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EXHIBIT 10.40
OPTION CONTRACT AND AGREEMENT
THIS OPTION CONTRACT AND AGREEMENT (this "Agreement") is entered into between
and among:
1. Casa Ole of Beaumont, Inc., a Texas general business corporation
(referred to herein as "Seller");
2. Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxxx and Xxxxxx X. Xxxxxxxx (herein
referred to collectively as "Shareholders"); and
3. Casa Ole Restaurants, Inc., a Texas general business corporation
(referred to herein as "Purchaser").
All of the Shareholders of Seller are referred to as Seller's owners. Seller,
Shareholders and Purchaser are sometimes collectively referred to as the
"Parties" or individually as a "Party".
W I T N E S S E T H:
Section 1. OPTION AND CONTRACT.
The options granted pursuant to this Agreement are granted in
consideration of $250,000 to be released to Seller pursuant to a certain escrow
agreement funded for the benefit of Purchaser.
Subject to and in accordance with all of the provisions of this
Agreement, in consideration of good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller hereby grants to Purchaser
an option to purchase (herein referred to as the "FIRST OPTION") from Seller
all of the property and assets of Seller that are a part of, comprise and
include the two Casa Ole restaurants owned by Seller located in Silsbee, Texas
and Jasper, Texas, generally referred to by Seller as Numbers 42 and 43 (herein
referred to as the "Restaurants"), and including all of the Seller's furniture
and fixtures, equipment, inventory, and other assets located within the
Restaurants, all as more particularly described in Exhibit "A" attached hereto
and incorporated herein by reference (herein referred to as the "Property"),
except that the Property shall not include any of the Excluded Assets defined
below. The Property shall not include (i) any of Seller's existing bank
accounts or cash, (ii) the land and buildings on or in which any of the
Restaurants are located, (iii) any of the equipment or property of Seller
located at 0000 Xxxxxx Xxxxxxx, Xxxxxxxx, Xxxxx, and (iv) the cash registers
located in any of the Restaurants (herein collectively referred to as the
"Excluded Assets").
The FIRST OPTION may be exercised by Purchaser one time only and only
during the month of July, 1997, with the closing of the sale to occur during
the month of October, 1997. If the FIRST OPTION is not exercised during the
month of July 1997, it shall automatically expire and all rights of the parties
under this Agreement shall terminate and Purchaser shall have no further rights
to acquire any of Seller's restaurants. Purchaser must give Seller written
notice during the month of July, 1997, of the exercise of the FIRST OPTION.
Upon the exercise of the FIRST OPTION, the parties shall proceed to complete
the sale of the Property pursuant to the terms and conditions of this
Agreement, and the closing of such sale shall take place during the month of
October, 1997.
2
The FIRST OPTION and the Purchaser's rights under this Agreement may
not be assigned, sold or transferred to any other person or entity without the
Seller's prior written consent, other than to any wholly-owned subsidiary or
subsidiaries of Purchaser but only if Purchaser guarantees the obligations of
the assignee.
Section 2. PURCHASE PRICE.
(a) Purchase Price. The price and total consideration (the "Purchase
Price") for which Seller agrees to sell the Property to Purchaser and which
Purchaser agrees to pay to Seller shall be an amount equal to five times the
Seller's annual "Net Earnings" (as defined herein) realized by Seller from the
operation of the Restaurants during the period from July 1, 1996, through June
30, 1997. For purposes hereof, Net Earnings shall be defined as the income/loss
from operations realized and reported by Seller for each of the Restaurants on
its internally generated financial statements for the period July 1, 1996,
through June 30, 1997, plus there shall be added to such amount the following
additional amounts reflected in Seller's financial statements: depreciation and
amortization expenses, administrative fees, interest expense, franchise taxes,
legal expenses, repairs and maintenance expenses in excess of three percent of
the gross sales, income realized by the Big Thicket Social Club, Inc. with
respect to the Restaurants during the same twelve month period, and any other
nonreoccurring and extraordinary expenses. In addition, the Purchase Price
shall be reduced by a rent calculation factor based on the rental to be paid by
Purchaser under the Leases to be entered into pursuant to Section 4 below, and
such reduction shall be calculated for each restaurant as set forth in
paragraphs (b) and (c) below.
(b) Silsbee Restaurant. The amount of reduction in the Purchase Price
shall be calculated for the Silsbee Restaurant as follows:
$78,000 annual base rent
+ 5% of gross sales in excess of $1,560,000 for the period of 7-1-96
through 6-30-97
---------------------------
= Rent amount
x 8
---------------------------
= Reduction in purchase price amount
(c) Jasper Restaurant. The amount of reduction in the Purchase Price
shall be calculated for the Jasper Restaurant as follows:
$30,600 annual base rent
+ 5% of gross sales in excess of $1,320,000 for the period of 7-1-96
through 6-30-97
---------------------------
= Rent amount
x 8
---------------------------
= Reduction in purchase price amount
(d) Examples. By way of example only, attached hereto as Exhibit "B"
and incorporated herein by reference is a calculation of the Purchase Price for
each of the Jasper and Silsbee Restaurants, including the reduction for rent as
provided above, assuming a closing in October of 1996 and using the Net
Earnings for such restaurants during the period from July 1, 1995 through June
30, 1996.
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(e) Liabilities Excluded. The Purchase Price set forth above shall be
the total consideration paid by Purchaser to Seller and Shareholders and under
no circumstances shall Purchaser assume, pay, perform or discharge any of the
debts, liabilities, obligations and accounts payable (collectively referred to
as the "Liabilities") of Seller relating to the Property, except as expressly
provided herein.
(f) Payment at Closing. Upon the closing of this transaction, the full
amount of the Purchase Price shall be paid in cash to Seller as provided
herein.
Section 3. SECOND OPTION.
As additional consideration for the closing of this transaction, and
conditioned upon the closing of the sale of the first two restaurants taking
place, Seller hereby grants Purchaser a second option (herein referred to as
the "SECOND OPTION") to acquire all but not less than all of the following four
restaurants owned by Seller:
Xxxx Xxxxxx, Xxxxx Xx. 00
Xxxx Xxxxxx, Texas Xx. 00
Xxxxxx, Xxxxx Xx. 00
Xxxxx, Xxxxx Xx. 00.
The SECOND OPTION may be exercised one time only during the month of July,
1998, with the closing of the sale to occur during the month of October, 1998.
If the SECOND OPTION is not exercised during the month of July, 1998, it shall
automatically expire and Purchaser shall have no further rights to acquire any
of Seller's other restaurants. Purchaser must give Seller written notice during
the month of July, 1998, of the exercise of the SECOND OPTION and the closing
of the sale of the restaurants covered by such notice shall take place on a
date mutually acceptable to Seller and Purchaser during the month of October,
1998, but in no event later than October 31, 1998. The terms of the acquisition
of each restaurant shall be on the same terms and conditions as the sale of the
Restaurants under this Agreement, and for this purpose the purchase price for
each restaurant will be determined based on the Net Earnings for the period
July 1, 1997, through June 30, 1998, and calculated in the same manner as
provided in Section 2 of this Agreement and as provided below for the Vidor
Restaurant. For this purpose, with respect to calculating the reduction in the
Purchase Price for the rent calculation factor, the formula and base rent
stated in Section 2(b) for the Silsbee Restaurant will be used for the Port
Xxxxxx Restaurant (No. 12) and the Orange Restaurant (No. 27). With respect to
the Vidor Restaurant, in calculating the Purchase Price for the Vidor
Restaurant, there shall be added to the Net Earnings of such restaurant the
amount of rental paid under the land lease for the Vidor Restaurant to Harken
Real Estate Company for the period July 1, 1997 through June 30, 1998; and the
reduction in the Purchase Price for the rent calculation factor with respect to
the Vidor Restaurant shall be calculated as follows:
$30,600 annual base building lease rent paid to Casa Ole of Beaumont, Inc.
+ $35,400 annual base land lease rent paid to Harken Real Estate Company
+ 5% of gross sales in excess of $1,320,000 for the period 7-1-98 through
6-30-98
---------------------------
= Rent Amount
x 8
---------------------------
= Reduction in Purchase Price Amount for the Vidor Restaurant
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There will be no reduction in the purchase price relating to the Port Xxxxxx
Restaurant (No. 19 - Central Mall location).
The SECOND OPTION and Purchaser's rights thereunder may not be
assigned, sold or transferred to any other person or entity without Seller's
prior written consent, other than to any wholly-owned subsidiary or
subsidiaries of Purchaser but only if Purchaser guarantees the obligations of
the assignee.
Section 4. LEASES.
(a) The Parties acknowledge that the Restaurant located in Jasper,
Texas is on land leased by Seller from Harken Real Estate Company, Inc., and
the Restaurant located in Silsbee, Texas, is on land owned by Seller. All of
the buildings of each Restaurant are owned by Seller. Title to the Jasper
restaurant building reverts to the landowner upon expiration of the lease. As
provided in Section 2, the land and buildings of each Restaurant are not
included as part of the Property and are not being sold hereunder to Purchaser.
At closing, Purchaser agrees to enter into the following leases:
i. A Land & Building Lease for the Silsbee Restaurant in
substantially the form attached hereto as Exhibit "C" and
incorporated herein by reference (the "Silsbee Land &
Building Lease"). The rent payable under the Silsbee Land
& Building Lease will be equal to a base rent of $6,500
per month, plus percentage rent of 5% of annual gross
sales in excess of $1,560,000. The base rent will be
increased as provided in the lease.
ii. A Building Lease for the building relating to the Jasper
Restaurant in substantially the form attached hereto as
Exhibit "D" and incorporated herein by reference (the
"Jasper Building Lease"), and a Land Lease for the land on
which the Jasper Restaurant is located in substantially
the form attached hereto as Exhibit "E" and incorporated
herein by reference (the "Jasper Land Lease"). The rent
payable under the Jasper Building Lease will be equal to
base rent of $2,550.00 per month, increased as provided in
the lease and with no percentage rent. The rent payable
under the Jasper Land Lease will be equal to base rent of
$2,950.00 per month, increased as provided in the Lease,
plus percentage rent of 5% of annual gross sales in excess
of $1,320,000.
Each lease shall be for an initial term of fifteen (15) years, with three
options to renew in favor of Purchaser for an additional five (5) years during
each renewal term, and with a rental payable by Purchaser in accordance with
the terms stated in the form of leases attached hereto.
(b) The parties further acknowledge that the Property shall not
include any of the cash registers located in the Restaurants and that the Cash
Registers are leased by Seller from Xxx and Xxxxx Xxxxxx. At closing, Seller
agrees to assign to Purchaser and Purchaser agrees to assume the leases for the
cash registers.
(c) If Purchaser exercises the SECOND OPTION, then at closing
Purchaser shall enter into the appropriate leases for the restaurants covered
by the SECOND OPTION, which leases shall be on substantially the same terms as
contained and referenced in Section 4(a) above, and shall include the
following: a Land & Building Lease for Restaurant No. 12 (Twin City Highway), a
Land & Building Lease for Restaurant No. 27 (Orange), a Building Lease and a
Land Lease for Restaurant No. 47 (Vidor). With respect to Restaurant No. 19
(Central Mall), Seller has no interest
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in the land and building and Seller's lease with the landlord will be assigned
and assumed by Purchaser at closing.
Section 5. CONDITION OF THE BUSINESS AND PROPERTY; LIMITED WARRANTY.
(a) The term "Condition of the Business and Property" means and
includes all facts and circumstances about the Property, including without
limitation:
(i) The quality, nature and adequacy of the physical
condition of the Property, including without limitation the mechanical
and operating condition of the Property;
(ii) The merchantability, fitness, suitability and
adequacy of the Property for any particular use or purpose;
(iii) The development potential, economic feasibility, cash
flow, earnings and profits and expenses of or related to the Property
being purchased hereunder; and
(iv) Any and all other aspects relating to the Property,
including without limitation, the risks associated with this
transaction, the competition with businesses competing with the
Property, the number of customers and clients of Seller's business and
all other matters relating to or concerning the Seller's business or
the Property.
