher than the maximum rate permitted by Law) multiplied by such overdue
amount from the date such overdue amount was due until paid (the
"Administrative Fee"). The parties hereby agree that such Administrative Fee
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of late payment by Tenant. Acceptance of such Administrative Fee by
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder.
17.04 Default by Landlord. Landlord will commit a default if
Landlord fails to perform any provision of this Lease required of it and the
failure is not cured within 30 days after notice has been given to Landlord.
If, however, the failure cannot reasonably be cured within the cure period,
Landlord will not be in default of this Lease if Landlord commences to cure the
failure within the cure period and diligently and in good faith continues to
cure the failure. Notices
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given under this Section 17.04 will specify the alleged breach and the
applicable Lease provisions. Tenant may, after expiration of the cure period
unless there is an emergency, correct or remedy any failure of Landlord not
timely cured and deduct the reasonable cost paid by Tenant from future rent as
it becomes due.
17.05 Mitigation. Landlord and Tenant will each exercise best
efforts to mitigate the damages caused by the other party's breach of this
Lease. Efforts to mitigate damages will not be construed as a waiver of the
nonbreaching party's right to recover damages.
17.06 Lender's Right to Cure. The respective lenders of each party
will have the right, in the party's behalf, to cure the party's alleged breach
within the same time period allocated under this Lease, Landlord shall upon
written request from Tenant provide copies of any notices of default given to
Tenant hereunder to lenders of Tenant as specified in such written request,
provided, however, that Landlord shall not be deemed to be in default hereunder
if Landlord fails to provide any such notices to any of Tenant's lenders nor
shall any such failure relieve Tenant from any liability hereunder or affect
any of Landlord's rights or remedies hereunder.
ARTICLE 18
SUBORDINATION
At Landlord's option, this Lease shall be subordinate to any superior
lease, mortgage, deed of trust, or any other hypothecation or security now or
hereafter placed upon any of the Premises and to any and all advances made on
the security thereof and to all renewals, modifications, consolidations,
replacements, and extensions thereof, provided that Landlord and any mortgagee
or beneficiary of Landlord shall execute the Subordination Agreement (as
defined below) with Tenant. In furtherance thereof, Tenant hereby agrees, upon
request by Landlord, to execute and deliver a subordination, non-disturbance
and attornment agreement substantially in the form attached hereto as Exhibit B
(a "Subordination Agreement") with respect to any such superior lease,
mortgage, deed of trust, hypothecation, or security.
ARTICLE 19
QUIET ENJOYMENT
Subject to the terms and conditions of this Lease and conditional upon
the performance of all of the provisions to be performed by Tenant hereunder,
Landlord agrees to secure to Tenant during the Lease Term and any and all
extensions thereof, the quiet and peaceful possession of the Premises and all
rights and privileges appertaining thereto and under this Lease.
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ARTICLE 20
REPRESENTATIONS AND WARRANTIES
To induce Landlord to enter into this Lease, Tenant represents and
warrants to Landlord and any mortgagee or beneficiary of Landlord as follows:
(a) It is a corporation duly organized and validly
existing, in good standing under the laws of California, has stock outstanding
which has been duly and validly issued, and is qualified to do business and is
in good standing in the jurisdiction in which any of the Premises are located
with full power and authority to consummate the transactions contemplated
hereby.
(b) The execution and delivery of this Lease has been
duly authorized by all action as may be required under the terms and provisions
of its governing instruments and the laws of the jurisdiction where any of the
Premises are located; this Lease will not violate or result in any breach of,
or constitute a default under, or result in the creation of any lien,
encumbrance, attachment, charge or other right or claim of any other party upon
any assets of Tenant or upon Tenant's beneficiary interest under the terms of
this Lease pursuant to any instrument or applicable Laws to which Tenant is a
party or by which it may be bound or create in favor of or grant to any third
party any interest whatsoever in Tenant's interest under the terms of this
Lease; this Lease is valid and enforceable in accordance with its terms, and
the execution and delivery of this Lease, and the consummation of the
transactions contemplated hereby, do not require the approval or consent of any
governmental authority having jurisdiction over Tenant or its property, or if
such approval or consent is required, it has been obtained.
(c) Tenant's financial statements and, if applicable, the
guarantors' financial statements heretofore delivered to Landlord are true and
correct in all material respects, have been prepared in accordance with
generally accepted accounting principles, and fairly present the respective
financial conditions of the subjects thereof as of the respective dates
thereof. No materially adverse change has occurred in the financial conditions
reflected therein since the respective dates thereof.
(d) There are no actions, suits or proceedings pending,
or to the best of Tenant's knowledge, threatened, against or affecting it or
any of the Premises or any guarantor of this Lease, or involving the validity
or enforceability of this Lease, at law or in equity, or before or by any
governmental authority except actions, suits and proceedings fully covered by
insurance or which, if adversely determined, would not materially impair the
ability of Tenant or any guarantor of this Lease to satisfy their obligations
under this Lease or any guarantee of this Lease.
(e) Tenant is not in default under any obligation for the
payment of borrowed money, for the deferred purchase price of property or for
the payment of any rent under any lease agreement, which, either individually
or in the aggregate, would adversely affect the
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financial condition of Tenant, or the ability of Tenant to perform its
obligations hereunder, or comply with the terms of this Lease.
ARTICLE 21
SURRENDER OF PREMISES
Except for changes resulting from eminent domain proceedings, at the
expiration or sooner termination of the Lease Term, Tenant shall surrender the
Premises in good and clean condition, reasonable wear and tear excepted, and
shall surrender all keys for the Premises to Landlord at the place then fixed
for the payment of rent and shall inform Landlord of all combinations on locks,
safes and vaults, if any, in the Premises. Tenant shall at such time remove
all of Tenant's property, as well as any alterations or improvements other than
permitted Alterations made in accordance with Article 12, if requested to do so
by Landlord, and shall repair any damage to any of the Premises caused thereby,
and any or all of such property not so removed shall, at Landlord's option,
become the exclusive property of Landlord or be disposed of by Landlord, at
Tenant's cost and expense, without further notice to or demand upon Tenant. If
the Premises are not so surrendered, Tenant shall indemnify Landlord against
loss or liability resulting from the delay by Tenant in so surrendering such
Premises including, without limitation, any claims made by any succeeding
occupant founded on such delay. Tenant's obligation to observe or perform this
covenant shall survive the expiration or other termination of the Lease Term.
ARTICLE 22
BANKRUPTCY OR INSOLVENCY
22.01 Bankruptcy or Insolvency. Subject to applicable law, Landlord
and Tenant acknowledge and agree that the provisions of this Section 22.01
shall control notwithstanding anything to the contrary contained in this Lease:
(a) In the event that Tenant shall become a debtor under
Chapter 7 of the Bankruptcy Reform Act of 1978, 11 U.S.C. 1 et seq ("Bankruptcy
Code"), and Tenant's trustee or Tenant shall elect to assume this Lease for the
purpose of assigning the same or otherwise, such election and assignment may be
made only if the provisions of this Section 22.01 are satisfied. If Tenant or
Tenant's trustee shall fail to assume this Lease within sixty (60) days after
the entry of an order for relief, this Lease shall be deemed to have been
rejected. Immediately thereupon Landlord shall be entitled to possession of
each of the Premises without further obligation to Tenant or Tenant's trustee
and this Lease, upon the election of Landlord, shall terminate, but Landlord's
right to be compensated for damages shall survive, whether or not this Lease
shall be terminated.
(b) In the event that a voluntary petition for
reorganization is filed by Tenant, or an involuntary petition is filed against
Tenant under Chapter 11 of the Bankruptcy Code, or
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in the event of the entry of an order for relief under Chapter 7 in a case
which is then transferred to Chapter 11, Tenant's trustee or Tenant, as
debtor-in-possession, must elect to assume this Lease within sixty (60) days
from the date of the filing of the petition under Chapter 11 or the transfer
thereto, or Tenant's trustee or the debtor-in-possession shall be deemed to
have rejected this Lease. Immediately thereupon Landlord shall be entitled to
possession of each of the Premises without further obligation to Tenant or
Tenant's trustee and this Lease, upon the election of Landlord, shall
terminate, but Landlord's right to be compensated for damages, shall survive,
whether or not this Lease shall be terminated.
(c) No election by Tenant's trustee or the
debtor-in-possession to assume this Lease, whether under Chapter 7 or Chapter
11, shall be effective unless each of the following conditions has been
satisfied:
(i) Tenant's trustee or the debtor-in-possession
has cured all defaults under this Lease, or has provided Landlord with
evidence satisfactory to Landlord that it will cure all defaults
susceptible of being cured by the payment of money within ten (10) days
from the date of such assumption and that it will cure all other
defaults under this Lease which are susceptible of being cured by the
performance of any act within thirty (30) days after the date of such
assumption.
(ii) Tenant's trustee or the debtor-in-possession
has compensated, or has provided Landlord with evidence satisfactory to
Landlord that, within ten (10) days from the date of such assumption,
that it will compensate Landlord for any actual pecuniary loss incurred
by Landlord arising from the default of Tenant, Tenant's trustee, or
the debtor-in-possession as indicated in any statement of actual
pecuniary loss sent by Landlord to Tenant's trustee or the
debtor-in-possession.
(iii) Tenant's trustee or the debtor-in-possession
(A) has provided Landlord with "Assurance", as hereinbelow defined, of
the future performance of each of the obligations under this Lease of
Tenant, Tenant's trustee, or the debtor-in-possession, and (B) shall,
in addition to any other security deposits held by Landlord, deposit
with Landlord, as security for the timely payment of Annual Rent and
for the performance of all other obligations of Tenant under this
Lease, an amount equal to three (3) monthly installments of Annual Rent
(at the rate then payable), and (C) pay in advance to Landlord on the
date each installment of Annual Rent is due and payable, one-twelfth of
Tenant's annual obligations for Impositions to be made by Tenant
pursuant to this Lease. The obligations imposed upon Tenant's trustee
or the debtor-in-possession by this Section 22.01 shall continue with
respect to Tenant or any assignee of this Lease, after the conclusion
of proceedings under the Bankruptcy Code.
(iv) Such assumption will not breach or cause a
default under any provision of any other lease, mortgage, financing
agreement or other agreement by which Landlord is bound, relating to
the Premises.
(d) For purposes of Section 22.01(c)(iii) hereof,
Landlord and Tenant shall acknowledge that "Assurance" shall mean no less than:
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(i) Tenant's trustee or the debtor-in-possession
has and will continue to have sufficient unencumbered assets after the
payment of all secured obligations and administrative expenses to
assure Landlord that sufficient funds will be available to fulfill the
obligations of Tenant under this Lease; and
(ii) To secure to Landlord the obligations of
Tenant, Tenant's trustee or the debtor-in-possession and to assure the
ability of Tenant, Tenant's trustee or the debtor-in-possession to cure
the defaults under this Lease, monetary and/or nonmonetary, there shall
have been: (A) sufficient cash deposited with Landlord, or (B) the
bankruptcy court shall have entered an order segregating sufficient
cash payable to Landlord, and/or (C) Tenant's trustee or the
debtor-in-possession shall have granted to Landlord a valid and
perfected first lien and security interest and/or mortgage in property
of Tenant, Tenant's trustee or the debtor-in-possession, acceptable as
to value and kind to Landlord.
(e) In the event that this Lease is assumed in accordance
with Section 22.01 (b) hereof and thereafter Tenant is liquidated or files, or
has filed against it, a subsequent petition under any provision of the
Bankruptcy Code or any similar statute for relief of debtors, Landlord may, at
its option, terminate this Lease and all rights of Tenant hereunder, by giving
Tenant notice of its election to so terminate within thirty (30) days after the
occurrence of either of such events.
(f) If Tenant's trustee or the debtor-in-possession has
assumed this Lease pursuant to the terms and provisions of this Section 22.01
for the purpose of assigning (or elects to assign) this Lease, this Lease may
be so assigned only if the proposed assignee has provided adequate assurance of
future performance of all of the terms, covenants and conditions of this Lease
to be performed by Tenant. Landlord shall be entitled to receive all
consideration for such assignment, whether cash or otherwise. As used in this
Section 22.01(f) "adequate assurance of future performance" shall mean at least
that clauses (B) and (C) of Section 22.01(c)(iii) hereof and each of the
following conditions, has been satisfied:
(i) The proposed assignee has furnished Landlord
with a current financial statement audited by a certified public
accountant determined in accordance with generally accepted accounting
principles consistently applied indicating a credit rating, net worth
and working capital in amounts which Landlord reasonably determines to
be sufficient to assure the future performance of such assignee of
Tenant's obligations under this Lease, but in no event indicating a
net worth less than the net worth of the Tenant and any guarantors of
this Lease, on the date of execution hereof.
(ii) Such assignment will not breach or cause a
default under any provision of any other lease, mortgage, financing
agreement or other agreement by which Landlord is bound, relating to
the Premises.
(iii) The proposed assignment will not release or
impair any guarantee under this Lease.
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(g) When, pursuant to the Bankruptcy Code, Tenant's
trustee or the debtor-in-possession shall be obligated to pay reasonable use
and occupancy charges for the use of the Premises, such charges shall not be
less than the Annual Rent and all additional rent payable by Tenant under this
Lease and shall be paid at the times and when due as though such charges were
Annual Rent and additional rent.
(h) Anything in this Lease to the contrary notwithstanding,
neither the whole nor any portion of Tenant's interest in this Lease or its
estate in the Premises shall pass to any trustee, receiver, assignee for the
benefit of creditors, or any other similar person or entity, or otherwise by
operation of law under the Bankruptcy Code or any similar federal statute now
or hereinafter enacted, or under the laws of any state, district or municipality
having jurisdiction of the person or property of Tenant unless Landlord shall
have consented to such transfer in writing. No acceptance by Landlord of rent
or any other payments from any such trustee, receiver, assignee, person or other
entity shall be deemed to constitute such consent by Landlord nor shall it be
deemed a waiver of Landlord's right to terminate this Lease for any transfer of
Tenant's interest under this Lease without such consent.
ARTICLE 23
HAZARDOUS MATERIALS
23.01 Representations and Warranties. Notwithstanding anything to
the contrary which may be contained in this Lease, Tenant represents, warrants
and covenants to Landlord and any mortgagee or beneficiary of Landlord as
follows:
(a) To the best of Tenant's Knowledge (as defined below),
except as set forth in the environmental and engineering reports for the
Premises previously delivered by Tenant or its affiliates to Landlord and any
environmental and engineering reports for the Premises prepared by Landlord in
connection herewith (collectively, the "Reports"), there are no and have been
no violations of the Relevant Environmental Laws (as hereinafter defined)
respecting the Premises and no consent orders have been entered with respect
thereto, except where noncompliance could not reasonably be expected to have a
materially adverse effect on the value or the use or operation of the Premises
for its intended purpose or the ability of Tenant to perform its obligations
under this Lease (a "Material Adverse Effect").
(b) To the best of Tenant's Knowledge, there are no and
have been no Hazardous Wastes (as hereinafter defined) or Asbestos (as
hereinafter defined) either at, upon, under or within, or discharged or emitted
at or from, the Premises, including, but not limited to, the air, soil,
surface, and ground water; no Hazardous Wastes or Asbestos have flowed, blown
or otherwise become present at the Premises from neighboring land; and no
Hazardous Wastes or Asbestos have been removed from the Premises other than
those Hazardous Wastes which are used and/or incidental to the ordinary course
of Tenant's business provided that the same are used, stored, handled and
disposed of in accordance with all Relevant Environmental Laws and all other
applicable Laws, industry standards and manufacturers specifications.
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(c) The Premises will not be used for the purpose of
storing Hazardous Wastes, and no such storage or use will otherwise be allowed
on any of the Premises which will cause or increase the likelihood of causing
the release of Hazardous Wastes onto any of the Premises other than those
Hazardous Wastes which are used and/or incidental to the ordinary course of
Tenant's business provided that the same are used, stored, handled and disposed
of in accordance with all Relevant Environmental Laws and all other applicable
Laws, industry standards and manufacturers specifications. Neither Tenant, nor
to the best of Tenant's Knowledge any third party, has installed, used or
removed any storage tanks on, from or in connection with the Premises except in
full compliance with all Relevant Environmental Laws, and to the best of
Tenant's Knowledge, there are no storage tanks or wells (whether existing or
abandoned) located on, under or about the Premises. To the best of Tenant's
Knowledge, except as set forth in the Reports, the Property does not consist of
any building materials that contain Hazardous Wastes or Asbestos.
(d) Tenant is not aware of any claims or litigation, and
has not received any communication from any person (including any governmental
authority), concerning the presence or possible presence of Hazardous Wastes or
Asbestos at or adjacent to any of the Premises or concerning any violation or
alleged violation of the Relevant Environmental Laws respecting any of the
Premises. Tenant shall promptly notify Landlord of any such claims and shall
furnish Landlord with a copy of any such communications received by Tenant.
(e) Tenant shall notify Landlord promptly and in
reasonable detail in the event that Tenant becomes aware of or suspects the
presence of Hazardous Wastes or Asbestos (other than those Hazardous Wastes or
Asbestos which are used and/or incidental to the ordinary course of Tenant's
business provided that the same are used, stored, handled and disposed of in
accordance with all Relevant Environmental Laws and all other applicable Laws,
industry standards and manufacturers specifications) or a violation of the
Relevant Environmental Laws, at or adjacent to any of the Premises.
(f) Tenant shall ensure that the Premises complies and
continues to comply in all respects with the Relevant Environmental Laws.
(g) If the Premises are used or maintained so as to
subject Tenant, Landlord or any mortgagee or beneficiary of Landlord or the
user of any of the Premises to a claim of violation of the Relevant
Environmental Laws (unless contested in good faith by appropriate proceedings),
Tenant shall immediately cease or cause a cessation of such use or operations
and shall remedy and fully cure any conditions arising therefrom, at its own
cost and expense.
(h) Upon Landlord's reasonable belief that there is a
material breach of one of the environmental representations or warranties set
forth above, Tenant shall permit Landlord, at its option, at any time upon five
(5) days' prior written notice to Tenant, to cause or conduct a complete
environmental audit to be performed. The audit shall be at Tenant's sole cost
and expense.
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23.02 Definitions.
(a) The "Relevant Environmental Laws," as referred to
herein, shall mean all applicable federal, state and local laws, rules,
regulations, orders, judicial determinations, and decisions or determinations
by any judicial, legislative or executive body of any governmental or
quasi-governmental entity, whether in the past, the present or the future, with
respect to: (A) the installation, existence, or removal of, or exposure to,
Asbestos on any of the Premises; (B) the existence on, discharge from, or
removal from any of the Premises of Hazardous Wastes; or (C) the effects on the
environment of any of the Premises or of any activity now, previously, or
hereafter conducted on any of the Premises. The Relevant Environmental Laws
shall include, but not be limited to, the following: (1) the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. Sections
9601 et M.; the Superfund Amendments and Reauthorization Act, Public Law
99-499, 100 Stat. 1613; the Resource Conservation and Recovery Act, 42 U.S.C.
Sections 6901 et seq.; the National Environmental Policy Act, 42 U.S.C.
Section 432 1; the Safe Drinking Water Act, 42 U.S.C. Sections 30OF et seq.;
the Toxic Substances Control Act, 15 U.S.C. Section 2601; the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801; the Federal Water
Pollution Control Act, 33 U.S.C. Sections 1251 et seq.; the Clean Air Act, 42
U.S.C. Sections 7401 et M.; and the regulations promulgated in connection
therewith; (2) Environmental Protection Agency regulations pertaining to
Asbestos (including 40 C.F.R. Part 61, Subpart M); Occupational Safety and
Health Administration regulations pertaining to Asbestos (including 29 C.F.R.
Sections 1910. 1001 and 1926.58); as each may now or hereafter be amended; and
(3) any state and local laws and regulations pertaining to Hazardous Wastes
and/or Asbestos;
(b) "Asbestos," as referred to herein, shall have the
meanings provided under the Relevant Environmental Laws, and shall include, but
not be limited to, asbestos fibers and friable asbestos, as such terms are
defined under the, Relevant Environmental Laws; and
(c) "Hazardous Wastes," as referred to herein, shall
mean any of the following as defined by the Relevant Environmental Laws: solid
wastes; petroleum and petroleum derivatives; natural or synthetic gas; radon
gas; toxic or hazardous substances, wastes, pollutants or contaminants
(including, but not limited to, polychlorinated biphenyls ("PCB's", paint
containing lead, and urea formaldehyde); and discharges of sewage or effluent.
(d) "Knowledge" shall mean the actual knowledge of any
executive officer after due inquiry of property management.
23.03 Tenant's Obligation. At its sole cost and expense, Tenant
shall:
(a) Pay immediately when due the cost of compliance with
the Relevant Environmental Laws.
(b) Keep the Premises free of any lien imposed pursuant
to the Relevant Environmental Laws.
28
<PAGE> 120
23.04 Landlord Options. In the event that Tenant fails to comply
with the requirements of this Article 23, after notice to Tenant and the
earlier of the expiration of any applicable cure period hereunder, or the
expiration of the cure period permitted under the Relevant Environmental Laws,
if any, or such earlier time if Landlord determines that life, person or
property is in jeopardy, Landlord may, but shall not be obligated to, exercise
its right to do one or more of the following: (a) declare that such failure
constitutes a default; and/or (b) take any and all actions, at Tenant's
expense, that Landlord reasonably deems necessary or desirable to cure said
failure of compliance. Any costs incurred pursuant to this Section 23.04 shall
become immediately due and payable by Tenant together with the applicable
Administrative Fee, and shall be paid or reimbursed to Landlord promptly upon
written notice from Landlord,
23.05 Indemnity. Landlord shall not be liable for and Tenant shall
immediately pay to Landlord when incurred and shall indemnify, defend and hold
Landlord and any mortgagee or beneficiary of Landlord harmless from and
against, all loss, cost, liability, damage and expense (including, but not
limited to, attorneys' fees and costs incurred in the investigation, defense
and settlement of claims) that Landlord or any mortgagee or beneficiary of
Landlord may suffer or incur as a result of or in connection in any way with
any Asbestos or Hazardous Wastes now or hereafter present, discharged,
released, generated, disposed, transported or emitted to, from, in on or under
any of the Premises or in connection with any violation of any of the Relevant
Environmental Laws, or any environmental assessment or study from time to time
undertaken or requested by Tenant or Landlord, or any breach of any
representation, covenant or undertaking by Tenant herein.
23.06 Survival. The provisions of this Article 23 shall survive the
expiration or termination of the Lease Term.
ARTICLE 24
GENERAL PROVISIONS
24.01 Estoppel Certificates. Each party ("Responding Party") shall
at any time upon not less than fifteen (15) business days' prior written notice
from the other party ("Requesting Party") execute, acknowledge, and deliver to
the Requesting Party a statement reasonably satisfactory to Landlord certifying
and acknowledging the following: (i) that this Lease represents the entire
agreement between Landlord and Tenant, and is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect) and the date to
which the Annual Rent and other charges are paid in advance, if any; and (ii)
that there are not, to the Responding Party's knowledge, any uncured defaults
on the part of the Requesting Party, or specifying such defaults if any are
claimed. Any such statement may be conclusively relied upon by any prospective
purchaser, mortgagee or encumbrancer of the Premises or of the business of the
Requesting Party.
24.02 Severability. The invalidity of any provision of this Lease
as determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.
29
<PAGE> 121
24.03 Entire Agreement. It is understood that there are no oral or
other written agreements or representations between the parties hereto
concerning the subject matter of this Lease, and that this Lease and the
Exhibits hereto supersede and cancel any and all previous negotiations,
arrangements, representations, brochures, displays, projections, estimates,
agreements, and understandings, if any, made by Landlord or Tenant with respect
to the subject matter hereof, and none thereof shall be used to interpret,
construe, supplement, or contradict this Lease. This Lease, and the Exhibits
hereto, and all amendments hereto, constitute and shall be considered to be the
only agreement between the parties hereto and their representatives and agents.
All negotiations and oral agreements acceptable to both parties have been
merged into and are included herein and in the Exhibits hereto.
24.04 Notices. Any notice required or permitted to be given
hereunder shall be in writing and may be given by personal delivery, certified
mail, return-receipt requested or by nationally recognized overnight courier
service and, if given by mail or courier service, shall be deemed sufficiently
given if addressed to Tenant or to Landlord, as the case may be, at the
addresses noted in Article 1 hereof. Delivery by courier will be deemed given
on the date indicated in the courier's records; delivery by certified mail will
be deemed given on the date indicated on the return receipt. Either party may
by notice to the other specify a different street address for notice purposes.
A copy of all notices required or permitted to be given hereunder shall be
concurrently transmitted to such party or parties at such addresses as may from
time to time hereafter be designated by notice.
24.05 Waivers. No waiver by a party of any provision hereof shall
be deemed a waiver of any other provision hereof or of any subsequent breach by
the other party of the same of any other provision. Landlord's consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent.
24.06 Recording. Either Landlord or Tenant shall, upon request of
the other, execute, acknowledge, and deliver to the other a "short form"
memorandum of this Lease for recording purposes. Such memorandum shall be in a
form reasonably acceptable to Landlord and sufficient for Tenant to obtain a
leasehold policy of title insurance based thereon. In the event of any
termination of this Lease, Tenant agrees to execute and deliver to Landlord a
termination agreement satisfactory to Landlord, which termination agreement
shall be similarly recorded.
24.07 Holding Over. If Tenant remains in possession of the Premises
or any part thereof after the expiration or termination of the Lease Term, such
occupancy shall be a tenancy from month-to-month upon all the provisions of
this Lease pertaining to the obligations of Tenant and Tenant shall thereby
waive its rights to any additional notice to quit, but all options, if any,
granted under the terms of this Lease shall be deemed terminated and be of no
further force or effect. The monthly rental during such hold-over period shall
be equal to one hundred ten percent (110%) of the monthly installment of Annual
Rent payable immediately prior to
30
<PAGE> 122
expiration or termination of the Lease Term. In addition, Tenant shall
continue to be obligated to pay all Impositions and other amounts required to
be paid by the terms of this Lease.
24.08 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
24.09 Choice of Law. The laws of the jurisdiction in which the
Premises are located shall govern the validity, performance, and enforcement of
this Lease.
24.10 Attorneys' Fees. Should either party institute any action or
proceeding to enforce any provision hereof or for a declaration of such party's
rights or obligations hereunder, the prevailing party shall be entitled to
receive from the losing party such amounts as the court may adjudge to be
reasonable attorneys' fees for services rendered to the party prevailing in any
such action or proceeding, and such fees shall be deemed to have accrued upon
the commencement of such action or proceeding.
24.11 Force Majeure. Except for payment obligations imposed
pursuant to this Lease, if there is any prevention, delay, or stoppage of an
act required of a party pursuant to this Lease because of strikes, lockouts,
other labor disputes, material shortages, embargoes, civil unrest, governmental
regulations, governmental controls, enemy or hostile governmental action,
judicial order, public emergency, fire, earthquake, other Acts of God, and
other causes beyond the reasonable control of the party obligated to perform,
performance of the act will be excused for the period of the delay.
24.12 Uneconomic Conditions. Landlord acknowledges that during the
course of a longterm lease such as this Lease, it is possible that any
particular location could become an underperforming asset due to a number of
causes, including, the discovery of an unexpected adverse site or environmental
condition or occurrence, the entry of a detrimental governmental law or
determination, or the occurrence of some other matter beyond the reasonable
control of Tenant, such that the Tenant's continued operation at the location
in compliance with this Lease would be uneconomic in a material adverse manner
as determined by Landlord and Tenant in good faith based on commercially
reasonable standards and criteria. In such event, Landlord shall negotiate in
good faith with Tenant to attempt to develop a mutually acceptable resolution
of such a situation, which may include, without limitation, a sale of the
affected Premises, the purchase of the affected Premises by Tenant or the
substitution of another property acceptable to Landlord in its sole discretion
for such Premises, in each case without cost or expense to Landlord, and
subject to the written consent of any mortgagee or beneficiary of Landlord and
to the payment by Tenant of any mortgage loans on the affected Premises (or the
portion of such loans allocable to the affected Premises as determined by
Landlord). If, notwithstanding the foregoing, Landlord incurs any costs or
expenses in connection with such resolution, Tenant shall reimburse Landlord
for all such costs and expenses, including without limitation reasonable
attorneys' fees and expenses.
24.13 Consent. Whenever the consent or approval of either party is
required pursuant to this Lease, such consent or approval will not be
unreasonably withheld or delayed except as otherwise expressly provided herein.
31
<PAGE> 123
24.14 Liability of Landlord.
(a) In the event of any sale or other transfer of
Landlord's interest in any of the Premises, Landlord shall be and hereby is
entirely freed and relieved of all liabilities and obligations of Landlord
hereunder with respect to such Premises to the extent accruing after the date
of such transfer.
(b) Notwithstanding anything contained herein to the
contrary, it is specifically understood and agreed that there shall be no
personal liability of Landlord or any of its shareholders, members, officers or
directors in respect of any of the terms, covenants, conditions or provisions
of this Lease, and in the event of a breach or default by Landlord of any of
its liabilities and obligations under this Lease, Tenant and any persons
claiming by, through or under Tenant shall look solely to the equity of
Landlord in the Premises for the satisfaction of Tenant's and/or such persons'
remedies and claims for damages.
24.15 No Merger. There shall be no merger of this Lease, or the
leasehold estate created by this Lease, with any other estate or interest in
the Premises, or any part thereof, by reason of the fact that the same person,
firm, corporation or other entity may acquire or own or hold, directly or
indirectly, (a) this Lease or the leasehold estate created by this Lease, or
any interest in this Lease or in any such leasehold estate, and (b) any such
other estate or interest in the Premises or any part thereof, and no such
merger shall occur unless and until all persons, corporations, firms, and other
entities having an interest (including a security interest) in (i) this Lease
or the leasehold estate created by this Lease; and (ii) any such other estate
or interest in the Premises, or any part thereof, shall join in a written
instrument effecting such merger and shall duly record the same.
24.16 Reports. Tenant agrees to furnish to Landlord, with
reasonable promptness upon Landlord's request: financial statements, reports
and documents which Tenant and each guarantor of this Lease sends to or makes
available to its public shareholders, noteholders or bondholders.
24.17 Definition of Rent. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, without limitation, all
Impositions, Real Property Taxes and insurance premiums payable hereunder,
shall be deemed to be "rent".
24.18 Interpretation. The captions by which the Articles and
Sections of this Lease are identified are for convenience only and shall have
no effect upon the interpretation of this Lease. Whenever the context so
requires, singular numbers shall include the plural, the plural shall refer to
the singular, the neuter gender shall include the masculine and feminine
genders, and the words "Landlord" and "Tenant" and "person" shall include
corporations, partnerships, associations, other legal entities, and
individuals.
24.19 Relationship of the Parties. Nothing in this Lease shall
create a partnership, joint venture, employment relationship, borrower and
lender relationship, or any other relationship between Landlord and Tenant
other than the relationship of landlord and tenant.
32
<PAGE> 124
24.20 Successors. This Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective personal and legal
representatives, heirs, successors, and assigns.
24.21 Modifications. This Lease may not be altered, amended,
changed, terminated, or modified in any manner unless the same shall be in
writing and signed by or on behalf of the party to be bound. No waiver of any
provision of this Lease of any right of Landlord hereunder shall be effective
unless in writing signed by or on behalf of the person to be bound.
24.22 Brokerage Fees. Landlord and Tenant each represent and
warrant that they have not employed a broker in connection with the execution
of this Lease. Landlord and Tenant shall each indemnify and hold the other
harmless from and against any claim or claims for brokerage or other
commissions arising from such party having employed a broker contrary to its
representation in this Section 24.22.
24.23 Not Binding Until Executed. This Lease does not constitute an
"offer" and is not binding until fully executed and delivered by Landlord.
LANDLORD:
_______________________, a ____________
By ____________________________________
Its ___________________________________
Date: _________________________________
TENANT:
ARG ENTERPRISES, INC., A CALIFORNIA
CORPORATION
By ____________________________________
Its ___________________________________
Date: _________________________________
33
<PAGE> 125
STATE OF _________________________)
) ss.:
COUNTY OF ________________________)
The foregoing instrument was acknowledged before me this _____________
day of _____________, 199__, by _______________, as ________________________ of
_____________________________, a __________________, on behalf of ___________ .
_______________________________________
Notary Public
Los Angeles County, California
My Commission Expires: ________________
[Notary Public's Seal]
STATE OF CALIFORNIA )
) ss.
COUNTY OF _____________________ )
The foregoing instrument was acknowledged before me this ________ day
of ______________, 199___, by ________, as __________ of ARG Enterprises, Inc.,
a California corporation, on behalf of ARG Enterprises, Inc.
_______________________________________
Notary Public
________________ County, ______________
My Commission Expires: ________________
[Notary Public's Seal]
34
<PAGE> 126
EXHIBIT A
TO
LEASE
[Insert legal description of Premises]
1
<PAGE> 127
EXHIBIT B
TO
LEASE
Recording Requested By
and When Recorded Mail To:
American Restaurant Group, Inc.
Attn: Law Department
4410 El Camino Real, Suite 201
Los Altos, California 94022
SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this
"Agreement") is made and entered into as of the ______ day of ________________
199___, by and among (i) ARG Enterprises, Inc., a California corporation
("Tenant"); (ii) ________________________________________ ("Landlord"); and
(iii) [LENDER], [ENTITY] ("Lender").
WITNESSETH:
WHEREAS, Lender is the holder of that certain mortgage/deed of trust,
dated _____________________, 1996 ("Mortgage/Deed of Trust") encumbering
those certain parcels of real property and the improvements thereon, relating
to _______________ (______) restaurant assets commonly known as either Stuart
Anderson's Black Angus or Stuart Anderson's Cattle Company restaurant(s)
located at and more particularly described in Exhibit 1 attached hereto and
incorporated herein by this reference (individually and collectively,
"Property");
WHEREAS, Lender and Landlord are parties to the Mortgage/Deed of Trust,
pursuant to which Landlord financed the Property with Lender; and
WHEREAS, Landlord and Tenant are parties to that certain Lease, dated
_______________, 1996 (the "Lease"), pursuant to which Tenant leased the
Property from Landlord.
NOW, THEREFORE, in consideration for the mutual covenants and agreements
contained herein, the sufficiency of which is hereby acknowledged, the parties
hereto hereby agree as follows:
1. Subordination. Subject to the terms of this Agreement, the
Lease, and the rights of Tenant in, to and under the Lease and the Property,
are hereby made subject, junior, and
B-1
<PAGE> 128
subordinate in all respects to the Mortgage/Deed of Trust and to all renewals,
modifications, consolidations, replacements, and extensions thereof and to the
respective rights of Lender thereunder as if all such instruments had been
executed, delivered and recorded prior to the execution of the Lease. This
clause shall be self-operative, and no further instrument shall be required.
However, Tenant covenants and agrees that if requested by Lender it will
execute, acknowledge and deliver any instrument or document reasonably
requested to confirm the foregoing subordination of the Lease within twenty
(20) days after receipt of written request therefor.
2. Non-Disturbance. So long as Tenant is not in default beyond
any applicable grace or cure period in the payment of rent or any other sums
payable under the Lease or in the performance of any of the other terms,
covenants or conditions of the Lease on Tenant's part to be performed, then:
(a) Tenant's possession of the Property shall not be diminished or interfered
with by Lender or any third-party purchaser; (b) the Lease shall not be
terminated or affected by the foreclosure of the Mortgage/Deed of Trust or the
Lender's exercise of any remedy provided for in the Mortgage/Deed of Trust; and
(c) in the event that Lender forecloses upon the Property, Lender shall elect
to preserve the Lease as a lease between Lender and Tenant in accordance with
the terms of this Agreement.
3. Attornment. In the event that the Lender forecloses upon the
Property, then:
(a) Tenant shall be bound to Lender, and Lender shall be
bound to Tenant, under all of the terms, covenants and conditions of the Lease
for the balance of the term thereof remaining, and any extensions or renewals
thereof which may be effected in accordance with any option therefor contained
in the Lease, with the same force and effect as if Lender were the original
landlord under the Lease, except that Paragraph 3(b) below and the other
provisions of this Agreement shall modify the Lease, and Tenant does hereby
attornment to Lender as its landlord, said attornment to be effective and
self-operative without the execution of any further instruments; provided,
however, that within twenty (20) days after receipt of written request therefor
from Lender, Tenant will execute and deliver to Lender any instrument or other
documents reasonably requested by Lender to confirm Tenant's attornment to
Lender.
(b) It is agreed that in no event shall Lender:
(1) be liable for any act or omission of any
prior landlord (including Landlord);
(2) be obligated to cure any defaults of any
prior landlord (including Landlord) which
occurred prior to the date that Lender
succeeded to the interest of such prior
landlord under the Lease; provided that from
and after the date Lender becomes owner of
the Property, Lender shall be obligated to
cure any continuing default of the landlord
under the Lease to the extent such default is
capable of being cured by Lender;
B-2
<PAGE> 129
(3) be subject to any offsets or defenses which
Tenant may be entitled to assert against any
prior landlord (including Landlord) with
respect to events occurring prior to the date
Lender succeeded to Landlord's interest;
(4) be bound by any Annual Rent or other amounts
paid by Tenant to any prior landlord
(including Landlord) more than one (1) month
in advance of the date that Lender succeeded
to the interest of such prior landlord under
the Lease; or
(5) be bound by any amendment or modification of
the Lease or any supplemental agreement made
without the written consent of Lender, such
consent not to be unreasonably withheld.
4. Payment of Rent to Lender. Tenant agrees to pay the Annual
Rent and any other payments due under the Lease to Lender upon receipt of
written notice from Lender that it has succeeded to the interest of Landlord
under the Lease, and Landlord agrees that Tenant is entitled to rely
conclusively upon such notice without any duty of inquiry.
5. Limitation on Liability of Lender. There shall be no personal
liability on the part of Lender or any officer, director, employee, shareholder
or partner of Lender for the performance of the Lease or any covenant or
agreement contained therein or in this Agreement. Tenant shall look solely to
Lender's estate and interest in the Property for the satisfaction of every
remedy of Tenant for any breach by Lender under the Lease or this Agreement or
otherwise arising out of or in connection with the Lease, and Tenant will not
collect or attempt to collect any such claim out of any other assets of Lender.
6. Performance by Lender: Conflict. Nothing in this Agreement
shall be or be deemed to be an agreement by Lender to perform any obligation of
Landlord under the Lease unless and until the Lender acquires the Property, and
then only if required to do so by the terms of the Lease, as modified and
limited by this Agreement. In the event of any conflict between the terms of
this Agreement and the terms of the Lease, the terms of this Agreement shall
control.
7. Notices. Any notice required or permitted to be given
hereunder shall be in writing and may be given by personal delivery, certified
mail, return receipt requested or by nationally recognized overnight courier
service and, if given by mail or by courier service, shall be deemed
sufficiently given if addressed to the parties at the addresses set forth
below. Delivery by courier will be deemed given on the date indicated in the
courier's records; delivery by certified mail will be deemed given on the date
indicated on the return receipt. Any party may by notice specify a different
street address for notice purposes.
B-3
<PAGE> 130
Addresses for Notices:
To Lender: [LENDER]
-------------------
-------------------
-------------------
To Landlord:
-------------------
-------------------
-------------------
-------------------
-------------------
To Tenant: ARG Enterprises, Inc.
6th Floor
450 Newport Center Drive
Newport Beach, CA 92660
Attn: Director of Real Estate
With a copy to: American Restaurant Group, Inc.
Suite 201
4410 El Camino Real
Los Altos, CA 94022
Attn: Law Department
8. Successors and Assigns. This Agreement and each and every
covenant and provision contained herein shall be binding upon and shall inure
to the benefit of the parties hereto and their respective representatives,
successors and assigns.
9. Modifications, Counterparts. This Agreement shall not be
modified or amended in whole or in part except by a writing executed by all of
the parties hereto or their respective representatives, successors or assigns.
This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original and all of which shall constitute one and the same
instrument.
10. Governing Law, Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the jurisdiction in which the
Property is located.
[SIGNATURE PAGE FOLLOWS]
B-4
<PAGE> 131
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the date set forth below.
TENANT:
ARG ENTERPRISES, INC.
By: __________________________________
Its: _________________________________
Dated: _______________________________
LANDLORD:
______________________________________
By: __________________________________
Its: _________________________________
Dated: _______________________________
LENDER:
[LENDER]
By: __________________________________
Its: _________________________________
Dated: _______________________________
B-5
<PAGE> 132
CALIFORNIA ALL-PURPOSE NOTARY ACKNOWLEDGMENT
State of __________
County of _________
On this ______ day of _________________, 199 __, before me,
____________________________________________________________________________,
Name, Title of Officer
personally appeared ________________________________________________________,
Name(s) of Signer(s)
[ ] personally known to me - OR - [ ] proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
__________________________________
SIGNATURE OF NOTARY
***************************** OPTIONAL SECTION *****************************
CAPACITY CLAIMED BY SIGNER
Though statute does not require the Notary to fill in the data below, doing so
may prove invaluable to persons relying on the document.
[ ] INDIVIDUAL
[ ] CORPORATE OFFICERS(S)
[ ] PARTNER(S) [ ] LIMITED
[ ] GENERAL
[ ] ATTORNEY-IN-FACT
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR
[ ] OTHER: _____________________
____________________________
____________________________
____________________________
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
_________________________________
_________________________________
_________________________________
_________________________________
***************************** OPTIONAL SECTION *****************************
THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW:
TITLE OR TYPE OF DOCUMENT ______________________________________________
NUMBER OF PAGES ______________ DATE OF DOCUMENT ________________________
SIGNER(S) OTHER THAN NAMED ABOVE _______________________________________
Though the data requested here is not required by law, it could prevent
fraudulent reattachment of this form.
<PAGE> 133
CALIFORNIA ALL-PURPOSE NOTARY ACKNOWLEDGMENT
State of __________
County of _________
On this ______ day of _________________, 199 __, before me,
____________________________________________________________________________,
Name, Title of Officer
personally appeared ________________________________________________________,
Name(s) of Signer(s)
[ ] personally known to me - OR - [ ] proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
__________________________________
SIGNATURE OF NOTARY
***************************** OPTIONAL SECTION *****************************
CAPACITY CLAIMED BY SIGNER
Though statute does not require the Notary to fill in the data below, doing so
may prove invaluable to persons relying on the document.
[ ] INDIVIDUAL
[ ] CORPORATE OFFICERS(S)
[ ] PARTNER(S) [ ] LIMITED
[ ] GENERAL
[ ] ATTORNEY-IN-FACT
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR
[ ] OTHER: _____________________
____________________________
____________________________
____________________________
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
_________________________________
_________________________________
_________________________________
_________________________________
***************************** OPTIONAL SECTION *****************************
THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW:
TITLE OR TYPE OF DOCUMENT ______________________________________________
NUMBER OF PAGES ______________ DATE OF DOCUMENT ________________________
SIGNER(S) OTHER THAN NAMED ABOVE _______________________________________
Though the data requested here is not required by law, it could prevent
fraudulent reattachment of this form.
<PAGE> 134
xxx
CALIFORNIA ALL-PURPOSE NOTARY ACKNOWLEDGMENT
State of __________
County of _________
On this ______ day of _________________, 199 __, before me,
____________________________________________________________________________,
Name, Title of Officer
personally appeared ________________________________________________________,
Name(s) of Signer(s)
[ ] personally known to me - OR - [ ] proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
__________________________________
SIGNATURE OF NOTARY
*** OPTIONAL SECTION ***
CAPACITY CLAIMED BY SIGNER
Through statute does not require the Notary to fill in the date below, doing so
may prove invaluable to persons relying on the document.
[ ] INDIVIDUAL
[ ] CORPORATE OFFICERS(S)
[ ] PARTNER(S) [ ] LIMITED
[ ] GENERAL
[ ] ATTORNEY-IN-FACT
[ ] TRUSTEE(S)
[ ] GUARDIAN/CONSERVATOR
[ ] OTHER: _____________________
____________________________
____________________________
____________________________
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
_________________________________
_________________________________
_________________________________
_________________________________
***************************** OPTIONAL SECTION *****************************
THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW:
TITLE OR TYPE OF DOCUMENT ______________________________________________
NUMBER OF PAGES ______________ DATE OF DOCUMENT ________________________
SIGNER(S) OTHER THAN NAMED ABOVE _______________________________________
Through the data requested here is not required by law, it could prevent
fraudulent reattachment of this form.
<PAGE> 135
EXHIBIT 1 to
SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
------------------------------------------------------
[Insert legal description of the Premises]
<PAGE> 136
EXHIBIT C
GUARANTY OF LEASE
The undersigned (hereinafter referred to as "Guarantor"), as a
material inducement to and in consideration of _________________, a
_________________, whose address is ___________________ ("Landlord"), entering
into that certain Lease ("Lease") with ARG ENTERPRISES, INC., a California
corporation ("Tenant"), dated as of _____________________, hereby
unconditionally, irrevocably and personally guarantees to and for the benefit of
Landlord, and Landlord's successors and assigns, the full and timely payment and
performance of all of Tenant's duties, obligations and covenants under the
Lease. This Guaranty is a guaranty of payment and performance and not of
collection.
All payments to be made by Guarantor under this Guaranty shall
be made without deduction or offset and shall be made immediately upon demand by
Landlord. This Guaranty is absolute and unconditional and shall not be affected
by Landlord's failure or delay to enforce any of its rights or any waiver by
Landlord, other than modifications or variations of the terms of the Lease
agreed to in writing by Landlord and Tenant or any waiver of Tenant's and
Guarantor's obligations with respect to the Lease agreed to in writing by
Landlord.
Guarantor's obligations are independent of Tenant's
obligations under the Lease and a separate action or actions may be brought and
prosecuted against Guarantor whether or not any action is brought against Tenant
or Tenant is joined in any such action or actions. If Tenant defaults under the
Lease, Landlord can proceed immediately against Guarantor or Tenant, or both, or
Landlord can enforce against Guarantor or Tenant, or both, any rights that it
has under the Lease, this Guaranty or pursuant to applicable laws. If the Lease
terminates and Landlord has any rights it can enforce against Tenant after
termination, Landlord can enforce those rights against Guarantor without giving
previous notice to Tenant or Guarantor or without making any demand on either of
them. Guarantor hereby consents to any remedy pursued by Landlord to enforce its
rights under the Lease, in whatever order such party may choose, including any
remedies which may affect or destroy Guarantor's right of subrogation or the
right of Guarantor to proceed against Tenant for reimbursement. Without limiting
the generality of the foregoing, Guarantor hereby waives any rights Guarantor
may have under California Civil Code Sections 2809, 2819, 2845, 2849 and 2850,
as they may be amended or modified from time to time, and any similar or
successor statutes.
Guarantor waives the right to require Landlord to first or
concurrently: (1) proceed against Tenant or any other person or pursue any
rights or remedies with respect to the Lease before proceeding against
Guarantor; (2) proceed against or exhaust any security that Landlord holds from
Tenant; or (3) pursue any other remedy in Landlord's power. The liability of
Guarantor shall not be released, discharged, affected or exonerated by any
extension of time, indulgence, compromise, settlement or modification or
variation of terms which may be extended by Landlord to Tenant or agreed upon by
Landlord or Tenant, other than modifications or variations of the terms of the
Lease agreed to in writing by Landlord and Tenant or any waiver of Tenant's and
Guarantor's obligations with respect to the Lease agreed to in writing by
Landlord, and regardless of the release or discharge of Tenant by Landlord or by
others or by operation of law, and, unless agreed to in writing by Landlord,
shall not be released, discharged,
<PAGE> 137
affected or exonerated by any assignment or sublease by Tenant of its interest
in the Lease, nor shall the liability of Guarantor be released, discharged,
affected or exonerated by the insolvency, bankruptcy (voluntary or involuntary),
or reorganization of Tenant, or by the voluntary or involuntary liquidation,
sale or other disposition of all or substantially all of the assets of Tenant or
by any assignment of the Lease by Tenant or by any trustee, receiver or
liquidator of Tenant or any consent which Landlord may give to any such
assignment, or by the release, substitution or addition of any other guarantor.
Landlord and Tenant, without notice to or consent by Guarantor, may at any time
or times enter into such modifications, extensions, amendments or other
covenants respecting the Lease as they may deem appropriate, and Guarantor shall
not be released of its liability or released, discharged or exonerated thereby
but shall continue to be fully liable for the payment and performance of all
obligations and duties of Tenant under the Lease as so modified, extended or
amended with the consent of Tenant.
Guarantor further agrees (1) to indemnify and hold harmless
Landlord from and against any claims, damages, expenses or losses, including to
the extent permitted by law, all reasonable attorney's fees incurred by counsel
of Landlord's choice (whether or not litigation is commenced), resulting from or
arising out of any breach of any provision of the Lease by Tenant or by reason
of Tenant's failure to perform any of its obligations thereunder, and (2) to the
extent permitted by law, to pay all costs and expenses, including reasonable
attorneys' fees (whether or not litigation is commenced) incurred by Landlord in
enforcing this Guaranty.
Landlord's rights under this Guaranty will not be exhausted by
any action by Landlord until all of the obligations of Tenant to pay rent and
other sums under the Lease have been fully paid and performed and the period of
time has expired during which any payment made by Tenant or Guarantor to
Landlord may be determined to be a Preferential Payment (hereinafter defined).
Guarantor further agrees that to the extent Tenant or Guarantor makes any
payment to Landlord in connection with the obligations of Tenant under the Lease
and all or any part of such payment is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid by Landlord or
paid over to a trustee, receiver or any other entity, whether under any
bankruptcy act or otherwise (any such payment is hereinafter referred to as a
"Preferential Payment"), then this Guaranty shall continue to be effective or
shall be reinstated, as the case may be, and, to the extent of such payment or
repayment by Landlord (but only to the extent of the then remaining liability of
Guarantor under this Guaranty), the obligations or part thereof intended to be
satisfied by such Preferential Payment shall be revived and continued in full
force and effect as if said Preferential Payment had not been made.
Notwithstanding any other provision of this Guaranty to the
contrary, Guarantor agrees that until such time as the obligations and
liabilities of Tenant to Landlord under or arising out of the Lease (whether now
existing or hereafter arising, voluntary of involuntary, whether or not jointly
owed with others, direct or indirect, absolute or contingent, liquidated or
unliquidated, and whether or not from time to time decreased or extinguished and
later increased, created or incurred), including, without limitations, Tenant's
obligations under the Lease to comply with certain provisions of the Financing
Documents, as such term is defined in the Lease (collectively, the
"Obligations") have been paid and performed in full and the period of time has
expired during which any payment made by Tenant or Guarantor to Landlord on
account of the Obligations may be determined to be a Preferential Payment, any
claim or
2
<PAGE> 138
other rights which Guarantor may now have or hereafter acquire against Tenant or
any other guarantor of all or any of the Obligations that arise from the
existence or performance of Guarantor's obligations under this Guaranty or
otherwise (all such claims and rights are referred to as "Guarantor's
Conditional Rights"), including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, or indemnification, any right to
participate in any claim or remedy of Landlord against Tenant or any collateral
which Landlord now has or hereafter acquires, whether or not such claim, remedy
or right arises in equity or under contract, statute or common law, by any
payment made hereunder or otherwise, including without limitation, the right to
take or receive from Tenant, directly or indirectly, in cash or other property
or by setoff or in any other manner, payment or security on account of such
claim or other rights, shall be subordinate to Landlord's right to full payment
and performance of the Obligations, and Guarantor shall not enforce any of
Guarantor's Conditional Rights during such period. If, notwithstanding the
foregoing provisions, any amount shall be paid to Guarantor on account of any
such Guarantor's Conditional Rights and either (a) such amount is paid to
Guarantor at any time when any of the Obligations shall not have been paid or
performed in full, or (b) regardless of when such amount is paid to Guarantor,
any payment made by Tenant to Landlord is at any time determined to be a
Preferential Payment, then such amount paid to Guarantor shall be held in trust
for the benefit of Landlord and shall forthwith be paid to Landlord to be
credited and applied upon the Obligations, whether matured or unmatured, in such
order as Landlord, in its sole and absolute discretion, shall determine.
Guarantor assumes the responsibility to remain informed of the
financial condition of Tenant and of all other circumstances bearing upon the
risk of Tenant's default, which reasonable inquiry would reveal, and agrees that
Landlord shall have no duty to advise Guarantor of information known to it
regarding such condition or any such circumstances. Landlord shall not be
required to inquire into the powers of Tenant or the officers, employees,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed under this Guaranty. Guarantor hereby represents and
warrants to Landlord that Guarantor has received a copy of the Lease, has read
or had the opportunity to read the Lease, and understands the terms of the
Lease. The provisions in the Lease relating to the execution of additional
documents, legal proceedings by Landlord against Tenant, severability of the
provisions of the Lease, interpretation of the Lease, notices, waivers
(including waiver of a jury trial), limitation on right of recovery against
Landlord, disclaimer of individual liability, and the applicable laws which
govern the interpretation of the Lease are incorporated herein in their entirety
by this reference and made a part hereof as though set forth in full herein; any
reference in those provisions to "Tenant" shall mean Guarantor and any reference
in those provisions to the "Lease" shall mean this Guaranty.
The liability of Guarantor shall not be affected by any
repossession of the leased premises by Landlord, provided, however, that the net
payments received by Landlord (except to the extent the liability of Tenant is
thereby affected) after deducting all costs and expenses of repossessing and/or
reletting the same, shall be credited from time to time by Landlord to the
account of Guarantor and Guarantor shall pay any balance owing to Landlord from
time to time, immediately upon demand by Landlord.
3
<PAGE> 139
No action or proceeding brought or instituted under this
Guaranty and no recovery in pursuance thereof shall be a bar or defense to any
further action or proceeding which may be brought under this Guaranty by reason
of any further default or defaults hereunder and/or under the Lease.
To the extent permitted by applicable law, Guarantor waives
its right to enforce any remedies that Tenant now has (except remedies Tenant
has as tenant only), or later may have, against Landlord. Guarantor waives any
right to participate in any security now or later held by Landlord. Guarantor
waives notice of acceptance of this Guaranty, and all other notices in
connection with this Guaranty or in connection with the liabilities, obligations
and duties guaranteed hereby, including notices to Guarantor of default by
Tenant under the Lease. Guarantor hereby waives diligence, presentment, demand
for performance, notice of nonperformance or nonpayment, protest, notice of
protest, notice of dishonor, and notice of acceptance of this Guaranty, and
waives all notices of the existence, creation, or incurring of new or additional
obligations. Guarantor hereby further waives and agrees not to assert or take
advantage of: (a) any right or defense that may arise by reason of the
incapacity, lack of authority, death or disability of Tenant or any other
person; (b) any and all defenses based upon an election of remedies by Landlord
which limits or destroys any subrogation rights Guarantor might otherwise have;
or (c) any bankruptcy of Tenant.
If there is more than one Guarantor, the liability of each
Guarantor shall be joint and several. Guarantor's obligations under this
Guaranty shall be binding on Guarantor's legal representatives, heirs,
successors and assigns.
If Tenant disposes of its interest in the Lease, "Tenant", as
used in this Guaranty, shall mean Tenant's successors or assigns. Assignment of
the Lease by Landlord (as permitted by the Lease) shall not affect this
Guaranty. In the event of an assignment of the Lease by Landlord, the term
"Landlord" as used in this Guaranty shall mean Landlord's successors or assigns.
All rights, powers and remedies of Landlord hereunder and
under any other agreement now or at any time hereafter in force between Landlord
and Guarantor relating to the Lease shall be cumulative and not alternative and
such rights, powers and remedies shall be in addition to all rights, powers and
remedies given to Landlord by law.
Any notice, request, demand, instruction or other
communication to be given to any party hereunder shall be in writing and shall
be sent by registered or certified mail, return receipt requested, to Guarantor
at the address provided under Guarantor's signature below, and if to Landlord at
the address provided above. Notices shall be deemed to have been given upon (i)
hand delivery, (ii) one (1) day after being deposited with Federal Express or
another reliable overnight courier service or transmitted by facsimile telecopy,
or (iii) forty-eight (48) hours after the deposit of the same in a United States
mail post office box in a state to which the notice is addressed, or three (3)
business days after deposit of same in any such post office box in a state other
than the state to which the notice is addressed, postage prepaid and addressed
as set forth above. A notice shall not be deemed given unless and until it shall
have been given to all
4
<PAGE> 140
address(es) to which notices must be sent. Any party may change its street
address(es) for notices by a notice given in accordance with this Section.
If Landlord is required to enforce Guarantor's obligations
under this Guaranty by any legal action or proceedings, or if a dispute arises
in connection with the validity, enforceability, enforcement or construction of
this Guaranty or any other matter relating to this Guaranty, the losing party
shall pay all reasonable attorneys' fees incurred by the prevailing party in
such dispute.
Guarantor hereby represents and warrants that: (a) Guarantor
has received and reviewed the Lease and is familiar with the terms thereof; (b)
the execution of this Guaranty will not render Guarantor insolvent in any way;
and (c) Landlord's entering into the Lease materially benefits Guarantor and
Guarantor is receiving fair consideration for this Guaranty.
Any amount required to be paid by Guarantor hereunder shall
bear interest from the date due until the date paid to Landlord at the lesser
of: (x) twelve percent (12%) per annum; or (y) the maximum rate permitted by
law. All interest shall be compounded monthly and shall be payable to Landlord
on demand.
Time is of the essence with respect to the performance of
Guarantor's obligations hereunder.
This Guaranty contains the entire agreement of Guarantor and
Landlord with respect to the subject matter hereof.
If any one or more of the provisions of this Guaranty shall be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Guaranty, and this Guaranty shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. This Guaranty shall be
construed according to the laws of the State of California ("State") without
regard to conflicts of laws principles. By execution hereof, the undersigned
specifically consents to this choice of law designation and agrees that all
actions or proceedings arising directly, indirectly or otherwise in connection
with, out of, related to, or from this Guaranty or the Lease shall be litigated
only in the courts located in the State, and the undersigned (i) consents and
submits in advance to the exclusive and in personam jurisdiction of any state or
federal court located within the State, (ii)
5
<PAGE> 141
waives any right to transfer or change the venue of litigation brought against
the undersigned, and (iii) agrees to service of process, to the extent permitted
by law, by mail.
Dated as of _________________.
GUARANTOR
AMERICAN RESTAURANT GROUP,
INC., a Delaware corporation
By
Its
GUARANTOR'S ADDRESS FOR
NOTICES:
4410 El Camino Real
Suite 201
Los Altos, California 94022
Attn: Legal Department
Fax No.: (415) 949-6442
6
<PAGE> 142
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this _____
day of ___________, 1996, by ____________________, the __________________ of
American Restaurant Group, Inc.
______________________
Notary Public
________ County,
My Commission Expires:
[Notary Public's Seal]
7
<PAGE> 143
EXHIBIT D
Form of Amendment Upon Removal of a Property
AMENDMENT NO._____
TO
MASTER LEASE
BETWEEN
ARG PROPERTIES I, LLC
AND
ARG ENTERPRISES, INC.
(Pursuant to Article 3 of the Master Lease)
This Amendment No. _____ (the "Amendment") is entered into
as of this day of __, 199_, between ARG PROPERTIES I, LLC, a California limited
liability company ("Landlord"), and ARG ENTERPRISES, INC., a California
corporation ("Tenant").
RECITALS
24.010 Landlord and Tenant are parties to that certain Master
Lease, dated as of September __, 1996, as previously amended by Amendment[s] No.
[through_____ ] thereto (the "Lease"). Capitalized terms used but not defined
herein shall have the meanings set forth in the Lease.
24.011 In accordance with Article 3 of the Lease, the real
property described on Exhibit A attached hereto (the "Property") is concurrently
herewith being sold by Landlord to a Purchaser, and Landlord and Tenant are
executing this Amendment to evidence the removal of the Property from the
Premises leased under the Lease.
NOW, THEREFORE, Landlord and Tenant hereby agree as follows:
1 Effective as of the date the deed transferring title to the
Property to Purchaser is duly recorded, Landlord and Tenant hereby agree that
the Property shall no longer constitute part of the Premises leased under the
Lease, and shall no longer be governed by the Lease, except as to obligations
under the Lease which expressly survive any termination thereof.
2 The Annual Rent payable under the Lease is hereby reduced to
____________ Dollars ($__________), and shall be payable in twelve (12) equal
monthly installments each in the amount of ____________ Dollars ($________),
subject to proration or adjustment as provided in the Lease, and otherwise in
accordance with the Lease.
D-1
<PAGE> 144
3 Except as provided herein, Landlord and Tenant hereby ratify
the Lease and agree that the Lease remains in full force and effect.
4 Landlord and tenant agree to execute and acknowledge and
cause to be recorded such instruments as may be required to remove the
short-form memorandum of the Lease, if any, previously recorded against the
Property.
LANDLORD
ARG PROPERTIES I, LLC,
a California limited liability company
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
TENANT
ARG ENTERPRISES, INC.,
a California corporation
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
D-2
<PAGE> 145
EXHIBIT E
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Orrick, Herrington & Sutcliffe LLP
777 South Figueroa Street
Suite 3200
Los Angeles, California 90017
Attn: Sara H. Reynolds, Esq.
- --------------------------------------------------------------------------------
(Space above this line for Recorder's use)
NOTICE OF NON-RESPONSIBILITY OF OWNER
NOTICE IS HEREBY GIVEN that the undersigned, ARG Properties I,
LLC, a California limited liability company ("Owner"), is the owner of the real
property located in the City of _____________, County of _________________,
commonly identified as _____________________________________________, and more
particularly described in Exhibit A attached hereto (the "Property").
That ARG Enterprises, Inc., a California corporation
("Tenant"), is the lessee of the Property.
That on __________________, the undersigned first obtained
knowledge that certain remodeling, construction, repair, or other work of or to
the building or other improvements located on the Property was being performed
on the Property, and that materials, equipment, labor, services and supplies
were being supplied in connection therewith.
E-1
<PAGE> 146
That neither the Owner nor any mortgagee or beneficiary of
Owner will be responsible for such work, materials, equipment, labor, services
or supplies or for any mechanics', materialmens' or other lien that may be
claimed in connection therewith.
Dated: ___________________.
ARG PROPERTIES I, LLC, a California limited
liability company
By: Net Lease Holdings Corporation, Manager
By:
----------------------------------------
Its:
---------------------------------------
The undersigned acknowledges that it has read the foregoing
Notice of Non- Responsibility and knows its contents, and it is true to the
undersigned's own knowledge.
Executed at Los Angeles, California on .
---------------
The undersigned declares under penalty of perjury that the
foregoing is true and correct.
ARG ENTERPRISES, INC., a California
corporation
By:
--------------------------------
Its:
-------------------------------
E-2
<PAGE> 147
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On , before me, the undersigned notary public in and for
------------------
said County and State, personally appeared .
-------------------
[ ] personally known to me [or]
[ ] proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) subscribed to the within
-----------------
instrument and acknowledged to me that executed the same in
-----------
authorized capacity(ies) and that, by signature(s) on the
- ----------- ----------
instrument, the person(s) or the entity(ies) upon behalf of which the person(s)
acted executed the instrument.
WITNESS my hand and official seal.
--------------------------------------------
My commission expires on
--------------------
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER
[ ] Individual
[ ] Corporate Officer
Title(s)
[ ] Partner(s)
__Limited __General
[ ] Attorney-In-Fact
[ ] Trustee(s)
[ ] Guardian/Conservator
[ ] Other:
DESCRIPTION OF ATTACHED DOCUMENT
- --------------------------------
Title or Type of Document
- --------------------------------
Signer(s) Other Than Named Above
Date of Document
----------------
Number of Pages
----------------
SIGNER IS REPRESENTING:
<PAGE> 148
DESCRIPTION OF ATTACHED DOCUMENT
- --------------------------------------------------------------------------------
Title or Type of Document
- --------------------------------------------------------------------------------
Signer(s) Other Than Named Above
Date of Document
----------------------------------------------------------------
Number of Pages
-----------------------------------------------------------------
SIGNER IS REPRESENTING:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 149
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On , before me, the undersigned notary public in and for
-------------------
said County and State, personally appeared .
-----------------
/ / personally known to me [or]
/ / proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) subscribed to the within
-----------------
instrument and acknowledged to me that executed the same in
-----------
authorized capacity(ies) and that, by signature(s) on the
- ----------- ----------
instrument, the person(s) or the entity(ies) upon behalf of which the person(s)
acted executed the instrument.
WITNESS my hand and official seal.
---------------------------------------------
My commission expires on
-------------------
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons
relying on the document and could prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER
/ / Individual
/ / Corporate Officer
Title(s)
/ / Partner(s)
__ Limited __ General
/ / Attorney-In-Fact
/ / Trustee(s)
/ / Guardian/Conservator
/ / Other:
DESCRIPTION OF ATTACHED DOCUMENT
- --------------------------------
Title or Type of Document
- --------------------------------
Signer(s) Other Than Named Above
Date of Document
---------------
Number of Pages
----------------
SIGNER IS REPRESENTING:
- --------------------------------
<PAGE> 150
DESCRIPTION OF ATTACHED DOCUMENT
- --------------------------------------------------------------------------------
Title or Type of Document
- --------------------------------------------------------------------------------
Signer(s) Other Than Named Above
Date of Document
----------------------------------------------------------------
Number of Pages
-----------------------------------------------------------------
SIGNER IS REPRESENTING:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 151
EXHIBIT F
TO
LEASE
Recording Requested By
and When Recorded Mail To:
American Restaurant Group, Inc.
Attn: Law Department
4410 El Camino Real, Suite 201
Los Altos, California 94022
SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT AND NOTICE OF NON-RESPONSIBILITY
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT AND NOTICE
OF NON-RESPONSIBILITY (this "Agreement") is made and entered into as of the 11th
day of September, 1996, by and among (i) ARG Enterprises, Inc., a California
corporation ("Tenant"); (ii) ARG Properties I, LLC, a California limited
liability company ("Landlord"); and (iii) [LENDER], [ENTITY] ("Lender").
WITNESSETH:
WHEREAS, Lender is the holder of that certain mortgage/deed of trust,
dated _______________________, 1996 ("Mortgage/Deed of Trust") encumbering those
certain parcels of real property and the improvements thereon, relating to
nineteen (19) restaurant assets commonly known as either Stuart Anderson's Black
Angus or Stuart Anderson's Cattle Company restaurants, including the restaurant
located on the real property more particularly described in Exhibit 1 attached
hereto and incorporated herein by this reference (individually and collectively,
"Property");
WHEREAS, Lender and Landlord are parties to the Mortgage/Deed of Trust,
pursuant to which Landlord financed the Property with Lender; and
WHEREAS, Landlord and Tenant are parties to that certain Lease, dated
as of September 11, 1996 (the "Lease"), pursuant to which Tenant leased the
Property from Landlord.
NOW, THEREFORE, in consideration for the mutual covenants and
agreements contained herein, the sufficiency of which is hereby acknowledged,
the parties hereto hereby agree as follows:
1. Subordination. Subject to the terms of this Agreement, the Lease,
and the rights of Tenant in, to and under the Lease and the Property, are hereby
made subject, junior, and subordinate in all respects to the Mortgage/Deed of
Trust and to all renewals, modifications, consolidations, replacements, and
extensions thereof and to the respective rights of Lender thereunder as if all
such instruments had been executed, delivered and recorded prior to the
execution of the Lease. This clause shall be self-operative, and no further
instrument shall be required. However, Tenant covenants and agrees that if
requested by Lender it will execute, acknowledge and deliver any instrument or
document
<PAGE> 152
reasonably requested to confirm the foregoing subordination of the Lease within
twenty (20) days after receipt of written request therefor.
2. Non-Disturbance. So long as Tenant is not in default beyond any
applicable grace or cure period in the payment of rent or any other sums payable
under the Lease or in the performance of any of the other terms, covenants or
conditions of the Lease on Tenant's part to be performed, then: (a) Tenant's
possession of the Property shall not be diminished or interfered with by Lender
or any third-party purchaser; (b) the Lease shall not be terminated or affected
by the foreclosure of the Mortgage/Deed of Trust or the Lender's exercise of any
remedy provided for in the Mortgage/Deed of Trust; and (c) in the event that
Lender forecloses upon the Property, Lender shall elect to preserve the Lease as
a lease between Lender and Tenant in accordance with the terms of this
Agreement.
3. Attornment. In the event that the Lender forecloses upon the
Property, then:
(a) Tenant shall be bound to Lender, and Lender shall be bound
to Tenant, under all of the terms, covenants and conditions of the Lease for the
balance of the term thereof remaining, and any extensions or renewals thereof
which may be effected in accordance with any option therefor contained in the
Lease, with the same force and effect as if Lender were the original landlord
under the Lease, except that Paragraph 3(b) below and the other provisions of
this Agreement shall modify the Lease, and Tenant does hereby attorn to Lender
as its landlord, said attornment to be effective and self-operative without the
execution of any further instruments; provided, however, that within twenty (20)
days after receipt of written request therefor from Lender, Tenant will execute
and deliver to Lender any instrument or other documents reasonably requested by
Lender to confirm Tenant's attornment to Lender.
(b) It is agreed that in no event shall Lender:
(1) be liable for any act or omission of any
prior landlord (including Landlord);
(2) be obligated to cure any defaults of any
prior landlord (including Landlord) which
occurred prior to the date that Lender
succeeded to the interest of such prior
landlord under the Lease; provided that from
and after the date Lender becomes owner of
the Property, Lender shall be obligated to
cure any continuing default of the landlord
under the Lease to the extent such default
is capable of being cured by Lender;
(3) be subject to any offsets or defenses which
Tenant may be entitled to assert against any
prior landlord (including Landlord) with
respect to events occurring prior to the
date Lender succeeded to Landlord's
interest;
(4) be bound by any Annual Rent or other amounts
paid by Tenant to any prior landlord
(including Landlord) more than one (1) month
in advance of the date that Lender succeeded
to the interest of such prior landlord under
the Lease; or
(5) be bound by any amendment or modification of
the Lease or any supplemental agreement made
without the written consent of Lender, such
consent not to be unreasonably withheld.
F-2
<PAGE> 153
4. Payment of Rent to Lender. Tenant agrees to pay the Annual Rent and
any other payments due under the Lease to Lender upon receipt of written notice
from Lender that it has succeeded to the interest of Landlord under the Lease,
and Landlord agrees that Tenant is entitled to rely conclusively upon such
notice without any duty of inquiry.
5. Limitation on Liability of Lender. There shall be no personal
liability on the part of Lender or any officer, director, employee, shareholder
or partner of Lender for the performance of the Lease or any covenant or
agreement contained therein or in this Agreement. Tenant shall look solely to
Lender's estate and interest in the Property for the satisfaction of every
remedy of Tenant for any breach by Lender under the Lease or this Agreement or
otherwise arising out of or in connection with the Lease, and Tenant will not
collect or attempt to collect any such claim out of any other assets of Lender.
6. Performance by Lender: Conflict. Nothing in this Agreement shall be
or be deemed to be an agreement by Lender to perform any obligation of Landlord
under the Lease unless and until the Lender acquires the Property, and then only
if required to do so by the terms of the Lease, as modified and limited by this
Agreement. In the event of any conflict between the terms of this Agreement and
the terms of the Lease, the terms of this Agreement shall control.
7. Notices. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal delivery, certified mail,
return receipt requested or by nationally recognized overnight courier service
and, if given by mail or by courier service, shall be deemed sufficiently given
if addressed to the parties at the addresses set forth below. Delivery by
courier will be deemed given on the date indicated in the courier's records;
delivery by certified mail will be deemed given on the date indicated on the
return receipt. Any party may by notice specify a different street address for
notice purposes.
Addresses for Notices:
To Lender: [LENDER]
---------------------------
---------------------------
---------------------------
To Landlord: ARG Properties I, LLC
c/o Griffin Capital
10940 Wilshire Blvd., Suite 1600
Los Angeles, CA 90024
Attn: Kevin A. Shields
To Tenant: ARG Enterprises, Inc.
6th Floor
450 Newport Center Drive
Newport Beach, CA 92660
Attn: Chief Financial Officer
With a copy to: American Restaurant Group, Inc.
Suite 201
4410 El Camino Real
Los Altos, CA 94022
Attn: Law Department
F-3
<PAGE> 154
8. Successors and Assigns. This Agreement and each and every covenant
and provision contained herein shall be binding upon and shall inure to the
benefit of the parties hereto and their respective representatives, successors
and assigns.
9. Modifications, Counterparts. This Agreement shall not be modified or
amended in whole or in part except by a writing executed by all of the parties
hereto or their respective representatives, successors or assigns. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed to be an original and all of which shall constitute one and the same
instrument.
10. Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the jurisdiction in which the
Property is located.
11. NOTICE OF NON-RESPONSIBILITY. NOTICE IS HEREBY GIVEN THAT NEITHER
LANDLORD NOR ANY LENDER WILL BE LIABLE OR RESPONSIBLE FOR ANY LABOR, SERVICES OR
MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT, OR TO ANYONE HOLDING AN
INTEREST IN THE PROPERTY OR ANY PART THEREOF THROUGH OR UNDER TENANT, AND THAT
NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL
ATTACH TO OR AFFECT THE INTEREST OF LANDLORD OR ANY LENDER IN AND TO THE
PROPERTY.
F-4
<PAGE> 155
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date set forth below.
TENANT:
ARG ENTERPRISES, INC., A CALIFORNIA
CORPORATION
By:_______________________________
Its:______________________________
Dated:____________________________
LANDLORD:
ARG PROPERTIES I, LLC, A CALIFORNIA LIMITED
LIABILITY COMPANY
By:_______________________________
Its:______________________________
Dated:____________________________
LENDER:
[LENDER]
By:________________________________
Its:_______________________________
Dated:_____________________________
F-5
<PAGE> 156
STATE OF CALIFORNIA )
) : ss.
COUNTY OF LOS ANGELES )
The foregoing instrument was acknowledged before me this
day of , 1996, by , as
- ----------- -------------- --------------
of ARG Enterprises, Inc., a California corporation, on behalf
- ------------------
of the ARG Enterprises, Inc.
-----------------------------------------
Notary Public
County,
-------------- ------------------
My Commission Expires:
-------------------
[Notary Public's Seal]
STATE OF CALIFORNIA )
) :SS.
COUNTY OF LOS ANGELES )
The foregoing instrument was acknowledged before me this _______ day
of _________, 1996, by ________________ as _________________ of ARG
Properties I, LLC, a California limited liability company, on behalf of the ARG
Properties I, LLC.
____________________________________________
Notary Public
Los Angeles County, California
My Commission Expires:______________________
[Notary Public's Seal]
F-6
<PAGE> 157
STATE OF ________________ )
) : ss.
COUNTY OF ______________ )
The foregoing instrument was acknowledged before me this
day of , 199 , by , as
- ------------ -------------- -- --------------
of [LENDER], [LENDER ENTITY], on behalf of the [ENTITY].
- ------------------
----------------------------------------
Notary Public
County,
-------------- -----------------
My Commission Expires:
------------------
[Notary Public's Seal]
Drafted By and When Recorded
Return to:
- ------------------------------------
- ------------------------------------
- ------------------------------------
- ------------------------------------
F-7
<PAGE> 158
EXHIBIT 1 TO
SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT AND NOTICE
OF NON-RESPONSIBILITY
[Insert legal description of the Premises.]
<PAGE> 159
EXHIBIT G
LIST OF FINANCING DOCUMENTS
A. SENIOR LOAN DOCUMENTS
1. Commitment Letter
2. Structuring Advisory Fee Agreement
3. Loan Agreement
4. Senior Debt Note
5. Deed of Trust, Security Agreement and Fixture Filing
6. Mortgage, Security Agreement and Fixture Filing (Indiana Property)
7. Assignment of Leases
8. Guaranty of Highland Securities Corporation, d/b/a Griffin Capital
9. Lock Box Agreement
10. Tenant's and Guarantor's Certificate
11. UCC-1 Financing Statements
12. Assignment of Purchase Agreement
13. Assignment and Pledge Agreement
B. MEZZANINE LOAN DOCUMENTS
1. Subordinate Loan Agreement
2. Subordinate Debt Note
3. Subordinate Deed of Trust, Security Agreement and Fixture Filing
4. Subordinate Mortgage, Security Agreement and Fixture Filing (Indiana
Property)
5. Subordinate Assignment of Leases
6. Guaranty of Highland Securities Corporation, d/b/a Griffin Capital
<PAGE> 160
7. Tenant's and Guarantor's Certificate
8. UCC-1 Financing Statements
9. Subordinate Assignment of Purchase Agreement
10. Assignment and Pledge Agreement
<PAGE> 161
ADDENDUM NO. 1 TO MASTER LEASE
ARIZONA STATE LAW PROVISIONS
Section 6.03 Tenant hereby waives all benefits and rights conferred by
Arizona Revised Statute (ARS) Section 33-343.
Article 17 With respect to the Properties located in Arizona, the rights
and remedies of Landlord under Article 17 of the Lease shall
include the rights and remedies conferred by ARS Sections
33-361(A), 33-361(D) and 33-362, without limitation of the
rights or remedies of Landlord under the Lease, at law or in
equity.
Section 23.02(a) For purposes of the Properties located in Arizona,
Relevant Environmental Laws shall include, without limitation,
ARS Section 49-101 et seq.
COLORADO STATE LAW PROVISIONS
1. Colorado Air Quality Control Act, C.R.S. 25-7-101 et seq.
2. Colorado Water Quality Control Act, C.R.S. 25-8-101 et seq.
3. Cherry Creek Basin Water Quality Authority, C.R.S. 25-8.5-101, et seq.
4. Colorado Water and Wastewater Treatment Plant Operators laws, C.R.S.
25-9-101, et seq.
5. Colorado Individual Sewage Disposal Systems Act, C.R.S. 25-10-101, et
seq.
6. Colorado Radiation Control laws, C.R.S. 25-11-101, et seq.
7. Colorado Noise Abatement laws, C.R.S. 25-12-101, et seq.
8. Colorado Control of Smoking laws, C.R.S. 25-14-101, et seq.
9. Colorado Hazardous Waste Act, C.R.S. 25-15-101, et seq.
10. Colorado Hazardous Waste Sites laws, C.R.S. 25-16-101, et seq.
11. Colorado Waste Diversion and Recycling laws, (Plastics--C.R.S.
25-17-101, et seq.; and Motor Vehicle Waste Tires--C.R.S. 25-17-201 et
seq.)
<PAGE> 162
12. Colorado Underground Storage Tank laws, C.R.S. 8-20.5-101 et seq.,
(C.R.S. 25-18-101 et seq. repealed effective July 1, 1995)
13. Small Community Environment Flexibility Act, C.R.S. 25-19-101 et seq.
14. Colorado Hazardous Waste and Nuclear Materials Transportation laws,
Article 20 of title 42, C.R.S.
15. Colorado Hazardous Substance Incident laws, C.R.S. 29-22-101 et seq.
16. The Western Interstate Nuclear Compact Authorization Act, C.R.S.
24-0-1401 et. seq.
17. Colorado Low-Level Radioactive Waste Act (C.R.S. 24-60-2201 et seq.)
authorizing the Rocky Mountain Low Level Radioactive Waste Compact
18. Colorado Environmental Self Evaluation Privilege, C.R.S. 13-25-126.6
Article 17 With respect to properties located in Colorado the rights and
remedies of Landlord under this Lease shall be and are hereby
supplemented by the Colorado state laws on Forcible Entry and
Detainer found in Colorado Revised Statutes 13-40-101, et seq.
In the event of conflict between the provisions of the Lease and
the provisions of these Colorado state laws the provisions of
the Lease shall control unless prohibited.
<PAGE> 1
EXHIBIT 2.3
Lease No. 06152
4470 West 78th Circle
Bloomington, Minnesota
LEASE
BETWEEN
CAPTEC NET LEASE REALTY, INC.
AND
ARG ENTERPRISES, INC.
Dated: September __, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE 1 FUNDAMENTAL LEASE PROVISIONS.................................................................. 1
ARTICLE 2 EXHIBITS...................................................................................... 2
ARTICLE 3 PREMISES...................................................................................... 2
ARTICLE 4 TERM.......................................................................................... 2
4.01 Term.......................................................................................... 2
4.02 Option to Extend Lease Term................................................................... 2
ARTICLE 5 LIENS......................................................................................... 3
ARTICLE 6 RENT.......................................................................................... 3
6.01 Rent.......................................................................................... 3
6.02 Rental Adjustments............................................................................ 4
6.03 Net Lease; Impositions........................................................................ 4
ARTICLE 7 USE OF THE PREMISES........................................................................... 5
7.01 Use........................................................................................... 5
7.02 Compliance With Law........................................................................... 5
7.03 Permits and Licenses.......................................................................... 5
ARTICLE 8 UTILITIES..................................................................................... 5
8.01 Payment....................................................................................... 5
8.02 Interruption in Service....................................................................... 5
ARTICLE 9 TAXES......................................................................................... 6
9.01 Payment of Taxes.............................................................................. 6
9.02 Definition of "Real Property Taxes"........................................................... 6
9.03 Personal Property Taxes....................................................................... 6
9.04 Tenant's Right to Contest Taxes............................................................... 6
ARTICLE 10 MAINTENANCE AND REPAIRS....................................................................... 7
10.01 Tenant's Obligations.......................................................................... 7
10.02 Landlord's Obligations........................................................................ 8
10.03 Landlord's Rights............................................................................. 8
ARTICLE 11 INSURANCE AND INDEMNIFICATION................................................................. 8
11.01 Tenant's Insurance Obligation................................................................. 8
11.02 Subrogation Waiver............................................................................ 10
11.03 Insurance Use Restrictions.................................................................... 10
11.04 Indemnification............................................................................... 10
11.05 Payment of Insurance.......................................................................... 11
ARTICLE 12 ALTERATIONS................................................................................... 11
12.01 Permitted Improvements........................................................................ 11
12.02 Liens......................................................................................... 11
12.03 Structural Alterations........................................................................ 11
12.04 Removal of Alterations........................................................................ 11
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
12.05 Alterations Required by Law................................................................... 11
12.06 General Conditions Relating to Alterations.................................................... 11
ARTICLE 13 SIGNS......................................................................................... 12
ARTICLE 14 DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD ................................................... 12
14.01 Obligation to Rebuild......................................................................... 12
14.02 No Abatement of Rent.......................................................................... 13
ARTICLE 15 EMINENT DOMAIN................................................................................ 13
15.01 Total Taking.................................................................................. 13
15.02 Partial Taking................................................................................ 13
15.03 Award......................................................................................... 13
15.04 Transfer Under Threat of Taking............................................................... 14
ARTICLE 16 ASSIGNMENT AND SUBLETTING..................................................................... 14
16.01 Landlord's Consent Required................................................................... 14
16.02 Assumption of Obligations..................................................................... 14
16.03 Assignment to Affiliate....................................................................... 14
16.04 Hypothecation of Lease........................................................................ 14
16.05 Corporate/Partnership/Limited Liability Company Restrictions.................................. 14
16.06 No Release of Tenant.......................................................................... 15
ARTICLE 17 DEFAULT; REMEDIES............................................................................. 15
17.01 Default....................................................................................... 15
17.02 Remedies...................................................................................... 16
17.03 Administrative Fee............................................................................ 16
17.04 Default by Landlord........................................................................... 17
17.05 Mitigation.................................................................................... 17
17.06 Lender's Right to Cure........................................................................ 17
ARTICLE 18 SUBORDINATION................................................................................. 17
ARTICLE 19 QUIET ENJOYMENT............................................................................... 17
ARTICLE 20 REPRESENTATIONS AND WARRANTIES................................................................ 18
20.01 Representations and Warranties................................................................ 18
20.02 Financial Statements.......................................................................... 18
ARTICLE 21 SURRENDER OF PREMISES......................................................................... 19
ARTICLE 22 BANKRUPTCY OR INSOLVENCY...................................................................... 19
ARTICLE 23 HAZARDOUS MATERIALS........................................................................... 21
23.01 Representations and Warranties................................................................ 21
23.02 Definitions................................................................................... 22
23.03 Tenant's Obligation........................................................................... 23
23.04 Landlord Options.............................................................................. 23
23.05 Indemnity..................................................................................... 23
23.06 Survival...................................................................................... 24
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE 24 GENERAL PROVISIONS............................................................................ 24
24.01 Estoppel Certificates......................................................................... 24
24.02 Severability.................................................................................. 24
24.03 Entire Agreement.............................................................................. 24
24.04 Notices....................................................................................... 24
24.05 Waivers....................................................................................... 24
24.06 Recording..................................................................................... 24
24.07 Holding Over.................................................................................. 25
24.08 Cumulative Remedies........................................................................... 25
24.09 Choice of Law................................................................................. 25
24.10 Attorneys' Fees............................................................................... 25
24.11 Force Majeure................................................................................. 25
24.12 Consent....................................................................................... 25
24.13 Liability of Landlord......................................................................... 25
24.14 No Merger..................................................................................... 25
24.15 Reports....................................................................................... 26
24.16 Definition of Rent............................................................................ 26
24.17 Interpretation................................................................................ 26
24.18 Relationship of the Parties................................................................... 26
24.19 Successors.................................................................................... 26
24.20 Modifications................................................................................. 26
24.21 Brokerage Fees................................................................................ 26
24.22 Not Binding Until Executed.................................................................... 26
24.23 Counterparts.................................................................................. 26
EXHIBIT A.......................................................................................................A-1
EXHIBIT B.......................................................................................................B-1
</TABLE>
-iii-
<PAGE> 5
LEASE
In consideration of the rents and covenants set forth below, Landlord
(as hereinafter defined) hereby leases to Tenant (as hereinafter defined), and
Tenant hereby leases from Landlord, the following Premises (as hereinafter
defined) upon the following terms and conditions:
ARTICLE 1
FUNDAMENTAL LEASE PROVISIONS
Date: September ___, 1996
Commencement Date: September ___, 1996
Landlord: Captec Net Lease Realty, Inc., a Michigan
corporation
Tenant: ARG Enterprises, Inc., a California
corporation
Tenant's Stuart Anderson's Cattle Company restaurant
Trade Name:
Lease Term: Twenty-Five (25) years, commencing on
the Commencement Date and ending on
September 30, 2021, with three (3) renewal
options of five (5) years each.
Annual Rent: Two Hundred Ninety-Four Thousand One Hundred
Ninety-Eight and 00/100 Dollars
($294,198.00), subject to adjustment as
hereinafter provided.
The Annual Rent shall be payable on the
first day of each month, commencing October
1, 1996, in twelve (12) equal installments
each in the amount of Twenty-Four Thousand
Five Hundred Seventeen and 00/100 Dollars
($24,517.00) during each year of the term of
this Lease, subject to proration or
adjustment as hereinafter provided.
Addresses for
Notices: To Landlord: Captec Net Lease Realty, Inc.
24 Frank Lloyd Wright Drive
Lobby L, 4th Floor
P. O. Box 544
Ann Arbor, Michigan 48106-0544
Attention: Senior Vice President,
Administration
Fax: (313) 994-1376
To Tenant: ARG Enterprises Inc.
450 Newport Center Drive, 6th Floor
Newport Beach, California 92660
Attention: Chief Financial Officer
Fax: (714) 721-8941
<PAGE> 6
with a copy to:
American Restaurant Group, Inc.
4410 El Camino Real, Suite 201
Los Altos, California 94022
Attention: Legal Department
Fax: (415) 949-6420
Premises: That certain real property, described in
Exhibit A attached hereto, and all
appurtenances, easements and rights of way
now or subsequently pertaining thereto,
together with all improvements located
thereon, consisting of a restaurant located
at 4470 West 78th Circle, Bloomington,
Minnesota, known as a Stuart Anderson's
Cattle Company restaurant.
References in this Article 1 to other Articles are for convenience and
designate some of the other Articles where references to the Fundamental Lease
Provisions appear. Each reference in this Lease to any of the Fundamental Lease
Provisions contained in this Article 1 shall be construed to incorporate all of
the terms provided under such Fundamental Lease Provisions. In the event of any
conflict between any Fundamental Lease Provision and the balance of this Lease,
the latter shall control.
ARTICLE 2
EXHIBITS
The following are attached hereto as Exhibits and made a part of this
Lease:
EXHIBIT A -- Description of the Premises
EXHIBIT B -- Form of Subordination, Non-Disturbance and
Attornment Agreement
In the event of any conflict between any of the above-referenced
Exhibits and the balance of this Lease, the Exhibit shall control.
ARTICLE 3
PREMISES
Landlord hereby leases and demises unto Tenant and Tenant hereby leases
and takes from Landlord, for the term, at the rental, and upon the terms,
covenants, and conditions hereinafter set forth, the property referred to in
Article 1 as the Premises and described on Exhibit A attached hereto.
ARTICLE 4
TERM
4.01 Term. The term of this Lease shall be the term specified in
Article 1 hereof (the initial term and any extensions exercised by Tenant
thereof are hereinafter referred to as the "Lease Term") and shall commence on
the Commencement Date.
4.02 Option to Extend Lease Term. Tenant shall have the option to
extend the initial term of this Lease for three (3) additional, successive
periods of five (5) years each (each, an ""Extension Period") on the same terms,
covenants and conditions of this Lease. In the event Tenant elects to exercise
the option(s), Tenant shall provide Landlord written notice of Tenant's exercise
of the option(s) not less than ninety (90) days prior to the end of the then
2
<PAGE> 7
current term, such notice to be given in the manner provided in Section 24.04 of
this Lease. Tenant's right to exercise the foregoing option(s) is conditioned
upon Tenant's performance of all of the duties and obligations on its part to be
performed under this Lease so that, at the time of the exercise of such options,
Tenant shall not be in default hereunder. In the event that Tenant elects to
extend the initial term of this Lease, the Annual Rent shall continue to be
adjusted as provided in Section 6.02 of this Lease.
ARTICLE 5
LIENS
Tenant shall do all things necessary to prevent the filing of any
mechanics' or other liens or encumbrances against the Premises, or any part
thereof, or upon any interest of Landlord or any mortgagee or beneficiary under
a deed of trust or any ground or underlying lessor in any portion of the
Premises, by reason of work, labor, services, or materials supplied or claimed
to have been supplied to Tenant, or anyone holding the Premises, or any part
thereof, through or under Tenant. If any such lien or encumbrance shall at any
time be filed against the Premises, or any portion thereof, Tenant shall either
cause same to be discharged of record within thirty (30) days after the date of
filing of same or, if Tenant in good faith determines that such lien should be
contested, Tenant will give Landlord prior notice of Tenant's intention to
contest any such lien and, upon demand by Landlord, will procure and record a
lien release bond under applicable law in the amount prescribed by applicable
law, or if no amount is prescribed by applicable law in an amount equal to one
hundred fifty percent (150%) of the lien amount. If a final judgment is rendered
against Tenant by a court of competent jurisdiction, or if the Premises or any
portion thereof are in danger of being foreclosed upon as a result of any such
lien, Tenant will satisfy such judgment or lien at once. If Tenant does not post
the release bond or fails to pay any such adverse judgment or to discharge any
lien in the event of any imminent foreclosure, then Landlord may post the bond
or pay the judgment or discharge the lien, as applicable, and Tenant will
promptly reimburse Landlord for all sums paid by it in connection therewith,
together with the applicable Administrative Fee (as hereinafter defined). Tenant
shall give Landlord notice of the intended commencement date of any Structural
Alterations (as defined in Section 12.03 below), or of any work, labor services
or material to be performed or provided to the Premises or any portion thereof
involving expenditures in excess of Fifty Thousand Dollars ($50,000) for any
individual project or materials to be performed or provided to the Premises or
any portion thereof, or Two Hundred Thousand Dollars ($200,000) in the aggregate
for multiple projects or materials to be provided to the Premises or any portion
thereof in any calendar year (as such dollar amounts shall be increased pursuant
to the provisions of Section 6.02 hereof), at least ten (10) days before said
date, and in connection with the performance or provision of any such work,
labor, services or materials, and Landlord shall also have the right and
opportunity to post and maintain on the Premises such notices, including notices
of non-responsibility and other similar notices, as are provided for under the
laws of the state in which the Premises are located, evidencing Tenant's
obligations with respect to any of the matters covered by this Article and
Landlord shall have the right to enter the Premises and post such notices at any
reasonable time.
ARTICLE 6
RENT
6.01 Rent. Tenant covenants and agrees to pay for the use and occupancy
of the Premises, the Annual Rent specified in Article 1 hereof, subject to
increase pursuant to the provisions of Section 6.02 hereof, in twelve (12) equal
monthly installments during each year of the Lease Term, in advance, on the
first day of each calendar month, without any offset or deduction. Should the
Lease Term commence on a day other than the first day of a calendar month, then
the rental for such first fractional month shall be computed on a daily basis
for the period from the Commencement Date to the end of such calendar month at
an amount equal to one three hundred sixty-fifth (1/365) of the Annual Rent for
each day, which rent for such fractional month shall be payable in advance on
the Commencement Date. Should the Lease Term end on a day other than the last
day of a calendar month, then the rental for such fractional month shall be
computed on a daily basis at an amount equal to one three hundred sixty- fifth
(1/365) of the Annual Rent for each day. Rent shall be paid in lawful money of
the United States to Landlord at the
3
<PAGE> 8
address stated in Article 1 or to such other persons or at such other places as
Landlord may designate in writing to Tenant.
6.02 Rental Adjustments. The Annual Rent payable under this Lease and
the dollar amounts specified in Article 5 and Section 12.06(b) shall be
increased on October 1, 2001 and every five (5) years thereafter (each, an
"Increase Date") during the Lease Term, as follows:
(a) The basis for computing the increase shall be the Consumer
Price Index for all Urban Consumers - All Items, as published monthly by the
Bureau of Labor Statistics of the United States Department of Labor (1982-84 =
100) ("Index"), published for the date nearest the Commencement Date (the
"Beginning Index").
(b) If the Index published for the date nearest the applicable
Increase Date (the "Extension Index") has increased over the Beginning Index,
the Annual Rent (or the dollar amounts under Article 5 and Section 12.06(b), as
applicable) will be calculated by multiplying the then Annual Rent (or the
dollar amounts under Article 5 and Section 12.06(b), as applicable) by a
fraction, the numerator of which is the Extension Index and the denominator of
which is the Beginning Index, not to exceed an increase equal to ten percent
(10%) of the Annual Rent (or the dollar amounts under Article 5 and Section
12.06(b), as applicable) in effect during the five (5) year period immediately
preceding the applicable Increase Date.
(c) In the event the Extension Index is not available on the
applicable Increase Date, Tenant will continue to pay the Annual Rent in effect
immediately prior to the Increase Date and the applicable dollar amounts under
Article 5 and Section 12.06(b) shall be those immediately in effect prior to the
Increase Date. As soon as practicable, Landlord will furnish Tenant with a true
copy of the Extension Index figure together with a computation of the increase
in the Annual Rent for the ensuing five (5) year period, if any, and an
appropriate adjustment will be paid within thirty (30) days of Tenant's receipt
of Landlord's statement.
(d) If the Index is changed so that the base year differs from
that in effect on the Commencement Date, the Index shall be converted in
accordance with the conversion factor published by the Bureau of Labor
Statistics. If the Index is discontinued or revised during the Lease Term, such
other governmental index or computation with which it is replaced will be used
in order to obtain substantially the same result as would be obtained if the
Index had not been discontinued or revised.
6.03 Net Lease; Impositions. This Lease is what is commonly called a
"triple net lease," it being understood that Landlord shall receive the Annual
Rent set forth in Article 1 hereof, as increased pursuant to Section 6.02, free
and clear of any and all other impositions, taxes, liens, charges, or expenses
of any nature whatsoever incurred in connection with the ownership and operation
of the Premises. In addition to the Annual Rent reserved by Article 1 hereof, as
increased pursuant to Section 6.02, Tenant shall pay to the appropriate parties
all impositions, insurance premiums, Real Property Taxes (as defined below),
operating charges, maintenance charges, construction costs, accounting and legal
fees, and any other charges, costs and expenses which arise or may be
contemplated under any provision of this Lease during the Lease Term
(collectively "Impositions"). All of such Impositions shall constitute
additional rent, and upon the failure of Tenant to pay any of such Impositions,
Landlord shall have the same rights and remedies as otherwise provided in this
Lease for the failure of Tenant to pay rent. Tenant shall furnish to Landlord,
promptly upon the reasonable request of Landlord, official receipts or other
satisfactory proof evidencing payment of such Impositions. Upon Tenant's failure
to pay any Real Property Taxes or insurance premiums, as provided herein,
Landlord shall have the right, at Landlord's option, to require Tenant to (a)
promptly deposit with Landlord funds sufficient for the payment of the current
Real Property Taxes or insurance premiums required to be paid by Tenant
hereunder; and (b) also deposit one-twelfth of the current annual or annualized
Real Property Taxes or insurance premiums, as the case may be (or those of the
preceding years if the current amounts thereof have not been fixed), on the
first day of each month in advance. It is the intention of the parties hereto
that this Lease shall not be terminable for any reason by Tenant, and that
Tenant shall in no event be entitled to any abatement of, deductions of any
kind, offset or reduction in rent payable under this Lease except as may
otherwise be expressly set forth in this Lease. Any present or future Law to the
contrary shall not alter this agreement of the parties.
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ARTICLE 7
USE OF THE PREMISES
7.01 Use. Tenant shall occupy and use the Premises solely for the
operation of a Stuart Anderson's Cattle Company restaurant or such other
restaurant use as may be approved by Landlord in writing, which approval shall
not be unreasonably withheld. Tenant may not use the Premises for any other
purpose without obtaining the prior written consent of Landlord, which consent
shall not be unreasonably withheld.
7.02 Compliance With Law.
(a) Tenant accepts the Premises in "AS IS" condition. Tenant
accepts the Premises "AS IS" in reliance upon Tenant's own knowledge as owner
and/or occupier of the Premises immediately prior to commencement of this Lease.
Landlord makes no representations or warranties of any type whatsoever,
including without limitation, whether there has been or are currently any
violations of any covenants or restrictions of record, or any applicable Laws in
effect regarding the Premises on the Commencement Date.
(b) Tenant shall, at Tenant's sole expense, comply in all
material respects with all applicable laws, ordinances, building codes, orders,
zoning ordinances, rules, and regulations, of any governmental authorities and
with any directive of any public officer which shall impose any order or duty
upon Landlord or Tenant with respect to the Premises or the use or occupation
thereof or relating to the environment, health or safety with respect to the
Premises or the use or occupation thereof or relating to the environment, health
or safety with respect to the Premises or the use or occupation thereof
(including, without limitation, any rule of common law and judicial decisions
and the Americans With Disabilities Act), and any covenants, conditions or
restrictions of record relating to the Premises or the use or occupation
thereof, in each case as now or hereafter in effect (collectively "Laws").
(c) Notwithstanding any other provision of this Lease, Tenant
shall not use or permit the Premises to be used in any manner which will result
in waste or the creation of a nuisance, and Tenant shall maintain the Premises
free of any objectionable noises, odors, or disturbances; provided that, as
between Landlord and Tenant only, odors and exhaust incidental to a restaurant,
excluding odors of deteriorating food, will not be deemed a nuisance or
objectionable provided the same do not violate applicable Laws and do not
subject Landlord to civil liability.
7.03 Permits and Licenses. As between Landlord and Tenant, Tenant shall
be solely responsible to apply for and secure any building permit or permission
of any duly constituted authority for the purpose of doing any of the things
which Tenant is required or permitted to do under the provisions of this Lease.
Landlord shall cooperate as reasonably requested by Tenant to facilitate
Tenant's compliance with this obligation but at no cost to Landlord.
ARTICLE 8
UTILITIES
8.01 Payment. Tenant shall pay to the utility companies or other
parties entitled to payment the cost of all water, heat, air conditioning, gas,
electricity, telephone, and other utilities and services provided to or for the
Premises, including connection fees and taxes thereon.
8.02 Interruption in Service. Landlord shall not be liable in damages
or otherwise for any failure or interruption of any utility or other service
being furnished to the Premises subject to the provisions of Section 11.04(b)
hereof, and no such failure or interruption shall entitle Tenant to any
abatement of, setoff of or reduction in the amounts payable to Landlord
hereunder or otherwise entitle Tenant to terminate this Lease.
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ARTICLE 9
TAXES
9.01 Payment of Taxes. Tenant shall timely pay the Real Property Taxes
(as defined in Section 9.02) applicable to the Premises during the Lease Term.
Landlord agrees to use reasonable efforts to have the relevant taxing
authorities send a duplicate copy of any tax bills applicable to the Premises
sent directly to Tenant; otherwise, Landlord shall deliver copies of such tax
bills to Tenant promptly after receipt. All such payments shall be made prior to
delinquency or within ten (10) days after receipt by Tenant of the tax bills
from Landlord, whichever is later. Upon Landlord's request, Tenant shall
promptly furnish Landlord with satisfactory evidence that such Real Property
Taxes have been paid. If any such Real Property Taxes paid by Tenant shall cover
any period of time prior to or after the expiration of the Lease Term, Landlord
shall promptly reimburse Tenant to the extent required. If Tenant shall fail to
pay any such Real Property Taxes, Landlord shall have the right but not the
obligation to pay the same in which case Tenant shall repay such amount plus any
penalties and interest resulting therefrom to Landlord with Tenant's next Annual
Rental installment together with the applicable Administrative Fee.
9.02 Definition of "Real Property Taxes". As used herein, the term
"Real Property Taxes" shall mean any form of real estate tax or assessment, ad
valorem tax or gross receipts tax fee, levy, penalty, interest or other charge
imposed by any authority having the direct or indirect power to tax, including
any city, county, state, or federal government, or any school, agricultural,
sanitary, fire, street, drainage, or other improvement district thereof, on,
against or with respect to the Premises, this Lease, any legal or equitable
interest of Landlord or any superior landlord or any mortgagee or beneficiary of
Landlord in the Premises or in the real property of which the Premises are a
part, and Landlord's right to rent. The term "Real Property Taxes" shall also
include any tax, fee, levy, assessment, penalty, interest or other charge (i) in
substitution of, partially or totally, any tax, fee, levy, assessment, or charge
included within the definition of Real Property Taxes, (ii) the nature of which
was included within the foregoing definition of Real Property Taxes, or (iii)
any tax or increase in any tax which is imposed as a result of a transfer,
either partial or total, of Landlord's interest in the Premises or which is
added to a tax or charge hereinbefore included within the definition of Real
Property Taxes by reason of such transfer (other than documentary, stamp or
other transfer taxes resulting from such transfer but including any increase in
Real Property Taxes attributable to such transfer), or which is imposed by
reason of the transfer of the Premises to Landlord or this transaction, any
modifications or changes hereto, or any transfers hereof. Notwithstanding the
foregoing, the term "Real Property Taxes" shall not include any general income
taxes, inheritance taxes, and estate taxes imposed upon Landlord or any superior
landlord or any mortgagee or beneficiary of Landlord or any taxes attributable
to the recording of any mortgage or deed of trust on Landlord's interest in the
Premises.
9.03 Personal Property Taxes. Tenant shall pay prior to delinquency,
all taxes assessed against and levied upon trade fixtures, furnishings,
equipment, and all other personal property of Tenant contained in the Premises
or elsewhere. Tenant shall seek to cause said trade fixtures, furnishings,
equipment, and all other personal property to be assessed and billed separately
from the real property of Landlord.
9.04 Tenant's Right to Contest Taxes.
(a) Tenant shall have the right, at its cost and expense, to
contest the amount or validity, in whole or in part, of any Real Property Taxes
of any kind by appropriate proceedings diligently conducted in good faith, but
no such contest shall be carried on or maintained by Tenant after the time limit
for the payment of any Real Property Taxes unless Tenant, at its option: (i)
shall pay the amount involved under protest; or (ii) shall procure and maintain
a stay of all proceedings to enforce any collection of any Real Property Taxes,
together with all penalties, interest, costs and expenses, by a deposit of a
sufficient sum of money, or by such undertaking, as may be required or permitted
by law to accomplish such stay; or (iii) shall deposit with Landlord, as
security for the performance by Tenant of its obligations hereunder with respect
to such Real Property Taxes, security in the amount, if any, prescribed by
applicable law, or if no amount is prescribed by applicable law, in an amount
equal to one hundred fifty percent (150%) of the contested amount or such other
reasonable security may be demanded by Landlord to ensure payment of such
contested Real Property Taxes and all penalties, interest, costs and expenses
which may accrue during the period of the contest. Upon the termination of any
such proceedings, it shall be the obligation of Tenant to pay
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the amount of such Real Property Taxes or part thereof, as finally determined in
such proceedings, together with any costs, fees (including attorneys' fees),
penalties or other liabilities in connection therewith; provided, however, that
if Tenant has deposited cash or cash equivalents with Landlord as security under
clause (iii) above, then, so long as no material default exists under this
Lease, Landlord pay such Real Property Taxes (or part thereof) together with the
applicable costs, fees and liabilities as described above out of such cash or
cash equivalents and return any unused balance, if any, to Tenant. Otherwise,
Landlord shall return or cause to have returned to Tenant all amounts, if any,
held by or on behalf of Landlord which were deposited by Tenant in accordance
with the provisions hereof.
(b) Tenant shall have the right, at its cost and expense, to
seek a reduction in the valuation of the Premises as assessed for tax purposes
and to prosecute any action or proceeding in connection therewith. Provided
Tenant is not in material default hereunder, Tenant shall be authorized to
collect any tax refund of any tax paid by Tenant obtained by reason thereof and
to retain the same.
(c) Landlord agrees that whenever Landlord's cooperation is
required in any of the proceedings brought by Tenant as aforesaid, Landlord will
reasonably cooperate therein, provided same shall not entail any cost, liability
or expense to Landlord, and Tenant will pay, indemnify and save Landlord
harmless of and from, any and all liabilities, losses, judgments, decrees, costs
and expenses (including all reasonable attorneys' fees and expenses) in
connection with any such contest and will, promptly after the final settlement,
fully pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith, and
Tenant shall perform and observe all acts and obligations, the performance of
which shall be ordered or decreed as a result thereof. No such contest shall
subject Landlord to the risk of any civil liability or the risk of any criminal
liability, and Tenant shall give such reasonable indemnity or security to
Landlord, as may reasonably be demanded by Landlord to ensure compliance with
the foregoing provisions of this Section 9.04.
ARTICLE 10
MAINTENANCE AND REPAIRS
10.01 Tenant's Obligations.
(a) Tenant shall, at Tenant's expense, maintain in good
repair, order, and serviceable condition, reasonable wear and tear excepted, the
Premises and every part thereof, including but not limited to all plumbing,
ventilation, heating, air conditioning, and electrical systems and equipment in,
on, or exclusively serving the Premises, and windows, doors, storefronts, plate
glass, interior walls, and ceilings which are part of the Premises.
(b) Tenant shall not commit or suffer to be committed any
waste upon or about the Premises, and shall promptly at Tenant's cost and
expense, make all necessary replacements, restorations, renewals and repairs to
the Premises and appurtenances thereto which are material to the operation of
the Premises, whether interior or exterior, structural or non-structural,
ordinary or extraordinary, and foreseen or unforeseen; provided that with
respect to appurtenances to the Premises which are material to the operation of
the Premises, if third parties are obligated to repair or maintain such
appurtenances, Tenant shall use commercially reasonable efforts to enforce such
obligations of third parties, or if such third parties fail to perform such
obligations, Tenant shall perform such obligations to the extent Tenant has the
legal right to do so. Tenant shall pay to the appropriate parties Tenant's pro
rata share of any maintenance, repair or other costs to the extent required with
respect to any appurtenances to the Premises. Repairs, restorations, renewals
and replacements shall be at least equivalent in quality to the original work or
the property replaced, as the case may be. Tenant shall not make any claim or
demand upon or bring any action against Landlord for any loss, cost, injury,
damage or other expense caused by any failure or defect, structural or
non-structural, of the Premises or any part thereof.
(c) Upon the expiration or earlier termination of this Lease,
Tenant shall return the Premises to Landlord in good and clean condition and
repair, reasonable wear and tear excepted. Any damage to the Premises, including
any structural damage, resulting from Tenant's use or from the removal of
Tenant's fixtures, furnishings, and equipment pursuant to Section 12.04 hereof,
shall be repaired by Tenant at Tenant's expense.
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10.02 Landlord's Obligations. Except for the obligations of Landlord
under Article 14 hereof (relating to destruction of the Premises), and under
Article 15 hereof (relating to the condemnation of the Premises), it is intended
by the parties hereto that Landlord have no obligation, in any manner
whatsoever, to repair and maintain the Premises nor the building located thereon
nor the equipment or personal property therein, whether interior or exterior,
structural or nonstructural, ordinary or extraordinary, all of which obligations
are that of Tenant under Section 10.01 hereof. Tenant expressly waives the
benefit of any statute or law now or hereafter in effect which would otherwise
afford Tenant the right to terminate this Lease because of Landlord's failure to
keep the Premises or any part thereof or the building located thereon or the
fixtures thereon or equipment or personal property therein in good order,
condition, and repair, or the right to repair and offset the cost related
thereto against rent.
10.03 Landlord's Rights. If Tenant refuses or neglects to make repairs
or maintain the Premises, or any part thereof, or any appurtenances thereto
material to the operation of the Premises or to enforce maintenance or repair
obligations of third parties with respect to any such appurtenances, as provided
above, in a manner reasonably satisfactory to Landlord, without prejudice to any
other remedy Landlord may have hereunder, upon giving Tenant ten (10) days'
prior written notice, Landlord shall have the right to enter the Premises and
perform such maintenance or make such repairs on behalf of and for the account
of Tenant. In the event Landlord so elects, Tenant shall pay the cost of such
repairs, maintenance, or replacements promptly following Tenant's receipt of a
bill therefor, together with the applicable Administrative Fee. Tenant agrees to
permit Landlord or its agent to enter the Premises, upon reasonable notice by
Landlord, during normal business hours for the purpose of inspecting the
Premises.
ARTICLE 11
INSURANCE AND INDEMNIFICATION
11.01 Tenant's Insurance Obligation. Tenant covenants and agrees that
Tenant will carry and maintain, at its sole cost and expense, the following
types of insurance, in the amounts specified and in the form hereinafter
provided for:
(a) COMMERCIAL GENERAL LIABILITY. Commercial general liability
insurance (including liquor liability insurance) against any loss, liability or
damage on or relating to the Premises, with limits of not less than Five Million
Dollars ($5,000,000) in any one occurrence for death or injuries to one or more
persons and/or for damage to property. If such insurance has a deductible or
self-insured retention clause, the deductible or self-insured retention shall
not exceed Five Hundred Thousand Dollars ($500,000) per occurrence without
Landlord's consent, such consent not to be unreasonably withheld, and Tenant
shall be liable for such deductible or self-insured retention amount.
(b) BUSINESS INTERRUPTION/RENTAL LOSS. Tenant shall purchase
at Tenant's option either a policy of business interruption insurance to protect
Tenant and Landlord against loss of earnings in the event of interruption of
Tenant's business through destruction of real or personal property at the
Premises or a policy of rental loss protection to protect Landlord (and any
mortgagee or beneficiary of Landlord with respect to the Premises) against loss
of rental income as a result of destruction of real or personal property with
respect to the Premises. Such policy shall be written in an amount equal to not
less than six (6) monthly installments of Annual Rent. Such policy shall insure
against loss of earnings or rental income (as applicable) caused by at least the
perils of fire and lightning, extended coverage, vandalism, malicious mischief
and, where pertinent, sprinkler leakage.
(c) WORKERS' COMPENSATION. Worker's compensation insurance or
self insurance as required by the jurisdiction in which the Premises are located
and employer's liability insurance with a limit of not less than One Million
Dollars ($1,000,000).
(d) PROPERTY DAMAGE. Insurance covering all improvements
located on the Premises and all of Tenant's fixtures, merchandise, and personal
property from time to time in, on or upon the Premises, in an amount not less
than one hundred percent (100%) of their full replacement value providing
protection against perils commonly included within the classification "All
Risk," and insurance against sprinkler damage (if applicable and to
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the extent not otherwise covered by such "All Risk" policy). If such insurance
has a deductible clause, the deductible shall not exceed Two Hundred Fifty
Thousand Dollars ($250,000) per occurrence without Landlord's consent, such
consent not to be unreasonably withheld, and Tenant shall be liable for such
deductible amount. Any policy proceeds shall be used for the repair or
replacement of the property damaged or destroyed to the extent necessary to
maintain the standard of operation of the Premises and the business operated
thereon existing prior to the damage or destruction.
(e) ADDITIONAL COVERAGE. Such other insurance and in such
amounts customarily carried for like businesses or properties (as determined by
Landlord in good faith) as may be reasonably required from time to time by
Landlord.
(f) POLICY FORM.
(i) All policies of insurance provided for herein
shall be issued by reputable and financially sound insurance companies
reasonably satisfactory to Landlord, and such insurance companies shall be
qualified to do business in the jurisdiction where the Premises are situated.
All such policies shall be issued in Tenant's name, with Landlord named as an
additional insured and/or loss payee, as applicable, and if requested by
Landlord, name any superior landlord and any mortgagee or beneficiary of
Landlord as an additional insured or loss payee. The policies shall be for the
mutual and joint benefit and protection of Landlord, Tenant, any superior
landlord and any mortgagee or beneficiary of Landlord. Certificates of insurance
shall be delivered to Landlord prior to Landlord's execution of this Lease, and
thereafter certificates or other evidence of renewal or replacement coverage
shall be delivered to Landlord within fifteen (15) days prior to the expiration
of the term of each such policy. As often as any such policy shall expire or
terminate, renewal or additional policies shall be procured and maintained by
Tenant in like manner and to like extent. All certificates of insurance
delivered to Landlord must contain a provision giving Landlord, any superior
landlord, and any mortgagee or beneficiary of Landlord fifteen (15) days' notice
in writing in advance of any modification, cancellation, lapse, or reduction in
the amounts of insurance. The commercial general liability policy shall contain
a severability of interests clause providing that each entity insured under the
policy will be protected as if it were the only insured; however, this provision
shall not increase the coverage limits of such policy. The property damage shall
contain an agreement that any loss otherwise payable thereunder shall be payable
notwithstanding any act or negligence of Landlord or Tenant which might, absent
such agreement, result in a forfeiture of all or part of the payment of such
loss. All public liability, property damage, and other casualty policies shall
be written on an occurrence basis as primary policies, not contributing with or
in excess of coverage which Landlord may carry. Tenant's failure to deliver the
certificates or other evidence of insurance coverage pursuant to this Section
(where such failure shall continue for a period of fifteen (15) days after
written notice thereof from Landlord to Tenant) shall constitute a material
default under this Lease.
(ii) Tenant's obligations to carry the insurance provided for
above may be brought within the coverage of a so-called blanket policy or
policies of insurance carried and maintained by Tenant; provided, however, that
such policy or policies must have limits of not less than Five Million and
00/100 Dollars ($5,000,000.00) and that Landlord, any superior landlord and any
mortgagee or beneficiary of Landlord shall be named as an additional insured
thereunder as their interests may appear and that the coverage afforded Landlord
will not be reduced or diminished by reason of the use of such blanket policies
and the requirements set forth herein are otherwise satisfied. Tenant agrees to
permit Landlord, not more often than annually, to examine Tenant's original
insurance policies required in this Lease, and to make copies of the sections of
such policies evidencing satisfaction of the requirements of this Lease,
provided such examination shall be conducted in the offices of Tenant or
Tenant's insurance broker and in the presence of a representative of Tenant or
Tenant's insurance broker.
11.02 Subrogation Waiver. Landlord (for itself and its insurer) hereby
waives any rights, including rights of subrogation, and Tenant (for itself and
its insurer) hereby waives any rights, including rights of subrogation, each may
have against the other on account of any loss or damage occasioned to Landlord
or Tenant, as the case may be, to their respective property, the Premises or its
contents that are caused by or result from risks insured against under any
property insurance policies carried by the parties hereto and in force at the
time of any such damage. The foregoing waivers of subrogation shall be operative
only so long as available in the jurisdiction where the Premises are located and
so long as no policy of insurance is invalidated thereby.
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11.03 Insurance Use Restrictions. Tenant agrees that it will not carry
any stock or goods or do anything in, on, or about the Premises outside of the
ordinary course of Tenant's business which will substantially increase the
insurance rates upon the building of which the Premises are a part.
11.04 Indemnification.
(a) Tenant shall at all times indemnify Landlord and any mortgagee or
beneficiary of Landlord for, defend (with counsel reasonably satisfactory to
Landlord) Landlord and any mortgagee or beneficiary of Landlord against, and
save Landlord and any mortgagee or beneficiary of Landlord harmless from, any
liability, loss, cost, injury, damage or other expense or risk (including,
without limitation, reasonable attorneys' fees) whatsoever that may occur or be
claimed by or with respect to any person(s) or property on or relating to the
Premises and resulting directly or indirectly from the use, misuse, occupancy,
possession or disuse of the Premises by Tenant or other persons claiming through
or under Tenant, or their respective agents, employees, licensees, invitees,
guests or other such persons, or from the condition of the Premises. Tenant
shall, at its cost and expense, defend against any and all such actions, claims
and demands and shall indemnify Landlord and any mortgagee or beneficiary of
Landlord for all costs, expenses and liabilities (including, without limitation,
reasonable attorneys' fees) it may incur in connection therewith. Neither
Landlord nor any mortgagee or beneficiary of Landlord shall in any event
whatsoever be liable for any injury or damage to the Premises or to the Tenant
or to any other persons claiming through or under Tenant, or their respective
agents, employees, licensees, invitees, guests or other such persons or to any
property of any such persons except as provided in subparagraph (b) below.
Tenant shall not make any claim or demand upon or institute any action against
Landlord as a result of such injury or damage except as provided in subparagraph
(b) below. Tenant covenants and agrees during the Lease Term hereof to pay when
due or reimburse and indemnify and hold Landlord and any mortgagee or
beneficiary of Landlord harmless from and against all inspection fees, taxes,
bonds, permits, certificates, assessments and sales, use, property or other
taxes, fees or tolls of any nature whatsoever (together with any related
interest or penalties) now or hereafter imposed against Landlord, any superior
landlord, or any mortgagee or beneficiary of Landlord, or Tenant by any federal,
state, county or local governmental authority upon or with respect to the
Premises or the use thereof or upon the possession, leasing, use, operation or
other disposition thereof or upon the rents, receipts or earnings arising
therefrom or upon or with respect to this Lease (excepting only federal, state,
and local net income taxes on the income of Landlord or any superior landlord or
any mortgagee or beneficiary of Landlord or any taxes attributable to the
recording of any mortgage or deed of trust on Landlord's interest in the
Premises).
(b) Notwithstanding the waiver of subrogation in Section 11.02,
Landlord shall indemnify, hold harmless and defend (with counsel reasonably
satisfactory to Tenant) Tenant from and against (i) any liability, loss, cost,
injury, damage, or other expense or risk, (including, without limitation,
reasonable attorneys' fees) whatsoever to the extent arising out of the
negligence or willful misconduct of Landlord or its representatives in
connection with any entry by Landlord or its representatives on the Premises, or
(ii) any liability, loss, cost, injury, damage, or other expense or risk,
(including, without limitation, reasonably attorneys' fees) whatsoever to the
extent arising out of the negligence or willful misconduct of Landlord or its
representatives in connection with any maintenance, construction or other
activities of Landlord on property adjacent to the Premises, except to the
extent arising from the negligence or willful misconduct of Tenant, its
representatives, or their respective agents, employees, licensees, invitees or
guests, or from the condition of the Premises.
11.05 Payment of Insurance. In the event that Tenant shall fail to
obtain the insurance policies required hereunder, Landlord shall have the right,
but not the obligation, to purchase the same in which case Tenant shall repay
the cost thereof to Landlord with Tenant's next Annual Rent installment together
with the applicable Administrative Fee.
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ARTICLE 12
ALTERATIONS
12.01 Permitted Improvements. Except as provided in Section 12.03
hereof, and subject to the provisions of this Article 12, at Tenant's own
expense and after giving Landlord notice in writing of its intention to do so as
required under Article 5, Tenant may from time to time make alterations,
replacements, additions, changes, and improvements (collectively referred to in
this Article 12 as "Alterations") in and to the Premises as it may find
necessary or convenient for its purposes; provided, however, that no such
Alterations shall decrease the value of the Premises.
12.02 Liens. Tenant shall pay the costs of any Alterations done on the
Premises pursuant to Section 12.01, and shall keep the Premises free and clear
of liens of any kind as required under Article 5. Tenant shall indemnify and
defend Landlord from and against any liability, loss, damage, costs, attorneys'
fees, and any other expense incurred as a result of claims of lien by any person
performing work or furnishing materials or supplies for Tenant or any person
claiming under Tenant.
12.03 Structural Alterations. Tenant shall not make any Structural
Alterations (as defined below) to the Premises without obtaining the prior
written consent of Landlord, which consent shall not be unreasonably withheld.
"Structural Alterations" shall mean any Alterations made to any of the
foundations, perimeter or load bearing walls, or roof structure. All work with
respect to any Alteration shall be done in a good and workmanlike manner by
properly qualified and licensed personnel, and such work shall be diligently
prosecuted to completion.
12.04 Removal of Alterations. All Alterations made on the Premises
shall become the property of Landlord at the expiration or termination of the
Lease Term and shall be surrendered with the Premises; provided, however, that
if Tenant is not in default at the time of such expiration or termination, (i)
Tenant shall have the right to remove any Alterations permitted or approved in
accordance with this Article 12, provided the removal thereof does not decrease
the value of the Premises as reasonably determined by Landlord, and provided
further that Tenant repairs any damage to the Premises caused by such removal,
and (ii) Tenant's equipment, machinery, and trade fixtures shall remain the
property of Tenant and may be removed by Tenant, and Tenant shall repair any
damage caused by its removal of any such equipment, machinery, and trade
fixtures.
Landlord agrees from time to time during the Lease Term, upon written
request from Tenant, to execute and deliver any instrument, release or other
document that may be reasonably required by any equipment supplier or vendor and
in form and substance reasonably satisfactory to Landlord whereby Landlord
waives and/or releases any rights it may have or acquire with respect to any
moveable equipment or trade fixtures which is subject to a security interest or
equipment lease in favor of such supplier or vendor.
12.05 Alterations Required by Law. Any Alteration, structural or
otherwise, to or on the Premises, or any part thereof, which may be necessary or
required by reason of any applicable Laws, shall be made by and at the sole cost
and expense of Tenant.
12.06 General Conditions Relating to Alterations. Any Alteration,
structural or otherwise, to or on the Premises, shall be subject to the
following conditions:
(a) No Alteration shall be undertaken until Tenant shall have
procured and paid for all required permits and authorizations of all municipal
departments and governmental subdivisions having jurisdiction.
(b) At Landlord's option, any Alteration involving an
estimated cost of more than One Hundred Thousand Dollars ($100,000) (as such
dollar amount shall be increased pursuant to the provisions of Section 6.02
hereof) shall, upon Landlord's reasonable request, be conducted under the
supervision of a licensed architect or engineer selected by Tenant and
satisfactory to Landlord and shall be made in accordance with detailed plans and
specifications (the "Plans and Specifications") and cost estimates prepared by
such architect or engineer and approved in writing in advance by Landlord.
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(c) Any Alteration shall be made promptly and in a good
workmanlike manner and in compliance with all applicable Laws.
(d) No Alteration shall tie-in or connect the Premises or any
improvements thereon with any property outside the Premises without the prior
written consent of Landlord.
(e) No Alteration shall reduce the value of the Premises or
impair the structural integrity of any building comprising a part of the
Premises.
ARTICLE 13
SIGNS
In addition to those signs already existing at the Premises, Tenant
shall have the right to erect or affix signs on the Premises of such sizes,
colors, and designs as required by Tenant. All signs on the Premises shall fully
comply with all applicable Laws.
ARTICLE 14
DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD
14.01 Obligation to Rebuild. If any portion of the Premises is damaged
or destroyed by fire or other casualty, Tenant shall forthwith give notice
thereof to Landlord. Tenant shall, at its sole cost and expense, diligently
repair, restore, rebuild or replace the damaged or destroyed improvements,
fixtures or equipment, and diligently complete the same as soon as reasonably
possible, to the condition they were in prior to such damage or destruction,
except for permitted Alterations and such changes in design or materials as may
then be required by applicable Laws. Landlord, in such event, shall, to the
extent and at the times the proceeds of the insurance are made available to
Landlord, reimburse Tenant for the costs of making such repairs, restoration,
rebuilding and replacements on such terms as Landlord may reasonably require. To
the extent that the available proceeds of insurance are insufficient to pay the
entire cost of making such repairs, restoration, rebuilding and replacements,
and notwithstanding the expiration or termination of the Lease Term of this
Lease, Tenant shall pay the amount by which such costs exceed the available
insurance proceeds. Any surplus of insurance proceeds over the cost of
restoration, net of all reasonable out-of-pocket expenses incurred by Landlord
in connection with the administration thereof, shall be promptly paid over to
Tenant.
Notwithstanding the foregoing, if any such damage or destruction occurs
during the last two (2) years of the initial term and the first (1st) and second
(2nd) Extension Periods hereof, or at any time during the third (3rd) Extension
Period hereof, provided Tenant is not in material default hereunder, Tenant may
elect to terminate this Lease upon written notice to Landlord within sixty (60)
days after the occurrence of such damage or destruction provided Tenant pays to
Landlord all rent and other amounts accruing under this Lease through the date
of termination, and except as to obligations hereunder which expressly survive
any termination of this Lease. In the event of any such termination of this
Lease, Landlord shall be entitled to retain all proceeds of insurance relating
to such damage and destruction, and Tenant shall promptly pay to Landlord any
such insurance proceeds received by Tenant and hereby assigns to Landlord all
rights of Tenant to receive such insurance proceeds.
14.02 No Abatement of Rent. Notwithstanding the partial or total
destruction of the Premises or any part thereof, there shall be no abatement of
rent or of any other obligation of Tenant hereunder by reason of such damage or
destruction.
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ARTICLE 15
EMINENT DOMAIN
15.01 Total Taking. If the Premises is taken in its entirety under the
power of eminent domain, this Lease shall terminate as of the date of such
taking, and upon Tenant's payment to Landlord of all rents and other amounts
accruing hereunder through such date, Landlord and Tenant shall each thereafter
be released from accruing any further liability under this Lease, subject to the
rights of Landlord and Tenant to receive the condemnation awards to which each
is entitled as provided in Section 15.03, and except as to obligations under
this Lease which survive the termination hereof.
15.02 Partial Taking. In the event that (a) more than twenty-five
percent (25%) of the floor area of the Premises is taken under the power of
eminent domain; or (b) by reason of any appropriation or taking, regardless of
the amount so taken, the remainder of the Premises is not one undivided parcel
of property; or (c) as a result of any taking, regardless of the amount so
taken, the remainder of the Premises is rendered unsuitable for the continued
operation of Tenant's business as determined by Tenant in good faith and based
upon commercially reasonable standards and criteria, and as agreed to by
Landlord, in Landlord's reasonable discretion, either Landlord or Tenant shall
have the right to terminate this Lease upon giving notice in writing of such
election within sixty (60) days after receipt by Tenant from Landlord of written
notice that said Premises have been so appropriated or taken (with the
understanding that such period of time may be extended, but in no event beyond a
total period of one hundred eighty (180) days, as reasonably necessary for
Tenant to assess the effect of such partial taking on Tenant's continued
operation of its business at the Premises, subject to Landlord's prior written
consent, which consent shall not be unreasonably withheld) provided Tenant shall
continue to pay Annual Rent and other amounts accruing hereunder through the
date of termination. In the event of such termination, upon Tenant's payment to
Landlord of all rents and other amounts accruing hereunder through such date for
the Premises, both Landlord and Tenant shall thereupon be released from any
liability thereafter accruing hereunder, except as to obligations hereunder
which survive the termination hereof. Each party agrees immediately after
learning of any actual or contemplated appropriation or taking to give to the
other party notice in writing thereof. If this Lease is not terminated, Tenant
shall remain in that portion of the Premises not so taken and Tenant, at
Tenant's sole cost and expense, shall restore the remaining portion of the
Premises as soon as possible to a complete unit of like quality and character as
existed prior to such taking. Landlord agrees to reimburse Tenant for the cost
of restoration, but in no event shall Landlord's obligation to reimburse Tenant
for the cost of restoring the remaining portion of the Premises exceed the
amount of the award or compensation that Landlord receives for a partial taking
of that portion of the Premises resulting in the need for restoration. So long
as this Lease is not terminated in the manner provided above, there shall be an
equitable adjustment of the rent payable by Tenant hereunder for the Premises by
reason of any partial taking. Tenant hereby waives any statutory rights of
termination which may arise by reason of any partial taking of the Premises
under the power of eminent domain.
15.03 Award. In the event of any taking, the entire award or
compensation in any eminent domain proceeding affecting the Premises, whether
for a total or partial taking, shall be distributed to Landlord, provided,
however, that Tenant will be entitled to receive, and Landlord will have no
right to pursue for itself, any award for claims based on (a) the value of
Tenant's Alterations to the Premises which Tenant has the right to remove
pursuant to the provisions of this Lease but elects not to remove, (b) loss of
or damage to Tenant's personal property, (c) loss to Tenant because of
interruption of business, (d) Tenant's loss of goodwill, and (e) Tenant's cost
of removal and relocation and any rent differential payable by Tenant for
replacement premises as a result of any relocation necessitated by the taking.
Landlord and Tenant may separately pursue their claims against the condemning
authority, provided, however, that notwithstanding anything to the contrary
contained in this Lease, Tenant will have no right to pursue a claim based upon
the residual value of the real property comprising the Premises after expiration
of the Lease Term or pursue claims or retain any award to which Landlord is
entitled so as inequitably to diminish Landlord's award. Tenant hereby assigns
to Landlord all rights of Tenant to receive any award or compensation as a
result of any taking except the awards to which Tenant is entitled under this
Section 15.03.
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15.04 Transfer Under Threat of Taking. For the purposes of this Article
only, a voluntary sale or conveyance under threat and in lieu of condemnation
shall be deemed an appropriation or taking under the power of eminent domain.
ARTICLE 16
ASSIGNMENT AND SUBLETTING
16.01 Landlord's Consent Required. For purposes of this Article 16, the
terms "assign" and "assignment" shall include and mean any act attempting to, or
document purporting to, assign, transfer or sublet (or enter into any similar
type of agreement), change ownership of, mortgage or hypothecate this Lease or
Tenant's interest in and to the Premises or any part thereof. Tenant shall not
assign this Lease or Tenant's interest in and to the Premises without obtaining
the prior written consent of Landlord, such consent not to be unreasonably
withheld. Any attempted assignment without such consent shall be void, and shall
constitute a breach of this Lease. Tenant hereby agrees to pay to Landlord fifty
percent (50%) of any rent or other substitute consideration in excess of the
monthly rent payable hereunder (as adjusted from time to time) which Tenant
receives by reason of any permitted assignment (the "Rent Premium").
Notwithstanding the foregoing, Tenant may deduct from such Rent Premium
reasonable, out-of-pocket expenses actually incurred in connection with such
permitted assignment (including without limitation, costs of leasehold
improvements, brokerage commissions and reasonable attorney's fees), which
expenses shall be documented to the satisfaction of Landlord; provided, however,
that nothing contained in this Section 16.01 shall reduce the Annual Rent and
other amounts payable by Tenant under this Lease. The payment of Tenant's share
of the Rent Premium shall be made within five (5) business days following the
date that such payment is received by Tenant.
16.02 Assumption of Obligations. Any assignment to which Landlord has
consented shall be evidenced by an instrument in writing and any assignee,
transferee or mortgagee shall agree for the benefit of Landlord to be bound by,
assume, and perform all of the terms, covenants, and conditions of this Lease.
Consent by Landlord to any assignment shall not constitute consent to any
subsequent assignment.
16.03 Assignment to Affiliate. Notwithstanding anything to the contrary
contained in this Article 16, Tenant shall have the right to assign this Lease,
or sublet the Premises or any portion thereof, without the consent of, but with
notice to, Landlord, to any corporation (a) with which Tenant may merge or
consolidate, (b) which is a parent or subsidiary of Tenant at any tier, (c)
which is the successor corporation to Tenant in the event of a corporate
reorganization, or (d) which acquires all or substantially all of the voting
stock of Tenant or all or substantially all of the assets of Tenant, provided
that said assignee assumes, in full, the obligations of Tenant under this Lease
and Tenant remains primarily liable under this Lease.
16.04 Hypothecation of Lease. Without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, Tenant may not
mortgage, pledge or otherwise encumber its leasehold estate hereunder, and any
attempt to mortgage, pledge or otherwise encumber such estate without such
consent shall be null and void and of no force and effect.
16.05 Corporate/Partnership/Limited Liability Company Restrictions. In
the event that Tenant shall, at any time, be a corporation, no change shall
occur in one or a series of related transactions in the majority ownership of
and/or the power to vote the majority of the outstanding capital stock of
Tenant, without the prior written consent of Landlord. In the event that Tenant
shall, at any time, be a partnership, no change shall occur in any one or more
of the general partners of the partnership or in the control of any general
partner, without the prior written consent of Landlord. In the event that Tenant
shall, at any time, be a limited liability company, no change shall occur in any
member of the limited liability company or in the control of any member, without
the prior written consent of Landlord. Notwithstanding the foregoing, nothing
contained herein shall prohibit (i) the public offering of shares of stock of
the Tenant on a nationally recognized stock exchange, or (ii) the private sale
of shares of all of the stock of the Tenant to any entity which is listed on a
nationally recognized stock exchange and has a net worth not less than the net
worth of Tenant on the Commencement Date.
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16.06 No Release of Tenant. Regardless of Landlord's consent, no
assignment shall release Tenant of Tenant's obligation or alter the primary
liability of Tenant to pay the rent and to perform all other obligations to be
performed by Tenant hereunder. The acceptance of rent by Landlord from any other
person shall not be deemed to be a waiver by Landlord of any provision hereof.
Consent to one assignment shall not be deemed consent to any subsequent
assignment. In the event of default by any assignee of Tenant or any successor
Tenant, in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
said assignee. Landlord may consent to subsequent assignments of this Lease or
amendments or modifications to this Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or their
consent thereto and such action shall not relieve Tenant of liability under this
Lease; provided that Tenant shall not be liable to the extent of amendments or
modifications made to this Lease which (i) materially increase the Annual Rent
(or additional rent) payable under this Lease, or (ii) extend the Lease Term
beyond the initial term and any Extension Periods hereunder, without Tenant's
consent, which consent shall not be unreasonably withheld.
ARTICLE 17
DEFAULT; REMEDIES
17.01 Default. The occurrence of any one or more of the following
events shall constitute a material default under this Lease by Tenant:
(a) The vacating or abandonment of the Premises by Tenant.
(b) The failure by Tenant to make any payment when due of
Annual Rent, Impositions or any other payment required to be made by Tenant
hereunder, where such failure shall continue for a period of five (5) days after
written notice from Landlord, provided that Landlord shall no obligation to
provide such notice after three (3) defaults by Tenant in such payments in any
calendar year.
(c) Except as otherwise provided in this Lease, the failure by
Tenant to observe or perform any of the covenants, conditions, or provisions of
this Lease to be observed or performed by Tenant, other than described in
subparagraph (b) above, where such failure shall continue for a period of thirty
(30) days after written notice thereof from Landlord to Tenant; provided,
however, that if the nature of Tenant's noncompliance is such that more than
thirty (30) days are reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant commences such cure within said thirty
(30)-day period and thereafter diligently and in good faith prosecutes such cure
to completion.
(d) (i) The making by Tenant of any general arrangement or
general assignment for the benefit of creditors; (ii) Tenant becomes a "debtor"
as defined in 11 U.S.C. Section 101 or any successor statute thereto (unless, in
the case of a petition filed against Tenant, the same is dismissed within sixty
(60) days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within sixty
(60) days; or (iv) the attachment, execution, or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within sixty (60)
days. In the event that any provision of this Section 17.01(d) is contrary to
any applicable law, such provision shall be of no force or effect.
(e) The breach of any representation or warranty by Tenant
hereunder in any material respect, or if any financial statements delivered to
Landlord hereunder by Tenant are intentionally false or misleading in any
material respect.
(f) The default, breach or insolvency of any guarantor of this
Lease beyond any applicable notice and/or grace period under its guarantee.
(g) The default by Tenant under any other leases or agreements
with Landlord or any "affiliate of Landlord" (as hereinafter defined); provided
that this subparagraph (g) shall not apply with respect to any lease or
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agreement assigned by Landlord or any affiliate of Landlord to a person or
entity which is not an affiliate of Landlord. For purposes of this Lease,
"affiliate of Landlord" shall mean (i) a person or entity which owns ten percent
(10%) or more of the voting securities of Landlord, or (ii) a person or entity
which directly or indirectly controls or is controlled by Captec Financial
Group, Inc., a Michigan corporation.
17.02 Remedies. In the event of any such material default by Tenant,
Landlord may at any time thereafter, with or without notice or demand and
without limiting Landlord in the exercise of any right or remedy which Landlord
may have by reason of such default:
(a) Terminate Tenant's right to possession of the Premises by
any lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. In such event,
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default including, but not limited to, the cost
of recovering possession of the Premises, expenses of reletting, including
reasonable and necessary renovation and alteration of the Premises, reasonable
attorneys' fees, and any real estate commission actually paid; and the worth at
the time of award by the court having jurisdiction thereof of the amount by
which the unpaid rent for the balance of the term after the time of such award
exceeds the amount of such unpaid rent for the same period that Tenant proves
could be reasonably avoided.
(b) Maintain Tenant's right to possession of the Premises by
any lawful means, in which case this Lease and the term hereof shall continue in
effect whether or not Tenant shall have vacated or abandoned the Premises. In
such event Landlord shall be entitled to enforce all of Landlord's rights and
remedies under the Lease, including the right to recover the rent as it becomes
due hereunder.
(c) Pursue any other remedy now or hereafter available to
Landlord under the Laws of the jurisdiction where the Premises are located.
(d) To the extent permitted by Law, the rights and remedies
under this Lease provided shall be cumulative, and the exercise of any one right
or remedy shall not preclude the exercise of or act as a waiver of any other
right or remedy of Landlord hereunder, or which may be existing at law, or in
equity or by statute or otherwise.
(e) In addition to the foregoing, Tenant, and its successors
and assigns, shall at all times indemnify Landlord for, defend Landlord against
and save Landlord harmless from any liability, loss, cost, injury, damage or
other expense or risk (including, without limitation, reasonable attorneys'
fees) whatsoever, directly or indirectly, arising out of, resulting from or
otherwise in connection with (i) the failure for any reason on the part of
Tenant to perform, observe or comply with any of the covenants, conditions and
obligations under this Lease to be performed, observed or complied with by
Tenant, and/or (ii) the failure for any reason of any representation or warranty
given by Tenant in connection with the execution of this Lease by Landlord to be
materially true, complete and accurate.
17.03 Administrative Fee. Tenant hereby acknowledges that late payment
by Tenant to Landlord of rent and other sums due hereunder will cause Landlord
to incur administrative costs not contemplated by this Lease, the exact amount
of which will be extremely difficult to ascertain. Such administrative costs may
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed on Landlord by the terms of any superior lease,
mortgage or trust deed covering the Premises. Accordingly, if any installment of
rent or any other sum due from Tenant shall not be received by Landlord or
Landlord's designee within five (5) days of the date of written notice from
Landlord (if such notice is required under Section 17.01(b); otherwise within
five (5) days of the date due), then, without any requirement for further notice
to Tenant, Tenant shall pay to Landlord an administrative fee consisting of (a)
default interest equal to the reference rate publicly announced from time to
time by Bank of America, NT & SA, or any successor thereto, plus six percent
(6%) per annum (but in no event higher than the maximum rate permitted by Law)
multiplied by such overdue amount from the date such overdue amount was due
until paid, plus (b) a late charge equal to two percent (2%) of such overdue
amount (collectively, the "Administrative Fee"). The parties hereby agree that
such Administrative Fee represents a fair and reasonable estimate of the costs
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Landlord will incur by reason of late payment by Tenant. Acceptance of such
Administrative Fee by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder.
17.04 Default by Landlord. Landlord will commit a default if Landlord
fails to perform any provision of this Lease required of it and the failure is
not cured within thirty (30) days after notice has been given to Landlord. If,
however, the failure cannot reasonably be cured within the cure period, Landlord
will not be in default of this Lease if Landlord commences to cure the failure
within the cure period and diligently and in good faith continues to cure the
failure. Notices given under this Section 17.04 will specify the alleged breach
and the applicable Lease provisions. Tenant may, after expiration of the cure
period unless there is an emergency, correct or remedy any failure of Landlord
not timely cured and deduct the reasonable costs paid by Tenant from future rent
as it becomes due.
17.05 Mitigation. Landlord and Tenant will each exercise best efforts
to mitigate the damages caused by the other party's breach of this Lease.
Efforts to mitigate damages will not be construed as a waiver of a nonbreaching
party's right to recover damages.
17.06 Lender's Right to Cure. The respective lenders of each party will
have the right, on the party's behalf, to cure the party's alleged breach within
the same time period allocated under this Lease. Landlord shall upon written
request from Tenant provide copies of any notices of default given to Tenant
hereunder to lenders of Tenant as specified in such written request, provided,
however, that Landlord shall not be deemed to be in default hereunder if
Landlord fails to provide any such notices to any of Tenant's lenders nor shall
any such failure relieve Tenant from any liability hereunder or affect any of
Landlord's rights or remedies hereunder.
ARTICLE 18
SUBORDINATION
At Landlord's option, this Lease shall be subordinate to any superior
lease, mortgage, deed of trust, or any other hypothecation or security now or
hereafter placed upon the Premises and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements, and extensions thereof, provided that Landlord and any mortgagee
or beneficiary of Landlord shall execute the Subordination Agreement (as defined
below) with Tenant. In furtherance thereof, Tenant hereby agrees, upon request
by Landlord, to execute and deliver a subordination, non-disturbance and
attornment agreement substantially in the form attached hereto as Exhibit B
("Subordination Agreement") with respect to any such superior lease, mortgage,
deed of trust, hypothecation, or security.
ARTICLE 19
QUIET ENJOYMENT
Subject to the terms and conditions of this Lease and conditional upon
the performance of all of the provisions to be performed by Tenant hereunder,
Landlord agrees to secure to Tenant during the Lease Term and any and all
extensions thereof, the quiet and peaceful possession of the Premises and all
rights and privileges appertaining thereto and under this Lease.
ARTICLE 20
REPRESENTATIONS AND WARRANTIES
20.01 Representations and Warranties. To induce Landlord to enter into
this Lease, Tenant represents and warrants to Landlord and any mortgagee or
beneficiary of Landlord as follows:
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(a) It is a corporation duly organized and validly existing,
in good standing under the laws of California, has stock outstanding which has
been duly and validly issued, and is qualified to do business and is in good
standing in the jurisdiction in which the Premises are located with full power
and authority to consummate the transactions contemplated hereby.
(b) The execution and delivery of this Lease has been duly
authorized by all action as may be required under the terms and provisions of
its governing instruments and the laws of the jurisdiction where the Premises
are located; this Lease will not violate or result in any breach of, or
constitute a default under, or result in the creation of any lien, encumbrance,
attachment, charge or other right or claim of any other party upon any assets of
Tenant or upon Tenant's beneficiary interest under the terms of this Lease
pursuant to any instrument or applicable law to which Tenant is a party or by
which it may be bound or create in favor of or grant to any third party any
interest whatsoever in Tenant's interest under the terms of this Lease; this
Lease is valid and enforceable in accordance with its terms, and the execution
and delivery of this Lease, and the consummation of the transactions
contemplated hereby, does not require the approval or consent of any
governmental authority having jurisdiction over Tenant or its property, or if
such approval or consent is required, it has been obtained.
(c) Tenant's financial statements and, if applicable, the
guarantors' financial statements heretofore delivered to Landlord are true and
correct in all material respects, have been prepared in accordance with
generally accepted accounting principles, and fairly present the respective
financial conditions of the subjects thereof as of the respective dates thereof.
No materially adverse change has occurred in the financial conditions reflected
therein since the respective dates thereof.
(d) There are no actions, suits or proceedings pending, or to
the best of Tenant's knowledge, threatened, against or affecting it or the
Premises or any guarantor of this Lease, or involving the validity or
enforceability of this Lease, at law or in equity, or before or by any
governmental authority except actions, suits and proceedings fully covered by
insurance or which, if adversely determined, would not materially impair the
ability of Tenant or any guarantor of this Lease to satisfy their obligations
under this Lease or any guarantee of this Lease.
(e) Tenant is not in default under any obligation for the
payment of borrowed money, for the deferred purchase price of property or for
the payment of any rent under any lease agreement, which, either individually or
in the aggregate, would adversely affect the financial condition of Tenant, or
the ability of Tenant to perform its obligations hereunder, or comply with the
terms of this Lease.
20.02 Financial Statements. Tenant hereby covenants and agrees to
deliver: (i) audited annual financial statements for Tenant and any guarantor of
this Lease to Landlord within one hundred five (105) days after the end of
Tenant's and any such guarantor's respective fiscal years, (ii) management
prepared and certified quarterly financial statements for Tenant and any such
guarantor within sixty (60) days after the end of Tenant's and any such
guarantor's respective fiscal quarters, and (iii) annual unit level profit and
loss statements on the operations of the Premises within forty-five (45) days
after the end of Tenant's fiscal year, provided that in the event that Tenant's
profit and loss statements are prepared on a consolidated basis, Tenant hereby
covenants and agrees to prepare profit and loss statements specifically relating
to the Premises. Tenant agrees to assist Landlord in obtaining consent from
Tenant's and guarantor's accountant(s) in the event that Tenant's or guarantor's
financial statements are to be included in any regulatory filing or report to be
filed by Landlord. Tenant's failure to deliver financial statements pursuant to
this Section (where such failure shall continue for a period of fifteen (15)
days after written notice thereof from Landlord to Tenant) shall constitute a
material default under this Lease. Such financial statements shall be true and
correct in all material respects, be prepared in accordance with generally
accepted accounting principles, and fairly present the respective financial
conditions of the subjects thereof as of the respective dates thereof. Landlord
will maintain confidential and not disclose to third parties the financial
information furnished or revealed pursuant to this Lease except as may be
required, in Landlord's reasonable judgment, for the exercise of Landlord's
rights under this Lease as may be required by Law or compelled by legal
proceedings, for disclosure in confidence to prospective lenders, investors or
purchasers, or to third parties in connection with the closing of this
transaction.
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ARTICLE 21
SURRENDER OF PREMISES
Except for Alterations permitted or approved in accordance with Article
12 hereof and changes resulting from eminent domain proceedings, at the
expiration or sooner termination of the Lease Term, Tenant shall surrender the
Premises in good and clean condition, reasonable wear and tear excepted, and
shall surrender all keys for the Premises to Landlord at the place then fixed
for the payment of rent and shall inform Landlord of all combinations on locks,
safes and vaults, if any, in the Premises. Tenant shall at such time remove all
of Tenant's property and shall repair any damage to the Premises caused thereby,
and any or all of such property not so removed shall, at Landlord's option,
become the exclusive property of Landlord or be disposed of by Landlord, at
Tenant's cost and expense, without further notice to or demand upon Tenant. If
the Premises are not so surrendered, Tenant shall indemnify Landlord against
loss or liability resulting from the delay by Tenant in so surrendering the
Premises including, without limitation, any claims made by any succeeding
occupant founded on such delay. Tenant's obligation to observe or perform this
covenant shall survive the expiration or other termination of the Lease Term.
ARTICLE 22
BANKRUPTCY OR INSOLVENCY
22.01 Bankruptcy or Insolvency. Subject to applicable law, Landlord and
Tenant acknowledge and agree that the provisions of this Section 23.01 shall
control notwithstanding anything to the contrary contained in this Lease:
(a) In the event that Tenant shall become a debtor under
Chapter 7 of the Bankruptcy Reform Act of 1978, 11 U.S.C. 1 et seq ("Bankruptcy
Code"), and Tenant's trustee or Tenant shall elect to assume this Lease for the
purpose of assigning the same or otherwise, such election and assignment may be
made only if the provisions of this Section 22.01 are satisfied. If Tenant or
Tenant's trustee shall fail to assume this Lease within sixty (60) days after
the entry of an order for relief, this Lease shall be deemed to have been
rejected. Immediately thereupon Landlord shall be entitled to possession of the
Premises without further obligation to Tenant or Tenant's trustee and this
Lease, upon the election of Landlord, shall terminate, but Landlord's right to
be compensated for damages shall survive, whether or not this Lease shall be
terminated.
(b) In the event that a voluntary petition for reorganization
is filed by Tenant, or an involuntary petition is filed against Tenant under
Chapter 11 of the Bankruptcy Code, or in the event of the entry of an order for
relief under Chapter 7 in a case which is then transferred to Chapter 11,
Tenant's trustee or Tenant, as debtor-in-possession, must elect to assume this
Lease within sixty (60) days from the date of the filing of the petition under
Chapter 11 or the transfer thereto, or Tenant's trustee or the
debtor-in-possession shall be deemed to have rejected this Lease. Immediately
thereupon Landlord shall be entitled to possession of the Premises without
further obligation to Tenant or Tenant's trustee and this Lease, upon the
election of Landlord, shall terminate, but Landlord's right to be compensated
for damages, shall survive, whether or not this Lease shall be terminated.
(c) No election by Tenant's trustee or the
debtor-in-possession to assume this Lease, whether under Chapter 7 or Chapter
11, shall be effective unless each of the following conditions has been
satisfied:
(i) Tenant's trustee or the debtor-in-possession has cured
all defaults under this Lease, or has provided Landlord with evidence
satisfactory to Landlord that it will cure all defaults susceptible of
being cured by the payment of money within ten (10) days from the date
of such assumption and that it will cure all other defaults under this
Lease which are susceptible of being cured by the performance of any
act within thirty (30) days after the date of such assumption.
(ii) Tenant's trustee or the debtor-in-possession has
compensated, or has provided Landlord with evidence satisfactory to
Landlord that, within ten (10) days from the date of such assumption,
that it will compensate Landlord for any actual pecuniary loss incurred
by Landlord arising from
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the default of Tenant, Tenant's trustee, or the debtor-in-possession as
indicated in any statement of actual pecuniary loss sent by Landlord to
Tenant's trustee or the debtor-in-possession.
(iii) Tenant's trustee or the debtor-in-possession (A) has
provided Landlord with "Assurance", as hereinbelow defined, of the
future performance of each of the obligations under this Lease of
Tenant, Tenant's trustee or the debtor-in-possession, and (B) shall, in
addition to any other security deposits held by Landlord, deposit with
Landlord, as security for the timely payment of Annual Rent and for the
performance of all other obligations of Tenant under this Lease, an
amount equal to three (3) monthly installments of Annual Rent (at the
rate then payable), and (C) pay in advance to Landlord on the date each
installment of Annual Rent is due and payable, one-twelfth of Tenant's
annual obligations for Impositions to be made by Tenant pursuant to
this Lease. The obligations imposed upon Tenant's trustee or the
debtor-in-possession by this Section 22.01 shall continue with respect
to Tenant or any assignee of this Lease, after the conclusion of
proceedings under the Bankruptcy Code.
(iv) Such assumption will not breach or cause a default
under any provision of any other lease, mortgage, financing agreement
or other agreement by which Landlord is bound, relating to the
Premises.
(d) For purposes of Section 22.01(c)(iii) hereof, Landlord and
Tenant shall acknowledge that "Assurance" shall mean no less than:
(i) Tenant's trustee or the debtor-in-possession has and
will continue to have sufficient unencumbered assets after the payment
of all secured obligations and administrative expenses to assure
Landlord that sufficient funds will be available to fulfill the
obligations of Tenant under this Lease; and
(ii) To secure to Landlord the obligations of Tenant,
Tenant's trustee or the debtor-in-possession and to assure the ability
of Tenant, Tenant's trustee or the debtor-in-possession to cure the
defaults under this Lease, monetary and/or nonmonetary, there shall
have been: (A) sufficient cash deposited with Landlord, or (B) the
bankruptcy court shall have entered an order segregating sufficient
cash payable to Landlord, and/or (C) Tenant's trustee or the
debtor-in-possession shall have granted to Landlord a valid and
perfected first lien and security interest and/or mortgage in property
of Tenant, Tenant's trustee or the debtor-in-possession, acceptable as
to value and kind to Landlord.
(e) In the event that this Lease is assumed in accordance with
Section 22.01(b) hereof and thereafter Tenant is liquidated or files, or has
filed against it, a subsequent petition under any provision of the Bankruptcy
Code or any similar statute for relief of debtors, Landlord may, at its option,
terminate this Lease and all rights of Tenant hereunder, by giving Tenant notice
of its election to so terminate within thirty (30) days after the occurrence of
either of such events.
(f) If Tenant's trustee or the debtor-in-possession has
assumed this Lease pursuant to the terms and provisions of this Section 22.01
for the purpose of assigning (or elects to assign) this Lease, this Lease may be
so assigned only if the proposed assignee has provided adequate assurance of
future performance of all of the terms, covenants and conditions of this Lease
to be performed by Tenant. Landlord shall be entitled to receive all
consideration for such assignment, whether cash or otherwise. As used in this
Section 22.01(f) "adequate assurance of future performance" shall mean at least
that clauses (B) and (C) of Section 22.01(c)(iii) hereof and each of the
following conditions, has been satisfied:
(i) The proposed assignee has furnished Landlord with a
current financial statement audited by a certified public accountant
determined in accordance with generally accepted accounting principles
consistently applied indicating a credit rating, net worth and working
capital in amounts which Landlord reasonably determines to be
sufficient to assure the future performance of such assignee of
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<PAGE> 25
Tenant's obligations under this Lease, but in no event indicating a net
worth less than the net worth of the Tenant and any guarantors of this
Lease, on the date of execution hereof.
(ii) Such assignment will not breach or cause a default
under any provision of any other lease, mortgage, financing agreement
or other agreement by which Landlord is bound, relating to the
Premises.
(iii) The proposed assignment will not release or impair
any guarantee under this Lease.
(g) When, pursuant to the Bankruptcy Code, Tenant's trustee or
the debtor-in-possession shall be obligated to pay reasonable use and occupancy
charges for the use of the Premises, such charges shall not be less than the
Annual Rent and all additional rent payable by Tenant under this Lease and shall
be paid at the times and when due as though such charges were Annual Rent and
additional rent.
(h) Anything in this Lease to the contrary notwithstanding,
neither the whole nor any portion of Tenant's interest in this Lease or its
estate in the Premises shall pass to any trustee, receiver, assignee for the
benefit of creditors, or any other similar person or entity, or otherwise by
operation of law under the Bankruptcy Code or any similar federal statute now or
hereinafter enacted, or under the laws of any state, district or municipality
having jurisdiction of the person or property of Tenant unless Landlord shall
have consented to such transfer in writing. No acceptance by Landlord of rent or
any other payments from any such trustee, receiver, assignee, person or other
entity shall be deemed to constitute such consent by Landlord nor shall it be
deemed a waiver of Landlord's right to terminate this Lease for any transfer of
Tenant's interest under this Lease without such consent.
(i) Anything in this Lease to the contrary notwithstanding,
Tenant covenants and agrees that this Lease is an extension of financial
benefits and accommodations to Tenant which are uniquely personal in nature and
such financial benefits and accommodations are a material inducement for
Landlord's execution and delivery of this Lease and are an integral part of the
consideration for this Lease.
ARTICLE 23
HAZARDOUS MATERIALS
23.01 Representations and Warranties. Notwithstanding anything to the
contrary which may be contained in this Lease, Tenant represents, warrants and
covenants to Landlord as follows:
(a) To the best of Tenant's Knowledge (as defined below),
except as set forth in the Phase I Assessment prepared by Eckland Consultants,
Inc. dated May 13, 1996 and identified as Comm. No. 96-118-001-024 (the
"Assessment"), there are no and have been no violations of the Relevant
Environmental Laws (as hereinafter defined) respecting the Premises and no
consent orders have been entered with respect thereto, except for minor
occurrences of noncompliance, none of which will have a materially adverse
effect on the value or use or operation of the Premises for its intended purpose
or the ability of Tenant to perform its obligations under this Lease (a
"Material Adverse Effect").
(b) To the best of Tenant's Knowledge, except as disclosed in
the Assessment, there are no and have been no Hazardous Wastes (as hereinafter
defined) or Asbestos (as hereinafter defined) either at, upon, under or within,
or discharged or emitted at or from, the Premises, including, but not limited
to, the air, soil, surface, and ground water; no Hazardous Wastes or Asbestos
have flowed, blown or otherwise become present at the Premises from neighboring
land; and no Hazardous Wastes or Asbestos have been removed from the Premises
other than those Hazardous Wastes or Asbestos which are used and/or incidental
to the ordinary course of Tenant's business provided that the same are used,
stored, handled and disposed of in accordance with all Relevant Environmental
Laws and all applicable Laws, industry standards and manufacturers'
specifications.
(c) The Premises will not be used for the purpose of storing
Hazardous Wastes, and no such storage or use will otherwise be allowed on the
Premises which will cause or increase the likelihood of causing the
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<PAGE> 26
release of Hazardous Wastes onto the Premises other than those Hazardous Wastes
which are used and/or incidental to the ordinary course of Tenant's business
provided that the same are used, stored, handled and disposed of in accordance
with all Relevant Environmental Laws and all applicable Laws, industry standards
and manufacturers' specifications. Neither Tenant, nor to the best of Tenant's
Knowledge any third party, has installed, used or removed any storage tanks on,
from or in connection with the Premises, except in full compliance with all
Relevant Environmental Laws, and to the best of Tenant's Knowledge, there are no
storage tanks or wells (whether existing or abandoned) located on, under or
about the Premises. To the best of Tenant's Knowledge, the Premises does not
consist of any building materials that contain Hazardous Wastes or Asbestos.
(d) Tenant is not aware of any claims or litigation, and has
not received any communication from any person (including any governmental
authority), concerning the presence or possible presence of Hazardous Wastes or
Asbestos at or adjacent to the Premises or concerning any violation or alleged
violation of the Relevant Environmental Laws respecting the Premises. Tenant
shall promptly notify Landlord of any such claims and shall furnish Landlord
with a copy of any such communications received by Tenant.
(e) Tenant shall notify Landlord promptly and in reasonable
detail in the event that Tenant becomes aware of or suspects the presence of
Hazardous Wastes or Asbestos (other than those Hazardous Wastes or Asbestos
which are used and/or incidental to the ordinary course of Tenant's business
provided that the same are used, stored, handled and disposed of in accordance
with all Relevant Environmental Laws and all applicable Laws, industry standards
and manufacturers' specifications) or a violation of the Relevant Environmental
Laws, at or adjacent to the Premises.
(f) Tenant shall ensure that the Premises comply and continue
to comply in all respects with the Relevant Environmental Laws.
(g) If the Premises are used or maintained so as to subject
Tenant, Landlord or any mortgagee or beneficiary of Landlord or the user of the
Premises to a claim of violation of the Relevant Environmental Laws (unless
contested in good faith by appropriate proceedings), Tenant shall immediately
cease or cause a cessation of such use or operations and shall remedy and fully
cure any conditions arising therefrom, at its own cost and expense.
(h) Upon Landlord's reasonable belief that there is a breach
of one of the environmental representations or warranties set forth above,
Tenant shall permit Landlord, at its option, at any time upon five (5) days'
prior written notice to Tenant, to cause or conduct a complete environmental
audit to be performed. The audit shall be at Tenant's sole cost and expense.
23.02 Definitions.
(a) The "Relevant Environmental Laws," as referred to herein,
shall mean all applicable federal, state and local laws, rules, regulations,
orders, judicial determinations, and decisions or determinations by any
judicial, legislative or executive body of any governmental or
quasi-governmental entity, whether in the past, the present or the future, with
respect to: (A) the installation, existence, or removal of, or exposure to,
Asbestos on the Premises; (B) the existence on, discharge from, or removal from
the Premises of Hazardous Wastes; or (C) the effects on the environment of the
Premises or of any activity now, previously, or hereafter conducted on the
Premises. The Relevant Environmental Laws shall include, but not be limited to,
the following: (1) the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Sections 9601 et seq.; the Superfund Amendments and
Reauthorization Act, Public Law 99-499, 100 Stat. 1613; the Resource
Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq.; the National
Environmental Policy Act, 42 U.S.C. Section 4321; the Safe Drinking Water Act,
42 U.S.C. Sections 300F et seq.; the Toxic Substances Control Act, 15 U.S.C.
Section 2601; the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801; the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq.;
the Clean Air Act, 42 U.S.C. Sections 7401 et seq.; and the regulations
promulgated in connection therewith; (2) Environmental Protection Agency
regulations pertaining to Asbestos (including 40 C.F.R. Part 61, Subpart M);
Occupational Safety and Health Administration regulations pertaining to Asbestos
(including 29
22
<PAGE> 27
C.F.R. Sections 1910.1001 and 1926.58); as each may now or hereafter be amended;
and (3) any state and local laws and regulations pertaining to Hazardous Wastes
and/or Asbestos;
(b) "Asbestos," as referred to herein, shall have the meanings
provided under the Relevant Environmental Laws, and shall include, but not be
limited to, asbestos fibers and friable asbestos, as such terms are defined
under the Relevant Environmental Laws; and
(c) "Hazardous Wastes," as referred to herein, shall mean any
of the following as defined by the Relevant Environmental Laws: solid wastes;
petroleum and petroleum derivatives; natural or synthetic gas; radon gas; toxic
or hazardous substances, wastes, pollutants or contaminants (including, but not
limited to, polychlorinated biphenyls ("PCB's"), paint containing lead, and urea
formaldehyde); and discharges of sewage or effluent.
(d) "Knowledge" shall mean the actual knowledge of any
executive officer of Tenant after due inquiry (and Tenant hereby acknowledges
that such due inquiry has been made) of the appropriate employees of Tenant's
real estate, construction, facilities, lease administration and legal
departments.
23.03 Tenant's Obligation. At its sole cost and expense, Tenant shall:
(a) Pay immediately when due the cost of compliance with the
Relevant Environmental Laws.
(b) Keep the Premises free of any lien imposed pursuant to the
Relevant Environmental Laws.
23.04 Landlord Options. In the event that Tenant fails to comply with
the requirements of this Article 23, after notice to Tenant and the earlier of
the expiration of any applicable cure period hereunder, or the expiration of the
cure period permitted under the Relevant Environmental Laws, if any, or such
earlier time if Landlord determines that life, person or property is in
jeopardy, Landlord may, but shall not be obligated to, exercise its right to do
one or more of the following: (a) declare that such failure constitutes a
default; and/or (b) take any and all actions, at Tenant's expense, that Landlord
reasonably deems necessary or desirable to cure said failure of compliance. Any
costs incurred pursuant to this Section 23.04 shall become immediately due and
payable by Tenant together with the applicable Administrative Fee, and shall be
paid or reimbursed to Landlord promptly upon written notice from Landlord.
23.05 Indemnity. Landlord shall not be liable for and Tenant shall
immediately pay to Landlord when incurred and shall indemnify, defend and hold
Landlord harmless from and against, all loss, cost, liability, damage and
expense (including, but not limited to, attorneys' fees and costs incurred in
the investigation, defense and settlement of claims) that Landlord may suffer or
incur as a result of or in connection in any way with any Asbestos or Hazardous
Wastes now or hereafter present, discharged, released, generated, disposed,
transported or emitted to, from, in, on or under the Premises, or in connection
with any violation of any of the Relevant Environmental Laws, or any
environmental assessment or study from time to time undertaken or requested by
Tenant or Landlord, or breach of any representation, covenant or undertaking by
the Tenant herein.
23.06 Survival. The provisions of this Article 23 shall survive the
expiration or termination of the Lease Term.
ARTICLE 24
GENERAL PROVISIONS
24.01 Estoppel Certificates. Each party ("Responding Party") shall at
any time upon not less than fifteen (15) days' prior written notice from the
other party ("Requesting Party") execute, acknowledge, and deliver to the
Requesting Party a statement in a form reasonably satisfactory to Landlord
certifying and acknowledging the following: (i) that this Lease represents the
entire agreement between Landlord and Tenant, and is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so
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modified, is in full force and effect) and the date to which the Annual Rent and
other charges are paid in advance, if any; and (ii) that there are not, to the
Responding Party's knowledge, any uncured defaults on the part of the Requesting
Party, or specifying such defaults if any are claimed. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises or of the business of the Requesting Party.
24.02 Severability. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.
24.03 Entire Agreement. It is understood that there are no oral or
other written agreements or representations between the parties hereto
concerning the subject matter of this Lease, and that this Lease and the
Exhibits hereto supersede and cancel any and all previous negotiations,
arrangements, representations, brochures, displays, projections, estimates,
agreements, and understandings, if any, made by Landlord and Tenant with respect
to the subject matter hereof, and none thereof shall be used to interpret,
construe, supplement, or contradict this Lease. This Lease, and the Exhibits
hereto, and all amendments hereto, constitute and shall be considered to be the
only agreement between the parties hereto and their representatives and agents.
All negotiations and oral agreements acceptable to both parties have been merged
into and are included herein and in the Exhibits hereto.
24.04 Notices. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal delivery, certified mail,
return receipt requested, by facsimile telecopy or by nationally recognized
overnight courier service and if given by mail or courier service, shall be
deemed sufficiently given if addressed to Tenant or to Landlord, as the case may
be, at the addresses noted in Article 1 hereof. Delivery by courier will be
deemed given on the date indicated in the courier's records; delivery by
certified mail will be deemed given on the date indicated on the return receipt;
and delivery by facsimile telecopy will be deemed given after receipt of written
confirmation of the transmission. Either party may by notice to the other
specify a different address for notice purposes. A copy of all notices required
or permitted to be given hereunder shall be concurrently transmitted to such
party or parties at such addresses as Landlord may from time to time hereafter
be designated by notice to Tenant.
24.05 Waivers. No waiver by a party of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by the
other party of the same of any other provision. Landlord's consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent.
24.06 Recording. Either Landlord or Tenant shall, upon request of the
other, execute, acknowledge, and deliver to the other a "short form" memorandum
of this Lease for recording purposes. Such memorandum shall be in a form
reasonably acceptable to Landlord and sufficient for Tenant to obtain a
leasehold policy of title insurance based thereon. In the event of any
termination of this Lease, Tenant agrees to execute and deliver to Landlord a
termination agreement satisfactory to Landlord, which termination agreement
shall be similarly recorded.
24.07 Holding Over. If Tenant remains in possession of the Premises or
any part thereof after the expiration or termination of the Lease Term, such
occupancy shall be a tenancy from month-to-month upon all the provisions of this
Lease pertaining to the obligations of Tenant and Tenant shall thereby waive its
rights to any additional notice to quit, but all options, if any, granted under
the terms of this Lease shall be deemed terminated and be of no further force or
effect. The monthly rental during such hold-over period shall be equal to one
hundred twenty-five percent (125%) of the monthly installment of Annual Rent
payable immediately prior to expiration or termination of the Lease Term. In
addition, Tenant shall continue to be obligated to pay all Impositions and other
amounts required to be paid by the terms of this Lease.
24.08 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
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24.09 Choice of Law. The laws of the jurisdiction in which the Premises
are located shall govern the validity, performance, and enforcement of this
Lease.
24.10 Attorneys' Fees. Should either party institute any action or
proceeding to enforce any provision hereof or for a declaration of such party's
rights or obligations hereunder, the prevailing party shall be entitled to
receive from the losing party such amounts as the court may adjudge to be
reasonable attorneys' fees for services rendered to the party prevailing in any
such action or proceeding, and such fees shall be deemed to have accrued upon
the commencement of such action or proceeding.
24.11 Force Majeure. Except for payment obligations imposed pursuant to
this Lease, if there is any prevention, delay or stoppage of an act required of
a party pursuant to this Lease because of strikes, lockouts, other labor
disputes, material shortages, embargoes, civil unrest, governmental regulations,
governmental controls, enemy or hostile governmental action, judicial order,
public emergency, fire, earthquake, other acts of God, and other causes beyond
the reasonable control of the party obligated to perform, performance of the act
will be excused for the period of the delay.
24.12 Consent. Whenever the consent or approval of either party is
required pursuant to this Lease, such consent or approval will not be
unreasonably withheld or delayed except as otherwise expressly provided herein.
24.13 Liability of Landlord.
(a) In the event of any sale or other transfer of Landlord's
interest in the Premises, Landlord shall be and hereby is entirely freed and
relieved of all liabilities and obligations of Landlord hereunder with respect
to the Premises to the extent accruing after the date of such transfer.
(b) Notwithstanding anything contained herein to the contrary,
it is specifically understood and agreed that there shall be no personal
liability of Landlord or any of its shareholders, members, officers or directors
in respect of any of the terms, covenants, conditions or provisions of this
Lease, and in the event of a breach or default by Landlord of any of its
liabilities and obligations under this Lease, Tenant and any persons claiming
by, through or under Tenant shall look solely to the equity of Landlord in the
Premises for the satisfaction of Tenant's and/or such persons' remedies and
claims for damages.
24.14 No Merger. There shall be no merger of this Lease, or the
leasehold estate created by this Lease, with any other estate or interest in the
Premises, or any part thereof, by reason of the fact that the same person, firm,
corporation or other entity may acquire or own or hold, directly or indirectly,
(a) this Lease or the leasehold estate created by this Lease, or any interest in
this Lease or in any such leasehold estate, and (b) any such other estate or
interest in the Premises or any part thereof; and no such merger shall occur
unless and until all persons, corporations, firms and other entities having an
interest (including a security interest) in (i) this Lease or the leasehold
estate created by this Lease; and (ii) any such other estate or interest in the
Premises, or any part thereof, shall join in a written instrument effecting such
merger and shall duly record the same.
24.15 Reports. Tenant agrees to furnish to Landlord, with reasonable
promptness, financial statements, reports, documents and information regarding
the financial condition and affairs of Tenant or any guarantor, which Tenant and
each guarantor of this Lease sends to or makes available to its shareholders,
noteholders or bondholders. In addition to the foregoing, Tenant shall obtain
and deliver to Landlord, with reasonable promptness, such other information
respecting the operation of the Premises as Landlord may from time to time
reasonably request.
24.16 Definition of Rent. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, without limitation, the Real
Property Taxes and insurance premiums payable hereunder shall be deemed to be
"rent".
24.17 Interpretation. The captions by which the Articles and Sections
of this Lease are identified are for convenience only and shall have no effect
upon the interpretation of this Lease. Whenever the context so requires,
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<PAGE> 30
singular numbers shall include the plural, the plural shall refer to the
singular, the neuter gender shall include the masculine and feminine genders,
and the words "Landlord" and "Tenant" and "person" shall include corporations,
partnerships, associations, other legal entities, and individuals.
24.18 Relationship of the Parties. Nothing in this Lease shall create a
partnership, joint venture, employment relationship, borrower and lender
relationship, or any other relationship between Landlord and Tenant other than
the relationship of landlord and tenant.
24.19 Successors. This Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective personal and legal
representatives, heirs, successors, and assigns.
24.20 Modifications. This Lease may not be altered, amended, changed,
waived, terminated, or modified in any manner unless the same shall be in
writing and signed by or on behalf of the party to be bound. No waiver of any
provision of this Lease of any right of Landlord hereunder shall be effective
unless in writing signed by or on behalf of the person to be bound.