(b) Other than the express limited warranties made in Section 9
hereof, Seller and Purchaser hereby agree that Seller and Shareholders make no
representations or warranties whatsoever, express or implied, with respect to
Seller's business, the Property or the Condition of the Business and the
Property. Purchaser further represents and warrants that Purchaser has already
independently inspected or caused to be inspected on Purchaser's behalf
Seller's business, the Property and every aspect of the Condition of the
Business and the Property and Purchaser has not entered into this Agreement
based upon any representation, warranty, agreement, statement or expression of
opinion by Seller or by any person or entity acting or allegedly acting for or
on behalf of Seller as to Seller's business, the Property or the Condition of
the Business and the Property. Purchaser agrees that Seller's business and the
Property will be sold and conveyed to and accepted by Purchaser at the closing
in its then present condition, AS IS, WHERE IS, WITH ALL FAULTS AND WITHOUT
REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, other than the
limited special warranty of title to be included in the Xxxx of Sale (hereafter
defined). Nothing herein will limit the indemnity afforded by Seller and
Seller's owners, however. Further, Purchaser represents and warrants to Seller
and Shareholders that Purchaser has knowledge and expertise in financial and
business matters that enable Purchaser to evaluate the merits and risks of the
transaction contemplated by this Agreement and that Purchaser is not in a
significantly disparate bargaining position. The provisions of this Section
5(b) shall survive the closing or a termination of this Agreement.
Section 6. RESTRICTIVE COVENANT NOT TO COMPETE.
In consideration for this transaction and the benefits to be realized
by Shareholders, Seller and Shareholders hereby agree, individually and
jointly, that neither of them shall in any manner own, operate, lease, invest
in or have any interest in any Mexican food restaurant that is located within
the City limits of Lumberton, Texas, nor any Mexican food restaurant that is
located within a three mile radius of either of the Restaurants sold to
Purchaser hereunder (or any of the restaurants acquired by Purchaser under the
SECOND OPTION) (herein referred to as the "Restrictive Covenant"); provided,
however, this restriction shall not apply to the existing Casa Ole restaurants
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or Crazy Jose's restaurant located in Beaumont, Texas. This Restrictive
Covenant shall remain in force and effect so long as the Leases referred to in
Section 4 above remain in effect. If any of such Leases expire or ever or
terminated or canceled, then the Restrictive Covenant shall terminate with
respect to the location covered by such Lease.
Section 7. CLOSING.
(a) The consummation of the transaction contemplated in this
Agreement, including the funding of the sums required under Section 7(c)(i)
hereof, shall occur on a day in October, 1997, that is mutually agreeable to
Seller and Purchaser, but in no event later than October 31, 1997 (the "Closing
Date"). As used in this Agreement, the terms "Closing" and "Closing Date" mean
the date, time and event described in this Section 7.
(b) Subject to the terms, conditions and provisions hereof and
provided Purchaser contemporaneously performs all of Purchaser's obligations
set forth in Sections 7(c) and 7(f) hereof, at the Closing, Seller shall
deliver or cause to be delivered the following:
(i) A xxxx of sale and an assignment (the "Xxxx of Sale")
covering the Property, naming Seller as grantor and Purchaser as
grantee, executed and acknowledged by Seller and to be executed by
Purchaser, and in substantially the form set forth on Exhibit "F"
attached hereto and made a part thereof for all purposes and
containing such reservations and exceptions set forth therein;
(ii) The leases for each of the Restaurants in
substantially the forms attached hereto and executed pursuant to the
terms of Section 4(b);
(iii) An assignment of the leases for the cash registers;
and
(iv) Such certificates as necessary to evidence that
Seller has good and marketable title to the Property free from any
liens, including UCC lien searches, tax and lien searches, and a
certificate of good standing and that the representations and
warranties of Seller are true and correct as of the Closing.
(c) Contemporaneously with the performance by Seller of Seller's
obligations under Section 7(b) hereof, Purchaser, at Purchaser's sole cost and
expense, shall execute, acknowledge (when the form of the document so provides)
and deliver to Seller at Closing the following:
(i) Cash in the amount the Purchase Price, together with
such additional cash, if any, as may be necessary to pay Purchaser's
share of the closing costs and prorations hereunder;
(ii) A closing certificate in substantially the form
attached hereto as Exhibit "G" (the "Closing Certificate"); and
(iii) Any and all other documents reasonably required by
Seller to facilitate and consummate the Closing.
(d) As a condition to closing any purchase pursuant to this
Agreement, Purchaser must be satisfied with the accuracy of Seller's
representations and warranties and with the results of any environmental audit
or review conducted at the request of or for the benefit of Purchaser. As a
condition to closing this transaction, Purchaser shall also cause to be
executed and delivered to
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Seller by Casa Ole Franchise Services, Inc. (herein referred to as the
"Franchise Company"), an appropriate amendment to Seller's existing franchise
agreement with the Franchise Company acknowledging that the Restaurants (and
any restaurants sold under the Option) have been sold by Seller to Purchaser
and that such Restaurants shall no longer be covered by the franchise
agreement. Seller shall not assign to Purchaser any of Seller's rights under
its franchise agreement with the Franchise Company and it shall be Purchaser's
responsibility to enter into a new franchise agreement, if necessary or
required, with the Franchise Company.
(e) Upon completion of the Closing and Seller's receipt of the
Purchase Price (less Seller's closing costs) in cash, Purchaser shall have and
acquire title to the Property.
(f) In connection with the transaction contemplated in this
Agreement, Purchaser hereby covenants and agrees to pay in cash at or prior to
closing each and all of the following fees, costs and expenses, to-wit:
(i) Purchaser's attorney's fees incurred in negotiating
this Agreement and in Closing the transaction contemplated in this
Agreement;
(ii) All costs and expenses incurred by Purchaser in
performing Purchaser's review and inspections of the Property and the
Condition of the Business and the Property; and
(iii) Purchaser's proportionate share of the items prorated
pursuant to Section 8 hereof.
(h) In connection with the transaction contemplated in this
Agreement, Seller hereby covenants and agrees to pay each and all of the
following fees, costs and expense, to-wit:
(i) Seller's attorney's fees incurred in drafting and
negotiating this Agreement, the closing documents referred to herein
and in Closing the transaction contemplated in this Agreement; and
(ii) Seller's proportionate share of the items prorated
pursuant to Section 8 hereof.
Section 8. PRORATIONS.
(a) Except for hazard and liability insurance premiums, at the
Closing, all normal and customarily prorated items, including without
limitation, maintenance fees and assessments, ad valorem taxes for the current
year (based on the most recent tax statement[s] for the Property, adjusted for
the most current tax rates and appraised value), rent, prepaid Yellow Pages
advertisements and other prepaid obligations and, to the extent available at
Closing, utility services being continued to the Property, shall be prorated as
of the Closing Date. In addition, all real estate taxes on the land and
building covered by any of the leases to be executed pursuant to Section 4 of
this Agreement shall be prorated as of the Closing Date. Seller (or the
landlord under any leases, as appropriate) shall be charged for and credited
with all prorated items up to and including the Closing Date and Purchaser
shall be charged for and credited with all of same from and after the Closing
Date.
(b) Premiums for hazard, liability and any other insurance will
not be prorated since Purchaser will not have the right to assume the coverage
maintained by Seller. Purchaser hereby
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acknowledges that Purchaser will be solely responsible for obtaining
Purchaser's own insurance coverage.
(c) If Purchaser desires to have existing utility services
continued to the Property after the Closing, Purchaser shall be solely
responsible to make arrangements for such continuation, including advising the
provider of such utility services of changes in billing name and address and
paying security deposits, if any are required by the provider of such utility
services. Absent Purchaser having made all such arrangements prior to the
Closing, Seller will order all existing utility services to the Property
discontinued as of 11:59 p.m. on the Closing Date. Whether existing utility
services to the Property are continued or discontinued, all deposits held by
the providers of such utility services shall be paid to Seller.
(d) The provisions of this Section 8 shall survive the Closing.
Section 9. WARRANTIES AND REPRESENTATIONS.
Seller hereby covenants, represents and warrants to Purchaser that as
of the date of execution of this Agreement and on the Closing Date:
(a) Seller has full power and authority to execute, deliver and
perform its obligations under and has duly executed and delivered this
Agreement and all of the documents and instruments required herein and this
Agreement and all of such documents and instruments constitute legal, valid and
binding obligations of Seller;
(b) Seller will not sell or otherwise dispose of any of the
Property prior to the Closing Date except for the sale and use of inventory and
supplies in the ordinary course of business;
(c) Until the Closing Date, Seller will continue to operate its
business and the Restaurants on a regular basis in the ordinary and usual
course in which it has customarily been conducted; and
(d) Seller possesses and will deliver unto Purchaser pursuant
hereto good and marketable title to all of the Property, free and clear of all
claims, security interests, liens and encumbrances of any nature whatsoever.
(e) Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas.
(f) Shareholders and their spouses own all of the issued and
outstanding stock of Seller and have consented to the terms of this Agreement
and their spouses shall at closing execute and deliver a consent to the closing
of this Agreement.
(g) The execution, delivery and performance of this Agreement by
the Seller has been duly authorized by all necessary corporate action. This
Agreement has been duly executed by the Seller and constitutes a valid and
legally binding obligation of the Seller enforceable in accordance with its
terms.
(h) The Seller has delivered to Purchaser its financial statements
dated as of June 30, 1997, consisting of a balance sheet and statement of
income (the "Financial Statements"). The Financial Statements have been
prepared in accordance with generally acceptable accounting principles
consistently applied and fairly present the financial condition of the Seller
for the periods
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covered thereby. The Seller has no liabilities except as reflected in the
Financial Statements or as otherwise incurred in the ordinary course of
business since the date of the Financial Statements.
(i) No lien imposed under Section 401(a)(29) or Section 412(n) of
the Code, Section 302(f) or Section 4068 of ERISA, or arising out of any action
filed under ERISA Section 4301(b), exists upon the Property. Neither Seller nor
any ERISA Affiliate has terminated any employee pension benefit plan (within
the meaning of Section 3(2) of ERISA) subject to Title IV of ERISA (herein
referred to as a "Title IV Plan") under circumstances giving rise to, or that
would give to any actual or potential liability to the Pension Benefit Guaranty
Corporation ("PBGC") or any other person, (ii) no event or condition exists
which presents a risk of termination of any Title IV Plan by the PBGC, (iii)
there is no actual or potential liability to the PBGC or any other person
expected b the Seller or any ERISA Affiliate to be incurred with respect to any
Title IV Plan, including, but not limited to, any liability for any accumulated
funding deficiency as defined in Section 302 of ERISA or for any minimum
funding contribution under Section 302 of ERISA, and (iv) no Title IV Plan has
applied for or obtained a waiver from the Internal Revenue Service of any
minimum funding requirement under Section 412 of the Code. Neither Seller nor
any ERISA Affiliate is required, or has been required during the past five (5)
years, to contribute to any "multiemployer plan" as such term is defined by
ERISA Section 3(37). "ERISA Affiliate" means any member of any "controlled
group of corporations" as defined by Section 414(b) of the Code that includes
Seller, any member of any group of "trades or businesses under common control"
as defined by Section 414(c) of the Code that includes the Seller, or any
member of any "affiliated service group" as defined in Section 414(m) of the
Code that includes Seller.
(j) Seller is not aware of any material liabilities affecting the
Property which have not been disclosed to Purchaser in writing.
Section 10. INDEMNIFICATION.