24.21 Brokerage Fees. Landlord and Tenant each represent and warrant
that they have not employed a broker in connection with the execution of this
Lease. Landlord and Tenant shall each indemnify and hold the other harmless from
and against any claim or claims for brokerage or other commissions arising from
such party having employed a broker contrary to its representation in this
Section 25.21.
24.22 Not Binding Until Executed. This Lease does not constitute an
"offer" and is not binding until fully executed and delivered by Landlord.
24.23 Counterparts. This Lease may be executed in one or more
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
26
<PAGE> 31
WITNESSES: LANDLORD:
CAPTEC NET LEASE REALTY, INC.
By
______________________________ ____________________________
Its
______________________________ _________________________
TENANT:
ARG ENTERPRISES, INC.
By
______________________________ ____________________________
Its
______________________________ _________________________
STATE OF MICHIGAN )
: ss.
COUNTY OF WASHTENAW )
The foregoing instrument was acknowledged before me this_____day of
September, 1996, by Gary A. Bruder, as Vice President of Captec Net Lease
Realty, Inc., a Michigan corporation, on behalf of the corporation.
____________________________________
Notary Public
Washtenaw County, Michigan
My Commission Expires:______________
[Notary Public's Seal]
STATE OF NEW YORK )
: ss.
COUNTY OF _______________ )
The foregoing instrument was acknowledged before me this ________ day
of September, 1996, by __________________, as _________________ of ARG
Enterprises, Inc., a California corporation, on behalf of the corporation.
____________________________________
Notary Public
Washtenaw County, Michigan
My Commission Expires:______________
[Notary Public's Seal]
27
<PAGE> 32
EXHIBIT A
TO
LEASE
Land situated in the County of Hennepin, State of Minnesota, and more
particularly described as follows:
That part of Lot 1, except the West 50.00 feet thereof, and Lots 2 and 3 in
Block 2, Oak Knoll Second Addition, according to the recorded plat thereof which
lies south of the North 92.00 feet of said lots and lying Southwesterly of a
line and its extensions. Said line is described as follows: Beginning at a
point on the East line of said Lot 3 distant 160.00 feet Northerly from the
Southeast corner of said Lot 3; thence Northwesterly to a point on the South
line of the North 92.00 feet of said lots distant 43.86 feet Westerly from the
East line of said Lot 3, as measured along the South line of the North 92.00
feet of said lots, and said line there terminating.
Torrens Certificate Number: 631365
A-1
<PAGE> 33
EXHIBIT B
TO
LEASE
CAPTEC NET LEASE REALTY, INC.,
ARG ENTERPRISES, INC.
AND
CS FIRST BOSTON MORTGAGE CAPITAL CORP.
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
Dated: September _____, 1996
Location: 10600 Wayzata, Minnetonka, Minnesota
Lease No.: 06154
RECORD AND RETURN TO:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Charles J. Hamilton, Jr., Esq.
B-1
<PAGE> 34
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
(this "Agreement") is made and entered into as of the ____ day of September,
1996, by and among (i) ARG ENTERPRISES, INC., a California corporation
("Tenant"); (ii) CAPTEC NET LEASE REALTY, INC., a Michigan corporation
("Landlord"); and (iii) CS FIRST BOSTON MORTGAGE CAPITAL CORP., a Delaware
corporation ("Lender").
WITNESSETH:
WHEREAS, Lender is or may become the holder of a certain
mortgage/deed of trust ("Mortgage/Deed of Trust") encumbering that certain
parcel of real property and the improvements thereon, commonly known as the
Stuart Anderson's Cattle Company restaurant located at 4470 West 78th Circle,
Bloomington, Minnesota, and more particularly described in Schedule 1 attached
hereto and incorporated herein by this reference (the "Property");
WHEREAS, Lender and Landlord are parties to the Mortgage/Deed
of Trust, pursuant to which Landlord financed the Property from Lender; and
WHEREAS, Landlord and Tenant are parties to that certain
Lease, dated September ___, 1996 (the "Lease"), pursuant to which Tenant leased
the Property from Landlord.
NOW, THEREFORE, in consideration for the mutual covenants and
agreements contained herein, the sufficiency of which is hereby acknowledged,
the parties hereto hereby agree as follows:
1. Subordination. Subject to the terms of this Agreement, the
Lease and all of the terms, covenants and provisions thereof and all rights,
remedies and options of Tenant thereunder are hereby made, and shall at all
times continue to be, subject, junior and subordinate in all respects to the
Mortgage/Deed of Trust and to the lien thereof and to all increases, renewals,
modifications, spreaders, consolidations, replacements and extensions thereof
and to the rights of Lender thereunder and to any and all sums secured thereby,
with the same force and effect as if the Mortgage/Deed of Trust and all other
such instruments had been executed, delivered and recorded prior to the
execution of the Lease. However, Tenant covenants and agrees that if requested
by Lender it will execute, acknowledge and deliver any instrument or document
reasonably requested to confirm the foregoing subordination of the Lease within
twenty (20) days after receipt of written request therefor.
2. Non-Disturbance. So long as (i) the term of the Lease shall
have commenced pursuant to the provisions thereof, (ii) Tenant shall be in
possession of the Property, (iii) the Lease shall be in full force and effect
and (iv) Tenant is not in default in the payment of rent or any other sums
payable under the Lease or any of the other terms, covenants or conditions of
the Lease on Tenant's part to be performed beyond any applicable grace or cure
period provided in the Lease, then: (a) Tenant's possession of the Property
shall not be diminished or interfered with by Lender or any third party
purchaser; (b) the Lease shall not be terminated or affected by the foreclosure
of the Mortgage/Deed of Trust or the Lender's exercise of any remedy provided
for in the Mortgage/Deed of Trust; and (c) in the event that Lender forecloses
upon the Property, Lender shall elect to preserve the Lease as a lease between
Lender and Tenant in accordance with the terms of this Agreement.
3. Attornment. In the event that Lender or any successors in
interest to Lender shall become the owner of the Property by reason of the
foreclosure of the Mortgage/Deed of Trust or the acceptance of a deed or
assignment in lieu of foreclosure or otherwise, then:
(a) Tenant shall be bound to Lender, and Lender shall be bound
to Tenant, under all of the terms, covenants and conditions of the Lease for the
balance of the term thereof remaining, and any extensions or renewals thereof
which may be effected in accordance with any option therefor contained in the
Lease, with the same
B-2
<PAGE> 35
force and effect as if Lender were the original landlord under the Lease, except
that Paragraph 3(b) below and the other provisions of this Agreement shall
modify the Lease, and Tenant does hereby attorn to Lender as its landlord, said
attornment to be effective and self-operative without the execution of any
further instruments; provided, however, that within twenty (20) days after
receipt of written request therefor from Lender, Tenant will execute and deliver
to Lender any instrument or other documents reasonably requested by Lender to
confirm Tenant's attornment to Lender.
(b) Notwithstanding the foregoing, however, it is agreed that
in no event shall Lender:
(1) be liable for any act or omission of any prior
landlord (including Landlord);
(2) be obligated to cure any defaults of any prior
landlord (including Landlord) which occurred prior to
the date that Lender succeeded to the interest of such
prior landlord under the Lease; provided that from and
after the date Lender becomes owner of the Property,
Lender shall be obligated to cure any continuing
non-monetary default of the landlord under the Lease
to the extent such default is capable of being cured
by Lender;
(3) be subject to any offsets or defenses which Tenant may
be entitled to assert against any prior landlord
(including Landlord) with respect to events occurring
prior to the date Lender succeeded to Landlord's
interest;
(4) be bound by any Annual Rent or other amounts paid by
Tenant to any prior landlord (including Landlord) more
than one (1) month in advance of the date that Lender
succeeded to the interest of such prior landlord under
the Lease; or
(5) be bound by any amendment or modification of the Lease
or any supplemental agreement made without the written
consent of Lender, such consent not to be unreasonably
withheld.
(c) The terms of the Lease shall be further amended by (i)
removing any offsets, claims or counterclaims which shall have accrued to Tenant
against Landlord prior to the date on which Lender or its successor in interest
shall have become the owner of the Property and (ii) providing that Lender shall
not be liable for any security deposit or other monies not actually received by
Lender.
4. Amendments. Tenant shall not, without the prior written
consent of Lender (a) enter into any agreement amending, modifying or
terminating the Lease, (b) prepay any of the rents, additional rents or other
sums due under the Lease for more than one (1) month in advance of the due date
thereof, (c) voluntarily surrender the Property or terminate the Lease without
cause or shorten the term thereof, or (d) assign the Lease or sublet the
Property or any part thereof, except to the extent permitted under the Lease;
and any such amendment, modification, termination, prepayment, voluntary
surrender, assignment or subletting, without the prior written consent of Lender
(such consent not be unreasonably withheld) shall not be binding on Lender,
except to the extent permitted under the Lease.
5. Tenant's Representations and Warranties. Tenant hereby
represents and warrants to Lender that as of the date hereof (a) Tenant is the
owner and holder of the tenant's interest under the Lease, (b) a true and
complete copy of the Lease is annexed hereto and made a part hereof as Schedule
2 and the Lease has not been modified or amended, (c) the Lease is in full force
and effect and the term thereof commenced on September ___, 1996 pursuant to the
provisions thereof, (d) the Property has been completed and Tenant has taken
possession of the same on a rent paying basis, (e) neither Tenant nor the
Landlord is in default under any of the terms, covenants or provisions of the
Lease and Tenant to the best of its knowledge knows of no event which but for
the passage of time or the giving of notice or both would constitute an event of
default by Tenant or the Landlord under the Lease,
B-3
<PAGE> 36
(f) neither Tenant nor the Landlord has commenced any action or given or
received any notice for the purpose of terminating the Lease, (g) all rents,
additional rents and other sums due and payable under the Lease have been paid
in full and no rents, additional rents or other sums payable under the Lease
have been paid for more than one (1) month in advance of the due dates thereof,
and (h) there are no offsets or defenses to the payment of the rents, additional
rents, or other sums payable under the Lease.
6. Payment of Rent to Lender. Tenant agrees to pay the rent
and any other payments due under the Lease to Lender upon receipt of written
notice from Lender that it has succeeded to the interest of Landlord under the
Lease, and Landlord agrees that Tenant is entitled to rely conclusively upon
such notice without any duty of inquiry.
7. Limitation on Liability of Lender. There shall be no
personal liability on the part of Lender or any officer, director, employee,
shareholder or partner of Lender for the performance of the Lease or any
covenant or agreement contained therein or in this Agreement. Tenant shall look
solely to Lender's estate and interest in the Property, if any, for the
satisfaction of every remedy of Tenant for any breach by Lender under the Lease
or this Agreement or otherwise arising out of or in connection with the Lease,
and Lender is hereby released or relieved of any other liability hereunder and
under the Lease. Tenant agrees that with respect to any money judgment which may
be obtained or secured by Tenant against Lender, Tenant shall look solely to the
estate or interest owned by Lender in the Property and Tenant will not collect
or attempt to collect any such claim out of any other assets of Lender.
8. Performance by Lender: Conflict. Nothing in this Agreement
shall be or be deemed to be an agreement by Lender to perform any obligation of
Landlord under the Lease unless and until the Lender acquires the Property, and
then only if required to do so by the terms of the Lease, as modified and
limited by this Agreement. In the event of any conflict between the terms of
this Agreement and the terms of the Lease, the terms of this Agreement shall
control.
9. Notices. Any notice required or permitted to be given
hereunder shall be in writing and may be given by personal delivery, certified
mail, return receipt requested, by facsimile telecopy or by nationally
recognized overnight courier service and if given by mail or courier service,
shall be deemed sufficiently given if addressed to the parties at the addresses
set forth below. Delivery by courier will be deemed given on the date indicated
in the courier's records; delivery by certified mail will be deemed given on the
date indicated on the return receipt; and delivery by facsimile telecopy will be
deemed given after receipt of written confirmation of the transmission. Any
party may by notice specify a different address for notice purposes.
Addresses for Notices:
To Lender: CS First Boston Mortgage Capital Corp.
55 E. 52nd Street
New York, New York 10055
Attention: Laura Goldberg
Fax: (212) 318-1468
To Landlord: Captec Net Lease Realty, Inc.
24 Frank Lloyd Wright Drive
Lobby L, 4th Floor
P.O. Box 544
Ann Arbor, Michigan 48106-0544
Attention: Gary A. Bruder
Fax: (313) 994-1376
To Tenant: ARG Enterprises Inc.
4410 El Camino Real, Suite 201
Los Altos, California 94022
B-4
<PAGE> 37
Attention: Director of Real Estate
Fax: (415) 949-6420
with a copy to: American Restaurant Group, Inc.
4410 El Camino Real, Suite 201
Los Altos, California 94022
Attention: Legal Department
Fax: (415) 949-6420
10. Successors and Assigns. This Agreement and each and every
covenant and provision contained herein shall be binding upon and shall inure to
the benefit of the parties hereto and their respective representatives,
successors and assigns.
11. Governing Law; Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the jurisdiction in
which the Property is located.
12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, INTENTIONALLY AND FREELY WAIVES TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OTHER PARTY HERETO IN RESPECT OF ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.
13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
B-5
<PAGE> 38
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the date hereinabove first written.
WITNESSES: TENANT:
ARG ENTERPRISES, INC.
_______________________________ By____________________________
_______________________________ Its_____________________________
WITNESSES: LANDLORD:
CAPTEC NET LEASE REALTY, INC.
_______________________________ By____________________________
_______________________________ Its_____________________________
WITNESSES: LENDER:
CS FIRST BOSTON MORTGAGE
CAPITAL CORP.
_______________________________ By____________________________
_______________________________ Its_____________________________
Prepared By:
Diane B. Cabbell, Esq.
Miller, Canfield, Paddock and Stone, P.L.C.
101 North Main, 7th Floor
Ann Arbor, Michigan 48104
B-6
<PAGE> 39
STATE OF NEW YORK )
: ss.
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this ___
day of September, 1996, by __________________, as ___________ of ARG
ENTERPRISES, INC., a California corporation on behalf of the corporation.
______________________________________
Notary Public
__________ County, New York
My commission Expires:____________
[Notary Public's Seal]
STATE OF MICHIGAN )
: ss.
COUNTY OF WASHTENAW )
The foregoing instrument was acknowledged before me this ___
day of September, 1996, by __________________, as ___________ of CAPTEC NET
LEASE REALTY, INC., a Michigan corporation, on behalf of the corporation.
______________________________________
Notary Public
__________ County, New York
My commission Expires:____________
[Notary Public's Seal]
STATE OF NEW YORK )
: ss.
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me this ___
day of September, 1996, by __________________, as ___________ of CS FIRST BOSTON
MORTGAGE CAPITAL CORP., a Delaware corporation, on behalf of the corporation.
______________________________________
Notary Public
__________ County, New York
My commission Expires:____________
[Notary Public's Seal]
B-7
<PAGE> 40
SCHEDULE 1
to
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
Land situated in the County of Hennepin, State of Minnesota, and more
particularly described as follows:
That part of Lot 1, except the West 50.00 feet thereof, and Lots 2 and 3 in
Block 2, Oak Knoll Second Addition, according to the recorded plat thereof which
lies south of the North 92.00 feet of said lots and lying Southwesterly of a
line and its extensions. Said line is described as follows: Beginning at a
point on the East line of said Lot 3 distant 160.00 feet Northerly from the
Southeast corner of said Lot 3; thence Northwesterly to a point on the South
line of the North 92.00 feet of said lots, and said line there terminating.
Torrens Certificate Number: 631365
B-8
<PAGE> 41
SCHEDULE 2
to
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
[Copy of the Lease]
[Intentionally Omitted from Copy Submitted for Recording.]
B-9
<PAGE> 1
EXHIBIT 2.4
Lease No. 06153
5696 University Avenue NE
Fridley, Minnesota
LEASE
BETWEEN
CAPTEC NET LEASE REALTY, INC.
AND
ARG ENTERPRISES, INC.
Dated: September __, 1996
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE 1 FUNDAMENTAL LEASE PROVISIONS......................... 1
ARTICLE 2 EXHIBITS............................................. 2
ARTICLE 3 PREMISES............................................. 2
ARTICLE 4 TERM................................................. 2
4.01 Term................................................. 2
4.02 Option to Extend Lease Term.......................... 2
ARTICLE 5 LIENS................................................ 3
ARTICLE 6 RENT................................................. 3
6.01 Rent................................................. 3
6.02 Rental Adjustments................................... 4
6.03 Net Lease; Impositions............................... 4
ARTICLE 7 USE OF THE PREMISES.................................. 5
7.01 Use.................................................. 5
7.02 Compliance With Law.................................. 5
7.03 Permits and Licenses................................. 5
ARTICLE 8 UTILITIES............................................ 5
8.01 Payment.............................................. 5
8.02 Interruption in Service.............................. 5
ARTICLE 9 TAXES................................................ 6
9.01 Payment of Taxes..................................... 6
9.02 Definition of "Real Property Taxes".................. 6
9.03 Personal Property Taxes.............................. 6
9.04 Tenant's Right to Contest Taxes...................... 6
ARTICLE 10 MAINTENANCE AND REPAIRS.............................. 7
10.01 Tenant's Obligations................................. 7
10.02 Landlord's Obligations............................... 8
10.03 Landlord's Rights.................................... 8
ARTICLE 11 INSURANCE AND INDEMNIFICATION........................ 8
11.01 Tenant's Insurance Obligation........................ 8
11.02 Subrogation Waiver................................... 9
11.03 Insurance Use Restrictions........................... 10
11.04 Indemnification...................................... 10
11.05 Payment of Insurance................................. 10
ARTICLE 12 ALTERATIONS.......................................... 11
12.01 Permitted Improvements............................... 11
12.02 Liens................................................ 11
12.03 Structural Alterations............................... 11
12.04 Removal of Alterations............................... 11
12.05 Alterations Required by Law.......................... 11
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<PAGE> 3
<TABLE>
<S> <C> <C>
12.06 General Conditions Relating to Alterations.................... 11
ARTICLE 13 SIGNS......................................................... 12
ARTICLE 14 DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD ................... 12
14.01 Obligation to Rebuild......................................... 12
14.02 No Abatement of Rent.......................................... 12
ARTICLE 15 EMINENT DOMAIN................................................ 13
15.01 Total Taking.................................................. 13
15.02 Partial Taking................................................ 13
15.03 Award......................................................... 13
15.04 Transfer Under Threat of Taking............................... 13
ARTICLE 16 ASSIGNMENT AND SUBLETTING..................................... 14
16.01 Landlord's Consent Required................................... 14
16.02 Assumption of Obligations..................................... 14
16.03 Assignment to Affiliate....................................... 14
16.04 Hypothecation of Lease........................................ 14
16.05 Corporate/Partnership/Limited Liability Company Restrictions.. 14
16.06 No Release of Tenant.......................................... 14
ARTICLE 17 DEFAULT; REMEDIES............................................. 15
17.01 Default....................................................... 15
17.02 Remedies...................................................... 16
17.03 Administrative Fee............................................ 16
17.04 Default by Landlord........................................... 16
17.05 Mitigation.................................................... 17
17.06 Lender's Right to Cure........................................ 17
ARTICLE 18 SUBORDINATION................................................. 17
ARTICLE 19 QUIET ENJOYMENT............................................... 17
ARTICLE 20 REPRESENTATIONS AND WARRANTIES................................ 17
20.01 Representations and Warranties................................ 17
20.02 Financial Statements.......................................... 18
ARTICLE 21 SURRENDER OF PREMISES......................................... 18
ARTICLE 22 BANKRUPTCY OR INSOLVENCY...................................... 19
ARTICLE 23 HAZARDOUS MATERIALS........................................... 21
23.01 Representations and Warranties................................ 21
23.02 Definitions................................................... 22
23.03 Tenant's Obligation........................................... 23
23.04 Landlord Options.............................................. 23
23.05 Indemnity..................................................... 23
23.06 Survival...................................................... 23
</TABLE>
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<PAGE> 4
ARTICLE 24 GENERAL PROVISIONS.................... 23
24.01 Estoppel Certificates................. 23
24.02 Severability.......................... 23
24.03 Entire Agreement...................... 23
24.04 Notices............................... 24
24.05 Waivers............................... 24
24.06 Recording............................. 24
24.07 Holding Over.......................... 24
24.08 Cumulative Remedies................... 24
24.09 Choice of Law......................... 24
24.10 Attorneys' Fees....................... 24
24.11 Force Majeure......................... 25
24.12 Consent............................... 25
24.13 Liability of Landlord................. 25
24.14 No Merger............................. 25
24.15 Reports............................... 25
24.16 Definition of Rent.................... 25
24.17 Interpretation........................ 25
24.18 Relationship of the Parties........... 25
24.19 Successors............................ 25
24.20 Modifications......................... 26
24.21 Brokerage Fees........................ 26
24.22 Not Binding Until Executed............ 26
24.23 Counterparts.......................... 26
EXHIBIT A...............................................A-1
EXHIBIT B...............................................B-1
-iii-
<PAGE> 5
LEASE
In consideration of the rents and covenants set forth below, Landlord
(as hereinafter defined) hereby leases to Tenant (as hereinafter defined), and
Tenant hereby leases from Landlord, the following Premises (as hereinafter
defined) upon the following terms and conditions:
ARTICLE 1
FUNDAMENTAL LEASE PROVISIONS
<TABLE>
<S> <C>
Date: September ___, 1996
Commencement Date: September ___, 1996
Landlord: Captec Net Lease Realty, Inc., a Michigan corporation
Tenant: ARG Enterprises, Inc., a California corporation
Tenant's Stuart Anderson's Cattle Company restaurant
Trade Name:
Lease Term: Twenty-Five (25) years, commencing on
the Commencement Date and ending on
September 30, 2021, with three (3) renewal
options of five (5) years each.
(Article 4, Section 4.01)
Annual Rent: Two Hundred Ten Thousand Six Hundred Thirty-Two and 00/100 Dollars
($210,632.00), subject to adjustment as hereinafter provided.
(Article 6, Section 6.01)
The Annual Rent shall be payable on the
first day of each month, commencing October
1, 1996, in twelve (12) equal installments
each in the amount of Seventeen Thousand
Five Hundred Fifty-Three and 00/100 Dollars
($17,553.00) during each year of the term of
this Lease, subject to proration or
adjustment as hereinafter provided.
Addresses for
Notices: To Landlord: Captec Net Lease Realty, Inc.
24 Frank Lloyd Wright Drive
Lobby L, 4th Floor
P. O. Box 544
Ann Arbor, Michigan 48106-0544
Attention: Senior Vice President, Administration
Fax: (313) 994-1376
To Tenant: ARG Enterprises Inc.
450 Newport Center Drive, 6th Floor
Newport Beach, California 92660
Attention: Chief Financial Officer
Fax: (714) 721-8941
</TABLE>
<PAGE> 6
<TABLE>
<S> <C> <C>
with a copy to:
American Restaurant Group, Inc.
4410 El Camino Real, Suite 201
Los Altos, California 94022
Attention: Legal Department
Fax: (415) 949-6420
</TABLE>
Premises: That certain real property, described in
Exhibit A attached hereto, and all
appurtenances, easements and rights of way
now or subsequently pertaining thereto,
together with all improvements located
thereon, consisting of a restaurant located
at 5696 University Avenue, Fridley,
Minnesota, known as a Stuart Anderson's
Cattle Company restaurant.
References in this Article 1 to other Articles are for convenience and
designate some of the other Articles where references to the Fundamental Lease
Provisions appear. Each reference in this Lease to any of the Fundamental Lease
Provisions contained in this Article 1 shall be construed to incorporate all of
the terms provided under such Fundamental Lease Provisions. In the event of any
conflict between any Fundamental Lease Provision and the balance of this Lease,
the latter shall control.
ARTICLE 2
EXHIBITS
The following are attached hereto as Exhibits and made a part of this
Lease:
<TABLE>
<S> <C>
EXHIBIT A -- Description of the Premises
EXHIBIT B -- Form of Subordination, Non-Disturbance and Attornment
Agreement
</TABLE>
In the event of any conflict between any of the above-referenced
Exhibits and the balance of this Lease, the Exhibit shall control.
ARTICLE 3
PREMISES
Landlord hereby leases and demises unto Tenant and Tenant hereby leases
and takes from Landlord, for the term, at the rental, and upon the terms,
covenants, and conditions hereinafter set forth, the property referred to in
Article 1 as the Premises and described on Exhibit A attached hereto.
ARTICLE 4
TERM
4.01 Term. The term of this Lease shall be the term specified in
Article 1 hereof (the initial term and any extensions exercised by Tenant
thereof are hereinafter referred to as the "Lease Term") and shall commence on
the Commencement Date.
4.02 Option to Extend Lease Term. Tenant shall have the option to
extend the initial term of this Lease for three (3) additional, successive
periods of five (5) years each (each, an ""Extension Period") on the same terms,
covenants and conditions of this Lease. In the event Tenant elects to exercise
the option(s), Tenant shall provide Landlord written notice of Tenant's exercise
of the option(s) not less than ninety (90) days prior to the end of the then
current term, such notice to be given in the manner provided in Section 24.04 of
this Lease. Tenant's right to exercise the foregoing
2
<PAGE> 7
option(s) is conditioned upon Tenant's performance of all of the duties and
obligations on its part to be performed under this Lease so that, at the time of
the exercise of such options, Tenant shall not be in default hereunder. In the
event that Tenant elects to extend the initial term of this Lease, the Annual
Rent shall continue to be adjusted as provided in Section 6.02 of this Lease.
ARTICLE 5
LIENS
Tenant shall do all things necessary to prevent the filing of any
mechanics' or other liens or encumbrances against the Premises, or any part
thereof, or upon any interest of Landlord or any mortgagee or beneficiary under
a deed of trust or any ground or underlying lessor in any portion of the
Premises, by reason of work, labor, services, or materials supplied or claimed
to have been supplied to Tenant, or anyone holding the Premises, or any part
thereof, through or under Tenant. If any such lien or encumbrance shall at any
time be filed against the Premises, or any portion thereof, Tenant shall either
cause same to be discharged of record within thirty (30) days after the date of
filing of same or, if Tenant in good faith determines that such lien should be
contested, Tenant will give Landlord prior notice of Tenant's intention to
contest any such lien and, upon demand by Landlord, will procure and record a
lien release bond under applicable law in the amount prescribed by applicable
law, or if no amount is prescribed by applicable law in an amount equal to one
hundred fifty percent (150%) of the lien amount. If a final judgment is rendered
against Tenant by a court of competent jurisdiction, or if the Premises or any
portion thereof are in danger of being foreclosed upon as a result of any such
lien, Tenant will satisfy such judgment or lien at once. If Tenant does not post
the release bond or fails to pay any such adverse judgment or to discharge any
lien in the event of any imminent foreclosure, then Landlord may post the bond
or pay the judgment or discharge the lien, as applicable, and Tenant will
promptly reimburse Landlord for all sums paid by it in connection therewith,
together with the applicable Administrative Fee (as hereinafter defined). Tenant
shall give Landlord notice of the intended commencement date of any Structural
Alterations (as defined in Section 12.03 below), or of any work, labor services
or material to be performed or provided to the Premises or any portion thereof
involving expenditures in excess of Fifty Thousand Dollars ($50,000) for any
individual project or materials to be performed or provided to the Premises or
any portion thereof, or Two Hundred Thousand Dollars ($200,000) in the aggregate
for multiple projects or materials to be provided to the Premises or any portion
thereof in any calendar year (as such dollar amounts shall be increased pursuant
to the provisions of Section 6.02 hereof), at least ten (10) days before said
date, and in connection with the performance or provision of any such work,
labor, services or materials, and Landlord shall also have the right and
opportunity to post and maintain on the Premises such notices, including notices
of non-responsibility and other similar notices, as are provided for under the
laws of the state in which the Premises are located, evidencing Tenant's
obligations with respect to any of the matters covered by this Article and
Landlord shall have the right to enter the Premises and post such notices at any
reasonable time.
ARTICLE 6
RENT
6.01 Rent. Tenant covenants and agrees to pay for the use and occupancy
of the Premises, the Annual Rent specified in Article 1 hereof, subject to
increase pursuant to the provisions of Section 6.02 hereof, in twelve (12) equal
monthly installments during each year of the Lease Term, in advance, on the
first day of each calendar month, without any offset or deduction. Should the
Lease Term commence on a day other than the first day of a calendar month, then
the rental for such first fractional month shall be computed on a daily basis
for the period from the Commencement Date to the end of such calendar month at
an amount equal to one three hundred sixty-fifth (1/365) of the Annual Rent for
each day, which rent for such fractional month shall be payable in advance on
the Commencement Date. Should the Lease Term end on a day other than the last
day of a calendar month, then the rental for such fractional month shall be
computed on a daily basis at an amount equal to one three hundred sixty- fifth
(1/365) of the Annual Rent for each day. Rent shall be paid in lawful money of
the United States to Landlord at the address stated in Article 1 or to such
other persons or at such other places as Landlord may designate in writing to
Tenant.
3
<PAGE> 8
6.02 Rental Adjustments. The Annual Rent payable under this Lease and
the dollar amounts specified in Article 5 and Section 12.06(b) shall be
increased on October 1, 2001 and every five (5) years thereafter (each, an
"Increase Date") during the Lease Term, as follows:
(a) The basis for computing the increase shall be the Consumer
Price Index for all Urban Consumers - All Items, as published monthly by the
Bureau of Labor Statistics of the United States Department of Labor (1982-84 =
100) ("Index"), published for the date nearest the Commencement Date (the
"Beginning Index").
(b) If the Index published for the date nearest the applicable
Increase Date (the "Extension Index") has increased over the Beginning Index,
the Annual Rent (or the dollar amounts under Article 5 and Section 12.06(b), as
applicable) will be calculated by multiplying the then Annual Rent (or the
dollar amounts under Article 5 and Section 12.06(b), as applicable) by a
fraction, the numerator of which is the Extension Index and the denominator of
which is the Beginning Index, not to exceed an increase equal to ten percent
(10%) of the Annual Rent (or the dollar amounts under Article 5 and Section
12.06(b), as applicable) in effect during the five (5) year period immediately
preceding the applicable Increase Date.
(c) In the event the Extension Index is not available on the
applicable Increase Date, Tenant will continue to pay the Annual Rent in effect
immediately prior to the Increase Date and the applicable dollar amounts under
Article 5 and Section 12.06(b) shall be those immediately in effect prior to the
Increase Date. As soon as practicable, Landlord will furnish Tenant with a true
copy of the Extension Index figure together with a computation of the increase
in the Annual Rent for the ensuing five (5) year period, if any, and an
appropriate adjustment will be paid within thirty (30) days of Tenant's receipt
of Landlord's statement.
(d) If the Index is changed so that the base year differs from
that in effect on the Commencement Date, the Index shall be converted in
accordance with the conversion factor published by the Bureau of Labor
Statistics. If the Index is discontinued or revised during the Lease Term, such
other governmental index or computation with which it is replaced will be used
in order to obtain substantially the same result as would be obtained if the
Index had not been discontinued or revised.
6.03 Net Lease; Impositions. This Lease is what is commonly called a
"triple net lease," it being understood that Landlord shall receive the Annual
Rent set forth in Article 1 hereof, as increased pursuant to Section 6.02, free
and clear of any and all other impositions, taxes, liens, charges, or expenses
of any nature whatsoever incurred in connection with the ownership and operation
of the Premises. In addition to the Annual Rent reserved by Article 1 hereof, as
increased pursuant to Section 6.02, Tenant shall pay to the appropriate parties
all impositions, insurance premiums, Real Property Taxes (as defined below),
operating charges, maintenance charges, construction costs, accounting and legal
fees, and any other charges, costs and expenses which arise or may be
contemplated under any provision of this Lease during the Lease Term
(collectively "Impositions"). All of such Impositions shall constitute
additional rent, and upon the failure of Tenant to pay any of such Impositions,
Landlord shall have the same rights and remedies as otherwise provided in this
Lease for the failure of Tenant to pay rent. Tenant shall furnish to Landlord,
promptly upon the reasonable request of Landlord, official receipts or other
satisfactory proof evidencing payment of such Impositions. Upon Tenant's failure
to pay any Real Property Taxes or insurance premiums, as provided herein,
Landlord shall have the right, at Landlord's option, to require Tenant to (a)
promptly deposit with Landlord funds sufficient for the payment of the current
Real Property Taxes or insurance premiums required to be paid by Tenant
hereunder; and (b) also deposit one-twelfth of the current annual or annualized
Real Property Taxes or insurance premiums, as the case may be (or those of the
preceding years if the current amounts thereof have not been fixed), on the
first day of each month in advance. It is the intention of the parties hereto
that this Lease shall not be terminable for any reason by Tenant, and that
Tenant shall in no event be entitled to any abatement of, deductions of any
kind, offset or reduction in rent payable under this Lease except as may
otherwise be expressly set forth in this Lease. Any present or future Law to the
contrary shall not alter this agreement of the parties.
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ARTICLE 7
USE OF THE PREMISES
7.01 Use. Tenant shall occupy and use the Premises solely for the
operation of a Stuart Anderson's Cattle Company restaurant or such other
restaurant use as may be approved by Landlord in writing, which approval shall
not be unreasonably withheld. Tenant may not use the Premises for any other
purpose without obtaining the prior written consent of Landlord, which consent
shall not be unreasonably withheld.
7.02 Compliance With Law.
(a) Tenant accepts the Premises in "AS IS" condition. Tenant
accepts the Premises "AS IS" in reliance upon Tenant's own knowledge as owner
and/or occupier of the Premises immediately prior to commencement of this Lease.
Landlord makes no representations or warranties of any type whatsoever,
including without limitation, whether there has been or are currently any
violations of any covenants or restrictions of record, or any applicable Laws in
effect regarding the Premises on the Commencement Date.
(b) Tenant shall, at Tenant's sole expense, comply in all material
respects with all applicable laws, ordinances, building codes, orders, zoning
ordinances, rules, and regulations, of any governmental authorities and with any
directive of any public officer which shall impose any order or duty upon
Landlord or Tenant with respect to the Premises or the use or occupation thereof
or relating to the environment, health or safety with respect to the Premises or
the use or occupation thereof or relating to the environment, health or safety
with respect to the Premises or the use or occupation thereof (including,
without limitation, any rule of common law and judicial decisions and the
Americans With Disabilities Act), and any covenants, conditions or restrictions
of record relating to the Premises or the use or occupation thereof, in each
case as now or hereafter in effect (collectively "Laws").
(c) Notwithstanding any other provision of this Lease, Tenant
shall not use or permit the Premises to be used in any manner which will result
in waste or the creation of a nuisance, and Tenant shall maintain the Premises
free of any objectionable noises, odors, or disturbances; provided that, as
between Landlord and Tenant only, odors and exhaust incidental to a restaurant,
excluding odors of deteriorating food, will not be deemed a nuisance or
objectionable provided the same do not violate applicable Laws and do not
subject Landlord to civil liability.
7.03 Permits and Licenses. As between Landlord and Tenant, Tenant shall
be solely responsible to apply for and secure any building permit or permission
of any duly constituted authority for the purpose of doing any of the things
which Tenant is required or permitted to do under the provisions of this Lease.
Landlord shall cooperate as reasonably requested by Tenant to facilitate
Tenant's compliance with this obligation but at no cost to Landlord.
ARTICLE 8
UTILITIES
8.01 Payment. Tenant shall pay to the utility companies or other
parties entitled to payment the cost of all water, heat, air conditioning, gas,
electricity, telephone, and other utilities and services provided to or for the
Premises, including connection fees and taxes thereon.
8.02 Interruption in Service. Landlord shall not be liable in damages
or otherwise for any failure or interruption of any utility or other service
being furnished to the Premises subject to the provisions of Section 11.04(b)
hereof, and no such failure or interruption shall entitle Tenant to any
abatement of, setoff of or reduction in the amounts payable to Landlord
hereunder or otherwise entitle Tenant to terminate this Lease.
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ARTICLE 9
TAXES
9.01 Payment of Taxes. Tenant shall timely pay the Real Property Taxes
(as defined in Section 9.02) applicable to the Premises during the Lease Term.
Landlord agrees to use reasonable efforts to have the relevant taxing
authorities send a duplicate copy of any tax bills applicable to the Premises
sent directly to Tenant; otherwise, Landlord shall deliver copies of such tax
bills to Tenant promptly after receipt. All such payments shall be made prior to
delinquency or within ten (10) days after receipt by Tenant of the tax bills
from Landlord, whichever is later. Upon Landlord's request, Tenant shall
promptly furnish Landlord with satisfactory evidence that such Real Property
Taxes have been paid. If any such Real Property Taxes paid by Tenant shall cover
any period of time prior to or after the expiration of the Lease Term, Landlord
shall promptly reimburse Tenant to the extent required. If Tenant shall fail to
pay any such Real Property Taxes, Landlord shall have the right but not the
obligation to pay the same in which case Tenant shall repay such amount plus any
penalties and interest resulting therefrom to Landlord with Tenant's next Annual
Rental installment together with the applicable Administrative Fee.
9.02 Definition of "Real Property Taxes". As used herein, the term
"Real Property Taxes" shall mean any form of real estate tax or assessment, ad
valorem tax or gross receipts tax fee, levy, penalty, interest or other charge
imposed by any authority having the direct or indirect power to tax, including
any city, county, state, or federal government, or any school, agricultural,
sanitary, fire, street, drainage, or other improvement district thereof, on,
against or with respect to the Premises, this Lease, any legal or equitable
interest of Landlord or any superior landlord or any mortgagee or beneficiary of
Landlord in the Premises or in the real property of which the Premises are a
part, and Landlord's right to rent. The term "Real Property Taxes" shall also
include any tax, fee, levy, assessment, penalty, interest or other charge (i) in
substitution of, partially or totally, any tax, fee, levy, assessment, or charge
included within the definition of Real Property Taxes, (ii) the nature of which
was included within the foregoing definition of Real Property Taxes, or (iii)
any tax or increase in any tax which is imposed as a result of a transfer,
either partial or total, of Landlord's interest in the Premises or which is
added to a tax or charge hereinbefore included within the definition of Real
Property Taxes by reason of such transfer (other than documentary, stamp or
other transfer taxes resulting from such transfer but including any increase in
Real Property Taxes attributable to such transfer), or which is imposed by
reason of the transfer of the Premises to Landlord or this transaction, any
modifications or changes hereto, or any transfers hereof. Notwithstanding the
foregoing, the term "Real Property Taxes" shall not include any general income
taxes, inheritance taxes, and estate taxes imposed upon Landlord or any superior
landlord or any mortgagee or beneficiary of Landlord or any taxes attributable
to the recording of any mortgage or deed of trust on Landlord's interest in the
Premises.
9.03 Personal Property Taxes. Tenant shall pay prior to delinquency,
all taxes assessed against and levied upon trade fixtures, furnishings,
equipment, and all other personal property of Tenant contained in the Premises
or elsewhere. Tenant shall seek to cause said trade fixtures, furnishings,
equipment, and all other personal property to be assessed and billed separately
from the real property of Landlord.
9.04 Tenant's Right to Contest Taxes.
(a) Tenant shall have the right, at its cost and expense, to
contest the amount or validity, in whole or in part, of any Real Property Taxes
of any kind by appropriate proceedings diligently conducted in good faith, but
no such contest shall be carried on or maintained by Tenant after the time limit
for the payment of any Real Property Taxes unless Tenant, at its option: (i)
shall pay the amount involved under protest; or (ii) shall procure and maintain
a stay of all proceedings to enforce any collection of any Real Property Taxes,
together with all penalties, interest, costs and expenses, by a deposit of a
sufficient sum of money, or by such undertaking, as may be required or permitted
by law to accomplish such stay; or (iii) shall deposit with Landlord, as
security for the performance by Tenant of its obligations hereunder with respect
to such Real Property Taxes, security in the amount, if any, prescribed by
applicable law, or if no amount is prescribed by applicable law, in an amount
equal to one hundred fifty percent (150%) of the contested amount or such other
reasonable security may be demanded by Landlord to ensure payment of such
contested Real Property Taxes and all penalties, interest, costs and expenses
which may accrue during the period of the contest. Upon the termination of any
such proceedings, it shall be the obligation of Tenant to pay the amount of such
Real Property Taxes or part thereof, as finally determined in such proceedings,
together with any costs, fees (including attorneys' fees), penalties or other
liabilities in connection therewith; provided, however, that if Tenant has
deposited cash or cash
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equivalents with Landlord as security under clause (iii) above, then, so long as
no material default exists under this Lease, Landlord pay such Real Property
Taxes (or part thereof) together with the applicable costs, fees and liabilities
as described above out of such cash or cash equivalents and return any unused
balance, if any, to Tenant. Otherwise, Landlord shall return or cause to have
returned to Tenant all amounts, if any, held by or on behalf of Landlord which
were deposited by Tenant in accordance with the provisions hereof.
(b) Tenant shall have the right, at its cost and expense, to seek
a reduction in the valuation of the Premises as assessed for tax purposes and to
prosecute any action or proceeding in connection therewith. Provided Tenant is
not in material default hereunder, Tenant shall be authorized to collect any tax
refund of any tax paid by Tenant obtained by reason thereof and to retain the
same.
(c) Landlord agrees that whenever Landlord's cooperation is
required in any of the proceedings brought by Tenant as aforesaid, Landlord will
reasonably cooperate therein, provided same shall not entail any cost, liability
or expense to Landlord, and Tenant will pay, indemnify and save Landlord
harmless of and from, any and all liabilities, losses, judgments, decrees, costs
and expenses (including all reasonable attorneys' fees and expenses) in
connection with any such contest and will, promptly after the final settlement,
fully pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith, and
Tenant shall perform and observe all acts and obligations, the performance of
which shall be ordered or decreed as a result thereof. No such contest shall
subject Landlord to the risk of any civil liability or the risk of any criminal
liability, and Tenant shall give such reasonable indemnity or security to
Landlord, as may reasonably be demanded by Landlord to ensure compliance with
the foregoing provisions of this Section 9.04.
ARTICLE 10
MAINTENANCE AND REPAIRS
10.01 Tenant's Obligations.
(a) Tenant shall, at Tenant's expense, maintain in good repair,
order, and serviceable condition, reasonable wear and tear excepted, the
Premises and every part thereof, including but not limited to all plumbing,
ventilation, heating, air conditioning, and electrical systems and equipment in,
on, or exclusively serving the Premises, and windows, doors, storefronts, plate
glass, interior walls, and ceilings which are part of the Premises.
(b) Tenant shall not commit or suffer to be committed any waste
upon or about the Premises, and shall promptly at Tenant's cost and expense,
make all necessary replacements, restorations, renewals and repairs to the
Premises and appurtenances thereto which are material to the operation of the
Premises, whether interior or exterior, structural or non-structural, ordinary
or extraordinary, and foreseen or unforeseen; provided that with respect to
appurtenances to the Premises which are material to the operation of the
Premises, if third parties are obligated to repair or maintain such
appurtenances, Tenant shall use commercially reasonable efforts to enforce such
obligations of third parties, or if such third parties fail to perform such
obligations, Tenant shall perform such obligations to the extent Tenant has the
legal right to do so. Tenant shall pay to the appropriate parties Tenant's pro
rata share of any maintenance, repair or other costs to the extent required with
respect to any appurtenances to the Premises. Repairs, restorations, renewals
and replacements shall be at least equivalent in quality to the original work or
the property replaced, as the case may be. Tenant shall not make any claim or
demand upon or bring any action against Landlord for any loss, cost, injury,
damage or other expense caused by any failure or defect, structural or
non-structural, of the Premises or any part thereof.
(c) Upon the expiration or earlier termination of this Lease,
Tenant shall return the Premises to Landlord in good and clean condition and
repair, reasonable wear and tear excepted. Any damage to the Premises, including
any structural damage, resulting from Tenant's use or from the removal of
Tenant's fixtures, furnishings, and equipment pursuant to Section 12.04 hereof,
shall be repaired by Tenant at Tenant's expense.
10.02 Landlord's Obligations. Except for the obligations of Landlord
under Article 14 hereof (relating to destruction of the Premises), and under
Article 15 hereof (relating to the condemnation of the Premises), it is intended
by the parties hereto that Landlord have no obligation, in any manner
whatsoever, to repair and maintain the Premises
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nor the building located thereon nor the equipment or personal property therein,
whether interior or exterior, structural or nonstructural, ordinary or
extraordinary, all of which obligations are that of Tenant under Section 10.01
hereof. Tenant expressly waives the benefit of any statute or law now or
hereafter in effect which would otherwise afford Tenant the right to terminate
this Lease because of Landlord's failure to keep the Premises or any part
thereof or the building located thereon or the fixtures thereon or equipment or
personal property therein in good order, condition, and repair, or the right to
repair and offset the cost related thereto against rent.
10.03 Landlord's Rights. If Tenant refuses or neglects to make repairs
or maintain the Premises, or any part thereof, or any appurtenances thereto
material to the operation of the Premises or to enforce maintenance or repair
obligations of third parties with respect to any such appurtenances, as provided
above, in a manner reasonably satisfactory to Landlord, without prejudice to any
other remedy Landlord may have hereunder, upon giving Tenant ten (10) days'
prior written notice, Landlord shall have the right to enter the Premises and
perform such maintenance or make such repairs on behalf of and for the account
of Tenant. In the event Landlord so elects, Tenant shall pay the cost of such
repairs, maintenance, or replacements promptly following Tenant's receipt of a
bill therefor, together with the applicable Administrative Fee. Tenant agrees to
permit Landlord or its agent to enter the Premises, upon reasonable notice by
Landlord, during normal business hours for the purpose of inspecting the
Premises.
ARTICLE 11
INSURANCE AND INDEMNIFICATION
11.01 Tenant's Insurance Obligation. Tenant covenants and agrees that
Tenant will carry and maintain, at its sole cost and expense, the following
types of insurance, in the amounts specified and in the form hereinafter
provided for:
(a) COMMERCIAL GENERAL LIABILITY. Commercial general liability
insurance (including liquor liability insurance) against any loss, liability or
damage on or relating to the Premises, with limits of not less than Five Million
Dollars ($5,000,000) in any one occurrence for death or injuries to one or more
persons and/or for damage to property. If such insurance has a deductible or
self-insured retention clause, the deductible or self-insured retention shall
not exceed Five Hundred Thousand Dollars ($500,000) per occurrence without
Landlord's consent, such consent not to be unreasonably withheld, and Tenant
shall be liable for such deductible or self-insured retention amount.
(b) BUSINESS INTERRUPTION/RENTAL LOSS. Tenant shall purchase at
Tenant's option either a policy of business interruption insurance to protect
Tenant and Landlord against loss of earnings in the event of interruption of
Tenant's business through destruction of real or personal property at the
Premises or a policy of rental loss protection to protect Landlord (and any
mortgagee or beneficiary of Landlord with respect to the Premises) against loss
of rental income as a result of destruction of real or personal property with
respect to the Premises. Such policy shall be written in an amount equal to not
less than six (6) monthly installments of Annual Rent. Such policy shall insure
against loss of earnings or rental income (as applicable) caused by at least the
perils of fire and lightning, extended coverage, vandalism, malicious mischief
and, where pertinent, sprinkler leakage.
(c) WORKERS' COMPENSATION. Worker's compensation insurance or self
insurance as equired by the jurisdiction in which the Premises are located and
employer's liability insurance with a limit of not less than One Million Dollars
($1,000,000).
(d) PROPERTY DAMAGE. Insurance covering all improvements
located on the Premises and all of Tenant's fixtures, merchandise, and personal
property from time to time in, on or upon the Premises, in an amount not less
than one hundred percent (100%) of their full replacement value providing
protection against perils commonly included within the classification "All
Risk," and insurance against sprinkler damage (if applicable and to the extent
not otherwise covered by such "All Risk" policy). If such insurance has a
deductible clause, the deductible shall not exceed Two Hundred Fifty Thousand
Dollars ($250,000) per occurrence without Landlord's consent, such consent not
to be unreasonably withheld, and Tenant shall be liable for such deductible
amount. Any policy proceeds shall be used for the repair or replacement of the
property damaged or destroyed to the extent necessary to maintain the standard
of operation of the Premises and the business operated thereon existing prior to
the damage or destruction.
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(e) ADDITIONAL COVERAGE. Such other insurance and in such amounts
customarily carried for like businesses or properties (as determined by Landlord
in good faith) as may be reasonably required from time to time by Landlord.
(f) POLICY FORM.
(i) All policies of insurance provided for herein shall
be issued by reputable and financially sound insurance companies reasonably
satisfactory to Landlord, and such insurance companies shall be qualified to do
business in the jurisdiction where the Premises are situated. All such policies
shall be issued in Tenant's name, with Landlord named as an additional insured
and/or loss payee, as applicable, and if requested by Landlord, name any
superior landlord and any mortgagee or beneficiary of Landlord as an additional
insured or loss payee. The policies shall be for the mutual and joint benefit
and protection of Landlord, Tenant, any superior landlord and any mortgagee or
beneficiary of Landlord. Certificates of insurance shall be delivered to
Landlord prior to Landlord's execution of this Lease, and thereafter
certificates or other evidence of renewal or replacement coverage shall be
delivered to Landlord within fifteen (15) days prior to the expiration of the
term of each such policy. As often as any such policy shall expire or terminate,
renewal or additional policies shall be procured and maintained by Tenant in
like manner and to like extent. All certificates of insurance delivered to
Landlord must contain a provision giving Landlord, any superior landlord, and
any mortgagee or beneficiary of Landlord fifteen (15) days' notice in writing in
advance of any modification, cancellation, lapse, or reduction in the amounts of
insurance. The commercial general liability policy shall contain a severability
of interests clause providing that each entity insured under the policy will be
protected as if it were the only insured; however, this provision shall not
increase the coverage limits of such policy. The property damage policy shall
contain an agreement that any loss otherwise payable thereunder shall be payable
notwithstanding any act or negligence of Landlord or Tenant which might, absent
such agreement, result in a forfeiture of all or part of the payment of such
loss. All public liability, property damage, and other casualty policies shall
be written on an occurrence basis as primary policies, not contributing with or
in excess of coverage which Landlord may carry. Tenant's failure to deliver the
certificates or other evidence of insurance coverage pursuant to this Section
(where such failure shall continue for a period of fifteen (15) days after
written notice thereof from Landlord to Tenant) shall constitute a material
default under this Lease.
(ii) Tenant's obligations to carry the insurance provided
for above may be brought within the coverage of a so-called blanket policy or
policies of insurance carried and maintained by Tenant; provided, however, that
such policy or policies must have limits of not less than Five Million and
00/100 Dollars ($5,000,000.00) and that Landlord, any superior landlord and any
mortgagee or beneficiary of Landlord shall be named as an additional insured
thereunder as their interests may appear and that the coverage afforded Landlord
will not be reduced or diminished by reason of the use of such blanket policies
and the requirements set forth herein are otherwise satisfied. Tenant agrees to
permit Landlord, not more often than annually, to examine Tenant's original
insurance policies required in this Lease, and to make copies of the sections of
such policies evidencing satisfaction of the requirements of this Lease,
provided such examination shall be conducted in the offices of Tenant or
Tenant's insurance broker and in the presence of a representative of Tenant or
Tenant's insurance broker.
11.02 Subrogation Waiver. Landlord (for itself and its insurer) hereby
waives any rights, including rights of subrogation, and Tenant (for itself and
its insurer) hereby waives any rights, including rights of subrogation, each may
have against the other on account of any loss or damage occasioned to Landlord
or Tenant, as the case may be, to their respective property, the Premises or its
contents that are caused by or result from risks insured against under any
property insurance policies carried by the parties hereto and in force at the
time of any such damage. The foregoing waivers of subrogation shall be operative
only so long as available in the jurisdiction where the Premises are located and
so long as no policy of insurance is invalidated thereby.
11.03 Insurance Use Restrictions. Tenant agrees that it will not carry
any stock or goods or do anything in, on, or about the Premises outside of the
ordinary course of Tenant's business which will substantially increase the
insurance rates upon the building of which the Premises are a part.
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11.04 Indemnification.
(a) Tenant shall at all times indemnify Landlord and any mortgagee
or beneficiary of Landlord for, defend (with counsel reasonably satisfactory to
Landlord) Landlord and any mortgagee or beneficiary of Landlord against, and
save Landlord and any mortgagee or beneficiary of Landlord harmless from, any
liability, loss, cost, injury, damage or other expense or risk (including,
without limitation, reasonable attorneys' fees) whatsoever that may occur or be
claimed by or with respect to any person(s) or property on or relating to the
Premises and resulting directly or indirectly from the use, misuse, occupancy,
possession or disuse of the Premises by Tenant or other persons claiming through
or under Tenant, or their respective agents, employees, licensees, invitees,
guests or other such persons, or from the condition of the Premises. Tenant
shall, at its cost and expense, defend against any and all such actions, claims
and demands and shall indemnify Landlord and any mortgagee or beneficiary of
Landlord for all costs, expenses and liabilities (including, without limitation,
reasonable attorneys' fees) it may incur in connection therewith. Neither
Landlord nor any mortgagee or beneficiary of Landlord shall in any event
whatsoever be liable for any injury or damage to the Premises or to the Tenant
or to any other persons claiming through or under Tenant, or their respective
agents, employees, licensees, invitees, guests or other such persons or to any
property of any such persons except as provided in subparagraph (b) below.
Tenant shall not make any claim or demand upon or institute any action against
Landlord as a result of such injury or damage except as provided in subparagraph
(b) below. Tenant covenants and agrees during the Lease Term hereof to pay when
due or reimburse and indemnify and hold Landlord and any mortgagee or
beneficiary of Landlord harmless from and against all inspection fees, taxes,
bonds, permits, certificates, assessments and sales, use, property or other
taxes, fees or tolls of any nature whatsoever (together with any related
interest or penalties) now or hereafter imposed against Landlord, any superior
landlord, or any mortgagee or beneficiary of Landlord, or Tenant by any federal,
state, county or local governmental authority upon or with respect to the
Premises or the use thereof or upon the possession, leasing, use, operation or
other disposition thereof or upon the rents, receipts or earnings arising
therefrom or upon or with respect to this Lease (excepting only federal, state,
and local net income taxes on the income of Landlord or any superior landlord or
any mortgagee or beneficiary of Landlord or any taxes attributable to the
recording of any mortgage or deed of trust on Landlord's interest in the
Premises).
(b) Notwithstanding the waiver of subrogation in Section 11.02,
Landlord shall indemnify, hold harmless and defend (with counsel reasonably
satisfactory to Tenant) Tenant from and against (i) any liability, loss, cost,
injury, damage, or other expense or risk, (including, without limitation,
reasonable attorneys' fees) whatsoever to the extent arising out of the
negligence or willful misconduct of Landlord or its representatives in
connection with any entry by Landlord or its representatives on the Premises,
(ii) any liability, loss, cost, injury, damage, or other expense or risk,
(including, without limitation, reasonable attorneys' fees) whatsoever to the
extent arising out of the negligence or willful misconduct of Landlord or its
representatives in connection with any maintenance, construction or other
activities of Landlord on property adjacent to the Premises, except to the
extent arising from the negligence or willful misconduct of Tenant, its
representatives, or their respective agents, employees, licensees, invitees or
guests, or from the condition of the Premises.
11.05 Payment of Insurance. In the event that Tenant shall fail to
obtain the insurance policies required hereunder, Landlord shall have the right,
but not the obligation, to purchase the same in which case Tenant shall repay
the cost thereof to Landlord with Tenant's next Annual Rent installment together
with the applicable Administrative Fee.
ARTICLE 12
ALTERATIONS
12.01 Permitted Improvements. Except as provided in Section 12.03
hereof, and subject to the provisions of this Article 12, at Tenants own
expense and after giving Landlord notice in writing of its intention to do so
as required under Article 5, Tenant may from time to time make alterations,
replacements, additions, changes, and improvements (collectively referred to in
this Article 12 as "Alterations") in and to the Premises as it may find
necessary or convenient for its purposes; provided, however, that no such
alterations shall decrease the value of the Premises.
12.02 Liens. Tenant shall pay the costs of any Alterations done on the
Premises pursuant to Section 12.01, and shall keep the Premises free and clear
of liens of any kind as required under Article 5. Tenant shall indemnify and
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defend Landlord from and against any liability, loss, damage, costs, attorneys'
fees, and any other expense incurred as a result of claims of lien by any person
performing work or furnishing materials or supplies for Tenant or any person
claiming under Tenant.
12.03 Structural Alterations. Tenant shall not make any Structural
Alterations (as defined below) to the Premises without obtaining the prior
written consent of Landlord, which consent shall not be unreasonably withheld.
"Structural Alterations" shall mean any Alterations made to any of the
foundations, perimeter or load bearing walls, or roof structure. All work with
respect to any Alteration shall be done in a good and workmanlike manner by
properly qualified and licensed personnel, and such work shall be diligently
prosecuted to completion.
12.04 Removal of Alterations. All Alterations made on the Premises
shall become the property of Landlord at the expiration or termination of the
Lease Term and shall be surrendered with the Premises; provided, however, that
if Tenant is not in default at the time of such expiration or termination, (i)
Tenant shall have the right to remove any Alterations permitted or approved in
accordance with this Article 12, provided the removal thereof does not decrease
the value of the Premises as reasonably determined by Landlord, and provided
further that Tenant repairs any damage to the Premises caused by such removal,
and (ii) Tenant's equipment, machinery, and trade fixtures shall remain the
property of Tenant and may be removed by Tenant, and Tenant shall repair any
damage caused by its removal of any such equipment, machinery, and trade
fixtures.
Landlord agrees from time to time during the Lease Term, upon written
request from Tenant, to execute and deliver any instrument, release or other
document that may be reasonably required by any equipment supplier or vendor and
in form and substance reasonably satisfactory to Landlord whereby Landlord
waives and/or releases any rights it may have or acquire with respect to any
moveable equipment or trade fixtures which is subject to a security interest or
equipment lease in favor of such supplier or vendor.
12.05 Alterations Required by Law. Any Alteration, structural or
otherwise, to or on the Premises, or any part thereof, which may be necessary or
required by reason of any applicable Laws, shall be made by and at the sole cost
and expense of Tenant.
12.06 General Conditions Relating to Alterations. Any Alteration,
structural or otherwise, to or on the Premises, shall be subject to the
following conditions:
(a) No Alteration shall be undertaken until Tenant shall have
procured and paid for all required permits and authorizations of all municipal
departments and governmental subdivisions having jurisdiction.
(b) At Landlord's option, any Alteration involving an estimated
cost of more than One Hundred Thousand Dollars ($100,000) (as such dollar amount
shall be increased pursuant to the provisions of Section 6.02 hereof) shall,
upon Landlord's reasonable request, be conducted under the supervision of a
licensed architect or engineer selected by Tenant and satisfactory to Landlord
and shall be made in accordance with detailed plans and specifications (the
"Plans and Specifications") and cost estimates prepared by such architect or
engineer and approved in writing in advance by Landlord.
(c) Any Alteration shall be made promptly and in a good
workmanlike manner and in compliance with all applicable Laws.
(d) No Alteration shall tie-in or connect the Premises or any
improvements thereon with any property outside the Premises without the prior
written consent of Landlord.
(e) No Alteration shall reduce the value of the Premises or impair
the structural integrity of any building comprising a part of the Premises.
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ARTICLE 13
SIGNS
In addition to those signs already existing at the Premises, Tenant
shall have the right to erect or affix signs on the Premises of such sizes,
colors, and designs as required by Tenant. All signs on the Premises shall fully
comply with all applicable Laws.
ARTICLE 14
DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD
14.01 Obligation to Rebuild. If any portion of the Premises is damaged
or destroyed by fire or other casualty, Tenant shall forthwith give notice
thereof to Landlord. Tenant shall, at its sole cost and expense, diligently
repair, restore, rebuild or replace the damaged or destroyed improvements,
fixtures or equipment, and diligently complete the same as soon as reasonably
possible, to the condition they were in prior to such damage or destruction,
except for permitted Alterations and such changes in design or materials as may
then be required by applicable Laws. Landlord, in such event, shall, to the
extent and at the times the proceeds of the insurance are made available to
Landlord, reimburse Tenant for the costs of making such repairs, restoration,
rebuilding and replacements on such terms as Landlord may reasonably require. To
the extent that the available proceeds of insurance are insufficient to pay the
entire cost of making such repairs, restoration, rebuilding and replacements,
and notwithstanding the expiration or termination of the Lease Term of this
Lease, Tenant shall pay the amount by which such costs exceed the available
insurance proceeds. Any surplus of insurance proceeds over the cost of
restoration, net of all reasonable out-of-pocket expenses incurred by Landlord
in connection with the administration thereof, shall be promptly paid over to
Tenant.
Notwithstanding the foregoing, if any such damage or destruction occurs
during the last two (2) years of the initial term and the first (1st) and second
(2nd) Extension Periods hereof, or at any time during the third (3rd) Extension
Period hereof, provided Tenant is not in material default hereunder, Tenant may
elect to terminate this Lease upon written notice to Landlord within sixty (60)
days after the occurrence of such damage or destruction provided Tenant pays to
Landlord all rent and other amounts accruing under this Lease through the date
of termination, and except as to obligations hereunder which expressly survive
any termination of this Lease. In the event of any such termination of this
Lease, Landlord shall be entitled to retain all proceeds of insurance relating
to such damage and destruction, and Tenant shall promptly pay to Landlord any
such insurance proceeds received by Tenant and hereby assigns to Landlord all
rights of Tenant to receive such insurance proceeds.
14.02 No Abatement of Rent. Notwithstanding the partial or total
destruction of the Premises or any part thereof, there shall be no abatement of
rent or of any other obligation of Tenant hereunder by reason of such damage or
destruction.
ARTICLE 15
EMINENT DOMAIN
15.01 Total Taking. If the Premises is taken in its entirety under the
power of eminent domain, this Lease shall terminate as of the date of such
taking, and upon Tenant's payment to Landlord of all rents and other amounts
accruing hereunder through such date, Landlord and Tenant shall each thereafter
be released from accruing any further liability under this Lease, subject to the
rights of Landlord and Tenant to receive the condemnation awards to which each
is entitled as provided in Section 15.03, and except as to obligations under
this Lease which survive the termination hereof.
15.02 Partial Taking. In the event that (a) more than twenty-five
percent (25%) of the floor area of the Premises is taken under the power of
eminent domain; or (b) by reason of any appropriation or taking, regardless of
the amount so taken, the remainder of the Premises is not one undivided parcel
of property; or (c) as a result of any taking, regardless of the amount so
taken, the remainder of the Premises is rendered unsuitable for the continued
operation of Tenant's business as determined by Tenant in good faith and based
upon commercially reasonable standards and criteria,
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and as agreed to by Landlord, in Landlord's reasonable discretion, either
Landlord or Tenant shall have the right to terminate this Lease upon giving
notice in writing of such election within sixty (60) days after receipt by
Tenant from Landlord of written notice that said Premises have been so
appropriated or taken (with the understanding that such period of time may be
extended, but in no event beyond a total period of one hundred eighty (180)
days, as reasonably necessary for Tenant to assess the effect of such partial
taking on Tenant's continued operation of its business at the Premises, subject
to Landlord's prior written consent, which consent shall not be unreasonably
withheld) provided Tenant shall continue to pay Annual Rent and other amounts
accruing hereunder through the date of termination. In the event of such
termination, upon Tenant's payment to Landlord of all rents and other amounts
accruing hereunder through such date for the Premises, both Landlord and Tenant
shall thereupon be released from any liability thereafter accruing hereunder,
except as to obligations hereunder which survive the termination hereof. Each
party agrees immediately after learning of any actual or contemplated
appropriation or taking to give to the other party notice in writing thereof. If
this Lease is not terminated, Tenant shall remain in that portion of the
Premises not so taken and Tenant, at Tenant's sole cost and expense, shall
restore the remaining portion of the Premises as soon as possible to a complete
unit of like quality and character as existed prior to such taking. Landlord
agrees to reimburse Tenant for the cost of restoration, but in no event shall
Landlord's obligation to reimburse Tenant for the cost of restoring the
remaining portion of the Premises exceed the amount of the award or compensation
that Landlord receives for a partial taking of that portion of the Premises
resulting in the need for restoration. So long as this Lease is not terminated
in the manner provided above, there shall be an equitable adjustment of the rent
payable by Tenant hereunder for the Premises by reason of any partial taking.
Tenant hereby waives any statutory rights of termination which may arise by
reason of any partial taking of the Premises under the power of eminent domain.
15.03 Award. In the event of any taking, the entire award or
compensation in any eminent domain proceeding affecting the Premises, whether
for a total or partial taking, shall be distributed to Landlord, provided,
however, that Tenant will be entitled to receive, and Landlord will have no
right to pursue for itself, any award for claims based on (a) the value of
Tenant's Alterations to the Premises which Tenant has the right to remove
pursuant to the provisions of this Lease but elects not to remove, (b) loss of
or damage to Tenant's personal property, (c) loss to Tenant because of
interruption of business, (d) Tenant's loss of goodwill, and (e) Tenant's cost
of removal and relocation and any rent differential payable by Tenant for
replacement premises as a result of any relocation necessitated by the taking.
Landlord and Tenant may separately pursue their claims against the condemning
authority, provided, however, that notwithstanding anything to the contrary
contained in this Lease, Tenant will have no right to pursue a claim based upon
the residual value of the real property comprising the Premises after expiration
of the Lease Term or pursue claims or retain any award to which Landlord is
entitled so as inequitably to diminish Landlord's award. Tenant hereby assigns
to Landlord all rights of Tenant to receive any award or compensation as a
result of any taking except the awards to which Tenant is entitled under this
Section 15.03.
15.04 Transfer Under Threat of Taking. For the purposes of this Article
only, a voluntary sale or conveyance under threat and in lieu of condemnation
shall be deemed an appropriation or taking under the power of eminent domain.
ARTICLE 16
ASSIGNMENT AND SUBLETTING
16.01 Landlord's Consent Required. For purposes of this Article 16, the
terms "assign" and "assignment" shall include and mean any act attempting to, or
document purporting to, assign, transfer or sublet (or enter into any similar
type of agreement), change ownership of, mortgage or hypothecate this Lease or
Tenant's interest in and to the Premises or any part thereof. Tenant shall not
assign this Lease or Tenant's interest in and to the Premises without obtaining
the prior written consent of Landlord, such consent not to be unreasonably
withheld. Any attempted assignment without such consent shall be void, and shall
constitute a breach of this Lease. Tenant hereby agrees to pay to Landlord fifty
percent (50%) of any rent or other substitute consideration in excess of the
monthly rent payable hereunder (as adjusted from time to time) which Tenant
receives by reason of any permitted assignment (the "Rent Premium").
Notwithstanding the foregoing, Tenant may deduct from such Rent Premium
reasonable, out-of-pocket expenses actually incurred in connection with such
permitted assignment (including without limitation, costs of leasehold
improvements, brokerage commissions and reasonable attorneys' fees), which
expenses shall be documented to the satisfaction of
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Landlord; provided, however, that nothing contained in this Section 16.01 shall
reduce the Annual Rent and other amounts payable by Tenant under this Lease. The
payment of Tenant's share of the Rent Premium shall be made within five (5)
business days following the date that such payment is received by Tenant.
16.02 Assumption of Obligations. Any assignment to which Landlord has
consented shall be evidenced by an instrument in writing and any assignee,
transferee or mortgagee shall agree for the benefit of Landlord to be bound by,
assume, and perform all of the terms, covenants, and conditions of this Lease.
Consent by Landlord to any assignment shall not constitute consent to any
subsequent assignment.
16.03 Assignment to Affiliate. Notwithstanding anything to the contrary
contained in this Article 16, Tenant shall have the right to assign this Lease,
or sublet the Premises or any portion thereof, without the consent of, but with
notice to, Landlord, to any corporation (a) with which Tenant may merge or
consolidate, (b) which is a parent or subsidiary of Tenant at any tier, (c)
which is the successor corporation to Tenant in the event of a corporate
reorganization, or (d) which acquires all or substantially all of the voting
stock of Tenant or all or substantially all of the assets of Tenant, provided
that said assignee assumes, in full, the obligations of Tenant under this Lease
and Tenant remains primarily liable under this Lease.
16.04 Hypothecation of Lease. Without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, Tenant may not
mortgage, pledge or otherwise encumber its leasehold estate hereunder, and any
attempt to mortgage, pledge or otherwise encumber such estate without such
consent shall be null and void and of no force and effect.
16.05 Corporate/Partnership/Limited Liability Company Restrictions. In
the event that Tenant shall, at any time, be a corporation, no change shall
occur in one or a series of related transactions in the majority ownership of
and/or the power to vote the majority of the outstanding capital stock of
Tenant, without the prior written consent of Landlord. In the event that Tenant
shall, at any time, be a partnership, no change shall occur in any one or more
of the general partners of the partnership or in the control of any general
partner, without the prior written consent of Landlord. In the event that Tenant
shall, at any time, be a limited liability company, no change shall occur in any
member of the limited liability company or in the control of any member, without
the prior written consent of Landlord. Notwithstanding the foregoing, nothing
contained herein shall prohibit (i) the public offering of shares of stock of
the Tenant on a nationally recognized stock exchange, or (ii) the private sale
of shares of all of the stock of the Tenant to any entity which is listed on a
nationally recognized stock exchange and has a net worth not less than the net
worth of Tenant on the Commencement Date.
16.06 No Release of Tenant. Regardless of Landlord's consent, no
assignment shall release Tenant of Tenant's obligation or alter the primary
liability of Tenant to pay the rent and to perform all other obligations to be
performed by Tenant hereunder. The acceptance of rent by Landlord from any other
person shall not be deemed to be a waiver by Landlord of any provision hereof.
Consent to one assignment shall not be deemed consent to any subsequent
assignment. In the event of default by any assignee of Tenant or any successor
Tenant, in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
said assignee. Landlord may consent to subsequent assignments of this Lease or
amendments or modifications to this Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or their
consent thereto and such action shall not relieve Tenant of liability under this
Lease; provided that Tenant shall not be liable to the extent of amendments or
modifications made to this Lease which (i) materially increase the Annual Rent
(or additional rent) payable under this Lease, or (ii) extend the Lease Term
beyond the initial term and any Extension Periods hereunder, without Tenant's
consent, which consent shall not be unreasonably withheld.
ARTICLE 17
DEFAULT; REMEDIES
17.01 Default. The occurrence of any one or more of the following
events shall constitute a material default under this Lease by Tenant:
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(a) The vacating or abandonment of the Premises by Tenant.
(b) The failure by Tenant to make any payment when due of Annual
Rent, Impositions or any other payment required to be made by Tenant hereunder,
where such failure shall continue for a period of five (5) days after written
notice from Landlord, provided that Landlord shall no obligation to provide such
notice after three (3) defaults by Tenant in such payments in any calendar year.
(c) Except as otherwise provided in this Lease, the failure by
Tenant to observe or perform any of the covenants, conditions, or provisions of
this Lease to be observed or performed by Tenant, other than described in
subparagraph (b) above, where such failure shall continue for a period of thirty
(30) days after written notice thereof from Landlord to Tenant; provided,
however, that if the nature of Tenant's noncompliance is such that more than
thirty (30) days are reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant commences such cure within said thirty
(30)-day period and thereafter diligently and in good faith prosecutes such cure
to completion.
(d) (i) The making by Tenant of any general arrangement or general
assignment for the benefit of creditors; (ii) Tenant becomes a "debtor" as
defined in 11 U.S.C. Section 101 or any successor statute thereto (unless, in
the case of a petition filed against Tenant, the same is dismissed within sixty
(60) days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within sixty
(60) days; or (iv) the attachment, execution, or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within sixty (60)
days. In the event that any provision of this Section 17.01(d) is contrary to
any applicable law, such provision shall be of no force or effect.
(e) The breach of any representation or warranty by Tenant
hereunder in any material respect, or if any financial statements delivered to
Landlord hereunder by Tenant are intentionally false or misleading in any
material respect.
(f) The default, breach or insolvency of any guarantor of this
Lease beyond any applicable notice and/or grace period under its guarantee.
(g) The default by Tenant under any other leases or agreements
with Landlord or any "affiliate of Landlord" (as hereinafter defined); provided
that this subparagraph (g) shall not apply with respect to any lease or
agreement assigned by Landlord or any affiliate of Landlord to a person or
entity which is not an affiliate of Landlord. For purposes of this Lease,
"affiliate of Landlord" shall mean (i) a person or entity which owns ten percent
(10%) or more of the voting securities of Landlord, or (ii) a person or entity
which directly or indirectly controls or is controlled by Captec Financial
Group, Inc., a Michigan corporation.
17.02 Remedies. In the event of any such material default by Tenant,
Landlord may at any time thereafter, with or without notice or demand and
without limiting Landlord in the exercise of any right or remedy which Landlord
may have by reason of such default:
(a) Terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. In
such event, Landlord shall be entitled to recover from Tenant all damages
incurred by Landlord by reason of Tenant's default including, but not limited
to, the cost of recovering possession of the Premises, expenses of reletting,
including reasonable and necessary renovation and alteration of the Premises,
reasonable attorneys' fees, and any real estate commission actually paid; and
the worth at the time of award by the court having jurisdiction thereof of the
amount by which the unpaid rent for the balance of the term after the time of
such award exceeds the amount of such unpaid rent for the same period that
Tenant proves could be reasonably avoided.
(b) Maintain Tenant's right to possession of the Premises
by any lawful means, in which case this Lease and the term hereof shall continue
in effect whether or not Tenant shall have vacated or abandoned the Premises. In
such event Landlord shall be entitled to enforce all of Landlord's rights and
remedies under the Lease, including the right to recover the rent as it becomes
due hereunder.
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(c) Pursue any other remedy now or hereafter available to
Landlord under the Laws of the jurisdiction where the Premises are located.
(d) To the extent permitted by Law, the rights and
remedies under this Lease provided shall be cumulative, and the exercise of any
one right or remedy shall not preclude the exercise of or act as a waiver of any
other right or remedy of Landlord hereunder, or which may be existing at law, or
in equity or by statute or otherwise.
(e) In addition to the foregoing, Tenant, and its
successors and assigns, shall at all times indemnify Landlord for, defend
Landlord against and save Landlord harmless from any liability, loss, cost,
injury, damage or other expense or risk (including, without limitation,
reasonable attorneys' fees) whatsoever, directly or indirectly, arising out of,
resulting from or otherwise in connection with (i) the failure for any reason on
the part of Tenant to perform, observe or comply with any of the covenants,
conditions and obligations under this Lease to be performed, observed or
complied with by Tenant, and/or (ii) the failure for any reason of any
representation or warranty given by Tenant in connection with the execution of
this Lease by Landlord to be materially true, complete and accurate.
17.03 Administrative Fee. Tenant hereby acknowledges that late payment
by Tenant to Landlord of rent and other sums due hereunder will cause Landlord
to incur administrative costs not contemplated by this Lease, the exact amount
of which will be extremely difficult to ascertain. Such administrative costs may
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed on Landlord by the terms of any superior lease,
mortgage or trust deed covering the Premises. Accordingly, if any installment of
rent or any other sum due from Tenant shall not be received by Landlord or
Landlord's designee within five (5) days of the date of written notice from
Landlord (if such notice is required under Section 17.01(b); otherwise within
five (5) days of the date due), then, without any requirement for further notice
to Tenant, Tenant shall pay to Landlord an administrative fee consisting of (a)
default interest equal to the reference rate publicly announced from time to
time by Bank of America, NT & SA, or any successor thereto, plus six percent
(6%) per annum (but in no event higher than the maximum rate permitted by Law)
multiplied by such overdue amount from the date such overdue amount was due
until paid, plus (b) a late charge equal to two percent (2%) of such overdue
amount (collectively, the "Administrative Fee"). The parties hereby agree that
such Administrative Fee represents a fair and reasonable estimate of the costs
Landlord will incur by reason of late payment by Tenant. Acceptance of such
Administrative Fee by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder.
17.04 Default by Landlord. Landlord will commit a default if Landlord
fails to perform any provision of this Lease required of it and the failure is
not cured within thirty (30) days after notice has been given to Landlord. If,
however, the failure cannot reasonably be cured within the cure period, Landlord
will not be in default of this Lease if Landlord commences to cure the failure
within the cure period and diligently and in good faith continues to cure the
failure. Notices given under this Section 17.04 will specify the alleged breach
and the applicable Lease provisions. Tenant may, after expiration of the cure
period unless there is an emergency, correct or remedy any failure of Landlord
not timely cured and deduct the reasonable costs paid by Tenant from future rent
as it becomes due.
17.05 Mitigation. Landlord and Tenant will each exercise best efforts
to mitigate the damages caused by the other party's breach of this Lease.
Efforts to mitigate damages will not be construed as a waiver of a nonbreaching
party's right to recover damages.
17.06 Lender's Right to Cure. The respective lenders of each party will
have the right, on the party's behalf, to cure the party's alleged breach within
the same time period allocated under this Lease. Landlord shall upon written
request from Tenant provide copies of any notices of default given to Tenant
hereunder to lenders of Tenant as specified in such written request, provided,
however, that Landlord shall not be deemed to be in default hereunder if
Landlord fails to provide any such notices to any of Tenant's lenders nor shall
any such failure relieve Tenant from any liability hereunder or affect any of
Landlord's rights or remedies hereunder.
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ARTICLE 18
SUBORDINATION
At Landlord's option, this Lease shall be subordinate to any superior
lease, mortgage, deed of trust, or any other hypothecation or security now or
hereafter placed upon the Premises and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements, and extensions thereof, provided that Landlord and any mortgagee
or beneficiary of Landlord shall execute the Subordination Agreement (as defined
below) with Tenant. In furtherance thereof, Tenant hereby agrees, upon request
by Landlord, to execute and deliver a subordination, non-disturbance and
attornment agreement substantially in the form attached hereto as Exhibit B
("Subordination Agreement") with respect to any such superior lease, mortgage,
deed of trust, hypothecation, or security.
ARTICLE 19
QUIET ENJOYMENT
Subject to the terms and conditions of this Lease and conditional upon
the performance of all of the provisions to be performed by Tenant hereunder,
Landlord agrees to secure to Tenant during the Lease Term and any and all
extensions thereof, the quiet and peaceful possession of the Premises and all
rights and privileges appertaining thereto and under this Lease.
ARTICLE 20
REPRESENTATIONS AND WARRANTIES
20.01 Representations and Warranties. To induce Landlord to enter into
this Lease, Tenant represents and warrants to Landlord and any mortgagee or
beneficiary of Landlord as follows:
(a) It is a corporation duly organized and validly
existing, in good standing under the laws of California, has stock outstanding
which has been duly and validly issued, and is qualified to do business and is
in good standing in the jurisdiction in which the Premises are located with full
power and authority to consummate the transactions contemplated hereby.
(b) The execution and delivery of this Lease has been
duly authorized by all action as may be required under the terms and provisions
of its governing instruments and the laws of the jurisdiction where the Premises
are located; this Lease will not violate or result in any breach of, or
constitute a default under, or result in the creation of any lien, encumbrance,
attachment, charge or other right or claim of any other party upon any assets of
Tenant or upon Tenant's beneficiary interest under the terms of this Lease
pursuant to any instrument or applicable law to which Tenant is a party or by
which it may be bound or create in favor of or grant to any third party any
interest whatsoever in Tenant's interest under the terms of this Lease; this
Lease is valid and enforceable in accordance with its terms, and the execution
and delivery of this Lease, and the consummation of the transactions
contemplated hereby, does not require the approval or consent of any
governmental authority having jurisdiction over Tenant or its property, or if
such approval or consent is required, it has been obtained.
(c) Tenant's financial statements and, if applicable, the
guarantors' financial statements heretofore delivered to Landlord are true and
correct in all material respects, have been prepared in accordance with
generally accepted accounting principles, and fairly present the respective
financial conditions of the subjects thereof as of the respective dates thereof.
No materially adverse change has occurred in the financial conditions reflected
therein since the respective dates thereof.
(d) There are no actions, suits or proceedings pending,
or to the best of Tenant's knowledge, threatened, against or affecting it or the
Premises or any guarantor of this Lease, or involving the validity or
enforceability of this Lease, at law or in equity, or before or by any
governmental authority except actions, suits and proceedings fully covered by
insurance or which, if adversely determined, would not materially impair the
ability of Tenant or any guarantor of this Lease to satisfy their obligations
under this Lease or any guarantee of this Lease.
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(e) Tenant is not in default under any obligation for the
payment of borrowed money, for the deferred purchase price of property or for
the payment of any rent under any lease agreement, which, either individually or
in the aggregate, would adversely affect the financial condition of Tenant, or
the ability of Tenant to perform its obligations hereunder, or comply with the
terms of this Lease.
20.02 Financial Statements. Tenant hereby covenants and agrees to
deliver: (i) audited annual financial statements for Tenant and any guarantor of
this Lease to Landlord within one hundred five (105) days after the end of
Tenant's and any such guarantor's respective fiscal years, (ii) management
prepared and certified quarterly financial statements for Tenant and any such
guarantor within sixty (60) days after the end of Tenant's and any such
guarantor's respective fiscal quarters, and (iii) annual unit level profit and
loss statements on the operations of the Premises within forty-five (45) days
after the end of Tenant's fiscal year, provided that in the event that Tenant's
profit and loss statements are prepared on a consolidated basis, Tenant hereby
covenants and agrees to prepare profit and loss statements specifically relating
to the Premises. Tenant agrees to assist Landlord in obtaining consent from
Tenant's and guarantor's accountant(s) in the event that Tenant's or guarantor's
financial statements are to be included in any regulatory filing or report to be
filed by Landlord. Tenant's failure to deliver financial statements pursuant to
this Section (where such failure shall continue for a period of fifteen (15)
days after written notice thereof from Landlord to Tenant) shall constitute a
material default under this Lease. Such financial statements shall be true and
correct in all material respects, be prepared in accordance with generally
accepted accounting principles, and fairly present the respective financial
conditions of the subjects thereof as of the respective dates thereof. Landlord
will maintain confidential and not disclose to third parties the financial
information furnished or revealed pursuant to this Lease except as may be
required, in Landlord's reasonable judgment, for the exercise of Landlord's
rights under this Lease as may be required by Law or compelled by legal
proceedings, for disclosure in confidence to prospective lenders, investors or
purchasers, or to third parties in connection with the closing of this
transaction.
ARTICLE 21
SURRENDER OF PREMISES
Except for Alterations permitted or approved in accordance with Article
12 hereof and changes resulting from eminent domain proceedings, at the
expiration or sooner termination of the Lease Term, Tenant shall surrender the
Premises in good and clean condition, reasonable wear and tear excepted, and
shall surrender all keys for the Premises to Landlord at the place then fixed
for the payment of rent and shall inform Landlord of all combinations on locks,
safes and vaults, if any, in the Premises. Tenant shall at such time remove all
of Tenant's property and shall repair any damage to the Premises caused thereby,
and any or all of such property not so removed shall, at Landlord's option,
become the exclusive property of Landlord or be disposed of by Landlord, at
Tenant's cost and expense, without further notice to or demand upon Tenant. If
the Premises are not so surrendered, Tenant shall indemnify Landlord against
loss or liability resulting from the delay by Tenant in so surrendering the
Premises including, without limitation, any claims made by any succeeding
occupant founded on such delay. Tenant's obligation to observe or perform this
covenant shall survive the expiration or other termination of the Lease Term.
ARTICLE 22
BANKRUPTCY OR INSOLVENCY
22.01 Bankruptcy or Insolvency. Subject to applicable law, Landlord and
Tenant acknowledge and agree that the provisions of this Section 23.01 shall
control notwithstanding anything to the contrary contained in this Lease:
(a) In the event that Tenant shall become a debtor under
Chapter 7 of the Bankruptcy Reform Act of 1978, 11 U.S.C. 1 et seq ("Bankruptcy
Code"), and Tenant's trustee or Tenant shall elect to assume this Lease for the
purpose of assigning the same or otherwise, such election and assignment may be
made only if the provisions of this Section 22.01 are satisfied. If Tenant or
Tenant's trustee shall fail to assume this Lease within sixty (60) days after
the entry of an order for relief, this Lease shall be deemed to have been
rejected. Immediately thereupon Landlord shall be entitled to possession of the
Premises without further obligation to Tenant or Tenant's trustee and this
Lease, upon the
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election of Landlord, shall terminate, but Landlord's right to be compensated
for damages shall survive, whether or not this Lease shall be terminated.
(b) In the event that a voluntary petition for
reorganization is filed by Tenant, or an involuntary petition is filed against
Tenant under Chapter 11 of the Bankruptcy Code, or in the event of the entry of
an order for relief under Chapter 7 in a case which is then transferred to
Chapter 11, Tenant's trustee or Tenant, as debtor-in-possession, must elect to
assume this Lease within sixty (60) days from the date of the filing of the
petition under Chapter 11 or the transfer thereto, or Tenant's trustee or the
debtor-in-possession shall be deemed to have rejected this Lease. Immediately
thereupon Landlord shall be entitled to possession of the Premises without
further obligation to Tenant or Tenant's trustee and this Lease, upon the
election of Landlord, shall terminate, but Landlord's right to be compensated
for damages, shall survive, whether or not this Lease shall be terminated.
(c) No election by Tenant's trustee or the
debtor-in-possession to assume this Lease, whether under Chapter 7 or Chapter
11, shall be effective unless each of the following conditions has been
satisfied:
(i) Tenant's trustee or the debtor-in-possession has cured all
defaults under this Lease, or has provided Landlord with evidence
satisfactory to Landlord that it will cure all defaults susceptible of
being cured by the payment of money within ten (10) days from the date
of such assumption and that it will cure all other defaults under this
Lease which are susceptible of being cured by the performance of any
act within thirty (30) days after the date of such assumption.