(a) Seller and Seller's owners hereby agree to indemnify and hold
harmless Purchaser for all losses, damages, liabilities and claims, and all
fees, costs and expenses of any kind related thereto (including, without
limitation, any and all Legal Fees), incurred, arising out of, based upon or
resulting from (i) the inaccuracy as of the date hereof or as of the Closing
Date of any representation or warranty of the Seller which is contained in or
made pursuant to this Agreement or (ii) the breach of, or failure to perform by
the Seller of any of its agreements, covenants or obligations contained in or
made pursuant to this Agreement, or (iii) any liability or obligation of, or
claim against Purchaser arising out of, or resulting from any act, or failure
to act, by Seller as of and prior to the Closing Date including without
limitation any failure of Seller to pay its debts or obligations, or trade
payables, which have not been expressly assumed by Purchaser hereunder, any
product liability claims, or negligence claims, workmen's compensation claims,
claims for COBRA continuation coverage by Seller's employees, former employees
and qualified beneficiaries, and use or misuse of the Property.
(b) Purchaser hereby agrees to indemnify and hold harmless Seller
and Seller's owners from any losses, damages, liabilities, and claims, and all
fees costs and expenses of any kind related thereto (including, without
limitation, any and all Legal Fees) incurred, arising out of, based upon or
resulting from (i) the inaccuracy as of the date hereof or as of the Closing
Date of any representation or warranty of the Purchaser which is contained in
or made pursuant to this Agreement, (ii) the breach of, or failure to perform
by, the Purchaser of any of its respective agreements, covenants or obligations
contained in this Agreement, including but not limited to, the failure by
Purchaser to perform and satisfy all obligations under the leases assumed by
Purchaser, or (iii) any liability or obligation of, or claim against, Seller or
Seller's owners in connection with any
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claim, demand or cause of action made by any person or entity and arising out
of any event directly or indirectly related to the conduct by Purchaser of its
business, or, the use or misuse of the Property subsequent to the Closing Date,
including but not limited to any claim filed by any employee under applicable
worker's compensation laws as a result of any injury or illness covered by such
laws that occurs subsequent to the Closing Date, or any product liability claim
or negligence claim arising after the Closing Date.
(c) As used herein, the term "Legal Fees" shall mean any and all
fees, costs and expenses of any kind (including without limitation any sales
taxes on such amounts) reasonably incurred by the indemnified party and its
counsel in investigating, preparing for, defending against or providing
evidence, producing documents or taking other action with respect to any
threatened or asserted claim, including the cost of settlement thereof.
(d) In the event of the occurrence of any event which the Seller
or Purchaser, as the case may be, (herein called the "Indemnitee") asserts is
an indemnifiable event pursuant to this Section 10 the Indemnitee shall notify
the Seller or the Purchaser, as the case may be (the "Indemnitor"), promptly.
Such notice shall set forth the nature and amount of the loss, damage,
liability or claim for which indemnification is to be made hereunder. If such
event involves the claim of any third person and the Indemnitor confirms in
writing its responsibility therefor, the Indemnitor shall have sole control
over, and shall assume all expense with respect to, the defense or settlement
of such claim; provided, however, that:
(i) the Indemnitee shall be entitled to participate in
the defense of such claim and to employ counsel at its own expense to assist in
the handling of such claim,
(ii) the Indemnitor shall obtain the prior written approval of
the Indemnitee before entering into any settlement of such claim or ceasing to
defend against such claim, if pursuant to or as a result of such settlement or
cessation, injunctive or other relief would be imposed against the Indemnitee,
and
(iii) the Indemnitor shall not be entitled to control (but
shall be entitled to participate at their own expense in the defense of), and
the Indemnitee shall be entitled to have sole control over, the defense or
settlement of any claim to the extent the claim seeks an order, injunction or
other equitable relief against the Indemnitee which, if successful, could
materially interfere with the business, operations, assets, conditions
(financial or otherwise) or prospects of the Indemnitee.
If Indemnitor does not assume sole control over the defense or
settlement of such claim as provided in this Section (d) the Indemnitee shall
have the right to defend and settle the claim in such manner as it may deem
appropriate at the cost and expense of the Indemnitor, and Indemnitor will
promptly reimburse and indemnify the Indemnitee therefor in accordance with
this Section 10.
(e) In the event that Indemnitor shall be obligated to indemnify
the Indemnitee pursuant to this Section 11 the Indemnitor shall, upon payment
of such indemnity in full, be subrogated to all rights of the Indemnitee with
respect to the claims to which such indemnification relates.
Section 11. NOTICES.
Any notice (hereinafter called "Notice") in this Agreement provided or
permitted to be given by either Party to the other Party must be in writing and
shall be given or be served by depositing the same in the United States Mail,
postage prepaid and registered or certified and addressed to
Page 10 of 87
11
the Party to be notified, with return receipt requested. Notice deposited in
the mail in the manner hereinabove described shall be effective from and after
the expiration of three (3) days after it is so deposited. Notice given in any
other manner shall be effective only if and when received and acknowledged as
received by the Party to be notified. For purposes of notice, the addresses of
the Parties shall, until changed as hereinafter provided, be as follows:
If to Seller, to: With a copy to:
Casa Ole of Beaumont, Inc. Xxxxxx, Xxxx & Xxxxxx, L.L.P.
Attention: Xxxxxx X. Xxxxxx Attention: Xxxxx Xxx
0000 Xxxxxx Xxxxxxx 000 Xxxxxxx
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Phone: (000) 000-0000 Phone: (000) 000-0000
Telecopier: (000) 000-0000
If to Purchaser, to: With a copy to:
Casa Ole Restaurants, Inc. Xxxxx Xxxxxxx Rain Xxxxxxx
Attention: Xxx Xxxx Attention: Xxx X. Xxxxxxxxxxx
1135 Edgebrook 0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000-0000 Xxxxxx, XX 00000
Phone: (000)000-0000 Phone: (000) 000-0000
Telecopier: (000) 000-0000
Section 12. BROKER.
Each Party represents and warrants to the other that no broker or
sales agent has been used, consulted or retained by such representing and
warranting Party in connection with the negotiation or execution of this
Agreement or the purchase and sale of the Business and the Property. Each Party
agrees to indemnify the other Party against all liabilities, claims, demands
and actions by third parties for brokerage, commission, finder's or other fees
(including reasonable attorney's fees and costs of court) in any way or manner
whatsoever arising out of, related to, connected with or emanating from the
negotiation or execution of this Agreement or the purchase and sale of the
Property and alleged to be due by the authorization or on account of the
actions of the indemnifying Party. The indemnities of this Section 12 shall
survive the Closing.
Section 13. ASSIGNMENT; BINDING EFFECT; NO THIRD PARTY BENEFICIARY.
(a) No party hereto shall assign its rights or duties hereunder
without the prior written consent of the other party, which consent shall not
be unreasonably withheld.
(b) This Agreement shall inure to the benefit of and be binding on
Seller and Purchaser (subject to clause (a) above) and their respective
successors, receivers and assigns. No other person or entity is intended to or
shall have any rights or benefits under this Agreement or be deemed to be a
third party beneficiary of this Agreement.
Page 11 of 87
12
Section 14. REMEDIES ON DEFAULT.
The parties agree that:
(a) If Purchaser defaults in the performance of its obligations
under this Agreement, Seller may pursue all remedies, at law or in equity, for
Purchaser's breach, including without limitation the right of specific
performance, without the necessity of proving the inadequacy of money damages
as a remedy. Seller, at Seller's option and in Seller's sole discretion, may
waive any default of Purchaser and close pursuant to this Agreement.
(b) If Seller defaults in the performance of its obligation under
this Agreement, Buyer may pursue all remedies, at law or in equity, for
Seller's breach, including without limitation the right of specific
performance, without the necessity of proving the inadequacy of money damages
as a remedy. Buyer, at Buyer's option and in Buyer's sole discretion, may waive
any default of Seller and close pursuant to this Agreement.
Section 15. ENTIRE AGREEMENT.
This Agreement contains the entire agreement between Seller and
Purchaser concerning the sale by Seller to Purchaser of Seller's business and
the Property. This Agreement supersedes all prior and contemporaneous oral or
written negotiations, understandings, agreements and covenants by or between
the Parties.
Section 16. EXHIBITS.
The Exhibits referred to herein and attached hereto and incorporated
herein by this reference for all purposes.
Section 17. ATTORNEY'S FEES.
Should either party employ an attorney to enforce any provision hereof
or to protect such Party's interests in any manner arising under this Agreement
or any other document executed by such Party in connection herewith, the non-
prevailing Party in any such action pursued in an alternative dispute
resolution format or in courts of competent jurisdiction, the finality of which
is not legally contestable, agrees to pay to the prevailing Party all
reasonable attorneys' fees expended or incurred by the prevailing Party in
connection therewith. The provisions of this Section 17 shall survive the
Closing or a termination of this Agreement.
Section 18. COUNTERPARTS.
This Agreement is executed in multiple counterparts, each of which
shall be deemed to be an original, but all of which taken together shall
constitute but one and the same instrument which may be sufficiently evidenced
by any one counterpart. Without limiting the generality of the foregoing, the
signatures of the Parties may appear on multiple separate signature pages.
Section 19. EFFECTIVE DATE.
The Effective Date of this Agreement shall be the date that the
Agreement has been executed by Purchaser and delivered to Seller and has been
accepted and executed by Seller.
Section 20. ACCESS TO INFORMATION, AUDITS AND REVIEWS.
At any time within ninety (90) days prior to the exercise periods of
the FIRST OPTION or SECOND OPTION, Purchaser will be granted full access to all
premises and relevant information regarding each restaurant covered by such
option, including all applicable financial information, upon reasonable notice
during regular business hours of Seller. Purchaser will expressly be permitted
to conduct or have conducted, at Purchaser's sole risk and expense, any
environmental or other compliance audit or review Purchaser may deem
appropriate prior to the purchase of any restaurant.
Page 12 of 87
13
EXECUTED in multiple original counterparts as of the date and year
written below the respective signatures of the Parties.
SELLER:
CASA OLE OF BEAUMONT, INC.
Date: January 10, 1997 By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx, Chairman and CEO
SHAREHOLDERS:
Date: January 10, 1997 /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx
Date: January 10, 1997 /s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxx
Date: January 10, 1997 /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Xxxxxx X. Xxxxxxxx
PURCHASER:
CASA OLE RESTAURANTS,INC.
Date: January 16, 1997
By: Xxxxx X. Xxxx
--------------------------------------
Title: CEO and Chairman
-----------------------------------
Page 13 of 87
14
LIST OF EXHIBITS
Exhibit "A" - Description of Property
Exhibit "B" - Example of Purchase Price Calculations
Exhibit "C" - Form of Silsbee Land & Building Lease
Exhibit "D" - Form of Jasper Building Lease
Exhibit "E" - Form of Jasper Land Lease
Exhibit "F" - Form of Xxxx of Sale
Exhibit "G" - Form of Purchaser's Closing Certificate
Page 14 of 87
15
EXHIBIT "A" TO OPTION CONTRACT AND AGREEMENT
All of the furniture and fixtures, equipment, tools, utensils, inventory, food
and beverages, and supplies of Seller's Casa Ole Restaurants located in
Silsbee, Texas, and in Jasper, Texas, but excluding the cash registers located
in such restaurants.
Page 15 of 87
16
EXHIBIT "B" TO OPTION CONTRACT AND AGREEMENT
EXAMPLE OF PURCHASE PRICE CALCULATIONS
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CASA OLE OF BEAUMONT, INC.
CALCULATION OF ESTIMATED SALES PRICE
KEEPING THE BUILDING
JASPER 943
YEAR 9 MONTHS 3 MONTHS 9 MONTHS 12 MONTHS
ENDED ENDED ENDED ENDED ENDED
9/30/95 6/30/95 9/30/95 6/30/96 6/30/96
-------------------------------------------------- ------------
TOTAL SALES 940,488 669,204 271,284 833,021 1,104,305
================================================== ============
NET INCOME (LOSS) FROM OPERATIONS (12,367) 7,755 (20,372) 72,849 72,477
ADD DEPRECIATION & AMORTIZATION 52,061 43,511 8,440 31,602 40,042
ADMINISTRATIVE FEES 65,826 46,834 18,992 58,325 77,317
INTEREST EXPENSE 47,455 36,252 18,992 58,325 42,184
FRANCHISE TAXES 5,564 0 5,564 0 5,564
LEGAL EXPENSES 26,000 26,094 (94) 1,500 1,405
REPAIRS & MAINTENANCE GREATER THAN 3% OF SALES 0 0 0 0 0
BIG THICKET INCOME (LOSS) 11,157 6,947 2,210 20,261 22,471
OTHER NONREOCCURRING 0
DEPREC. ADJ..[(52.051 1/4) - 8,440] (4,573) 4,573 4,573
LEASE PROPERTY ADJUSTMENT 17,650 (9,950) 27,500 (950) 25,750
-------------------------------------------------- ------------
213,318 154,200 50,118 233,858 292,784
MULTIPLE 5
------------
1,483,920
LEASE HYPOTHETICAL RENT (5,500/MO - 2,950/MO + 5% OF SALES GREATER THAN 1,320,000) - 5 (244,800)
------------
SALES PRICE 1,219,120
============
Page 17 of 87
18
CASA OLE OF BEAUMONT, INC.
CALCULATION OF ESTIMATED SALES PRICE
KEEPING THE BUILDING
SILSBEE 942
YEAR 9 MONTHS 3 MONTHS 9 MONTHS 12 MONTHS
ENDED ENDED ENDED ENDED ENDED
9/30/95 6/30/95 9/30/95 6/30/96 6/30/96
-------------------------------------------------- ------------
TOTAL SALES 1,410,993 1,053,472 357,521 1,082,244 1,439,765
================================================== ============
NET INCOME (LOSS) FROM OPERATIONS 293,042 221,915 71,127 215,933 287,080
ADD DEPRECIATION & AMORTIZATION 52,143 43,059 9,084 31,871 40,955
ADMINISTRATIVE FEES 96,764 73,738 25,026 75,755 100,781
INTEREST EXPENSE 48,646 36,028 12,818 32,800 45,418
FRANCHISE TAXES 5,564 0 5,564 0 5,564
LEGAL EXPENSES 0 94 (94) 1,537 1,443
REPAIRS & MAINTENANCE GREATER THAN 3% OF SALES 0 0 0 0 0
BIG THICKET INCOME (LOSS) (2,433) (3,061) 648 30 670
OTHER NONREOCCURRING 0
DEPREC. ADJ..[(52.143 1/4) - 9,084] (3,952) 3,952 3,952
-------------------------------------------------- ------------
495,726 367,601 127,925 367,926 488,851
MULTIPLE 5
------------
2,429,255
LEASE HYPOTHETICAL RENT (5,500/MO - 2,950/MO + 5% OF SALES GREATER THAN 1,320,000) - 5 (624,000)
------------
SALES PRICE 1,805,255
============
Page 18 of 87
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EXHIBIT "C" TO OPTION CONTRACT AND AGREEMENT
FORM OF SILSBEE LAND & BUILDING LEASE
Page 19 of 87
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SILSBEE LAND & BUILDING LEASE AGREEMENT
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF XXXXXX )
WITNESS THIS LEASE AGREEMENT made and entered into by and between Casa
Ole of Beaumont, Inc., a Texas general business (hereinafter referred to as
"Landlord" or "Lessor"), and Casa Ole Restaurants, Inc., a Texas general
business (hereinafter referred to as "Tenant" or "Lessee").
WHEREAS, Lessee desires to lease certain property from Lessor for the
conduct of its business;
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE 1
Lessor has leased, demised and rented, and by these presents does
lease, demise and rent to Lessee the land, building and premises, including
expressly Lessor's interest in the parking and delivery areas and all interests
and rights appurtenant to the premises, and easements for pedestrian and
vehicular ingress and egress over and across the relevant paved areas as exist
from time to time, situated in Silsbee, Xxxxxx County, Texas, as more fully
described in Exhibit A attached hereto, which exhibit is hereby incorporated
for all purposes, hereinafter referred to as the "leased premises".
ARTICLE 2
2.1 The primary term ("Primary Term") of this Lease shall be for
fifteen (15) years and shall commence on ______________, 199___ (the "Date of
Commencement") and shall expire on _______________, 200___.
2.2 Lessee is hereby granted and shall, if not at the time in
default under this Lease, have an option to renew and extend the term of this
Lease for three (3) additional terms of five (5) years each (each such five
year renewal term referred to herein as a "Renewal Term"), otherwise on the
same terms, covenants and conditions and, subject to the same exceptions and
reservations herein contained.
2.3 The renewal options set forth in paragraph 2.02 above shall be
exercised only by Lessee's delivering to Lessor in person or by United States
mail not less than two hundred seventy (270) days prior
Page 20 of 87
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to the commencement of each the Renewal Term, written notice of Lessee's
intention to exercise such option as herein provided. If mailed, notice shall
be deemed given when it is deposited in the U.S. mail, postage prepaid,
addressed to Lessor at the address provided herein for the giving of notice.
2.4 If Lessee shall fail to appropriately exercise the renewal
options set forth above, then the Lease shall expire at the end of the current
term of the Lease then in effect.
ARTICLE 3
3.1 During the Primary Term of this Lease, Lessee agrees and
obligates itself to pay to Lessor rental in the amount set forth herein, which
shall be due and payable as hereinafter provided.
3.2 Lessee agrees to pay Lessor base rental in monthly
installments of SIX THOUSAND FIVE HUNDRED AND NO/100 DOLLARS ($6,500.00) each
month, said rent being payable on the first (1st) day of each calendar month,
monthly in advance, beginning the 1st day of _________, 199___, and continuing
monthly thereafter, provided however, upon Lessor's request, Lessee will pay
the first month's rental installment to Lessor upon the execution hereof,
notwithstanding the fact that this Lease Agreement may be signed prior to the
beginning of the Primary Term. At the beginning of each Renewal Term, the base
rent shall increase by the sum of THREE HUNDRED DOLLARS ($300.00) per month.
3.3 The monthly installments of base rent shall be due and payable
by Lessee monthly in advance as above provided, without demand or other notice.
3.4 All rental installments, when due and payable, shall be paid
in lawful money of the United State of America to Lessor at Lessor's address
set forth herein or at such other address as shall be designated by Lessor by
written notice given to Lessee at least ten (10) days prior to the next ensuing
rental payment date. All rental payable hereunder shall be due and payable
without prior demand and without any set-offs or deductions whatsoever.
3.5 (a) In addition to the base rent provided above, Lessee
agrees to pay to Lessor, as additional rent for the use and occupancy of the
leased premises, a sum equal to five percent (5%) of all of Lessee's annual
gross receipts in excess of ONE MILLION FIVE HUNDRED SIXTY THOUSAND
Page 21 of 87
22
DOLLARS ($1,560,000.00) that Lessee realizes each lease year from operation of
the leased premises. This percentage rent shall be paid monthly, beginning on
the twentieth (20th) day of the month immediately following the month in which
Lessee's gross receipts for the current lease year have reached ONE MILLION
FIVE HUNDRED SIXTY THOUSAND DOLLARS ($1,560,000.00), and continuing on the same
day of each succeeding month thereafter for the remainder of the then current
lease year.
(b) The term GROSS RECEIPTS as used in this Lease means
receipts from gross retail sales of Lessee and of all licensees,
concessionaires and lessees of Lessee from all business conducted on or from
the leased premises by Lessee and all others, whether such sales be evidenced
by check, credit, charge account, exchange or otherwise.
1. The term GROSS RECEIPTS includes, but is not limited
to, the following:
(i) The amounts received from the sale of food,
beverages, merchandise and services sold or performed
in, on or from the leased premises, whether such
orders be filled from the leased premises or
elsewhere.
(ii) Proceeds from all automatic vending and other
machines owned and operated by Lessee in or on the
premises.
(iii) Commissions received by Lessee from automatic vending
and other machines not owned by Lessee but operated
in or on the leased premises.
(iv) Commissions received by Lessee from the operation of
public telephones in or on the leased premises.
(v) Proceeds from sales of merchandise or services based
on orders solicited or taken from, in or on the
leased premises, to be delivered or performed off of
the leased premises or from sources outside of the
leased premises.
2. The term GROSS RECEIPTS does not include the
following items, which may be excluded from gross receipts to the
extent they have been included:
(i) Credits and refunds made to customers for foods,
beverages or merchandise returned or exchanged or for
services performed unsatisfactorily.
(ii) Any sales, use, value added or gross receipts tax
imposed by any federal, state, municipal or
governmental authority directly on sales and
collected from customers, provided that the amount of
the tax is added to the selling price or absorbed in
that price and paid by Lessee to the governmental
authority.
Page 22 of 87
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(c) On or before the twentieth (20th) day following each
month during the term and each renewal term of this Lease, Lessee shall furnish
Lessor with a true and accurate statement, signed by Lessee or by an authorized
representative of Lessee, showing the gross receipts, as defined in paragraph
(b) for the preceding month.
(d) For the purpose of ascertaining the amount payable as
rent, Lessee agrees to prepare and maintain for a period of not less than three
(3) years following the end of each lease year, adequate records that will show
inventories and receipts of food, beverages and merchandise at the leased
premises and daily receipts from all sales and other transactions on or from
the leased premises by Lessee and any other persons conducting any business on
or from the leased premises. At the time of each transaction, Lessee or any
other person conducting the transaction on or from the leased premises will
record all receipts from sales and other transactions, whether for cash or
credit, in a cash register or registers having a cumulative total and sealed in
a manner approved by Lessor and having such other features as approved by
Lessor. Lessee further agrees to maintain on the leased premises, or at its
corporate headquarters, for at least five (5) years following the end of each
lease year, all sales, use, value added, gross receipts and occupation tax
returns with respect to the lease year and all pertinent original sales
records. Pertinent original sales records shall include the following: all cash
register tapes, serially numbered sales slips and originals of all orders
filled by Lessee from the leased premises or processed by Lessee at the leased
premises and filled from some location other than the leased premises.
(e) Lessor and authorized representatives of Lessor shall have
the right to examine the records described in the preceding paragraph at the
leased premises during Lessee's regular business hours. If, on examination of
the books or records of Lessee, an error shall be revealed in favor of Lessor
that results in additional percentage rental due Lessor in excess of $2,500.00,
then the reasonable costs of the examination must be paid by Lessee to Lessor.
Otherwise, Lessor will bear the cost of the examination.
Page 23 of 87
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ARTICLE 4
4.1 Lessee shall pay, in addition to the rent herein required, all
taxes, assessments, and other governmental charges, general or special,
ordinary and extraordinary, and any kind and nature whatsoever applicable to
the leased premises and all improvements, fixtures and equipment thereon,
including but not limited to assessments for public improvements or benefits
which shall, during the term hereof, be laid, assessed, levied or imposed or
become due and payable and a lien upon the leased premises or any part thereof.
4.2 Lessee shall pay all personal property taxes levied upon any
property in or about said premises; provided that Lessee will not be obligated
to pay personal property taxes levied on Lessor's property not utilized by
Lessee in the ordinary course of its business.
4.3 Real property taxes for the fiscal year pertaining to the
commencement of this Lease and for the fiscal year pertaining to the
termination of this Lease shall be prorated as of the date of said commencement
and termination.
4.4 Except as hereinafter provided, all payments to be made by Lessee
pursuant to this article shall be made before any fine, penalty, interest or
cost may be added thereto for the non-payment thereof, and Lessee shall furnish
Lessor, within thirty (30) days after written request thereof by Lessor, with
official receipts or other evidence satisfactory to Lessor that such tax has
been paid.