(ii) Tenant's trustee or the debtor-in-possession has
compensated, or has provided Landlord with evidence satisfactory to
Landlord that, within ten (10) days from the date of such assumption,
that it will compensate Landlord for any actual pecuniary loss incurred
by Landlord arising from the default of Tenant, Tenant's trustee, or
the debtor-in-possession as indicated in any statement of actual
pecuniary loss sent by Landlord to Tenant's trustee or the
debtor-in-possession.
(iii) Tenant's trustee or the debtor-in-possession (A) has
provided Landlord with "Assurance", as hereinbelow defined, of the
future performance of each of the obligations under this Lease of
Tenant, Tenant's trustee or the debtor-in-possession, and (B) shall, in
addition to any other security deposits held by Landlord, deposit with
Landlord, as security for the timely payment of Annual Rent and for the
performance of all other obligations of Tenant under this Lease, an
amount equal to three (3) monthly installments of Annual Rent (at the
rate then payable), and (C) pay in advance to Landlord on the date each
installment of Annual Rent is due and payable, one-twelfth of Tenant's
annual obligations for Impositions to be made by Tenant pursuant to
this Lease. The obligations imposed upon Tenant's trustee or the
debtor-in-possession by this Section 22.01 shall continue with respect
to Tenant or any assignee of this Lease, after the conclusion of
proceedings under the Bankruptcy Code.
(iv) Such assumption will not breach or cause a default under
any provision of any other lease, mortgage, financing agreement or
other agreement by which Landlord is bound, relating to the Premises.
(d) For purposes of Section 22.01(c)(iii) hereof, Landlord and
Tenant shall acknowledge that "Assurance" shall mean no less than:
(i) Tenant's trustee or the debtor-in-possession has and will
continue to have sufficient unencumbered assets after the payment of
all secured obligations and administrative expenses to assure Landlord
that sufficient funds will be available to fulfill the obligations of
Tenant under this Lease; and
(ii) To secure to Landlord the obligations of Tenant, Tenant's
trustee or the debtor-in-possession and to assure the ability of
Tenant, Tenant's trustee or the debtor-in-possession to cure the
defaults under this Lease, monetary and/or nonmonetary, there shall
have been: (A) sufficient cash deposited with Landlord, or (B) the
bankruptcy court shall have entered an order segregating sufficient
cash payable to Landlord, and/or (C) Tenant's trustee or the
debtor-in-possession shall have granted to Landlord a valid and
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<PAGE> 24
perfected first lien and security interest and/or mortgage in property
of Tenant, Tenant's trustee or the debtor-in-possession, acceptable as
to value and kind to Landlord.
(e) In the event that this Lease is assumed in accordance with
Section 22.01(b) hereof and thereafter Tenant is liquidated or files, or has
filed against it, a subsequent petition under any provision of the Bankruptcy
Code or any similar statute for relief of debtors, Landlord may, at its option,
terminate this Lease and all rights of Tenant hereunder, by giving Tenant notice
of its election to so terminate within thirty (30) days after the occurrence of
either of such events.
(f) If Tenant's trustee or the debtor-in-possession has assumed
this Lease pursuant to the terms and provisions of this Section 22.01 for the
purpose of assigning (or elects to assign) this Lease, this Lease may be so
assigned only if the proposed assignee has provided adequate assurance of future
performance of all of the terms, covenants and conditions of this Lease to be
performed by Tenant. Landlord shall be entitled to receive all consideration for
such assignment, whether cash or otherwise. As used in this Section 22.01(f)
"adequate assurance of future performance" shall mean at least that clauses (B)
and (C) of Section 22.01(c)(iii) hereof and each of the following conditions,
has been satisfied:
(i) The proposed assignee has furnished Landlord with a
current financial statement audited by a certified public accountant
determined in accordance with generally accepted accounting principles
consistently applied indicating a credit rating, net worth and working
capital in amounts which Landlord reasonably determines to be
sufficient to assure the future performance of such assignee of
Tenant's obligations under this Lease, but in no event indicating a net
worth less than the net worth of the Tenant and any guarantors of this
Lease, on the date of execution hereof.
(ii) Such assignment will not breach or cause a default under
any provision of any other lease, mortgage, financing agreement or
other agreement by which Landlord is bound, relating to the Premises.
(iii) The proposed assignment will not release or impair any
guarantee under this Lease.
(g) When, pursuant to the Bankruptcy Code, Tenant's trustee or the
debtor-in-possession shall be obligated to pay reasonable use and occupancy
charges for the use of the Premises, such charges shall not be less than the
Annual Rent and all additional rent payable by Tenant under this Lease and shall
be paid at the times and when due as though such charges were Annual Rent and
additional rent.
(h) Anything in this Lease to the contrary notwithstanding,
neither the whole nor any portion of Tenant's interest in this Lease or its
estate in the Premises shall pass to any trustee, receiver, assignee for the
benefit of creditors, or any other similar person or entity, or otherwise by
operation of law under the Bankruptcy Code or any similar federal statute now or
hereinafter enacted, or under the laws of any state, district or municipality
having jurisdiction of the person or property of Tenant unless Landlord shall
have consented to such transfer in writing. No acceptance by Landlord of rent or
any other payments from any such trustee, receiver, assignee, person or other
entity shall be deemed to constitute such consent by Landlord nor shall it be
deemed a waiver of Landlord's right to terminate this Lease for any transfer of
Tenant's interest under this Lease without such consent.
(i) Anything in this Lease to the contrary notwithstanding, Tenant
covenants and agrees that this Lease is an extension of financial benefits and
accommodations to Tenant which are uniquely personal in nature and such
financial benefits and accommodations are a material inducement for Landlord's
execution and delivery of this Lease and are an integral part of the
consideration for this Lease.
ARTICLE 23
HAZARDOUS MATERIALS
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<PAGE> 25
23.01 Representations and Warranties. Notwithstanding anything to the
contrary which may be contained in this Lease, Tenant represents, warrants and
covenants to Landlord as follows:
(a) To the best of Tenant's Knowledge (as defined below), there
are no and have been no violations of the Relevant Environmental Laws (as
hereinafter defined) respecting the Premises and no consent orders have been
entered with respect thereto, except for minor occurrences of noncompliance,
none of which will have a materially adverse effect on the value or use or
operation of the Premises for its intended purpose or the ability of Tenant to
perform its obligations under this Lease (a "Material Adverse Effect").
(b) To the best of Tenant's Knowledge, there are no and have been
no Hazardous Wastes (as hereinafter defined) or Asbestos (as hereinafter
defined) either at, upon, under or within, or discharged or emitted at or from,
the Premises, including, but not limited to, the air, soil, surface, and ground
water; no Hazardous Wastes or Asbestos have flowed, blown or otherwise become
present at the Premises from neighboring land; and no Hazardous Wastes or
Asbestos have been removed from the Premises other than those Hazardous Wastes
or Asbestos which are used and/or incidental to the ordinary course of Tenant's
business provided that the same are used, stored, handled and disposed of in
accordance with all Relevant Environmental Laws and all applicable Laws,
industry standards and manufacturers' specifications.
(c) The Premises will not be used for the purpose of storing
Hazardous Wastes, and no such storage or use will otherwise be allowed on the
Premises which will cause or increase the likelihood of causing the release of
Hazardous Wastes onto the Premises other than those Hazardous Wastes which are
used and/or incidental to the ordinary course of Tenant's business provided that
the same are used, stored, handled and disposed of in accordance with all
Relevant Environmental Laws and all applicable Laws, industry standards and
manufacturers' specifications. Neither Tenant, nor to the best of Tenant's
Knowledge any third party, has installed, used or removed any storage tanks on,
from or in connection with the Premises, except in full compliance with all
Relevant Environmental Laws, and to the best of Tenant's Knowledge, there are no
storage tanks or wells (whether existing or abandoned) located on, under or
about the Premises. To the best of Tenant's Knowledge, the Premises does not
consist of any building materials that contain Hazardous Wastes or Asbestos.
(d) Tenant is not aware of any claims or litigation, and has not
received any communication from any person (including any governmental
authority), concerning the presence or possible presence of Hazardous Wastes or
Asbestos at or adjacent to the Premises or concerning any violation or alleged
violation of the Relevant Environmental Laws respecting the Premises. Tenant
shall promptly notify Landlord of any such claims and shall furnish Landlord
with a copy of any such communications received by Tenant.
(e) Tenant shall notify Landlord promptly and in reasonable detail
in the event that Tenant becomes aware of or suspects the presence of Hazardous
Wastes or Asbestos (other than those Hazardous Wastes or Asbestos which are used
and/or incidental to the ordinary course of Tenant's business provided that the
same are used, stored, handled and disposed of in accordance with all Relevant
Environmental Laws and all applicable Laws, industry standards and
manufacturers' specifications) or a violation of the Relevant Environmental
Laws, at or adjacent to the Premises.
(f) Tenant shall ensure that the Premises comply and continue to
comply in all respects with the Relevant Environmental Laws.
(g) If the Premises are used or maintained so as to subject
Tenant, Landlord or any mortgagee or beneficiary of Landlord or the user of the
Premises to a claim of violation of the Relevant Environmental Laws (unless
contested in good faith by appropriate proceedings), Tenant shall immediately
cease or cause a cessation of such use or operations and shall remedy and fully
cure any conditions arising therefrom, at its own cost and expense.
(h) Upon Landlord's reasonable belief that there is a breach of
one of the environmental representations or warranties set forth above, Tenant
shall permit Landlord, at its option, at any time upon five (5) days' prior
written notice to Tenant, to cause or conduct a complete environmental audit to
be performed. The audit shall be at Tenant's sole cost and expense.
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23.02 Definitions.
(a) The "Relevant Environmental Laws," as referred to herein,
shall mean all applicable federal, state and local laws, rules, regulations,
orders, judicial determinations, and decisions or determinations by any
judicial, legislative or executive body of any governmental or
quasi-governmental entity, whether in the past, the present or the future, with
respect to: (A) the installation, existence, or removal of, or exposure to,
Asbestos on the Premises; (B) the existence on, discharge from, or removal from
the Premises of Hazardous Wastes; or (C) the effects on the environment of the
Premises or of any activity now, previously, or hereafter conducted on the
Premises. The Relevant Environmental Laws shall include, but not be limited to,
the following: (1) the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Sections 9601 et seq.; the Superfund Amendments and
Reauthorization Act, Public Law 99-499, 100 Stat. 1613; the Resource
Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq.; the National
Environmental Policy Act, 42 U.S.C. Section 4321; the Safe Drinking Water Act,
42 U.S.C. Sections 300F et seq.; the Toxic Substances Control Act, 15 U.S.C.
Section 2601; the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801; the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq.;
the Clean Air Act, 42 U.S.C. Sections 7401 et seq.; and the regulations
promulgated in connection therewith; (2) Environmental Protection Agency
regulations pertaining to Asbestos (including 40 C.F.R. Part 61, Subpart M);
Occupational Safety and Health Administration regulations pertaining to Asbestos
(including 29 C.F.R. Sections 1910.1001 and 1926.58); as each may now or
hereafter be amended; and (3) any state and local laws and regulations
pertaining to Hazardous Wastes and/or Asbestos;
(b) "Asbestos," as referred to herein, shall have the meanings
provided under the Relevant Environmental Laws, and shall include, but not be
limited to, asbestos fibers and friable asbestos, as such terms are defined
under the Relevant Environmental Laws; and
(c) "Hazardous Wastes," as referred to herein, shall mean any of
the following as defined by the Relevant Environmental Laws: solid wastes;
petroleum and petroleum derivatives; natural or synthetic gas; radon gas; toxic
or hazardous substances, wastes, pollutants or contaminants (including, but not
limited to, polychlorinated biphenyls ("PCB's"), paint containing lead, and urea
formaldehyde); and discharges of sewage or effluent.
(d) "Knowledge" shall mean the actual knowledge of any
executive officer of Tenant after due inquiry (and Tenant hereby acknowledges
that such due inquiry has been made) of the appropriate employees of Tenant's
real estate, construction, facilities, lease administration and legal
departments.
23.03 Tenant's Obligation. At its sole cost and expense, Tenant shall:
(a) Pay immediately when due the cost of compliance with
the Relevant Environmental Laws.
(b) Keep the Premises free of any lien imposed pursuant
to the Relevant Environmental Laws.
23.04 Landlord Options. In the event that Tenant fails to comply with
the requirements of this Article 23, after notice to Tenant and the earlier of
the expiration of any applicable cure period hereunder, or the expiration of the
cure period permitted under the Relevant Environmental Laws, if any, or such
earlier time if Landlord determines that life, person or property is in
jeopardy, Landlord may, but shall not be obligated to, exercise its right to do
one or more of the following: (a) declare that such failure constitutes a
default; and/or (b) take any and all actions, at Tenant's expense, that Landlord
reasonably deems necessary or desirable to cure said failure of compliance. Any
costs incurred pursuant to this Section 23.04 shall become immediately due and
payable by Tenant together with the applicable Administrative Fee, and shall be
paid or reimbursed to Landlord promptly upon written notice from Landlord.
23.05 Indemnity. Landlord shall not be liable for and Tenant shall
immediately pay to Landlord when incurred and shall indemnify, defend and hold
Landlord harmless from and against, all loss, cost, liability, damage and
expense (including, but not limited to, attorneys' fees and costs incurred in
the investigation, defense and settlement of claims) that Landlord may suffer or
incur as a result of or in connection in any way with any Asbestos or Hazardous
Wastes now or hereafter present, discharged, released, generated, disposed,
transported or emitted to, from, in, on or under the Premises, or in connection
with any violation of any of the Relevant Environmental Laws, or any
environmental
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assessment or study from time to time undertaken or requested by Tenant or
Landlord, or breach of any representation, covenant or undertaking by the Tenant
herein.
23.06 Survival. The provisions of this Article 23 shall survive the
expiration or termination of the Lease Term.
ARTICLE 24
GENERAL PROVISIONS
24.01 Estoppel Certificates. Each party ("Responding Party") shall at
any time upon not less than fifteen (15) days' prior written notice from the
other party ("Requesting Party") execute, acknowledge, and deliver to the
Requesting Party a statement in a form reasonably satisfactory to Landlord
certifying and acknowledging the following: (i) that this Lease represents the
entire agreement between Landlord and Tenant, and is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect) and the
date to which the Annual Rent and other charges are paid in advance, if any; and
(ii) that there are not, to the Responding Party's knowledge, any uncured
defaults on the part of the Requesting Party, or specifying such defaults if any
are claimed. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Premises or of the business of the
Requesting Party.
24.02 Severability. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.
24.03 Entire Agreement. It is understood that there are no oral or
other written agreements or representations between the parties hereto
concerning the subject matter of this Lease, and that this Lease and the
Exhibits hereto supersede and cancel any and all previous negotiations,
arrangements, representations, brochures, displays, projections, estimates,
agreements, and understandings, if any, made by Landlord and Tenant with respect
to the subject matter hereof, and none thereof shall be used to interpret,
construe, supplement, or contradict this Lease. This Lease, and the Exhibits
hereto, and all amendments hereto, constitute and shall be considered to be the
only agreement between the parties hereto and their representatives and agents.
All negotiations and oral agreements acceptable to both parties have been merged
into and are included herein and in the Exhibits hereto.
24.04 Notices. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal delivery, certified mail,
return receipt requested, by facsimile telecopy or by nationally recognized
overnight courier service and if given by mail or courier service, shall be
deemed sufficiently given if addressed to Tenant or to Landlord, as the case may
be, at the addresses noted in Article 1 hereof. Delivery by courier will be
deemed given on the date indicated in the courier's records; delivery by
certified mail will be deemed given on the date indicated on the return receipt;
and delivery by facsimile telecopy will be deemed given after receipt of written
confirmation of the transmission. Either party may by notice to the other
specify a different address for notice purposes. A copy of all notices required
or permitted to be given hereunder shall be concurrently transmitted to such
party or parties at such addresses as Landlord may from time to time hereafter
be designated by notice to Tenant.
24.05 Waivers. No waiver by a party of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by the
other party of the same of any other provision. Landlord's consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent.
24.06 Recording. Either Landlord or Tenant shall, upon request of the
other, execute, acknowledge, and deliver to the other a "short form" memorandum
of this Lease for recording purposes. Such memorandum shall be in a form
reasonably acceptable to Landlord and sufficient for Tenant to obtain a
leasehold policy of title insurance based thereon. In the event of any
termination of this Lease, Tenant agrees to execute and deliver to Landlord a
termination agreement satisfactory to Landlord, which termination agreement
shall be similarly recorded.
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24.07 Holding Over. If Tenant remains in possession of the Premises or
any part thereof after the expiration or termination of the Lease Term, such
occupancy shall be a tenancy from month-to-month upon all the provisions of this
Lease pertaining to the obligations of Tenant and Tenant shall thereby waive its
rights to any additional notice to quit, but all options, if any, granted under
the terms of this Lease shall be deemed terminated and be of no further force or
effect. The monthly rental during such hold-over period shall be equal to one
hundred twenty-five percent (125%) of the monthly installment of Annual Rent
payable immediately prior to expiration or termination of the Lease Term. In
addition, Tenant shall continue to be obligated to pay all Impositions and other
amounts required to be paid by the terms of this Lease.
24.08 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
24.09 Choice of Law. The laws of the jurisdiction in which the Premises
are located shall govern the validity, performance, and enforcement of this
Lease.
24.10 Attorneys' Fees. Should either party institute any action or
proceeding to enforce any provision hereof or for a declaration of such party's
rights or obligations hereunder, the prevailing party shall be entitled to
receive from the losing party such amounts as the court may adjudge to be
reasonable attorneys' fees for services rendered to the party prevailing in any
such action or proceeding, and such fees shall be deemed to have accrued upon
the commencement of such action or proceeding.
24.11 Force Majeure. Except for payment obligations imposed pursuant to
this Lease, if there is any prevention, delay or stoppage of an act required of
a party pursuant to this Lease because of strikes, lockouts, other labor
disputes, material shortages, embargoes, civil unrest, governmental regulations,
governmental controls, enemy or hostile governmental action, judicial order,
public emergency, fire, earthquake, other acts of God, and other causes beyond
the reasonable control of the party obligated to perform, performance of the act
will be excused for the period of the delay.
24.12 Consent. Whenever the consent or approval of either party is
required pursuant to this Lease, such consent or approval will not be
unreasonably withheld or delayed except as otherwise expressly provided herein.
24.13 Liability of Landlord.
(a) In the event of any sale or other transfer of Landlord's
interest in the Premises, Landlord shall be and hereby is entirely freed and
relieved of all liabilities and obligations of Landlord hereunder with respect
to the Premises to the extent accruing after the date of such transfer.
(b) Notwithstanding anything contained herein to the contrary, it
is specifically understood and agreed that there shall be no personal liability
of Landlord or any of its shareholders, members, officers or directors in
respect of any of the terms, covenants, conditions or provisions of this Lease,
and in the event of a breach or default by Landlord of any of its liabilities
and obligations under this Lease, Tenant and any persons claiming by, through or
under Tenant shall look solely to the equity of Landlord in the Premises for the
satisfaction of Tenant's and/or such persons' remedies and claims for damages.
24.14 No Merger. There shall be no merger of this Lease, or the
leasehold estate created by this Lease, with any other estate or interest in the
Premises, or any part thereof, by reason of the fact that the same person, firm,
corporation or other entity may acquire or own or hold, directly or indirectly,
(a) this Lease or the leasehold estate created by this Lease, or any interest in
this Lease or in any such leasehold estate, and (b) any such other estate or
interest in the Premises or any part thereof; and no such merger shall occur
unless and until all persons, corporations, firms and other entities having an
interest (including a security interest) in (i) this Lease or the leasehold
estate created by this Lease; and (ii) any such other estate or interest in the
Premises, or any part thereof, shall join in a written instrument effecting such
merger and shall duly record the same.
24.15 Reports. Tenant agrees to furnish to Landlord, with reasonable
promptness, financial statements, reports, documents and information regarding
the financial condition and affairs of Tenant or any guarantor, which Tenant and
each guarantor of this Lease sends to or makes available to its shareholders,
noteholders or bondholders. In addition
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<PAGE> 29
to the foregoing, Tenant shall obtain and deliver to Landlord, with reasonable
promptness, such other information respecting the operation of the Premises as
Landlord may from time to time reasonably request.
24.16 Definition of Rent. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, without limitation, the Real
Property Taxes and insurance premiums payable hereunder shall be deemed to be
"rent".
24.17 Interpretation. The captions by which the Articles and Sections
of this Lease are identified are for convenience only and shall have no effect
upon the interpretation of this Lease. Whenever the context so requires,
singular numbers shall include the plural, the plural shall refer to the
singular, the neuter gender shall include the masculine and feminine genders,
and the words "Landlord" and "Tenant" and "person" shall include corporations,
partnerships, associations, other legal entities, and individuals.
24.18 Relationship of the Parties. Nothing in this Lease shall create a
partnership, joint venture, employment relationship, borrower and lender
relationship, or any other relationship between Landlord and Tenant other than
the relationship of landlord and tenant.
24.19 Successors. This Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective personal and legal
representatives, heirs, successors, and assigns.
24.20 Modifications. This Lease may not be altered, amended, changed,
waived, terminated, or modified in any manner unless the same shall be in
writing and signed by or on behalf of the party to be bound. No waiver of any
provision of this Lease of any right of Landlord hereunder shall be effective
unless in writing signed by or on behalf of the person to be bound.
24.21 Brokerage Fees. Landlord and Tenant each represent and warrant
that they have not employed a broker in connection with the execution of this
Lease. Landlord and Tenant shall each indemnify and hold the other harmless from
and against any claim or claims for brokerage or other commissions arising from
such party having employed a broker contrary to its representation in this
Section 25.21.
24.22 Not Binding Until Executed. This Lease does not constitute an
"offer" and is not binding until fully executed and delivered by Landlord.
24.23 Counterparts. This Lease may be executed in one or more
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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<PAGE> 30
WITNESSES: LANDLORD:
CAPTEC NET LEASE REALTY, INC.
______________________________ BY__________________________________
______________________________ Its_________________________________
TENANT:
ARG ENTERPRISES, INC.
______________________________ BY __________________________________
______________________________ Its _________________________________
STATE OF MICHIGAN )
: ss.
COUNTY OF WASHTENAW )
The foregoing instrument was acknowledged before me this _______ day of
September, 1996, by Gary A. Bruder, as Vice President of Captec Net Lease
Realty, Inc., a Michigan corporation, on behalf of the corporation.
_____________________________________________
Notary Public
Washtenaw County, Michigan
My Commission Expires:_______________________
[Notary Public's Seal]
STATE OF NEW YORK )
: ss.
COUNTY OF _______________ )
The foregoing instrument was acknowledged before me this ________ day
of September, 1996, by __________________, as _________________ of ARG
Enterprises, Inc., a California corporation, on behalf of the corporation.
____________________________________________
Notary Public
________________ County, New York
My Commission Expires:______________________
[Notary Public's Seal]
26
<PAGE> 31
EXHIBIT A
TO
LEASE
Land situated in the County of Anoka, State of Minnesota, and more particularly
described as follows:
Lot 2, Block 1, Holiday North 1st Addition, according to the plat on file in the
office of the Registrar of Titles, Anoka County, Minnesota.
Torrens Certificate Number: 52563
A-1
<PAGE> 32
EXHIBIT B
TO
LEASE
CAPTEC NET LEASE REALTY, INC.,
ARG ENTERPRISES, INC.
AND
CS FIRST BOSTON MORTGAGE CAPITAL CORP.
------------------------------------------
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
------------------------------------------
Dated: September __, 1996
Location: 5696 University Avenue NE, Fridley, Minnesota
Lease No.: 06153
RECORD AND RETURN TO:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Charles J. Hamilton, Jr., Esq.
B-1
<PAGE> 33
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this
"Agreement") is made and entered into as of the ____ day of September, 1996, by
and among (i) ARG ENTERPRISES, INC., a California corporation ("Tenant"); (ii)
CAPTEC NET LEASE REALTY, INC., a Michigan corporation ("Landlord"); and (iii) CS
FIRST BOSTON MORTGAGE CAPITAL CORP., a Delaware corporation ("Lender").
WITNESSETH:
WHEREAS, Lender is or may become the holder of a certain mortgage/deed
of trust ("Mortgage/Deed of Trust") encumbering that certain parcel of real
property and the improvements thereon, commonly known as the Stuart Anderson's
Cattle Company restaurant located at 5696 University Avenue NE, Fridley,
Minnesota, and more particularly described in Schedule 1 attached hereto and
incorporated herein by this reference (the "Property");
WHEREAS, Lender and Landlord are parties to the Mortgage/Deed of Trust,
pursuant to which Landlord financed the Property from Lender; and
WHEREAS, Landlord and Tenant are parties to that certain Lease, dated
September __, 1996 (the "Lease"), pursuant to which Tenant leased the Property
from Landlord.
NOW, THEREFORE, in consideration for the mutual covenants and
agreements contained herein, the sufficiency of which is hereby acknowledged,
the parties hereto hereby agree as follows:
1. Subordination. Subject to the terms of this Agreement, the
Lease and all of the terms, covenants and provisions thereof and all rights,
remedies and options of Tenant thereunder are hereby made, and shall at all
times continue to be, subject, junior and subordinate in all respects to the
Mortgage/Deed of Trust and to the lien thereof and to all increases, renewals,
modifications, spreaders, consolidations, replacements and extensions thereof
and to the rights of Lender thereunder and to any and all sums secured thereby,
with the same force and effect as if the Mortgage/Deed of Trust and all other
such instruments had been executed, delivered and recorded prior to the
execution of the Lease. However, Tenant covenants and agrees that if requested
by Lender it will execute, acknowledge and deliver any instrument or document
reasonably requested to confirm the foregoing subordination of the Lease within
twenty (20) days after receipt of written request therefor.
2. Non-Disturbance. So long as (i) the term of the Lease shall
have commenced pursuant to the provisions thereof, (ii) Tenant shall be in
possession of the Property, (iii) the Lease shall be in full force and effect
and (iv) Tenant is not in default in the payment of rent or any other sums
payable under the Lease or any of the other terms, covenants or conditions of
the Lease on Tenant's part to be performed beyond any applicable grace or cure
period provided in the Lease, then: (a) Tenant's possession of the Property
shall not be diminished or interfered with by Lender or any third party
purchaser; (b) the Lease shall not be terminated or affected by the foreclosure
of the Mortgage/Deed of Trust or the Lender's exercise of any remedy provided
for in the Mortgage/Deed of Trust; and (c) in the event that Lender forecloses
upon the Property, Lender shall elect to preserve the Lease as a lease between
Lender and Tenant in accordance with the terms of this Agreement.
3. Attornment. In the event that Lender or any successors in
interest to Lender shall become the owner of the Property by reason of the
foreclosure of the Mortgage/Deed of Trust or the acceptance of a deed or
assignment in lieu of foreclosure or otherwise, then:
(a) Tenant shall be bound to Lender, and Lender shall be bound to
Tenant, under all of the terms, covenants and conditions of the Lease for the
balance of the term thereof remaining, and any extensions or renewals thereof
which may be effected in accordance with any option therefor contained in the
Lease, with the same force and effect as if Lender were the original landlord
under the Lease, except that Paragraph 3(b) below and the other provisions of
this Agreement shall modify the Lease, and Tenant does hereby attorn to Lender
as its landlord, said attornment to be effective and self-operative without the
execution of any further instruments; provided, however, that within twenty (20)
B-2
<PAGE> 34
days after receipt of written request therefor from Lender, Tenant will execute
and deliver to Lender any instrument or other documents reasonably requested by
Lender to confirm Tenant's attornment to Lender.
(b) Notwithstanding the foregoing, however, it is agreed that in
no event shall Lender:
(1) be liable for any act or omission of any prior
landlord (including Landlord);
(2) be obligated to cure any defaults of any prior
landlord (including Landlord) which occurred prior to
the date that Lender succeeded to the interest of
such prior landlord under the Lease; provided that
from and after the date Lender becomes owner of the
Property, Lender shall be obligated to cure any
continuing non-monetary default of the landlord under
the Lease to the extent such default is capable of
being cured by Lender;
(3) be subject to any offsets or defenses which Tenant
may be entitled to assert against any prior landlord
(including Landlord) with respect to events occurring
prior to the date Lender succeeded to Landlord's
interest;
(4) be bound by any Annual Rent or other amounts paid by
Tenant to any prior landlord (including Landlord)
more than one (1) month in advance of the date that
Lender succeeded to the interest of such prior
landlord under the Lease; or
(5) be bound by any amendment or modification of the
Lease or any supplemental agreement made without the
written consent of Lender, such consent not to be
unreasonably withheld.
(c) The terms of the Lease shall be further amended by (i)
removing any offsets, claims or counterclaims which shall have accrued to Tenant
against Landlord prior to the date on which Lender or its successor in interest
shall have become the owner of the Property and (ii) providing that Lender shall
not be liable for any security deposit or other monies not actually received by
Lender.
4. Amendments. Tenant shall not, without the prior written consent of
Lender (a) enter into any agreement amending, modifying or terminating the
Lease, (b) prepay any of the rents, additional rents or other sums due under the
Lease for more than one (1) month in advance of the due date thereof, (c)
voluntarily surrender the Property or terminate the Lease without cause or
shorten the term thereof, or (d) assign the Lease or sublet the Property or any
part thereof, except to the extent permitted under the Lease; and any such
amendment, modification, termination, prepayment, voluntary surrender,
assignment or subletting, without the prior written consent of Lender (such
consent not be unreasonably withheld) shall not be binding on Lender, except to
the extent permitted under the Lease.
5. Tenant's Representations and Warranties. Tenant hereby represents
and warrants to Lender that as of the date hereof (a) Tenant is the owner and
holder of the tenant's interest under the Lease, (b) a true and complete copy of
the Lease is annexed hereto and made a part hereof as Schedule 2 and the Lease
has not been modified or amended, (c) the Lease is in full force and effect and
the term thereof commenced on September ___, 1996 pursuant to the provisions
thereof, (d) the Property has been completed and Tenant has taken possession of
the same on a rent paying basis, (e) neither Tenant nor the Landlord is in
default under any of the terms, covenants or provisions of the Lease and Tenant
to the best of its knowledge knows of no event which but for the passage of time
or the giving of notice or both would constitute an event of default by Tenant
or the Landlord under the Lease, (f) neither Tenant nor the Landlord has
commenced any action or given or received any notice for the purpose of
terminating the Lease, (g) all rents, additional rents and other sums due and
payable under the Lease have been paid in full and no rents, additional rents or
other sums payable under the Lease have been paid for more than one (1) month in
advance of the due dates thereof, and (h) there are no offsets or defenses to
the payment of the rents, additional rents, or other sums payable under the
Lease.
B-3
<PAGE> 35
6. Payment of Rent to Lender. Tenant agrees to pay the rent and any
other payments due under the Lease to Lender upon receipt of written notice from
Lender that it has succeeded to the interest of Landlord under the Lease, and
Landlord agrees that Tenant is entitled to rely conclusively upon such notice
without any duty of inquiry.
7. Limitation on Liability of Lender. There shall be no personal
liability on the part of Lender or any officer, director, employee, shareholder
or partner of Lender for the performance of the Lease or any covenant or
agreement contained therein or in this Agreement. Tenant shall look solely to
Lender's estate and interest in the Property, if any, for the satisfaction of
every remedy of Tenant for any breach by Lender under the Lease or this
Agreement or otherwise arising out of or in connection with the Lease, and
Lender is hereby released or relieved of any other liability hereunder and under
the Lease. Tenant agrees that with respect to any money judgment which may be
obtained or secured by Tenant against Lender, Tenant shall look solely to the
estate or interest owned by Lender in the Property and Tenant will not collect
or attempt to collect any such claim out of any other assets of Lender.
8. Performance by Lender: Conflict. Nothing in this Agreement shall be
or be deemed to be an agreement by Lender to perform any obligation of Landlord
under the Lease unless and until the Lender acquires the Property, and then only
if required to do so by the terms of the Lease, as modified and limited by this
Agreement. In the event of any conflict between the terms of this Agreement and
the terms of the Lease, the terms of this Agreement shall control.
9. Notices. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal delivery, certified mail,
return receipt requested, by facsimile telecopy or by nationally recognized
overnight courier service and if given by mail or courier service, shall be
deemed sufficiently given if addressed to the parties at the addresses set forth
below. Delivery by courier will be deemed given on the date indicated in the
courier's records; delivery by certified mail will be deemed given on the date
indicated on the return receipt; and delivery by facsimile telecopy will be
deemed given after receipt of written confirmation of the transmission. Any
party may by notice specify a different address for notice purposes.
Addresses for Notices:
To Lender: CS First Boston Mortgage Capital Corp.
55 E. 52nd Street
New York, New York 10055
Attention: Laura Goldberg
Fax: (212) 318-1468
To Landlord: Captec Net Lease Realty, Inc.
24 Frank Lloyd Wright Drive
Lobby L, 4th Floor
P.O. Box 544
Ann Arbor, Michigan 48106-0544
Attention: Gary A. Bruder
Fax: (313) 994-1376
To Tenant: ARG Enterprises Inc.
4410 El Camino Real, Suite 201
Los Altos, California 94022
Attention: Director of Real Estate
Fax: (415) 949-6420
B-4
<PAGE> 36
with a copy to:
American Restaurant Group, Inc.
4410 El Camino Real, Suite 201
Los Altos, California 94022
Attention: Legal Department
Fax: (415) 949-6420
10. Successors and Assigns. This Agreement and each and every
covenant and provision contained herein shall be binding upon and shall inure to
the benefit of the parties hereto and their respective representatives,
successors and assigns.
11. Governing Law; Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the jurisdiction in which the
Property is located.
12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, INTENTIONALLY AND FREELY WAIVES TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OTHER PARTY HERETO IN RESPECT OF ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
B-5
<PAGE> 37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date hereinabove first written.
WITNESSES: TENANT:
ARG ENTERPRISES, INC.
_______________________________ By____________________________
_______________________________ Its_____________________________
WITNESSES: LANDLORD:
CAPTEC NET LEASE REALTY, INC.
_______________________________ By____________________________
_______________________________ Its_____________________________
WITNESSES: LENDER:
CS FIRST BOSTON MORTGAGE
CAPITAL CORP.
_______________________________ By____________________________
_______________________________ Its_____________________________
Prepared By:
Diane B. Cabbell, Esq.
Miller, Canfield, Paddock and Stone, P.L.C.
101 North Main, 7th Floor
Ann Arbor, Michigan 48104
B-6
<PAGE> 38
STATE OF NEW YORK )
: ss.
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this ___ day of
September, 1996, by __________________, as ___________ of ARG ENTERPRISES, INC.,
a California corporation on behalf of the corporation.
_________________________________________
Notary Public
__________ County, New York
My commission Expires:____________
[Notary Public's Seal]
STATE OF MICHIGAN )
: ss.
COUNTY OF WASHTENAW )
The foregoing instrument was acknowledged before me this ___ day of
September, 1996, by __________________, as ___________ of CAPTEC NET LEASE
REALTY, INC., a Michigan corporation, on behalf of the corporation.
_________________________________________
Notary Public
Washtenaw County, Michigan
My commission Expires:____________
[Notary Public's Seal]
STATE OF NEW YORK )
: ss.
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me this ___ day of
September, 1996, by __________________, as ___________ of CS FIRST BOSTON
MORTGAGE CAPITAL CORP., a Delaware corporation, on behalf of the corporation.
_________________________________________
Notary Public
__________ County,________________
My commission Expires:____________
[Notary Public's Seal]
B-7
<PAGE> 39
SCHEDULE 1
to
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
Land situated in the County of Anoka, State of Minnesota, and more particularly
described as follows:
Lot 2, Block 1, Holiday North 1st Addition, according to the plat on file in the
office of the Registrar of Titles, Anoka County, Minnesota.
Torrens Certificate Number: 52563
B-8
<PAGE> 40
SCHEDULE 2
to
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
[Copy of the Lease]
[Intentionally Omitted from Copy Submitted for Recording.]
B-9
<PAGE> 1
EXHIBIT 2.5
Lease No. 06154
10600 Wayzata
Minnetonka, Minnesota
LEASE
BETWEEN
CAPTEC NET LEASE REALTY, INC.
AND
ARG ENTERPRISES, INC.
Dated: September __, 1996
<PAGE> 2
TABLE OF CONTENTS
PAGE
ARTICLE 1 FUNDAMENTAL LEASE PROVISIONS............................ 1
ARTICLE 2 EXHIBITS................................................ 2
ARTICLE 3 PREMISES................................................ 2
ARTICLE 4 TERM.................................................... 2
4.01 Term.................................................... 2
4.02 Option to Extend Lease Term............................. 2
ARTICLE 5 LIENS................................................... 3
ARTICLE 6 RENT.................................................... 3
6.01 Rent.................................................... 3
6.02 Rental Adjustments...................................... 4
6.03 Net Lease; Impositions.................................. 4
ARTICLE 7 USE OF THE PREMISES..................................... 5
7.01 Use..................................................... 5
7.02 Compliance With Law..................................... 5
7.03 Permits and Licenses.................................... 5
ARTICLE 8 UTILITIES............................................... 5
8.01 Payment................................................. 5
8.02 Interruption in Service................................. 5
ARTICLE 9 TAXES................................................... 6
9.01 Payment of Taxes........................................ 6
9.02 Definition of "Real Property Taxes"..................... 6
9.03 Personal Property Taxes................................. 6
9.04 Tenant's Right to Contest Taxes......................... 6
ARTICLE 10 MAINTENANCE AND REPAIRS................................. 7
10.01 Tenant's Obligations.................................... 7
10.02 Landlord's Obligations.................................. 8
10.03 Landlord's Rights....................................... 8
ARTICLE 11 INSURANCE AND INDEMNIFICATION........................... 8
11.01 Tenant's Insurance Obligation........................... 8
11.02 Subrogation Waiver...................................... 9
11.03 Insurance Use Restrictions.............................. 10
11.04 Indemnification......................................... 10
11.05 Payment of Insurance.................................... 10
ARTICLE 12 ALTERATIONS............................................. 11
12.01 Permitted Improvements.................................. 11
12.02 Liens................................................... 11
12.03 Structural Alterations.................................. 11
12.04 Removal of Alterations.................................. 11
12.05 Alterations Required by Law............................. 11
12.06 General Conditions Relating to Alterations.............. 11
-i-
<PAGE> 3
ARTICLE 13 SIGNS................................................... 12
ARTICLE 14 DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD ............. 12
14.01 Obligation to Rebuild................................... 12
14.02 No Abatement of Rent.................................... 12
ARTICLE 15 EMINENT DOMAIN.......................................... 13
15.01 Total Taking............................................ 13
15.02 Partial Taking.......................................... 13
15.03 Award................................................... 13
15.04 Transfer Under Threat of Taking......................... 13
ARTICLE 16 ASSIGNMENT AND SUBLETTING............................... 14
16.01 Landlord's Consent Required............................. 14
16.02 Assumption of Obligations............................... 14
16.03 Assignment to Affiliate................................. 14
16.04 Hypothecation of Lease.................................. 14
16.05 Corporate/Partnership/Limited Liability Company
Restrictions.......................................... 14
16.06 No Release of Tenant.................................... 14
ARTICLE 17 DEFAULT; REMEDIES....................................... 15
17.01 Default................................................. 15
17.02 Remedies................................................ 16
17.03 Administrative Fee...................................... 16
17.04 Default by Landlord..................................... 17
17.05 Mitigation.............................................. 17
17.06 Lender's Right to Cure.................................. 17
ARTICLE 18 SUBORDINATION........................................... 17
ARTICLE 19 QUIET ENJOYMENT......................................... 17
ARTICLE 20 REPRESENTATIONS AND WARRANTIES.......................... 17
20.01 Representations and Warranties.......................... 17
20.02 Financial Statements.................................... 18
ARTICLE 21 SURRENDER OF PREMISES................................... 19
ARTICLE 22 BANKRUPTCY OR INSOLVENCY................................ 19
ARTICLE 23 HAZARDOUS MATERIALS..................................... 21
23.01 Representations and Warranties.......................... 21
23.02 Definitions............................................. 22
23.03 Tenant's Obligation..................................... 23
23.04 Landlord Options........................................ 23
23.05 Indemnity............................................... 23
23.06 Survival................................................ 23
ARTICLE 24 GENERAL PROVISIONS...................................... 23
24.01 Estoppel Certificates................................... 23
24.02 Severability............................................ 24
-ii-
<PAGE> 4
24.03 Entire Agreement........................................ 24
24.04 Notices................................................. 24
24.05 Waivers................................................. 24
24.06 Recording............................................... 24
24.07 Holding Over............................................ 24
24.08 Cumulative Remedies..................................... 24
24.09 Choice of Law........................................... 24
24.10 Attorneys' Fees......................................... 25
24.11 Force Majeure........................................... 25
24.12 Consent................................................. 25
24.13 Liability of Landlord................................... 25
24.14 No Merger............................................... 25
24.15 Reports................................................. 25
24.16 Definition of Rent...................................... 25
24.17 Interpretation.......................................... 25
24.18 Relationship of the Parties............................. 26
24.19 Successors.............................................. 26
24.20 Modifications........................................... 26
24.21 Brokerage Fees.......................................... 26
24.22 Not Binding Until Executed.............................. 26
24.23 Counterparts............................................ 26
EXHIBIT A.................................................................A-1
EXHIBIT B.................................................................B-1
-iii-
<PAGE> 5
LEASE
In consideration of the rents and covenants set forth below, Landlord
(as hereinafter defined) hereby leases to Tenant (as hereinafter defined), and
Tenant hereby leases from Landlord, the following Premises (as hereinafter
defined) upon the following terms and conditions:
ARTICLE 1
FUNDAMENTAL LEASE PROVISIONS
Date: September ___, 1996
Commencement Date: September ___, 1996
Landlord: Captec Net Lease Realty, Inc., a Michigan
corporation
Tenant: ARG Enterprises, Inc., a California corporation
Tenant's
Trade Name: Stuart Anderson's Cattle Company restaurant
Lease Term: Twenty-Five (25) years, commencing on
the Commencement Date and ending on
September 30, 2021, with three (3) renewal
options of five (5) years each.
(Article 4, Section 4.01)
AnnualRent: Two Hundred Forty-Three Thousand Eight Hundred
Thirty and 00/100 Dollars ($243,830.00), subject to
adjustment as hereinafter provided. (Article 6,
Section 6.01)
The Annual Rent shall be payable on the first day
of each month, commencing October 1, 1996, in
twelve (12) equal installments each in the amount
of Twenty Thousand Three Hundred Twenty 00/100
Dollars ($20,320.00) during each year of the term
of this Lease, subject to proration or adjustment
as hereinafter provided.
Addresses for
Notices: To Landlord: Captec Net Lease Realty, Inc.
24 Frank Lloyd Wright Drive
Lobby L, 4th Floor
P. O. Box 544
Ann Arbor, Michigan 48106-0544
Attention: Senior Vice President,
Administration
Fax: (313) 994-1376
To Tenant: ARG Enterprises Inc. 450 Newport
Center Drive, 6th Floor Newport
Beach, California 92660 Attention:
Chief Financial Officer
Fax: (714) 721-8941
<PAGE> 6
with a copy to:
American Restaurant Group, Inc.
4410 El Camino Real, Suite 201
Los Altos, California 94022
Attention: Legal Department
Fax: (415) 949-6420
Premises: That certain real property, described in Exhibit A
attached hereto, and all appurtenances, easements
and rights of way now or subsequently pertaining
thereto, together with all improvements located
thereon, consisting of a restaurant located at
10600 Wayzata, Minnetonka, Minnesota, known as a
Stuart Anderson's Cattle Company restaurant.
References in this Article 1 to other Articles are for convenience and
designate some of the other Articles where references to the Fundamental Lease
Provisions appear. Each reference in this Lease to any of the Fundamental Lease
Provisions contained in this Article 1 shall be construed to incorporate all of
the terms provided under such Fundamental Lease Provisions. In the event of any
conflict between any Fundamental Lease Provision and the balance of this Lease,
the latter shall control.
ARTICLE 2
EXHIBITS
The following are attached hereto as Exhibits and made a part of this
Lease:
EXHIBIT A -- Description of the Premises
EXHIBIT B -- Form of Subordination, Non-Disturbance and
Attornment Agreement
In the event of any conflict between any of the above-referenced
Exhibits and the balance of this Lease, the Exhibit shall control.
ARTICLE 3
PREMISES
Landlord hereby leases and demises unto Tenant and Tenant hereby leases
and takes from Landlord, for the term, at the rental, and upon the terms,
covenants, and conditions hereinafter set forth, the property referred to in
Article 1 as the Premises and described on Exhibit A attached hereto.
ARTICLE 4
TERM
4.01 Term. The term of this Lease shall be the term specified in
Article 1 hereof (the initial term and any extensions exercised by Tenant
thereof are hereinafter referred to as the "Lease Term") and shall commence on
the Commencement Date.
4.02 Option to Extend Lease Term. Tenant shall have the option to
extend the initial term of this Lease for three (3) additional, successive
periods of five (5) years each (each, an ""Extension Period") on the same terms,
covenants and conditions of this Lease. In the event Tenant elects to exercise
the option(s), Tenant shall provide Landlord written notice of Tenant's exercise
of the option(s) not less than ninety (90) days prior to the end of the then
2
<PAGE> 7
current term, such notice to be given in the manner provided in Section 24.04 of
this Lease. Tenant's right to exercise the foregoing option(s) is conditioned
upon Tenant's performance of all of the duties and obligations on its part to be
performed under this Lease so that, at the time of the exercise of such options,
Tenant shall not be in default hereunder. In the event that Tenant elects to
extend the initial term of this Lease, the Annual Rent shall continue to be
adjusted as provided in Section 6.02 of this Lease.
ARTICLE 5
LIENS
Tenant shall do all things necessary to prevent the filing of any
mechanics' or other liens or encumbrances against the Premises, or any part
thereof, or upon any interest of Landlord or any mortgagee or beneficiary under
a deed of trust or any ground or underlying lessor in any portion of the
Premises, by reason of work, labor, services, or materials supplied or claimed
to have been supplied to Tenant, or anyone holding the Premises, or any part
thereof, through or under Tenant. If any such lien or encumbrance shall at any
time be filed against the Premises, or any portion thereof, Tenant shall either
cause same to be discharged of record within thirty (30) days after the date of
filing of same or, if Tenant in good faith determines that such lien should be
contested, Tenant will give Landlord prior notice of Tenant's intention to
contest any such lien and, upon demand by Landlord, will procure and record a
lien release bond under applicable law in the amount prescribed by applicable
law, or if no amount is prescribed by applicable law in an amount equal to one
hundred fifty percent (150%) of the lien amount. If a final judgment is rendered
against Tenant by a court of competent jurisdiction, or if the Premises or any
portion thereof are in danger of being foreclosed upon as a result of any such
lien, Tenant will satisfy such judgment or lien at once. If Tenant does not post
the release bond or fails to pay any such adverse judgment or to discharge any
lien in the event of any imminent foreclosure, then Landlord may post the bond
or pay the judgment or discharge the lien, as applicable, and Tenant will
promptly reimburse Landlord for all sums paid by it in connection therewith,
together with the applicable Administrative Fee (as hereinafter defined). Tenant
shall give Landlord notice of the intended commencement date of any Structural
Alterations (as defined in Section 12.03 below), or of any work, labor services
or material to be performed or provided to the Premises or any portion thereof
involving expenditures in excess of Fifty Thousand Dollars ($50,000) for any
individual project or materials to be performed or provided to the Premises or
any portion thereof, or Two Hundred Thousand Dollars ($200,000) in the aggregate
for multiple projects or materials to be provided to the Premises or any portion
thereof in any calendar year (as such dollar amounts shall be increased pursuant
to the provisions of Section 6.02 hereof), at least ten (10) days before said
date, and in connection with the performance or provision of any such work,
labor, services or materials, and Landlord shall also have the right and
opportunity to post and maintain on the Premises such notices, including notices
of non-responsibility and other similar notices, as are provided for under the
laws of the state in which the Premises are located, evidencing Tenant's
obligations with respect to any of the matters covered by this Article and
Landlord shall have the right to enter the Premises and post such notices at any
reasonable time.
ARTICLE 6
RENT
6.01 Rent. Tenant covenants and agrees to pay for the use and occupancy
of the Premises, the Annual Rent specified in Article 1 hereof, subject to
increase pursuant to the provisions of Section 6.02 hereof, in twelve (12) equal
monthly installments during each year of the Lease Term, in advance, on the
first day of each calendar month, without any offset or deduction. Should the
Lease Term commence on a day other than the first day of a calendar month, then
the rental for such first fractional month shall be computed on a daily basis
for the period from the Commencement Date to the end of such calendar month at
an amount equal to one three hundred sixty-fifth (1/365) of the Annual Rent for
each day, which rent for such fractional month shall be payable in advance on
the Commencement Date. Should the Lease Term end on a day other than the last
day of a calendar month, then the rental for such fractional month shall be
computed on a daily basis at an amount equal to one three hundred sixty- fifth
(1/365) of the Annual Rent for each day. Rent shall be paid in lawful money of
the United States to Landlord at the
3
<PAGE> 8
address stated in Article 1 or to such other persons or at such other places as
Landlord may designate in writing to Tenant.
6.02 Rental Adjustments. The Annual Rent payable under this Lease and
the dollar amounts specified in Article 5 and Section 12.06(b) shall be
increased on October 1, 2001 and every five (5) years thereafter (each, an
"Increase Date") during the Lease Term, as follows:
(a) The basis for computing the increase shall be the Consumer
Price Index for all Urban Consumers - All Items, as published monthly by the
Bureau of Labor Statistics of the United States Department of Labor (1982-84 =
100) ("Index"), published for the date nearest the Commencement Date (the
"Beginning Index").
(b) If the Index published for the date nearest the applicable
Increase Date (the "Extension Index") has increased over the Beginning Index,
the Annual Rent (or the dollar amounts under Article 5 and Section 12.06(b), as
applicable) will be calculated by multiplying the then Annual Rent (or the
dollar amounts under Article 5 and Section 12.06(b), as applicable) by a
fraction, the numerator of which is the Extension Index and the denominator of
which is the Beginning Index, not to exceed an increase equal to ten percent
(10%) of the Annual Rent (or the dollar amounts under Article 5 and Section
12.06(b), as applicable) in effect during the five (5) year period immediately
preceding the applicable Increase Date.
(c) In the event the Extension Index is not available on the
applicable Increase Date, Tenant will continue to pay the Annual Rent in effect
immediately prior to the Increase Date and the applicable dollar amounts under
Article 5 and Section 12.06(b) shall be those immediately in effect prior to the
Increase Date. As soon as practicable, Landlord will furnish Tenant with a true
copy of the Extension Index figure together with a computation of the increase
in the Annual Rent for the ensuing five (5) year period, if any, and an
appropriate adjustment will be paid within thirty (30) days of Tenant's receipt
of Landlord's statement.
(d) If the Index is changed so that the base year differs from
that in effect on the Commencement Date, the Index shall be converted in
accordance with the conversion factor published by the Bureau of Labor
Statistics. If the Index is discontinued or revised during the Lease Term, such
other governmental index or computation with which it is replaced will be used
in order to obtain substantially the same result as would be obtained if the
Index had not been discontinued or revised.
6.03 Net Lease; Impositions. This Lease is what is commonly called a
"triple net lease," it being understood that Landlord shall receive the Annual
Rent set forth in Article 1 hereof, as increased pursuant to Section 6.02, free
and clear of any and all other impositions, taxes, liens, charges, or expenses
of any nature whatsoever incurred in connection with the ownership and operation
of the Premises. In addition to the Annual Rent reserved by Article 1 hereof, as
increased pursuant to Section 6.02, Tenant shall pay to the appropriate parties
all impositions, insurance premiums, Real Property Taxes (as defined below),
operating charges, maintenance charges, construction costs, accounting and legal
fees, and any other charges, costs and expenses which arise or may be
contemplated under any provision of this Lease during the Lease Term
(collectively "Impositions"). All of such Impositions shall constitute
additional rent, and upon the failure of Tenant to pay any of such Impositions,
Landlord shall have the same rights and remedies as otherwise provided in this
Lease for the failure of Tenant to pay rent. Tenant shall furnish to Landlord,
promptly upon the reasonable request of Landlord, official receipts or other
satisfactory proof evidencing payment of such Impositions. Upon Tenant's failure
to pay any Real Property Taxes or insurance premiums, as provided herein,
Landlord shall have the right, at Landlord's option, to require Tenant to (a)
promptly deposit with Landlord funds sufficient for the payment of the current
Real Property Taxes or insurance premiums required to be paid by Tenant
hereunder; and (b) also deposit one-twelfth of the current annual or annualized
Real Property Taxes or insurance premiums, as the case may be (or those of the
preceding years if the current amounts thereof have not been fixed), on the
first day of each month in advance. It is the intention of the parties hereto
that this Lease shall not be terminable for any reason by Tenant, and that
Tenant shall in no event be entitled to any abatement of, deductions of any
kind, offset or reduction in rent payable under this Lease except as may
otherwise be expressly set forth in this Lease. Any present or future Law to the
contrary shall not alter this agreement of the parties.
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ARTICLE 7
USE OF THE PREMISES
7.01 Use. Tenant shall occupy and use the Premises solely for the
operation of a Stuart Anderson's Cattle Company restaurant or such other
restaurant use as may be approved by Landlord in writing, which approval shall
not be unreasonably withheld. Tenant may not use the Premises for any other
purpose without obtaining the prior written consent of Landlord, which consent
shall not be unreasonably withheld.
7.02 Compliance With Law.
(a) Tenant accepts the Premises in "AS IS" condition. Tenant
accepts the Premises "AS IS" in reliance upon Tenant's own knowledge as owner
and/or occupier of the Premises immediately prior to commencement of this Lease.
Landlord makes no representations or warranties of any type whatsoever,
including without limitation, whether there has been or are currently any
violations of any covenants or restrictions of record, or any applicable Laws in
effect regarding the Premises on the Commencement Date.
(b) Tenant shall, at Tenant's sole expense, comply in all
material respects with all applicable laws, ordinances, building codes, orders,
zoning ordinances, rules, and regulations, of any governmental authorities and
with any directive of any public officer which shall impose any order or duty
upon Landlord or Tenant with respect to the Premises or the use or occupation
thereof or relating to the environment, health or safety with respect to the
Premises or the use or occupation thereof or relating to the environment, health
or safety with respect to the Premises or the use or occupation thereof
(including, without limitation, any rule of common law and judicial decisions
and the Americans With Disabilities Act), and any covenants, conditions or
restrictions of record relating to the Premises or the use or occupation
thereof, in each case as now or hereafter in effect (collectively "Laws").
(c) Notwithstanding any other provision of this Lease, Tenant
shall not use or permit the Premises to be used in any manner which will result
in waste or the creation of a nuisance, and Tenant shall maintain the Premises
free of any objectionable noises, odors, or disturbances; provided that, as
between Landlord and Tenant only, odors and exhaust incidental to a restaurant,
excluding odors of deteriorating food, will not be deemed a nuisance or
objectionable provided the same do not violate applicable Laws and do not
subject Landlord to civil liability.
7.03 Permits and Licenses. As between Landlord and Tenant, Tenant shall
be solely responsible to apply for and secure any building permit or permission
of any duly constituted authority for the purpose of doing any of the things
which Tenant is required or permitted to do under the provisions of this Lease.
Landlord shall cooperate as reasonably requested by Tenant to facilitate
Tenant's compliance with this obligation but at no cost to Landlord.
ARTICLE 8
UTILITIES
8.01 Payment. Tenant shall pay to the utility companies or other
parties entitled to payment the cost of all water, heat, air conditioning, gas,
electricity, telephone, and other utilities and services provided to or for the
Premises, including connection fees and taxes thereon.
8.02 Interruption in Service. Landlord shall not be liable in damages
or otherwise for any failure or interruption of any utility or other service
being furnished to the Premises subject to the provisions of Section 11.04(b)
hereof, and no such failure or interruption shall entitle Tenant to any
abatement of, setoff of or reduction in the amounts payable to Landlord
hereunder or otherwise entitle Tenant to terminate this Lease.
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ARTICLE 9
TAXES
9.01 Payment of Taxes. Tenant shall timely pay the Real Property Taxes
(as defined in Section 9.02) applicable to the Premises during the Lease Term.
Landlord agrees to use reasonable efforts to have the relevant taxing
authorities send a duplicate copy of any tax bills applicable to the Premises
sent directly to Tenant; otherwise, Landlord shall deliver copies of such tax
bills to Tenant promptly after receipt. All such payments shall be made prior to
delinquency or within ten (10) days after receipt by Tenant of the tax bills
from Landlord, whichever is later. Upon Landlord's request, Tenant shall
promptly furnish Landlord with satisfactory evidence that such Real Property
Taxes have been paid. If any such Real Property Taxes paid by Tenant shall cover
any period of time prior to or after the expiration of the Lease Term, Landlord
shall promptly reimburse Tenant to the extent required. If Tenant shall fail to
pay any such Real Property Taxes, Landlord shall have the right but not the
obligation to pay the same in which case Tenant shall repay such amount plus any
penalties and interest resulting therefrom to Landlord with Tenant's next Annual
Rental installment together with the applicable Administrative Fee.
9.02 Definition of "Real Property Taxes". As used herein, the term
"Real Property Taxes" shall mean any form of real estate tax or assessment, ad
valorem tax or gross receipts tax fee, levy, penalty, interest or other charge
imposed by any authority having the direct or indirect power to tax, including
any city, county, state, or federal government, or any school, agricultural,
sanitary, fire, street, drainage, or other improvement district thereof, on,
against or with respect to the Premises, this Lease, any legal or equitable
interest of Landlord or any superior landlord or any mortgagee or beneficiary of
Landlord in the Premises or in the real property of which the Premises are a
part, and Landlord's right to rent. The term "Real Property Taxes" shall also
include any tax, fee, levy, assessment, penalty, interest or other charge (i) in
substitution of, partially or totally, any tax, fee, levy, assessment, or charge
included within the definition of Real Property Taxes, (ii) the nature of which
was included within the foregoing definition of Real Property Taxes, or (iii)
any tax or increase in any tax which is imposed as a result of a transfer,
either partial or total, of Landlord's interest in the Premises or which is
added to a tax or charge hereinbefore included within the definition of Real
Property Taxes by reason of such transfer (other than documentary, stamp or
other transfer taxes resulting from such transfer but including any increase in
Real Property Taxes attributable to such transfer), or which is imposed by
reason of the transfer of the Premises to Landlord or this transaction, any
modifications or changes hereto, or any transfers hereof. Notwithstanding the
foregoing, the term "Real Property Taxes" shall not include any general income
taxes, inheritance taxes, and estate taxes imposed upon Landlord or any superior
landlord or any mortgagee or beneficiary of Landlord or any taxes attributable
to the recording of any mortgage or deed of trust on Landlord's interest in the
Premises.
9.03 Personal Property Taxes. Tenant shall pay prior to delinquency,
all taxes assessed against and levied upon trade fixtures, furnishings,
equipment, and all other personal property of Tenant contained in the Premises
or elsewhere. Tenant shall seek to cause said trade fixtures, furnishings,
equipment, and all other personal property to be assessed and billed separately
from the real property of Landlord.
9.04 Tenant's Right to Contest Taxes.
(a) Tenant shall have the right, at its cost and expense, to
contest the amount or validity, in whole or in part, of any Real Property Taxes
of any kind by appropriate proceedings diligently conducted in good faith, but
no such contest shall be carried on or maintained by Tenant after the time limit
for the payment of any Real Property Taxes unless Tenant, at its option: (i)
shall pay the amount involved under protest; or (ii) shall procure and maintain
a stay of all proceedings to enforce any collection of any Real Property Taxes,
together with all penalties, interest, costs and expenses, by a deposit of a
sufficient sum of money, or by such undertaking, as may be required or permitted
by law to accomplish such stay; or (iii) shall deposit with Landlord, as
security for the performance by Tenant of its obligations hereunder with respect
to such Real Property Taxes, security in the amount, if any, prescribed by
applicable law, or if no amount is prescribed by applicable law, in an amount
equal to one hundred fifty percent (150%) of the contested amount or such other
reasonable security may be demanded by Landlord to ensure payment of such
contested Real Property Taxes and all penalties, interest, costs and expenses
which may accrue during the period of the contest. Upon the termination of any
such proceedings, it shall be the obligation of Tenant to pay
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the amount of such Real Property Taxes or part thereof, as finally determined in
such proceedings, together with any costs, fees (including attorneys' fees),
penalties or other liabilities in connection therewith; provided, however, that
if Tenant has deposited cash or cash equivalents with Landlord as security under
clause (iii) above, then, so long as no material default exists under this
Lease, Landlord pay such Real Property Taxes (or part thereof) together with the
applicable costs, fees and liabilities as described above out of such cash or
cash equivalents and return any unused balance, if any, to Tenant. Otherwise,
Landlord shall return or cause to have returned to Tenant all amounts, if any,
held by or on behalf of Landlord which were deposited by Tenant in accordance
with the provisions hereof.
(b) Tenant shall have the right, at its cost and expense, to
seek a reduction in the valuation of the Premises as assessed for tax purposes
and to prosecute any action or proceeding in connection therewith. Provided
Tenant is not in material default hereunder, Tenant shall be authorized to
collect any tax refund of any tax paid by Tenant obtained by reason thereof and
to retain the same.
(c) Landlord agrees that whenever Landlord's cooperation is
required in any of the proceedings brought by Tenant as aforesaid, Landlord will
reasonably cooperate therein, provided same shall not entail any cost, liability
or expense to Landlord, and Tenant will pay, indemnify and save Landlord
harmless of and from, any and all liabilities, losses, judgments, decrees, costs
and expenses (including all reasonable attorneys' fees and expenses) in
connection with any such contest and will, promptly after the final settlement,
fully pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith, and
Tenant shall perform and observe all acts and obligations, the performance of
which shall be ordered or decreed as a result thereof. No such contest shall
subject Landlord to the risk of any civil liability or the risk of any criminal
liability, and Tenant shall give such reasonable indemnity or security to
Landlord, as may reasonably be demanded by Landlord to ensure compliance with
the foregoing provisions of this Section 9.04.
ARTICLE 10
MAINTENANCE AND REPAIRS
10.01 Tenant's Obligations.
(a) Tenant shall, at Tenant's expense, maintain in good
repair, order, and serviceable condition, reasonable wear and tear excepted, the
Premises and every part thereof, including but not limited to all plumbing,
ventilation, heating, air conditioning, and electrical systems and equipment in,
on, or exclusively serving the Premises, and windows, doors, storefronts, plate
glass, interior walls, and ceilings which are part of the Premises.
(b) Tenant shall not commit or suffer to be committed any
waste upon or about the Premises, and shall promptly at Tenant's cost and
expense, make all necessary replacements, restorations, renewals and repairs to
the Premises and appurtenances thereto which are material to the operation of
the Premises, whether interior or exterior, structural or non-structural,
ordinary or extraordinary, and foreseen or unforeseen; provided that with
respect to appurtenances to the Premises which are material to the operation of
the Premises, if third parties are obligated to repair or maintain such
appurtenances, Tenant shall use commercially reasonable efforts to enforce such
obligations of third parties, or if such third parties fail to perform such
obligations, Tenant shall perform such obligations to the extent Tenant has the
legal right to do so. Tenant shall pay to the appropriate parties Tenant's pro
rata share of any maintenance, repair or other costs to the extent required with
respect to any appurtenances to the Premises. Repairs, restorations, renewals
and replacements shall be at least equivalent in quality to the original work or
the property replaced, as the case may be. Tenant shall not make any claim or
demand upon or bring any action against Landlord for any loss, cost, injury,
damage or other expense caused by any failure or defect, structural or
non-structural, of the Premises or any part thereof.
(c) Upon the expiration or earlier termination of this Lease,
Tenant shall return the Premises to Landlord in good and clean condition and
repair, reasonable wear and tear excepted. Any damage to the Premises, including
any structural damage, resulting from Tenant's use or from the removal of
Tenant's fixtures, furnishings, and equipment pursuant to Section 12.04 hereof,
shall be repaired by Tenant at Tenant's expense.
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10.02 Landlord's Obligations. Except for the obligations of Landlord
under Article 14 hereof (relating to destruction of the Premises), and under
Article 15 hereof (relating to the condemnation of the Premises), it is intended
by the parties hereto that Landlord have no obligation, in any manner
whatsoever, to repair and maintain the Premises nor the building located thereon
nor the equipment or personal property therein, whether interior or exterior,
structural or nonstructural, ordinary or extraordinary, all of which obligations
are that of Tenant under Section 10.01 hereof. Tenant expressly waives the
benefit of any statute or law now or hereafter in effect which would otherwise
afford Tenant the right to terminate this Lease because of Landlord's failure to
keep the Premises or any part thereof or the building located thereon or the
fixtures thereon or equipment or personal property therein in good order,
condition, and repair, or the right to repair and offset the cost related
thereto against rent.
10.03 Landlord's Rights. If Tenant refuses or neglects to make repairs
or maintain the Premises, or any part thereof, or any appurtenances thereto
material to the operation of the Premises or to enforce maintenance or repair
obligations of third parties with respect to any such appurtenances, as provided
above, in a manner reasonably satisfactory to Landlord, without prejudice to any
other remedy Landlord may have hereunder, upon giving Tenant ten (10) days'
prior written notice, Landlord shall have the right to enter the Premises and
perform such maintenance or make such repairs on behalf of and for the account
of Tenant. In the event Landlord so elects, Tenant shall pay the cost of such
repairs, maintenance, or replacements promptly following Tenant's receipt of a
bill therefor, together with the applicable Administrative Fee. Tenant agrees to
permit Landlord or its agent to enter the Premises, upon reasonable notice by
Landlord, during normal business hours for the purpose of inspecting the
Premises.
ARTICLE 11
INSURANCE AND INDEMNIFICATION
11.01 Tenant's Insurance Obligation. Tenant covenants and agrees that
Tenant will carry and maintain, at its sole cost and expense, the following
types of insurance, in the amounts specified and in the form hereinafter
provided for:
(a) COMMERCIAL GENERAL LIABILITY. Commercial general liability
insurance (including liquor liability insurance) against any loss, liability or
damage on or relating to the Premises, with limits of not less than Five Million
Dollars ($5,000,000) in any one occurrence for death or injuries to one or more
persons and/or for damage to property. If such insurance has a deductible or
self-insured retention clause, the deductible or self-insured retention shall
not exceed Five Hundred Thousand Dollars ($500,000) per occurrence without
Landlord's consent, such consent not to be unreasonably withheld, and Tenant
shall be liable for such deductible or self-insured retention amount.
(b) BUSINESS INTERRUPTION/RENTAL LOSS. Tenant shall purchase
at Tenant's option either a policy of business interruption insurance to protect
Tenant and Landlord against loss of earnings in the event of interruption of
Tenant's business through destruction of real or personal property at the
Premises or a policy of rental loss protection to protect Landlord (and any
mortgagee or beneficiary of Landlord with respect to the Premises) against loss
of rental income as a result of destruction of real or personal property with
respect to the Premises. Such policy shall be written in an amount equal to not
less than six (6) monthly installments of Annual Rent. Such policy shall insure
against loss of earnings or rental income (as applicable) caused by at least the
perils of fire and lightning, extended coverage, vandalism, malicious mischief
and, where pertinent, sprinkler leakage.
(c) WORKERS' COMPENSATION. Worker's compensation insurance or
self insurance as required by the jurisdiction in which the Premises are located
and employer's liability insurance with a limit of not less than One Million
Dollars ($1,000,000).
(d) PROPERTY DAMAGE. Insurance covering all improvements
located on the Premises and all of Tenant's fixtures, merchandise, and personal
property from time to time in, on or upon the Premises, in an amount not less
than one hundred percent (100%) of their full replacement value providing
protection against perils commonly included within the classification "All
Risk," and insurance against sprinkler damage (if applicable and to
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the extent not otherwise covered by such "All Risk" policy). If such insurance
has a deductible clause, the deductible shall not exceed Two Hundred Fifty
Thousand Dollars ($250,000) per occurrence without Landlord's consent, such
consent not to be unreasonably withheld, and Tenant shall be liable for such
deductible amount. Any policy proceeds shall be used for the repair or
replacement of the property damaged or destroyed to the extent necessary to
maintain the standard of operation of the Premises and the business operated
thereon existing prior to the damage or destruction.
(e) ADDITIONAL COVERAGE. Such other insurance and in such
amounts customarily carried for like businesses or properties (as determined by
Landlord in good faith) as may be reasonably required from time to time by
Landlord.
(f) POLICY FORM.
(i) All policies of insurance provided for herein
shall be issued by reputable and financially sound insurance companies
reasonably satisfactory to Landlord, and such insurance companies shall be
qualified to do business in the jurisdiction where the Premises are situated.
All such policies shall be issued in Tenant's name, with Landlord named as an
additional insured and/or loss payee, as applicable, and if requested by
Landlord, name any superior landlord and any mortgagee or beneficiary of
Landlord as an additional insured or loss payee. The policies shall be for the
mutual and joint benefit and protection of Landlord, Tenant, any superior
landlord and any mortgagee or beneficiary of Landlord. Certificates of insurance
shall be delivered to Landlord prior to Landlord's execution of this Lease, and
thereafter certificates or other evidence of renewal or replacement coverage
shall be delivered to Landlord within fifteen (15) days prior to the expiration
of the term of each such policy. As often as any such policy shall expire or
terminate, renewal or additional policies shall be procured and maintained by
Tenant in like manner and to like extent. All certificates of insurance
delivered to Landlord must contain a provision giving Landlord, any superior
landlord, and any mortgagee or beneficiary of Landlord fifteen (15) days' notice
in writing in advance of any modification, cancellation, lapse, or reduction in
the amounts of insurance. The commercial general liability policy shall contain
a severability of interests clause providing that each entity insured under the
policy will be protected as if it were the only insured; however, this provision
shall not increase the coverage limits of such policy. The property damage
policy shall contain an agreement that any loss otherwise payable thereunder
shall be payable notwithstanding any act or negligence of Landlord or Tenant
which might, absent such agreement, result in a forfeiture of all or part of the
payment of such loss. All public liability, property damage, and other casualty
policies shall be written on an occurrence basis as primary policies, not
contributing with or in excess of coverage which Landlord may carry. Tenant's
failure to deliver the certificates or other evidence of insurance coverage
pursuant to this Section (where such failure shall continue for a period of
fifteen (15) days after written notice thereof from Landlord to Tenant) shall
constitute a material default under this Lease.
(ii) Tenant's obligations to carry the insurance
provided for above may be brought within the coverage of a so-called blanket
policy or policies of insurance carried and maintained by Tenant; provided,
however, that such policy or policies must have limits of not less than Five
Million and 00/100 Dollars ($5,000,000.00) and that Landlord, any superior
landlord and any mortgagee or beneficiary of Landlord shall be named as an
additional insured thereunder as their interests may appear and that the
coverage afforded Landlord will not be reduced or diminished by reason of the
use of such blanket policies and the requirements set forth herein are otherwise
satisfied. Tenant agrees to permit Landlord, not more often than annually, to
examine Tenant's original insurance policies required in this Lease, and to make
copies of the sections of such policies evidencing satisfaction of the
requirements of this Lease, provided such examination shall be conducted in the
offices of Tenant or Tenant's insurance broker and in the presence of a
representative of Tenant or Tenant's insurance broker.
11.02 Subrogation Waiver. Landlord (for itself and its insurer) hereby
waives any rights, including rights of subrogation, and Tenant (for itself and
its insurer) hereby waives any rights, including rights of subrogation, each may
have against the other on account of any loss or damage occasioned to Landlord
or Tenant, as the case may be, to their respective property, the Premises or its
contents that are caused by or result from risks insured against under any
property insurance policies carried by the parties hereto and in force at the
time of any such damage. The foregoing waivers of subrogation shall be operative
only so long as available in the jurisdiction where the Premises are located and
so long as no policy of insurance is invalidated thereby.
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11.03 Insurance Use Restrictions. Tenant agrees that it will not carry
any stock or goods or do anything in, on, or about the Premises outside of the
ordinary course of Tenant's business which will substantially increase the
insurance rates upon the building of which the Premises are a part.
11.04 Indemnification.
(a) Tenant shall at all times indemnify Landlord and any mortgagee or
beneficiary of Landlord for, defend (with counsel reasonably satisfactory to
Landlord) Landlord and any mortgagee or beneficiary of Landlord against, and
save Landlord and any mortgagee or beneficiary of Landlord harmless from, any
liability, loss, cost, injury, damage or other expense or risk (including,
without limitation, reasonable attorneys' fees) whatsoever that may occur or be
claimed by or with respect to any person(s) or property on or relating to the
Premises and resulting directly or indirectly from the use, misuse, occupancy,
possession or disuse of the Premises by Tenant or other persons claiming through
or under Tenant, or their respective agents, employees, licensees, invitees,
guests or other such persons, or from the condition of the Premises. Tenant
shall, at its cost and expense, defend against any and all such actions, claims
and demands and shall indemnify Landlord and any mortgagee or beneficiary of
Landlord for all costs, expenses and liabilities (including, without limitation,
reasonable attorneys' fees) it may incur in connection therewith. Neither
Landlord nor any mortgagee or beneficiary of Landlord shall in any event
whatsoever be liable for any injury or damage to the Premises or to the Tenant
or to any other persons claiming through or under Tenant, or their respective
agents, employees, licensees, invitees, guests or other such persons or to any
property of any such persons except as provided in subparagraph (b) below.
Tenant shall not make any claim or demand upon or institute any action against
Landlord as a result of such injury or damage except as provided in subparagraph
(b) below. Tenant covenants and agrees during the Lease Term hereof to pay when
due or reimburse and indemnify and hold Landlord and any mortgagee or
beneficiary of Landlord harmless from and against all inspection fees, taxes,
bonds, permits, certificates, assessments and sales, use, property or other
taxes, fees or tolls of any nature whatsoever (together with any related
interest or penalties) now or hereafter imposed against Landlord, any superior
landlord, or any mortgagee or beneficiary of Landlord, or Tenant by any federal,
state, county or local governmental authority upon or with respect to the
Premises or the use thereof or upon the possession, leasing, use, operation or
other disposition thereof or upon the rents, receipts or earnings arising
therefrom or upon or with respect to this Lease (excepting only federal, state,
and local net income taxes on the income of Landlord or any superior landlord or
any mortgagee or beneficiary of Landlord or any taxes attributable to the
recording of any mortgage or deed of trust on Landlord's interest in the
Premises).
(b) Notwithstanding the waiver of subrogation in Section 11.02,
Landlord shall indemnify, hold harmless and defend (with counsel reasonably
satisfactory to Tenant) Tenant from and against (i) any liability, loss, cost,
injury, damage, or other expense or risk, (including, without limitation,
reasonable attorneys' fees) whatsoever to the extent arising out of the
negligence or willful misconduct of Landlord or its representatives in
connection with any entry by Landlord or its representatives on the Premises, or
(ii) any liability, loss, cost, injury, damage, or other expense or risk,
(including, without limitation, reasonable attorneys' fees) whatsoever to the
extent arising out of the negligence or willful misconduct of Landlord or its
representatives in connection with any maintenance, construction or other
activities of Landlord on property adjacent to the Premises, except to the
extent arising from the negligence or willful misconduct of Tenant, its
representatives, or their respective agents, employees, licensees, invitees or
guests, or from the condition of the Premises.
11.05 Payment of Insurance. In the event that Tenant shall fail to
obtain the insurance policies required hereunder, Landlord shall have the right,
but not the obligation, to purchase the same in which case Tenant shall repay
the cost thereof to Landlord with Tenant's next Annual Rent installment together
with the applicable Administrative Fee.
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ARTICLE 12
ALTERATIONS
12.01 Permitted Improvements. Except as provided in Section 12.03
hereof, and subject to the provisions of this Article 12, at Tenant's own
expense and after giving Landlord notice in writing of its intention to do so as
required under Article 5, Tenant may from time to time make alterations,
replacements, additions, changes, and improvements (collectively referred to in
this Article 12 as "Alterations") in and to the Premises as it may find
necessary or convenient for its purposes; provided, however, that no such
Alterations shall decrease the value of the Premises.
12.02 Liens. Tenant shall pay the costs of any Alterations done on the
Premises pursuant to Section 12.01, and shall keep the Premises free and clear
of liens of any kind as required under Article 5. Tenant shall indemnify and
defend Landlord from and against any liability, loss, damage, costs, attorneys'
fees, and any other expense incurred as a result of claims of lien by any person
performing work or furnishing materials or supplies for Tenant or any person
claiming under Tenant.
12.03 Structural Alterations. Tenant shall not make any Structural
Alterations (as defined below) to the Premises without obtaining the prior
written consent of Landlord, which consent shall not be unreasonably withheld.
"Structural Alterations" shall mean any Alterations made to any of the
foundations, perimeter or load bearing walls, or roof structure. All work with
respect to any Alteration shall be done in a good and workmanlike manner by
properly qualified and licensed personnel, and such work shall be diligently
prosecuted to completion.
12.04 Removal of Alterations. All Alterations made on the Premises
shall become the property of Landlord at the expiration or termination of the
Lease Term and shall be surrendered with the Premises; provided, however, that
if Tenant is not in default at the time of such expiration or termination, (i)
Tenant shall have the right to remove any Alterations permitted or approved in
accordance with this Article 12, provided the removal thereof does not decrease
the value of the Premises as reasonably determined by Landlord, and provided
further that Tenant repairs any damage to the Premises caused by such removal,
and (ii) Tenant's equipment, machinery, and trade fixtures shall remain the
property of Tenant and may be removed by Tenant, and Tenant shall repair any
damage caused by its removal of any such equipment, machinery, and trade
fixtures.
Landlord agrees from time to time during the Lease Term, upon written
request from Tenant, to execute and deliver any instrument, release or other
document that may be reasonably required by any equipment supplier or vendor and
in form and substance reasonably satisfactory to Landlord whereby Landlord
waives and/or releases any rights it may have or acquire with respect to any
moveable equipment or trade fixtures which is subject to a security interest or
equipment lease in favor of such supplier or vendor.
12.05 Alterations Required by Law. Any Alteration, structural or
otherwise, to or on the Premises, or any part thereof, which may be necessary or
required by reason of any applicable Laws, shall be made by and at the sole cost
and expense of Tenant.
12.06 General Conditions Relating to Alterations. Any Alteration,
structural or otherwise, to or on the Premises, shall be subject to the
following conditions:
(a) No Alteration shall be undertaken until Tenant shall have
procured and paid for all required permits and authorizations of all municipal
departments and governmental subdivisions having jurisdiction.
(b) At Landlord's option, any Alteration involving an
estimated cost of more than One Hundred Thousand Dollars ($100,000) (as such
dollar amount shall be increased pursuant to the provisions of Section 6.02
hereof) shall, upon Landlord's reasonable request, be conducted under the
supervision of a licensed architect or engineer selected by Tenant and
satisfactory to Landlord and shall be made in accordance with detailed plans and
specifications (the "Plans and Specifications") and cost estimates prepared by
such architect or engineer and approved in writing in advance by Landlord.
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(c) Any Alteration shall be made promptly and in a good
workmanlike manner and in compliance with all applicable Laws.
(d) No Alteration shall tie-in or connect the Premises or any
improvements thereon with any property outside the Premises without the prior
written consent of Landlord.
(e) No Alteration shall reduce the value of the Premises or
impair the structural integrity of any building comprising a part of the
Premises.
ARTICLE 13
SIGNS
In addition to those signs already existing at the Premises, Tenant
shall have the right to erect or affix signs on the Premises of such sizes,
colors, and designs as required by Tenant. All signs on the Premises shall fully
comply with all applicable Laws.
ARTICLE 14
DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD
14.01 Obligation to Rebuild. If any portion of the Premises is damaged
or destroyed by fire or other casualty, Tenant shall forthwith give notice
thereof to Landlord. Tenant shall, at its sole cost and expense, diligently
repair, restore, rebuild or replace the damaged or destroyed improvements,
fixtures or equipment, and diligently complete the same as soon as reasonably
possible, to the condition they were in prior to such damage or destruction,
except for permitted Alterations and such changes in design or materials as may
then be required by applicable Laws. Landlord, in such event, shall, to the
extent and at the times the proceeds of the insurance are made available to
Landlord, reimburse Tenant for the costs of making such repairs, restoration,
rebuilding and replacements on such terms as Landlord may reasonably require. To
the extent that the available proceeds of insurance are insufficient to pay the
entire cost of making such repairs, restoration, rebuilding and replacements,
and notwithstanding the expiration or termination of the Lease Term of this
Lease, Tenant shall pay the amount by which such costs exceed the available
insurance proceeds. Any surplus of insurance proceeds over the cost of
restoration, net of all reasonable out-of-pocket expenses incurred by Landlord
in connection with the administration thereof, shall be promptly paid over to
Tenant.
Notwithstanding the foregoing, if any such damage or destruction occurs
during the last two (2) years of the initial term and the first (1st) and second
(2nd) Extension Periods hereof, or at any time during the third (3rd) Extension
Period hereof, provided Tenant is not in material default hereunder, Tenant may
elect to terminate this Lease upon written notice to Landlord within sixty (60)
days after the occurrence of such damage or destruction provided Tenant pays to
Landlord all rent and other amounts accruing under this Lease through the date
of termination, and except as to obligations hereunder which expressly survive
any termination of this Lease. In the event of any such termination of this
Lease, Landlord shall be entitled to retain all proceeds of insurance relating
to such damage and destruction, and Tenant shall promptly pay to Landlord any
such insurance proceeds received by Tenant and hereby assigns to Landlord all
rights of Tenant to receive such insurance proceeds.
14.02 No Abatement of Rent. Notwithstanding the partial or total
destruction of the Premises or any part thereof, there shall be no abatement of
rent or of any other obligation of Tenant hereunder by reason of such damage or
destruction.
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ARTICLE 15
EMINENT DOMAIN
15.01 Total Taking. If the Premises is taken in its entirety under the
power of eminent domain, this Lease shall terminate as of the date of such
taking, and upon Tenant's payment to Landlord of all rents and other amounts
accruing hereunder through such date, Landlord and Tenant shall each thereafter
be released from accruing any further liability under this Lease, subject to the
rights of Landlord and Tenant to receive the condemnation awards to which each
is entitled as provided in Section 15.03, and except as to obligations under
this Lease which survive the termination hereof.
15.02 Partial Taking. In the event that (a) more than twenty-five
percent (25%) of the floor area of the Premises is taken under the power of
eminent domain; or (b) by reason of any appropriation or taking, regardless of
the amount so taken, the remainder of the Premises is not one undivided parcel
of property; or (c) as a result of any taking, regardless of the amount so
taken, the remainder of the Premises is rendered unsuitable for the continued
operation of Tenant's business as determined by Tenant in good faith and based
upon commercially reasonable standards and criteria, and as agreed to by
Landlord, in Landlord's reasonable discretion, either Landlord or Tenant shall
have the right to terminate this Lease upon giving notice in writing of such
election within sixty (60) days after receipt by Tenant from Landlord of written
notice that said Premises have been so appropriated or taken (with the
understanding that such period of time may be extended, but in no event beyond a
total period of one hundred eighty (180) days, as reasonably necessary for
Tenant to assess the effect of such partial taking on Tenant's continued
operation of its business at the Premises, subject to Landlord's prior written
consent, which consent shall not be unreasonably withheld) provided Tenant shall
continue to pay Annual Rent and other amounts accruing hereunder through the
date of termination. In the event of such termination, upon Tenant's payment to
Landlord of all rents and other amounts accruing hereunder through such date for
the Premises, both Landlord and Tenant shall thereupon be released from any
liability thereafter accruing hereunder, except as to obligations hereunder
which survive the termination hereof. Each party agrees immediately after
learning of any actual or contemplated appropriation or taking to give to the
other party notice in writing thereof. If this Lease is not terminated, Tenant
shall remain in that portion of the Premises not so taken and Tenant, at
Tenant's sole cost and expense, shall restore the remaining portion of the
Premises as soon as possible to a complete unit of like quality and character as
existed prior to such taking. Landlord agrees to reimburse Tenant for the cost
of restoration, but in no event shall Landlord's obligation to reimburse Tenant
for the cost of restoring the remaining portion of the Premises exceed the
amount of the award or compensation that Landlord receives for a partial taking
of that portion of the Premises resulting in the need for restoration. So long
as this Lease is not terminated in the manner provided above, there shall be an
equitable adjustment of the rent payable by Tenant hereunder for the Premises by
reason of any partial taking. Tenant hereby waives any statutory rights of
termination which may arise by reason of any partial taking of the Premises
under the power of eminent domain.
15.03 Award. In the event of any taking, the entire award or
compensation in any eminent domain proceeding affecting the Premises, whether
for a total or partial taking, shall be distributed to Landlord, provided,
however, that Tenant will be entitled to receive, and Landlord will have no
right to pursue for itself, any award for claims based on (a) the value of
Tenant's Alterations to the Premises which Tenant has the right to remove
pursuant to the provisions of this Lease but elects not to remove, (b) loss of
or damage to Tenant's personal property, (c) loss to Tenant because of
interruption of business, (d) Tenant's loss of goodwill, and (e) Tenant's cost
of removal and relocation and any rent differential payable by Tenant for
replacement premises as a result of any relocation necessitated by the taking.
Landlord and Tenant may separately pursue their claims against the condemning
authority, provided, however, that notwithstanding anything to the contrary
contained in this Lease, Tenant will have no right to pursue a claim based upon
the residual value of the real property comprising the Premises after expiration
of the Lease Term or pursue claims or retain any award to which Landlord is
entitled so as inequitably to diminish Landlord's award. Tenant hereby assigns
to Landlord all rights of Tenant to receive any award or compensation as a
result of any taking except the awards to which Tenant is entitled under this
Section 15.03.