4.5 Lessee shall have the right in good faith to contest or review by
legal proceedings, or in such other manner as it deems suitable (which
proceedings, if instituted, shall be conducted promptly at Lessee's expense and
free of expense to Lessor) any such charges, real property and personal
property taxes, and assessments, provided that upon the conclusion of such
proceedings Lessee shall pay the amount that shall be finally assessed or
imposed against said premises or be adjudicated or otherwise determined to be
due and payable. Lessor will join in any contest or protest provided for in
this article at the request of Lessee, but at Lessee's sole cost and expense,
and as a condition of such joinder may require reasonable indemnity against
costs or other damages by reason of such joinder.
Page 24 of 87
25
ARTICLE 5
5.1 During the term of this Lease, Lessee, at its expense, shall keep
and maintain upon all improvements and fixtures on the leased premises fire
insurance with extended coverage endorsement, written by a responsible
insurance company or companies authorized to do an insurance business in Texas
and acceptable to Lessor in an amount equal to not less than the full insurable
value thereof, excluding foundation and excavation costs. Said policy or
policies of insurance shall provide that payment for any losses covered under
or by said policy or policies shall be made to Lessor and Lessor shall be
entitled to retain the proceeds of any such insurance. A certificate of such
insurance shall be forwarded to Lessor by Lessee or on Lessee's behalf.
5.2 In addition to the insurance required under Section 5.1, Lessee
agrees to carry and maintain, and have in full force and effect throughout the
term of this Lease, workmen's compensation insurance, general comprehensive
liability insurance (which includes, but is not limited to, coverage for
products and completed operations and premises operation), and liquor liability
insurance, with an insurance company or companies authorized to transact
business in the State of Texas, for the benefit of Lessor and Lessee, and for
the protection of all persons who may suffer injury while in, on or about the
premises or from Lessee's activities and conduct of business. The amount and
coverage of such insurance shall be as reasonably approved by Lessor from time
to time. Such liability policies, if available, shall be endorsed to insure
contractual liabilities of Lessee including but not limited to the indemnities
of Lessee to Lessor under this Lease. Lessee agrees to deliver to Lessor, upon
request, a certificate showing that said insurance is in full force and effect.
The obligation of Lessee for the insurance specified herein may be brought
under the provisions of any so-called blanket policies carried by Lessee which
otherwise meet the requirements hereof, provided that all of said policies of
insurance shall name Lessor as co-insured.
5.3 LESSEE AGREES TO PROTECT AND TO INDEMNIFY AND SAVE HARMLESS LESSOR
AGAINST AND FROM ANY AND ALL CLAIMS, DAMAGES, LIABILITIES, COSTS, LOSSES, AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) ARISING OR RESULTING IN ANY
MANNER, DIRECTLY OR INDIRECTLY, (i) FROM THE CONDUCT OF LESSEE'S BUSINESS, OR
(ii) FROM ANY WORK, CONSTRUCTION, REPAIRS, MAINTENANCE, OR THING WHATSOEVER
DONE OR SUFFERED TO BE
Page 25 of 87
26
DONE BY LESSEE ON OR ABOUT THE LEASED PREMISES, OR (iii) FROM ANY CONDITION OF
OR DEFECT IN THE LEASED PREMISES CAUSED BY LESSEE OR IN ANY FIXTURES,
IMPROVEMENTS OR EQUIPMENT NOW OR HEREAFTER LOCATED THEREON OR THEREUNDER CAUSED
BY LESSEE, OR (iv) FROM ANY BREACH OR DEFAULT ON THE PART OF LESSEE IN THE
PERFORMANCE OF ANY COVENANT OR AGREEMENT ON THE PART OF LESSEE TO BE PERFORMED
PURSUANT TO THE TERMS OF THIS LEASE, WHETHER OR NOT ACTED UPON BY LESSOR, OR
(v) FROM ANY ACT OR OMISSION OF LESSEE, OR ANY OF ITS AGENTS, DEALERS,
CONTRACTORS, SERVANTS, EMPLOYEES, LICENSEES, OR INVITEES, OR (vi) FROM LEAKS,
DISCHARGES, OR EMISSIONS OF ANY KIND FROM THE LEASED PREMISES CAUSED BY LESSEE
OR ANY FIXTURES, IMPROVEMENTS OR EQUIPMENT THEREON OR THEREUNDER CAUSED BY
LESSEE WHETHER OR NOT SUCH OCCURRENCE CONSTITUTES A VIOLATION OF ANY APPLICABLE
LEGAL REQUIREMENTS OR A NUISANCE, OR (vii) FROM ANY FIRE OR EXPLOSION CAUSED BY
LESSEE OCCURRING ON OR ABOUT THE LEASED PREMISES OR IN CONNECTION WITH THE
OPERATION OF LESSEE'S BUSINESS, OR (viii) FROM ANY NUISANCE CREATED OR SUFFERED
TO EXIST BY LESSEE, ITS AGENTS, DEALERS, CONTRACTORS, SERVANTS, EMPLOYEES,
LICENSEES, OR INVITEES, OR (ix) ANY VIOLATION OF OR FAILURE TO SATISFY ANY
LEGAL REQUIREMENT BY LESSEE DURING THE TERM OF THIS AGREEMENT. THESE
INDEMNITIES SHALL APPLY TO ACTS, OMISSIONS, AND OCCURRENCES DURING THE TERM OF
THIS LEASE. THESE INDEMNITIES BY LESSEE SHALL APPLY REGARDLESS OF THE SOLE OR
ANY CONTRIBUTING NEGLIGENCE OR NON-NEGLIGENT ACTS OR OMISSIONS OF OR VIOLATION
OR LACK OF COMPLIANCE WITH ANY LEGAL REQUIREMENTS BY LESSOR, THEIR AGENTS,
CONTRACTORS, EMPLOYEES, SERVANTS, DEALERS, OR LICENSEES. FOR PURPOSES OF THESE
INDEMNITIES, DAMAGES SHALL BE DEEMED TO INCLUDE ACTUAL, CONSEQUENTIAL, TREBLE,
AND PUNITIVE DAMAGES AND FINES AND PENALTIES OF ANY KIND PAYABLE TO THIRD
PARTIES. IN NO EVENT SHALL LESSEE BE LIABLE FOR (i) ANY ACT, OMISSION OR
OCCURRENCE OR OTHER LIABILITY (WHETHER CONTRACTUAL OR TORT) RELATING TO THE
LEASED PREMISES ARISING PRIOR TO THE DATE OF THIS LEASE, AND/OR (ii) ANY
CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES TO LESSOR FOR ANY MATERS ARISING
OUT OF OR RELATED TO THIS LEASE.
IN CASE ANY ACTION OR PROCEEDING COVERED BY THE FOREGOING INDEMNITY
SHOULD BE BROUGHT AGAINST LESSOR, LESSEE, UPON NOTICE FROM LESSOR, COVENANTS TO
RESIST OR DEFEND SUCH ACTION OR PROCEEDING BY RETAINING COUNSEL REASONABLY
SATISFACTORY TO LESSOR.
Page 26 of 87
27
LESSEE COVENANTS AND AGREES TO PAY, AND TO INDEMNIFY LESSOR AGAINST,
ALL LEGAL COSTS AND CHARGES, INCLUDING COUNSEL FEES, LAWFULLY AND REASONABLY
INCURRED IN OBTAINING POSSESSION OF THE PREMISES AFTER DEFAULT BY LESSEE OR
UPON EXPIRATION OR EARLIER TERMINATION OF THE TERM OF THIS LEASE OR IN
ENFORCING ANY COVENANT OR AGREEMENT OF LESSEE HEREIN CONTAINED.
THE COVENANTS BY LESSEE TO INDEMNIFY LESSOR PROVIDED IN THIS ARTICLE
SHALL SURVIVE THE TERMINATION OF THIS LEASE WITH RESPECT TO ANY CLAIMS,
DAMAGES, LIABILITIES, COSTS, LOSSES AND EXPENSES THEREAFTER ASSERTED OR
INCURRED BASED UPON, ARISING FROM OR TRACEABLE TO (IN WHOLE OR IN PART) ANY
EVENTS, ACTS, OMISSIONS, OR OCCURRENCES DURING THE TERM OF THIS LEASE.
5.4 LESSOR AGREES TO PROTECT AND TO INDEMNIFY AND SAVE HARMLESS LESSEE
AGAINST AND FROM ANY AND ALL CLAIMS, DAMAGES, LIABILITIES, COSTS, LOSSES, AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) ARISING OR RESULTING IN ANY
MANNER, DIRECTLY OR INDIRECTLY, (i) FROM ANY ACT OR OMISSION OF LESSOR OR ANY
OF LESSOR'S AGENTS, EMPLOYEES, OFFICERS, DIRECTORS, INVITEES, CONTRACTORS OR
REPRESENTATIVES OCCURRING PRIOR TO THE DATE OF THIS LEASE AGREEMENT, (ii) FROM
THE OPERATION OF LESSOR'S BUSINESS OR THE BUSINESS OF ANY PRIOR TENANT ON AND
ABOUT THE LEASED PREMISES PRIOR TO THE DATE OF THIS LEASE AGREEMENT, OR (iii)
FROM ANY ENVIRONMENTAL CONTAMINATION OR THE PRESENCE OF ANY TOXIC OR HAZARDOUS
SUBSTANCE THAT EXISTS ON THE LEASED PREMISES AS OF OR PRIOR TO THE DATE OF THIS
LEASE AGREEMENT, OR (iv) FROM ANY BREACH OR DEFAULT ON THE PART OF LESSOR IN
THE PERFORMANCE OF ANY COVENANT OR AGREEMENT ON THE PART OF LESSOR TO BE
PERFORMED PURSUANT TO THE TERMS OF THIS LEASE, WHETHER OR NOT ACTED UPON BY
LESSEE.
ARTICLE 6
Lessee shall not assign or hypothecate this Lease, or any part
thereof, of the leased premises, either voluntarily or involuntarily, or by
operation of law, without the prior written consent of Lessor, which consent
shall not be unreasonably withheld or delayed. Lessee shall not sublease and
grant concessions on all or any part of the leased premises without the consent
of Lessor and shall in all such cases remain fully and directly responsible for
all of the obligations of Lessee hereunder.
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ARTICLE 7
All improvements erected upon the leased premises shall become a part
thereof and shall become the property of Lessor upon the termination of this
Lease. All trade fixtures installed by and belonging to Lessee may be removed
by Lessee upon termination of this Lease, provided Lessee is not in default
under the terms of this Lease and that same may be so removed without permanent
damage to any building or improvements on the premises, and provided further
that any damage to the said building or improvements occasioned by such removal
shall be promptly repaired by Lessee. In the event said fixtures are not so
removed within sixty (60) days from and after termination of this Lease, the
same shall become the property of Lessor.
ARTICLE 8
Lessee accepts the leased premises as is, in its present condition,
and Lessor has made no representation or warranty as to the condition,
habitability, or fitness for any purpose of the leased premises, and Lessor
shall not be liable for any latent or patent defects therein; provided,
however, Lessor has not received notice of and is not aware of any material
violations of applicable laws that exist at the leased premises.
Lessee agrees that it accepts the premises "as is" and hereby waives
any claim against Lessor for any latent defects which may exist. Any building
and improvements constructed upon the leased premises shall constitute and be a
part of the leased premises for all purposes.
Lessee shall be obligated, at its sole cost and expense, to keep all
of the leased premises, including, but not limited to, all glass, roofs,
fixtures, plumbing, wiring, HVAC equipment, walls and parking and driveway
areas in good order and repair, usual wear and tear and damage by the elements,
earthquake and fires excepted. Lessee may, at its sole cost and expense, make
additional alterations and improvements to any building and improvements as it
deems necessary during the period of said Lease, provided, however, that no
structural improvements, alterations or additions shall be made without
Lessor's written consent, which consent shall not be unreasonably withheld.
Lessee shall hold Lessor harmless for any cost or
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expenses incurred in connection with any such initial or subsequent
improvements or additions. Notwithstanding the foregoing, Lessee shall be
permitted to make any alterations to the leased premises that may be required
from time to time by applicable law without the consent of Lessor; provided,
however, prior to making any alteration Lessee shall notify Lessor and shall be
subject to the reasonable directions of the Lessor in making such alteration,
and all of such alterations shall be made at Lessee's sole expense. If any
repair should be necessitated by reason of an insured casualty, Lessee's
obligation shall be limited to the extent of insurance proceeds received by
Lessee.
Nothing in this article limits the indemnities for third-party
liabilities provided by this Lease.
ARTICLE 9
Lessee shall comply with all laws, ordinances, judgments, injunctions,
orders, regulations, rules, requirements, guidelines, and notices (hereinafter
called "legal requirements") of every kind or nature, applicable in any way to
the conduct of Lessee's business, or any maintenance, repair or construction
work undertaken on the leased premises, or to Lessee's use or occupancy of the
leased premises, and whether the same or any of them relate to ordinary or
extraordinary, structural or nonstructural, changes or requirements to or in
and about said premises, or any improvements thereon or any such property or
changes or requirements incident to or as the result of any use or occupation
thereof and Lessee shall pay any and all costs and expenses incidental to such
compliance with all legal requirements. Without relieving Lessee of its duty to
indemnify Lessor under this Lease or under any other agreement, Lessee shall
have the right to contest the validity of or seek a variance from or review of
said legal requirements by legal proceedings or in any such other manner as it
deems suitable, and may have, if able, said legal requirements cancelled,
removed, or revoked without actual compliance with the same, and if such
actions or proceedings are instituted, they shall be conducted promptly at the
expense of Lessee and free of expense to Lessor. Notwithstanding the foregoing,
Lessee shall not be obligated to indemnify Lessor for any violation of legal
requirements relating to the condition of the leased premises existing on the
date hereof. If and whenever said legal requirements shall become absolute
against Lessee and the leased premises, or against Lessor,
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after contest thereof, Lessee shall then comply with the same with due
diligence. Lessor shall have no duty to inspect, monitor, check or otherwise
supervise, review or enforce any of Lessee's responsibilities hereunder and
Lessor's failure to do so shall in no way limit the liability of Lessee to
indemnify Lessor as provided in this Lease or any other agreement. Lessor will
join in any contest provided for in this article at the request of Lessee, but
at Lessee's sole cost and expense, and as a condition of such joinder may
require reasonable indemnity against costs or other damages by reason of such
joinder.
ARTICLE 10
Lessor shall not be liable for any damage occasioned by failure to
keep the premises in repair and shall not be liable for any damage done or
occasioned by or from plumbing, gas, water, steam, or other pipes or sewerage,
nor for any damages arising from acts of neglect of Lessee, sub-lessees or
other occupants of the premises, with or without Lessor's consent, or of any
owners or occupants of adjacent or contiguous property.
ARTICLE 11
Lessee may use the premises solely for the purpose of operating a
Mexican food restaurant. Lessee shall not permit said premises to be used for
any unlawful purpose or purposes that will injure the reputation of the same or
the improvements thereon and will not permit the same or any portion thereof to
remain vacant or unoccupied for more than one (1) month without the consent of
Lessor, which consent will not be unreasonably withheld.
ARTICLE 12
Lessee shall pay, in addition to the rents above specified, all
utility bills of any nature, and garbage, sewerage, and waste disposal costs
and expenses levied or charged on said premises for and during the time for
which this Lease is granted.
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ARTICLE 13
If Lessee shall fail to pay any rental as herein provided when the
same is due and payable, or if Lessee shall fail to observe, keep or perform
any other provisions of this Lease required to be observed, kept or performed
by Lessee, Lessee shall have twenty (20) days from and after written notice of
default within which to cure same; provided if such default is of a nature that
it cannot be cured within twenty (20) days and Lessee commences to cure such
default within such twenty (20) day period and thereafter diligently proceeds
to cure such default, the twenty (20) day period shall be extended for an
additional one hundred twenty (120) days so long as Lessee is diligently
proceeding in good faith to cure such default. If Lessee shall fail to cure any
default as provided herein, Lessor shall have the right at its election and in
addition and without prejudice to any other remedies, to declare the entire
amount of rental due and payable forthwith, and/or to terminate this Lease
and/or enter upon said leased premises or any part thereof either with, or
without, process of law, and Lessee, or any person or persons occupying the
same, may be expelled, removed or put out, using such force as may be necessary
so to do, and repossess and enjoy said premises as before this Lease, without
prejudice to any remedies which might otherwise be used for arrears of rent or
preceding breach of covenants.
Any repossession of said premises shall not constitute a termination
of this Lease unless Lessor so notified Lessee in writing, and Lessor shall
have the right, at its option, to lease the premises so repossessed to any
other person or persons upon such terms and conditions as Lessor shall
determine. In such event, Lessee shall be and remain liable to Lessor for the
difference between the rental provided herein and the rentals so obtained from
any third person, plus all costs and expenses to Lessor of repossessing and
releasing said premises, and of transporting, repairing and/or otherwise
handling the fixtures and equipment located thereon.
ARTICLE 14
If at any time during the term hereof, proceedings in bankruptcy shall
be instituted by or against Lessee and result in an adjudication of bankruptcy,
or if Lessee shall file, or any creditor shall file, or any
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other person shall file, any petition in bankruptcy, under the Bankruptcy Act
of the United States of America as such act is now in force, or the same may be
amended or superseded, and shall be judicially approved, or a receiver of the
business or assets of Lessee shall be appointed, and if such appointment be not
vacated within twenty (20) days after notice thereof to Lessee, or if a general
assignment is made by Lessee or sub-lessee for the benefit of creditors, any
sheriff, marshal, constable or keeper take possession thereof by authority of
any attachment or execution proceedings, Lessor may at its option, in either or
any of such events, without notice to Lessee or any other person or persons,
immediately recapture and take possession of the leased premises and terminate
this Lease, with or without process of law; such process being expressly waived
by Lessee.
ARTICLE 15
In the event that greater than fifty percent (50%) of the leased
premises is destroyed or significantly damaged by fire or other casualty, the
Lessee shall have the right to terminate this Lease in accordance with this
Article 15, and the Lessor shall have the right to terminate this Lease in
accordance with this Article 15 if fewer than five (5) years remain for the
balance of this Lease and any renewals at such time. Upon such event, any party
entitled to terminate the Lease must do so by giving written notice to the
other party within thirty (30) days of the date that the damaged was sustained
by the leased premises. If the parties do not exercise any right they have to
terminate the Lease, or if less than fifty percent (50%) of the leased premises
is destroyed or significantly damaged by fire or other casualty, then the Lease
will not terminate and in that event Lessor shall be obligated to restore the
leased premises to substantially the same condition as before the damage was
sustained thereto, provided that Lessor shall not be obligated to spend any
amount to restore the leased premises that exceeds the amount of insurance
proceeds that Lessor receives as a result of the damage sustained to the leased
premises. Lessor shall not be obligated to begin restoring the leased premises
until Lessor has received the insurance proceeds payable as a result of the
damage. So long as the damage to the leased premises was not caused of Lessee's
negligence or intentional act, then the rent payable hereunder shall be abated
during such time that the Lessee is unable to use the leased premises
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until they have been restored. Lessee shall not be entitled to any abatement of
rent if the damage to the leased premises was caused by Lessee's negligence or
intentional act.
Regardless of the cause of any damage sustained by the leased
premises, in no event shall Lessee receive or be entitled to compensation or
damages from Lessor on account of any loss, whether of business, profits,
property, or otherwise, or for inconvenience, annoyance or personal injury
resulting from such destruction, or from or in the course of restoration,
repair or reconstruction of all or any part of the buildings or improvements,
nor for any loss, injury to or damage to persons or property in, upon or from
the leased premises from any cause or from the termination of this Lease, as
herein provided.
ARTICLE 16
Each and all of the terms, conditions, covenants and obligations
hereof shall inure to the benefit of and bind the successors in interest of the
parties hereto, provided that these provisions shall not be deemed to alter the
provisions of Article 6 hereof.
ARTICLE 17
17.1 Total Taking. If all or substantially all of the improvements
on the Leased Premises or the Leased Premises shall be taken by condemnation or
in any other manner for any public or quasi-public use or purpose (other than
for temporary use or occupancy), the term of this Lease shall terminate as of
the date of vesting of title (the "Date of the Taking") and, subject to a
proration and apportionment of all rental and other sums due hereunder as of
the Date of the Taking, no further rent shall be due hereunder.
17.2 Partial Taking. If a part of the Leased Premises shall be so
taken by condemnation, then Lessor shall give Lessee prompt written notice
thereof and the part so taken shall no longer constitute part of the Leased
Premises, but this Lease shall continue in force and effect as to the part not
so taken; provided, however, that Lessee may elect to terminate this Lease (i)
if a partial taking is more than fifty percent (50%) of the Leased Premises;
(ii) if the partial taking lasts for more than one (1) year; or (iii) if, in
the good faith and mutual judgment of Lessee and Lessor, the remaining portion
of the Leased Premises cannot be economically and practicably used by Lessee
for the conduct of its business. Lessee shall give
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notice of any election to terminate to Lessor not later than sixty (60) days
after notice of such taking is given by Lessor to Lessee. Upon the date
specified in Lessee's notice (which shall not be more than one hundred eighty
(180) days thereafter), the term of this Lease shall terminate and, subject to
a proration and apportionment of all rental and other sums due hereunder as of
the Date of the Taking and such date, as applicable, no further rent shall be
due hereunder. Upon a partial taking and the term of this Lease continuing in
force as to any part of the Leased Premises, the rental shall be reduced
proportionately based upon the part or parts of the Leased Premises and/or
other parts of the improvements so taken.
17.3 Award. Lessor shall be entitled to receive the entire award in
any proceeding with respect to any taking (other than for temporary use and
occupancy) provided for in this Article without deduction therefrom for any
estate vested in Lessee by this Lease and Lessee shall receive no part of such
award, except as hereinafter expressly provided. Lessee shall have the right to
make a separate claim with the condemning authority for (i) any moving expenses
incurred by Lessee as a result of such condemnation; (ii) any costs incurred
and paid by Lessee in connection with any alteration or improvement made by
Lessee to the Leased Premises; (iii) the value of any of Lessee's property
taken; and (iv) any other separate claim which Lessee may hereafter be
permitted to make, provided, however, that such separate claim shall not reduce
or adversely affect the amount of the award (as hereinafter defined) to which
Lessor is entitled. If Lessee shall not be permitted to make a separate claim
in such proceeding, Lessor shall prosecute all claims in such proceeding on
behalf of both Lessor and Lessee in which event Lessee may, if it so elects and
at its expense, attend hearings, present arguments and generally participate in
the conduct of the proceeding; provided, however, that if Lessor incurs any
additional expense because of Lessee's exercising its rights under this
sentence, Lessee will bear such additional expense.
17.4 Temporary Taking. If all or any part of the Leased Premises
shall be temporarily taken by condemnation or otherwise for any public or
quasi-public use or purpose (unless Lessee shall have elected to terminate the
term of this Lease in accordance with the option provided in the last sentence
of this section), this Lease shall nevertheless remain in full force and
effect. Lessee shall continue to be
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responsible for all of its obligations hereunder insofar as such obligations
are not affected by such taking; provided, however, that Lessee shall not be
liable for the payment of rental or other sums for the part of the Leased
Premises so temporarily taken.
ARTICLE 18
No express or implied waiver of Lessor or of any default hereunder
shall be in any way construed to be a waiver of any future or subsequent
default of Lessee, or a waiver of any of the rights of Lessor under the terms
of this Lease. If any clause or provision of this Lease is invalid or
unenforceable for any reason, such clause or provision shall be deemed
severable and the other clauses and provisions hereof shall remain in full
force and effect and shall be enforceable to the full extent permitted by law.