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15.04 Transfer Under Threat of Taking. For the purposes of this Article
only, a voluntary sale or conveyance under threat and in lieu of condemnation
shall be deemed an appropriation or taking under the power of eminent domain.
ARTICLE 16
ASSIGNMENT AND SUBLETTING
16.01 Landlord's Consent Required. For purposes of this Article 16, the
terms "assign" and "assignment" shall include and mean any act attempting to, or
document purporting to, assign, transfer or sublet (or enter into any similar
type of agreement), change ownership of, mortgage or hypothecate this Lease or
Tenant's interest in and to the Premises or any part thereof. Tenant shall not
assign this Lease or Tenant's interest in and to the Premises without obtaining
the prior written consent of Landlord, such consent not to be unreasonably
withheld. Any attempted assignment without such consent shall be void, and shall
constitute a breach of this Lease. Tenant hereby agrees to pay to Landlord fifty
percent (50%) of any rent or other substitute consideration in excess of the
monthly rent payable hereunder (as adjusted from time to time) which Tenant
receives by reason of any permitted assignment (the "Rent Premium").
Notwithstanding the foregoing, Tenant may deduct from such Rent Premium
reasonable, out-of-pocket expenses actually incurred in connection with such
permitted assignment (including without limitation, costs of leasehold
improvements, brokerage commissions and reasonable attorneys' fees), which
expenses shall be documented to the satisfaction of Landlord; provided, however,
that nothing contained in this Section 16.01 shall reduce the Annual Rent and
other amounts payable by Tenant under this Lease. The payment of Tenant's share
of the Rent Premium shall be made within five (5) business days following the
date that such payment is received by Tenant.
16.02 Assumption of Obligations. Any assignment to which Landlord has
consented shall be evidenced by an instrument in writing and any assignee,
transferee or mortgagee shall agree for the benefit of Landlord to be bound by,
assume, and perform all of the terms, covenants, and conditions of this Lease.
Consent by Landlord to any assignment shall not constitute consent to any
subsequent assignment.
16.03 Assignment to Affiliate. Notwithstanding anything to the contrary
contained in this Article 16, Tenant shall have the right to assign this Lease,
or sublet the Premises or any portion thereof, without the consent of, but with
notice to, Landlord, to any corporation (a) with which Tenant may merge or
consolidate, (b) which is a parent or subsidiary of Tenant at any tier, (c)
which is the successor corporation to Tenant in the event of a corporate
reorganization, or (d) which acquires all or substantially all of the voting
stock of Tenant or all or substantially all of the assets of Tenant, provided
that said assignee assumes, in full, the obligations of Tenant under this Lease
and Tenant remains primarily liable under this Lease.
16.04 Hypothecation of Lease. Without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, Tenant may not
mortgage, pledge or otherwise encumber its leasehold estate hereunder, and any
attempt to mortgage, pledge or otherwise encumber such estate without such
consent shall be null and void and of no force and effect.
16.05 Corporate/Partnership/Limited Liability Company Restrictions. In
the event that Tenant shall, at any time, be a corporation, no change shall
occur in one or a series of related transactions in the majority ownership of
and/or the power to vote the majority of the outstanding capital stock of
Tenant, without the prior written consent of Landlord. In the event that Tenant
shall, at any time, be a partnership, no change shall occur in any one or more
of the general partners of the partnership or in the control of any general
partner, without the prior written consent of Landlord. In the event that Tenant
shall, at any time, be a limited liability company, no change shall occur in any
member of the limited liability company or in the control of any member, without
the prior written consent of Landlord. Notwithstanding the foregoing, nothing
contained herein shall prohibit (i) the public offering of shares of stock of
the Tenant on a nationally recognized stock exchange, or (ii) the private sale
of shares of all of the stock of the Tenant to any entity which is listed on a
nationally recognized stock exchange and has a net worth not less than the net
worth of Tenant on the Commencement Date.
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16.06 No Release of Tenant. Regardless of Landlord's consent, no
assignment shall release Tenant of Tenant's obligation or alter the primary
liability of Tenant to pay the rent and to perform all other obligations to be
performed by Tenant hereunder. The acceptance of rent by Landlord from any other
person shall not be deemed to be a waiver by Landlord of any provision hereof.
Consent to one assignment shall not be deemed consent to any subsequent
assignment. In the event of default by any assignee of Tenant or any successor
Tenant, in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
said assignee. Landlord may consent to subsequent assignments of this Lease or
amendments or modifications to this Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or their
consent thereto and such action shall not relieve Tenant of liability under this
Lease; provided that Tenant shall not be liable to the extent of amendments or
modifications made to this Lease which (i) materially increase the Annual Rent
(or additional rent) payable under this Lease, or (ii) extend the Lease Term
beyond the initial term and any Extension Periods hereunder, without Tenant's
consent, which consent shall not be unreasonably withheld.
ARTICLE 17
DEFAULT; REMEDIES
17.01 Default. The occurrence of any one or more of the following
events shall constitute a material default under this Lease by Tenant:
(a) The vacating or abandonment of the Premises by
Tenant.
(b) The failure by Tenant to make any payment when due of
Annual Rent, Impositions or any other payment required to be made by Tenant
hereunder, where such failure shall continue for a period of five (5) days after
written notice from Landlord, provided that Landlord shall no obligation to
provide such notice after three (3) defaults by Tenant in such payments in any
calendar year.
(c) Except as otherwise provided in this Lease, the
failure by Tenant to observe or perform any of the covenants, conditions, or
provisions of this Lease to be observed or performed by Tenant, other than
described in subparagraph (b) above, where such failure shall continue for a
period of thirty (30) days after written notice thereof from Landlord to Tenant;
provided, however, that if the nature of Tenant's noncompliance is such that
more than thirty (30) days are reasonably required for its cure, then Tenant
shall not be deemed to be in default if Tenant commences such cure within said
thirty (30)-day period and thereafter diligently and in good faith prosecutes
such cure to completion.
(d) (i) The making by Tenant of any general arrangement
or general assignment for the benefit of creditors; (ii) Tenant becomes a
"debtor" as defined in 11 U.S.C. Section 101 or any successor statute thereto
(unless, in the case of a petition filed against Tenant, the same is dismissed
within sixty (60) days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not restored to Tenant
within sixty (60) days; or (iv) the attachment, execution, or other judicial
seizure of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where such seizure is not discharged within
sixty (60) days. In the event that any provision of this Section 17.01(d) is
contrary to any applicable law, such provision shall be of no force or effect.
(e) The breach of any representation or warranty by
Tenant hereunder in any material respect, or if any financial statements
delivered to Landlord hereunder by Tenant are intentionally false or misleading
in any material respect.
(f) The default, breach or insolvency of any guarantor of
this Lease beyond any applicable notice and/or grace period under its guarantee.
(g) The default by Tenant under any other leases or
agreements with Landlord or any "affiliate of Landlord" (as hereinafter
defined); provided that this subparagraph (g) shall not apply with respect to
any lease or
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agreement assigned by Landlord or any affiliate of Landlord to a person or
entity which is not an affiliate of Landlord. For purposes of this Lease,
"affiliate of Landlord" shall mean (i) a person or entity which owns ten percent
(10%) or more of the voting securities of Landlord, or (ii) a person or entity
which directly or indirectly controls or is controlled by Captec Financial
Group, Inc., a Michigan corporation.
17.02 Remedies. In the event of any such material default by Tenant,
Landlord may at any time thereafter, with or without notice or demand and
without limiting Landlord in the exercise of any right or remedy which Landlord
may have by reason of such default:
(a) Terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. In
such event, Landlord shall be entitled to recover from Tenant all damages
incurred by Landlord by reason of Tenant's default including, but not limited
to, the cost of recovering possession of the Premises, expenses of reletting,
including reasonable and necessary renovation and alteration of the Premises,
reasonable attorneys' fees, and any real estate commission actually paid; and
the worth at the time of award by the court having jurisdiction thereof of the
amount by which the unpaid rent for the balance of the term after the time of
such award exceeds the amount of such unpaid rent for the same period that
Tenant proves could be reasonably avoided.
(b) Maintain Tenant's right to possession of the Premises
by any lawful means, in which case this Lease and the term hereof shall continue
in effect whether or not Tenant shall have vacated or abandoned the Premises. In
such event Landlord shall be entitled to enforce all of Landlord's rights and
remedies under the Lease, including the right to recover the rent as it becomes
due hereunder.
(c) Pursue any other remedy now or hereafter available to
Landlord under the Laws of the jurisdiction where the Premises are located.
(d) To the extent permitted by Law, the rights and
remedies under this Lease provided shall be cumulative, and the exercise of any
one right or remedy shall not preclude the exercise of or act as a waiver of any
other right or remedy of Landlord hereunder, or which may be existing at law, or
in equity or by statute or otherwise.
(e) In addition to the foregoing, Tenant, and its
successors and assigns, shall at all times indemnify Landlord for, defend
Landlord against and save Landlord harmless from any liability, loss, cost,
injury, damage or other expense or risk (including, without limitation,
reasonable attorneys' fees) whatsoever, directly or indirectly, arising out of,
resulting from or otherwise in connection with (i) the failure for any reason on
the part of Tenant to perform, observe or comply with any of the covenants,
conditions and obligations under this Lease to be performed, observed or
complied with by Tenant, and/or (ii) the failure for any reason of any
representation or warranty given by Tenant in connection with the execution of
this Lease by Landlord to be materially true, complete and accurate.
17.03 Administrative Fee. Tenant hereby acknowledges that late payment
by Tenant to Landlord of rent and other sums due hereunder will cause Landlord
to incur administrative costs not contemplated by this Lease, the exact amount
of which will be extremely difficult to ascertain. Such administrative costs may
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed on Landlord by the terms of any superior lease,
mortgage or trust deed covering the Premises. Accordingly, if any installment of
rent or any other sum due from Tenant shall not be received by Landlord or
Landlord's designee within five (5) days of the date of written notice from
Landlord (if such notice is required under Section 17.01(b); otherwise within
five (5) days of the date due), then, without any requirement for further notice
to Tenant, Tenant shall pay to Landlord an administrative fee consisting of (a)
default interest equal to the reference rate publicly announced from time to
time by Bank of America, NT & SA, or any successor thereto, plus six percent
(6%) per annum (but in no event higher than the maximum rate permitted by Law)
multiplied by such overdue amount from the date such overdue amount was due
until paid, plus (b) a late charge equal to two percent (2%) of such overdue
amount (collectively, the "Administrative Fee"). The parties hereby agree that
such Administrative Fee represents a fair and reasonable estimate of the costs
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Landlord will incur by reason of late payment by Tenant. Acceptance of such
Administrative Fee by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder.
17.04 Default by Landlord. Landlord will commit a default if Landlord
fails to perform any provision of this Lease required of it and the failure is
not cured within thirty (30) days after notice has been given to Landlord. If,
however, the failure cannot reasonably be cured within the cure period, Landlord
will not be in default of this Lease if Landlord commences to cure the failure
within the cure period and diligently and in good faith continues to cure the
failure. Notices given under this Section 17.04 will specify the alleged breach
and the applicable Lease provisions. Tenant may, after expiration of the cure
period unless there is an emergency, correct or remedy any failure of Landlord
not timely cured and deduct the reasonable costs paid by Tenant from future rent
as it becomes due.
17.05 Mitigation. Landlord and Tenant will each exercise best efforts
to mitigate the damages caused by the other party's breach of this Lease.
Efforts to mitigate damages will not be construed as a waiver of a nonbreaching
party's right to recover damages.
17.06 Lender's Right to Cure. The respective lenders of each party will
have the right, on the party's behalf, to cure the party's alleged breach within
the same time period allocated under this Lease. Landlord shall upon written
request from Tenant provide copies of any notices of default given to Tenant
hereunder to lenders of Tenant as specified in such written request, provided,
however, that Landlord shall not be deemed to be in default hereunder if
Landlord fails to provide any such notices to any of Tenant's lenders nor shall
any such failure relieve Tenant from any liability hereunder or affect any of
Landlord's rights or remedies hereunder.
ARTICLE 18
SUBORDINATION
At Landlord's option, this Lease shall be subordinate to any superior
lease, mortgage, deed of trust, or any other hypothecation or security now or
hereafter placed upon the Premises and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements, and extensions thereof, provided that Landlord and any mortgagee
or beneficiary of Landlord shall execute the Subordination Agreement (as defined
below) with Tenant. In furtherance thereof, Tenant hereby agrees, upon request
by Landlord, to execute and deliver a subordination, non-disturbance and
attornment agreement substantially in the form attached hereto as Exhibit B
("Subordination Agreement") with respect to any such superior lease, mortgage,
deed of trust, hypothecation, or security.
ARTICLE 19
QUIET ENJOYMENT
Subject to the terms and conditions of this Lease and conditional upon
the performance of all of the provisions to be performed by Tenant hereunder,
Landlord agrees to secure to Tenant during the Lease Term and any and all
extensions thereof, the quiet and peaceful possession of the Premises and all
rights and privileges appertaining thereto and under this Lease.
ARTICLE 20
REPRESENTATIONS AND WARRANTIES
20.01 Representations and Warranties. To induce Landlord to enter into
this Lease, Tenant represents and warrants to Landlord and any mortgagee or
beneficiary of Landlord as follows:
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(a) It is a corporation duly organized and validly
existing, in good standing under the laws of California, has stock outstanding
which has been duly and validly issued, and is qualified to do business and is
in good standing in the jurisdiction in which the Premises are located with full
power and authority to consummate the transactions contemplated hereby.
(b) The execution and delivery of this Lease has been
duly authorized by all action as may be required under the terms and provisions
of its governing instruments and the laws of the jurisdiction where the Premises
are located; this Lease will not violate or result in any breach of, or
constitute a default under, or result in the creation of any lien, encumbrance,
attachment, charge or other right or claim of any other party upon any assets of
Tenant or upon Tenant's beneficiary interest under the terms of this Lease
pursuant to any instrument or applicable law to which Tenant is a party or by
which it may be bound or create in favor of or grant to any third party any
interest whatsoever in Tenant's interest under the terms of this Lease; this
Lease is valid and enforceable in accordance with its terms, and the execution
and delivery of this Lease, and the consummation of the transactions
contemplated hereby, does not require the approval or consent of any
governmental authority having jurisdiction over Tenant or its property, or if
such approval or consent is required, it has been obtained.
(c) Tenant's financial statements and, if applicable, the
guarantors' financial statements heretofore delivered to Landlord are true and
correct in all material respects, have been prepared in accordance with
generally accepted accounting principles, and fairly present the respective
financial conditions of the subjects thereof as of the respective dates thereof.
No materially adverse change has occurred in the financial conditions reflected
therein since the respective dates thereof.
(d) There are no actions, suits or proceedings pending,
or to the best of Tenant's knowledge, threatened, against or affecting it or the
Premises or any guarantor of this Lease, or involving the validity or
enforceability of this Lease, at law or in equity, or before or by any
governmental authority except actions, suits and proceedings fully covered by
insurance or which, if adversely determined, would not materially impair the
ability of Tenant or any guarantor of this Lease to satisfy their obligations
under this Lease or any guarantee of this Lease.
(e) Tenant is not in default under any obligation for the
payment of borrowed money, for the deferred purchase price of property or for
the payment of any rent under any lease agreement, which, either individually or
in the aggregate, would adversely affect the financial condition of Tenant, or
the ability of Tenant to perform its obligations hereunder, or comply with the
terms of this Lease.
20.02 Financial Statements. Tenant hereby covenants and agrees to
deliver: (i) audited annual financial statements for Tenant and any guarantor of
this Lease to Landlord within one hundred five (105) days after the end of
Tenant's and any such guarantor's respective fiscal years, (ii) management
prepared and certified quarterly financial statements for Tenant and any such
guarantor within sixty (60) days after the end of Tenant's and any such
guarantor's respective fiscal quarters, and (iii) annual unit level profit and
loss statements on the operations of the Premises within forty-five (45) days
after the end of Tenant's fiscal year, provided that in the event that Tenant's
profit and loss statements are prepared on a consolidated basis, Tenant hereby
covenants and agrees to prepare profit and loss statements specifically relating
to the Premises. Tenant agrees to assist Landlord in obtaining consent from
Tenant's and guarantor's accountant(s) in the event that Tenant's or guarantor's
financial statements are to be included in any regulatory filing or report to be
filed by Landlord. Tenant's failure to deliver financial statements pursuant to
this Section (where such failure shall continue for a period of fifteen (15)
days after written notice thereof from Landlord to Tenant) shall constitute a
material default under this Lease. Such financial statements shall be true and
correct in all material respects, be prepared in accordance with generally
accepted accounting principles, and fairly present the respective financial
conditions of the subjects thereof as of the respective dates thereof. Landlord
will maintain confidential and not disclose to third parties the financial
information furnished or revealed pursuant to this Lease except as may be
required, in Landlord's reasonable judgment, for the exercise of Landlord's
rights under this Lease as may be required by Law or compelled by legal
proceedings, for disclosure in confidence to prospective lenders, investors or
purchasers, or to third parties in connection with the closing of this
transaction.
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ARTICLE 21
SURRENDER OF PREMISES
Except for Alterations permitted or approved in accordance with Article
12 hereof and changes resulting from eminent domain proceedings, at the
expiration or sooner termination of the Lease Term, Tenant shall surrender the
Premises in good and clean condition, reasonable wear and tear excepted, and
shall surrender all keys for the Premises to Landlord at the place then fixed
for the payment of rent and shall inform Landlord of all combinations on locks,
safes and vaults, if any, in the Premises. Tenant shall at such time remove all
of Tenant's property and shall repair any damage to the Premises caused thereby,
and any or all of such property not so removed shall, at Landlord's option,
become the exclusive property of Landlord or be disposed of by Landlord, at
Tenant's cost and expense, without further notice to or demand upon Tenant. If
the Premises are not so surrendered, Tenant shall indemnify Landlord against
loss or liability resulting from the delay by Tenant in so surrendering the
Premises including, without limitation, any claims made by any succeeding
occupant founded on such delay. Tenant's obligation to observe or perform this
covenant shall survive the expiration or other termination of the Lease Term.
ARTICLE 22
BANKRUPTCY OR INSOLVENCY
22.01 Bankruptcy or Insolvency. Subject to applicable law, Landlord and
Tenant acknowledge and agree that the provisions of this Section 23.01 shall
control notwithstanding anything to the contrary contained in this Lease:
(a) In the event that Tenant shall become a debtor under
Chapter 7 of the Bankruptcy Reform Act of 1978, 11 U.S.C. 1 et seq ("Bankruptcy
Code"), and Tenant's trustee or Tenant shall elect to assume this Lease for the
purpose of assigning the same or otherwise, such election and assignment may be
made only if the provisions of this Section 22.01 are satisfied. If Tenant or
Tenant's trustee shall fail to assume this Lease within sixty (60) days after
the entry of an order for relief, this Lease shall be deemed to have been
rejected. Immediately thereupon Landlord shall be entitled to possession of the
Premises without further obligation to Tenant or Tenant's trustee and this
Lease, upon the election of Landlord, shall terminate, but Landlord's right to
be compensated for damages shall survive, whether or not this Lease shall be
terminated.
(b) In the event that a voluntary petition for
reorganization is filed by Tenant, or an involuntary petition is filed against
Tenant under Chapter 11 of the Bankruptcy Code, or in the event of the entry of
an order for relief under Chapter 7 in a case which is then transferred to
Chapter 11, Tenant's trustee or Tenant, as debtor-in-possession, must elect to
assume this Lease within sixty (60) days from the date of the filing of the
petition under Chapter 11 or the transfer thereto, or Tenant's trustee or the
debtor-in-possession shall be deemed to have rejected this Lease. Immediately
thereupon Landlord shall be entitled to possession of the Premises without
further obligation to Tenant or Tenant's trustee and this Lease, upon the
election of Landlord, shall terminate, but Landlord's right to be compensated
for damages, shall survive, whether or not this Lease shall be terminated.
(c) No election by Tenant's trustee or the
debtor-in-possession to assume this Lease, whether under Chapter 7 or Chapter
11, shall be effective unless each of the following conditions has been
satisfied:
(i) Tenant's trustee or the debtor-in-possession has
cured all defaults under this Lease, or has provided Landlord
with evidence satisfactory to Landlord that it will cure all
defaults susceptible of being cured by the payment of money
within ten (10) days from the date of such assumption and that
it will cure all other defaults under this Lease which are
susceptible of being cured by the performance of any act
within thirty (30) days after the date of such assumption.
(ii) Tenant's trustee or the debtor-in-possession has
compensated, or has provided Landlord with evidence
satisfactory to Landlord that, within ten (10) days from the
date of such assumption, that it will compensate Landlord for
any actual pecuniary loss incurred by Landlord arising from
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the default of Tenant, Tenant's trustee, or the
debtor-in-possession as indicated in any statement of actual
pecuniary loss sent by Landlord to Tenant's trustee or the
debtor-in-possession.
(iii) Tenant's trustee or the debtor-in-possession
(A) has provided Landlord with "Assurance", as hereinbelow
defined, of the future performance of each of the obligations
under this Lease of Tenant, Tenant's trustee or the
debtor-in-possession, and (B) shall, in addition to any other
security deposits held by Landlord, deposit with Landlord, as
security for the timely payment of Annual Rent and for the
performance of all other obligations of Tenant under this
Lease, an amount equal to three (3) monthly installments of
Annual Rent (at the rate then payable), and (C) pay in advance
to Landlord on the date each installment of Annual Rent is due
and payable, one-twelfth of Tenant's annual obligations for
Impositions to be made by Tenant pursuant to this Lease. The
obligations imposed upon Tenant's trustee or the
debtor-in-possession by this Section 22.01 shall continue with
respect to Tenant or any assignee of this Lease, after the
conclusion of proceedings under the Bankruptcy Code.
(iv) Such assumption will not breach or cause a
default under any provision of any other lease, mortgage,
financing agreement or other agreement by which Landlord is
bound, relating to the Premises.
(d) For purposes of Section 22.01(c)(iii) hereof,
Landlord and Tenant shall acknowledge that "Assurance" shall mean no less than:
(i) Tenant's trustee or the debtor-in-possession has
and will continue to have sufficient unencumbered assets after
the payment of all secured obligations and administrative
expenses to assure Landlord that sufficient funds will be
available to fulfill the obligations of Tenant under this
Lease; and
(ii) To secure to Landlord the obligations of Tenant,
Tenant's trustee or the debtor-in-possession and to assure the
ability of Tenant, Tenant's trustee or the
debtor-in-possession to cure the defaults under this Lease,
monetary and/or nonmonetary, there shall have been: (A)
sufficient cash deposited with Landlord, or (B) the bankruptcy
court shall have entered an order segregating sufficient cash
payable to Landlord, and/or (C) Tenant's trustee or the
debtor-in-possession shall have granted to Landlord a valid
and perfected first lien and security interest and/or mortgage
in property of Tenant, Tenant's trustee or the
debtor-in-possession, acceptable as to value and kind to
Landlord.
(e) In the event that this Lease is assumed in accordance
with Section 22.01(b) hereof and thereafter Tenant is liquidated or files, or
has filed against it, a subsequent petition under any provision of the
Bankruptcy Code or any similar statute for relief of debtors, Landlord may, at
its option, terminate this Lease and all rights of Tenant hereunder, by giving
Tenant notice of its election to so terminate within thirty (30) days after the
occurrence of either of such events.
(f) If Tenant's trustee or the debtor-in-possession has
assumed this Lease pursuant to the terms and provisions of this Section 22.01
for the purpose of assigning (or elects to assign) this Lease, this Lease may be
so assigned only if the proposed assignee has provided adequate assurance of
future performance of all of the terms, covenants and conditions of this Lease
to be performed by Tenant. Landlord shall be entitled to receive all
consideration for such assignment, whether cash or otherwise. As used in this
Section 22.01(f) "adequate assurance of future performance" shall mean at least
that clauses (B) and (C) of Section 22.01(c)(iii) hereof and each of the
following conditions, has been satisfied:
(i) The proposed assignee has furnished Landlord with
a current financial statement audited by a certified public
accountant determined in accordance with generally accepted
accounting principles consistently applied indicating a credit
rating, net worth and working capital in amounts which
Landlord reasonably determines to be sufficient to assure the
future performance of such assignee of
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<PAGE> 25
Tenant's obligations under this Lease, but in no event
indicating a net worth less than the net worth of the Tenant
and any guarantors of this Lease, on the date of execution
hereof.
(ii) Such assignment will not breach or cause a
default under any provision of any other lease, mortgage,
financing agreement or other agreement by which Landlord is
bound, relating to the Premises.
(iii) The proposed assignment will not release or
impair any guarantee under this Lease.
(g) When, pursuant to the Bankruptcy Code, Tenant's
trustee or the debtor-in-possession shall be obligated to pay reasonable use and
occupancy charges for the use of the Premises, such charges shall not be less
than the Annual Rent and all additional rent payable by Tenant under this Lease
and shall be paid at the times and when due as though such charges were Annual
Rent and additional rent.
(h) Anything in this Lease to the contrary
notwithstanding, neither the whole nor any portion of Tenant's interest in this
Lease or its estate in the Premises shall pass to any trustee, receiver,
assignee for the benefit of creditors, or any other similar person or entity, or
otherwise by operation of law under the Bankruptcy Code or any similar federal
statute now or hereinafter enacted, or under the laws of any state, district or
municipality having jurisdiction of the person or property of Tenant unless
Landlord shall have consented to such transfer in writing. No acceptance by
Landlord of rent or any other payments from any such trustee, receiver,
assignee, person or other entity shall be deemed to constitute such consent by
Landlord nor shall it be deemed a waiver of Landlord's right to terminate this
Lease for any transfer of Tenant's interest under this Lease without such
consent.
(i) Anything in this Lease to the contrary
notwithstanding, Tenant covenants and agrees that this Lease is an extension of
financial benefits and accommodations to Tenant which are uniquely personal in
nature and such financial benefits and accommodations are a material inducement
for Landlord's execution and delivery of this Lease and are an integral part of
the consideration for this Lease.
ARTICLE 23
HAZARDOUS MATERIALS
23.01 Representations and Warranties. Notwithstanding anything to the
contrary which may be contained in this Lease, Tenant represents, warrants and
covenants to Landlord as follows:
(a) To the best of Tenant's Knowledge (as defined below),
there are no and have been no violations of the Relevant Environmental Laws (as
hereinafter defined) respecting the Premises and no consent orders have been
entered with respect thereto, except for minor occurrences of noncompliance,
none of which will have a materially adverse effect on the value or use or
operation of the Premises for its intended purpose or the ability of Tenant to
perform its obligations under this Lease (a "Material Adverse Effect").
(b) To the best of Tenant's Knowledge, there are no and
have been no Hazardous Wastes (as hereinafter defined) or Asbestos (as
hereinafter defined) either at, upon, under or within, or discharged or emitted
at or from, the Premises, including, but not limited to, the air, soil, surface,
and ground water; no Hazardous Wastes or Asbestos have flowed, blown or
otherwise become present at the Premises from neighboring land; and no Hazardous
Wastes or Asbestos have been removed from the Premises other than those
Hazardous Wastes or Asbestos which are used and/or incidental to the ordinary
course of Tenant's business provided that the same are used, stored, handled and
disposed of in accordance with all Relevant Environmental Laws and all
applicable Laws, industry standards and manufacturers' specifications.
(c) The Premises will not be used for the purpose of
storing Hazardous Wastes, and no such storage or use will otherwise be allowed
on the Premises which will cause or increase the likelihood of causing the
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<PAGE> 26
release of Hazardous Wastes onto the Premises other than those Hazardous Wastes
which are used and/or incidental to the ordinary course of Tenant's business
provided that the same are used, stored, handled and disposed of in accordance
with all Relevant Environmental Laws and all applicable Laws, industry standards
and manufacturers' specifications. Neither Tenant, nor to the best of Tenant's
Knowledge any third party, has installed, used or removed any storage tanks on,
from or in connection with the Premises, except in full compliance with all
Relevant Environmental Laws, and to the best of Tenant's Knowledge, there are no
storage tanks or wells (whether existing or abandoned) located on, under or
about the Premises. To the best of Tenant's Knowledge, the Premises does not
consist of any building materials that contain Hazardous Wastes or Asbestos.
(d) Tenant is not aware of any claims or litigation, and
has not received any communication from any person (including any governmental
authority), concerning the presence or possible presence of Hazardous Wastes or
Asbestos at or adjacent to the Premises or concerning any violation or alleged
violation of the Relevant Environmental Laws respecting the Premises. Tenant
shall promptly notify Landlord of any such claims and shall furnish Landlord
with a copy of any such communications received by Tenant.
(e) Tenant shall notify Landlord promptly and in
reasonable detail in the event that Tenant becomes aware of or suspects the
presence of Hazardous Wastes or Asbestos (other than those Hazardous Wastes or
Asbestos which are used and/or incidental to the ordinary course of Tenant's
business provided that the same are used, stored, handled and disposed of in
accordance with all Relevant Environmental Laws and all applicable Laws,
industry standards and manufacturers' specifications) or a violation of the
Relevant Environmental Laws, at or adjacent to the Premises.
(f) Tenant shall ensure that the Premises comply and
continue to comply in all respects with the Relevant Environmental Laws.
(g) If the Premises are used or maintained so as to
subject Tenant, Landlord or any mortgagee or beneficiary of Landlord or the user
of the Premises to a claim of violation of the Relevant Environmental Laws
(unless contested in good faith by appropriate proceedings), Tenant shall
immediately cease or cause a cessation of such use or operations and shall
remedy and fully cure any conditions arising therefrom, at its own cost and
expense.
(h) Upon Landlord's reasonable belief that there is a
breach of one of the environmental representations or warranties set forth
above, Tenant shall permit Landlord, at its option, at any time upon five (5)
days' prior written notice to Tenant, to cause or conduct a complete
environmental audit to be performed. The audit shall be at Tenant's sole cost
and expense.
23.02 Definitions.
(a) The "Relevant Environmental Laws," as referred to
herein, shall mean all applicable federal, state and local laws, rules,
regulations, orders, judicial determinations, and decisions or determinations by
any judicial, legislative or executive body of any governmental or
quasi-governmental entity, whether in the past, the present or the future, with
respect to: (A) the installation, existence, or removal of, or exposure to,
Asbestos on the Premises; (B) the existence on, discharge from, or removal from
the Premises of Hazardous Wastes; or (C) the effects on the environment of the
Premises or of any activity now, previously, or hereafter conducted on the
Premises. The Relevant Environmental Laws shall include, but not be limited to,
the following: (1) the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Sections 9601 et seq.; the Superfund Amendments and
Reauthorization Act, Public Law 99-499, 100 Stat. 1613; the Resource
Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq.; the National
Environmental Policy Act, 42 U.S.C. Section 4321; the Safe Drinking Water Act,
42 U.S.C. Sections 300F et seq.; the Toxic Substances Control Act, 15 U.S.C.
Section 2601; the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801; the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq.;
the Clean Air Act, 42 U.S.C. Sections 7401 et seq.; and the regulations
promulgated in connection therewith; (2) Environmental Protection Agency
regulations pertaining to Asbestos (including 40 C.F.R. Part 61, Subpart M);
Occupational Safety and Health Administration regulations pertaining to Asbestos
(including 29
22
<PAGE> 27
C.F.R. Sections 1910.1001 and 1926.58); as each may now or hereafter be amended;
and (3) any state and local laws and regulations pertaining to Hazardous Wastes
and/or Asbestos;
(b) "Asbestos," as referred to herein, shall have the
meanings provided under the Relevant Environmental Laws, and shall include, but
not be limited to, asbestos fibers and friable asbestos, as such terms are
defined under the Relevant Environmental Laws; and
(c) "Hazardous Wastes," as referred to herein, shall mean
any of the following as defined by the Relevant Environmental Laws: solid
wastes; petroleum and petroleum derivatives; natural or synthetic gas; radon
gas; toxic or hazardous substances, wastes, pollutants or contaminants
(including, but not limited to, polychlorinated biphenyls ("PCB's"), paint
containing lead, and urea formaldehyde); and discharges of sewage or effluent.
(d) "Knowledge" shall mean the actual knowledge of any
executive officer of Tenant after due inquiry (and Tenant hereby acknowledges
that such due inquiry has been made) of the appropriate employees of Tenant's
real estate, construction, facilities, lease administration and legal
departments.
23.03 Tenant's Obligation. At its sole cost and expense, Tenant shall:
(a) Pay immediately when due the cost of compliance with
the Relevant Environmental Laws.
(b) Keep the Premises free of any lien imposed pursuant
to the Relevant Environmental Laws.
23.04 Landlord Options. In the event that Tenant fails to comply with
the requirements of this Article 23, after notice to Tenant and the earlier of
the expiration of any applicable cure period hereunder, or the expiration of the
cure period permitted under the Relevant Environmental Laws, if any, or such
earlier time if Landlord determines that life, person or property is in
jeopardy, Landlord may, but shall not be obligated to, exercise its right to do
one or more of the following: (a) declare that such failure constitutes a
default; and/or (b) take any and all actions, at Tenant's expense, that Landlord
reasonably deems necessary or desirable to cure said failure of compliance. Any
costs incurred pursuant to this Section 23.04 shall become immediately due and
payable by Tenant together with the applicable Administrative Fee, and shall be
paid or reimbursed to Landlord promptly upon written notice from Landlord.
23.05 Indemnity. Landlord shall not be liable for and Tenant shall
immediately pay to Landlord when incurred and shall indemnify, defend and hold
Landlord harmless from and against, all loss, cost, liability, damage and
expense (including, but not limited to, attorneys' fees and costs incurred in
the investigation, defense and settlement of claims) that Landlord may suffer or
incur as a result of or in connection in any way with any Asbestos or Hazardous
Wastes now or hereafter present, discharged, released, generated, disposed,
transported or emitted to, from, in, on or under the Premises, or in connection
with any violation of any of the Relevant Environmental Laws, or any
environmental assessment or study from time to time undertaken or requested by
Tenant or Landlord, or breach of any representation, covenant or undertaking by
the Tenant herein.
23.06 Survival. The provisions of this Article 23 shall survive the
expiration or termination of the Lease Term.
ARTICLE 24
GENERAL PROVISIONS
24.01 Estoppel Certificates. Each party ("Responding Party") shall at
any time upon not less than fifteen (15) days' prior written notice from the
other party ("Requesting Party") execute, acknowledge, and deliver to the
Requesting Party a statement in a form reasonably satisfactory to Landlord
certifying and acknowledging the following: (i) that this Lease represents the
entire agreement between Landlord and Tenant, and is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so
23
<PAGE> 28
modified, is in full force and effect) and the date to which the Annual Rent and
other charges are paid in advance, if any; and (ii) that there are not, to the
Responding Party's knowledge, any uncured defaults on the part of the
Requesting Party, or specifying such defaults if any are claimed. Any such
statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Premises or of the business of the Requesting Party.
24.02 Severability. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.
24.03 Entire Agreement. It is understood that there are no oral or
other written agreements or representations between the parties hereto
concerning the subject matter of this Lease, and that this Lease and the
Exhibits hereto supersede and cancel any and all previous negotiations,
arrangements, representations, brochures, displays, projections, estimates,
agreements, and understandings, if any, made by Landlord and Tenant with respect
to the subject matter hereof, and none thereof shall be used to interpret,
construe, supplement, or contradict this Lease. This Lease, and the Exhibits
hereto, and all amendments hereto, constitute and shall be considered to be the
only agreement between the parties hereto and their representatives and agents.
All negotiations and oral agreements acceptable to both parties have been merged
into and are included herein and in the Exhibits hereto.
24.04 Notices. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal delivery, certified mail,
return receipt requested, by facsimile telecopy or by nationally recognized
overnight courier service and if given by mail or courier service, shall be
deemed sufficiently given if addressed to Tenant or to Landlord, as the case may
be, at the addresses noted in Article 1 hereof. Delivery by courier will be
deemed given on the date indicated in the courier's records; delivery by
certified mail will be deemed given on the date indicated on the return receipt;
and delivery by facsimile telecopy will be deemed given after receipt of written
confirmation of the transmission. Either party may by notice to the other
specify a different address for notice purposes. A copy of all notices required
or permitted to be given hereunder shall be concurrently transmitted to such
party or parties at such addresses as Landlord may from time to time hereafter
be designated by notice to Tenant.
24.05 Waivers. No waiver by a party of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by the
other party of the same of any other provision. Landlord's consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent.
24.06 Recording. Either Landlord or Tenant shall, upon request of the
other, execute, acknowledge, and deliver to the other a "short form" memorandum
of this Lease for recording purposes. Such memorandum shall be in a form
reasonably acceptable to Landlord and sufficient for Tenant to obtain a
leasehold policy of title insurance based thereon. In the event of any
termination of this Lease, Tenant agrees to execute and deliver to Landlord a
termination agreement satisfactory to Landlord, which termination agreement
shall be similarly recorded.
24.07 Holding Over. If Tenant remains in possession of the Premises or
any part thereof after the expiration or termination of the Lease Term, such
occupancy shall be a tenancy from month-to-month upon all the provisions of this
Lease pertaining to the obligations of Tenant and Tenant shall thereby waive its
rights to any additional notice to quit, but all options, if any, granted under
the terms of this Lease shall be deemed terminated and be of no further force or
effect. The monthly rental during such hold-over period shall be equal to one
hundred twenty-five percent (125%) of the monthly installment of Annual Rent
payable immediately prior to expiration or termination of the Lease Term. In
addition, Tenant shall continue to be obligated to pay all Impositions and other
amounts required to be paid by the terms of this Lease.
24.08 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
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<PAGE> 29
24.09 Choice of Law. The laws of the jurisdiction in which the Premises
are located shall govern the validity, performance, and enforcement of this
Lease.
24.10 Attorneys' Fees. Should either party institute any action or
proceeding to enforce any provision hereof or for a declaration of such party's
rights or obligations hereunder, the prevailing party shall be entitled to
receive from the losing party such amounts as the court may adjudge to be
reasonable attorneys' fees for services rendered to the party prevailing in any
such action or proceeding, and such fees shall be deemed to have accrued upon
the commencement of such action or proceeding.
24.11 Force Majeure. Except for payment obligations imposed pursuant to
this Lease, if there is any prevention, delay or stoppage of an act required of
a party pursuant to this Lease because of strikes, lockouts, other labor
disputes, material shortages, embargoes, civil unrest, governmental regulations,
governmental controls, enemy or hostile governmental action, judicial order,
public emergency, fire, earthquake, other acts of God, and other causes beyond
the reasonable control of the party obligated to perform, performance of the act
will be excused for the period of the delay.
24.12 Consent. Whenever the consent or approval of either party is
required pursuant to this Lease, such consent or approval will not be
unreasonably withheld or delayed except as otherwise expressly provided herein.
24.13 Liability of Landlord.
(a) In the event of any sale or other transfer of
Landlord's interest in the Premises, Landlord shall be and hereby is entirely
freed and relieved of all liabilities and obligations of Landlord hereunder with
respect to the Premises to the extent accruing after the date of such transfer.
(b) Notwithstanding anything contained herein to the
contrary, it is specifically understood and agreed that there shall be no
personal liability of Landlord or any of its shareholders, members, officers or
directors in respect of any of the terms, covenants, conditions or provisions of
this Lease, and in the event of a breach or default by Landlord of any of its
liabilities and obligations under this Lease, Tenant and any persons claiming
by, through or under Tenant shall look solely to the equity of Landlord in the
Premises for the satisfaction of Tenant's and/or such persons' remedies and
claims for damages.
24.14 No Merger. There shall be no merger of this Lease, or the
leasehold estate created by this Lease, with any other estate or interest in the
Premises, or any part thereof, by reason of the fact that the same person, firm,
corporation or other entity may acquire or own or hold, directly or indirectly,
(a) this Lease or the leasehold estate created by this Lease, or any interest in
this Lease or in any such leasehold estate, and (b) any such other estate or
interest in the Premises or any part thereof; and no such merger shall occur
unless and until all persons, corporations, firms and other entities having an
interest (including a security interest) in (i) this Lease or the leasehold
estate created by this Lease; and (ii) any such other estate or interest in the
Premises, or any part thereof, shall join in a written instrument effecting such
merger and shall duly record the same.
24.15 Reports. Tenant agrees to furnish to Landlord, with reasonable
promptness, financial statements, reports, documents and information regarding
the financial condition and affairs of Tenant or any guarantor, which Tenant and
each guarantor of this Lease sends to or makes available to its shareholders,
noteholders or bondholders. In addition to the foregoing, Tenant shall obtain
and deliver to Landlord, with reasonable promptness, such other information
respecting the operation of the Premises as Landlord may from time to time
reasonably request.
24.16 Definition of Rent. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, without limitation, the Real
Property Taxes and insurance premiums payable hereunder shall be deemed to be
"rent".
24.17 Interpretation. The captions by which the Articles and Sections
of this Lease are identified are for convenience only and shall have no effect
upon the interpretation of this Lease. Whenever the context so requires,
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<PAGE> 30
singular numbers shall include the plural, the plural shall refer to the
singular, the neuter gender shall include the masculine and feminine genders,
and the words "Landlord" and "Tenant" and "person" shall include corporations,
partnerships, associations, other legal entities, and individuals.
24.18 Relationship of the Parties. Nothing in this Lease shall create a
partnership, joint venture, employment relationship, borrower and lender
relationship, or any other relationship between Landlord and Tenant other than
the relationship of landlord and tenant.
24.19 Successors. This Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective personal and legal
representatives, heirs, successors, and assigns.
24.20 Modifications. This Lease may not be altered, amended, changed,
waived, terminated, or modified in any manner unless the same shall be in
writing and signed by or on behalf of the party to be bound. No waiver of any
provision of this Lease of any right of Landlord hereunder shall be effective
unless in writing signed by or on behalf of the person to be bound.
24.21 Brokerage Fees. Landlord and Tenant each represent and warrant
that they have not employed a broker in connection with the execution of this
Lease. Landlord and Tenant shall each indemnify and hold the other harmless from
and against any claim or claims for brokerage or other commissions arising from
such party having employed a broker contrary to its representation in this
Section 25.21.
24.22 Not Binding Until Executed. This Lease does not constitute an
"offer" and is not binding until fully executed and delivered by Landlord.
24.23 Counterparts. This Lease may be executed in one or more
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
26
<PAGE> 31
WITNESSES: LANDLORD:
CAPTEC NET LEASE REALTY, INC.
__________________________________ By________________________________
__________________________________ Its_______________________________
TENANT:
ARG ENTERPRISES, INC.
__________________________________ By________________________________
__________________________________ Its_______________________________
STATE OF MICHIGAN )
: ss.
COUNTY OF WASHTENAW )
The foregoing instrument was acknowledged before me this _______ day of
September, 1996, by Gary A. Bruder, as Vice President of Captec Net Lease
Realty, Inc., a Michigan corporation, on behalf of the corporation.
__________________________________
Notary Public
Washtenaw County, Michigan
My Commission Expires:____________
[Notary Public's Seal]
STATE OF NEW YORK )
: ss.
COUNTY OF _______________ )
The foregoing instrument was acknowledged before me this ________ day
of September, 1996, by __________________, as _________________ of ARG
Enterprises, Inc., a California corporation, on behalf of the corporation.
__________________________________
Notary Public
________________ County, New York
My Commission Expires:
[Notary Public's Seal]
27
<PAGE> 32
EXHIBIT A
TO
LEASE
Land situated in the County of Ramsey, State of Minnesota, and more particularly
described as follows:
Lot 1, Block 1, Venture 2nd Addition, Ramsey County, Minnesota.
Abstract.
A-1
<PAGE> 33
EXHIBIT B
TO
LEASE
CAPTEC NET LEASE REALTY, INC.,
ARG ENTERPRISES, INC.
AND
CS FIRST BOSTON MORTGAGE CAPITAL CORP.
------------------------------------------
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
------------------------------------------
Dated: September _______, 1996
Location: 2750 North Snelling Avenue, Roseville,
Minnesota
Lease No.: 06155
RECORD AND RETURN TO:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Charles J. Hamilton, Jr., Esq.
B-1
<PAGE> 34
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this
"Agreement") is made and entered into as of the ____ day of September, 1996, by
and among (i) ARG ENTERPRISES, INC., a California corporation ("Tenant"); (ii)
CAPTEC NET LEASE REALTY, INC., a Michigan corporation ("Landlord"); and (iii) CS
FIRST BOSTON MORTGAGE CAPITAL CORP., a Delaware corporation ("Lender").
WITNESSETH:
WHEREAS, Lender is or may become the holder of a certain mortgage/deed
of trust ("Mortgage/Deed of Trust") encumbering that certain parcel of real
property and the improvements thereon, commonly known as the Stuart Anderson's
Cattle Company restaurant located at 2750 North Snelling Avenue, Roseville,
Minnesota, and more particularly described in Schedule 1 attached hereto and
incorporated herein by this reference (the "Property");
WHEREAS, Lender and Landlord are parties to the Mortgage/Deed of Trust,
pursuant to which Landlord financed the Property from Lender; and
WHEREAS, Landlord and Tenant are parties to that certain Lease, dated
September ____, 1996 (the "Lease"), pursuant to which Tenant leased the Property
from Landlord.
NOW, THEREFORE, in consideration for the mutual covenants and
agreements contained herein, the sufficiency of which is hereby acknowledged,
the parties hereto hereby agree as follows:
1. Subordination. Subject to the terms of this Agreement, the
Lease and all of the terms, covenants and provisions thereof and all rights,
remedies and options of Tenant thereunder are hereby made, and shall at all
times continue to be, subject, junior and subordinate in all respects to the
Mortgage/Deed of Trust and to the lien thereof and to all increases, renewals,
modifications, spreaders, consolidations, replacements and extensions thereof
and to the rights of Lender thereunder and to any and all sums secured thereby,
with the same force and effect as if the Mortgage/Deed of Trust and all other
such instruments had been executed, delivered and recorded prior to the
execution of the Lease. However, Tenant covenants and agrees that if requested
by Lender it will execute, acknowledge and deliver any instrument or document
reasonably requested to confirm the foregoing subordination of the Lease within
twenty (20) days after receipt of written request therefor.
2. Non-Disturbance. So long as (i) the term of the Lease shall
have commenced pursuant to the provisions thereof, (ii) Tenant shall be in
possession of the Property, (iii) the Lease shall be in full force and effect
and (iv) Tenant is not in default in the payment of rent or any other sums
payable under the Lease or any of the other terms, covenants or conditions of
the Lease on Tenant's part to be performed beyond any applicable grace or cure
period provided in the Lease, then: (a) Tenant's possession of the Property
shall not be diminished or interfered with by Lender or any third party
purchaser; (b) the Lease shall not be terminated or affected by the foreclosure
of the Mortgage/Deed of Trust or the Lender's exercise of any remedy provided
for in the Mortgage/Deed of Trust; and (c) in the event that Lender forecloses
upon the Property, Lender shall elect to preserve the Lease as a lease between
Lender and Tenant in accordance with the terms of this Agreement.
3. Attornment. In the event that Lender or any successors in
interest to Lender shall become the owner of the Property by reason of the
foreclosure of the Mortgage/Deed of Trust or the acceptance of a deed or
assignment in lieu of foreclosure or otherwise, then:
(a) Tenant shall be bound to Lender, and Lender shall be bound to
Tenant, under all of the terms, covenants and conditions of the Lease for the
balance of the term thereof remaining, and any extensions or renewals thereof
which may be effected in accordance with any option therefor contained in the
Lease, with the same
B-2
<PAGE> 35
force and effect as if Lender were the original landlord under the Lease, except
that Paragraph 3(b) belowand the other provisions of this Agreement shall modify
the Lease, and Tenant does hereby attorn to Lender as its landlord, said
attornment to be effective and self-operative without the execution of any
further instruments; provided, however, that within twenty (20) days after
receipt of written request therefor from Lender, Tenant will execute and deliver
to Lender any instrument or other documents reasonably requested by Lender to
confirm Tenant's attornment to Lender.
(b) Notwithstanding the foregoing, however, it is agreed that in
no event shall Lender:
(1) be liable for any act or omission of any prior
landlord (including Landlord);
(2) be obligated to cure any defaults of any prior
landlord (including Landlord) which occurred prior to
the date that Lender succeeded to the interest of
such prior landlord under the Lease; provided that
from and after the date Lender becomes owner of the
Property, Lender shall be obligated to cure any
continuing non-monetary default of the landlord under
the Lease to the extent such default is capable of
being cured by Lender;
(3) be subject to any offsets or defenses which Tenant
may be entitled to assert against any prior landlord
(including Landlord) with respect to events occurring
prior to the date Lender succeeded to Landlord's
interest;
(4) be bound by any Annual Rent or other amounts paid by
Tenant to any prior landlord (including Landlord)
more than one (1) month in advance of the date that
Lender succeeded to the interest of such prior
landlord under the Lease; or
(5) be bound by any amendment or modification of the
Lease or any supplemental agreement made without the
written consent of Lender, such consent not to be
unreasonably withheld.
(c) The terms of the Lease shall be further amended by (i)
removing any offsets, claims or counterclaims which shall have accrued to Tenant
against Landlord prior to the date on which Lender or its successor in interest
shall have become the owner of the Property and (ii) providing that Lender shall
not be liable for any security deposit or other monies not actually received by
Lender.
4. Amendments. Tenant shall not, without the prior written consent of
Lender (a) enter into any agreement amending, modifying or terminating the
Lease, (b) prepay any of the rents, additional rents or other sums due under the
Lease for more than one (1) month in advance of the due date thereof, (c)
voluntarily surrender the Property or terminate the Lease without cause or
shorten the term thereof, or (d) assign the Lease or sublet the Property or any
part thereof, except to the extent permitted under the Lease; and any such
amendment, modification, termination, prepayment, voluntary surrender,
assignment or subletting, without the prior written consent of Lender (such
consent not be unreasonably withheld) shall not be binding on Lender, except to
the extent permitted under the Lease.
5. Tenant's Representations and Warranties. Tenant hereby represents
and warrants to Lender that as of the date hereof (a) Tenant is the owner and
holder of the tenant's interest under the Lease, (b) a true and complete copy of
the Lease is annexed hereto and made a part hereof as Schedule 2 and the Lease
has not been modified or amended, (c) the Lease is in full force and effect and
the term thereof commenced on September ___, 1996 pursuant to the provisions
thereof, (d) the Property has been completed and Tenant has taken possession of
the same on a rent paying basis, (e) neither Tenant nor the Landlord is in
default under any of the terms, covenants or provisions of the Lease and Tenant
to the best of its knowledge knows of no event which but for the passage of time
or the giving of notice or both would constitute an event of default by Tenant
or the Landlord under the Lease,
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<PAGE> 36
(f) neither Tenant nor the Landlord has commenced any action or given or
received any notice for the purpose of terminating the Lease, (g) all rents,
additional rents and other sums due and payable under the Lease have been paid
in full and no rents, additional rents or other sums payable under the Lease
have been paid for more than one (1) month in advance of the due dates thereof,
and (h) there are no offsets or defenses to the payment of the rents, additional
rents, or other sums payable under the Lease.
6. Payment of Rent to Lender. Tenant agrees to pay the rent and
any other payments due under the Lease to Lender upon receipt of written notice
from Lender that it has succeeded to the interest of Landlord under the Lease,
and Landlord agrees that Tenant is entitled to rely conclusively upon such
notice without any duty of inquiry.
7. Limitation on Liability of Lender. There shall be no personal
liability on the part of Lender or any officer, director, employee, shareholder
or partner of Lender for the performance of the Lease or any covenant or
agreement contained therein or in this Agreement. Tenant shall look solely to
Lender's estate and interest in the Property, if any, for the satisfaction of
every remedy of Tenant for any breach by Lender under the Lease or this
Agreement or otherwise arising out of or in connection with the Lease, and
Lender is hereby released or relieved of any other liability hereunder and under
the Lease. Tenant agrees that with respect to any money judgment which may be
obtained or secured by Tenant against Lender, Tenant shall look solely to the
estate or interest owned by Lender in the Property and Tenant will not collect
or attempt to collect any such claim out of any other assets of Lender.
8. Performance by Lender: Conflict. Nothing in this Agreement
shall be or be deemed to be an agreement by Lender to perform any obligation of
Landlord under the Lease unless and until the Lender acquires the Property, and
then only if required to do so by the terms of the Lease, as modified and
limited by this Agreement. In the event of any conflict between the terms of
this Agreement and the terms of the Lease, the terms of this Agreement shall
control.
9. Notices. Any notice required or permitted to be given
hereunder shall be in writing and may be given by personal delivery, certified
mail, return receipt requested, by facsimile telecopy or by nationally
recognized overnight courier service and if given by mail or courier service,
shall be deemed sufficiently given if addressed to the parties at the addresses
set forth below. Delivery by courier will be deemed given on the date indicated
in the courier's records; delivery by certified mail will be deemed given on the
date indicated on the return receipt; and delivery by facsimile telecopy will be
deemed given after receipt of written confirmation of the transmission. Any
party may by notice specify a different address for notice purposes.
Addresses for Notices:
To Lender: CS First Boston Mortgage Capital Corp.
55 E. 52nd Street
New York, New York 10055
Attention: Laura Goldberg
Fax: (212) 318-1468
To Landlord: Captec Net Lease Realty, Inc.
24 Frank Lloyd Wright Drive
Lobby L, 4th Floor
P.O. Box 544
Ann Arbor, Michigan 48106-0544
Attention: Gary A. Bruder
Fax: (313) 994-1376
To Tenant: ARG Enterprises Inc.
4410 El Camino Real, Suite 201
Los Altos, California 94022
B-4
<PAGE> 37
Attention: Director of Real Estate
Fax: (415) 949-6420
with a copy to:
American Restaurant Group, Inc.
4410 El Camino Real, Suite 201
Los Altos, California 94022
Attention: Legal Department
Fax: (415) 949-6420
10. Successors and Assigns. This Agreement and each and every
covenant and provision contained herein shall be binding upon and shall inure to
the benefit of the parties hereto and their respective representatives,
successors and assigns.
11. Governing Law; Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the jurisdiction in which the
Property is located.
12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, INTENTIONALLY AND FREELY WAIVES TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OTHER PARTY HERETO IN RESPECT OF ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
B-5
<PAGE> 38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date hereinabove first written.
WITNESSES: TENANT:
ARG ENTERPRISES, INC.
_______________________________ By____________________________
_______________________________ Its_____________________________
WITNESSES: LANDLORD:
CAPTEC NET LEASE REALTY, INC.
_______________________________ By____________________________
_______________________________ Its_____________________________
WITNESSES: LENDER:
CS FIRST BOSTON MORTGAGE
CAPITAL CORP.
_______________________________ By____________________________
_______________________________ Its_____________________________
Prepared By:
Diane B. Cabbell, Esq.
Miller, Canfield, Paddock and Stone, P.L.C.
101 North Main, 7th Floor
Ann Arbor, Michigan 48104
B-6
<PAGE> 39
STATE OF NEW YORK )
: ss.
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this ___ day of
September, 1996, by __________________, as ___________ of ARG ENTERPRISES, INC.,
a California corporation on behalf of the corporation.
__________________________________
Notary Public
__________ County, New York
My commission Expires:____________
[Notary Public's Seal]
STATE OF MICHIGAN )
: ss.
COUNTY OF WASHTENAW )
The foregoing instrument was acknowledged before me this ___ day of
September, 1996, by _________________, as ___________ of CAPTEC NET LEASE
REALTY, INC., a Michigan corporation, on behalf of the corporation.
__________________________________
Notary Public
Washtenaw County, Michigan
My commission Expires:____________
[Notary Public's Seal]
STATE OF NEW YORK )
: ss.
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me this ___ day of
September, 1996, by __________________, as ___________ of CS FIRST BOSTON
MORTGAGE CAPITAL CORP., a Delaware corporation, on behalf of the corporation.
__________________________________
Notary Public
__________ County, New York
My commission Expires:____________
[Notary Public's Seal]
B-7
<PAGE> 40
SCHEDULE 1
to
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
Land situated in the County of Ramsey, State of Minnesota, and more particularly
described as follows:
Lot 1, Block 1, Venture 2nd Addition, Ramsey County, Minnesota.
Abstract.
B-8
<PAGE> 41
SCHEDULE 2
to
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
[Copy of the Lease]
[Intentionally Omitted from Copy Submitted for Recording.]
B-9
<PAGE> 1
EXHIBIT 2.6
Lease No. 06155
2750 North Snelling Avenue
Roseville, Minnesota
LEASE
BETWEEN
CAPTEC NET LEASE REALTY, INC.
AND
ARG ENTERPRISES, INC.
Dated: September __, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
ARTICLE 1 FUNDAMENTAL LEASE PROVISIONS.................................................................. 1
ARTICLE 2 EXHIBITS...................................................................................... 2
ARTICLE 3 PREMISES...................................................................................... 2
ARTICLE 4 TERM.......................................................................................... 2
4.01 Term.......................................................................................... 2
4.02 Option to Extend Lease Term................................................................... 2
ARTICLE 5 LIENS......................................................................................... 3
ARTICLE 6 RENT.......................................................................................... 3
6.01 Rent.......................................................................................... 3
6.02 Rental Adjustments............................................................................ 4
6.03 Net Lease; Impositions........................................................................ 4
ARTICLE 7 USE OF THE PREMISES........................................................................... 5
7.01 Use........................................................................................... 5
7.02 Compliance With Law........................................................................... 5
7.03 Permits and Licenses.......................................................................... 5
ARTICLE 8 UTILITIES..................................................................................... 5
8.01 Payment....................................................................................... 5
8.02 Interruption in Service....................................................................... 5
ARTICLE 9 TAXES......................................................................................... 6
9.01 Payment of Taxes.............................................................................. 6
9.02 Definition of "Real Property Taxes"........................................................... 6
9.03 Personal Property Taxes....................................................................... 6
9.04 Tenant's Right to Contest Taxes............................................................... 6
ARTICLE 10 MAINTENANCE AND REPAIRS....................................................................... 7
10.01 Tenant's Obligations.......................................................................... 7
10.02 Landlord's Obligations........................................................................ 8
10.03 Landlord's Rights............................................................................. 8
ARTICLE 11 INSURANCE AND INDEMNIFICATION................................................................. 8
11.01 Tenant's Insurance Obligation................................................................. 8
11.02 Subrogation Waiver............................................................................ 9
11.03 Insurance Use Restrictions.................................................................... 10
11.04 Indemnification............................................................................... 10
11.05 Payment of Insurance.......................................................................... 10
ARTICLE 12 ALTERATIONS................................................................................... 11
12.01 Permitted Improvements........................................................................ 11
12.02 Liens......................................................................................... 11
12.03 Structural Alterations........................................................................ 11
12.04 Removal of Alterations........................................................................ 11
12.05 Alterations Required by Law................................................................... 11
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C> <C>
12.06 General Conditions Relating to Alterations.................................................... 11
ARTICLE 13 SIGNS......................................................................................... 12
ARTICLE 14 DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD ................................................... 12
14.01 Obligation to Rebuild......................................................................... 12
14.02 No Abatement of Rent.......................................................................... 12
ARTICLE 15 EMINENT DOMAIN................................................................................ 13
15.01 Total Taking.................................................................................. 13
15.02 Partial Taking................................................................................ 13
15.03 Award......................................................................................... 13
15.04 Transfer Under Threat of Taking............................................................... 13
ARTICLE 16 ASSIGNMENT AND SUBLETTING..................................................................... 14
16.01 Landlord's Consent Required................................................................... 14
16.02 Assumption of Obligations..................................................................... 14
16.03 Assignment to Affiliate....................................................................... 14
16.04 Hypothecation of Lease........................................................................ 14
16.05 Corporate/Partnership/Limited Liability Company Restrictions.................................. 14
16.06 No Release of Tenant.......................................................................... 14
ARTICLE 17 DEFAULT; REMEDIES............................................................................. 15
17.01 Default....................................................................................... 15
17.02 Remedies...................................................................................... 16
17.03 Administrative Fee............................................................................ 16
17.04 Default by Landlord........................................................................... 17
17.05 Mitigation.................................................................................... 17
17.06 Lender's Right to Cure........................................................................ 17
ARTICLE 18 SUBORDINATION................................................................................. 17
ARTICLE 19 QUIET ENJOYMENT............................................................................... 17
ARTICLE 20 REPRESENTATIONS AND WARRANTIES................................................................ 17
20.01 Representations and Warranties................................................................ 17
20.02 Financial Statements.......................................................................... 18
ARTICLE 21 SURRENDER OF PREMISES......................................................................... 19
ARTICLE 22 BANKRUPTCY OR INSOLVENCY...................................................................... 19
ARTICLE 23 HAZARDOUS MATERIALS........................................................................... 21
23.01 Representations and Warranties................................................................ 21
23.02 Definitions................................................................................... 22
23.03 Tenant's Obligation........................................................................... 23
23.04 Landlord Options.............................................................................. 23
23.05 Indemnity..................................................................................... 23
23.06 Survival...................................................................................... 23
ARTICLE 24 GENERAL PROVISIONS............................................................................ 23
24.01 Estoppel Certificates......................................................................... 23
24.02 Severability.................................................................................. 24
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C> <C>
24.03 Entire Agreement.............................................................................. 24
24.04 Notices....................................................................................... 24
24.05 Waivers....................................................................................... 24
24.06 Recording..................................................................................... 24
24.07 Holding Over.................................................................................. 24
24.08 Cumulative Remedies........................................................................... 24
24.09 Choice of Law................................................................................. 24
24.10 Attorneys' Fees............................................................................... 25
24.11 Force Majeure................................................................................. 25
24.12 Consent....................................................................................... 25
24.13 Liability of Landlord......................................................................... 25
24.14 No Merger..................................................................................... 25
24.15 Reports....................................................................................... 25
24.16 Definition of Rent............................................................................ 25
24.17 Interpretation................................................................................ 25
24.18 Relationship of the Parties................................................................... 26
24.19 Successors.................................................................................... 26
24.20 Modifications................................................................................. 26
24.21 Brokerage Fees................................................................................ 26
24.22 Not Binding Until Executed.................................................................... 26
24.23 Counterparts.................................................................................. 26
EXHIBIT A.......................................................................................................A-1
EXHIBIT B.......................................................................................................B-1
</TABLE>
-iii-
<PAGE> 5
LEASE
In consideration of the rents and covenants set forth below, Landlord
(as hereinafter defined) hereby leases to Tenant (as hereinafter defined), and
Tenant hereby leases from Landlord, the following Premises (as hereinafter
defined) upon the following terms and conditions:
ARTICLE 1
FUNDAMENTAL LEASE PROVISIONS
Date: September ___, 1996
Commencement Date: September ___, 1996
Landlord: Captec Net Lease Realty, Inc., a Michigan
corporation
Tenant: ARG Enterprises, Inc., a California
corporation
Tenant's
Trade Name: Stuart Anderson's Cattle Company restaurant
Lease Term: Twenty-Five (25) years, commencing on
the Commencement Date and ending on
September 30, 2021, with three (3) renewal
options of five (5) years each.
(Article 4, Section 4.01)
Annual Rent: Two Hundred Fifty-Six Thousand Four Hundred
Twenty-Two and 00/100 Dollars ($256,422.00),
subject to adjustment as hereinafter
provided.
(Article 6, Section 6.01)
The Annual Rent shall be payable on the
first day of each month, commencing October
1, 1996, in twelve (12) equal installments
each in the amount of Twenty-One Thousand
Three Hundred Sixty-Nine and 00/100 Dollars
($21,369.00) during each year of the term of
this Lease, subject to proration or
adjustment as hereinafter provided.
Addresses for
Notices: To Landlord: Captec Net Lease Realty, Inc.
24 Frank Lloyd Wright Drive
Lobby L, 4th Floor
P. O. Box 544
Ann Arbor, Michigan 48106-0544
Attention: Senior Vice President,
Administration
Fax: (313) 994-1376
To Tenant: ARG Enterprises Inc.
450 Newport Center Drive, 6th Floor
Newport Beach, California 92660
Attention: Chief Financial Officer
Fax: (714) 721-8941
<PAGE> 6
with a copy to:
American Restaurant Group, Inc.
4410 El Camino Real, Suite 201
Los Altos, California 94022
Attention: Legal Department
Fax: (415) 949-6420
Premises: That certain real property, described in
Exhibit A attached hereto, and all
appurtenances, easements and rights of way
now or subsequently pertaining thereto,
together with all improvements located
thereon, consisting of a restaurant located
at 2750 North Snelling Avenue, Roseville,
Minnesota, known as a Stuart Anderson's
Cattle Company restaurant.
References in this Article 1 to other Articles are for convenience and
designate some of the other Articles where references to the Fundamental Lease
Provisions appear. Each reference in this Lease to any of the Fundamental Lease
Provisions contained in this Article 1 shall be construed to incorporate all of
the terms provided under such Fundamental Lease Provisions. In the event of any
conflict between any Fundamental Lease Provision and the balance of this Lease,
the latter shall control.
ARTICLE 2
EXHIBITS
The following are attached hereto as Exhibits and made a part of this
Lease:
EXHIBIT A -- Description of the Premises
EXHIBIT B -- Form of Subordination, Non-Disturbance
and Attornment Agreement
In the event of any conflict between any of the above-referenced
Exhibits and the balance of this Lease, the Exhibit shall control.
ARTICLE 3
PREMISES
Landlord hereby leases and demises unto Tenant and Tenant hereby leases
and takes from Landlord, for the term, at the rental, and upon the terms,
covenants, and conditions hereinafter set forth, the property referred to in
Article 1 as the Premises and described on Exhibit A attached hereto.
ARTICLE 4
TERM
4.01 Term. The term of this Lease shall be the term specified in
Article 1 hereof (the initial term and any extensions exercised by Tenant
thereof are hereinafter referred to as the "Lease Term") and shall commence on
the Commencement Date.
4.02 Option to Extend Lease Term. Tenant shall have the option to
extend the initial term of this Lease for three (3) additional, successive
periods of five (5) years each (each, an ""Extension Period") on the same terms,
covenants and conditions of this Lease. In the event Tenant elects to exercise
the option(s), Tenant shall provide Landlord written notice of Tenant's exercise
of the option(s) not less than ninety (90) days prior to the end of the then
2
<PAGE> 7
current term, such notice to be given in the manner provided in Section 24.04 of
this Lease. Tenant's right to exercise the foregoing option(s) is conditioned
upon Tenant's performance of all of the duties and obligations on its part to be
performed under this Lease so that, at the time of the exercise of such options,
Tenant shall not be in default hereunder. In the event that Tenant elects to
extend the initial term of this Lease, the Annual Rent shall continue to be
adjusted as provided in Section 6.02 of this Lease.
ARTICLE 5
LIENS
Tenant shall do all things necessary to prevent the filing of any
mechanics' or other liens or encumbrances against the Premises, or any part
thereof, or upon any interest of Landlord or any mortgagee or beneficiary under
a deed of trust or any ground or underlying lessor in any portion of the
Premises, by reason of work, labor, services, or materials supplied or claimed
to have been supplied to Tenant, or anyone holding the Premises, or any part
thereof, through or under Tenant. If any such lien or encumbrance shall at any
time be filed against the Premises, or any portion thereof, Tenant shall either
cause same to be discharged of record within thirty (30) days after the date of
filing of same or, if Tenant in good faith determines that such lien should be
contested, Tenant will give Landlord prior notice of Tenant's intention to
contest any such lien and, upon demand by Landlord, will procure and record a
lien release bond under applicable law in the amount prescribed by applicable
law, or if no amount is prescribed by applicable law in an amount equal to one
hundred fifty percent (150%) of the lien amount. If a final judgment is rendered
against Tenant by a court of competent jurisdiction, or if the Premises or any
portion thereof are in danger of being foreclosed upon as a result of any such
lien, Tenant will satisfy such judgment or lien at once. If Tenant does not post
the release bond or fails to pay any such adverse judgment or to discharge any
lien in the event of any imminent foreclosure, then Landlord may post the bond
or pay the judgment or discharge the lien, as applicable, and Tenant will
promptly reimburse Landlord for all sums paid by it in connection therewith,
together with the applicable Administrative Fee (as hereinafter defined). Tenant
shall give Landlord notice of the intended commencement date of any Structural
Alterations (as defined in Section 12.03 below), or of any work, labor services
or material to be performed or provided to the Premises or any portion thereof
involving expenditures in excess of Fifty Thousand Dollars ($50,000) for any
individual project or materials to be performed or provided to the Premises or
any portion thereof, or Two Hundred Thousand Dollars ($200,000) in the aggregate
for multiple projects or materials to be provided to the Premises or any portion
thereof in any calendar year (as such dollar amounts shall be increased pursuant
to the provisions of Section 6.02 hereof), at least ten (10) days before said
date, and in connection with the performance or provision of any such work,
labor, services or materials, and Landlord shall also have the right and
opportunity to post and maintain on the Premises such notices, including notices
of non-responsibility and other similar notices, as are provided for under the
laws of the state in which the Premises are located, evidencing Tenant's
obligations with respect to any of the matters covered by this Article and
Landlord shall have the right to enter the Premises and post such notices at any
reasonable time.
ARTICLE 6
RENT
6.01 Rent. Tenant covenants and agrees to pay for the use and occupancy
of the Premises, the Annual Rent specified in Article 1 hereof, subject to
increase pursuant to the provisions of Section 6.02 hereof, in twelve (12) equal
monthly installments during each year of the Lease Term, in advance, on the
first day of each calendar month, without any offset or deduction. Should the
Lease Term commence on a day other than the first day of a calendar month, then
the rental for such first fractional month shall be computed on a daily basis
for the period from the Commencement Date to the end of such calendar month at
an amount equal to one three hundred sixty-fifth (1/365) of the Annual Rent for
each day, which rent for such fractional month shall be payable in advance on
the Commencement Date. Should the Lease Term end on a day other than the last
day of a calendar month, then the rental for such fractional month shall be
computed on a daily basis at an amount equal to one three hundred sixty- fifth
(1/365) of the Annual Rent for each day. Rent shall be paid in lawful money of
the United States to Landlord at the
3
<PAGE> 8
address stated in Article 1 or to such other persons or at such other places as
Landlord may designate in writing to Tenant.
6.02 Rental Adjustments. The Annual Rent payable under this Lease and
the dollar amounts specified in Article 5 and Section 12.06(b) shall be
increased on October 1, 2001 and every five (5) years thereafter (each, an
"Increase Date") during the Lease Term, as follows:
(a) The basis for computing the increase shall be the
Consumer Price Index for all Urban Consumers - All Items, as published monthly
by the Bureau of Labor Statistics of the United States Department of Labor
(1982-84 = 100) ("Index"), published for the date nearest the Commencement Date
(the "Beginning Index").
(b) If the Index published for the date nearest the
applicable Increase Date (the "Extension Index") has increased over the
Beginning Index, the Annual Rent (or the dollar amounts under Article 5 and
Section 12.06(b), as applicable) will be calculated by multiplying the then
Annual Rent (or the dollar amounts under Article 5 and Section 12.06(b), as
applicable) by a fraction, the numerator of which is the Extension Index and the
denominator of which is the Beginning Index, not to exceed an increase equal to
ten percent (10%) of the Annual Rent (or the dollar amounts under Article 5 and
Section 12.06(b), as applicable) in effect during the five (5) year period
immediately preceding the applicable Increase Date.
(c) In the event the Extension Index is not available on
the applicable Increase Date, Tenant will continue to pay the Annual Rent in
effect immediately prior to the Increase Date and the applicable dollar amounts
under Article 5 and Section 12.06(b) shall be those immediately in effect prior
to the Increase Date. As soon as practicable, Landlord will furnish Tenant with
a true copy of the Extension Index figure together with a computation of the
increase in the Annual Rent for the ensuing five (5) year period, if any, and an
appropriate adjustment will be paid within thirty (30) days of Tenant's receipt
of Landlord's statement.
(d) If the Index is changed so that the base year differs
from that in effect on the Commencement Date, the Index shall be converted in
accordance with the conversion factor published by the Bureau of Labor
Statistics. If the Index is discontinued or revised during the Lease Term, such
other governmental index or computation with which it is replaced will be used
in order to obtain substantially the same result as would be obtained if the
Index had not been discontinued or revised.
6.03 Net Lease; Impositions. This Lease is what is commonly called a
"triple net lease," it being understood that Landlord shall receive the Annual
Rent set forth in Article 1 hereof, as increased pursuant to Section 6.02, free
and clear of any and all other impositions, taxes, liens, charges, or expenses
of any nature whatsoever incurred in connection with the ownership and operation
of the Premises. In addition to the Annual Rent reserved by Article 1 hereof, as
increased pursuant to Section 6.02, Tenant shall pay to the appropriate parties
all impositions, insurance premiums, Real Property Taxes (as defined below),
operating charges, maintenance charges, construction costs, accounting and legal
fees, and any other charges, costs and expenses which arise or may be
contemplated under any provision of this Lease during the Lease Term
(collectively "Impositions"). All of such Impositions shall constitute
additional rent, and upon the failure of Tenant to pay any of such Impositions,
Landlord shall have the same rights and remedies as otherwise provided in this
Lease for the failure of Tenant to pay rent. Tenant shall furnish to Landlord,
promptly upon the reasonable request of Landlord, official receipts or other
satisfactory proof evidencing payment of such Impositions. Upon Tenant's failure
to pay any Real Property Taxes or insurance premiums, as provided herein,
Landlord shall have the right, at Landlord's option, to require Tenant to (a)
promptly deposit with Landlord funds sufficient for the payment of the current
Real Property Taxes or insurance premiums required to be paid by Tenant
hereunder; and (b) also deposit one-twelfth of the current annual or annualized
Real Property Taxes or insurance premiums, as the case may be (or those of the
preceding years if the current amounts thereof have not been fixed), on the
first day of each month in advance. It is the intention of the parties hereto
that this Lease shall not be terminable for any reason by Tenant, and that
Tenant shall in no event be entitled to any abatement of, deductions of any
kind, offset or reduction in rent payable under this Lease except as may
otherwise be expressly set forth in this Lease. Any present or future Law to the
contrary shall not alter this agreement of the parties.
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ARTICLE 7
USE OF THE PREMISES
7.01 Use. Tenant shall occupy and use the Premises solely for the
operation of a Stuart Anderson's Cattle Company restaurant or such other
restaurant use as may be approved by Landlord in writing, which approval shall
not be unreasonably withheld. Tenant may not use the Premises for any other
purpose without obtaining the prior written consent of Landlord, which consent
shall not be unreasonably withheld.
7.02 Compliance With Law.
(a) Tenant accepts the Premises in "AS IS" condition.
Tenant accepts the Premises "AS IS" in reliance upon Tenant's own knowledge as
owner and/or occupier of the Premises immediately prior to commencement of this
Lease. Landlord makes no representations or warranties of any type whatsoever,
including without limitation, whether there has been or are currently any
violations of any covenants or restrictions of record, or any applicable Laws in
effect regarding the Premises on the Commencement Date.
(b) Tenant shall, at Tenant's sole expense, comply in all
material respects with all applicable laws, ordinances, building codes, orders,
zoning ordinances, rules, and regulations, of any governmental authorities and
with any directive of any public officer which shall impose any order or duty
upon Landlord or Tenant with respect to the Premises or the use or occupation
thereof or relating to the environment, health or safety with respect to the
Premises or the use or occupation thereof or relating to the environment, health
or safety with respect to the Premises or the use or occupation thereof
(including, without limitation, any rule of common law and judicial decisions
and the Americans With Disabilities Act), and any covenants, conditions or
restrictions of record relating to the Premises or the use or occupation
thereof, in each case as now or hereafter in effect (collectively "Laws").
(c) Notwithstanding any other provision of this Lease,
Tenant shall not use or permit the Premises to be used in any manner which will
result in waste or the creation of a nuisance, and Tenant shall maintain the
Premises free of any objectionable noises, odors, or disturbances; provided
that, as between Landlord and Tenant only, odors and exhaust incidental to a
restaurant, excluding odors of deteriorating food, will not be deemed a nuisance
or objectionable provided the same do not violate applicable Laws and do not
subject Landlord to civil liability.
7.03 Permits and Licenses. As between Landlord and Tenant, Tenant shall
be solely responsible to apply for and secure any building permit or permission
of any duly constituted authority for the purpose of doing any of the things
which Tenant is required or permitted to do under the provisions of this Lease.
Landlord shall cooperate as reasonably requested by Tenant to facilitate
Tenant's compliance with this obligation but at no cost to Landlord.
ARTICLE 8
UTILITIES
8.01 Payment. Tenant shall pay to the utility companies or other
parties entitled to payment the cost of all water, heat, air conditioning, gas,
electricity, telephone, and other utilities and services provided to or for the
Premises, including connection fees and taxes thereon.
8.02 Interruption in Service. Landlord shall not be liable in damages
or otherwise for any failure or interruption of any utility or other service
being furnished to the Premises subject to the provisions of Section 11.04(b)
hereof, and no such failure or interruption shall entitle Tenant to any
abatement of, setoff of or reduction in the amounts payable to Landlord
hereunder or otherwise entitle Tenant to terminate this Lease.
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ARTICLE 9
TAXES
9.01 Payment of Taxes. Tenant shall timely pay the Real Property Taxes
(as defined in Section 9.02) applicable to the Premises during the Lease Term.
Landlord agrees to use reasonable efforts to have the relevant taxing
authorities send a duplicate copy of any tax bills applicable to the Premises
sent directly to Tenant; otherwise, Landlord shall deliver copies of such tax
bills to Tenant promptly after receipt. All such payments shall be made prior to
delinquency or within ten (10) days after receipt by Tenant of the tax bills
from Landlord, whichever is later. Upon Landlord's request, Tenant shall
promptly furnish Landlord with satisfactory evidence that such Real Property
Taxes have been paid. If any such Real Property Taxes paid by Tenant shall cover
any period of time prior to or after the expiration of the Lease Term, Landlord
shall promptly reimburse Tenant to the extent required. If Tenant shall fail to
pay any such Real Property Taxes, Landlord shall have the right but not the
obligation to pay the same in which case Tenant shall repay such amount plus any
penalties and interest resulting therefrom to Landlord with Tenant's next Annual
Rental installment together with the applicable Administrative Fee.
9.02 Definition of "Real Property Taxes". As used herein, the term
"Real Property Taxes" shall mean any form of real estate tax or assessment, ad
valorem tax or gross receipts tax fee, levy, penalty, interest or other charge
imposed by any authority having the direct or indirect power to tax, including
any city, county, state, or federal government, or any school, agricultural,
sanitary, fire, street, drainage, or other improvement district thereof, on,
against or with respect to the Premises, this Lease, any legal or equitable
interest of Landlord or any superior landlord or any mortgagee or beneficiary of
Landlord in the Premises or in the real property of which the Premises are a
part, and Landlord's right to rent. The term "Real Property Taxes" shall also
include any tax, fee, levy, assessment, penalty, interest or other charge (i) in
substitution of, partially or totally, any tax, fee, levy, assessment, or charge
included within the definition of Real Property Taxes, (ii) the nature of which
was included within the foregoing definition of Real Property Taxes, or (iii)
any tax or increase in any tax which is imposed as a result of a transfer,
either partial or total, of Landlord's interest in the Premises or which is
added to a tax or charge hereinbefore included within the definition of Real
Property Taxes by reason of such transfer (other than documentary, stamp or
other transfer taxes resulting from such transfer but including any increase in
Real Property Taxes attributable to such transfer), or which is imposed by
reason of the transfer of the Premises to Landlord or this transaction, any
modifications or changes hereto, or any transfers hereof. Notwithstanding the
foregoing, the term "Real Property Taxes" shall not include any general income
taxes, inheritance taxes, and estate taxes imposed upon Landlord or any superior
landlord or any mortgagee or beneficiary of Landlord or any taxes attributable
to the recording of any mortgage or deed of trust on Landlord's interest in the
Premises.
9.03 Personal Property Taxes. Tenant shall pay prior to delinquency,
all taxes assessed against and levied upon trade fixtures, furnishings,
equipment, and all other personal property of Tenant contained in the Premises
or elsewhere. Tenant shall seek to cause said trade fixtures, furnishings,
equipment, and all other personal property to be assessed and billed separately
from the real property of Landlord.
9.04 Tenant's Right to Contest Taxes.
(a) Tenant shall have the right, at its cost and expense,
to contest the amount or validity, in whole or in part, of any Real Property
Taxes of any kind by appropriate proceedings diligently conducted in good faith,
but no such contest shall be carried on or maintained by Tenant after the time
limit for the payment of any Real Property Taxes unless Tenant, at its option:
(i) shall pay the amount involved under protest; or (ii) shall procure and
maintain a stay of all proceedings to enforce any collection of any Real
Property Taxes, together with all penalties, interest, costs and expenses, by a
deposit of a sufficient sum of money, or by such undertaking, as may be required
or permitted by law to accomplish such stay; or (iii) shall deposit with
Landlord, as security for the performance by Tenant of its obligations hereunder
with respect to such Real Property Taxes, security in the amount, if any,
prescribed by applicable law, or if no amount is prescribed by applicable law,
in an amount equal to one hundred fifty percent (150%) of the contested amount
or such other reasonable security may be demanded by Landlord to ensure payment
of such contested Real Property Taxes and all penalties, interest, costs and
expenses which may accrue during the period of the contest. Upon the termination
of any such proceedings, it shall be the obligation of Tenant to pay
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the amount of such Real Property Taxes or part thereof, as finally determined in
such proceedings, together with any costs, fees (including attorneys' fees),
penalties or other liabilities in connection therewith; provided, however, that
if Tenant has deposited cash or cash equivalents with Landlord as security under
clause (iii) above, then, so long as no material default exists under this
Lease, Landlord pay such Real Property Taxes (or part thereof) together with the
applicable costs, fees and liabilities as described above out of such cash or
cash equivalents and return any unused balance, if any, to Tenant. Otherwise,
Landlord shall return or cause to have returned to Tenant all amounts, if any,
held by or on behalf of Landlord which were deposited by Tenant in accordance
with the provisions hereof.
(b) Tenant shall have the right, at its cost and expense,
to seek a reduction in the valuation of the Premises as assessed for tax
purposes and to prosecute any action or proceeding in connection therewith.
Provided Tenant is not in material default hereunder, Tenant shall be authorized
to collect any tax refund of any tax paid by Tenant obtained by reason thereof
and to retain the same.
(c) Landlord agrees that whenever Landlord's cooperation
is required in any of the proceedings brought by Tenant as aforesaid, Landlord
will reasonably cooperate therein, provided same shall not entail any cost,
liability or expense to Landlord, and Tenant will pay, indemnify and save
Landlord harmless of and from, any and all liabilities, losses, judgments,
decrees, costs and expenses (including all reasonable attorneys' fees and
expenses) in connection with any such contest and will, promptly after the final
settlement, fully pay and discharge the amounts which shall be levied, assessed,
charged or imposed or be determined to be payable therein or in connection
therewith, and Tenant shall perform and observe all acts and obligations, the
performance of which shall be ordered or decreed as a result thereof. No such
contest shall subject Landlord to the risk of any civil liability or the risk of
any criminal liability, and Tenant shall give such reasonable indemnity or
security to Landlord, as may reasonably be demanded by Landlord to ensure
compliance with the foregoing provisions of this Section 9.04.
ARTICLE 10
MAINTENANCE AND REPAIRS
10.01 Tenant's Obligations.
(a) Tenant shall, at Tenant's expense, maintain in good
repair, order, and serviceable condition, reasonable wear and tear excepted, the
Premises and every part thereof, including but not limited to all plumbing,
ventilation, heating, air conditioning, and electrical systems and equipment in,
on, or exclusively serving the Premises, and windows, doors, storefronts, plate
glass, interior walls, and ceilings which are part of the Premises.
(b) Tenant shall not commit or suffer to be committed any
waste upon or about the Premises, and shall promptly at Tenant's cost and
expense, make all necessary replacements, restorations, renewals and repairs to
the Premises and appurtenances thereto which are material to the operation of
the Premises, whether interior or exterior, structural or non-structural,
ordinary or extraordinary, and foreseen or unforeseen; provided that with
respect to appurtenances to the Premises which are material to the operation of
the Premises, if third parties are obligated to repair or maintain such
appurtenances, Tenant shall use commercially reasonable efforts to enforce such
obligations of third parties, or if such third parties fail to perform such
obligations, Tenant shall perform such obligations to the extent Tenant has the
legal right to do so. Tenant shall pay to the appropriate parties Tenant's pro
rata share of any maintenance, repair or other costs to the extent required with
respect to any appurtenances to the Premises. Repairs, restorations, renewals
and replacements shall be at least equivalent in quality to the original work or
the property replaced, as the case may be. Tenant shall not make any claim or
demand upon or bring any action against Landlord for any loss, cost, injury,
damage or other expense caused by any failure or defect, structural or
non-structural, of the Premises or any part thereof.
(c) Upon the expiration or earlier termination of this
Lease, Tenant shall return the Premises to Landlord in good and clean condition
and repair, reasonable wear and tear excepted. Any damage to the Premises,
including any structural damage, resulting from Tenant's use or from the removal
of Tenant's fixtures, furnishings, and equipment pursuant to Section 12.04
hereof, shall be repaired by Tenant at Tenant's expense.
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10.02 Landlord's Obligations. Except for the obligations of Landlord
under Article 14 hereof (relating to destruction of the Premises), and under
Article 15 hereof (relating to the condemnation of the Premises), it is intended
by the parties hereto that Landlord have no obligation, in any manner
whatsoever, to repair and maintain the Premises nor the building located thereon
nor the equipment or personal property therein, whether interior or exterior,
structural or nonstructural, ordinary or extraordinary, all of which obligations
are that of Tenant under Section 10.01 hereof. Tenant expressly waives the
benefit of any statute or law now or hereafter in effect which would otherwise
afford Tenant the right to terminate this Lease because of Landlord's failure to
keep the Premises or any part thereof or the building located thereon or the
fixtures thereon or equipment or personal property therein in good order,
condition, and repair, or the right to repair and offset the cost related
thereto against rent.
10.03 Landlord's Rights. If Tenant refuses or neglects to make repairs
or maintain the Premises, or any part thereof, or any appurtenances thereto
material to the operation of the Premises or to enforce maintenance or repair
obligations of third parties with respect to any such appurtenances, as provided
above, in a manner reasonably satisfactory to Landlord, without prejudice to any
other remedy Landlord may have hereunder, upon giving Tenant ten (10) days'
prior written notice, Landlord shall have the right to enter the Premises and
perform such maintenance or make such repairs on behalf of and for the account
of Tenant. In the event Landlord so elects, Tenant shall pay the cost of such
repairs, maintenance, or replacements promptly following Tenant's receipt of a
bill therefor, together with the applicable Administrative Fee. Tenant agrees to
permit Landlord or its agent to enter the Premises, upon reasonable notice by
Landlord, during normal business hours for the purpose of inspecting the
Premises.
ARTICLE 11
INSURANCE AND INDEMNIFICATION
11.01 Tenant's Insurance Obligation. Tenant covenants and agrees that
Tenant will carry and maintain, at its sole cost and expense, the following
types of insurance, in the amounts specified and in the form hereinafter
provided for:
(a) COMMERCIAL GENERAL LIABILITY. Commercial general
liability insurance (including liquor liability insurance) against any loss,
liability or damage on or relating to the Premises, with limits of not less than
Five Million Dollars ($5,000,000) in any one occurrence for death or injuries to
one or more persons and/or for damage to property. If such insurance has a
deductible or self-insured retention clause, the deductible or self-insured
retention shall not exceed Five Hundred Thousand Dollars ($500,000) per
occurrence without Landlord's consent, such consent not to be unreasonably
withheld, and Tenant shall be liable for such deductible or self-insured
retention amount.
(b) BUSINESS INTERRUPTION/RENTAL LOSS. Tenant shall
purchase t Tenant's option either a policy of business interruption insurance to
protect Tenant and Landlord against loss of earnings in the event of
interruption of Tenant's business through destruction of real or personal
property at the Premises or a policy of rental loss protection to protect
Landlord (and any mortgagee or beneficiary of Landlord with respect to the
Premises) against loss of rental income as a result of destruction of real or
personal property with respect to the Premises. Such policy shall be written in
an amount equal to not less than six (6) monthly installments of Annual Rent.
Such policy shall insure against loss of earnings or rental income (as
applicable) caused by at least the perils of fire and lightning, extended
coverage, vandalism, malicious mischief and, where pertinent, sprinkler leakage.
(c) WORKERS' COMPENSATION. Worker's compensation
insurance or self insurance as required by the jurisdiction in which the
Premises are located and employer's liability insurance with a limit of not less
than One Million Dollars ($1,000,000).
(d) PROPERTY DAMAGE. Insurance covering all improvements
located on the Premises and all of Tenant's fixtures, merchandise, and personal
property from time to time in, on or upon the Premises, in an amount not less
than one hundred percent (100%) of their full replacement value providing
protection against perils commonly included within the classification "All
Risk," and insurance against sprinkler damage (if applicable and to
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the extent not otherwise covered by such "All Risk" policy). If such insurance
has a deductible clause, the deductible shall not exceed Two Hundred Fifty
Thousand Dollars ($250,000) per occurrence without Landlord's consent, such
consent not to be unreasonably withheld, and Tenant shall be liable for such
deductible amount. Any policy proceeds shall be used for the repair or
replacement of the property damaged or destroyed to the extent necessary to
maintain the standard of operation of the Premises and the business operated
thereon existing prior to the damage or destruction.
(e) ADDITIONAL COVERAGE. Such other insurance and in such
amounts customarily carried for like businesses or properties (as determined by
Landlord in good faith) as may be reasonably required from time to time by
Landlord.
(f) POLICY FORM.
(i) All policies of insurance provided for
herein shall be issued by reputable and financially sound insurance companies
reasonably satisfactory to Landlord, and such insurance companies shall be
qualified to do business in the jurisdiction where the Premises are situated.
All such policies shall be issued in Tenant's name, with Landlord named as an
additional insured and/or loss payee, as applicable, and if requested by
Landlord, name any superior landlord and any mortgagee or beneficiary of
Landlord as an additional insured or loss payee. The policies shall be for the
mutual and joint benefit and protection of Landlord, Tenant, any superior
landlord and any mortgagee or beneficiary of Landlord. Certificates of insurance
shall be delivered to Landlord prior to Landlord's execution of this Lease, and
thereafter certificates or other evidence of renewal or replacement coverage
shall be delivered to Landlord within fifteen (15) days prior to the expiration
of the term of each such policy. As often as any such policy shall expire or
terminate, renewal or additional policies shall be procured and maintained by
Tenant in like manner and to like extent. All certificates of insurance
delivered to Landlord must contain a provision giving Landlord, any superior
landlord, and any mortgagee or beneficiary of Landlord fifteen (15) days' notice
in writing in advance of any modification, cancellation, lapse, or reduction in
the amounts of insurance. The commercial general liability policy shall contain
a severability of interests clause providing that each entity insured under the
policy will be protected as if it were the only insured; however, this provision
shall not increase the coverage limits of such policy. The property damage
policy shall contain an agreement that any loss otherwise payable thereunder
shall be payable notwithstanding any act or negligence of Landlord or Tenant
which might, absent such agreement, result in a forfeiture of all or part of the
payment of such loss. All public liability, property damage, and other casualty
policies shall be written on an occurrence basis as primary policies, not
contributing with or in excess of coverage which Landlord may carry. Tenant's
failure to deliver the certificates or other evidence of insurance coverage
pursuant to this Section (where such failure shall continue for a period of
fifteen (15) days after written notice thereof from Landlord to Tenant) shall
constitute a material default under this Lease.
(ii) Tenant's obligations to carry the insurance
provided for above may be brought within the coverage of a so-called blanket
policy or policies of insurance carried and maintained by Tenant; provided,
however, that such policy or policies must have limits of not less than Five
Million and 00/100 Dollars ($5,000,000.00) and that Landlord, any superior
landlord and any mortgagee or beneficiary of Landlord shall be named as an
additional insured thereunder as their interests may appear and that the
coverage afforded Landlord will not be reduced or diminished by reason of the
use of such blanket policies and the requirements set forth herein are otherwise
satisfied. Tenant agrees to permit Landlord, not more often than annually, to
examine Tenant's original insurance policies required in this Lease, and to make
copies of the sections of such policies evidencing satisfaction of the
requirements of this Lease, provided such examination shall be conducted in the
offices of Tenant or Tenant's insurance broker and in the presence of a
representative of Tenant or Tenant's insurance broker.
11.02 Subrogation Waiver. Landlord (for itself and its insurer) hereby
waives any rights, including rights of subrogation, and Tenant (for itself and
its insurer) hereby waives any rights, including rights of subrogation, each may
have against the other on account of any loss or damage occasioned to Landlord
or Tenant, as the case may be, to their respective property, the Premises or its
contents that are caused by or result from risks insured against under any
property insurance policies carried by the parties hereto and in force at the
time of any such damage. The foregoing waivers of subrogation shall be operative
only so long as available in the jurisdiction where the Premises are located and
so long as no policy of insurance is invalidated thereby.
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11.03 Insurance Use Restrictions. Tenant agrees that it will not carry
any stock or goods or do anything in, on, or about the Premises outside of the
ordinary course of Tenant's business which will substantially increase the
insurance rates upon the building of which the Premises are a part.
11.04 Indemnification.
(a) Tenant shall at all times indemnify Landlord and any
mortgagee or beneficiary of Landlord for, defend (with counsel reasonably
satisfactory to Landlord) Landlord and any mortgagee or beneficiary of Landlord
against, and save Landlord and any mortgagee or beneficiary of Landlord harmless
from, any liability, loss, cost, injury, damage or other expense or risk
(including, without limitation, reasonable attorneys' fees) whatsoever that may
occur or be claimed by or with respect to any person(s) or property on or
relating to the Premises and resulting directly or indirectly from the use,
misuse, occupancy, possession or disuse of the Premises by Tenant or other
persons claiming through or under Tenant, or their respective agents, employees,
licensees, invitees, guests or other such persons, or from the condition of the
Premises. Tenant shall, at its cost and expense, defend against any and all such
actions, claims and demands and shall indemnify Landlord and any mortgagee or
beneficiary of Landlord for all costs, expenses and liabilities (including,
without limitation, reasonable attorneys' fees) it may incur in connection
therewith. Neither Landlord nor any mortgagee or beneficiary of Landlord shall
in any event whatsoever be liable for any injury or damage to the Premises or to
the Tenant or to any other persons claiming through or under Tenant, or their
respective agents, employees, licensees, invitees, guests or other such persons
or to any property of any such persons except as provided in subparagraph (b)
below. Tenant shall not make any claim or demand upon or institute any action
against Landlord as a result of such injury or damage except as provided in
subparagraph (b) below. Tenant covenants and agrees during the Lease Term hereof
to pay when due or reimburse and indemnify and hold Landlord and any mortgagee
or beneficiary of Landlord harmless from and against all inspection fees, taxes,
bonds, permits, certificates, assessments and sales, use, property or other
taxes, fees or tolls of any nature whatsoever (together with any related
interest or penalties) now or hereafter imposed against Landlord, any superior
landlord, or any mortgagee or beneficiary of Landlord, or Tenant by any federal,
state, county or local governmental authority upon or with respect to the
Premises or the use thereof or upon the possession, leasing, use, operation or
other disposition thereof or upon the rents, receipts or earnings arising
therefrom or upon or with respect to this Lease (excepting only federal, state,
and local net income taxes on the income of Landlord or any superior landlord or
any mortgagee or beneficiary of Landlord or any taxes attributable to the
recording of any mortgage or deed of trust on Landlord's interest in the
Premises).
(b) Notwithstanding the waiver of subrogation in Section
11.02, Landlord shall indemnify, hold harmless and defend (with counsel
reasonably satisfactory to Tenant) Tenant from and against (i) any liability,
loss, cost, injury, damage, or other expense or risk, (including, without
limitation, reasonable attorneys' fees) whatsoever to the extent arising out of
the negligence or willful misconduct of Landlord or its representatives in
connection with any entry by Landlord or its representatives on the Premises, or
(ii) any liability, loss, cost, injury, damage, or other expense or risk,
(including, without limitation, reasonable attorneys' fees) whatsoever to the
extent arising out of the negligence or willful misconduct of Landlord or its
representatives in connection with any maintenance, construction or other
activities of Landlord on property adjacent to the Premises, except to the
extent arising from the negligence or willful misconduct of Tenant, its
representatives, or their respective agents, employees, licensees, invitees or
guests, or from the condition of the Premises.
11.05 Payment of Insurance. In the event that Tenant shall fail to
obtain the insurance policies required hereunder, Landlord shall have the right,
but not the obligation, to purchase the same in which case Tenant shall repay
the cost thereof to Landlord with Tenant's next Annual Rent installment together
with the applicable Administrative Fee.
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ARTICLE 12
ALTERATIONS
12.01 Permitted Improvements. Except as provided in Section 12.03
hereof, and subject to the provisions of this Article 12, at Tenant's own
expense and after giving Landlord notice in writing of its intention to do so as
required under Article 5, Tenant may from time to time make alterations,
replacements, additions, changes, and improvements (collectively referred to in
this Article 12 as "Alterations") in and to the Premises as it may find
necessary or convenient for its purposes; provided, however, that no such
Alterations shall decrease the value of the Premises.
12.02 Liens. Tenant shall pay the costs of any Alterations done on the
Premises pursuant to Section 12.01, and shall keep the Premises free and clear
of liens of any kind as required under Article 5. Tenant shall indemnify and
defend Landlord from and against any liability, loss, damage, costs, attorneys'
fees, and any other expense incurred as a result of claims of lien by any person
performing work or furnishing materials or supplies for Tenant or any person
claiming under Tenant.
12.03 Structural Alterations. Tenant shall not make any Structural
Alterations (as defined below) to the Premises without obtaining the prior
written consent of Landlord, which consent shall not be unreasonably withheld.
"Structural Alterations" shall mean any Alterations made to any of the
foundations, perimeter or load bearing walls, or roof structure. All work with
respect to any Alteration shall be done in a good and workmanlike manner by
properly qualified and licensed personnel, and such work shall be diligently
prosecuted to completion.
12.04 Removal of Alterations. All Alterations made on the Premises
shall become the property of Landlord at the expiration or termination of the
Lease Term and shall be surrendered with the Premises; provided, however, that
if Tenant is not in default at the time of such expiration or termination, (i)
Tenant shall have the right to remove any Alterations permitted or approved in
accordance with this Article 12, provided the removal thereof does not decrease
the value of the Premises as reasonably determined by Landlord, and provided
further that Tenant repairs any damage to the Premises caused by such removal,
and (ii) Tenant's equipment, machinery, and trade fixtures shall remain the
property of Tenant and may be removed by Tenant, and Tenant shall repair any
damage caused by its removal of any such equipment, machinery, and trade
fixtures.
Landlord agrees from time to time during the Lease Term, upon written
request from Tenant, to execute and deliver any instrument, release or other
document that may be reasonably required by any equipment supplier or vendor and
in form and substance reasonably satisfactory to Landlord whereby Landlord
waives and/or releases any rights it may have or acquire with respect to any
moveable equipment or trade fixtures which is subject to a security interest or
equipment lease in favor of such supplier or vendor.
12.05 Alterations Required by Law. Any Alteration, structural or
otherwise, to or on the Premises, or any part thereof, which may be necessary or
required by reason of any applicable Laws, shall be made by and at the sole cost
and expense of Tenant.
12.06 General Conditions Relating to Alterations. Any Alteration,
structural or otherwise, to or on the Premises, shall be subject to the
following conditions:
(a) No Alteration shall be undertaken until Tenant shall
have procured and paid for all required permits and authorizations of all
municipal departments and governmental subdivisions having jurisdiction.
(b) At Landlord's option, any Alteration involving an
estimated cost of more than One Hundred Thousand Dollars ($100,000) (as such
dollar amount shall be increased pursuant to the provisions of Section 6.02
hereof) shall, upon Landlord's reasonable request, be conducted under the
supervision of a licensed architect or engineer selected by Tenant and
satisfactory to Landlord and shall be made in accordance with detailed plans and
specifications (the "Plans and Specifications") and cost estimates prepared by
such architect or engineer and approved in writing in advance by Landlord.
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(c) Any Alteration shall be made promptly and in a good
workmanlike manner and in compliance with all applicable Laws.
(d) No Alteration shall tie-in or connect the Premises or
any improvements thereon with any property outside the Premises without the
prior written consent of Landlord.
(e) No Alteration shall reduce the value of the Premises
or impair the structural integrity of any building comprising a part of the
Premises.
ARTICLE 13
SIGNS
In addition to those signs already existing at the Premises, Tenant
shall have the right to erect or affix signs on the Premises of such sizes,
colors, and designs as required by Tenant. All signs on the Premises shall fully
comply with all applicable Laws.
ARTICLE 14
DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD
14.01 Obligation to Rebuild. If any portion of the Premises is damaged
or destroyed by fire or other casualty, Tenant shall forthwith give notice
thereof to Landlord. Tenant shall, at its sole cost and expense, diligently
repair, restore, rebuild or replace the damaged or destroyed improvements,
fixtures or equipment, and diligently complete the same as soon as reasonably
possible, to the condition they were in prior to such damage or destruction,
except for permitted Alterations and such changes in design or materials as may
then be required by applicable Laws. Landlord, in such event, shall, to the
extent and at the times the proceeds of the insurance are made available to
Landlord, reimburse Tenant for the costs of making such repairs, restoration,
rebuilding and replacements on such terms as Landlord may reasonably require. To
the extent that the available proceeds of insurance are insufficient to pay the
entire cost of making such repairs, restoration, rebuilding and replacements,
and notwithstanding the expiration or termination of the Lease Term of this
Lease, Tenant shall pay the amount by which such costs exceed the available
insurance proceeds. Any surplus of insurance proceeds over the cost of
restoration, net of all reasonable out-of-pocket expenses incurred by Landlord
in connection with the administration thereof, shall be promptly paid over to
Tenant.
Notwithstanding the foregoing, if any such damage or destruction occurs
during the last two (2) years of the initial term and the first (1st) and second
(2nd) Extension Periods hereof, or at any time during the third (3rd) Extension
Period hereof, provided Tenant is not in material default hereunder, Tenant may
elect to terminate this Lease upon written notice to Landlord within sixty (60)
days after the occurrence of such damage or destruction provided Tenant pays to
Landlord all rent and other amounts accruing under this Lease through the date
of termination, and except as to obligations hereunder which expressly survive
any termination of this Lease. In the event of any such termination of this
Lease, Landlord shall be entitled to retain all proceeds of insurance relating
to such damage and destruction, and Tenant shall promptly pay to Landlord any
such insurance proceeds received by Tenant and hereby assigns to Landlord all
rights of Tenant to receive such insurance proceeds.
14.02 No Abatement of Rent. Notwithstanding the partial or total
destruction of the Premises or any part thereof, there shall be no abatement of
rent or of any other obligation of Tenant hereunder by reason of such damage or
destruction.
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ARTICLE 15
EMINENT DOMAIN
15.01 Total Taking. If the Premises is taken in its entirety under the
power of eminent domain, this Lease shall terminate as of the date of such
taking, and upon Tenant's payment to Landlord of all rents and other amounts
accruing hereunder through such date, Landlord and Tenant shall each thereafter
be released from accruing any further liability under this Lease, subject to the
rights of Landlord and Tenant to receive the condemnation awards to which each
is entitled as provided in Section 15.03, and except as to obligations under
this Lease which survive the termination hereof.
15.02 Partial Taking. In the event that (a) more than twenty-five
percent (25%) of the floor area of the Premises is taken under the power of
eminent domain; or (b) by reason of any appropriation or taking, regardless of
the amount so taken, the remainder of the Premises is not one undivided parcel
of property; or (c) as a result of any taking, regardless of the amount so
taken, the remainder of the Premises is rendered unsuitable for the continued
operation of Tenant's business as determined by Tenant in good faith and based
upon commercially reasonable standards and criteria, and as agreed to by
Landlord, in Landlord's reasonable discretion, either Landlord or Tenant shall
have the right to terminate this Lease upon giving notice in writing of such
election within sixty (60) days after receipt by Tenant from Landlord of written
notice that said Premises have been so appropriated or taken (with the
understanding that such period of time may be extended, but in no event beyond a
total period of one hundred eighty (180) days, as reasonably necessary for
Tenant to assess the effect of such partial taking on Tenant's continued
operation of its business at the Premises, subject to Landlord's prior written
consent, which consent shall not be unreasonably withheld) provided Tenant shall
continue to pay Annual Rent and other amounts accruing hereunder through the
date of termination. In the event of such termination, upon Tenant's payment to
Landlord of all rents and other amounts accruing hereunder through such date for
the Premises, both Landlord and Tenant shall thereupon be released from any
liability thereafter accruing hereunder, except as to obligations hereunder
which survive the termination hereof. Each party agrees immediately after
learning of any actual or contemplated appropriation or taking to give to the
other party notice in writing thereof. If this Lease is not terminated, Tenant
shall remain in that portion of the Premises not so taken and Tenant, at
Tenant's sole cost and expense, shall restore the remaining portion of the
Premises as soon as possible to a complete unit of like quality and character as
existed prior to such taking. Landlord agrees to reimburse Tenant for the cost
of restoration, but in no event shall Landlord's obligation to reimburse Tenant
for the cost of restoring the remaining portion of the Premises exceed the
amount of the award or compensation that Landlord receives for a partial taking
of that portion of the Premises resulting in the need for restoration. So long
as this Lease is not terminated in the manner provided above, there shall be an
equitable adjustment of the rent payable by Tenant hereunder for the Premises by
reason of any partial taking. Tenant hereby waives any statutory rights of
termination which may arise by reason of any partial taking of the Premises
under the power of eminent domain.
15.03 Award. In the event of any taking, the entire award or
compensation in any eminent domain proceeding affecting the Premises, whether
for a total or partial taking, shall be distributed to Landlord, provided,
however, that Tenant will be entitled to receive, and Landlord will have no
right to pursue for itself, any award for claims based on (a) the value of
Tenant's Alterations to the Premises which Tenant has the right to remove
pursuant to the provisions of this Lease but elects not to remove, (b) loss of
or damage to Tenant's personal property, (c) loss to Tenant because of
interruption of business, (d) Tenant's loss of goodwill, and (e) Tenant's cost
of removal and relocation and any rent differential payable by Tenant for
replacement premises as a result of any relocation necessitated by the taking.
Landlord and Tenant may separately pursue their claims against the condemning
authority, provided, however, that notwithstanding anything to the contrary
contained in this Lease, Tenant will have no right to pursue a claim based upon
the residual value of the real property comprising the Premises after expiration
of the Lease Term or pursue claims or retain any award to which Landlord is
entitled so as inequitably to diminish Landlord's award. Tenant hereby assigns
to Landlord all rights of Tenant to receive any award or compensation as a
result of any taking except the awards to which Tenant is entitled under this
Section 15.03.
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15.04 Transfer Under Threat of Taking. For the purposes of this Article
only, a voluntary sale or conveyance under threat and in lieu of condemnation
shall be deemed an appropriation or taking under the power of eminent domain.
ARTICLE 16
ASSIGNMENT AND SUBLETTING
16.01 Landlord's Consent Required. For purposes of this Article 16, the
terms "assign" and "assignment" shall include and mean any act attempting to, or
document purporting to, assign, transfer or sublet (or enter into any similar
type of agreement), change ownership of, mortgage or hypothecate this Lease or
Tenant's interest in and to the Premises or any part thereof. Tenant shall not
assign this Lease or Tenant's interest in and to the Premises without obtaining
the prior written consent of Landlord, such consent not to be unreasonably
withheld. Any attempted assignment without such consent shall be void, and shall
constitute a breach of this Lease. Tenant hereby agrees to pay to Landlord fifty
percent (50%) of any rent or other substitute consideration in excess of the
monthly rent payable hereunder (as adjusted from time to time) which Tenant
receives by reason of any permitted assignment (the "Rent Premium").
Notwithstanding the foregoing, Tenant may deduct from such Rent Premium
reasonable, out-of-pocket expenses actually incurred in connection with such
permitted assignment (including without limitation, costs of leasehold
improvements, brokerage commissions and reasonable attorneys' fees), which
expenses shall be documented to the satisfaction of Landlord; provided, however,
that nothing contained in this Section 16.01 shall reduce the Annual Rent and
other amounts payable by Tenant under this Lease. The payment of Tenant's share
of the Rent Premium shall be made within five (5) business days following the
date that such payment is received by Tenant.
16.02 Assumption of Obligations. Any assignment to which Landlord has
consented shall be evidenced by an instrument in writing and any assignee,
transferee or mortgagee shall agree for the benefit of Landlord to be bound by,
assume, and perform all of the terms, covenants, and conditions of this Lease.
Consent by Landlord to any assignment shall not constitute consent to any
subsequent assignment.
16.03 Assignment to Affiliate. Notwithstanding anything to the contrary
contained in this Article 16, Tenant shall have the right to assign this Lease,
or sublet the Premises or any portion thereof, without the consent of, but with
notice to, Landlord, to any corporation (a) with which Tenant may merge or
consolidate, (b) which is a parent or subsidiary of Tenant at any tier, (c)
which is the successor corporation to Tenant in the event of a corporate
reorganization, or (d) which acquires all or substantially all of the voting
stock of Tenant or all or substantially all of the assets of Tenant, provided
that said assignee assumes, in full, the obligations of Tenant under this Lease
and Tenant remains primarily liable under this Lease.
16.04 Hypothecation of Lease. Without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, Tenant may not
mortgage, pledge or otherwise encumber its leasehold estate hereunder, and any
attempt to mortgage, pledge or otherwise encumber such estate without such
consent shall be null and void and of no force and effect.
16.05 Corporate/Partnership/Limited Liability Company Restrictions. In
the event that Tenant shall, at any time, be a corporation, no change shall
occur in one or a series of related transactions in the majority ownership of
and/or the power to vote the majority of the outstanding capital stock of
Tenant, without the prior written consent of Landlord. In the event that Tenant
shall, at any time, be a partnership, no change shall occur in any one or more
of the general partners of the partnership or in the control of any general
partner, without the prior written consent of Landlord. In the event that Tenant
shall, at any time, be a limited liability company, no change shall occur in any
member of the limited liability company or in the control of any member, without
the prior written consent of Landlord. Notwithstanding the foregoing, nothing
contained herein shall prohibit (i) the public offering of shares of stock of
the Tenant on a nationally recognized stock exchange, or (ii) the private sale
of shares of all of the stock of the Tenant to any entity which is listed on a
nationally recognized stock exchange and has a net worth not less than the net
worth of Tenant on the Commencement Date.
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16.06 No Release of Tenant. Regardless of Landlord's consent, no
assignment shall release Tenant of Tenant's obligation or alter the primary
liability of Tenant to pay the rent and to perform all other obligations to be
performed by Tenant hereunder. The acceptance of rent by Landlord from any other
person shall not be deemed to be a waiver by Landlord of any provision hereof.
Consent to one assignment shall not be deemed consent to any subsequent
assignment. In the event of default by any assignee of Tenant or any successor
Tenant, in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
said assignee. Landlord may consent to subsequent assignments of this Lease or
amendments or modifications to this Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or their
consent thereto and such action shall not relieve Tenant of liability under this
Lease; provided that Tenant shall not be liable to the extent of amendments or
modifications made to this Lease which (i) materially increase the Annual Rent
(or additional rent) payable under this Lease, or (ii) extend the Lease Term
beyond the initial term and any Extension Periods hereunder, without Tenant's
consent, which consent shall not be unreasonably withheld.
ARTICLE 17
DEFAULT; REMEDIES
17.01 Default. The occurrence of any one or more of the following
events shall constitute a material default under this Lease by Tenant:
(a) The vacating or abandonment of the Premises by
Tenant.
(b) The failure by Tenant to make any payment when due of
Annual Rent, Impositions or any other payment required to be made by Tenant
hereunder, where such failure shall continue for a period of five (5) days after
written notice from Landlord, provided that Landlord shall no obligation to
provide such notice after three (3) defaults by Tenant in such payments in any
calendar year.
(c) Except as otherwise provided in this Lease, the
failure by Tenant to observe or perform any of the covenants, conditions, or
provisions of this Lease to be observed or performed by Tenant, other than
described in subparagraph (b) above, where such failure shall continue for a
period of thirty (30) days after written notice thereof from Landlord to Tenant;
provided, however, that if the nature of Tenant's noncompliance is such that
more than thirty (30) days are reasonably required for its cure, then Tenant
shall not be deemed to be in default if Tenant commences such cure within said
thirty (30)-day period and thereafter diligently and in good faith prosecutes
such cure to completion.
(d) (i) The making by Tenant of any general arrangement
or general assignment for the benefit of creditors; (ii) Tenant becomes a
"debtor" as defined in 11 U.S.C. Section 101 or any successor statute thereto
(unless, in the case of a petition filed against Tenant, the same is dismissed
within sixty (60) days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where possession is not restored to Tenant
within sixty (60) days; or (iv) the attachment, execution, or other judicial
seizure of substantially all of Tenant's assets located at the Premises or of
Tenant's interest in this Lease, where such seizure is not discharged within
sixty (60) days. In the event that any provision of this Section 17.01(d) is
contrary to any applicable law, such provision shall be of no force or effect.
(e) The breach of any representation or warranty by
Tenant hereunder in any material respect, or if any financial statements
delivered to Landlord hereunder by Tenant are intentionally false or misleading
in any material respect.
(f) The default, breach or insolvency of any guarantor of
this Lease beyond any applicable notice and/or grace period under its guarantee.
(g) The default by Tenant under any other leases or
agreements with Landlord or any "affiliate of Landlord" (as hereinafter
defined); provided that this subparagraph (g) shall not apply with respect to
any lease or
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agreement assigned by Landlord or any affiliate of Landlord to a person or
entity which is not an affiliate of Landlord. For purposes of this Lease,
"affiliate of Landlord" shall mean (i) a person or entity which owns ten percent
(10%) or more of the voting securities of Landlord, or (ii) a person or entity
which directly or indirectly controls or is controlled by Captec Financial
Group, Inc., a Michigan corporation.
17.02 Remedies. In the event of any such material default by Tenant,
Landlord may at any time thereafter, with or without notice or demand and
without limiting Landlord in the exercise of any right or remedy which Landlord
may have by reason of such default:
(a) Terminate Tenant's right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord. In
such event, Landlord shall be entitled to recover from Tenant all damages
incurred by Landlord by reason of Tenant's default including, but not limited
to, the cost of recovering possession of the Premises, expenses of reletting,
including reasonable and necessary renovation and alteration of the Premises,
reasonable attorneys' fees, and any real estate commission actually paid; and
the worth at the time of award by the court having jurisdiction thereof of the
amount by which the unpaid rent for the balance of the term after the time of
such award exceeds the amount of such unpaid rent for the same period that
Tenant proves could be reasonably avoided.
(b) Maintain Tenant's right to possession of the Premises
by any lawful means, in which case this Lease and the term hereof shall continue
in effect whether or not Tenant shall have vacated or abandoned the Premises. In
such event Landlord shall be entitled to enforce all of Landlord's rights and
remedies under the Lease, including the right to recover the rent as it becomes
due hereunder.
(c) Pursue any other remedy now or hereafter available to
Landlord under the Laws of the jurisdiction where the Premises are located.
(d) To the extent permitted by Law, the rights and
remedies under this Lease provided shall be cumulative, and the exercise of any
one right or remedy shall not preclude the exercise of or act as a waiver of any
other right or remedy of Landlord hereunder, or which may be existing at law, or
in equity or by statute or otherwise.
(e) In addition to the foregoing, Tenant, and its
successors and assigns, shall at all times indemnify Landlord for, defend
Landlord against and save Landlord harmless from any liability, loss, cost,
injury, damage or other expense or risk (including, without limitation,
reasonable attorneys' fees) whatsoever, directly or indirectly, arising out of,
resulting from or otherwise in connection with (i) the failure for any reason on
the part of Tenant to perform, observe or comply with any of the covenants,
conditions and obligations under this Lease to be performed, observed or
complied with by Tenant, and/or (ii) the failure for any reason of any
representation or warranty given by Tenant in connection with the execution of
this Lease by Landlord to be materially true, complete and accurate.
17.03 Administrative Fee. Tenant hereby acknowledges that late payment
by Tenant to Landlord of rent and other sums due hereunder will cause Landlord
to incur administrative costs not contemplated by this Lease, the exact amount
of which will be extremely difficult to ascertain. Such administrative costs may
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed on Landlord by the terms of any superior lease,
mortgage or trust deed covering the Premises. Accordingly, if any installment of
rent or any other sum due from Tenant shall not be received by Landlord or
Landlord's designee within five (5) days of the date of written notice from
Landlord (if such notice is required under Section 17.01(b); otherwise within
five (5) days of the date due), then, without any requirement for further notice
to Tenant, Tenant shall pay to Landlord an administrative fee consisting of (a)
default interest equal to the reference rate publicly announced from time to
time by Bank of America, NT & SA, or any successor thereto, plus six percent
(6%) per annum (but in no event higher than the maximum rate permitted by Law)
multiplied by such overdue amount from the date such overdue amount was due
until paid, plus (b) a late charge equal to two percent (2%) of such overdue
amount (collectively, the "Administrative Fee"). The parties hereby agree that
such Administrative Fee represents a fair and reasonable estimate of the costs
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Landlord will incur by reason of late payment by Tenant. Acceptance of such
Administrative Fee by Landlord shall in no event constitute a waiver of Tenant's
default with respect to such overdue amount, nor prevent Landlord from
exercising any of the other rights and remedies granted hereunder.
17.04 Default by Landlord. Landlord will commit a default if Landlord
fails to perform any provision of this Lease required of it and the failure is
not cured within thirty (30) days after notice has been given to Landlord. If,
however, the failure cannot reasonably be cured within the cure period, Landlord
will not be in default of this Lease if Landlord commences to cure the failure
within the cure period and diligently and in good faith continues to cure the
failure. Notices given under this Section 17.04 will specify the alleged breach
and the applicable Lease provisions. Tenant may, after expiration of the cure
period unless there is an emergency, correct or remedy any failure of Landlord
not timely cured and deduct the reasonable costs paid by Tenant from future rent
as it becomes due.
17.05 Mitigation. Landlord and Tenant will each exercise best efforts
to mitigate the damages caused by the other party's breach of this Lease.
Efforts to mitigate damages will not be construed as a waiver of a nonbreaching
party's right to recover damages.
17.06 Lender's Right to Cure. The respective lenders of each party will
have the right, on the party's behalf, to cure the party's alleged breach within
the same time period allocated under this Lease. Landlord shall upon written
request from Tenant provide copies of any notices of default given to Tenant
hereunder to lenders of Tenant as specified in such written request, provided,
however, that Landlord shall not be deemed to be in default hereunder if
Landlord fails to provide any such notices to any of Tenant's lenders nor shall
any such failure relieve Tenant from any liability hereunder or affect any of
Landlord's rights or remedies hereunder.
ARTICLE 18
SUBORDINATION
At Landlord's option, this Lease shall be subordinate to any superior
lease, mortgage, deed of trust, or any other hypothecation or security now or
hereafter placed upon the Premises and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements, and extensions thereof, provided that Landlord and any mortgagee
or beneficiary of Landlord shall execute the Subordination Agreement (as defined
below) with Tenant. In furtherance thereof, Tenant hereby agrees, upon request
by Landlord, to execute and deliver a subordination, non-disturbance and
attornment agreement substantially in the form attached hereto as Exhibit B
("Subordination Agreement") with respect to any such superior lease, mortgage,
deed of trust, hypothecation, or security.
ARTICLE 19
QUIET ENJOYMENT
Subject to the terms and conditions of this Lease and conditional upon
the performance of all of the provisions to be performed by Tenant hereunder,
Landlord agrees to secure to Tenant during the Lease Term and any and all
extensions thereof, the quiet and peaceful possession of the Premises and all
rights and privileges appertaining thereto and under this Lease.
ARTICLE 20
REPRESENTATIONS AND WARRANTIES
20.01 Representations and Warranties. To induce Landlord to enter into
this Lease, Tenant represents and warrants to Landlord and any mortgagee or
beneficiary of Landlord as follows:
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(a) It is a corporation duly organized and validly
existing, in good standing under the laws of California, has stock outstanding
which has been duly and validly issued, and is qualified to do business and is
in good standing in the jurisdiction in which the Premises are located with full
power and authority to consummate the transactions contemplated hereby.
(b) The execution and delivery of this Lease has been
duly authorized by all action as may be required under the terms and provisions
of its governing instruments and the laws of the jurisdiction where the Premises
are located; this Lease will not violate or result in any breach of, or
constitute a default under, or result in the creation of any lien, encumbrance,
attachment, charge or other right or claim of any other party upon any assets of
Tenant or upon Tenant's beneficiary interest under the terms of this Lease
pursuant to any instrument or applicable law to which Tenant is a party or by
which it may be bound or create in favor of or grant to any third party any
interest whatsoever in Tenant's interest under the terms of this Lease; this
Lease is valid and enforceable in accordance with its terms, and the execution
and delivery of this Lease, and the consummation of the transactions
contemplated hereby, does not require the approval or consent of any
governmental authority having jurisdiction over Tenant or its property, or if
such approval or consent is required, it has been obtained.
(c) Tenant's financial statements and, if applicable, the
guarantors' financial statements heretofore delivered to Landlord are true and
correct in all material respects, have been prepared in accordance with
generally accepted accounting principles, and fairly present the respective
financial conditions of the subjects thereof as of the respective dates thereof.
No materially adverse change has occurred in the financial conditions reflected
therein since the respective dates thereof.
(d) There are no actions, suits or proceedings pending,
or to the best of Tenant's knowledge, threatened, against or affecting it or the
Premises or any guarantor of this Lease, or involving the validity or
enforceability of this Lease, at law or in equity, or before or by any
governmental authority except actions, suits and proceedings fully covered by
insurance or which, if adversely determined, would not materially impair the
ability of Tenant or any guarantor of this Lease to satisfy their obligations
under this Lease or any guarantee of this Lease.
(e) Tenant is not in default under any obligation for the
payment of borrowed money, for the deferred purchase price of property or for
the payment of any rent under any lease agreement, which, either individually or
in the aggregate, would adversely affect the financial condition of Tenant, or
the ability of Tenant to perform its obligations hereunder, or comply with the
terms of this Lease.
20.02 Financial Statements. Tenant hereby covenants and agrees to
deliver: (i) audited annual financial statements for Tenant and any guarantor of
this Lease to Landlord within one hundred five (105) days after the end of
Tenant's and any such guarantor's respective fiscal years, (ii) management
prepared and certified quarterly financial statements for Tenant and any such
guarantor within sixty (60) days after the end of Tenant's and any such
guarantor's respective fiscal quarters, and (iii) annual unit level profit and
loss statements on the operations of the Premises within forty-five (45) days
after the end of Tenant's fiscal year, provided that in the event that Tenant's
profit and loss statements are prepared on a consolidated basis, Tenant hereby
covenants and agrees to prepare profit and loss statements specifically relating
to the Premises. Tenant agrees to assist Landlord in obtaining consent from
Tenant's and guarantor's accountant(s) in the event that Tenant's or guarantor's
financial statements are to be included in any regulatory filing or report to be
filed by Landlord. Tenant's failure to deliver financial statements pursuant to
this Section (where such failure shall continue for a period of fifteen (15)
days after written notice thereof from Landlord to Tenant) shall constitute a
material default under this Lease. Such financial statements shall be true and
correct in all material respects, be prepared in accordance with generally
accepted accounting principles, and fairly present the respective financial
conditions of the subjects thereof as of the respective dates thereof. Landlord
will maintain confidential and not disclose to third parties the financial
information furnished or revealed pursuant to this Lease except as may be
required, in Landlord's reasonable judgment, for the exercise of Landlord's
rights under this Lease as may be required by Law or compelled by legal
proceedings, for disclosure in confidence to prospective lenders, investors or
purchasers, or to third parties in connection with the closing of this
transaction.
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ARTICLE 21
SURRENDER OF PREMISES
Except for Alterations permitted or approved in accordance with Article
12 hereof and changes resulting from eminent domain proceedings, at the
expiration or sooner termination of the Lease Term, Tenant shall surrender the
Premises in good and clean condition, reasonable wear and tear excepted, and
shall surrender all keys for the Premises to Landlord at the place then fixed
for the payment of rent and shall inform Landlord of all combinations on locks,
safes and vaults, if any, in the Premises. Tenant shall at such time remove all
of Tenant's property and shall repair any damage to the Premises caused thereby,
and any or all of such property not so removed shall, at Landlord's option,
become the exclusive property of Landlord or be disposed of by Landlord, at
Tenant's cost and expense, without further notice to or demand upon Tenant. If
the Premises are not so surrendered, Tenant shall indemnify Landlord against
loss or liability resulting from the delay by Tenant in so surrendering the
Premises including, without limitation, any claims made by any succeeding
occupant founded on such delay. Tenant's obligation to observe or perform this
covenant shall survive the expiration or other termination of the Lease Term.
ARTICLE 22
BANKRUPTCY OR INSOLVENCY
22.01 Bankruptcy or Insolvency. Subject to applicable law, Landlord and
Tenant acknowledge and agree that the provisions of this Section 23.01 shall
control notwithstanding anything to the contrary contained in this Lease:
(a) In the event that Tenant shall become a debtor under
Chapter 7 of the Bankruptcy Reform Act of 1978, 11 U.S.C. 1 et seq ("Bankruptcy
Code"), and Tenant's trustee or Tenant shall elect to assume this Lease for the
purpose of assigning the same or otherwise, such election and assignment may be
made only if the provisions of this Section 22.01 are satisfied. If Tenant or
Tenant's trustee shall fail to assume this Lease within sixty (60) days after
the entry of an order for relief, this Lease shall be deemed to have been
rejected. Immediately thereupon Landlord shall be entitled to possession of the
Premises without further obligation to Tenant or Tenant's trustee and this
Lease, upon the election of Landlord, shall terminate, but Landlord's right to
be compensated for damages shall survive, whether or not this Lease shall be
terminated.
(b) In the event that a voluntary petition for
reorganization is filed by Tenant, or an involuntary petition is filed against
Tenant under Chapter 11 of the Bankruptcy Code, or in the event of the entry of
an order for relief under Chapter 7 in a case which is then transferred to
Chapter 11, Tenant's trustee or Tenant, as debtor-in-possession, must elect to
assume this Lease within sixty (60) days from the date of the filing of the
petition under Chapter 11 or the transfer thereto, or Tenant's trustee or the
debtor-in-possession shall be deemed to have rejected this Lease. Immediately
thereupon Landlord shall be entitled to possession of the Premises without
further obligation to Tenant or Tenant's trustee and this Lease, upon the
election of Landlord, shall terminate, but Landlord's right to be compensated
for damages, shall survive, whether or not this Lease shall be terminated.
(c) No election by Tenant's trustee or the
debtor-in-possession to assume this Lease, whether under Chapter 7 or Chapter
11, shall be effective unless each of the following conditions has been
satisfied:
(i) Tenant's trustee or the debtor-in-possession
has cured all defaults under this Lease, or has provided Landlord with evidence
satisfactory to Landlord that it will cure all defaults susceptible of being
cured by the payment of money within ten (10) days from the date of such
assumption and that it will cure all other defaults under this Lease which are
susceptible of being cured by the performance of any act within thirty (30) days
after the date of such assumption.
(ii) Tenant's trustee or the debtor-in-possession
has compensated, or has provided Landlord with evidence satisfactory to Landlord
that, within ten (10) days from the date of such assumption, that it will
compensate Landlord for any actual pecuniary loss incurred by Landlord arising
from
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the default of Tenant, Tenant's trustee, or the debtor-in-possession as
indicated in any statement of actual pecuniary loss sent by Landlord to Tenant's
trustee or the debtor-in-possession.
(iii) Tenant's trustee or the debtor-in-possession
(A) has provided Landlord with "Assurance", as hereinbelow defined, of the
future performance of each of the obligations under this Lease of Tenant,
Tenant's trustee or the debtor-in-possession, and (B) shall, in addition to any
other security deposits held by Landlord, deposit with Landlord, as security for
the timely payment of Annual Rent and for the performance of all other
obligations of Tenant under this Lease, an amount equal to three (3) monthly
installments of Annual Rent (at the rate then payable), and (C) pay in advance
to Landlord on the date each installment of Annual Rent is due and payable,
one-twelfth of Tenant's annual obligations for Impositions to be made by Tenant
pursuant to this Lease. The obligations imposed upon Tenant's trustee or the
debtor-in-possession by this Section 22.01 shall continue with respect to Tenant
or any assignee of this Lease, after the conclusion of proceedings under the
Bankruptcy Code.
(iv) Such assumption will not breach or cause a
default under any provision of any other lease, mortgage, financing agreement or
other agreement by which Landlord is bound, relating to the Premises.
(d) For purposes of Section 22.01(c)(iii) hereof,
Landlord and Tenant shall acknowledge that "Assurance" shall mean no less than:
(i) Tenant's trustee or the debtor-in-possession
has and will continue to have sufficient unencumbered assets after the payment
of all secured obligations and administrative expenses to assure Landlord that
sufficient funds will be available to fulfill the obligations of Tenant under
this Lease; and
(ii) To secure to Landlord the obligations of
Tenant, Tenant's trustee or the debtor-in-possession and to assure the ability
of Tenant, Tenant's trustee or the debtor-in-possession to cure the defaults
under this Lease, monetary and/or nonmonetary, there shall have been: (A)
sufficient cash deposited with Landlord, or (B) the bankruptcy court shall have
entered an order segregating sufficient cash payable to Landlord, and/or (C)
Tenant's trustee or the debtor-in-possession shall have granted to Landlord a
valid and perfected first lien and security interest and/or mortgage in property
of Tenant, Tenant's trustee or the debtor-in-possession, acceptable as to value
and kind to Landlord.
(e) In the event that this Lease is assumed in accordance
with Section 22.01(b) hereof and thereafter Tenant is liquidated or files, or
has filed against it, a subsequent petition under any provision of the
Bankruptcy Code or any similar statute for relief of debtors, Landlord may, at
its option, terminate this Lease and all rights of Tenant hereunder, by giving
Tenant notice of its election to so terminate within thirty (30) days after the
occurrence of either of such events.
(f) If Tenant's trustee or the debtor-in-possession has
assumed this Lease pursuant to the terms and provisions of this Section 22.01
for the purpose of assigning (or elects to assign) this Lease, this Lease may be
so assigned only if the proposed assignee has provided adequate assurance of
future performance of all of the terms, covenants and conditions of this Lease
to be performed by Tenant. Landlord shall be entitled to receive all
consideration for such assignment, whether cash or otherwise. As used in this
Section 22.01(f) "adequate assurance of future performance" shall mean at least
that clauses (B) and (C) of Section 22.01(c)(iii) hereof and each of the
following conditions, has been satisfied:
(i) The proposed assignee has furnished Landlord
with a current financial statement audited by a certified public accountant
determined in accordance with generally accepted accounting principles
consistently applied indicating a credit rating, net worth and working capital
in amounts which Landlord reasonably determines to be sufficient to assure the
future performance of such assignee of
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<PAGE> 25
Tenant's obligations under this Lease, but in no event indicating a net worth
less than the net worth of the Tenant and any guarantors of this Lease, on the
date of execution hereof.
(ii) Such assignment will not breach or cause a
default under any provision of any other lease, mortgage, financing agreement or
other agreement by which Landlord is bound, relating to the Premises.
(iii) The proposed assignment will not release or
impair any guarantee under this Lease.
(g) When, pursuant to the Bankruptcy Code, Tenant's
trustee or the debtor-in-possession shall be obligated to pay reasonable use and
occupancy charges for the use of the Premises, such charges shall not be less
than the Annual Rent and all additional rent payable by Tenant under this Lease
and shall be paid at the times and when due as though such charges were Annual
Rent and additional rent.
(h) Anything in this Lease to the contrary
notwithstanding, neither the whole nor any portion of Tenant's interest in this
Lease or its estate in the Premises shall pass to any trustee, receiver,
assignee for the benefit of creditors, or any other similar person or entity, or
otherwise by operation of law under the Bankruptcy Code or any similar federal
statute now or hereinafter enacted, or under the laws of any state, district or
municipality having jurisdiction of the person or property of Tenant unless
Landlord shall have consented to such transfer in writing. No acceptance by
Landlord of rent or any other payments from any such trustee, receiver,
assignee, person or other entity shall be deemed to constitute such consent by
Landlord nor shall it be deemed a waiver of Landlord's right to terminate this
Lease for any transfer of Tenant's interest under this Lease without such
consent.
(i) Anything in this Lease to the contrary
notwithstanding, Tenant covenants and agrees that this Lease is an extension of
financial benefits and accommodations to Tenant which are uniquely personal in
nature and such financial benefits and accommodations are a material inducement
for Landlord's execution and delivery of this Lease and are an integral part of
the consideration for this Lease.
ARTICLE 23
HAZARDOUS MATERIALS
23.01 Representations and Warranties. Notwithstanding anything to the
contrary which may be contained in this Lease, Tenant represents, warrants and
covenants to Landlord as follows:
(a) To the best of Tenant's Knowledge (as defined below), there
are no and have been no violations of the Relevant Environmental Laws (as
hereinafter defined) respecting the Premises and no consent orders have been
entered with respect thereto, except for minor occurrences of noncompliance,
none of which will have a materially adverse effect on the value or use or
operation of the Premises for its intended purpose or the ability of Tenant to
perform its obligations under this Lease (a "Material Adverse Effect").
(b) To the best of Tenant's Knowledge, there are no and have been
no Hazardous Wastes (as hereinafter defined) or Asbestos (as hereinafter
defined) either at, upon, under or within, or discharged or emitted at or from,
the Premises, including, but not limited to, the air, soil, surface, and ground
water; no Hazardous Wastes or Asbestos have flowed, blown or otherwise become
present at the Premises from neighboring land; and no Hazardous Wastes or
Asbestos have been removed from the Premises other than those Hazardous Wastes
or Asbestos which are used and/or incidental to the ordinary course of Tenant's
business provided that the same are used, stored, handled and disposed of in
accordance with all Relevant Environmental Laws and all applicable Laws,
industry standards and manufacturers' specifications.
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<PAGE> 26
(c) The Premises will not be used for the purpose of storing
Hazardous Wastes, and no such storage or use will otherwise be allowed on the
Premises which will cause or increase the likelihood of causing the release of
Hazardous Wastes onto the Premises other than those Hazardous Wastes which are
used and/or incidental to the ordinary course of Tenant's business provided that
the same are used, stored, handled and disposed of in accordance with all
Relevant Environmental Laws and all applicable Laws, industry standards and
manufacturers' specifications. Neither Tenant, nor to the best of Tenant's
Knowledge any third party, has installed, used or removed any storage tanks on,
from or in connection with the Premises, except in full compliance with all
Relevant Environmental Laws, and to the best of Tenant's Knowledge, there are no
storage tanks or wells (whether existing or abandoned) located on, under or
about the Premises. To the best of Tenant's Knowledge, the Premises does not
consist of any building materials that contain Hazardous Wastes or Asbestos.
(d) Tenant is not aware of any claims or litigation, and has not
received any communication from any person (including any governmental
authority), concerning the presence or possible presence of Hazardous Wastes or
Asbestos at or adjacent to the Premises or concerning any violation or alleged
violation of the Relevant Environmental Laws respecting the Premises. Tenant
shall promptly notify Landlord of any such claims and shall furnish Landlord
with a copy of any such communications received by Tenant.
(e) Tenant shall notify Landlord promptly and in reasonable detail
in the event that Tenant becomes aware of or suspects the presence of Hazardous
Wastes (other than those Hazardous Wastes or Asbestos which are used and/or
incidental to the ordinary course of Tenant's business provided that the same
are used, stored, handled and disposed of in accordance with all Relevant
Environmental Laws and all applicable Laws, industry standards and
manufacturers' specifications) or a violation of the Relevant Environmental
Laws, at or adjacent to the Premises.
(f) Tenant shall ensure that the Premises comply and continue to
comply in all respects with the Relevant Environmental Laws.
(g) If the Premises are used or maintained so as to subject
Tenant, Landlord or any mortgagee or beneficiary of Landlord or the user of the
Premises to a claim of violation of the Relevant Environmental Laws (unless
contested in good faith by appropriate proceedings), Tenant shall immediately
cease or cause a cessation of such use or operations and shall remedy and fully
cure any conditions arising therefrom, at its own cost and expense.
(h) Upon Landlord's reasonable belief that there is a breach of
one of the environmental representations or warranties set forth above, Tenant
shall permit Landlord, at its option, at any time upon five (5) days' prior
written notice to Tenant, to cause or conduct a complete environmental audit to
be performed. The audit shall be at Tenant's sole cost and expense.
23.02 Definitions.
(a) The "Relevant Environmental Laws," as referred to herein,
shall mean all applicable federal, state and local laws, rules, regulations,
orders, judicial determinations, and decisions or determinations by any
judicial, legislative or executive body of any governmental or
quasi-governmental entity, whether in the past, the present or the future, with
respect to: (A) the installation, existence, or removal of, or exposure to,
Asbestos on the Premises; (B) the existence on, discharge from, or removal from
the Premises of Hazardous Wastes; or (C) the effects on the environment of the
Premises or of any activity now, previously, or hereafter conducted on the
Premises. The Relevant Environmental Laws shall include, but not be limited to,
the following: (1) the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Sections 9601 et seq.; the Superfund Amendments and
Reauthorization Act, Public Law 99-499, 100 Stat. 1613; the Resource
Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq.; the National
Environmental Policy Act, 42 U.S.C. Section 4321; the Safe Drinking Water Act,
42 U.S.C. Sections 300F et seq.; the Toxic Substances Control Act, 15 U.S.C.
Section 2601; the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801; the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq.;
the Clean Air Act, 42 U.S.C. Sections 7401 et seq.; and the regulations
promulgated in connection therewith; (2) Environmental Protection Agency
regulations pertaining to Asbestos (including 40 C.F.R.
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<PAGE> 27
Part 61, Subpart M); Occupational Safety and Health Administration regulations
pertaining to Asbestos (including 29 C.F.R. Sections 1910.1001 and 1926.58); as
each may now or hereafter be amended; and (3) any state and local laws and
regulations pertaining to Hazardous Wastes and/or Asbestos;
(b) "Asbestos," as referred to herein, shall have the meanings
provided under the Relevant Environmental Laws, and shall include, but not be
limited to, asbestos fibers and friable asbestos, as such terms are defined
under the Relevant Environmental Laws; and
(c) "Hazardous Wastes," as referred to herein, shall mean any of
the following as defined by the Relevant Environmental Laws: solid wastes;
petroleum and petroleum derivatives; natural or synthetic gas; radon gas; toxic
or hazardous substances, wastes, pollutants or contaminants (including, but not
limited to, polychlorinated biphenyls ("PCB's"), paint containing lead, and urea
formaldehyde); and discharges of sewage or effluent.
(d) "Knowledge" shall mean the actual knowledge of any executive
officer of Tenant after due inquiry (and Tenant hereby acknowledges that such
due inquiry has been made) of the appropriate employees of Tenant's real estate,
construction, facilities, lease administration and legal departments.
23.03 Tenant's Obligation. At its sole cost and expense, Tenant shall:
(a) Pay immediately when due the cost of compliance with the
Relevant Environmental Laws.
(b) Keep the Premises free of any lien imposed pursuant to the
Relevant Environmental Laws.
23.04 Landlord Options. In the event that Tenant fails to comply with
the requirements of this Article 23, after notice to Tenant and the earlier of
the expiration of any applicable cure period hereunder, or the expiration of the
cure period permitted under the Relevant Environmental Laws, if any, or such
earlier time if Landlord determines that life, person or property is in
jeopardy, Landlord may, but shall not be obligated to, exercise its right to do
one or more of the following: (a) declare that such failure constitutes a
default; and/or (b) take any and all actions, at Tenant's expense, that Landlord
reasonably deems necessary or desirable to cure said failure of compliance. Any
costs incurred pursuant to this Section 23.04 shall become immediately due and
payable by Tenant together with the applicable Administrative Fee, and shall be
paid or reimbursed to Landlord promptly upon written notice from Landlord.
23.05 Indemnity. Landlord shall not be liable for and Tenant shall
immediately pay to Landlord when incurred and shall indemnify, defend and hold
Landlord harmless from and against, all loss, cost, liability, damage and
expense (including, but not limited to, attorneys' fees and costs incurred in
the investigation, defense and settlement of claims) that Landlord may suffer or
incur as a result of or in connection in any way with any Asbestos or Hazardous
Wastes now or hereafter present, discharged, released, generated, disposed,
transported or emitted to, from, in, on or under the Premises, or in connection
with any violation of any of the Relevant Environmental Laws, or any
environmental assessment or study from time to time undertaken or requested by
Tenant or Landlord, or breach of any representation, covenant or undertaking by
the Tenant herein.
23.06 Survival. The provisions of this Article 23 shall survive the
expiration or termination of the Lease Term.
ARTICLE 24
GENERAL PROVISIONS
24.01 Estoppel Certificates. Each party ("Responding Party") shall at
any time upon not less than fifteen (15) days' prior written notice from the
other party ("Requesting Party") execute, acknowledge, and deliver to the
Requesting Party a statement in a form reasonably satisfactory to Landlord
certifying and acknowledging the following: (i) that this Lease represents the
entire agreement between Landlord and Tenant, and is unmodified and
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<PAGE> 28
in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the Annual Rent and other charges are paid in
advance, if any; and (ii) that there are not, to the Responding Party's
knowledge, any uncured defaults on the part of the Requesting Party, or
specifying such defaults if any are claimed. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the
Premises or of the business of the Requesting Party.
24.02 Severability. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.
24.03 Entire Agreement. It is understood that there are no oral or
other written agreements or representations between the parties hereto
concerning the subject matter of this Lease, and that this Lease and the
Exhibits hereto supersede and cancel any and all previous negotiations,
arrangements, representations, brochures, displays, projections, estimates,
agreements, and understandings, if any, made by Landlord and Tenant with respect
to the subject matter hereof, and none thereof shall be used to interpret,
construe, supplement, or contradict this Lease. This Lease, and the Exhibits
hereto, and all amendments hereto, constitute and shall be considered to be the
only agreement between the parties hereto and their representatives and agents.
All negotiations and oral agreements acceptable to both parties have been merged
into and are included herein and in the Exhibits hereto.
24.04 Notices. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal delivery, certified mail,
return receipt requested, by facsimile telecopy or by nationally recognized
overnight courier service and if given by mail or courier service, shall be
deemed sufficiently given if addressed to Tenant or to Landlord, as the case may
be, at the addresses noted in Article 1 hereof. Delivery by courier will be
deemed given on the date indicated in the courier's records; delivery by
certified mail will be deemed given on the date indicated on the return receipt;
and delivery by facsimile telecopy will be deemed given after receipt of written
confirmation of the transmission. Either party may by notice to the other
specify a different address for notice purposes. A copy of all notices required
or permitted to be given hereunder shall be concurrently transmitted to such
party or parties at such addresses as Landlord may from time to time hereafter
be designated by notice to Tenant.
24.05 Waivers. No waiver by a party of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by the
other party of the same of any other provision. Landlord's consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent.
24.06 Recording. Either Landlord or Tenant shall, upon request of the
other, execute, acknowledge, and deliver to the other a "short form" memorandum
of this Lease for recording purposes. Such memorandum shall be in a form
reasonably acceptable to Landlord and sufficient for Tenant to obtain a
leasehold policy of title insurance based thereon. In the event of any
termination of this Lease, Tenant agrees to execute and deliver to Landlord a
termination agreement satisfactory to Landlord, which termination agreement
shall be similarly recorded.
24.07 Holding Over. If Tenant remains in possession of the Premises or
any part thereof after the expiration or termination of the Lease Term, such
occupancy shall be a tenancy from month-to-month upon all the provisions of this
Lease pertaining to the obligations of Tenant and Tenant shall thereby waive its
rights to any additional notice to quit, but all options, if any, granted under
the terms of this Lease shall be deemed terminated and be of no further force or
effect. The monthly rental during such hold-over period shall be equal to one
hundred twenty-five percent (125%) of the monthly installment of Annual Rent
payable immediately prior to expiration or termination of the Lease Term. In
addition, Tenant shall continue to be obligated to pay all Impositions and other
amounts required to be paid by the terms of this Lease.
24.08 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
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24.09 Choice of Law. The laws of the jurisdiction in which the Premises
are located shall govern the validity, performance, and enforcement of this
Lease.
24.10 Attorneys' Fees. Should either party institute any action or
proceeding to enforce any provision hereof or for a declaration of such party's
rights or obligations hereunder, the prevailing party shall be entitled to
receive from the losing party such amounts as the court may adjudge to be
reasonable attorneys' fees for services rendered to the party prevailing in any
such action or proceeding, and such fees shall be deemed to have accrued upon
the commencement of such action or proceeding.
24.11 Force Majeure. Except for payment obligations imposed pursuant to
this Lease, if there is any prevention, delay or stoppage of an act required of
a party pursuant to this Lease because of strikes, lockouts, other labor
disputes, material shortages, embargoes, civil unrest, governmental regulations,
governmental controls, enemy or hostile governmental action, judicial order,
public emergency, fire, earthquake, other acts of God, and other causes beyond
the reasonable control of the party obligated to perform, performance of the act
will be excused for the period of the delay.
24.12 Consent. Whenever the consent or approval of either party is
required pursuant to this Lease, such consent or approval will not be
unreasonably withheld or delayed except as otherwise expressly provided herein.
24.13 Liability of Landlord.
(a) In the event of any sale or other transfer of
Landlord's interest in the Premises, Landlord shall be and hereby is entirely
freed and relieved of all liabilities and obligations of Landlord hereunder with
respect to the Premises to the extent accruing after the date of such transfer.
(b) Notwithstanding anything contained herein to the
contrary, it is specifically understood and agreed that there shall be no
personal liability of Landlord or any of its shareholders, members, officers or
directors in respect of any of the terms, covenants, conditions or provisions of
this Lease, and in the event of a breach or default by Landlord of any of its
liabilities and obligations under this Lease, Tenant and any persons claiming
by, through or under Tenant shall look solely to the equity of Landlord in the
Premises for the satisfaction of Tenant's and/or such persons' remedies and
claims for damages.
24.14 No Merger. There shall be no merger of this Lease, or the
leasehold estate created by this Lease, with any other estate or interest in the
Premises, or any part thereof, by reason of the fact that the same person, firm,
corporation or other entity may acquire or own or hold, directly or indirectly,
(a) this Lease or the leasehold estate created by this Lease, or any interest in
this Lease or in any such leasehold estate, and (b) any such other estate or
interest in the Premises or any part thereof; and no such merger shall occur
unless and until all persons, corporations, firms and other entities having an
interest (including a security interest) in (i) this Lease or the leasehold
estate created by this Lease; and (ii) any such other estate or interest in the
Premises, or any part thereof, shall join in a written instrument effecting such
merger and shall duly record the same.
24.15 Reports. Tenant agrees to furnish to Landlord, with reasonable
promptness, financial statements, reports, documents and information regarding
the financial condition and affairs of Tenant or any guarantor, which Tenant and
each guarantor of this Lease sends to or makes available to its shareholders,
noteholders or bondholders. In addition to the foregoing, Tenant shall obtain
and deliver to Landlord, with reasonable promptness, such other information
respecting the operation of the Premises as Landlord may from time to time
reasonably request.
24.16 Definition of Rent. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, without limitation, the Real
Property Taxes and insurance premiums payable hereunder shall be deemed to be
"rent".
24.17 Interpretation. The captions by which the Articles and Sections
of this Lease are identified are for convenience only and shall have no effect
upon the interpretation of this Lease. Whenever the context so requires,
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singular numbers shall include the plural, the plural shall refer to the
singular, the neuter gender shall include the masculine and feminine genders,
and the words "Landlord" and "Tenant" and "person" shall include corporations,
partnerships, associations, other legal entities, and individuals.
24.18 Relationship of the Parties. Nothing in this Lease shall create a
partnership, joint venture, employment relationship, borrower and lender
relationship, or any other relationship between Landlord and Tenant other than
the relationship of landlord and tenant.
24.19 Successors. This Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective personal and legal
representatives, heirs, successors, and assigns.
24.20 Modifications. This Lease may not be altered, amended, changed,
waived, terminated, or modified in any manner unless the same shall be in
writing and signed by or on behalf of the party to be bound. No waiver of any
provision of this Lease of any right of Landlord hereunder shall be effective
unless in writing signed by or on behalf of the person to be bound.
24.21 Brokerage Fees. Landlord and Tenant each represent and warrant
that they have not employed a broker in connection with the execution of this
Lease. Landlord and Tenant shall each indemnify and hold the other harmless from
and against any claim or claims for brokerage or other commissions arising from
such party having employed a broker contrary to its representation in this
Section 25.21.
24.22 Not Binding Until Executed. This Lease does not constitute an
"offer" and is not binding until fully executed and delivered by Landlord.
24.23 Counterparts. This Lease may be executed in one or more
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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<PAGE> 31
WITNESSES: LANDLORD:
CAPTEC NET LEASE REALTY, INC.
_________________________________________ By________________________________
_________________________________________ Its_______________________________
TENANT:
ARG ENTERPRISES, INC.
_________________________________________ By________________________________
_________________________________________ Its_______________________________
STATE OF MICHIGAN )
: ss.
COUNTY OF WASHTENAW )
The foregoing instrument was acknowledged before me this _______ day of
September, 1996, by Gary A. Bruder, as Vice President of Captec Net Lease
Realty, Inc., a Michigan corporation, on behalf of the corporation.
__________________________________
Notary Public
Washtenaw County, Michigan
My Commission Expires:____________
[Notary Public's Seal]
STATE OF NEW YORK )
: ss.
COUNTY OF _______________ )
The foregoing instrument was acknowledged before me this ________ day
of September, 1996, by __________________, as _________________ of ARG
Enterprises, Inc., a California corporation, on behalf of the corporation.
__________________________________
Notary Public
________________ County, New York
My Commission Expires:
[Notary Public's Seal]
27
<PAGE> 32
EXHIBIT A
TO
LEASE
Land situated in the County of Hennepin, State of Minnesota, and more
particularly described as follows:
Lot 1, Block 1, Normandale Center 2nd Addition, according to the plat
thereof on file or of record in the office of the Registrar of Titles,
Hennepin County,
Torrens Certificate Number: 642067
A-1
<PAGE> 33
EXHIBIT B
TO
LEASE
CAPTEC NET LEASE REALTY, INC.,
ARG ENTERPRISES, INC.
AND
CS FIRST BOSTON MORTGAGE CAPITAL CORP.
__________________________________________
SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT
__________________________________________
Dated: September _____, 1996
Location: 4470 West 78th Circle, Bloomington, Minnesota
Lease No.: 06152
RECORD AND RETURN TO:
Battle Fowler LLP
75 East 55th Street
New York, New York 10022
Attention: Charles J. Hamilton, Jr., Esq.
B-1
<PAGE> 34
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this
"Agreement") is made and entered into as of the ____ day of September, 1996, by
and among (i) ARG ENTERPRISES, INC., a California corporation ("Tenant");
(ii) CAPTEC NET LEASE REALTY, INC., a Michigan corporation ("Landlord"); and
(iii) CS FIRST BOSTON MORTGAGE CAPITAL CORP., a Delaware corporation ("Lender").
WITNESSETH:
WHEREAS, Lender is or may become the holder of a certain mortgage/deed
of trust ("Mortgage/Deed of Trust") encumbering that certain parcel of real
property and the improvements thereon, commonly known as the Stuart Anderson's
Cattle Company restaurant located at 4470 West 78th Circle, Bloomington,
Minnesota, and more particularly described in Schedule 1 attached hereto and
incorporated herein by this reference (the "Property");
WHEREAS, Lender and Landlord are parties to the Mortgage/Deed of Trust,
pursuant to which Landlord financed the Property from Lender; and
WHEREAS, Landlord and Tenant are parties to that certain Lease, dated
September ___, 1996 (the "Lease"), pursuant to which Tenant leased the Property
from Landlord.
NOW, THEREFORE, in consideration for the mutual covenants and
agreements contained herein, the sufficiency of which is hereby acknowledged,
the parties hereto hereby agree as follows:
1. Subordination. Subject to the terms of this Agreement, the
Lease and all of the terms, covenants and provisions thereof and all rights,
remedies and options of Tenant thereunder are hereby made, and shall at all
times continue to be, subject, junior and subordinate in all respects to the
Mortgage/Deed of Trust and to the lien thereof and to all increases, renewals,
modifications, spreaders, consolidations, replacements and extensions thereof
and to the rights of Lender thereunder and to any and all sums secured thereby,
with the same force and effect as if the Mortgage/Deed of Trust and all other
such instruments had been executed, delivered and recorded prior to the
execution of the Lease. However, Tenant covenants and agrees that if requested
by Lender it will execute, acknowledge and deliver any instrument or document
reasonably requested to confirm the foregoing subordination of the Lease within
twenty (20) days after receipt of written request therefor.
2. Non-Disturbance. So long as (i) the term of the Lease shall
have commenced pursuant to the provisions thereof, (ii) Tenant shall be in
possession of the Property, (iii) the Lease shall be in full force and effect
and (iv) Tenant is not in default in the payment of rent or any other sums
payable under the Lease or any of the other terms, covenants or conditions of
the Lease on Tenant's part to be performed beyond any applicable grace or cure
period provided in the Lease, then: (a) Tenant's possession of the Property
shall not be diminished or interfered with by Lender or any third party
purchaser; (b) the Lease shall not be terminated or affected by the foreclosure
of the Mortgage/Deed of Trust or the Lender's exercise of any remedy provided
for in the Mortgage/Deed of Trust; and (c) in the event that Lender forecloses
upon the Property, Lender shall elect to preserve the Lease as a lease between
Lender and Tenant in accordance with the terms of this Agreement.
3. Attornment. In the event that Lender or any successors in
interest to Lender shall become the owner of the Property by reason of the
foreclosure of the Mortgage/Deed of Trust or the acceptance of a deed or
assignment in lieu of foreclosure or otherwise, then:
(a) Tenant shall be bound to Lender, and Lender shall be bound to
Tenant, under all of the terms, covenants and conditions of the Lease for the
balance of the term thereof remaining, and any extensions or renewals thereof
which may be effected in accordance with any option therefor contained in the
Lease, with the same
B-2
<PAGE> 35
force and effect as if Lender were the original landlord under the Lease, except
that Paragraph 3(b) below and the other provisions of this Agreement shall
modify the Lease, and Tenant does hereby attorn to Lender as its landlord, said
attornment to be effective and self-operative without the execution of any
further instruments; provided, however, that within twenty (20) days after
receipt of written request therefor from Lender, Tenant will execute and deliver
to Lender any instrument or other documents reasonably requested by Lender to
confirm Tenant's attornment to Lender.
(b) Notwithstanding the foregoing, however, it is agreed that in
no event shall Lender:
(1) be liable for any act or omission of any prior
landlord (including Landlord);
(2) be obligated to cure any defaults of any prior
landlord (including Landlord) which occurred prior to
the date that Lender succeeded to the interest of
such prior landlord under the Lease; provided that
from and after the date Lender becomes owner of the
Property, Lender shall be obligated to cure any
continuing non-monetary default of the landlord under
the Lease to the extent such default is capable of
being cured by Lender;
(3) be subject to any offsets or defenses which Tenant
may be entitled to assert against any prior landlord
(including Landlord) with respect to events occurring
prior to the date Lender succeeded to Landlord's
interest;
(4) be bound by any Annual Rent or other amounts paid by
Tenant to any prior landlord (including Landlord)
more than one (1) month in advance of the date that
Lender succeeded to the interest of such prior
landlord under the Lease; or
(5) be bound by any amendment or modification of the
Lease or any supplemental agreement made without the
written consent of Lender, such consent not to be
unreasonably withheld.
(c) The terms of the Lease shall be further amended by (i)
removing any offsets, claims or counterclaims which shall have
accrued to Tenant against Landlord prior to the date on which
Lender or its successor in interest shall have become the
owner of the Property and (ii) providing that Lender shall not
be liable for any security deposit or other monies not
actually received by Lender.
4. Amendments. Tenant shall not, without the prior written
consent of Lender (a) enter into any agreement amending,
modifying or terminating the Lease, (b) prepay any of the
rents, additional rents or other sums due under the Lease for
more than one (1) month in advance of the due date thereof,
(c) voluntarily surrender the Property or terminate the Lease
without cause or shorten the term thereof, or (d) assign the
Lease or sublet the Property or any part thereof, except to
the extent permitted under the Lease; and any such amendment,
modification, termination, prepayment, voluntary surrender,
assignment or subletting, without the prior written consent of
Lender (such consent not be unreasonably withheld) shall not
be binding on Lender, except to the extent permitted under the
Lease.
5. Tenant's Representations and Warranties. Tenant hereby
represents and warrants to Lender that as of the date hereof
(a) Tenant is the owner and holder of the tenant's interest
under the Lease, (b) a true and complete copy of the Lease is
annexed hereto and made a part hereof as Schedule 2 and the
Lease has not been modified or amended, (c) the Lease is in
full force and effect and the term thereof commenced on
September ___, 1996 pursuant to the provisions thereof, (d)
the Property has been completed and Tenant has taken
possession of the same on a rent paying basis, (e) neither
Tenant nor the Landlord is in default under any of the terms,
covenants or provisions of the Lease and Tenant to the best of
its knowledge knows of no event which but for the passage of
time or the giving of notice or both would constitute an event
of default by Tenant or the Landlord under the Lease,
B-3
<PAGE> 36
(f) neither Tenant nor the Landlord has commenced any action or given or
received any notice for the purpose of terminating the Lease, (g) all rents,
additional rents and other sums due and payable under the Lease have been paid
in full and no rents, additional rents or other sums payable under the Lease
have been paid for more than one (1) month in advance of the due dates thereof,
and (h) there are no offsets or defenses to the payment of the rents, additional
rents, or other sums payable under the Lease.
6. Payment of Rent to Lender. Tenant agrees to pay the rent and
any other payments due under the Lease to Lender upon receipt of written notice
from Lender that it has succeeded to the interest of Landlord under the Lease,
and Landlord agrees that Tenant is entitled to rely conclusively upon such
notice without any duty of inquiry.
7. Limitation on Liability of Lender. There shall be no personal
liability on the part of Lender or any officer, director, employee, shareholder
or partner of Lender for the performance of the Lease or any covenant or
agreement contained therein or in this Agreement. Tenant shall look solely to
Lender's estate and interest in the Property, if any, for the satisfaction of
every remedy of Tenant for any breach by Lender under the Lease or this
Agreement or otherwise arising out of or in connection with the Lease, and
Lender is hereby released or relieved of any other liability hereunder and under
the Lease. Tenant agrees that with respect to any money judgment which may be
obtained or secured by Tenant against Lender, Tenant shall look solely to the
estate or interest owned by Lender in the Property and Tenant will not collect
or attempt to collect any such claim out of any other assets of Lender.
8. Performance by Lender: Conflict. Nothing in this Agreement
shall be or be deemed to be an agreement by Lender to perform any obligation of
Landlord under the Lease unless and until the Lender acquires the Property, and
then only if required to do so by the terms of the Lease, as modified and
limited by this Agreement. In the event of any conflict between the terms of
this Agreement and the terms of the Lease, the terms of this Agreement shall
control.
9. Notices. Any notice required or permitted to be given
hereunder shall be in writing and may be given by personal delivery, certified
mail, return receipt requested, by facsimile telecopy or by nationally
recognized overnight courier service and if given by mail or courier service,
shall be deemed sufficiently given if addressed to the parties at the addresses
set forth below. Delivery by courier will be deemed given on the date indicated
in the courier's records; delivery by certified mail will be deemed given on the
date indicated on the return receipt; and delivery by facsimile telecopy will be
deemed given after receipt of written confirmation of the transmission. Any
party may by notice specify a different address for notice purposes.
Addresses for Notices:
To Lender: CS First Boston Mortgage Capital Corp.
55 E. 52nd Street
New York, New York 10055
Attention: Laura Goldberg
Fax: (212) 318-1468
To Landlord: Captec Net Lease Realty, Inc.
24 Frank Lloyd Wright Drive
Lobby L, 4th Floor
P.O. Box 544
Ann Arbor, Michigan 48106-0544
Attention: Gary A. Bruder
Fax: (313) 994-1376
B-4
<PAGE> 37
To Tenant: ARG Enterprises Inc.
4410 El Camino Real, Suite 201
Los Altos, California 94022
Attention: Director of Real Estate
Fax: (415) 949-6420
with a copy to: American Restaurant Group, Inc.
4410 El Camino Real, Suite 201
Los Altos, California 94022
Attention: Legal Department
Fax: (415) 949-6420
10. Successors and Assigns. This Agreement and each and every
covenant and provision contained herein shall be binding upon
and shall inure to the benefit of the parties hereto and their
respective representatives, successors and assigns.
11. Governing Law; Jurisdiction. This Agreement shall be governed
by and construed in accordance with the laws of the
jurisdiction in which the Property is located.
12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
KNOWINGLY, INTENTIONALLY AND FREELY WAIVES TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY OTHER
PARTY HERETO IN RESPECT OF ANY MATTER ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall constitute an original, and
all of which together shall constitute one and the same
instrument.
[SIGNATURE PAGE FOLLOWS]
B-5
<PAGE> 38
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date hereinabove first written.
WITNESSES: TENANT:
ARG ENTERPRISES, INC.
_______________________________ By____________________________
_______________________________ Its_____________________________
WITNESSES: LANDLORD:
CAPTEC NET LEASE REALTY, INC.
_______________________________ By____________________________
_______________________________ Its_____________________________
WITNESSES: LENDER:
CS FIRST BOSTON MORTGAGE
CAPITAL CORP.
_______________________________ By____________________________
_______________________________ Its_____________________________
Prepared By:
Diane B. Cabbell, Esq.
Miller, Canfield, Paddock and Stone, P.L.C.
101 North Main, 7th Floor
Ann Arbor, Michigan 48104
B-6
<PAGE> 39
STATE OF NEW YORK )
: ss.
COUNTY OF _____________ )
The foregoing instrument was acknowledged before me this ___ day of
September, 1996, by __________________, as ___________ of ARG ENTERPRISES, INC.,
a California corporation on behalf of the corporation.
__________________________________
Notary Public
__________ County, New York
My commission Expires:____________
[Notary Public's Seal]
STATE OF MICHIGAN )
: ss.
COUNTY OF WASHTENAW )
The foregoing instrument was acknowledged before me this ___ day of
September, 1996, by __________________, as ___________ of CAPTEC NET LEASE
REALTY, INC., a Michigan corporation, on behalf of the corporation.
__________________________________
Notary Public Washtenaw County, Michigan
My commission Expires:____________
[Notary Public's Seal]
STATE OF NEW YORK )
: ss.
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me this ___ day of
September, 1996, by __________________, as ___________ of CS FIRST BOSTON
MORTGAGE CAPITAL CORP., a Delaware corporation, on behalf of the corporation.
__________________________________
Notary Public
__________ County,________________
My commission Expires:____________
[Notary Public's Seal]
B-7
<PAGE> 40
SCHEDULE 1
to
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
Land situated in the County of Hennepin, State of Minnesota, and more
particularly described as follows:
Lot 1, Block 1, Normandale Center 2nd Addition, according to the plat
thereof on file or of record in the office of the Registrar of Titles,
Hennepin County, Minnesota.
B-8
<PAGE> 41
SCHEDULE 2
to
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
[Copy of the Lease]
[Intentionally Omitted from Copy Submitted for Recording.]
B-9
<PAGE> 1
EXHIBIT 2.7
LEASE
(INDIVIDUAL)
BETWEEN
SAFEWAY INC., AS LANDLORD
AND
ARG ENTERPRISES, INC., AS TENANT
DATED: SEPTEMBER 11, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
ARTICLE 1
FUNDAMENTAL LEASE PROVISIONS................................................................................. 1
ARTICLE 2
EXHIBITS..................................................................................................... 2
ARTICLE 3
PREMISES..................................................................................................... 3
ARTICLE 4
TERM......................................................................................................... 3
4.01 Term....................................................................................... 3
4.02 Tenant's Option To Terminate............................................................... 3
ARTICLE 5
LIENS........................................................................................................ 3
ARTICLE 6
RENT......................................................................................................... 4
6.01 Rent....................................................................................... 4
6.02 Rental Adjustments......................................................................... 4
6.03 Net Lease; Impositions..................................................................... 5
ARTICLE 7
USE OF THE PREMISES.......................................................................................... 5
7.01 Use........................................................................................ 5
7.02 Compliance With Laws....................................................................... 6
7.03 Permits and Licenses....................................................................... 6
ARTICLE 8
UTILITIES.................................................................................................... 6
8.01 Payment.................................................................................... 6
8.02 Interruption in Service.................................................................... 7
ARTICLE 9
TAXES........................................................................................................ 7
9.01 Payment of Taxes........................................................................... 7
9.02 Definition of "Real Property Taxes......................................................... 7
9.03 Personal Property Taxes.................................................................... 8
9.04 Tenant's Right to Contest Taxes............................................................ 8
9.05 Survival of Tenant's Tax Obligations....................................................... 9
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
ARTICLE 10
MAINTENANCE AND REPAIRS...................................................................................... 9
10.01 Tenant's Obligations....................................................................... 9
10.02 Landlord's Obligations..................................................................... 10
10.03 Landlord's Rights.......................................................................... 10
ARTICLE 11
INSURANCE AND INDEMNIFICATION................................................................................ 10
11.01 Tenant's Insurance Obligation.............................................................. 10
11.02 Subrogation Waiver......................................................................... 12
11.03 Insurance Use Restrictions................................................................. 12
11.04 Indemnification............................................................................ 12
11.05 Payment of Insurance....................................................................... 13
ARTICLE 12
ALTERATIONS.................................................................................................. 13
12.01 Permitted Improvements..................................................................... 13
12.02 Liens...................................................................................... 13
12.03 Structural Alterations..................................................................... 13
12.04 Removal of Alterations..................................................................... 14
12.05 Alterations Required by Law................................................................ 14
12.06 General Conditions Relating to Alterations................................................. 14
ARTICLE 13
SIGNS........................................................................................................ 15
ARTICLE 14
DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD................................................................... 15
14.01 Obligation to Rebuild...................................................................... 15
14.02 No Abatement of Rent....................................................................... 15
ARTICLE 15
EMINENT DOMAIN............................................................................................... 15
15.01 Total Taking............................................................................... 16
15.02 Partial Taking............................................................................. 16
15.03 Award...................................................................................... 16
15.04 Transfer Under Threat of Taking............................................................ 17
ARTICLE 16
ASSIGNMENT AND SUBLETTING.................................................................................... 17
16.01 Landlord's Consent Required................................................................ 17
16.02 Assumption of Obligations.................................................................. 17
16.03 Assignment to Affiliate.................................................................... 17
16.04 No Release of Tenant....................................................................... 18
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
ARTICLE 17
DEFAULT; REMEDIES............................................................................................ 18
17.01 Default.................................................................................... 18
17.02 Remedies................................................................................... 19
17.03 Administrative Fee......................................................................... 20
17.04 Default by Landlord........................................................................ 20
17.05 Mitigation................................................................................. 20
17.06 Lender's Right to Cure..................................................................... 20
ARTICLE 18
SUBORDINATION................................................................................................ 21
ARTICLE 19
QUIET ENJOYMENT.............................................................................................. 21
ARTICLE 20
REPRESENTATIONS AND WARRANTIES............................................................................... 21
ARTICLE 21
SURRENDER OF PREMISES........................................................................................ 22
ARTICLE 22
BANKRUPTCY OR INSOLVENCY..................................................................................... 23
22.01 Bankruptcy or Insolvency................................................................... 23
ARTICLE 23
HAZARDOUS MATERIALS.......................................................................................... 26
23.01 Representations and Warranties............................................................. 26
23.02 Definitions................................................................................ 27
23.03 Tenant's Obligation........................................................................ 28
23.04 Landlord Options........................................................................... 28
23.05 Indemnity.................................................................................. 28
23.06 Survival................................................................................... 29
ARTICLE 24
GENERAL PROVISIONS........................................................................................... 29
24.01 Estoppel Certificates...................................................................... 29
24.02 Severability............................................................................... 29
24.03 Entire Agreement........................................................................... 29
24.04 Notices.................................................................................... 29
24.05 Waivers.................................................................................... 30
24.06 Recording.................................................................................. 30
24.07 Holding Over............................................................................... 30
24.08 Cumulative Remedies........................................................................ 30
24.09 Choice of Law.............................................................................. 30
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
24.10 Attorneys' Fees............................................................................ 30
24.11 Force Majeure.............................................................................. 31
24.12 Intentionally omitted...................................................................... 31
24.13 Consent.................................................................................... 31
24.14 Liability of Landlord...................................................................... 31
24.15 No Merger.................................................................................. 31
24.16 Reports.................................................................................... 31
24.17 Definition of Rent......................................................................... 32
24.18 Interpretation............................................................................. 32
24.19 Relationship of the Parties................................................................ 32
24.20 Successors................................................................................. 32
24.21 Modifications.............................................................................. 32
24.22 Brokerage Fees............................................................................. 32
24.23 Not Binding Until Executed................................................................. 33
</TABLE>
iv
<PAGE> 6
LEASE
In consideration of the rents and covenants set forth below, Landlord
(as hereinafter defined) hereby leases to Tenant (as hereinafter defined), and
Tenant hereby leases from Landlord, the following Premises (as hereinafter
defined) upon the following terms and conditions: 1.
ARTICLE 1
FUNDAMENTAL LEASE PROVISIONS
Date: September 11, 1996
Commencement
Date: September 13, 1996
Landlord: Safeway Inc., a Delaware corporation
Tenant: ARG Enterprises, Inc., a California
corporation
Tenant's
Trade Name: Stuart Anderson's Black Angus or Stuart
Anderson's Cattle Company restaurants
Guarantor: American Restaurant Group, Inc.
Lease Term: Three (3) years, commencing on the
Commencement Date and ending on September
13, 1999, subject to termination as provided
herein. (Article 4)
Annual
Rent: Two Hundred Forty Thousand and no/100
Dollars ($240,000.00), subject to adjustment
and abatement as hereinafter provided.
(Article 6, Section 6.01)
The Annual Rent shall be payable on the
first day of each month, commencing on
October 1, 1996, in twelve (12) equal
installments each in the amount of Twenty
Thousand and no/100 Dollars ($20,000.00)
during each year of the term of this Lease
subject to proration or adjustment as
hereinafter provided.
<PAGE> 7
Addresses for
Notices: To Landlord: Safeway Inc.
5918 Stoneridge Mall Road
Pleasanton, CA 94588-3229
Attn: Manager, Real Estate Law Division
Fax: (510) 467-3224
To Tenant: ARG Enterprises, Inc.
6th Floor
450 Newport Center Drive
Newport Beach, CA 92660
Attn: Chief Financial Officer
Fax: (714) 721-8941
With a copy to: American Restaurant Group, Inc.
Suite 201
4410 El Camino Real
Los Altos, CA 94022
Attn: Legal Department
Fax: (415) 949-6420
Premises: That certain real property described in
Exhibit A attached hereto, and all
appurtenances, easements and rights of way
now or subsequently pertaining thereto,
together with all improvements located
thereon, consisting of a restaurant located
at 5930 Stoneridge Mall Road, Pleasanton,
California, known as Stuart Anderson's Black
Angus restaurant.