ARTICLE 19
Notices and demands by either party hereto may be given by certified
or registered mail, postage prepaid, addressed as follows:
LESSOR: Casa Ole of Beaumont, Inc.
0000 Xxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
LESSEE: Casa Ole Restaurants, Inc.
0000 Xxxxxxxxx
Xxxxxxx, XX 00000
subject to the right of either party to designate, by notice in writing, any
new address to which said notices or demands must be sent.
ARTICLE 20
Lessor shall have the right to mortgage the leased premises and this
Lease shall be subordinate to any existing or future mortgage; provided,
however, that the mortgage holder must agree to enter into a nondisturbance
agreement with Lessee on terms reasonably acceptable to Lessee and the mortgage
holder.
ARTICLE 21
This Lease shall be binding upon and inure to the benefit of the
successors, assigns, heirs, administrators and executors of each of the parties
hereto. The parties may concurrently herewith for
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recording purposes execute a short form of the within lease, the same to be
acknowledged by all parties before a Notary Public. Whenever in this Lease the
word "mortgage" is used, it shall be deemed to include in its use a "Deed of
Trust" and shall also be deemed to include interim mortgages during
construction and permanent mortgages after completion of construction.
ARTICLE 22
This Lease is subject in all events to all easements, restrictions,
rights-of-way, and covenants of record affecting the leased premises, and
Lessee hereby covenants to abide by all such covenants and restrictions.
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IN WITNESS WHEREOF, the parties have hereunto set their hands
effective as of the _____ day of _______________, 199__.
CASA OLE OF BEAUMONT, INC.
By:
----------------------------------
Xxxxxx X. Xxxxxx, Chairman and CEO
LESSOR
CASA OLE RESTAURANTS, INC.
By:
----------------------------------
Title:
-------------------------------
LESSEE
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00
XXX XXXXX XX XXXXX )
)
COUNTY OF JEFFERSON )
This instrument was acknowledged before me on the _______ day of
__________________, 199___, by Xxxxxx X. Xxxxxx, Chairman and CEO of Casa Ole
of Beaumont, Inc., a Texas corporation, on behalf of said corporation.
----------------------------------
Notary Public, State of Texas
THE STATE OF TEXAS )
)
COUNTY OF JEFFERSON )
This instrument was acknowledged before me on the _______ day of
_____________________, 199___, by ___________________, ________________ of Casa
Ole Restaurants, Inc., a Texas corporation, on behalf of said corporation.
----------------------------------
Notary Public, State of Texas
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EXHIBIT "A"
DESCRIPTION OF LEASED PREMISES
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JASPER BUILDING LEASE AGREEMENT
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF JASPER )
WITNESS THIS LEASE AGREEMENT made and entered into by and between Casa
Ole of Beaumont, Inc., a Texas general business (hereinafter referred to as
"Landlord" or "Lessor"), and Casa Ole Restaurants, Inc., a Texas general
business (hereinafter referred to as "Tenant" or "Lessee").
WHEREAS, Lessee desires to lease certain property from Lessor for the
conduct of its business;
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE 1
Lessor has leased, demised and rented, and by these presents does
lease, demise and rent to Lessee the building and improvements, including
expressly Lessor's interest in the premises, parking and delivery areas and all
interests and rights appurtenant to the premises, and easements for pedestrian
and vehicular ingress and egress over and across the relevant paved areas as
exist from time to time, situated in Jasper, Jasper County, Texas, as more
fully described in Exhibit A attached hereto, which exhibit is hereby
incorporated for all purposes, hereinafter referred to as the "leased
premises".
ARTICLE 2
2.1 The primary term ("Primary Term") of this Lease shall be for
fifteen (15) years and shall commence on ______________, 199___ (the "Date of
Commencement") and shall expire on _______________, 200___.
2.2 Lessee is hereby granted and shall, if not at the time in
default under this Lease, have an option to renew and extend the term of this
Lease for three (3) additional terms of five (5) years each (each such five
year renewal term referred to herein as a "Renewal Term"), otherwise on the
same terms, covenants and conditions and, subject to the same exceptions and
reservations herein contained.
2.3 The renewal options set forth in paragraph 2.02 above shall be
exercised only by Lessee's delivering to Lessor in person or by United States
mail not less than two hundred seventy (270) days prior
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EXHIBIT "D" TO OPTION CONTRACT AND AGREEMENT
FORM OF JASPER BUILDING LEASE
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to the commencement of each the Renewal Term, written notice of Lessee's
intention to exercise such option as herein provided. If mailed, notice shall
be deemed given when it is deposited in the U.S. mail, postage prepaid,
addressed to Lessor at the address provided herein for the giving of notice.
2.4 If Lessee shall fail to appropriately exercise the renewal
options set forth above, then the Lease shall expire at the end of the current
term of the Lease then in effect.
ARTICLE 3
3.1 During the Primary Term of this Lease, Lessee agrees and
obligates itself to pay to Lessor rental in the amount set forth herein, which
shall be due and payable as hereinafter provided.
3.2 Lessee agrees to pay Lessor base rental in monthly
installments of TWO THOUSAND FIVE HUNDRED FIFTY AND NO/100 DOLLARS ($2,550.00)
each month, said rent being payable on the first (1st) day of each calendar
month, monthly in advance, beginning the 1st day of _________, 199___, and
continuing monthly thereafter, provided however, upon Lessor's request, Lessee
will pay the first month's rental installment to Lessor upon the execution
hereof, notwithstanding the fact that this Lease Agreement may be signed prior
to the beginning of the Primary Term. At the beginning of each Renewal Term,
the base rent shall increase by the sum of ONE HUNDRED FIFTY DOLLARS ($150.00)
per month.
3.3 The monthly installments of base rent shall be due and payable
by Lessee monthly in advance as above provided, without demand or other notice.
3.4 All rental installments, when due and payable, shall be paid
in lawful money of the United State of America to Lessor at Lessor's address
set forth herein or at such other address as shall be designated by Lessor by
written notice given to Lessee at least ten (10) days prior to the next ensuing
rental payment date. All rental payable hereunder shall be due and payable
without prior demand and without any set-offs or deductions whatsoever.
3.5 Not applicable.
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ARTICLE 4
4.1 Lessee shall pay, in addition to the rent herein required, all
taxes, assessments, and other governmental charges, general or special,
ordinary and extraordinary, and any kind and nature whatsoever applicable to
the leased premises and all improvements, fixtures and equipment thereon,
including but not limited to assessments for public improvements or benefits
which shall, during the term hereof, be laid, assessed, levied or imposed or
become due and payable and a lien upon the leased premises or any part thereof.
4.2 Lessee shall pay all personal property taxes levied upon any
property in or about said premises; provided that Lessee will not be obligated
to pay personal property taxes levied on Lessor's property not utilized by
Lessee in the ordinary course of its business.
4.3 Real property taxes for the fiscal year pertaining to the
commencement of this Lease and for the fiscal year pertaining to the
termination of this Lease shall be prorated as of the date of said commencement
and termination.
4.4 Except as hereinafter provided, all payments to be made by Lessee
pursuant to this article shall be made before any fine, penalty, interest or
cost may be added thereto for the non-payment thereof, and Lessee shall furnish
Lessor, within thirty (30) days after written request thereof by Lessor, with
official receipts or other evidence satisfactory to Lessor that such tax has
been paid.
4.5 Lessee shall have the right in good faith to contest or review by
legal proceedings, or in such other manner as it deems suitable (which
proceedings, if instituted, shall be conducted promptly at Lessee's expense and
free of expense to Lessor) any such charges, real property and personal
property taxes, and assessments, provided that upon the conclusion of such
proceedings Lessee shall pay the amount that shall be finally assessed or
imposed against said premises or be adjudicated or otherwise determined to be
due and payable. Lessor will join in any contest or protest provided for in
this article at the request of Lessee, but at Lessee's sole cost and expense,
and as a condition of such joinder may require reasonable indemnity against
costs or other damages by reason of such joinder.
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ARTICLE 5
5.1 During the term of this Lease, Lessee, at its expense, shall keep
and maintain upon all improvements and fixtures on the leased premises fire
insurance with extended coverage endorsement, written by a responsible
insurance company or companies authorized to do an insurance business in Texas
and acceptable to Lessor in an amount equal to not less than the full insurable
value thereof, excluding foundation and excavation costs. Said policy or
policies of insurance shall provide that payment for any losses covered under
or by said policy or policies shall be made to Lessor and Lessor shall be
entitled to retain the proceeds of any such insurance. A certificate of such
insurance shall be forwarded to Lessor by Lessee or on Lessee's behalf.
5.2 In addition to the insurance required under Section 5.1, Lessee
agrees to carry and maintain, and have in full force and effect throughout the
term of this Lease, workmen's compensation insurance, general comprehensive
liability insurance (which includes, but is not limited to, coverage for
products and completed operations and premises operation), and liquor liability
insurance, with an insurance company or companies authorized to transact
business in the State of Texas, for the benefit of Lessor and Lessee, and for
the protection of all persons who may suffer injury while in, on or about the
premises or from Lessee's activities and conduct of business. The amount and
coverage of such insurance shall be as reasonably approved by Lessor from time
to time. Such liability policies, if available, shall be endorsed to insure
contractual liabilities of Lessee including but not limited to the indemnities
of Lessee to Lessor under this Lease. Lessee agrees to deliver to Lessor, upon
request, a certificate showing that said insurance is in full force and effect.
The obligation of Lessee for the insurance specified herein may be brought
under the provisions of any so-called blanket policies carried by Lessee which
otherwise meet the requirements hereof, provided that all of said policies of
insurance shall name Lessor as co-insured.
5.3 LESSEE AGREES TO PROTECT AND TO INDEMNIFY AND SAVE HARMLESS LESSOR
AGAINST AND FROM ANY AND ALL CLAIMS, DAMAGES, LIABILITIES, COSTS, LOSSES, AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) ARISING OR RESULTING IN ANY
MANNER, DIRECTLY OR INDIRECTLY, (i) FROM THE CONDUCT OF LESSEE'S BUSINESS, OR
(ii) FROM ANY WORK, CONSTRUCTION, REPAIRS, MAINTENANCE, OR THING WHATSOEVER
DONE OR SUFFERED TO BE
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DONE BY LESSEE ON OR ABOUT THE LEASED PREMISES, OR (iii) FROM ANY CONDITION OF
OR DEFECT IN THE LEASED PREMISES CAUSED BY LESSEE OR IN ANY FIXTURES,
IMPROVEMENTS OR EQUIPMENT NOW OR HEREAFTER LOCATED THEREON OR THEREUNDER CAUSED
BY LESSEE, OR (iv) FROM ANY BREACH OR DEFAULT ON THE PART OF LESSEE IN THE
PERFORMANCE OF ANY COVENANT OR AGREEMENT ON THE PART OF LESSEE TO BE PERFORMED
PURSUANT TO THE TERMS OF THIS LEASE, WHETHER OR NOT ACTED UPON BY LESSOR, OR
(v) FROM ANY ACT OR OMISSION OF LESSEE, OR ANY OF ITS AGENTS, DEALERS,
CONTRACTORS, SERVANTS, EMPLOYEES, LICENSEES, OR INVITEES, OR (vi) FROM LEAKS,
DISCHARGES, OR EMISSIONS OF ANY KIND FROM THE LEASED PREMISES CAUSED BY LESSEE
OR ANY FIXTURES, IMPROVEMENTS OR EQUIPMENT THEREON OR THEREUNDER CAUSED BY
LESSEE WHETHER OR NOT SUCH OCCURRENCE CONSTITUTES A VIOLATION OF ANY APPLICABLE
LEGAL REQUIREMENTS OR A NUISANCE, OR (vii) FROM ANY FIRE OR EXPLOSION CAUSED BY
LESSEE OCCURRING ON OR ABOUT THE LEASED PREMISES OR IN CONNECTION WITH THE
OPERATION OF LESSEE'S BUSINESS, OR (viii) FROM ANY NUISANCE CREATED OR SUFFERED
TO EXIST BY LESSEE, ITS AGENTS, DEALERS, CONTRACTORS, SERVANTS, EMPLOYEES,
LICENSEES, OR INVITEES, OR (ix) ANY VIOLATION OF OR FAILURE TO SATISFY ANY
LEGAL REQUIREMENT BY LESSEE DURING THE TERM OF THIS AGREEMENT. THESE
INDEMNITIES SHALL APPLY TO ACTS, OMISSIONS, AND OCCURRENCES DURING THE TERM OF
THIS LEASE. THESE INDEMNITIES BY LESSEE SHALL APPLY REGARDLESS OF THE SOLE OR
ANY CONTRIBUTING NEGLIGENCE OR INTENTIONAL OR NON-NEGLIGENT ACTS OR OMISSIONS
OF OR VIOLATION OR LACK OF COMPLIANCE WITH ANY LEGAL REQUIREMENTS BY LESSOR,
THEIR AGENTS, CONTRACTORS, EMPLOYEES, SERVANTS, DEALERS, OR LICENSEES. FOR
PURPOSES OF THESE INDEMNITIES, DAMAGES SHALL BE DEEMED TO INCLUDE ACTUAL,
CONSEQUENTIAL, TREBLE, AND PUNITIVE DAMAGES AND FINES AND PENALTIES OF ANY KIND
PAYABLE TO THIRD PARTIES. IN NO EVENT SHALL LESSEE BE LIABLE FOR (I) ANY ACT,
OMISSION OR OCCURRENCE OR OTHER LIABILITY (WHETHER CONTRACTUAL OR TORT)
RELATING TO THE LEASED PREMISES ARISING PRIOR TO THE DATE OF THIS LEASE, AND/OR
(ii) ANY CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES TO LESSOR FOR ANY MATERS
ARISING OUT OF OR RELATED TO THIS LEASE.