References in this Article 1 to other Articles are for convenience and
designate some of the other Articles where references to the Fundamental Lease
Provisions appear. Each reference in this Lease to any of the Fundamental Lease
Provisions contained in this Article 1 shall be construed to incorporate all of
the terms provided under such Fundamental Lease Provisions. In the event of any
conflict between any Fundamental Lease Provision and the balance of this Lease,
the latter shall control.
ARTICLE 2
EXHIBITS
The following are attached hereto as Exhibits and made a part of this
Lease:
EXHIBIT A--Description of the Premises
2
<PAGE> 8
In the event of any conflict between any of the above-referenced
Exhibits and the balance of this Lease, the Exhibit shall control.
ARTICLE 3
PREMISES
Landlord hereby leases and demises unto Tenant and Tenant hereby leases
and takes from Landlord, for the term, at the rental, and upon the terms,
covenants, and conditions hereinafter set forth, the property referred to in
Article 1 as the Premises and described on Exhibit A attached hereto. 4.
ARTICLE 4
TERM
4.01 Term. The term of this Lease shall be the term specified in
Article 1 hereof (the "Lease Term") and shall commence on the Commencement Date.
4.02 Tenant's Option To Terminate. Notwithstanding any other provision
of this Lease, Tenant shall have the right at Tenant's option to terminate this
Lease at any time upon at least six (6) months' prior written notice to Landlord
of its intention to terminate and payment of all rent accruing prior to and
through the date of termination. Upon any such termination, Landlord and Tenant
shall accrue no further liability under this Lease except for provisions of this
Lease which expressly survive a termination of this Lease.
ARTICLE 5
LIENS
Tenant shall do all things necessary to prevent the filing of any
mechanics' or other liens or encumbrances against the Premises, or any part
thereof, or upon any interest of Landlord or any mortgagee or beneficiary under
a deed of trust or any ground or underlying lessor in any portion of the
Premises, by reason of work, labor, services, or materials supplied or claimed
to have been supplied to Tenant, or anyone holding the Premises, or any part
thereof, through or under Tenant. If any such lien or encumbrance shall at any
time be filed against the Premises, or any portion thereof, Tenant shall either
cause same to be discharged of record within thirty (30) days after the date of
filing of same or, if Tenant in good faith determines that such lien should be
contested, Tenant will give Landlord prior notice of Tenant's intention to
contest any such lien and will procure and record a lien release bond under
applicable law in the amount prescribed by applicable law or if no amount is
prescribed by applicable law in an amount equal to 150% of the lien amount. If a
final judgment is rendered against Tenant by a court of competent jurisdiction,
or if the Premises or any portion thereof are in danger of being
3
<PAGE> 9
foreclosed upon as a result of any such lien, Tenant will satisfy such judgment
or lien at once. If Tenant does not post the release bond or fails to pay any
such adverse judgment or to discharge any lien in the event of any imminent
foreclosure, then Landlord may post the bond or pay the judgment or discharge
the lien, as applicable, and Tenant will promptly reimburse Landlord for all
sums paid by it in connection therewith, together with the applicable
Administrative Fee (as hereinafter defined). Tenant shall give Landlord notice
of the intended commencement date of any work, labor, services or material to be
performed or provided to the Premises or any portion thereof involving total
expenditures for any project in excess of twenty percent (20%) of the Annual
Rent, as it may be adjusted as provided herein, at least ten (10) days before
said date. Landlord shall have the right and opportunity, to post and maintain
on the Premises such notices, including notices of nonresponsibility and other
similar notices, as are provided for under the Laws (as defined below) of the
state in which the Premises is located, evidencing Tenant's obligations with
respect to any of the matters covered by this Article and Landlord shall have
the right to enter the Premises and post such notices at any reasonable time.
ARTICLE 6
RENT
6.01 Rent. Tenant covenants and agrees to pay for the use and occupancy
of the Premises, the Annual Rent specified in Article 1 hereof, subject to
increase pursuant to the provisions of Section 6.02 hereof, in twelve (12) equal
monthly installments during each year of the Lease Term, in advance, on the
first day of each calendar month, without any offset or deduction. Rental for
any fractional month during the Lease Term shall be computed on a daily basis at
an amount equal to one three hundred sixty-fifth (1/365) of the Annual Rent for
each day. Rent shall be paid in lawful money of the United States to Landlord at
the address stated in Article 1 or to such other persons or at such other places
as Landlord may designate in writing to Tenant.
6.02 Rental Adjustments. In the event of any holdover in accordance
with Section 24.07 hereof, the Annual Rent payable under this Lease shall be
increased on October 1, 2001 and every five (5) years thereafter (each, an
"Increase Date") as follows:
(a) The basis for computing the increase shall be the Consumer
Price Index for all Urban Consumers - All Items, published monthly by the Bureau
of Labor Statistics of the United States Department of Labor (Base Period
1982-1984=100) ("Index"), published for the date nearest the Commencement Date
(the "Beginning Index").
(b) If the Index published for the date nearest the applicable
Increase Date (the "Extension Index") has increased over the Beginning Index,
the Annual Rent will be calculated by multiplying the then Annual Rent by a
fraction, the numerator of which is the Extension Index and the denominator of
which is the Beginning Index, not to exceed an increase equal to
4
<PAGE> 10
10% of the Annual Rent in effect during the five-year period immediately
preceding the applicable Increase Date.
(c) In the event the Extension Index is not available on the
applicable Increase Date, Tenant will continue to pay the Annual Rent in effect
immediately prior to the Increase Date. As soon as practicable, Landlord will
furnish Tenant with a true copy of the Extension Index figure together with a
computation of the increase in the Annual Rent for the ensuing five-year period,
if any, and an appropriate adjustment will be paid within 30 days of Tenant's
receipt of Landlord's statement.
(d) If the Index is changed so that the base year differs from
that in effect on the Commencement Date, the Index shall be converted in
accordance with the conversion factor published by the Bureau of Labor
Statistics. If the Index is discontinued or revised during the Lease Term, such
other governmental index or computation with which it is replaced will be used
in order to obtain substantially the same result as would be obtained if the
Index had not been discontinued or revised.
6.03 Net Lease; Impositions. This Lease is what is commonly called a
"triple net lease," it being understood that Landlord shall receive the Annual
Rent set forth in Article 1 hereof, as increased pursuant to Section 6.02, free
and clear of any and all other impositions, taxes, liens, charges, or expenses
of any nature whatsoever incurred in connection with the ownership and operation
of the Premises. In addition to the Annual Rent reserved by Article 1 hereof, as
increased pursuant to Section 6.02, Tenant shall pay to the appropriate parties
all impositions, insurance premiums, Real Property Taxes (as defined below),
operating charges, maintenance charges, construction costs, accounting and legal
fees, and any other charges, costs and expenses which arise or may be
contemplated under any provision of this Lease during the Lease Term
(collectively "Impositions"). All of such Impositions shall constitute
additional rent, and upon the failure of Tenant to pay any of such Impositions,
Landlord shall have the same rights and remedies as otherwise provided in this
Lease for the failure of Tenant to pay rent. Tenant shall furnish to Landlord,
promptly upon the reasonable request of Landlord, official receipts or other
satisfactory proof evidencing payment of any such Impositions. Upon Tenant's
failure to pay any Real Property Taxes as provided herein, Landlord shall have
the right, at Landlord's option, to require Tenant to (a) promptly deposit with
Landlord funds sufficient for the payment of the current Real Property Taxes
required to be paid by Tenant hereunder; and (b) also deposit one-twelfth of the
current annual or annualized Real Property Taxes (or those of the preceding
years if the current amounts thereof have not been fixed), on the first day of
each month in advance. It is the intention of the parties hereto that this Lease
shall not be terminable for any reason by Tenant, and that Tenant shall in no
event be entitled to any abatement of, deductions of any kind, offset or
reduction in rent payable under this Lease, except as otherwise expressly set
forth in this Lease. Any present or future Law to the contrary shall not alter
this agreement of the parties.
5
<PAGE> 11
ARTICLE 7
USE OF THE PREMISES
7.01 Use. Tenant shall occupy and use the Premises solely for the
operation of a Stuart Anderson's Black Angus or Cattle Company restaurant or
other sit down restaurant. Tenant may not use the Premises for any other purpose
without obtaining the prior written consent of Landlord, which consent shall not
be unreasonably withheld.
7.02 Compliance With Laws.
(a) Tenant accepts the Premises in its "AS IS" condition.
Tenant accepts the Premises "AS IS" in reliance upon Tenant's own knowledge as
owner and/or occupier of the Premises immediately prior to commencement of this
Lease. Landlord makes no representations or warranties of any type whatsoever,
including without limitation, whether there has been or are currently any
violations of any covenants or restrictions of record, or any applicable Laws
regarding the Premises on the Commencement Date.
(b) Tenant shall, at Tenant's sole expense, comply in all
material respects with all applicable laws, ordinances, building codes, orders,
zoning ordinances, rules, and regulations of any governmental authorities and
with any directive of any public officer which shall impose any order or duty
upon Landlord or Tenant with respect to the Premises or the use or occupation
thereof or relating to the environment, health or safety with respect to the
Premises or the use or occupation thereof (including, without limitation, any
rule of common law and judicial decisions and The Americans With Disabilities
Act), and any covenants, conditions or restrictions of record relating to the
Premises or the use or occupation thereof, in each case as now or hereafter in
effect (collectively, "Laws").
(c) Notwithstanding any other provision of this Lease, Tenant
shall not use or permit the Premises to be used in any manner which will result
in waste or the creation of a nuisance, and Tenant shall maintain the Premises
free of any objectionable noises, odors, or disturbances; provided that, as
between Landlord and Tenant only, odors and exhaust incidental to a restaurant,
excluding odors of deteriorating food, will not be deemed a nuisance or
objectionable provided the same do not violate applicable Laws and do not
subject Landlord to any civil liability.
7.03 Permits and Licenses. As between Landlord and Tenant, Tenant shall
be solely responsible to apply for and secure any building permit or permission
of any duly constituted authority for the purpose of doing any of the things
which Tenant is required or permitted to do under the provisions of this Lease.
Landlord shall cooperate as reasonably requested by Tenant to facilitate
Tenant's compliance with this obligation but at no cost to Landlord.
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ARTICLE 8
UTILITIES
8.01 Payment. Tenant shall pay to the utility companies or other
parties entitled to payment the cost of all water, heat, air conditioning, gas,
electricity, telephone, and other utilities and services provided to or for the
Premises, including connection fees and taxes thereon.
8.02 Interruption in Service. Landlord shall not be liable in damages
or otherwise for any failure or interruption of any utility or other service
being furnished to the Premises, subject to the provisions of Section 11.04(b)
hereof, and no such failure or interruption shall entitle Tenant to any
abatement of, setoff of or reduction in the amounts payable to Landlord
hereunder or otherwise entitle Tenant to terminate this Lease.
ARTICLE 9
TAXES
9.01 Payment of Taxes. Tenant shall pay the Real Property Taxes (as
defined in Section 9.02) applicable to the Premises during the Lease Term.
Landlord and Tenant agree to cooperate to ensure that all tax bills applicable
to the Premises are sent directly to Tenant by the taxing authority. All such
payments shall be made prior to delinquency. Upon Landlord's request, Tenant
shall promptly furnish Landlord with satisfactory evidence that such Real
Property Taxes have been paid. If any such Real Property Taxes paid by Tenant
shall cover any period of time prior to or after the expiration of the Lease
Term, Landlord shall promptly reimburse Tenant to the extent required. If Tenant
shall fail to pay any such Real Property Taxes, Landlord shall have the right
but not the obligation to pay the same in which case Tenant shall repay such
amount plus any penalties and interest resulting therefrom to Landlord with
Tenant's next Annual Rental installment together with the applicable
Administrative Fee.
9.02 Definition of "Real Property Taxes". As used herein, the term
"Real Property Taxes" shall mean any form of real estate tax or assessment, ad
valorem tax or gross receipts tax, fee, levy, penalty, interest or other charge,
imposed by any authority having the direct or indirect power to tax, including
any city, county, state, or federal government, or any school, agricultural,
sanitary, fire, street, drainage, or other improvement district thereof, on,
against or with respect to the Premises, this Lease, any legal or equitable
interest of Landlord or any superior landlord or any mortgagee of Landlord in
the Premises or in the real property of which the Premises are a part, and
Landlord's right to rent. The term "Real Property Taxes" shall also include any
tax, fee, levy, assessment, penalty, interest or other charge (i) in
substitution of, partially or totally, any tax, fee, levy, assessment, or charge
included within the foregoing definition of Real Property Taxes, (ii) the nature
of which was included within the foregoing definition of Real Property Taxes, or
(iii) any tax or increase in any tax which is imposed as a result of a transfer,
either partial or total, of Landlord's interest in the Premises or which is
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added to a tax or charge hereinbefore included within the definition of Real
Property Taxes by reason of such transfer (other than documentary, stamp or
other transfer taxes resulting from any such transfer but including any increase
in any Real Property Taxes attributable to any such transfer), or which is
imposed by reason of the transfer of the Premises to Landlord or this
transaction, any modifications or changes hereto, or any other transfers hereof.
Notwithstanding the foregoing, the term "Real Property Taxes" shall not include
any general income taxes, inheritance taxes, and estate taxes imposed upon
Landlord or any superior landlord or any mortgagee or beneficiary of Landlord or
any taxes attributable to the recording of any mortgage or deed of trust on
Landlord's interest in the Premises.
9.03 Personal Property Taxes. Tenant shall pay, prior to delinquency,
all taxes assessed against and levied upon trade fixtures, furnishings,
equipment, and all other personal property of Tenant contained in the Premises
or elsewhere. Tenant shall seek to cause said trade fixtures, furnishings,
equipment, and all other personal property to be assessed and billed separately
from the real property of Landlord.
9.04 Tenant's Right to Contest Taxes.
(a) Tenant shall have the right, at its cost and expense, to
contest the amount or validity, in whole or in part, of any Real Property Taxes
of any kind by appropriate proceedings diligently conducted in good faith, but
no such contest shall be carried on or maintained by Tenant after the time limit
for the payment of any Real Property Taxes unless Tenant, at its option: (i)
shall pay the amount involved under protest; or (ii) shall procure and maintain
a stay of all proceedings to enforce any collection of any Real Property Taxes,
together with all penalties, interest, costs and expenses, by a deposit of a
sufficient sum of money, or by such undertaking, as may be required or permitted
by law to accomplish such stay; or (iii) shall deposit with Landlord, as
security for the performance by Tenant of its obligations hereunder with respect
to such Real Property Taxes, security in the amount, if any, prescribed by
applicable law, or if no amount is prescribed by applicable law, in amounts
equal to one hundred fifty percent (150%) of the contested amount or such other
reasonable security as may be demanded by Landlord to ensure payment of such
contested Real Property Taxes and all penalties, interest, costs and expenses
which may accrue during the period of the contest. Upon the termination of any
such proceedings, it shall be the obligation of Tenant to pay the amount of such
Real Property Taxes or part thereof, as finally determined in such proceedings,
together with any costs, fees (including attorneys' fees), penalties or other
liabilities in connection therewith; provided, however, that if Tenant has
deposited cash or cash equivalents with Landlord as security under clause (iii)
above, then, so long as no material default exists under this Lease, Landlord
shall pay such Real Property Taxes (or part thereof) together with the
applicable costs, fees and liabilities as described above out of such cash or
cash equivalents and return any unused balance, if any, to Tenant. Otherwise,
Landlord shall return or arrange to have returned to Tenant all amounts, if any,
held by or on behalf of Landlord which were deposited by Tenant in accordance
with the provisions hereof.
(b) Tenant shall have the right, at its cost and expense, to
seek a reduction in the valuation of the Premises as assessed for tax purposes
and to prosecute any action or proceeding in connection therewith. Provided
Tenant is not in material default hereunder,
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Tenant shall be authorized to collect any tax refund of any tax paid by Tenant
obtained by reason thereof and to retain the same.
(c) Landlord agrees that whenever Landlord's cooperation is
required in any of the proceedings brought by Tenant as aforesaid, Landlord will
reasonably cooperate therein, provided same shall not entail any cost, liability
or expense to Landlord, and Tenant will pay, indemnify and save Landlord
harmless of and from, any and all liabilities, losses, judgments, decrees, costs
and expenses (including all reasonable attorneys' fees and expenses) in
connection with any such contest and will, promptly after the final settlement,
fully pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith, and
Tenant shall perform and observe all acts and obligations, the performance of
which shall be ordered or decreed as a result thereof. No such contest shall
subject Landlord to the risk of any civil liability or the risk of any criminal
liability, and Tenant shall give such reasonable indemnity or security to
Landlord, as may reasonably be demanded by Landlord, to ensure compliance with
the foregoing provisions of this Section 9.04.
9.05 Survival of Tenant's Tax Obligations. Tenant's tax obligations
pursuant to this Article 9 shall survive the termination or expiration of this
Lease such that, notwithstanding such termination or expiration of this Lease,
Tenant shall continue to be responsible for that portion of the Real Property
Taxes and/or personal property taxes which pertain to the period prior to the
date of such termination or expiration of this Lease.
ARTICLE 10
MAINTENANCE AND REPAIRS
10.01 Tenant's Obligations.
(a) Tenant shall, at Tenant's expense, maintain in good
repair, order, and serviceable condition, reasonable wear and tear excepted, the
Premises and every part thereof, including but not limited to all plumbing,
ventilation, heating, air conditioning, and electrical systems and equipment in,
on, or exclusively serving the Premises, and windows, doors, storefronts, plate
glass, interior walls, and ceilings which are part of the Premises.
(b) Tenant shall not commit or suffer to be committed any
waste upon or about the Premises, and shall promptly at Tenant's cost and
expense, make all necessary replacements, restorations, renewals and repairs to
the Premises and appurtenances thereto which are material to the operation of
the Premises, whether interior or exterior, structural or non-structural,
ordinary or extraordinary, and foreseen or unforeseen; provided that with
respect to appurtenances to the Premises which are material to the operation of
the Premises (for example, the maintenance and repair of the parking lot,
sidewalks and other common areas appurtenant to the Premises as provided in that
certain Declaration of Covenants, Conditions, Easements and Restrictions
Certerpointe dated January 13, 1983, recorded January 27, 1983 as Series No. 83-
014539, Official Records of Alameda County, California), if third parties are
obligated to repair or maintain such appurtenances, Tenant shall use
commercially reasonable efforts to enforce
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such obligations of third parties or, if such third parties fail to perform such
obligations, Tenant shall perform such obligations to the extent Tenant has the
legal right to do so. Tenant shall pay to the appropriate parties Tenant's pro
rata share of any maintenance, repair or other costs to the extent required
under any appurtenances to the Premises. Repairs, restorations, renewals and
replacements shall be at least equivalent in quality to the original work or the
property replaced, as the case may be. Tenant shall not make any claim or demand
upon or bring any action against Landlord for any loss, cost, injury, damage or
other expense caused by any failure or defect, structural or non-structural, of
the Premises or any part thereof.
(c) Upon the expiration or earlier termination of this Lease,
Tenant shall return the Premises to Landlord in good and clean condition and
repair, reasonable wear and tear excepted. Any damage to the Premises, including
any structural damage, resulting from Tenant's use or from the removal of
Tenant's fixtures, furnishings, and equipment pursuant to Section 12.04 hereof,
shall be repaired by Tenant at Tenant's expense.
10.02 Landlord's Obligations. Except for the obligations of Landlord
under Article 14 hereof (relating to destruction of the Premises), and under
Article 15 hereof (relating to the condemnation of the Premises), it is intended
by the parties hereto that Landlord have no obligation, in any manner
whatsoever, to repair and maintain the Premises nor the building located thereon
nor the fixtures thereon or equipment or personal property therein, whether
interior or exterior, structural or nonstructural, ordinary or extraordinary,
all of which obligations are that of Tenant under Section 10.01 hereof. Tenant
expressly waives the benefit of any statute or law now or hereafter in effect
which would otherwise afford Tenant the right to terminate this Lease because of
Landlord's failure to keep the Premises or any part thereof or the building
located thereon or fixtures thereon or equipment or personal property therein in
good order, condition, and repair, or the right to repair and offset the cost
related thereto against rent.
10.03 Landlord's Rights. If Tenant refuses or neglects to make repairs
or maintain the Premises, or any part thereof, or any appurtenances thereto
material to the operation of the Premises or to enforce maintenance or repair
obligations of third parties with respect to any such appurtenances, as provided
above, in a manner reasonably satisfactory to Landlord, without prejudice to any
other remedy Landlord may have hereunder, upon giving Tenant ten (10) days'
prior written notice, Landlord shall have the right to enter the Premises and
perform such maintenance or make such repairs on behalf of and for the account
of Tenant. In the event Landlord so elects, Tenant shall pay the cost of such
repairs, maintenance, or replacements promptly following Tenant's receipt of a
bill therefor, together with the applicable Administrative Fee. Tenant agrees to
permit Landlord or its agent to enter the Premises, upon reasonable notice by
Landlord, during normal business hours for the purpose of inspecting the
Premises.
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ARTICLE 11
INSURANCE AND INDEMNIFICATION
11.01 Tenant's Insurance Obligation. Tenant covenants and agrees that
Tenant will carry and maintain, at its sole cost and expense, the following
types of insurance, in the amounts specified and in the form hereinafter
provided for:
(a) COMMERCIAL GENERAL LIABILITY. Commercial general liability
insurance (including liquor liability insurance) against any loss, liability or
damage on or relating to the Premises, with limits of not less than Two Million
Dollars ($2,000,000) in any one occurrence for death or injuries to one or more
persons and/or for damage to property.
(b) BUSINESS INTERRUPTION. Tenant shall purchase at Tenant's
option either a policy of business interruption insurance to protect Tenant and
Landlord against loss of earnings in the event of interruption of Tenant's
business through destruction of real or personal property with respect to the
Premises, or a policy of rental loss protection to protect Landlord (and any
mortgagee of Landlord with respect to the Premises) against loss of rental
income as a result of destruction of real or personal property with respect to
the Premises. Such policy shall be written in an amount equal to not less than
six (6) monthly installments of Annual Rent. Such policy shall insure against
loss of earnings or rental income (as applicable) caused by at least the perils
of fire and lightning, extended coverage, vandalism, malicious mischief and,
where pertinent, sprinkler leakage.
(c) WORKERS' COMPENSATION. Worker's compensation insurance or
self insurance as required by the jurisdiction in which the Premises is located.
(d) PROPERTY DAMAGE. Insurance covering all improvements
located on the Premises and all of Tenant's fixtures, merchandise, and personal
property from time to time in, on or upon the Premises, in an amount not less
than one hundred percent (100%) of their full replacement value providing
protection against perils commonly included within the classification "All
Risk", and insurance against sprinkler damage (if applicable) and liquor
liability insurance (to the extent not otherwise covered by such "All Risk"
policy). Any policy proceeds shall be used for the repair or replacement of the
property damaged or destroyed to the extent necessary to maintain the standard
of operation of the Premises and the business operated thereon existing prior to
the damage or destruction.
(e) POLICY FORM.
(i) All policies of insurance provided for herein
shall be issued by reputable and financially sound insurance companies
reasonably satisfactory to Landlord, and such insurance companies shall be
qualified to do business in the jurisdiction where the Premises is situated. All
such policies shall be issued in Tenant's name, with Landlord named as an
additional insured and/or loss payee as applicable, and, if requested by
Landlord, name any superior landlord and any mortgagee or beneficiary of
Landlord as an additional insured or loss
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payee. The policies shall be for the mutual and joint benefit and protection of
Landlord, Tenant, any superior landlord and any mortgagee or beneficiary of
Landlord. Certificates of insurance shall be delivered to Landlord prior to
Landlord's execution of this Lease, and thereafter certificates or other
evidence of renewal coverage shall be delivered to Landlord within five (5) days
prior to the expiration of the term of each such policy. As often as any such
policy shall expire or terminate, renewal or additional policies shall be
procured and maintained by Tenant in like manner and to like extent. All
certificates of insurance delivered to Landlord must contain a provision giving
Landlord, any superior landlord, and any mortgagee or beneficiary of Landlord
thirty (30) days' notice in writing in advance of any cancellation or lapse,
except only ten (10) days' notice will be provided for cancellation due to
premium non-payment, of insurance. All public liability, property damage, and
other casualty policies shall be written on an occurrence basis as primary
policies, not contributing with or in excess of coverage which Landlord may
carry.
(ii) Tenant's obligations to carry the insurance
provided for above may be brought within the coverage of a so-called blanket
policy or policies of insurance carried and maintained by Tenant; provided,
however, that such policy or policies must have limits of not less than Five
Million and 00/100 Dollars ($5,000,000) and that Landlord, any superior landlord
and any mortgagee or beneficiary of Landlord shall be named as an additional
insured thereunder as their interests may appear and that the coverage afforded
Landlord will not be reduced or diminished by reason of the use of such blanket
policies and the requirements set forth herein are otherwise satisfied.
11.02 Subrogation Waiver. Landlord (for itself and its insurer) hereby
waives any rights, including rights of subrogation, and Tenant (for itself and
its insurer) hereby waives any rights, including rights of subrogation, each may
have against the other on account of any loss or damage occasioned to Landlord
or Tenant, as the case may be, to their respective property, the Premises or its
contents that are caused by or result from risks insured against under any
property insurance policies carried by the parties hereto and in force at the
time of any such damage. The foregoing waivers of subrogation shall be operative
only so long as available in the jurisdiction where the Premises is located and
so long as no policy of insurance is invalidated thereby.
11.03 Insurance Use Restrictions. Tenant agrees that it will not carry
any stock or goods or do anything in, on, or about the Premises outside of the
ordinary course of Tenant's business which will substantially increase the
insurance rates upon the building of which the Premises is a part.
11.04 Indemnification. (a) Tenant shall at all times indemnify Landlord
for, defend (with counsel reasonably satisfactory to Landlord) Landlord against,
and save Landlord harmless from, any liability, loss, cost, injury, damage or
other expense or risk (including without limitation reasonable attorneys' fees)
whatsoever that may occur or be claimed by or with respect to any person(s) or
property on or relating to the Premises and resulting directly or indirectly
from the use, misuse, occupancy, possession or disuse of the Premises by Tenant
or other persons claiming through or under Tenant, or their respective agents,
employees, licensees, invitees, guests or other such persons, or from the
condition of the Premises. Tenant shall, at
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its cost and expense, defend against any and all such actions, claims and
demands and shall indemnify Landlord and any mortgage or beneficiary of Landlord
for all costs, expenses and liabilities (including, without limitation,
reasonable attorneys' fees) it may incur in connection therewith. Neither
Landlord nor any mortgagee or beneficiary of Landlord shall in any event
whatsoever be liable for any injury or damage to the Premises or to the Tenant
or to any other persons claiming through or under Tenant, or their respective
agents, employees, licensees, invitees, guests or other such persons or to any
property of any such persons except as provided in subparagraph (b) below.
Tenant shall not make any claim or demand upon or institute any action against
Landlord as a result of such injury or damage except as provided in subparagraph
(b) below. Tenant covenants and agrees during the Lease Term hereof to pay when
due or reimburse and indemnify and hold Landlord and any mortgagee or
beneficiary of Landlord harmless from and against all inspection fees, taxes,
bonds, permits, certificates, assessments and sales, use, property or other
taxes, fees or tolls of any nature whatsoever (together with any related
interest or penalties) now or hereafter imposed against Landlord, any superior
landlord or any mortgagee or beneficiary of Landlord or Tenant by any federal,
state, county or local governmental authority upon or with respect to the
Premises or the use thereof or upon the possession, leasing, use, operation or
other disposition thereof or upon the rents, receipts or earnings arising
therefrom or upon or with respect to this Lease (excepting only federal, state,
and local net income taxes on the income of Landlord or any superior landlord or
any mortgagee or beneficiary of Landlord or any taxes attributable to the
recording of any mortgage or deed of trust on Landlord's interest in the
Premises).
(b) Notwithstanding the waiver of subrogation under Section
11.02, Landlord shall indemnify, hold harmless and defend (with counsel
reasonably satisfactory to Tenant) Tenant from and against any liability, loss,
cost, injury, damage or other expense or risk (including, without limitation,
reasonable attorneys' fees) whatsoever to the extent arising out of the
negligence or willful misconduct of Landlord or its representatives in
connection with any entry by Landlord or its representatives on the Premises or
in connection with any development by Landlord on any adjacent property, except
to the extent arising from the negligence or willful misconduct of Tenant, its
representatives, or their respective agents, employees, licensees, invitees or
guests, or from the condition of the Premises.
11.05 Payment of Insurance. In the event that Tenant shall fail to
obtain the insurance policies required hereunder, Landlord shall have the right,
but not the obligation, to purchase the same in which case Tenant shall repay
the cost thereof to Landlord with Tenant's next Annual Rent installment together
with the applicable Administrative Fee.
ARTICLE 12
ALTERATIONS
12.01 Permitted Improvements. Except as provided in Section 12.03
hereof, and subject to the provisions of this Article 12, at Tenant's own
expense and after giving Landlord notice in writing of its intention to do so as
required under Article 5, Tenant may from time to time make alterations,
replacements, additions, changes, and improvements (collectively referred to
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in this Article 12 as "Alterations") in and to the Premises as it may find
necessary or convenient for its purposes; provided, however, that no such
Alterations shall decrease the value of the Premises.
12.02 Liens. Tenant shall pay the costs of any Alterations done on the
Premises pursuant to Section 12.01, and shall keep the Premises free and clear
of liens of any kind as required under Article 5. Tenant shall indemnify and
defend Landlord from and against any liability, loss, damage, costs, attorneys'
fees, and any other expense incurred as a result of claims of lien by any person
performing work or furnishing materials or supplies for Tenant or any person
claiming under Tenant.
12.03 Structural Alterations. Tenant shall not make any Alterations to
the foundations, perimeter or load-bearing walls, or roof structure, involving
expenditures in excess of the amounts specified in Article 5, without obtaining
the prior written consent of Landlord, which consent shall not be unreasonably
withheld. All work with respect to any Alteration shall be done in a good and
workmanlike manner by properly qualified and licensed personnel, and such work
shall be diligently prosecuted to completion.
12.04 Removal of Alterations. All Alterations made on the Premises
shall become the property of Landlord at the expiration or termination of the
Lease Term and shall be surrendered with the Premises; provided, however, that
if Tenant is not in default at the time of such expiration or termination, (i)
Tenant shall have the right to remove any permitted Alterations made in
accordance with this Article 12 provided the removal thereof does not decrease
the value of the Premises as reasonably determined by Landlord and provided
Tenant repairs any damage to the Premises caused by such removal, and (ii)
Tenant's equipment, machinery, and trade fixtures shall remain the property of
Tenant and may be removed by Tenant, provided Tenant shall repair any damage
caused by its removal of any such equipment, machinery, and trade fixtures.
Landlord agrees from time to time during the term, upon
written request from Tenant, to execute and deliver any instrument, release, or
other document that may be reasonably required by any equipment supplier or
vendor and in form and substance reasonably satisfactory to Landlord whereby
Landlord waives and/or releases any rights it may have or acquire with respect
to any equipment or trade fixtures which may be affixed to any of the Premises
and which is subject to a security interest or equipment lease in favor of such
supplier or vendor and agrees that the same do not constitute realty regardless
of the manner same are attached.
12.05 Alterations Required by Law. Any Alteration, structural or
otherwise, to or on the Premises, or any part thereof, which may be necessary or
required by reason of any applicable Laws, shall be made by and at the sole cost
and expense of Tenant.
12.06 General Conditions Relating to Alterations. Any Alteration,
structural or otherwise, to or on the Premises, shall be subject to the
following conditions:
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(a) No Alteration shall be undertaken until Tenant shall have
procured and paid for all required permits and authorizations of all municipal
departments and governmental subdivisions having jurisdiction.
(b) Any structural Alteration involving an estimated cost of
more than One Hundred Thousand and 00/100 Dollars ($100,000) shall, at
Landlord's reasonable request, be conducted under the supervision of a licensed
architect or engineer selected by Tenant and satisfactory to Landlord and shall
be made in accordance with detailed plans and specifications (the "Plans and
Specifications") and cost estimates prepared by such architect or engineer and
approved in writing in advance by Landlord.
(c) Any Alteration shall be made promptly and in a good
workmanlike manner and in compliance with all applicable Laws.
(d) No Alteration shall tie-in or connect the Premises or any
improvements thereon with any property outside the Premises without the prior
written consent of Landlord.
(e) No Alteration shall reduce the value of the Premises or
impair the structural integrity of any building comprising a part of the
Premises.
ARTICLE 13
SIGNS
In addition to those signs already existing at the Premises, Tenant
shall have the right to erect or affix signs on the Premises of such sizes,
colors, and designs as required by Tenant. All signs on the Premises shall fully
comply with all applicable Laws.
ARTICLE 14
DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD
14.01 Obligation to Rebuild. If any portion of the Premises is damaged
or destroyed by fire or other casualty, Tenant shall forthwith give notice
thereof to Landlord. Tenant shall, at its sole cost and expense, diligently
repair, restore, rebuild or replace the damaged or destroyed improvements,
fixtures or equipment, and diligently complete the same as soon as reasonably
possible, to the condition they were in prior to such damage or destruction,
except for permitted Alterations and such changes in design or materials as may
then be required by applicable Laws. Landlord, in such event, shall, to the
extent and at the times the proceeds of the insurance are made available to
Landlord, reimburse Tenant for the costs of making such repairs, restoration,
rebuilding and replacements on such terms as Landlord may reasonably require. To
the extent that available proceeds of insurance are insufficient to pay the
entire cost of making such repairs, restoration, rebuilding and replacements,
and notwithstanding the expiration or termination of the Lease Term of this
Lease, Tenant shall pay the amount by which
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such costs exceed the available insurance proceeds. Any surplus of insurance
proceeds over the cost of restoration, net of all reasonable out-of-pocket
expenses incurred by Landlord in connection with the administration thereof,
shall be promptly paid over to Tenant.
14.02 No Abatement of Rent. Notwithstanding the partial or total
destruction of the Premises, there shall be no abatement of rent or of any other
obligation of Tenant hereunder by reason of such damage or destruction.
ARTICLE 15
EMINENT DOMAIN
15.01 Total Taking. If the Premises is taken in its entirety under the
power of eminent domain, this Lease shall terminate as of the date of such
taking, and upon Tenant's payment to Landlord of all rents and other amounts
accruing hereunder through such date, Landlord and Tenant shall each thereafter
be released from accruing any further liability under this Lease subject to the
rights of Landlord and Tenant to receive condemnation awards to which each is
entitled as provided in Section 15.03, and except as to obligations under this
Lease which survive the termination hereof.
15.02 Partial Taking. In the event that (a) more than twenty-five
percent (25%) of the floor area of the Premises is taken under the power of
eminent domain; or (b) by reason of any appropriation or taking, regardless of
the amount so taken, the remainder of the Premises is not one undivided parcel
of property; or (c) as a result of any taking, regardless of the amount so
taken, the remainder of the Premises is rendered unsuitable for the continued
operation of Tenant's business as determined by Tenant in good faith and based
on commercially reasonable standards and criteria, Tenant shall have the right
to terminate this Lease, upon giving notice in writing of such election within
sixty (60) days after receipt by Tenant from Landlord of written notice that
said Premises have been so appropriated or taken (with the understanding that
such 60-day period of time may be extended as reasonably necessary for Tenant to
assess the effect of such partial taking on Tenant's continued operation of its
business at the Premises, subject to Landlord's prior written consent, which
consent shall not be unreasonably withheld), provided Tenant shall continue to
pay Annual Rent and other amounts accruing hereunder through the date of
termination. In the event of such termination, upon Tenant's payment to Landlord
of all rents and other amounts accruing hereunder through the date of
termination, both Landlord and Tenant shall thereupon be released from any
liability thereafter accruing hereunder, except as to obligations hereunder
which survive the termination hereof. Each party agrees immediately after
learning of any actual or contemplated appropriation or taking to give to the
other party notice in writing thereof. If this Lease is not terminated, Tenant
shall remain in that portion of the Premises not so taken and Tenant, at
Tenant's sole cost and expense, shall restore the remaining portion of the
Premises as soon as possible to a complete unit of the quality and character as
existed prior to such taking. Landlord agrees to reimburse Tenant for the cost
of restoration, but in no event shall Landlord's obligation to reimburse Tenant
for the cost of restoring the remaining portion of the Premises exceed the
amount of award of compensation that Landlord receives for a partial taking of
that portion of the Premises resulting
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in the need for restoration. So long as the Lease is not terminated in the
manner provided above, there shall be an equitable adjustment of the rent
payable by Tenant hereunder for the Premises by reason of any partial taking.
Tenant hereby waives any statutory rights of termination which may arise by
reason of any partial taking of the Premises under the power of eminent domain.
15.03 Award. In the event of any taking, the entire award or
compensation in any eminent domain proceeding affecting the Premises, whether
for a total or partial taking, shall be distributed to Landlord, provided,
however, that Tenant will be entitled to receive, and Landlord will have no
right to pursue for itself, any award for claims based on (a) the value of
Tenant's Alterations to the Premises which Tenant has the right to remove
pursuant to the provisions of this Lease but elects not to remove, (b) loss of
or damage to Tenant's personal property, (c) loss to Tenant because of
interruption of business, (d) Tenant's loss of goodwill, and (e) Tenant's cost
of removal and relocation and any rent differential payable by Tenant for
replacement premises as a result of any relocation necessitated by the taking.
Landlord and Tenant may separately pursue their claims against the condemning
authority, provided, however, that notwithstanding anything to the contrary
contained in this Lease, Tenant will have no right to pursue a claim based upon
the residual value of the real property comprising the Premises after expiration
of the Lease Term or pursue claims or retain any award to which Landlord is
entitled so as inequitably to diminish Landlord's award. Landlord and Tenant
shall cooperate to maximize the award payable by the condemning authority.
Tenant hereby assigns to Landlord all rights of Tenant to receive any award of
compensation as a result of any taking except the awards to which Tenant is
entitled under this Section 15.03.
15.04 Transfer Under Threat of Taking. For the purposes of this Article
only, a voluntary sale or conveyance under threat and in lieu of condemnation
shall be deemed an appropriation or taking under the power of eminent domain.
ARTICLE 16
ASSIGNMENT AND SUBLETTING
16.01 Landlord's Consent Required. For purposes of this Article 16, the
terms "assign" and "assignment" shall include and mean any act attempting to, or
document purporting to, assign, transfer, sublet or change ownership of,
Tenant's interest in and to the Premises or any part thereof, or enter into
license or concession agreements for a material portion of the Premises or any
part thereof. Tenant shall not assign this Lease or Tenant's interest in and to
the Premises without obtaining the prior written consent of Landlord, such
consent not to be unreasonably withheld. Any attempted assignment without such
consent shall be void, and shall constitute a breach of this Lease. Tenant may
at any time encumber its leasehold interest by deed of trust, mortgage,
assignment, or other security agreement, including sale and leaseback financing
of Tenant's improvements, without the consent of Landlord, but no such
encumbrance will constitute a lien on Landlord's estate.
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16.02 Assumption of Obligations. Any assignment to which Landlord has
consented shall be evidenced by an instrument in writing and any assignee or
transferee shall agree for the benefit of Landlord to be bound by, assume, and
perform all of the terms, covenants, and conditions of this Lease. Consent by
Landlord to any assignment shall not constitute consent to any subsequent
assignment.
16.03 Assignment to Affiliate. Notwithstanding anything to the contrary
contained in this Article 16, Tenant shall have the right to assign this Lease,
or sublet the Premises or any portion thereof, without the consent of, but with
notice to, Landlord, to any corporation (a) with which Tenant may merge or
consolidate, (b) which is a parent or subsidiary of Tenant at any tier, (c)
which is the successor corporation to Tenant in the event of a corporate
reorganization, or (d) which acquires all or substantially all of the voting
stock of Tenant or all or substantially all of the assets of Tenant, provided
that said assignee assumes, in full, the obligations of Tenant under this Lease
and Tenant remains primarily liable under this Lease. In addition, nothing
contained herein shall prohibit the public offering of or subsequent sale of
shares of stock in Tenant in the public markets.
16.04 No Release of Tenant. Regardless of Landlord's consent, no
assignment shall release Tenant of Tenant's obligation or alter the primary
liability of Tenant to pay the rent and to perform all other obligations to be
performed by Tenant hereunder. The acceptance of rent by Landlord from any other
person shall not be deemed to be a waiver by Landlord of any provision hereof.
Consent to one assignment shall not be deemed consent to any subsequent
assignment. In the event of default by any assignee of Tenant or any successor
to Tenant, in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
said assignee. Landlord may consent to subsequent assignments of this Lease or
amendments or modifications to this Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or their
consent thereto and such action shall not relieve Tenant of liability under this
Lease, provided that Tenant shall not be liable to the extent of amendments or
modifications made to this Lease with assignees not affiliated with Tenant
without Tenant's consent, which consent shall not be unreasonably withheld,
which materially increase Tenant's monetary obligations under this Lease (such
as an increase in the Annual Rent payable hereunder or extension of the Lease
Term beyond the original term hereof and any renewal options hereunder).
ARTICLE 17
DEFAULT; REMEDIES
17.01 Default. The occurrence of any one or more of the following
events shall constitute a material default under this Lease by Tenant:
(a) The vacating or abandonment of the Premises by Tenant.
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(b) The failure by Tenant to make any payment when due of
Annual Rent, Impositions or any other payment required to be made by Tenant
hereunder, where such failure shall continue for a period of ten (10) days after
written notice from Landlord.
(c) Except as otherwise provided in this Lease, the failure by
Tenant to observe or perform any of the covenants, conditions, or provisions of
this Lease to be observed or performed by Tenant, other than described in
Paragraph (b) above, where such failure shall continue for a period of thirty
(30) days after written notice thereof from Landlord to Tenant; provided,
however, that if the nature of Tenant's noncompliance is such that more than
thirty (30) days are reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant commences such cure within said thirty
(30)-day period and thereafter diligently and in good faith prosecutes such cure
to completion.
(d) (i) The making by Tenant of any general arrangement or
general assignment for the benefit of creditors; (ii) Tenant becomes a "debtor"
as defined in 11 U.S.C. Section 101 or any successor statute thereto (unless, in
the case of a petition filed against Tenant, the same is dismissed within sixty
(60) days); (iii) the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within sixty
(60) days; or (iv) the attachment, execution, or other judicial seizure of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where such seizure is not discharged within sixty (60)
days. In the event that any provision of this Section 17.01(d) is contrary to
any applicable law, such provision shall be of no force or effect.
(e) The breach of any representation or warranty by Tenant
hereunder in any material respect.
(f) The default, breach or insolvency of any guarantor of this
Lease beyond any applicable notice and/or grace period under its guarantee.
17.02 Remedies. In the event of any such material default by Tenant,
Landlord may at any time thereafter, with or without notice or demand and
without limiting Landlord in the exercise of any right or remedy which Landlord
may have by reason of such default:
(a) Terminate Tenant's right to possession of the Premises by
any lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. In such event,
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default including, but not limited to, the cost
of recovering possession of the Premises, expenses of reletting, including
reasonable and necessary renovation and alteration of the Premises, reasonable
attorneys' fees, and any real estate commission actually paid; and the worth at
the time of award by the court having jurisdiction thereof of the amount by
which the unpaid rent for the balance of the term after the time of such award
exceeds the amount of such unpaid rent for the same period that Tenant proves
could be reasonably avoided.
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(b) Maintain Tenant's right to possession of the Premises by
any lawful means, in which case this Lease and the term hereof shall continue in
effect whether or not Tenant shall have vacated or abandoned the Premises. In
such event Landlord shall be entitled to enforce all of Landlord's rights and
remedies under the Lease, including the right to recover the rent as it becomes
due hereunder.
(c) Pursue any other remedy now or hereafter available to
Landlord under the Laws of the jurisdiction where the Premises is located.
(d) To the extent permitted by law, the rights and remedies
under this Lease provided shall be cumulative, and the exercise of any one right
or remedy shall not preclude the exercise of or act as a waiver of any other
right or remedy of Landlord hereunder, or which may be existing at law, or in
equity or by statute or otherwise.
(e) In addition to the foregoing, Tenant, and its successors
and assigns, shall at all times indemnify Landlord for, defend Landlord against
and save Landlord harmless from any liability, loss, cost, injury, damage or
other expense or risk (including, without limitation, reasonable attorneys'
fees) whatsoever, directly or indirectly, arising out of, resulting from or
otherwise in connection with (i) the failure for any reason on the part of
Tenant to perform, observe or comply with any of the covenants, conditions and
obligations under this Lease to be performed, observed or complied with by
Tenant, and/or (ii) the failure for any reason of any representation or warranty
given by Tenant in connection with the execution of this Lease by Landlord to be
materially true, complete and accurate.
17.03 Administrative Fee. Tenant hereby acknowledges that late payment
by Tenant to Landlord of rent and other sums due hereunder may cause Landlord to
incur administrative costs not contemplated by this Lease, the exact amount of
which will be extremely difficult to ascertain. Such administrative costs may
include, but are not limited to, processing and accounting charges, and late
charges which may be imposed on Landlord by the terms of any superior lease,
mortgage or trust deed covering the Premises. Accordingly, if any installment of
rent or any other sum due from Tenant is not received by Landlord or Landlord's
designee within ten (10) days after written notice from Landlord, then, without
any requirement for further notice to Tenant, Tenant shall pay to Landlord an
administrative fee equal to the Bank of America, NT & SA, reference rate plus
four percent (4%) per annum (but in no event higher than the maximum rate
permitted by Law) multiplied by such overdue amount (the "Administrative Fee").
The parties hereby agree that such Administrative Fee represents a fair and
reasonable estimate of the costs Landlord will incur by reason of late payment
by Tenant. Acceptance of such Administrative Fee by Landlord shall in no event
constitute a waiver of Tenant's default with respect to such overdue amount, nor
prevent Landlord from exercising any of the other rights and remedies granted
hereunder.
17.04 Default by Landlord. Landlord will commit a default if Landlord
fails to perform any provision of this Lease required of it and the failure is
not cured within 30 days after notice has been given to Landlord. If, however,
the failure cannot reasonably be cured within the cure period, Landlord will not
be in default of this Lease if Landlord commences to cure the failure within the
cure period and diligently and in good faith continues to cure the failure.
Notices
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given under this Section 17.04 will specify the alleged breach and the
applicable Lease provisions. Tenant may, after expiration of the cure period
unless there is an emergency, correct or remedy any failure of Landlord not
timely cured and deduct the reasonable cost paid by Tenant from future rent as
it becomes due.
17.05 Mitigation. Landlord and Tenant will each exercise best efforts
to mitigate the damages caused by the other party's breach of this Lease.
Efforts to mitigate damages will not be construed as a waiver of the
nonbreaching party's right to recover damages.
17.06 Lender's Right to Cure. The respective lenders of each party will
have the right, in the party's behalf, to cure the party's alleged breach within
the same time period allocated under this Lease. Landlord shall upon written
request from Tenant provide copies of any notices of default given to Tenant
hereunder to lenders of Tenant as specified in such written request, provided,
however, that Landlord shall not be deemed to be in default hereunder if
Landlord fails to provide any such notices to any of Tenant's lenders nor shall
any such failure relieve Tenant from any liability hereunder or affect any of
Landlord's rights or remedies hereunder.
ARTICLE 18
SUBORDINATION
At Landlord's option, this Lease shall be subordinate to any superior
lease, mortgage, deed of trust, or any other hypothecation or security now or
hereafter placed upon the Premises and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements, and extensions thereof, provided that Landlord and any mortgagee
or beneficiary of Landlord shall execute the Subordination Agreement (as defined
below) with Tenant. In furtherance thereof, Tenant hereby agrees, upon request
by Landlord, to execute and deliver a subordination, non-disturbance and
attornment agreement in form reasonably satisfactory to Landlord with respect to
any such superior lease, mortgage, deed of trust, hypothecation, or security
(the "Subordination Agreement").
ARTICLE 19
QUIET ENJOYMENT
Subject to the terms and conditions of this Lease and conditional upon
the performance of all of the provisions to be performed by Tenant hereunder,
Landlord agrees to secure to Tenant during the Lease Term and any and all
extensions thereof, the quiet and peaceful possession of the Premises and all
rights and privileges appertaining thereto and under this Lease.
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ARTICLE 20
REPRESENTATIONS AND WARRANTIES
To induce Landlord to enter into this Lease, Tenant represents and
warrants to Landlord as follows:
(a) It is a corporation duly organized and validly existing,
in good standing under the laws of Delaware, has stock outstanding which has
been duly and validly issued, and is qualified to do business and is in good
standing in the jurisdiction in which the Premises is located with full power
and authority to consummate the transactions contemplated hereby.
(b) The execution and delivery of this Lease has been duly
authorized by all action as may be required under the terms and provisions of
its governing instruments and the laws of the jurisdiction where the Premises is
located; this Lease will not violate or result in any breach of, or constitute a
default under, or result in the creation of any lien, encumbrance, attachment,
charge or other right or claim of any other party upon any assets of Tenant or
upon Tenant's beneficiary interest under the terms of this Lease pursuant to any
instrument or applicable Laws to which Tenant is a party or by which it may be
bound or create in favor of or grant to any third party any interest whatsoever
in Tenant's interest under the terms of this Lease; this Lease is valid and
enforceable in accordance with its terms, and the execution and delivery of this
Lease, and the consummation of the transactions contemplated hereby, do not
require the approval or consent of any governmental authority having
jurisdiction over Tenant or its property, or if such approval or consent is
required, it has been obtained.
(c) Tenant's financial statements and, if applicable, the
guarantors' financial statements heretofore delivered to Landlord are true and
correct in all material respects, have been prepared in accordance with
generally accepted accounting principles, and fairly present the respective
financial conditions of the subjects thereof as of the respective dates thereof.
No materially adverse change has occurred in the financial conditions reflected
therein since the respective dates thereof.
(d) There are no actions, suits or proceedings pending, or to
the best of Tenant's knowledge, threatened, against or affecting it or the
Premises or any guarantor of this Lease, or involving the validity or
enforceability of this Lease, at law or in equity, or before or by any
governmental authority except actions, suits and proceedings fully covered by
insurance or which, if adversely determined, would not materially impair the
ability of Tenant or any guarantor of this Lease to satisfy their obligations
under this Lease or any guarantee of this Lease.
(e) Tenant is not in default under any obligation for the
payment of borrowed money, for the deferred purchase price of property or for
the payment of any rent under any lease agreement, which, either individually or
in the aggregate, would adversely affect the financial condition of Tenant, or
the ability of Tenant to perform its obligations hereunder, or comply with the
terms of this Lease.
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ARTICLE 21
SURRENDER OF PREMISES
Except for changes resulting from eminent domain proceedings, at the
expiration or sooner termination of the Lease Term, Tenant shall surrender the
Premises in good and clean condition, reasonable wear and tear excepted, and
shall surrender all keys for the Premises to Landlord at the place then fixed
for the payment of rent and shall inform Landlord of all combinations on locks,
safes and vaults, if any, in the Premises. Tenant shall at such time remove all
of Tenant's property, as well as any alterations or improvements other than
permitted Alterations made in accordance with Article 12, if requested to do so
by Landlord, and shall repair any damage to any of the Premises caused thereby,
and any or all of such property not so removed shall, at Landlord's option,
become the exclusive property of Landlord or be disposed of by Landlord, at
Tenant's cost and expense, without further notice to or demand upon Tenant. If
the Premises is not so surrendered, Tenant shall indemnify Landlord against loss
or liability resulting from the delay by Tenant in so surrendering the Premises
including, without limitation, any claims made by any succeeding occupant
founded on such delay. Tenant's obligation to observe or perform this covenant
shall survive the expiration or other termination of the Lease Term.
ARTICLE 22
BANKRUPTCY OR INSOLVENCY
22.01 Bankruptcy or Insolvency. Subject to applicable law, Landlord and
Tenant acknowledge and agree that the provisions of this Section 22.01 shall
control notwithstanding anything to the contrary contained in this Lease:
(a) In the event that Tenant shall become a debtor under
Chapter 7 of the Bankruptcy Reform Act of 1978, 11 U.S.C. 1 et seq ("Bankruptcy
Code"), and Tenant's trustee or Tenant shall elect to assume this Lease for the
purpose of assigning the same or otherwise, such election and assignment may be
made only if the provisions of this Section 22.01 are satisfied. If Tenant or
Tenant's trustee shall fail to assume this Lease within sixty (60) days after
the entry of an order for relief, this Lease shall be deemed to have been
rejected. Immediately thereupon Landlord shall be entitled to possession of the
Premises without further obligation to Tenant or Tenant's trustee and this
Lease, upon the election of Landlord, shall terminate, but Landlord's right to
be compensated for damages shall survive, whether or not this Lease shall be
terminated.
(b) In the event that a voluntary petition for reorganization
is filed by Tenant, or an involuntary petition is filed against Tenant under
Chapter 11 of the Bankruptcy Code, or in the event of the entry of an order for
relief under Chapter 7 in a case which is then transferred to Chapter 11,
Tenant's trustee or Tenant, as debtor-in-possession, must elect to assume this
Lease within sixty (60) days from the date of the filing of the petition under
Chapter
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11 or the transfer thereto, or Tenant's trustee or the debtor-in-possession
shall be deemed to have rejected this Lease. Immediately thereupon Landlord
shall be entitled to possession of the Premises without further obligation to
Tenant or Tenant's trustee and this Lease, upon the election of Landlord, shall
terminate, but Landlord's right to be compensated for damages, shall survive,
whether or not this Lease shall be terminated.
(c) No election by Tenant's trustee or the
debtor-in-possession to assume this Lease, whether under Chapter 7 or Chapter
11, shall be effective unless each of the following conditions has been
satisfied:
(i) Tenant's trustee or the debtor-in-possession has
cured all defaults under this Lease, or has provided Landlord with evidence
satisfactory to Landlord that it will cure all defaults susceptible of being
cured by the payment of money within ten (10) days from the date of such
assumption and that it will cure all other defaults under this Lease which are
susceptible of being cured by the performance of any act within thirty (30) days
after the date of such assumption.
(ii) Tenant's trustee or the debtor-in-possession has
compensated, or has provided Landlord with evidence satisfactory to Landlord
that, within ten (10) days from the date of such assumption, it will compensate
Landlord for any actual pecuniary loss incurred by Landlord arising from the
default of Tenant, Tenant's trustee, or the debtor-in-possession as indicated in
any statement of actual pecuniary loss sent by Landlord to Tenant's trustee or
the debtor-in-possession.
(iii) Tenant's trustee or the debtor-in-possession
(A) has provided Landlord with "Assurance", as hereinbelow defined, of the
future performance of each of the obligations under this Lease of Tenant,
Tenant's trustee, or the debtor-in-possession, and (B) shall, in addition to any
other security deposits held by Landlord, deposit with Landlord, as security for
the timely payment of Annual Rent and for the performance of all other
obligations of Tenant under this Lease, an amount equal to three (3) monthly
installments of Annual Rent (at the rate then payable), and (C) pay in advance
to Landlord on the date each installment of Annual Rent is due and payable,
one-twelfth of Tenant's annual obligations for Impositions to be made by Tenant
pursuant to this Lease. The obligations imposed upon Tenant's trustee or the
debtor-in-possession by this Section 22.01 shall continue with respect to Tenant
or any assignee of this Lease, after the conclusion of proceedings under the
Bankruptcy Code.
(iv) Such assumption will not breach or cause a
default under any provision of any other lease, mortgage, financing agreement or
other agreement by which Landlord is bound, relating to the Premises.
(d) For purposes of Section 22.01(c)(iii) hereof, Landlord and
Tenant shall acknowledge that "Assurance" shall mean no less than:
(i) Tenant's trustee or the debtor-in-possession has
and will continue to have sufficient unencumbered assets after the payment of
all secured obligations and
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administrative expenses to assure Landlord that sufficient funds will be
available to fulfill the obligations of Tenant under this Lease; and
(ii) To secure to Landlord the obligations of Tenant,
Tenant's trustee or the debtor-in-possession and to assure the ability of
Tenant, Tenant's trustee or the debtor-in-possession to cure the defaults under
this Lease, monetary and/or nonmonetary, there shall have been: (A) sufficient
cash deposited with Landlord, or (B) the bankruptcy court shall have entered an
order segregating sufficient cash payable to Landlord, and/or (C) Tenant's
trustee or the debtor-in-possession shall have granted to Landlord a valid and
perfected first lien and security interest and/or mortgage in property of
Tenant, Tenant's trustee or the debtor-in-possession, acceptable as to value and
kind to Landlord.
(e) In the event that this Lease is assumed in accordance with
Section 22.01(b) hereof and thereafter Tenant is liquidated or files, or has
filed against it, a subsequent petition under any provision of the Bankruptcy
Code or any similar statute for relief of debtors, Landlord may, at its option,
terminate this Lease and all rights of Tenant hereunder, by giving Tenant notice
of its election to so terminate within thirty (30) days after the occurrence of
either of such events.
(f) If Tenant's trustee or the debtor-in-possession has
assumed this Lease pursuant to the terms and provisions of this Section 22.01
for the purpose of assigning (or elects to assign) this Lease, this Lease may be
so assigned only if the proposed assignee has provided adequate assurance of
future performance of all of the terms, covenants and conditions of this Lease
to be performed by Tenant. Landlord shall be entitled to receive all
consideration for such assignment, whether cash or otherwise. As used in this
Section 22.01(f) "adequate assurance of future performance" shall mean at least
that clauses (B) and (C) of Section 22.01(c)(iii)hereof and each of the
following conditions, has been satisfied:
(i) The proposed assignee has furnished Landlord with
a current financial statement audited by a certified public accountant
determined in accordance with generally accepted accounting principles
consistently applied indicating a credit rating, net worth and working capital
in amounts which Landlord reasonably determines to be sufficient to assure the
future performance of such assignee of Tenant's obligations under this Lease,
but in no event indicating a net worth less than the net worth of the Tenant and
any guarantors of this Lease, on the date of execution hereof.
(ii) Such assignment will not breach or cause a
default under any provision of any other lease, mortgage, financing agreement or
other agreement by which Landlord is bound, relating to the Premises.
(iii) The proposed assignment will not release or
impair any guarantee under this Lease.
(g) When, pursuant to the Bankruptcy Code, Tenant's trustee or
the debtor-in-possession shall be obligated to pay reasonable use and occupancy
charges for the use of the Premises, such charges shall not be less than the
Annual Rent and all additional rent payable by
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Tenant under this Lease and shall be paid at the times and when due as though
such charges were Annual Rent and additional rent.
(h) Anything in this Lease to the contrary notwithstanding,
neither the whole nor any portion of Tenant's interest in this Lease or its
estate in the Premises shall pass to any trustee, receiver, assignee for the
benefit of creditors, or any other similar person or entity, or otherwise by
operation of law under the Bankruptcy Code or any similar federal statute now or
hereinafter enacted, or under the laws of any state, district or municipality
having jurisdiction of the person or property of Tenant unless Landlord shall
have consented to such transfer in writing. No acceptance by Landlord of rent or
any other payments from any such trustee, receiver, assignee, person or other
entity shall be deemed to constitute such consent by Landlord nor shall it be
deemed a waiver of Landlord's right to terminate this Lease for any transfer of
Tenant's interest under this Lease without such consent.
ARTICLE 23
HAZARDOUS MATERIALS
23.01 Representations and Warranties. Notwithstanding anything to the
contrary which may be contained in this Lease, Tenant represents, warrants and
covenants to Landlord and any mortgagee or beneficiary of Landlord as follows:
(a) To the best of Tenant's Knowledge (as defined below),
except as set forth in the environmental and engineering reports for the
Premises previously delivered by Tenant or its affiliates to Landlord and the
environmental and engineering reports for the Premises prepared by Landlord in
connection herewith (collectively, the "Reports"), there are no and have been no
violations of the Relevant Environmental Laws (as hereinafter defined)
respecting the Premises and no consent orders have been entered with respect
thereto, except where noncompliance could not reasonably be expected to have a
materially adverse effect on the value or the use or operation of the Premises
for its intended purpose or the ability of Tenant to perform its obligations
under this Lease (a "Material Adverse Effect").
(b) To the best of Tenant's Knowledge, there are no and have
been no Hazardous Wastes (as hereinafter defined) or Asbestos (as hereinafter
defined) either at, upon, under or within, or discharged or emitted at or from,
the Premises, including, but not limited to, the air, soil, surface, and ground
water; no Hazardous Wastes or Asbestos have flowed, blown or otherwise become
present at the Premises from neighboring land; and no Hazardous Wastes or
Asbestos have been removed from any of the Premises other than those Hazardous
Wastes which are used and/or incidental to the ordinary course of Tenant's
business provided that the same are used, stored, handled and disposed of in
accordance with all Relevant Environmental Laws and all other applicable Laws,
industry standards and manufacturers specifications.
(c) The Premises will not be used for the purpose of storing
Hazardous Wastes, and no such storage or use will otherwise be allowed on the
Premises which will cause
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or increase the likelihood of causing the release of Hazardous Wastes onto the
Premises other than those Hazardous Wastes which are used and/or incidental to
the ordinary course of Tenant's business provided that the same are used,
stored, handled and disposed of in accordance with all Relevant Environmental
Laws and all other applicable Laws, industry standards and manufacturers
specifications. Neither Tenant, nor to the best of Tenant's Knowledge any third
party, has installed, used or removed any storage tanks on, from or in
connection with the Premises except in full compliance with all Relevant
Environmental Laws, and to the best of Tenant's knowledge, there are no storage
tanks or wells (whether existing or abandoned) located on, under or about the
Premises. To the best of Tenant's Knowledge, except as set forth in the Reports,
the Property does not consist of any building materials that contain Hazardous
Wastes or Asbestos.
(d) Tenant is not aware of any claims or litigation, and has
not received any communication from any person (including any governmental
authority), concerning the presence or possible presence of Hazardous Wastes or
Asbestos at or adjacent to the Premises or concerning any violation or alleged
violation of the Relevant Environmental Laws respecting the Premises. Tenant
shall promptly notify Landlord of any such claims and shall furnish Landlord
with a copy of any such communications received by Tenant.
(e) Tenant shall notify Landlord promptly and in reasonable
detail in the event that Tenant becomes aware of or suspects the presence of
Hazardous Wastes (other than those Hazardous Wastes which are used and/or
incidental to the ordinary course of Tenant's business provided that the same
are used, stored, handled and disposed of in accordance with all Relevant
Environmental Laws and all other applicable Laws, industry standards and
manufacturers specifications) or a violation of the Relevant Environmental Laws,
at or adjacent to the Premises.
(f) Tenant shall ensure that the Premises complies and
continues to comply in all respects with the Relevant Environmental Laws.
(g) If the Premises is used or maintained so as to subject
Tenant, Landlord or any mortgagee or beneficiary of Landlord or the user of the
Premises to a claim of violation of the Relevant Environmental Laws (unless
contested in good faith by appropriate proceedings), Tenant shall immediately
cease or cause a cessation of such use or operations and shall remedy and fully
cure any conditions arising therefrom, at its own cost and expense.
(h) Upon Landlord's reasonable belief that there is a material
breach of one of the environmental representations or warranties set forth
above, Tenant shall permit Landlord, at its option, at any time upon five (5)
days prior written notice to Tenant, to cause or conduct a complete
environmental audit to be performed. The audit shall be at Tenant's sole cost
and expense.
23.02 Definitions.
(a) The "Relevant Environmental Laws," as referred to herein,
shall mean all applicable federal, state and local laws, rules, regulations,
orders, judicial determinations, and decisions or determinations by any
judicial, legislative or executive body of any governmental
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<PAGE> 33
or quasi-governmental entity, whether in the past, the present or the future,
with respect to: (A) the installation, existence, or removal of, or exposure to,
Asbestos on the Premises; (B) the existence on, discharge from, or removal from
the Premises of Hazardous Wastes; or (C) the effects on the environment on the
Premises or of any activity now, previously, or hereafter conducted on the
Premises. The Relevant Environmental Laws shall include, but not be limited to,
the following: (1) the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Sections 9601 et seq.; the Superfund Amendments and
Reauthorization Act, Public Law 99-499, 100 Stat. 1613; the Resource
Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq.; the National
Environmental Policy Act, 42 U.S.C. Section 4321; the Safe Drinking Water Act,
42 U.S.C. Sections 300F et seq.; the Toxic Substances Control Act, 15 U.S.C.
Section 2601; the Hazardous Materials Transportation Act, 49 U.S.C. Section
1801; the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq.;
the Clean Air Act, 42 U.S.C. Sections 7401 et seq.; and the regulations
promulgated in connection therewith; (2) Environmental Protection Agency
regulations pertaining to Asbestos (including 40 C.F.R. Part 61, Subpart M);
Occupational Safety and Health Administration regulations pertaining to Asbestos
(including 29 C.F.R. Sections 1910. 1001 and 1926.58); as each may now or
hereafter be amended; and (3) any state and local laws and regulations
pertaining to Hazardous Wastes and/or Asbestos;
(b) "Asbestos," as referred to herein, shall have the meanings
provided under the Relevant Environmental Laws, and shall include, but not be
limited to, asbestos fibers and friable asbestos, as such terms are defined
under the, Relevant Environmental Laws; and
(c) "Hazardous Wastes," as referred to herein, shall mean any
of the following as defined by the Relevant Environmental Laws: solid wastes;
petroleum and petroleum derivatives; natural or synthetic gas; radon gas; toxic
or hazardous substances, wastes, pollutants or contaminants (including, but not
limited to, polychlorinated biphenyls ("PCB's", paint containing lead, and urea
formaldehyde); and discharges of sewage or effluent.
(d) "Knowledge" shall mean the actual knowledge of any
executive officer after due inquiry of property management.
23.03 Tenant's Obligation. At its sole cost and expense, Tenant shall:
(a) Pay immediately when due the cost of compliance with the
Relevant Environmental Laws.
(b) Keep the Premises free of any lien imposed pursuant to the
Relevant Environmental Laws.
23.04 Landlord Options. In the event that Tenant fails to comply with
the requirements of this Article 23, after notice to Tenant and the earlier of
the expiration of any applicable cure period hereunder, or the expiration of the
cure period permitted under the Relevant Environmental Laws, if any, or such
earlier time if Landlord determines that life, person or property is in
jeopardy, Landlord may, but shall not be obligated to, exercise its right to do
one or more of the following: (a) declare that such failure constitutes a
default; and/or (b) take any
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<PAGE> 34
and all actions, at Tenant's expense, that Landlord reasonably deems necessary
or desirable to cure said failure of compliance. Any costs incurred pursuant to
this Section 23.04 shall become immediately due and payable by Tenant together
with the applicable Administrative Fee, and shall be paid or reimbursed to
Landlord promptly upon written notice from Landlord.
23.05 Indemnity. Landlord shall not be liable for and Tenant shall
immediately pay to Landlord when incurred and shall indemnify, defend and hold
Landlord and any mortgagee or beneficiary of Landlord harmless from and against,
all loss, cost, liability, damage and expense (including, but not limited to,
attorneys' fees and costs incurred in the investigation, defense and settlement
of claims) that Landlord or any mortgagee or beneficiary of Landlord may suffer
or incur as a result of or in connection in any way with any Asbestos or
Hazardous Wastes now or hereafter present, discharged, released, generated,
disposed, transported or emitted to, from, in on or under the Premises or in
connection with any violation of any of the Relevant Environmental Laws, or any
environmental assessment or study from time to time undertaken or requested by
Tenant or Landlord, or any breach of any representation, covenant or undertaking
by Tenant herein.
23.06 Survival. The provisions of this Article 23 shall survive the
expiration or termination of the Lease Term.
ARTICLE 24
GENERAL PROVISIONS
24.01 Estoppel Certificates. Each party ("Responding Party") shall at
any time upon not less than fifteen (15) business days' prior written notice
from the other party ("Requesting Party") execute, acknowledge, and deliver to
the Requesting Party a statement reasonably satisfactory to Landlord certifying
and acknowledging the following: (i) that this Lease represents the entire
agreement between Landlord and Tenant, and is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect) and the date to
which the Annual Rent and other charges are paid in advance, if any; and (ii)
that there are not, to the Responding Party's knowledge, any uncured defaults on
the part of the Requesting Party, or specifying such defaults if any are
claimed. Any such statement may be conclusively relied upon by any prospective
purchaser, mortgagee or encumbrancer of the Premises or of the business of the
Requesting Party.
24.02 Severability. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.
24.03 Entire Agreement. It is understood that there are no other oral
or written agreements or representations between the parties hereto concerning
the subject matter of this Lease, and that this Lease and the Exhibits hereto
supersede and cancel any and all previous negotiations, arrangements,
representations, brochures, displays, projections, estimates, agreements, and
understandings, if any, made by Landlord or Tenant with respect to the subject
29
<PAGE> 35
matter hereof, and none thereof shall be used to interpret, construe,
supplement, or contradict this Lease. This Lease, and the Exhibits hereto, and
all amendments hereto, constitute and shall be considered to be the only
agreement between the parties hereto and their representatives and agents. All
negotiations and oral agreements acceptable to both parties have been merged
into and are included herein and in the Exhibits hereto.
24.04 Notices. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal delivery, certified mail,
return-receipt requested or by nationally recognized overnight courier service
and, if given by mail or courier service, shall be deemed sufficiently given if
addressed to Tenant or to Landlord, as the case may be, at the addresses noted
in Article 1 hereof. Delivery by courier will be deemed given on the date
indicated in the courier's records; delivery by certified mail will be deemed
given on the date indicated on the return receipt. Personal delivery to Landlord
shall be effective only if delivered to the Manager of Landlord's Real Estate
Law division or one of the other attorneys in that division. Either party may by
notice to the other specify a different street address for notice purposes. A
copy of all notices required or permitted to be given hereunder shall be
concurrently transmitted to such party or parties at such addresses as may from
time to time hereafter be designated by notice.
24.05 Waivers. No waiver by a party of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by the
other party of the same of any other provision. Landlord's consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of any preceding
breach by Tenant of any provision hereof, other than the failure of Tenant to
pay the particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent.
24.06 Recording. Either Landlord or Tenant shall, upon request of the
other, execute, acknowledge, and deliver to the other a "short form" memorandum
of this Lease for recording purposes. Such memorandum shall be in a form
reasonably acceptable to Landlord and sufficient for Tenant to obtain a
leasehold policy of title insurance based thereon. In the event of any
termination of this Lease, Tenant agrees to execute and deliver to Landlord a
termination agreement satisfactory to Landlord, which termination agreement
shall be similarly recorded.
24.07 Holding Over. If Tenant remains in possession of the Premises or
any part thereof after the expiration or termination of the Lease Term, such
occupancy, if rent is paid by Tenant and accepted by Landlord, shall be a
tenancy from month-to-month upon all the provisions of this Lease pertaining to
the obligations of Tenant and Tenant shall thereby waive its rights to any
additional notice to quit, but all options, if any, granted under the terms of
this Lease shall be deemed terminated and be of no further force or effect. The
monthly rental during such hold-over period shall be equal to one hundred
percent (100%) of the monthly installment of Annual Rent payable immediately
prior to expiration or termination of the Lease Term, as it may be increased
pursuant to Section 6.02 hereof. In addition, Tenant shall continue to be
obligated to pay all Impositions and other amounts required to be paid by the
terms of this Lease. It is understood that nothing in this Section 24.07
obligates Landlord to accept rent from
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<PAGE> 36
Tenant and permit Tenant to hold over, nor does this Section imply a right of
Tenant to hold over beyond the termination or expiration of this Lease as
otherwise provided herein.
24.08 Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
24.09 Choice of Law. The laws of the jurisdiction in which the Premises
is located shall govern the validity, performance, and enforcement of this
Lease.
24.10 Attorneys' Fees. Should either party institute any action or
proceeding to enforce any provision hereof or for a declaration of such party's
rights or obligations hereunder, the prevailing party shall be entitled to
receive from the losing party such amounts as the court may adjudge to be
reasonable attorneys' fees for services rendered to the party prevailing in any
such action or proceeding, and such fees shall be deemed to have accrued upon
the commencement of such action or proceeding.
24.11 Force Majeure. Except for payment obligations imposed pursuant to
this Lease, if there is any prevention, delay, or stoppage of an act required of
a party pursuant to this Lease because of strikes, lockouts, other labor
disputes, material shortages, embargoes, civil unrest, governmental regulations,
governmental controls, enemy or hostile governmental action, judicial order,
public emergency, fire, earthquake, other Acts of God, and other causes (other
than financial conditions) beyond the reasonable control of the party obligated
to perform, performance of the act will be excused for the period of the delay.
24.12 Intentionally omitted.
24.13 Consent. Whenever the consent or approval of either party is
required pursuant to this Lease, such consent or approval will not be
unreasonably withheld or delayed except as otherwise expressly provided herein.
24.14 Liability of Landlord.
(a) In the event of any sale or other transfer of Landlord's
interest in the Premises, Landlord shall be and hereby is entirely freed and
relieved of all liabilities and obligations of Landlord hereunder with respect
to such Premises to the extent accruing after the date of such transfer.
(b) Notwithstanding anything contained herein to the contrary,
it is specifically understood and agreed that there shall be no personal
liability of Landlord or any of its shareholders, members, officers or directors
in respect of any of the terms, covenants, conditions or provisions of this
Lease, and in the event of a breach or default by Landlord of any of its
liabilities and obligations under this Lease, Tenant and any persons claiming
by, through or under Tenant shall look solely to the equity of Landlord in the
Premises for the satisfaction of Tenant's and/or such persons' remedies and
claims for damages.
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<PAGE> 37
24.15 No Merger. There shall be no merger of this Lease, or the
leasehold estate created by this Lease, with any other estate or interest in the
Premises, or any part thereof, by reason of the fact that the same person, firm,
corporation or other entity may acquire or own or hold, directly or indirectly,
(a) this Lease or the leasehold estate created by this Lease, or any interest in
this Lease or in any such leasehold estate, and (b) any such other estate or
interest in the Premises or any part thereof, and no such merger shall occur
unless and until all persons, corporations, firms, and other entities having an
interest (including a security interest) in (i) this Lease or the leasehold
estate created by this Lease; and (ii) any such other estate or interest in the
Premises, or any part thereof, shall join in a written instrument effecting such
merger and shall duly record the same.
24.16 Reports. Tenant agrees to furnish to Landlord, with reasonable
promptness upon Landlord's request: financial statements, reports and documents
which Tenant and each guarantor of this Lease sends to or makes available to its
public shareholders, noteholders or bondholders.
24.17 Definition of Rent. All monetary obligations of Tenant to
Landlord under the terms of this Lease, including, without limitation, the Real
Property Taxes and insurance premiums payable hereunder, shall be deemed to be
"rent".
24.18 Interpretation. The captions by which the Articles and Sections
of this Lease are identified are for convenience only and shall have no effect
upon the interpretation of this Lease. Whenever the context so requires,
singular numbers shall include the plural, the plural shall refer to the
singular, the neuter gender shall include the masculine and feminine genders,
and the words "Landlord" and "Tenant" and "person" shall include corporations,
partnerships, associations, other legal entities, and individuals.
24.19 Relationship of the Parties. Nothing in this Lease shall create a
partnership, joint venture, employment relationship, borrower and lender
relationship, or any other relationship between Landlord and Tenant other than
the relationship of landlord and tenant.
24.20 Successors. This Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective personal and legal
representatives, heirs, successors, and assigns.
24.21 Modifications. This Lease may not be altered, amended, changed,
terminated, or modified in any manner unless the same shall be in writing and
signed by or on behalf of the party to be bound. No waiver of any provision of
this Lease of any right of Landlord hereunder shall be effective unless in
writing signed by or on behalf of the person to be bound.
24.22 Brokerage Fees. Landlord and Tenant each represent and warrant
that they have not employed a broker in connection with the execution of this
Lease. Landlord and Tenant shall each indemnify and hold the other harmless from
and against any claim or claims for brokerage or other commissions arising from
such party having employed a broker contrary to its representation in this
Section 24.22.
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24.23 Not Binding Until Executed. This Lease does not constitute an
"offer" and is not binding until fully executed and delivered by Landlord.
LANDLORD:
SAFEWAY INC.,
A DELAWARE CORPORATION
By /s/ illegible
----------------------------------------
Its Assistant Vice President
By /s/ illegible
----------------------------------------
Its Assistant Secretary
Date: September 11, 1996
-------------------------------------
TENANT:
ARG ENTERPRISES, INC.,
A CALIFORNIA CORPORATION
By /s/ William J. McCaffrey, Jr.
----------------------------------------
Its Vice President & CFO
--------------------------------------
Date: September 12, 1996
-------------------------------------
33
<PAGE> 39
ACKNOWLEDGMENT
STATE OF CALIFORNIA )
) : ss.
COUNTY OF ALAMEDA )
On September 11, 1996 before me, Gloria L. Woo, Notary Public, personally
appeared Steven J. Gouig and Marilyn K. Johnston, personally known to me to be
persons whose names are subscribed to the within instrument and acknowledged to
me that they executed the same in their authorized capacities, and that by their
signatures on the instrument, the persons or the entity upon behalf of which the
persons acted, executed the instrument.
WITNESS my hand and official seal.
Signature _______________________ (Seal)
<PAGE> 40
STATE OF _______________ )
) : ss.
COUNTY OF _______________ )
The foregoing instrument was acknowledged before me this _________day
of ______________, 1996, by ______________, as _____________ of_____________ ,
a___________ , on behalf of_______________ .
___________________________________________
Notary Public
Los Angeles County, California
My Commission Expires:_____________________
[Notary Public's Seal]
STATE OF CALIFORNIA )
) : ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me this __________ day
of __________, 1996, by ______________, as _____________ of ARG Enterprises,
Inc., a California corporation, on behalf of ARG Enterprises, Inc.
___________________________________________
Notary Public
__________ County,_________________________
My Commission Expires:_____________________
[Notary Public's Seal]
<PAGE> 41
That certain real property situate in the State of California, County of
Alameda, City of Pleasanton, described as follows:
"Parcel A:
Parcel 5, as shown on Parcel Map 3708, filed July 30, 1982, in Book 135, Pages
42 and 43, inclusive, records of Alameda County, California.
Excepting therefrom, all minerals, oil, gas and other hydrocarbon substances and
all geothermal substances, and all minerals and subsurface rights whatsoever, in
and under, or that may be produced from a depth below 200 feet from the surface
of the said property, as reserved in the deed from the Stoneson Development
Corporation, recorded January 9, 1981, Series No. 81-004519.
Parcel B:
Easements as such easements are more particularly described in the sections
entitled, "Certain Easements for Owners" and "Support, Settlement and
Encroachment" of the article entitled "Easements" of the Declaration of
Covenants, Conditions Easements and Restrictions described in instrument
recorded January 27, 1983, Series No. 83-14540."
EXHIBIT A
<PAGE> 1
EXHIBIT 2.8
GUARANTY OF LEASE
The undersigned (hereinafter referred to as "Guarantor"), as a material
inducement to and in consideration of ARG PROPERTIES I, LLC, a California
limited liability company, whose address is c/o Griffin Capital, 10940 Wilshire
Boulevard, Suite 1600, Los Angeles, California 90024 ("Landlord"), entering
into that certain Master Lease ("Lease") with ARG ENTERPRISES, INC., a
California corporation ("Tenant"), dated as of September 11, 1996, hereby
unconditionally, irrevocably and personally guarantees to and for the benefit
of Landlord, and Landlord's successors and assigns, the full and timely payment
and performance of all of Tenant's duties, obligations and covenants under the
Lease. This Guaranty is a guaranty of payment and performance and not of
collection.
All payments to be made by Guarantor under this Guaranty shall be made
without deduction or offset and shall be made immediately upon demand by
Landlord. This Guaranty is absolute and unconditional and shall not be affected
by Landlord's failure or delay to enforce any of its rights or any waiver by
Landlord, other than modifications or variations of the terms of the Lease
agreed to in writing by Landlord and Tenant or any waiver of Tenant's and
Guarantor's obligations with respect to the Lease agreed to in writing by
Landlord.
Guarantor's obligations are independent of Tenant's obligations under
the Lease and a separate action or actions may be brought and prosecuted
against Guarantor whether or not any action is brought against Tenant or Tenant
is joined in any such action or actions. If Tenant defaults under the Lease,
Landlord can proceed immediately against Guarantor or Tenant, or both, or
Landlord can enforce against Guarantor or Tenant, or both, any rights that it
has under the Lease, this Guaranty or pursuant to applicable laws. If the Lease
terminates and Landlord has any rights it can enforce against Tenant after
termination, Landlord can enforce those rights against Guarantor without giving
previous notice to Tenant or Guarantor or without making any demand on either
of them. Guarantor hereby consents to any remedy pursued by Landlord to enforce
its rights under the Lease, in whatever order such party may choose, including
any remedies which may affect or destroy Guarantor's right of subrogation or
the right of Guarantor to proceed against Tenant for reimbursement. Without
limiting the generality of the foregoing, Guarantor hereby waives any rights
Guarantor may have under California Civil Code Sections 2809, 2819, 2845, 2849
and 2850, as they may be amended or modified from time to time, and any similar
or successor statutes.
Guarantor waives the right to require Landlord to first or
concurrently: (1) proceed against Tenant or any other person or pursue any
rights or remedies with respect to the Lease before proceeding against
Guarantor; (2) proceed against or exhaust any security that Landlord holds from
Tenant; or (3) pursue any other remedy in Landlord's power. The liability of
Guarantor shall not
<PAGE> 2
be released, discharged, affected or exonerated by any extension of time,
indulgence, compromise, settlement or modification or variation of terms which
may be extended by Landlord to Tenant or agreed upon by Landlord or Tenant,
other than modifications or variations of the terms of the Lease agreed to in
writing by Landlord and Tenant or any waiver of Tenant's and Guarantor's
obligations with respect to the Lease agreed to in writing by Landlord, and
regardless of the release or discharge of Tenant by Landlord or by others or by
operation of law, and, unless agreed to in writing by Landlord, shall not be
released, discharged, affected or exonerated by any assignment or sublease by
Tenant of its interest in the Lease, nor shall the liability of Guarantor be
released, discharged, affected or exonerated by the insolvency, bankruptcy
(voluntary or involuntary), or reorganization of Tenant, or by the voluntary or
involuntary liquidation, sale or other disposition of all or substantially all
of the assets of Tenant or by any assignment of the Lease by Tenant or by any
trustee, receiver or liquidator of Tenant or any consent which Landlord may
give to any such assignment, or by the release, substitution or addition of any
other guarantor, Landlord and Tenant, without notice to or consent by
Guarantor. Landlord and Tenant, without notice to or consent by Guarantor, may
at any time or times enter into such modifications, extensions, amendments or
other covenants respecting the Lease as they may deem appropriate, and
Guarantor shall not be released of its liability or released, discharged or
exonerated thereby but shall continue to be fully liable for the payment and
performance of all obligations and duties of Tenant under the Lease as so
modified, extended or amended with the consent of Tenant.
Guarantor further agrees (1) to indemnify and hold harmless Landlord
from and against any claims, damages, expenses or losses, including to the
extent permitted by law, all reasonable attorney's fees incurred by counsel of
Landlord's choice (whether or not litigation is commenced), resulting from or
arising out of any breach of any provision of the Lease by Tenant or by reason
of Tenant's failure to perform any of its obligations thereunder, and (2) to
the extent permitted by law, to pay all costs and expenses, including
reasonable attorneys' fees (whether or not litigation is commenced) incurred by
Landlord in enforcing this Guaranty.
Landlord's rights under this Guaranty will not be exhausted by any
action by Landlord until all of the obligations of Tenant to pay rent and other
sums under the Lease have been fully paid and performed and the period of time
has expired during which any payment made by Tenant or Guarantor to Landlord
may be determined to be a Preferential Payment (hereinafter defined). Guarantor
further agrees that to the extent Tenant or Guarantor makes any payment to
Landlord in connection with the obligations of Tenant under the Lease and all
or any part of such payment is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid by Landlord or
paid over to a trustee, receiver or any other entity, whether under any
bankruptcy act or otherwise (any such payment is hereinafter referred to as a
"Preferential Payment"), then this Guaranty shall
2
<PAGE> 3
continue to be effective or shall be reinstated, as the case may be, and, to
the extent of such payment or repayment by Landlord (but only to the extent of
the then remaining liability of Guarantor under this Guaranty), the obligations
or part thereof intended to be satisfied by such Preferential Payment shall be
revived and continued in full force and effect as if said Preferential Payment
had not been made.
Notwithstanding any other provision of this Guaranty to the contrary,
Guarantor agrees that until such time as the obligations and liabilities of
Tenant to Landlord under or arising out of the Lease (whether now existing or
hereafter arising, voluntary or involuntary, whether or not jointly owned with
others, direct or indirect, absolute or contingent, liquidated or unliquidated,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred), including, without limitations, Tenant's
obligations under the Lease to comply with certain provisions of the Financing
Documents, as such term is defined in the Lease (collectively, the
"Obligations") have been paid and performed in full and the period of time has
expired during which any payment made by Tenant or Guarantor to Landlord on
account of the Obligations may be determined to be a Preferential Payment, any
claim or other rights which Guarantor may now have or hereafter acquire against
Tenant or any other guarantor of all or any of the Obligations that arise from
the existence or performance of Guarantor's obligations under this Guaranty or
otherwise (all such claims and rights are referred to as "Guarantor's
Conditional Rights"), including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, or indemnification, any right to
participate in any claim or remedy of Landlord against Tenant or any collateral
which Landlord now has or hereafter acquires, whether or not such claim, remedy
or right arises in equity or under contract, statute or common law, by any
payment made hereunder or otherwise, including without limitation, the right to
take or receive from Tenant, directly or indirectly, in cash or other property
or by setoff or in any other manner, payment or security on account of such
claim or other rights, shall be subordinate to Landlord's right to full payment
and performance of the Obligations, and Guarantor shall not enforce any of
Guarantor's Conditional Rights during such period. If, notwithstanding the
foregoing provisions, any amount shall be paid to Guarantor on account of any
such Guarantor's Conditional Rights and either (a) such amount is paid to
Guarantor at any time when any of the Obligations shall not have been paid or
performed in full, or (b) regardless of when such amount is paid to Guarantor,
any payment made by Tenant to Landlord is at any time determined to be a
Preferential Payment, then such amount paid to Guarantor shall be held in trust
for the benefit of Landlord and shall forthwith be paid to Landlord to be
credited and applied upon the Obligations, whether matured or unmatured, in such
order as Landlord, in its sole and absolute discretion, shall determine.
Guarantor agrees to comply with all provisions of the Lease and the
Financing Documents applicable to Guarantor.
3
<PAGE> 4
including, without limitation, any requirement for delivery of financial
statements of Guarantor thereunder. Without limiting the forgoing, Guarantor
acknowledges that landlord is relying on (and is an intended third party
beneficiary of, as applicable) the representations and warranties of Guarantor
contained in the Lease and in the other Transaction Documents (as defined in
the Lease).
Guarantor assumes the responsibility to remain informed of the
financial condition of Tenant and of all other circumstances bearing upon the
risk of Tenant's default, which reasonable inquiry would reveal, and agrees
that Landlord shall have no duty to advise Guarantor of information known to it
regarding such condition or any such circumstances. Landlord shall not be
required to inquire into the powers of Tenant or the officers, employees,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed under this Guaranty. Guarantor hereby represents
and warrants to Landlord that Guarantor has received a copy of the Lease, has
read or had the opportunity to read the Lease, and understands the terms of the
Lease. The provisions in the Lease relating to the execution of additional
documents, legal proceedings by Landlord against Tenant, severability of the
provisions of the Lease, interpretation of the Lease, notices, waivers
(including waiver of a jury trial), limitation on right of recovery against
Landlord, disclaimer of individual liability, and the applicable laws which
govern the interpretation of the Lease are incorporated herein in their
entirety by this reference and made a part hereof as though set forth in full
herein; any reference in those provisions to "Tenant" shall mean Guarantor
and any reference in those provisions to the "Lease" shall mean this Guaranty.
Guarantor agrees in accordance with Article 3 of the Lease, to execute
and deliver to Landlord an Individual Guaranty (as defined in the Lease)
in connection with each sale of a Property to a Purchaser (as such terms are
defined in the Lease). In addition, upon the fifth (5th) anniversary of the
Commencement Date, Guarantor acknowledges and agrees that the Lease shall
be replaced by an individual lease for each remaining Property not then sold
in accordance with Article 3, and agrees that this guaranty shall remain in
full force and effect and shall thereafter be a guaranty of the obligations
of Tenant under each such individual lease and, if requested by Landlord,
to execute an individual guaranty substantially in the form of the
Individual Guaranty attached as Exhibit C to the Lease of each such
individual lease.
The liability of Guarantor shall not be affected by any repossession
of the leased premises by Landlord (except to the extent the liability of
Tenant is thereby affected), provided, however, that the net payments received
by Landlord after deducting all costs and expenses of repossessing and/or
reletting the same, shall be credited from time to time by Landlord to the
account of
4
<PAGE> 5
Guarantor and Guarantor shall pay any balance owing to Landlord from time
to time, immediately upon demand by Landlord.
No action or proceeding brought or instituted under this Guaranty
and no recovery in pursuance thereof shall be a bar or defense to any further
action or proceeding which may be brought under this Guaranty by reason of
any further default or defaults hereunder and/or under the Lease.
To the extent permitted by applicable law, Guarantor waives its
right to enforce any remedies (except remedies Tenant has as tenant only) that
Tenant now has, or later may have, against Landlord. Guarantor waives any right
to participate in any security now or later held by Landlord. Guarantor waives
notice of acceptance of this Guaranty, and all other notices in connection with
this Guaranty or in connection with the liabilities, obligations and duties
guaranteed hereby, including notices to Guarantor of default by Tenant under the
Lease. Guarantor hereby waives diligence, presentment, demand for performance,
notice of nonperformance or nonpayment, protest, notice of protest, notice of
dishonor, and notice of acceptance of this Guaranty, and waives all notices of
the existence, creation, or incurring of new or additional obligations.
Guarantor hereby further waives and agrees not to assert or take advantage of:
(a) any right or defense that may arise by reason of the incapacity, lack of
authority, death or disability of Tenant or any other pseron; (b) any and all
defenses based upon an election of remedies by Landlord which limits or destroys
any subrogation rights Guarantor might otherwise have; or (c) any bankruptcy of
Tenant.
If there is more than one Guarantor, the liability of each guarantor
shall be joint and several. Guarantor's obligations under this Guaranty shall
be binding on Guarantor's legal representatives, heirs, successors and
assigns.
If Tenant disposes of its interest in the Lease, "Tenant", as used
in this Guaranty, shall mean Tenant's successors or assigns. Assignment of
the Lease by Landlord (as permitted by the Lease) shall not affect this
Guaranty. In the event of an assignment of the Lease by Landlord, the term
"Landlord" as used in this Guaranty shall mean Landlord's successors or
assigns.
All rights, powers and remedies of Landlord hereunder and under
any other agreement now or at any time hereafter in force between Landlord
and Guarantor relating to the Lease shall be cumulative and not alternative
and such rights, powers and remedies shall be in addition to all rights,
powers and remedies given to Landlord by law.
Any notice, request, demand, instruction or other communication to
be given to any party hereunder shall be in writing and shall be sent by
registered or certified mail, return receipt requested, to Guarantor at the
address provided under Guarantor's signature below, and if to Landlord at
the address
5
<PAGE> 6
provided above. Notices shall be deemed to have been given upon (i) hand
delivery, (ii) one (1) day after being deposited with Federal Express or
another reliable overnight courier service or transmitted by facsimile telecopy,
or (iii) forty-eight (48) hours after the deposit of the same in a United
States mail post office box in a state to which the notice is addressed, or
three (3) business days after deposit of same in any such post office box in a
state other than the state to which the notice is addressed, postage prepaid
and addressed as set forth above. A notice shall not be deemed given unless and
until it shall have been given to all address(es) to which notices must be
sent. Any party may change its street address(es) for notices by a notice given
in accordance with this Section.
If Landlord is required to enforce Guarantor's obligations under this
Guaranty by any legal action or proceedings, or if a dispute arises in
connection with the validity, enforceability, enforcement or construction of
this Guaranty or any other matter relating to this Guaranty, the losing party
shall pay all reasonable attorney's fees incurred by the prevailing party in
such dispute.
Guarantor hereby represents and warrants that: (a) Guarantor has
received and reviewed the Lease and is familiar with the terms thereof; (b) the
execution of this Guaranty will not render Guarantor insolvent in any way; and
(c) Landlord's entering into the Lease materially benefits Guarantor and
Guarantor is receiving fair consideration for this Guaranty.
Any amount required to be paid by Guarantor hereunder shall bear
interest from the date due until the date paid to Landlord at the lesser of:
(x) twelve percent (12%) per annum; or (y) the maximum rate permitted by law.
All interest shall be compounded monthly and shall be payable to Landlord on
demand.
Time is of the essence with respect to the performance of Guarantor's
obligations hereunder.
This Guaranty contains the entire agreement of Guarantor and Landlord
with respect to the subject matter hereof.
If any one or more of the provisions of this Guaranty shall be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Guaranty, and this Guaranty shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. This Guaranty shall be
construed according to the laws of the State of California ("State") without
regard to conflicts of laws principles. By execution hereof, the undersigned
specifically consents to this choice of law designation and agrees that all
actions or proceedings arising directly, indirectly or otherwise in connection
with, out of, related to, or from this Guaranty or the Lease shall be litigated
only in the courts located in the State, and the
6
<PAGE> 7
undersigned (i) consents and submits in advance to the exclusive and in
personam jurisdiction of any state or federal court located within the State,
(ii) waives any right to transfer or change the venue of litigation brought
against the undersigned, and (iii) agrees to service of process, to the extent
permitted by law, by mail.
Dated as of September 11, 1996.
GUARANTOR
AMERICAN RESTAURANT GROUP,
INC., a Delaware corporation
By /s/ William J. McCaffery, Jr.
--------------------------------
Its Vice President & CPO
--------------------------------
GUARANTOR'S ADDRESS FOR NOTICES:
4410 El Camino Real
Suite 201
Los Altos, California 94022
Attn: Legal Department
Fax No.: (415) 949-6442
7
<PAGE> 8
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this 12 day of
September, 1996, by William J. McCaffrey, Jr. the Vice President of American
Restaurant Group, Inc.
/s/
__________________________________
Notary Public
__________ County,_________________
My Commission Expires: ____________
(Notary Public's Seal)
Seal Seal
8
<PAGE> 1
EXHIBIT 2.9
Lease No. 06152
4470 West 78th Circle
Bloomington, Minnesota
GUARANTY OF LEASE
The undersigned (hereinafter referred to as "Guarantor"), as a
material inducement to and in consideration of CAPTEC NET LEASE REALTY, INC., a
Michigan corporation, whose address is 24 Frank Lloyd Wright Drive, Lobby L,
Ann Arbor, Michigan 48106 ("Landlord"), entering into that certain Lease dated
even herewith ("Lease") with ARG ENTERPRISES, INC., a California corporation,
whose address is 4410 El Camino Real, Suite 201, Los Altos, California 94022
("Tenant"), hereby unconditionally, irrevocably and personally guarantees to
and for the benefit of Landlord, and Landlord's successors and assigns, the
full and timely payment and performance of all of the Tenant's duties,
obligations and covenants under the Lease. This Guaranty is a guaranty of
payment and performance and not of collection.
All payments to be made by Guarantor under this Guaranty shall be made
without deduction or offset and shall be made immediately upon demand by
Landlord. This Guaranty is absolute and unconditional and shall not be
affected by Landlord's failure or delay to enforce any of its rights or any
waiver by Landlord other than any waiver of Tenant's or Guarantor's obligations
with respect to the Lease agreed to in writing by Landlord.
Guarantor's obligations are independent of Tenant's obligations under
the Lease and a separate action or actions may be brought and prosecuted
against Guarantor whether or not any action is brought against Tenant or Tenant
is joined in any such action or actions. If Tenant defaults under the Lease,
Landlord can proceed immediately against Guarantor or Tenant, or both, or
Landlord can enforce against Guarantor or Tenant, or both, any rights that it
has under the Lease, this Guaranty or pursuant to applicable laws. If the
Lease terminates and Landlord has any rights it can enforce against Tenant
after termination, Landlord can enforce those rights against Guarantor without
giving previous notice to Tenant or Guarantor or without making any demand on
either of them. Guarantor hereby consents to any remedy pursued by Landlord to
enforce its rights under the Lease, in whatever order such party may choose,
including any remedies which may affect or destroy Guarantor's right of
subrogation or the right of Guarantor to proceed against Tenant for
reimbursement.
Guarantor waives the right to require Landlord to first or
concurrently: (1) proceed against Tenant or any other person or pursue any
rights or remedies with respect to the Lease before proceeding against
Guarantor; (2) proceed against or exhaust any security that Landlord holds from
Tenant; or (3) pursue any other remedy in Landlord's power. The liability of
Guarantor shall not be released, discharged, affected or exonerated by any
extension of time, indulgence, compromise, settlement or modification or
variation of terms which may be extended by Landlord to Tenant, or agreed upon
by Landlord or Tenant, except to the extent thereof, other than any waiver of
Tenant's or Guarantor's obligations with respect to the Lease agreed to in
writing by Landlord and regardless of the release or discharge of Tenant by
Landlord or others or the operation of law, and, unless agreed to in writing by
Landlord, shall not be released, discharged, affected or exonerated by any
assignment or sublease by Tenant of its interest in the Lease, nor shall the
liability of the Guarantor be released, discharged, affected or exonerated by
the insolvency, bankruptcy (voluntary or involuntary), or reorganization of
Tenant, nor by the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Tenant or by any
assignment of the Lease by Tenant or by any trustee, receiver, or liquidator of
Tenant or any consent which Landlord may give to any such assignment, or by the
release, substitution or addition of any other guarantor. Landlord and Tenant,
without notice to or consent by Guarantor, may at any time or times enter into
such modifications, extensions, amendments or other covenants respecting the
Lease as they may deem appropriate, and Guarantor shall not be released of its
liability or discharged or exonerated thereby but shall continue to be fully
liable for the payment and performance of all obligations and duties of Tenant
under the Lease as so modified, extended or amended.
<PAGE> 2
Guarantor further agrees (1) to indemnify and hold harmless Landlord
from and against any claims, damages, expenses or losses, including to the
extent permitted by law, all reasonable attorneys' fees incurred by counsel of
Landlord's choice (whether or not litigation is commenced), resulting from or
arising out of any breach of any provision of the Lease by Tenant or by reason
of breach of any provision of the Lease by Tenant or by reason of Tenant's
failure to perform any of its obligations thereunder, and (2) to the extent
permitted by law, to pay all costs and expenses, including reasonable
attorneys' fees (whether or not litigation is commenced), incurred by Landlord
in enforcing this Guaranty.
Landlord's rights under this Guaranty will not be exhausted by any
action by Landlord until all of the obligations of Tenant to pay rent and other
sums under the Lease have been fully paid and performed and the period of time
has expired during which any payment made by Tenant or Guarantor to Landlord
may be determined to be a preferential payment (hereinafter defined).
Guarantor further agrees that to the extent Tenant or Guarantor makes any
payment to Landlord in connection with the obligations of Tenant under the
Lease and all or any part of such payment is subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid by
Landlord or paid over to a trustee, receiver or other entity, whether under any
bankruptcy act or otherwise (any such payment is hereinafter referred to as a
"Preferential Payment"), then this Guaranty shall continue to be effective or
shall be reinstated, as the case may be, and, to the extent of such payment or
repayment by Landlord (but only to the extent of the then remaining liability
of Guarantor under this Guaranty), the obligations or part thereof, intended to
be satisfied by such Preferential Payment shall be revived and continued in
full force and effect as if said Preferential Payment had not been made.
Notwithstanding any other provision of this Guaranty to the contrary,
Guarantor hereby agrees that until such time as the obligations and liabilities
of Tenant to Landlord under or arising out of the Lease, whether now existing
or hereafter arising, voluntary or involuntary, whether or not jointly owed
with others, direct or indirect, absolute or contingent, liquidated or
unliquidated, and whether or not from time to time decreased or extinguished
and later increased, created or incurred (collectively, the "Obligations") have
been paid and performed in full and the period of time has expired during which
any payment made by Tenant or Guarantor to Landlord on account of the
Obligations may be determined to be a Preferential Payment, any claim or other
rights which Guarantor may now have or hereafter acquire against Tenant or any
other guarantor of all or any of the Obligations that arise from the existence
or performance of Guarantor's obligations under this Guaranty or otherwise (all
such claims and rights are referred to as "Guarantor's Conditional Rights"),
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, or indemnification, any right to participate in any
claim or remedy of Landlord against Tenant or any collateral which Landlord now
has or hereafter acquires, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, by any payment made hereunder
or otherwise, including without limitation, the right to take or receive from
Tenant, directly or indirectly, in cash or other property or by setoff or in
any other manner, payment or security on account of such claim or other rights,
shall be subordinate to Landlord's right to full payment and performance of the
Obligations, and Guarantor shall not enforce any of Guarantor's Conditional
Rights during such period. If, notwithstanding the foregoing provisions, any
amount shall be paid to Guarantor on account of any such Guarantor's
Conditional Rights and either (a) such amount is paid to Guarantor at any time
when any of the Obligations shall not have been paid or performed in full, or
(b) regardless of when such amount is paid to Guarantor, any payment made by
Tenant to Landlord is at any time determined to be a Preferential Payment, then
such amount paid to Guarantor shall be held in trust for the benefit of
Landlord and shall forthwith be paid to Landlord to be credited and applied
upon the Obligations under the Lease, whether matured or unmatured, in such
order as Landlord, in its sole and absolute discretion, shall determine.
Guarantor assumes the responsibility to remain informed of the
financial condition of Tenant and of all other circumstances bearing upon the
risk of Tenant's default, which reasonable inquiry would reveal, and agrees
that Landlord shall have no duty to advise Guarantor of information known to it
regarding such condition or any such circumstances. Landlord shall not be
required to inquire into the powers of Tenant or the officers, employees,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed under this Guaranty. Guarantor hereby represents
and warrants to Landlord that such Guarantor has received a copy of the Lease,
has read or had the opportunity to read
2
<PAGE> 3
the Lease, and understands the terms of the Lease. The provisions in the Lease
relating to the execution of additional documents, legal proceedings by
Landlord against Tenant, severability of the provisions of the Lease,
interpretation of the Lease, notices, waivers, limitation on right of recovery
against Landlord, disclaimer of individual liability, and the applicable laws
which govern the interpretation of the Lease are incorporated herein in their
entirety by this reference and made a part hereof as though set forth in full
herein; any reference in those provisions to "Tenant" shall mean each Guarantor
and any reference in those provisions to the "Lease" shall mean this Guaranty.
The liability of Guarantor shall not be effected by any repossession
of the leased premises by Landlord (except to the extent the liability of
Tenant is thereby affected), provided, however, that the net payments received
by Landlord after deducting all costs and expenses of repossessing and/or
reletting the same, shall be credited from time to time by Landlord to the
account of Guarantor and Guarantor shall pay any balance owing to Landlord from
time to time, immediately upon demand by Landlord.
No action or proceeding brought or instituted under this Guaranty and
no recovery in pursuance thereof shall be a bar or defense to any further
action or proceeding which may be brought under this Guaranty by reason of any
further default or defaults hereunder and/or under the Lease.
To the extent permitted by applicable law, Guarantor waives its right
to enforce any remedies (except remedies that Tenant has as tenant only) that
Tenant now has, or later may have, against Landlord. Guarantor waives any
right to participate in any security now or later held by Landlord. Guarantor
waives notice of acceptance of this Guaranty, and all other notices in
connection with this Guaranty or in connection with the liabilities,
obligations and duties guaranteed hereby, including notices to Guarantor of
default by the Tenant under the Lease. Guarantor hereby waives diligence,
presentment, demand for performance, notice of nonperformance, protest, notice
of protest, notice of dishonor, and notice of acceptance of this Guaranty, and
waives all notices of the existence, creation, or incurring of new or
additional obligations. Guarantor hereby waives and agrees not to assert or
take advantage of: (a) any right or defense that may arise by reason of the
incapacity, lack of authority, death or disability of Tenant or any other
person; (b) any and all defenses based upon an election of remedies by Landlord
which limits or destroys any subrogation rights Guarantor might otherwise have;
or (c) any bankruptcy of Tenant.
If there is more than one Guarantor, the liability of each Guarantor
shall be joint and several. Guarantor's obligations under this Guaranty shall
be binding on Guarantor's legal representatives, heirs, successors and assigns.
If Tenant disposes of its interest in the Lease, "Tenant", as used in
this Guaranty, shall mean Tenant's successors or assigns. Assignment of the
Lease by Landlord (as permitted by the Lease) shall not affect this Guaranty.
In the event of an assignment of the Lease by Landlord, the term "Landlord" as
used in this Guaranty shall mean Landlord's successors or assigns.
Guarantor hereby covenants and agrees to deliver to Landlord: (i)
annual financial statements for Guarantor which have been audited by an
independent certified public accountant within ninety (90) days after the end
of Guarantor's fiscal year; and (ii) management prepared and certified
quarterly financial statements for Guarantor within forty-five (45) days after
the end of the first three (3) quarters of Guarantor's fiscal year. At the
request of Landlord, Guarantor shall obtain the written consent of Guarantor's
accountants) to the inclusion of Guarantor's most recent annual audit report in
any regulatory filing or report to be filed by Landlord. Such financial
statements shall be true and correct in all respects, be prepared in accordance
with generally accepted accounting principles, and fairly present the
respective financial conditions of the subjects thereof as of the respective
dates thereof Landlord will maintain confidential and not disclose to third
parties the financial information furnished or revealed pursuant to this
Guaranty except as may be required, in Landlord's reasonable judgment, for the
exercise of Landlord's rights under this Guaranty as may be required by
applicable law or compelled by legal proceedings, for disclosure in confidence
to prospective lenders, investors or purchasers, or to third parties in
connection with the closing of the lease transaction with Tenant. Guarantor
further agrees to comply with all provisions of the Lease applicable to
Guarantor. Without limiting the foregoing, Guarantor acknowledges that
Landlord is relying on, and
3
<PAGE> 4
is an intended third party beneficiary of, as applicable, the representations
and warranties of Guarantor contained in the Lease and all other documents
executed in connection therewith.
All rights, powers and remedies of Landlord hereunder and under any
other agreement now or at any time hereafter in force between Landlord and
Guarantor relating to the Lease shall be cumulative and not alternative and
such rights, powers and remedies shall be in addition to all rights, powers and
remedies given to Landlord by law.
Any notice, request, demand, instruction or other communication to be
given to any party hereunder shall be in writing and shall be sent by
registered or certified mail, return receipt requested, to Guarantor at the
address provided under Guarantor's signature below, and if to Landlord at the
address provided above. Notices shall be deemed to have been give upon (i)
hand delivery, (ii) one (1) day after being deposited with Federal Express or
another reliable overnight courier service, (iii) receipt of written
confirmation of transmission if transmitted by facsimile telecopy, or (iv)
forty-eight (48) hours after the deposit of the same in a United States Mail
post office box in a state to which the notice is addressed, or three (3)
business days after deposit of the same in any such post office box in a state
other than the state to which the notice is addressed, postage prepaid and
addresses set forth above. A notice shall not be deemed given unless and until
it shall have been given to all address(es) to which notices must be sent. Any
party may change its street address(es) for notices by a notice given in
accordance with this Section.
If Landlord is required to enforce Guarantor's obligations under this
Guaranty by any legal action or proceedings, or if a dispute arises in
connection with the validity, enforceability, enforcement or construction of
this Guaranty or any other matter relating to this Guaranty, the losing party
shall pay all reasonable attorneys' fees incurred by the prevailing party in
such dispute.
Guarantor hereby represents and warrants that: (a) Guarantor has
received and reviewed the Lease and is familiar with the terms thereof; (b) the
execution of this Guaranty will not render the Guarantor insolvent in any way;
and (c) Landlord's entering into the Lease materially benefits Guarantor and
Guarantor is receiving fair for this Guaranty.
Any amount required to be paid by Guarantor hereunder shall bear
interest from the date due until the date paid to Landlord at the lesser of:
(x) twelve percent (12 %) per annum; or (y) the maximum rate permitted by law.
All interest shall be compounded monthly and shall be payable to Landlord on
demand.
Time is of the essence with respect to the performance of Guarantor's
obligations hereunder.
This Guaranty contains the entire agreement of Guarantor and Landlord
with respect to the subject matter hereof.
If any one or more of the provisions of this Guaranty shall be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Guaranty, and this Guaranty shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. This Guaranty shall
be construed according to the laws of the State of Minnesota without regard to
conflicts of laws principles. By execution hereof, Guarantor specifically
consents to this choice of law designation and agrees that all actions or
proceedings &rising directly, indirectly or otherwise in connection with, out
of, related to, or from this Guaranty or the Lease shall be litigated only in
the courts located in the State or in Michigan, and Guarantor (i) consents and
submits in advance to the exclusive and in personam jurisdiction of any state or
federal court located within the State or in Michigan, (ii) waives any right to
transfer or change the venue of litigation brought against Guarantor, and (iii)
agrees to service of process, to the extent permitted by law, by mail.
4
<PAGE> 5
Dated as of September ____, 1996.
WITNESSES: AMERICAN RESTAURANT GROUP, INC.
By [SIG]
- -------------------------------- -------------------------------------
Its Secretary
- -------------------------------- -------------------------------
GUARANTOR'S ADDRESS FOR NOTICES:
4410 El Camino Real
Suite 201
Los Altos, California 94022
Attention: Legal Department
Fax Number: (415) 949-6422
STATE OF NEW YORK )
: ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this ______ day of
September, 1996, by _______________________, the ___________________________ of
American Restaurant Group, Inc., a Delaware corporation, on behalf of the
corporation.
---------------------------------------
Notary Public
______________ County, New York
My Commission Expires: ________________
[Notary Public's Seal]
5
<PAGE> 6
Lease No. 06153
5696 University Avenue NE
Fridley, Minnesota
GUARANTY OF LEASE
The undersigned (hereinafter referred to as "Guarantor"), as a
material inducement to and in consideration of CAPTEC NET LEASE REALTY, INC., a
Michigan corporation, whose address is 24 Frank Lloyd Wright Drive, Lobby L,
Ann Arbor, Michigan 48106 ("Landlord"), entering into that certain Lease dated
even herewith ("Lease") with ARG ENTERPRISES, INC., a California corporation,
whose address is 4410 El Camino Real, Suite 201, Los Altos, California 94022
("Tenant"), hereby unconditionally, irrevocably and personally guarantees to
and for the benefit of Landlord, and Landlord's successors and assigns, the
full and timely payment and performance of all of the Tenant's duties,
obligations and covenants under the Lease. This Guaranty is a guaranty of
payment and performance and not of collection.
All payments to be made by Guarantor under this Guaranty shall be made
without deduction or offset and shall be made immediately upon demand by
Landlord. This Guaranty is absolute and unconditional and shall not be
affected by Landlord's failure or delay to enforce any of its rights or any
waiver by Landlord other than any waiver of Tenant's or Guarantor's obligations
with respect to the Lease agreed to in writing by Landlord.
Guarantor's obligations are independent of Tenant's obligations under
the Lease and a separate action or actions may be brought and prosecuted
against Guarantor whether or not any action is brought against Tenant or Tenant
is joined in any such action or actions. If Tenant defaults under the Lease,
Landlord can proceed immediately against Guarantor or Tenant, or both, or
Landlord can enforce against Guarantor or Tenant, or both, any rights that it
has under the Lease, this Guaranty or pursuant to applicable laws. If the
Lease terminates and Landlord has any rights it can enforce against Tenant
after termination, Landlord can enforce those rights against Guarantor without
giving previous notice to Tenant or Guarantor or without making any demand on
either of them. Guarantor hereby consents to any remedy pursued by Landlord to
enforce its rights under the Lease, in whatever order such party may choose,
including any remedies which may affect or destroy Guarantor's right of
subrogation or the right of Guarantor to proceed against Tenant for
reimbursement.
Guarantor waives the right to require Landlord to first or
concurrently: (1) proceed against Tenant or any other person or pursue any
rights or remedies with respect to the Lease before proceeding against
Guarantor; (2) proceed against or exhaust any security that Landlord holds from
Tenant; or (3) pursue any other remedy in Landlord's power. The liability of
Guarantor shall not be released, discharged, affected or exonerated by any
extension of time, indulgence, compromise, settlement or modification or
variation of terms which may be extended by Landlord to Tenant, or agreed upon
by Landlord or Tenant, except to the extent thereof, other than any waiver of
Tenant's or Guarantor's obligations with respect to the Lease agreed to in
writing by Landlord and regardless of the release or discharge of Tenant by
Landlord or others or the operation of law, and, unless agreed to in writing by
Landlord, shall not be released, discharged, affected or exonerated by any
assignment or sublease by Tenant of its interest in the Lease, nor shall the
liability of the Guarantor be released, discharged, affected or exonerated by
the insolvency, bankruptcy (voluntary or involuntary), or reorganization of
Tenant, nor by the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Tenant or by any
assignment of the Lease by Tenant or by any trustee, receiver, or liquidator of
Tenant or any consent which Landlord may give to any such assignment, or by the
release, substitution or addition of any other guarantor. Landlord and Tenant,
without notice to or consent by Guarantor, may at any time or times enter into
such modifications, extensions, amendments or other covenants respecting the
Lease as they may deem appropriate, and Guarantor shall not be released of its
liability or discharged or exonerated thereby but shall continue to be fully
liable for the payment and performance of all obligations and duties of Tenant
under the Lease as so modified, extended or amended.
<PAGE> 7
Guarantor further agrees (1) to indemnify and hold harmless Landlord
from and against any claims, damages, expenses or losses, including to the
extent permitted by law, all reasonable attorneys' fees incurred by counsel of
Landlord's choice (whether or not litigation is commenced), resulting from or
arising out of any breach of any provision of the Lease by Tenant or by reason
of breach of any provision of the Lease by Tenant or by reason of Tenant's
failure to perform any of its obligations thereunder, and (2) to the extent
permitted by law, to pay all costs and expenses, including reasonable
attorneys' fees (whether or not litigation is commenced), incurred by Landlord
in enforcing this Guaranty.
Landlord's rights under this Guaranty will not be exhausted by any
action by Landlord until all of the obligations of Tenant to pay rent and other
sums under the Lease have been fully paid and performed and the period of time
has expired during which any payment made by Tenant or Guarantor to Landlord
may be determined to be a preferential payment (hereinafter defined).
Guarantor further agrees that to the extent Tenant or Guarantor makes any
payment to Landlord in connection with the obligations of Tenant under the
Lease and all or any part of such payment is subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid by
Landlord or paid over to a trustee, receiver or other entity, whether under any
bankruptcy act or otherwise (any such payment is hereinafter referred to as a
"Preferential Payment"), then this Guaranty shall continue to be effective or
shall be reinstated, as the case may be, and, to the extent of such payment or
repayment by Landlord (but only to the extent of the then remaining liability
of Guarantor under this Guaranty), the obligations or part thereof, intended to
be satisfied by such Preferential Payment shall be revived and continued in
full force and effect as if said Preferential Payment had not been made.
Notwithstanding any other provision of this Guaranty to the contrary,
Guarantor hereby agrees that until such time as the obligations and liabilities
of Tenant to Landlord under or arising out of the Lease, whether now existing
or hereafter arising, voluntary or involuntary, whether or not jointly owed
with others, direct or indirect, absolute or contingent, liquidated or
unliquidated, and whether or not from time to time decreased or extinguished
and later increased, created or incurred (collectively, the "Obligations") have
been paid and performed in full and the period of time has expired during which
any payment made by Tenant or Guarantor to Landlord on account of the
Obligations may be determined to be a Preferential Payment, any claim or other
rights which Guarantor may now have or hereafter acquire against Tenant or any
other guarantor of all or any of the Obligations that arise from the existence
or performance of Guarantor's obligations under this Guaranty or otherwise (all
such claims and rights are referred to as "Guarantor's Conditional Rights"),
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, or indemnification, any right to participate in any
claim or remedy of Landlord against Tenant or any collateral which Landlord now
has or hereafter acquires, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, by any payment made hereunder
or otherwise, including without limitation, the right to take or receive from
Tenant, directly or indirectly, in cash or other property or by setoff or in
any other manner, payment or security on account of such claim or other rights,
shall be subordinate to Landlord's right to full payment and performance of the
Obligations, and Guarantor shall not enforce any of Guarantor's Conditional
Rights during such period. If, notwithstanding the foregoing provisions, any
amount shall be paid to Guarantor on account of any such Guarantor's
Conditional Rights and either (a) such amount is paid to Guarantor at any time
when any of the Obligations shall not have been paid or performed in full, or
(b) regardless of when such amount is paid to Guarantor, any payment made by
Tenant to Landlord is at any time determined to be a Preferential Payment, then
such amount paid to Guarantor shall be held in trust for the benefit of
Landlord and shall forthwith be paid to Landlord to be credited and applied
upon the Obligations under the Lease, whether matured or unmatured, in such
order as Landlord, in its sole and absolute discretion, shall determine.
Guarantor assumes the responsibility to remain informed of the
financial condition of Tenant and of all other circumstances bearing upon the
risk of Tenant's default, which reasonable inquiry would reveal, and agrees
that Landlord shall have no duty to advise Guarantor of information known to it
regarding such condition or any such circumstances. Landlord shall not be
required to inquire into the powers of Tenant or the officers, employees,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed under this Guaranty. Guarantor hereby represents
and warrants to Landlord that such Guarantor has received a copy of the Lease,
has read or had the opportunity to read
2
<PAGE> 8
the Lease, and understands the terms of the Lease. The provisions in the Lease
relating to the execution of additional documents, legal proceedings by
Landlord against Tenant, severability of the provisions of the Lease,
interpretation of the Lease, notices, waivers, limitation on right of recovery
against Landlord, disclaimer of individual liability, and the applicable laws
which govern the interpretation of the Lease are incorporated herein in their
entirety by this reference and made a part hereof as though set forth in full
herein; any reference in those provisions to "Tenant" shall mean each Guarantor
and any reference in those provisions to the "Lease" shall mean this Guaranty.
The liability of Guarantor shall not be effected by any repossession
of the leased premises by Landlord (except to the extent the liability of
Tenant is thereby affected), provided, however, that the net payments received
by Landlord after deducting all costs and expenses of repossessing and/or
reletting the same, shall be credited from time to time by Landlord to the
account of Guarantor and Guarantor shall pay any balance owing to Landlord from
time to time, immediately upon demand by Landlord.
No action or proceeding brought or instituted under this Guaranty and
no recovery in pursuance thereof shall be a bar or defense to any further
action or proceeding which may be brought under this Guaranty by reason of any
further default or defaults hereunder and/or under the Lease.
To the extent permitted by applicable law, Guarantor waives its right
to enforce any remedies (except remedies Tenant has as tenant only) that
Tenant now has, or later may have, against Landlord. Guarantor waives any
right to participate in any security now or later held by Landlord. Guarantor
waives notice of acceptance of this Guaranty, and all other notices in
connection with this Guaranty or in connection with the liabilities,
obligations and duties guaranteed hereby, including notices to Guarantor of
default by the Tenant under the Lease. Guarantor hereby waives diligence,
presentment, demand for performance, notice of nonperformance, protest, notice
of protest, notice of dishonor, and notice of acceptance of this Guaranty, and
waives all notices of the existence, creation, or incurring of new or
additional obligations. Guarantor hereby waives and agrees not to assert or
take advantage of: (a) any right or defense that may arise by reason of the
incapacity, lack of authority, death or disability of Tenant or any other
person; (b) any and all defenses based upon an election of remedies by Landlord
which limits or destroys any subrogation rights Guarantor might otherwise have;
or (c) any bankruptcy of Tenant.
If there is more than one Guarantor, the liability of each Guarantor
shall be joint and several. Guarantor's obligations under this Guaranty shall
be binding on Guarantor's legal representatives, heirs, successors and assigns.
If Tenant disposes of its interest in the Lease, "Tenant", as used in
this Guaranty, shall mean Tenant's successors or assigns. Assignment of the
Lease by Landlord (as permitted by the Lease) shall not affect this Guaranty.
In the event of an assignment of the Lease by Landlord, the term "Landlord" as
used in this Guaranty shall mean Landlord's successors or assigns.
Guarantor hereby covenants and agrees to deliver to Landlord: (i)
annual financial statements for Guarantor which have been audited by an
independent certified public accountant within ninety (90) days after the end
of Guarantor's fiscal year; and (ii) management prepared and certified
quarterly financial statements for Guarantor within forty-five (45) days after
the end of the first three (3) quarters of Guarantor's fiscal year. At the
request of Landlord, Guarantor shall obtain the written consent of Guarantor's
accountant(s) to the inclusion of Guarantor's most recent annual audit report in
any regulatory filing or report to be filed by Landlord. Such financial
statements shall be true and correct in all respects, be prepared in accordance
with generally accepted accounting principles, and fairly present the
respective financial conditions of the subjects thereof as of the respective
dates thereof Landlord will maintain confidential and not disclose to third
parties the financial information furnished or revealed pursuant to this
Guaranty except as may be required, in Landlord's reasonable judgment, for the
exercise of Landlord's rights under this Guaranty as may be required by
applicable law or compelled by legal proceedings, for disclosure in confidence
to prospective lenders, investors or purchasers, or to third parties in
connection with the closing of the lease transaction with Tenant. Guarantor
further agrees to comply with all provisions of the Lease applicable to
Guarantor. Without limiting the foregoing, Guarantor acknowledges that
Landlord is relying on, and is an intended third party beneficiary of, as
applicable, the representations and warranties of Guarantor contained
3
<PAGE> 9
in the Lease and all other documents executed in connection therewith.
All rights, powers and remedies of Landlord hereunder and under any
other agreement now or at any time hereafter in force between Landlord and
Guarantor relating to the Lease shall be cumulative and not alternative and
such rights, powers and remedies shall be in addition to all rights, powers and
remedies given to Landlord by law.
Any notice, request, demand, instruction or other communication to be
given to any party hereunder shall be in writing and shall be sent by
registered or certified mail, return receipt requested, to Guarantor at the
address provided under Guarantor's signature below, and if to Landlord at the
address provided above. Notices shall be deemed to have been give upon (i)
hand delivery, (ii) one (1) day after being deposited with Federal Express or
another reliable overnight courier service, (iii) receipt of written
confirmation of transmission if transmitted by facsimile telecopy, or (iv)
forty-eight (48) hours after the deposit of the same in a United States Mail
post office box in a state to which the notice is addressed, or three (3)
business days after deposit of the same in any such post office box in a state
other than the state to which the notice is addressed, postage prepaid and
addresses set forth above. A notice shall not be deemed given unless and until
it shall have been given to all address(es) to which notices must be sent. Any
party may change its street address(es) for notices by a notice given in
accordance with this Section.
If Landlord is required to enforce Guarantor's obligations under this
Guaranty by any legal action or proceedings, or if a dispute arises in
connection with the validity, enforceability, enforcement or construction of
this Guaranty or any other matter relating to this Guaranty, the losing party
shall pay all reasonable attorneys' fees incurred by the prevailing party in
such dispute.
Guarantor hereby represents and warrants that: (a) Guarantor has
received and reviewed the Lease and is familiar with the terms thereof; (b) the
execution of this Guaranty will not render the Guarantor insolvent in any way;
and (c) Landlord's entering into the Lease materially benefits Guarantor and
Guarantor is receiving fair for this Guaranty.
Any amount required to be paid by Guarantor hereunder shall bear
interest from the date due until the date paid to Landlord at the lesser of:
(x) twelve percent (12%) per annum; or (y) the maximum rate permitted by law.
All interest shall be compounded monthly and shall be payable to Landlord on
demand.
Time is of the essence with respect to the performance of Guarantor's
obligations hereunder.
This Guaranty contains the entire agreement of Guarantor and Landlord
with respect to the subject matter hereof.
If any one or more of the provisions of this Guaranty shall be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Guaranty, and this Guaranty shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. This Guaranty shall
be construed according to the laws of the State of Minnesota without regard to
conflicts of laws principles. By execution hereof, Guarantor specifically
consents to this choice of law designation and agrees that all actions or
proceedings arising directly, indirectly or otherwise in connection with, out
of, related to, or from this Guaranty or the Lease shall be litigated only in
the courts located in the State or in Michigan, and Guarantor (i) consents and
submits in advance to the exclusive and in personam jurisdiction of any state or
federal court located within the State or in Michigan, (ii) waives any right to
transfer or change the venue of litigation brought against Guarantor, and (iii)
agrees to service of process, to the extent permitted by law, by mail.
4
<PAGE> 10
Dated as of September ____, 1996.
WITNESSES: AMERICAN RESTAURANT GROUP, INC.
By
- -------------------------------- -------------------------------------
Its Secretary
- -------------------------------- -------------------------------
GUARANTOR'S ADDRESS FOR NOTICES:
4410 El Camino Real
Suite 201
Los Altos, California 94022
Attention: Legal Department
Fax Number: (415) 949-6422
STATE OF NEW YORK )
) ss.:
COUNTY OF _______________ )
The foregoing instrument was acknowledged before me this ______ day of
September, 1996, by _______________________, the ___________________________ of
American Restaurant Group, Inc., a Delaware corporation, on behalf of the
corporation.
---------------------------------------
Notary Public
______________ County, New York
My Commission Expires: ________________
[Notary Public's Seal]
5
<PAGE> 11
Lease No. 06154
10600 Wayzata
Minnetonka, Minnesota
GUARANTY OF LEASE
The undersigned (hereinafter referred to as "Guarantor"), as a
material inducement to and in consideration of CAPTEC NET LEASE REALTY, INC., a
Michigan corporation, whose address is 24 Frank Lloyd Wright Drive, Lobby L,
Ann Arbor, Michigan 48106 ("Landlord"), entering into that certain Lease dated
even herewith ("Lease") with ARG ENTERPRISES, INC., a California corporation,
whose address is 4410 El Camino Real, Suite 201, Los Altos, California 94022
("Tenant"), hereby unconditionally, irrevocably and personally guarantees to
and for the benefit of Landlord, and Landlord's successors and assigns, the
full and timely payment and performance of all of the Tenant's duties,
obligations and covenants under the Lease. This Guaranty is a guaranty of
payment and performance and not of collection.
All payments to be made by Guarantor under this Guaranty shall be made
without deduction or offset and shall be made immediately upon demand by
Landlord. This Guaranty is absolute and unconditional and shall not be
affected by Landlord's failure or delay to enforce any of its rights or any
waiver by Landlord other than any waiver of Tenant's or Guarantor's obligations
with respect to the Lease agreed to in writing by Landlord.
Guarantor's obligations are independent of Tenant's obligations under
the Lease and a separate action or actions may be brought and prosecuted
against Guarantor whether or not any action is brought against Tenant or Tenant
is joined in any such action or actions. If Tenant defaults under the Lease,
Landlord can proceed immediately against Guarantor or Tenant, or both, or
Landlord can enforce against Guarantor or Tenant, or both, any rights that it
has under the Lease, this Guaranty or pursuant to applicable laws. If the
Lease terminates and Landlord has any rights it can enforce against Tenant
after termination, Landlord can enforce those rights against Guarantor without
giving previous notice to Tenant or Guarantor or without making any demand on
either of them. Guarantor hereby consents to any remedy pursued by Landlord to
enforce its rights under the Lease, in whatever order such party may choose,
including any remedies which may affect or destroy Guarantor's right of
subrogation or the right of Guarantor to proceed against Tenant for
reimbursement.
Guarantor waives the right to require Landlord to first or
concurrently: (1) proceed against Tenant or any other person or pursue any
rights or remedies with respect to the Lease before proceeding against
Guarantor; (2) proceed against or exhaust any security that Landlord holds from
Tenant; or (3) pursue any other remedy in Landlord's power. The liability of
Guarantor shall not be released, discharged, affected or exonerated by any
extension of time, indulgence, compromise, settlement or modification or
variation of terms which may be extended by Landlord to Tenant, or agreed upon
by Landlord or Tenant, except to the extent thereof, other than any waiver of
Tenant's or Guarantor's obligations with respect to the Lease agreed to in
writing by Landlord and regardless of the release or discharge of Tenant by
Landlord or others or the operation of law, and, unless agreed to in writing by
Landlord, shall not be released, discharged, affected or exonerated by any
assignment or sublease by Tenant of its interest in the Lease, nor shall the
liability of the Guarantor be released, discharged, affected or exonerated by
the insolvency, bankruptcy (voluntary or involuntary), or reorganization of
Tenant, nor by the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Tenant or by any
assignment of the Lease by Tenant or by any trustee, receiver, or liquidator of
Tenant or any consent which Landlord may give to any such assignment, or by the
release, substitution or addition of any other guarantor. Landlord and Tenant,
without notice to or consent by Guarantor, may at any time or times enter into
such modifications, extensions, amendments or other covenants respecting the
Lease as they may deem appropriate, and Guarantor shall not be released of its
liability or discharged or exonerated thereby but shall continue to be fully
liable for the payment and performance of all obligations and duties of Tenant
under the Lease as so modified, extended or amended.
<PAGE> 12
Guarantor further agrees (1) to indemnify and hold harmless Landlord
from and against any claims, damages, expenses or losses, including to the
extent permitted by law, all reasonable attorneys' fees incurred by counsel of
Landlord's choice (whether or not litigation is commenced), resulting from or
arising out of any breach of any provision of the Lease by Tenant or by reason
of breach of any provision of the Lease by Tenant or by reason of Tenant's
failure to perform any of its obligations thereunder, and (2) to the extent
permitted by law, to pay all costs and expenses, including reasonable
attorneys' fees (whether or not litigation is commenced), incurred by Landlord
in enforcing this Guaranty.
Landlord's rights under this Guaranty will not be exhausted by any
action by Landlord until all of the obligations of Tenant to pay rent and other
sums under the Lease have been fully paid and performed and the period of time
has expired during which any payment made by Tenant or Guarantor to Landlord
may be determined to be a preferential payment (hereinafter defined).
Guarantor further agrees that to the extent Tenant or Guarantor makes any
payment to Landlord in connection with the obligations of Tenant under the
Lease and all or any part of such payment is subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid by
Landlord or paid over to a trustee, receiver or other entity, whether under any
bankruptcy act or otherwise (any such payment is hereinafter referred to as a
"Preferential Payment"), then this Guaranty shall continue to be effective or
shall be reinstated, as the case may be, and, to the extent of such payment or
repayment by Landlord (but only to the extent of the then remaining liability
of Guarantor under this Guaranty), the obligations or part thereof, intended to
be satisfied by such Preferential Payment shall be revived and continued in
full force and effect as if said Preferential Payment had not been made.
Notwithstanding any other provision of this Guaranty to the contrary,
Guarantor hereby agrees that until such time as the obligations and liabilities
of Tenant to Landlord under or arising out of the Lease, whether now existing
or hereafter arising, voluntary or involuntary, whether or not jointly owed
with others, direct or indirect, absolute or contingent, liquidated or
unliquidated, and whether or not from time to time decreased or extinguished
and later increased, created or incurred (collectively, the "Obligations") have
been paid and performed in full and the period of time has expired during which
any payment made by Tenant or Guarantor to Landlord on account of the
Obligations may be determined to be a Preferential Payment, any claim or other
rights which Guarantor may now have or hereafter acquire against Tenant or any
other guarantor of all or any of the Obligations that arise from the existence
or performance of Guarantor's obligations under this Guaranty or otherwise (all
such claims and rights are referred to as "Guarantor's Conditional Rights"),
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, or indemnification, any right to participate in any
claim or remedy of Landlord against Tenant or any collateral which Landlord now
has or hereafter acquires, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, by any payment made hereunder
or otherwise, including without limitation, the right to take or receive from
Tenant, directly or indirectly, in cash or other property or by setoff or in
any other manner, payment or security on account of such claim or other rights,
shall be subordinate to Landlord's right to full payment and performance of the
Obligations, and Guarantor shall not enforce any of Guarantor's Conditional
Rights during such period. If, notwithstanding the foregoing provisions, any
amount shall be paid to Guarantor on account of any such Guarantor's
Conditional Rights and either (a) such amount is paid to Guarantor at any time
when any of the Obligations shall not have been paid or performed in full, or
(b) regardless of when such amount is paid to Guarantor, any payment made by
Tenant to Landlord is at any time determined to be a Preferential Payment, then
such amount paid to Guarantor shall be held in trust for the benefit of
Landlord and shall forthwith be paid to Landlord to be credited and applied
upon the Obligations under the Lease, whether matured or unmatured, in such
order as Landlord, in its sole and absolute discretion, shall determine.
Guarantor assumes the responsibility to remain informed of the
financial condition of Tenant and of all other circumstances bearing upon the
risk of Tenant's default, which reasonable inquiry would reveal, and agrees
that Landlord shall have no duty to advise Guarantor of information known to it
regarding such condition or any such circumstances. Landlord shall not be
required to inquire into the powers of Tenant or the officers, employees,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed under this Guaranty. Guarantor hereby represents
and warrants to Landlord that such Guarantor has received a copy of the Lease,
has read or had the opportunity to read
2
<PAGE> 13
the Lease, and understands the terms of the Lease. The provisions in the Lease
relating to the execution of additional documents, legal proceedings by
Landlord against Tenant, severability of the provisions of the Lease,
interpretation of the Lease, notices, waivers, limitation on right of recovery
against Landlord, disclaimer of individual liability, and the applicable laws
which govern the interpretation of the Lease are incorporated herein in their
entirety by this reference and made a part hereof as though set forth in full
herein; any reference in those provisions to "Tenant" shall mean each Guarantor
and any reference in those provisions to the "Lease" shall mean this Guaranty.
The liability of Guarantor shall not be effected by any repossession
of the leased premises by Landlord (except to the extent the liability of
Tenant is thereby affected), provided, however, that the net payments received
by Landlord after deducting all costs and expenses of repossessing and/or
reletting the same, shall be credited from time to time by Landlord to the
account of Guarantor and Guarantor shall pay any balance owing to Landlord from
time to time, immediately upon demand by Landlord.
No action or proceeding brought or instituted under this Guaranty and
no recovery in pursuance thereof shall be a bar or defense to any further
action or proceeding which may be brought under this Guaranty by reason of any
further default or defaults hereunder and/or under the Lease.
To the extent permitted by applicable law, Guarantor waives its right
to enforce any remedies (except remedies that Tenant has as tenant only) that
Tenant now has, or later may have, against Landlord. Guarantor waives any
right to participate in any security now or later held by Landlord. Guarantor
waives notice of acceptance of this Guaranty, and all other notices in
connection with this Guaranty or in connection with the liabilities,
obligations and duties guaranteed hereby, including notices to Guarantor of
default by the Tenant under the Lease. Guarantor hereby waives diligence,
presentment, demand for performance, notice of nonperformance, protest, notice
of protest, notice of dishonor, and notice of acceptance of this Guaranty, and
waives all notices of the existence, creation, or incurring of new or
additional obligations. Guarantor hereby waives and agrees not to assert or
take advantage of: (a) any right or defense that may arise by reason of the
incapacity, lack of authority, death or disability of Tenant or any other
person; (b) any and all defenses based upon an election of remedies by Landlord
which limits or destroys any subrogation rights Guarantor might otherwise have;
or (c) any bankruptcy of Tenant.
If there is more than one Guarantor, the liability of each Guarantor
shall be joint and several. Guarantor's obligations under this Guaranty shall
be binding on Guarantor's legal representatives, heirs, successors and assigns.
If Tenant disposes of its interest in the Lease, "Tenant", as used in
this Guaranty, shall mean Tenant's successors or assigns. Assignment of the
Lease by Landlord (as permitted by the Lease) shall not affect this Guaranty.
In the event of an assignment of the Lease by Landlord, the term "Landlord" as
used in this Guaranty shall mean Landlord's successors or assigns.
Guarantor hereby covenants and agrees to deliver to Landlord: (i)
annual financial statements for Guarantor which have been audited by an
independent certified public accountant within ninety (90) days after the end
of Guarantor's fiscal year; and (ii) management prepared and certified
quarterly financial statements for Guarantor within forty-five (45) days after
the end of the first three (3) quarters of Guarantor's fiscal year. At the
request of Landlord, Guarantor shall obtain the written consent of Guarantor's
accountants) to the inclusion of Guarantor's most recent annual audit report in
any regulatory filing or report to be filed by Landlord. Such financial
statements shall be true and correct in all respects, be prepared in accordance
with generally accepted accounting principles, and fairly present the
respective financial conditions of the subjects thereof as of the respective
dates thereof Landlord will maintain confidential and not disclose to third
parties the financial information furnished or revealed pursuant to this
Guaranty except as may be required, in Landlord's reasonable judgment, for the
exercise of Landlord's rights under this Guaranty as may be required by
applicable law or compelled by legal proceedings, for disclosure in confidence
to prospective lenders, investors or purchasers, or to third parties in
connection with the closing of the lease transaction with Tenant. Guarantor
further agrees to comply with all provisions of the Lease applicable to
Guarantor. Without limiting the foregoing, Guarantor acknowledges that
Landlord is relying on, and
3
<PAGE> 14
is an intended third party beneficiary of, as applicable, the representations
and warranties of Guarantor contained in the Lease and all other documents
executed in connection therewith.
All rights, powers and remedies of Landlord hereunder and under any
other agreement now or at any time hereafter in force between Landlord and
Guarantor relating to the Lease shall be cumulative and not alternative and
such rights, powers and remedies shall be in addition to all rights, powers and
remedies given to Landlord by law.
Any notice, request, demand, instruction or other communication to be
given to any party hereunder shall be in writing and shall be sent by
registered or certified mail, return receipt requested, to Guarantor at the
address provided under Guarantor's signature below, and if to Landlord at the
address provided above. Notices shall be deemed to have been give upon (i)
hand delivery, (ii) one (1) day after being deposited with Federal Express or
another reliable overnight courier service, (iii) receipt of written
confirmation of transmission if transmitted by facsimile telecopy, or (iv)
forty-eight (48) hours after the deposit of the same in a United States Mail
post office box in a state to which the notice is addressed, or three (3)
business days after deposit of the same in any such post office box in a state
other than the state to which the notice is addressed, postage prepaid and
addresses set forth above. A notice shall not be deemed given unless and until
it shall have been given to all addressees) to which notices must be sent. Any
party may change its street addressees) for notices by a notice given in
accordance with this Section.
If Landlord is required to enforce Guarantor's obligations under this
Guaranty by any legal action or proceedings, or if a dispute arises in
connection with the validity, enforceability, enforcement or construction of
this Guaranty or any other matter relating to this Guaranty, the losing party
shall pay all reasonable attorneys' fees incurred by the prevailing party in
such dispute.
Guarantor hereby represents and wan-ants that: (a) Guarantor has
received and reviewed the Lease and is familiar with the terms thereof; (b) the
execution of this Guaranty will not render the Guarantor insolvent in any way;
and (c) Landlord's entering into the Lease materially benefits Guarantor and
Guarantor is receiving fair for this Guaranty.
Any amount required to be paid by Guarantor hereunder shall bear
interest from the date due until the date paid to Landlord at the lesser of:
(x) twelve percent (12%) per annum; or (y) the maximum rate permitted by law.
All interest shall be compounded monthly and shall be payable to Landlord on
demand.
Time is of the essence with respect to the performance of Guarantor's
obligations hereunder.
This Guaranty contains the entire agreement of Guarantor and Landlord
with respect to the subject matter hereof.
If any one or more of the provisions of this Guaranty shall be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Guaranty, and this Guaranty shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. This Guaranty shall
be construed according to the laws of the State of Minnesota without regard to
conflicts of laws principles. By execution hereof, Guarantor specifically
consents to this choice of law designation and agrees that all actions or
proceedings &rising directly, indirectly or otherwise in connection with, out
of, related to, or from this Guaranty or the Lease shall be litigated only in
the courts located in the State or in Michigan, and Guarantor (i) consents and
submits in advance to the exclusive and in per??? jurisdiction of any state or
federal court located within the State or in Michigan, (ii) waives any right to
transfer or change the venue of litigation brought against Guarantor, and (iii)
agrees to service of process, to the extent permitted by law, by mail.
4
<PAGE> 15
Dated as of September 11, 1996.
WITNESSES: AMERICAN RESTAURANT GROUP, INC.
By /s/ SIG
- -------------------------------- -------------------------------------
Its Secretary
- -------------------------------- -------------------------------
GUARANTOR'S ADDRESS FOR NOTICES:
4410 El Camino Real
Suite 201
Los Altos, California 94022
Attention: Legal Department
Fax Number: (415) 949-6422
STATE OF NEW YORK )
) ss.:
COUNTY OF )
The foregoing instrument was acknowledged before me this ______ day of
September, 1996, by _______________________, the ___________________________ of
American Restaurant Group, Inc., a Delaware corporation, on behalf of the
corporation.
---------------------------------------
Notary Public
______________ County, New York
My Commission Expires: ________________
[Notary Public's Seal]
5
<PAGE> 16
Lease No. 06155
2750 North Snelling Avenue
Roseville, Minnesota
GUARANTY OF LEASE
The undersigned (hereinafter referred to as "Guarantor"), as a
material inducement to and in consideration of CAPTEC NET LEASE REALTY, INC., a
Michigan corporation, whose address is 24 Frank Lloyd Wright Drive, Lobby L,
Ann Arbor, Michigan 48106 ("Landlord"), entering into that certain Lease dated
even herewith ("Lease") with ARG ENTERPRISES, INC., a California corporation,
whose address is 4410 El Camino Real, Suite 201, Los Altos, California 94022
("Tenant"), hereby unconditionally, irrevocably and personally guarantees to
and for the benefit of Landlord, and Landlord's successors and assigns, the
full and timely payment and performance of all of the Tenant's duties,
obligations and covenants under the Lease. This Guaranty is a guaranty of
payment and performance and not of collection.
All payments to be made by Guarantor under this Guaranty shall be made
without deduction or offset and shall be made immediately upon demand by
Landlord. This Guaranty is absolute and unconditional and shall not be
affected by Landlord's failure or delay to enforce any of its rights or any
waiver by Landlord other than any waiver of Tenant's or Guarantor's obligations
with respect to the Lease agreed to in writing by Landlord.
Guarantor's obligations are independent of Tenant's obligations under
the Lease and a separate action or actions may be brought and prosecuted
against Guarantor whether or not any action is brought against Tenant or Tenant
is joined in any such action or actions. If Tenant defaults under the Lease,
Landlord can proceed immediately against Guarantor or Tenant, or both, or
Landlord can enforce against Guarantor or Tenant, or both, any rights that it
has under the Lease, this Guaranty or pursuant to applicable laws. If the
Lease terminates and Landlord has any rights it can enforce against Tenant
after termination, Landlord can enforce those rights against Guarantor without
giving previous notice to Tenant or Guarantor or without making any demand on
either of them. Guarantor hereby consents to any remedy pursued by Landlord to
enforce its rights under the Lease, in whatever order such party may choose,
including any remedies which may affect or destroy Guarantor's right of
subrogation or the right of Guarantor to proceed against Tenant for
reimbursement.
Guarantor waives the right to require Landlord to first or
concurrently: (1) proceed against Tenant or any other person or pursue any
rights or remedies with respect to the Lease before proceeding against
Guarantor; (2) proceed against or exhaust any security that Landlord holds from
Tenant; or (3) pursue any other remedy in Landlord's power. The liability of
Guarantor shall not be released, discharged, affected or exonerated by any
extension of time, indulgence, compromise, settlement or modification or
variation of terms which may be extended by Landlord to Tenant, or agreed upon
by Landlord or Tenant, except to the extent thereof, other than any waiver of
Tenant's or Guarantor's obligations with respect to the Lease agreed to in
writing by Landlord and regardless of the release or discharge of Tenant by
Landlord or others or the operation of law, and, unless agreed to in writing by
Landlord, shall not be released, discharged, affected or exonerated by any
assignment or sublease by Tenant of its interest in the Lease, nor shall the
liability of the Guarantor be released, discharged, affected or exonerated by
the insolvency, bankruptcy (voluntary or involuntary), or reorganization of
Tenant, nor by the voluntary or involuntary liquidation, sale or other
disposition of all or substantially all of the assets of Tenant or by any
assignment of the Lease by Tenant or by any trustee, receiver, or liquidator of
Tenant or any consent which Landlord may give to any such assignment, or by the
release, substitution or addition of any other guarantor. Landlord and Tenant,
without notice to or consent by Guarantor, may at any time or times enter into
such modifications, extensions, amendments or other covenants respecting the
Lease as they may deem appropriate, and Guarantor shall not be released of its
liability or discharged or exonerated thereby but shall continue to be fully
liable for the payment and performance of all obligations and duties of Tenant
under the Lease as so modified, extended or amended.
<PAGE> 17
Guarantor further agrees (1) to indemnify and hold harmless Landlord
from and against any claims, damages, expenses or losses, including to the
extent permitted by law, all reasonable attorneys' fees incurred by counsel of
Landlord's choice (whether or not litigation is commenced), resulting from or
arising out of any breach of any provision of the Lease by Tenant or by reason
of breach of any provision of the Lease by Tenant or by reason of Tenant's
failure to perform any of its obligations thereunder, and (2) to the extent
permitted by law, to pay all costs and expenses, including reasonable
attorneys' fees (whether or not litigation is commenced), incurred by Landlord
in enforcing this Guaranty.
Landlord's rights under this Guaranty will not be exhausted by any
action by Landlord until all of the obligations of Tenant to pay rent and other
sums under the Lease have been fully paid and performed and the period of time
has expired during which any payment made by Tenant or Guarantor to Landlord
may be determined to be a preferential payment (hereinafter defined).
Guarantor further agrees that to the extent Tenant or Guarantor makes any
payment to Landlord in connection with the obligations of Tenant under the
Lease and all or any part of such payment is subsequently invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid by
Landlord or paid over to a trustee, receiver or other entity, whether under any
bankruptcy act or otherwise (any such payment is hereinafter referred to as a
"Preferential Payment"), then this Guaranty shall continue to be effective or
shall be reinstated, as the case may be, and, to the extent of such payment or
repayment by Landlord (but only to the extent of the then remaining liability
of Guarantor under this Guaranty), the obligations or part thereof, intended to
be satisfied by such Preferential Payment shall be revived and continued in
full force and effect as if said Preferential Payment had not been made.
Notwithstanding any other provision of this Guaranty to the contrary,
Guarantor hereby agrees that until such time as the obligations and liabilities
of Tenant to Landlord under or arising out of the Lease, whether now existing
or hereafter arising, voluntary or involuntary, whether or not jointly owed
with others, direct or indirect, absolute or contingent, liquidated or
unliquidated, and whether or not from time to time decreased or extinguished
and later increased, created or incurred (collectively, the "Obligations") have
been paid and performed in full and the period of time has expired during which
any payment made by Tenant or Guarantor to Landlord on account of the
Obligations may be determined to be a Preferential Payment, any claim or other
rights which Guarantor may now have or hereafter acquire against Tenant or any
other guarantor of all or any of the Obligations that arise from the existence
or performance of Guarantor's obligations under this Guaranty or otherwise (all
such claims and rights are referred to as "Guarantor's Conditional Rights"),
including, without limitation, any right of subrogation, reimbursement,
exoneration, contribution, or indemnification, any right to participate in any
claim or remedy of Landlord against Tenant or any collateral which Landlord now
has or hereafter acquires, whether or not such claim, remedy or right arises in
equity or under contract, statute or common law, by any payment made hereunder
or otherwise, including without limitation, the right to take or receive from
Tenant, directly or indirectly, in cash or other property or by setoff or in
any other manner, payment or security on account of such claim or other rights,
shall be subordinate to Landlord's right to full payment and performance of the
Obligations, and Guarantor shall not enforce any of Guarantor's Conditional
Rights during such period. If, notwithstanding the foregoing provisions, any
amount shall be paid to Guarantor on account of any such Guarantor's
Conditional Rights and either (a) such amount is paid to Guarantor at any time
when any of the Obligations shall not have been paid or performed in full, or
(b) regardless of when such amount is paid to Guarantor, any payment made by
Tenant to Landlord is at any time determined to be a Preferential Payment, then
such amount paid to Guarantor shall be held in trust for the benefit of
Landlord and shall forthwith be paid to Landlord to be credited and applied
upon the Obligations under the Lease, whether matured or unmatured, in such
order as Landlord, in its sole and absolute discretion, shall determine.
Guarantor assumes the responsibility to remain informed of the
financial condition of Tenant and of all other circumstances bearing upon the
risk of Tenant's default, which reasonable inquiry would reveal, and agrees
that Landlord shall have no duty to advise Guarantor of information known to it
regarding such condition or any such circumstances. Landlord shall not be
required to inquire into the powers of Tenant or the officers, employees,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed under this Guaranty. Guarantor hereby represents
and warrants to Landlord that such Guarantor has received a copy of the Lease,
has read or had the opportunity to read
2
<PAGE> 18
the Lease, and understands the terms of the Lease. The provisions in the Lease
relating to the execution of additional documents, legal proceedings by
Landlord against Tenant, severability of the provisions of the Lease,
interpretation of the Lease, notices, waivers, limitation on right of recovery
against Landlord, disclaimer of individual liability, and the applicable laws
which govern the interpretation of the Lease are incorporated herein in their
entirety by this reference and made a part hereof as though set forth in full
herein; any reference in those provisions to "Tenant" shall mean each Guarantor
and any reference in those provisions to the "Lease" shall mean this Guaranty.
The liability of Guarantor shall not be effected by any repossession
of the leased premises by Landlord (except to the extent the liability of
Tenant is thereby affected), provided, however, that the net payments received
by Landlord after deducting all costs and expenses of repossessing and/or
reletting the same, shall be credited from time to time by Landlord to the
account of Guarantor and Guarantor shall pay any balance owing to Landlord from
time to time, immediately upon demand by Landlord.
No action or proceeding brought or instituted under this Guaranty and
no recovery in pursuance thereof shall be a bar or defense to any further
action or proceeding which may be brought under this Guaranty by reason of any
further default or defaults hereunder and/or under the Lease.
To the extent permitted by applicable law, Guarantor waives its right
to enforce any remedies (except remedies that Tenant has as tenant only) that
Tenant now has, or later may have, against Landlord. Guarantor waives any
right to participate in any security now or later held by Landlord. Guarantor
waives notice of acceptance of this Guaranty, and all other notices in
connection with this Guaranty or in connection with the liabilities,
obligations and duties guaranteed hereby, including notices to Guarantor of
default by the Tenant under the Lease. Guarantor hereby waives diligence,
presentment, demand for performance, notice of nonperformance, protest, notice
of protest, notice of dishonor, and notice of acceptance of this Guaranty,- and
waives all notices of the existence, creation, or incurring of new or
additional obligations. Guarantor hereby waives and agrees not to assert or
take advantage of. (a) any right or defense that may arise by reason of the
incapacity, lack of authority, death or disability of Tenant or any other
person; (b) any and all defenses based upon an election of remedies by Landlord
which limits or destroys any subrogation rights Guarantor might otherwise have;
or (c) any bankruptcy of Tenant.
If there is more than one Guarantor, the liability of each Guarantor
shall be joint and several. Guarantor's obligations under this Guaranty shall
be binding on Guarantor's legal representatives, heirs, successors and assigns.
If Tenant disposes of its interest in the Lease, "Tenant", as used in
this Guaranty, shall mean Tenant's successors or assigns. Assignment of the
Lease by Landlord (as permitted by the Lease) shall not affect this Guaranty.
In the event of an assignment. of the Lease by Landlord, the term "Landlord" as
used in this Guaranty shall mean Landlord's successors or assigns.
Guarantor hereby covenants and agrees to deliver to Landlord: (i)
annual financial statements for Guarantor which have been audited by an
independent certified public accountant within ninety (90) days after the end
of Guarantor's fiscal year; and (ii) management prepared and certified
quarterly financial statements for Guarantor within forty-five (45) days after
the end of the first three (3) quarters of Guarantor's fiscal year. At the
request of Landlord, Guarantor shall obtain the written consent of Guarantor's
accountants) to the inclusion of Guarantor's most recent annual audit report in
any regulatory filing or report to be filed by Landlord. Such financial
statements shall be true and correct in all respects, be prepared in accordance
with generally accepted accounting principles, and fairly present the
respective financial conditions of the subjects thereof as of the respective
dates thereof Landlord will maintain confidential and not disclose to third
parties the financial information furnished or revealed pursuant to this
Guaranty except as may be required, in Landlord's reasonable judgment, for the
exercise of Landlord's rights under this Guaranty as may be required by
applicable law or compelled by legal proceedings, for disclosure in confidence
to prospective lenders, investors or purchasers, or to third parties in
connection with the closing of the lease transaction with Tenant. Guarantor
further agrees to comply with all provisions of the Lease applicable to
Guarantor. Without limiting the foregoing, Guarantor acknowledges that
Landlord is relying on, and
3
<PAGE> 19
is an intended third party beneficiary of, as applicable, the representations
and warranties of Guarantor contained in the Lease and all other documents
executed in connection therewith.
All rights, powers and remedies of Landlord hereunder and under any
other agreement now or at any time hereafter in force between Landlord and
Guarantor relating to the Lease shall be cumulative and not alternative and
such rights, powers and remedies shall be in addition to all rights, powers and
remedies given to Landlord by law.
Any notice, request, demand, instruction or other communication to be
given to any party hereunder shall be in writing and shall be sent by
registered or certified mail, return receipt requested, to Guarantor at the
address provided under Guarantor's signature below, and if to Landlord at the
address provided above. Notices shall be deemed to have been give upon (i)
hand delivery, (ii) one (1) day after being deposited with Federal Express or
another reliable overnight courier service, (iii) receipt of written
confirmation of transmission if transmitted by facsimile telecopy, or (iv)
forty-eight (48) hours after the deposit of the same in a United States Mail
post office box in a state to which the notice is addressed, or three (3)
business days after deposit of the same in any such post office box in a state
other than the state to which the notice is addressed, postage prepaid and
addresses set forth above. A notice shall not be deemed given unless and until
it shall have been given to all addressees) to which notices must be sent. Any
party may change its street addressees) for notices by a notice given in
accordance with this Section.
If Landlord is required to enforce Guarantor's obligations under this
Guaranty by any legal action or proceedings, or if a dispute arises in
connection with the validity, enforceability, enforcement or construction of
this Guaranty or any other matter relating to this Guaranty, the losing party
shall pay all reasonable attorneys' fees incurred by the prevailing party in
such dispute.
Guarantor hereby represents and wan-ants that: (a) Guarantor has
received and reviewed the Lease and is familiar with the terms thereof; (b) the
execution of this Guaranty will not render the Guarantor insolvent in any way;
and (c) Landlord's entering into the Lease materially benefits Guarantor and
Guarantor is receiving fair for this Guaranty.
Any amount required to be paid by Guarantor hereunder shall bear
interest from the date due until the date paid to Landlord at the lesser of:
(x) twelve percent (12%) per annum; or (y) the maximum rate permitted by law.
All interest shall be compounded monthly and shall be payable to Landlord on
demand.
Time is of the essence with respect to the performance of Guarantor's
obligations hereunder.
This Guaranty contains the entire agreement of Guarantor and Landlord
with respect to the subject matter hereof.
If any one or more of the provisions of this Guaranty shall be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Guaranty, and this Guaranty shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein. This Guaranty shall
be construed according to the laws of the State of Minnesota without regard to
conflicts of laws principles. By execution hereof, Guarantor specifically
consents to this choice of law designation and agrees that all actions or
proceedings &rising directly, indirectly or otherwise in connection with, out
of, related to, or from this Guaranty or the Lease shall be litigated only in
the courts located in the State or in Michigan, and Guarantor (i) consents and
submits in advance to the exclusive and in per??? jurisdiction of any state or
federal court located within the State or in Michigan, (ii) waives any right to
transfer or change the venue of litigation brought against Guarantor, and (iii)
agrees to service of process, to the extent permitted by law, by mail.
4
<PAGE> 20
Dated as of September 11, 1996.
WITNESSES: AMERICAN RESTAURANT GROUP, INC.
By /s/ SIG
- -------------------------------- -------------------------------------
Its Secretary
- -------------------------------- -------------------------------
GUARANTOR'S ADDRESS FOR NOTICES:
4410 El Camino Real
Suite 201
Los Altos, California 94022
Attention: Legal Department
Fax Number: (415) 949-6422
STATE OF NEW YORK )
) ss.:
COUNTY OF )
The foregoing instrument was acknowledged before me this ______ day of
September, 1996, by _______________________, the ___________________________ of
American Restaurant Group, Inc., a Delaware corporation, on behalf of the
corporation.
---------------------------------------
Notary Public
______________ County, New York
My Commission Expires: ________________
[Notary Public's Seal]
5
<PAGE> 1
EXHIBIT 2.10
GUARANTY OF LEASE
The undersigned (hereinafter referred to as "Guarantor"), as a material
inducement to and in consideration of SAFEWAY INC., a Delaware corporation,
whose address is 5918 Stoneridge Mall Road, Pleasanton, California 94588-3229
("Landlord"), entering into that certain Lease ("Lease") with ARG ENTERPRISES,
INC., a California corporation ("Tenant"), dated as of September 11, 1996,
hereby unconditionally, irrevocably and personally guarantees to and for the
benefit of Landlord, and Landlord's successors and assigns, the full and timely
payment and performance of all of Tenant's duties, obligations and covenants
under the Lease. This Guaranty is a guaranty of payment and performance and not
of collection.
All payments to be made by Guarantor under this Guaranty shall be made
without deduction or offset and shall be made immediately upon demand by
Landlord. This Guaranty is absolute and unconditional and shall not be affected
by Landlord's failure or delay to enforce any of its rights or any waiver by
Landlord, other than modifications or variations of the terms of the Lease
agreed to in writing by Landlord and Tenant or any waiver of Tenant's and
Guarantor's obligations with respect to the Lease agreed to in writing by
Landlord.
Guarantor's obligations are independent of Tenant's obligations under
the Lease and a separate action or actions may be brought and prosecuted against
Guarantor whether or not any action is brought against Tenant or Tenant is
joined in any such action or actions. If Tenant defaults under the Lease,
Landlord can proceed immediately against Guarantor or Tenant, or both, or
Landlord can enforce against Guarantor or Tenant, or both, any rights that it
has under the Lease, this Guaranty or pursuant to applicable laws. If the Lease
terminates and Landlord has any rights it can enforce against Tenant after
termination, Landlord can enforce those rights against Guarantor without giving
previous notice to Tenant or Guarantor or without making any demand on either of
them. Guarantor hereby consents to any remedy pursued by Landlord to enforce its
rights under the Lease, in whatever order such party may choose, including any
remedies which may affect or destroy Guarantor's right of subrogation or the
right of Guarantor to proceed against Tenant for reimbursement. Without limiting
the generality of the foregoing, Guarantor hereby waives any rights Guarantor
may have under California Civil Code Sections 2809, 2819, 2845, 2849 and 2850,
as they may be amended or modified from time to time, and any similar or
successor statutes.
To the extent permitted by applicable law, Guarantor waives the benefit
of any statute of limitations affecting Guarantor's liability under this
Guaranty. Guarantor waives the right to require Landlord to first or
concurrently: (1) proceed against Tenant or any other person or pursue any
rights or remedies with respect to the Lease before proceeding against
Guarantor; (2) proceed against or exhaust any security that Landlord holds from
Tenant; or (3) pursue any other remedy in Landlord's power. The liability of
Guarantor shall not be
<PAGE> 2
released, discharged, affected or exonerated by any extension of time,
indulgence, compromise, settlement or modification or variation of terms which
may be extended by Landlord to Tenant or agreed upon by Landlord or Tenant,
other than modifications or variations of the terms of the Lease agreed to in
writing by Landlord and Tenant or any waiver of Tenant's and Guarantor's
obligations with respect to the Lease agreed to in writing by Landlord, and
regardless of the release or discharge of Tenant by Landlord or by others or by
operation of law, and, unless agreed to in writing by Landlord, shall not be
released, discharged, affected or exonerated by any assignment or sublease by
Tenant of its interest in the Lease, nor shall the liability of Guarantor be
released, discharged, affected or exonerated by the insolvency, bankruptcy
(voluntary or involuntary), or reorganization of Tenant, or by the voluntary or
involuntary liquidation, sale or other disposition of all or substantially all
of the assets of Tenant or by any assignment of the Lease by Tenant or by any
trustee, receiver or liquidator of Tenant or any consent which Landlord may give
to any such assignment, or by the release, substitution or addition of any other
guarantor. Landlord and Tenant, without notice to or consent by Guarantor, may
at any time or times enter into such modifications, extensions, amendments or
other covenants respecting the Lease as they may deem appropriate, and Guarantor
shall not be released of its liability or released, discharged or exonerated
thereby but shall continue to be fully liable for the payment and performance of
all obligations and duties of Tenant under the Lease as so modified, extended or
amended with the consent of Tenant.
Guarantor further agrees (1) to indemnify and hold harmless Landlord
from and against any claims, damages, expenses or losses, including to the
extent permitted by law, all reasonable attorney's fees incurred by counsel of
Landlord's choice (whether or not litigation is commenced), resulting from or
arising out of any breach of any provision of the Lease by Tenant or by reason
of Tenant's failure to perform any of its obligations thereunder, and (2) to the
extent permitted by law, to pay all costs and expenses, including reasonable
attorneys' fees (whether or not litigation is commenced) incurred by Landlord in
enforcing this Guaranty.
Landlord's rights under this Guaranty will not be exhausted by any
action by Landlord until all of the obligations of Tenant to pay rent and other
sums under the Lease have been fully paid and performed and the period of time
has expired during which any payment made by Tenant or Guarantor to Landlord may
be determined to be a Preferential Payment (hereinafter defined). Guarantor
further agrees that to the extent Tenant or Guarantor makes any payment to
Landlord in connection with the obligations of Tenant under the Lease and all or
any part of such payment is subsequently invalidated, declared to be fraudulent
or preferential, set aside or required to be repaid by Landlord or paid over to
a trustee, receiver or any other entity, whether under any bankruptcy act or
otherwise (any such payment is hereinafter referred to as a "Preferential
Payment"), then this Guaranty shall continue to be effective or shall be
reinstated, as the case may be, and, to the extent of such payment or repayment
by Landlord (but only to the extent of the then remaining liability of Guarantor
under this Guaranty), the obligations or part thereof intended to be satisfied
by such Preferential Payment shall be revived and continued in full force and
effect as if said Preferential Payment had not been made.
2
<PAGE> 3
Notwithstanding any other provision of this Guaranty to the contrary,
Guarantor agrees that until such time as the obligations and liabilities of
Tenant to Landlord under or arising out of the Lease (whether now existing or
hereafter arising, voluntary of involuntary, whether or not jointly owed with
others, direct or indirect, absolute or contingent, liquidated or unliquidated,
and whether or not from time to time decreased or extinguished and later
increased, created or incurred), including, without limitations, Tenant's
obligations under the Lease to comply with certain provisions of the Financing
Documents, as such term is defined in the Lease (collectively, the
"Obligations") have been paid and performed in full and the period of time has
expired during which any payment made by Tenant or Guarantor to Landlord on
account of the Obligations may be determined to be a Preferential Payment, any
claim or other rights which Guarantor may now have or hereafter acquire against
Tenant or any other guarantor of all or any of the Obligations that arise from
the existence or performance of Guarantor's obligations under this Guaranty or
otherwise (all such claims and rights are referred to as "Guarantor's
Conditional Rights"), including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution, or indemnification, any right to
participate in any claim or remedy of Landlord against Tenant or any collateral
which Landlord now has or hereafter acquires, whether or not such claim, remedy
or right arises in equity or under contract, statute or common law, by any
payment made hereunder or otherwise, including without limitation, the right to
take or receive from Tenant, directly or indirectly, in cash or other property
or by setoff or in any other manner, payment or security on account of such
claim or other rights, shall be subordinate to Landlord's right to full payment
and performance of the Obligations, and Guarantor shall not enforce any of
Guarantor's Conditional Rights during such period. If, notwithstanding the
foregoing provisions, any amount shall be paid to Guarantor on account of any
such Guarantor's Conditional Rights and either (a) such amount is paid to
Guarantor at any time when any of the Obligations shall not have been paid or
performed in full, or (b) regardless of when such amount is paid to Guarantor,
any payment made by Tenant to Landlord is at any time determined to be a
Preferential Payment, then such amount paid to Guarantor shall be held in trust
for the benefit of Landlord and shall forthwith be paid to Landlord to be
credited and applied upon the Obligations, whether matured or unmatured, in such
order as Landlord, in its sole and absolute discretion, shall determine.
Guarantor assumes the responsibility to remain informed of the
financial condition of Tenant and of all other circumstances bearing upon the
risk of Tenant's default, which reasonable inquiry would reveal, and agrees that
Landlord shall have no duty to advise Guarantor of information known to it
regarding such condition or any such circumstances. Landlord shall not be
required to inquire into the powers of Tenant or the officers, employees,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed under this Guaranty. Guarantor hereby represents and
warrants to Landlord that Guarantor has received a copy of the Lease, has read
or had the opportunity to read the Lease, and understands the terms of the
Lease. The provisions in the Lease relating to the execution of additional
documents, legal proceedings by Landlord against Tenant, severability of the
provisions of the Lease, interpretation of the Lease, notices, waivers
(including waiver of a jury trial), limitation on right of recovery against
Landlord, disclaimer of individual liability, and the applicable laws which
govern the interpretation of the Lease are incorporated herein in their
3
<PAGE> 4
entirety by this reference and made a part hereof as though set forth in full
herein; any reference in those provisions to "Tenant" shall mean Guarantor and
any reference in those provisions to the "Lease" shall mean this Guaranty.
The liability of Guarantor shall not be affected by any repossession of
the leased premises by Landlord, provided, however, that the net payments
received by Landlord after deducting all costs and expenses of repossessing
and/or reletting the same, shall be credited from time to time by Landlord to
the account of Guarantor and Guarantor shall pay any balance owing to Landlord
from time to time, immediately upon demand by Landlord.
No action or proceeding brought or instituted under this Guaranty and
no recovery in pursuance thereof shall be a bar or defense to any further action
or proceeding which may be brought under this Guaranty by reason of any further
default or defaults hereunder and/or under the Lease.
To the extent permitted by applicable law, Guarantor waives its right
to enforce any remedies that Tenant now has, or later may have, against
Landlord. Guarantor waives any right to participate in any security now or later
held by Landlord. Guarantor waives notice of acceptance of this Guaranty, and
all other notices in connection with this Guaranty or in connection with the
liabilities, obligations and duties guaranteed hereby, including notices to
Guarantor of default by Tenant under the Lease. Guarantor hereby waives
diligence, presentment, demand for performance, notice of nonperformance or
nonpayment, protest, notice of protest, notice of dishonor, and notice of
acceptance of this Guaranty, and waives all notices of the existence, creation,
or incurring of new or additional obligations. Guarantor hereby further waives
and agrees not to assert or take advantage of: (a) any right or defense that may
arise by reason of the incapacity, lack of authority, death or disability of
Tenant or any other person; (b) any and all defenses based upon an election of
remedies by Landlord which limits or destroys any subrogation rights Guarantor
might otherwise have; or (c) any bankruptcy of Tenant.
If there is more than one Guarantor, the liability of each Guarantor
shall be joint and several. Guarantor's obligations under this Guaranty shall be
binding on Guarantor's legal representatives, heirs, successors and assigns.
If Tenant disposes of its interest in the Lease, "Tenant", as used in
this Guaranty, shall mean Tenant's successors or assigns. Assignment of the
Lease by Landlord (as permitted by the Lease) shall not affect this Guaranty. In
the event of an assignment of the Lease by Landlord, the term "Landlord" as used
in this Guaranty shall mean Landlord's successors or assigns.
All rights, powers and remedies of Landlord hereunder and under any
other agreement now or at any time hereafter in force between Landlord and
Guarantor relating to the Lease shall be cumulative and not alternative and such
rights, powers and remedies shall be in addition to all rights, powers and
remedies given to Landlord by law.
4
<PAGE> 5
Any notice, request, demand, instruction or other communication to be
given to any party hereunder shall be in writing and shall be sent by registered
or certified mail, return receipt requested, to Guarantor at the address
provided under Guarantor's signature below, and if to Landlord at the address
provided above. Notices shall be deemed to have been given upon (i) hand
delivery, (ii) one (1) day after being deposited with Federal Express or another
reliable overnight courier service or transmitted by facsimile telecopy, or
(iii) forty-eight (48) hours after the deposit of the same in a United States
mail post office box in a state to which the notice is addressed, or three (3)
business days after deposit of same in any such post office box in a state other
than the state to which the notice is addressed, postage prepaid and addressed
as set forth above. A notice shall not be deemed given unless and until it shall
have been given to all address(es) to which notices must be sent. Any party may
change its street address(es) for notices by a notice given in accordance with
this Section.
If Landlord is required to enforce Guarantor's obligations under this
Guaranty by any legal action or proceedings, or if a dispute arises in
connection with the validity, enforceability, enforcement or construction of
this Guaranty or any other matter relating to this Guaranty, the losing party
shall pay all reasonable attorneys' fees incurred by the prevailing party in
such dispute.
Guarantor hereby represents and warrants that: (a) Guarantor has
received and reviewed the Lease and is familiar with the terms thereof; (b) the
execution of this Guaranty will not render Guarantor insolvent in any way; and
(c) Landlord's entering into the Lease materially benefits Guarantor and
Guarantor is receiving fair consideration for this Guaranty.
Any amount required to be paid by Guarantor hereunder shall bear
interest from the date due until the date paid to Landlord at the lesser of: (x)
twelve percent (12%) per annum; or (y) the maximum rate permitted by law. All
interest shall be compounded monthly and shall be payable to Landlord on demand.
Time is of the essence with respect to the performance of Guarantor's
obligations hereunder.
This Guaranty contains the entire agreement of Guarantor and Landlord
with respect to the subject matter hereof.
If any one or more of the provisions of this Guaranty shall be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this Guaranty, and
this Guaranty shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. This Guaranty shall be construed
according to the laws of the State of California ("State") without regard to
conflicts of laws principles. By execution hereof, the undersigned specifically
consents to this choice of law designation and agrees that all actions or
proceedings arising directly, indirectly or otherwise in connection with, out
of, related to, or from this Guaranty or the Lease shall be litigated only in
the courts located in the State, and the undersigned (i) consents and submits in
advance to the exclusive and in personam jurisdiction of any state or
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federal court located within the State, (ii) waives any right to transfer or
change the venue of litigation brought against the undersigned, and (iii) agrees
to service of process, to the extent permitted by law, by mail.
Dated as of September 11, 1996.
GUARANTOR
AMERICAN RESTAURANT GROUP,
INC., a Delaware corporation
By
Its
GUARANTOR'S ADDRESS FOR
NOTICES:
4410 El Camino Real
Suite 201
Los Altos, California 94022
Attn: Legal Department
Fax No.: (415) 949-6442
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<PAGE> 7
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
The foregoing instrument was acknowledged before me this _____ day of
___________, 1996, by ____________________, the __________________ of American
Restaurant Group, Inc.
__________________________________
Notary Public
________ County,__________________
My Commission Expires:
[Notary Public's Seal]
7