IN CASE ANY ACTION OR PROCEEDING COVERED BY THE FOREGOING INDEMNITY
SHOULD BE BROUGHT AGAINST LESSOR, LESSEE, UPON NOTICE FROM LESSOR, COVENANTS TO
RESIST OR DEFEND SUCH ACTION OR PROCEEDING BY RETAINING COUNSEL REASONABLY
SATISFACTORY TO LESSOR.
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LESSEE COVENANTS AND AGREES TO PAY, AND TO INDEMNIFY LESSOR AGAINST,
ALL LEGAL COSTS AND CHARGES, INCLUDING COUNSEL FEES, LAWFULLY AND REASONABLY
INCURRED IN OBTAINING POSSESSION OF THE PREMISES AFTER DEFAULT BY LESSEE OR
UPON EXPIRATION OR EARLIER TERMINATION OF THE TERM OF THIS LEASE OR IN
ENFORCING ANY COVENANT OR AGREEMENT OF LESSEE HEREIN CONTAINED.
THE COVENANTS BY LESSEE TO INDEMNIFY LESSOR PROVIDED IN THIS ARTICLE
SHALL SURVIVE THE TERMINATION OF THIS LEASE WITH RESPECT TO ANY CLAIMS,
DAMAGES, LIABILITIES, COSTS, LOSSES AND EXPENSES THEREAFTER ASSERTED OR
INCURRED BASED UPON, ARISING FROM OR TRACEABLE TO (IN WHOLE OR IN PART) ANY
EVENTS, ACTS, OMISSIONS, OR OCCURRENCES DURING THE TERM OF THIS LEASE.
ARTICLE 6
Lessee shall not assign or hypothecate this Lease, or any part
thereof, of the leased premises, either voluntarily or involuntarily, or by
operation of law, without the prior written consent of Lessor, which consent
shall not be unreasonably withheld or delayed. Lessee shall not sublease and
grant concessions on all or any part of the leased premises without the consent
of Lessor and shall in all such cases remain fully and directly responsible for
all of the obligations of Lessee hereunder.
ARTICLE 7
All improvements erected upon the leased premises shall become a part
thereof and shall become the property of Lessor upon the termination of this
Lease. All trade fixtures installed by and belonging to Lessee may be removed
by Lessee upon termination of this Lease, provided Lessee is not in default
under the terms of this Lease and that same may be so removed without permanent
damage to any building or improvements on the premises, and provided further
that any damage to the said building or improvements occasioned by such removal
shall be promptly repaired by Lessee. In the event said fixtures are not so
removed within sixty (60) days from and after termination of this Lease, the
same shall become the property of Lessor.
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ARTICLE 8
Lessee accepts the leased premises as is, in its present condition,
and Lessor has made no representation or warranty as to the condition,
habitability, or fitness for any purpose of the leased premises, and Lessor
shall not be liable for any latent or patent defects therein; provided,
however, Lessor has not received notice of and is not aware of any material
violations of applicable laws that exist at the leased premises.
Lessee agrees that it accepts the premises "as is" and hereby waives
any claim against Lessor for any latent defects which may exist. Any building
and improvements constructed upon the leased premises shall constitute and be a
part of the leased premises for all purposes.
Lessee shall be obligated, at its sole cost and expense, to keep all
of the leased premises, including, but not limited to, all glass, roofs,
fixtures, plumbing, wiring, HVAC equipment, walls and parking and driveway
areas in good order and repair, usual wear and tear and damage by the elements,
earthquake and fires excepted. Lessee may, at its sole cost and expense, make
additional alterations and improvements to any building and improvements as it
deems necessary during the period of said Lease, provided, however, that no
structural improvements, alterations or additions shall be made without
Lessor's written consent, which consent shall not be unreasonably withheld.
Lessee shall hold Lessor harmless for any cost or expenses incurred in
connection with any such initial or subsequent improvements or additions.
Notwithstanding the foregoing, Lessee shall be permitted to make any
alterations to the leased premises that may be required from time to time by
applicable law without the consent of Lessor; provided, however, prior to
making any alteration Lessee shall notify Lessor and shall be subject to the
reasonable directions of the Lessor in making such alteration, and all of such
alterations shall be made at Lessee's sole expense. If any repair should be
necessitated by reason of an insured casualty, Lessee's obligation shall be
limited to the extent of insurance proceeds received by Lessee.
Nothing in this article limits the indemnities for third-party
liabilities provided by this Lease.
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ARTICLE 9
Lessee shall comply with all laws, ordinances, judgments, injunctions,
orders, regulations, rules, requirements, guidelines, and notices (hereinafter
called "legal requirements") of every kind or nature, applicable in any way to
the conduct of Lessee's business, or any maintenance, repair or construction
work undertaken on the leased premises, or to Lessee's use or occupancy of the
leased premises, and whether the same or any of them relate to ordinary or
extraordinary, structural or nonstructural, changes or requirements to or in
and about said premises, or any improvements thereon or any such property or
changes or requirements incident to or as the result of any use or occupation
thereof and Lessee shall pay any and all costs and expenses incidental to such
compliance with all legal requirements. Without relieving Lessee of its duty to
indemnify Lessor under this Lease or under any other agreement, Lessee shall
have the right to contest the validity of or seek a variance from or review of
said legal requirements by legal proceedings or in any such other manner as it
deems suitable, and may have, if able, said legal requirements cancelled,
removed, or revoked without actual compliance with the same, and if such
actions or proceedings are instituted, they shall be conducted promptly at the
expense of Lessee and free of expense to Lessor. Notwithstanding the foregoing,
Lessee shall not be obligated to indemnify Lessor for any violation of legal
requirements relating to the condition of the leased premises existing on the
date hereof. If and whenever said legal requirements shall become absolute
against Lessee and the leased premises, or against Lessor, after contest
thereof, Lessee shall then comply with the same with due diligence. Lessor
shall have no duty to inspect, monitor, check or otherwise supervise, review or
enforce any of Lessee's responsibilities hereunder and Lessor's failure to do
so shall in no way limit the liability of Lessee to indemnify Lessor as
provided in this Lease or any other agreement. Lessor will join in any contest
provided for in this article at the request of Lessee, but at Lessee's sole
cost and expense, and as a condition of such joinder may require reasonable
indemnity against costs or other damages by reason of such joinder.
ARTICLE 10
Lessor shall not be liable for any damage occasioned by failure to
keep the premises in repair and shall not be liable for any damage done or
occasioned by or from plumbing, gas, water, steam, or other
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pipes or sewerage, nor for any damages arising from acts of neglect of Lessee,
sub-lessees or other occupants of the premises, with or without Lessor's
consent, or of any owners or occupants of adjacent or contiguous property.
ARTICLE 11
Lessee may use the premises solely for the purpose of operating a
Mexican food restaurant. Lessee shall not permit said premises to be used for
any unlawful purpose or purposes that will injure the reputation of the same or
the improvements thereon and will not permit the same or any portion thereof to
remain vacant or unoccupied for more than one (1) month without the consent of
Lessor, which consent will not be unreasonably withheld.
ARTICLE 12
Lessee shall pay, in addition to the rents above specified, all
utility bills of any nature, and garbage, sewerage, and waste disposal costs
and expenses levied or charged on said premises for and during the time for
which this Lease is granted.
ARTICLE 13
If Lessee shall fail to pay any rental as herein provided when the
same is due and payable, or if Lessee shall fail to observe, keep or perform
any other provisions of this Lease required to be observed, kept or performed
by Lessee, or if Lessee shall default under the Land Lease relating to the
premises entered into between Lessee and Harken Real Estate Company, Inc.,
Lessee shall be in default under this Lease and Lessee shall have twenty (20)
days from and after written notice of default within which to cure same;
provided if such default is of a nature that it cannot be cured within twenty
(20) days and Lessee commences to cure such default within such twenty (20) day
period and thereafter diligently proceeds to cure such default, the twenty (20)
day period shall be extended for an additional one hundred twenty (120) days so
long as Lessee is diligently proceeding in good faith to cure such default. If
Lessee shall fail to cure any default as provided herein, Lessor shall have the
right at its election and in addition and without prejudice to any other
remedies, to declare the entire amount of rental due and payable forthwith,
and/or to
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terminate this Lease and/or enter upon said leased premises or any part thereof
either with, or without, process of law, and Lessee, or any person or persons
occupying the same, may be expelled, removed or put out, using such force as
may be necessary so to do, and repossess and enjoy said premises as before this
Lease, without prejudice to any remedies which might otherwise be used for
arrears of rent or preceding breach of covenants.
Any repossession of said premises shall not constitute a termination
of this Lease unless Lessor so notified Lessee in writing, and Lessor shall
have the right, at its option, to lease the premises so repossessed to any
other person or persons upon such terms and conditions as Lessor shall
determine. In such event, Lessee shall be and remain liable to Lessor for the
difference between the rental provided herein and the rentals so obtained from
any third person, plus all costs and expenses to Lessor of repossessing and
releasing said premises, and of transporting, repairing and/or otherwise
handling the fixtures and equipment located thereon.
ARTICLE 14
If at any time during the term hereof, proceedings in bankruptcy shall
be instituted by or against Lessee and result in an adjudication of bankruptcy,
or if Lessee shall file, or any creditor shall file, or any other person shall
file, any petition in bankruptcy, under the Bankruptcy Act of the United States
of America as such act is now in force, or the same may be amended or
superseded, and shall be judicially approved, or a receiver of the business or
assets of Lessee shall be appointed, and if such appointment be not vacated
within twenty (20) days after notice thereof to Lessee, or if a general
assignment is made by Lessee or sub-lessee for the benefit of creditors, any
sheriff, marshal, constable or keeper take possession thereof by authority of
any attachment or execution proceedings, Lessor may at its option, in either or
any of such events, without notice to Lessee or any other person or persons,
immediately recapture and take possession of the leased premises and terminate
this Lease, with or without process of law; such process being expressly waived
by Lessee.
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ARTICLE 15
In the event that greater than fifty percent (50%) of the leased
premises is destroyed or significantly damaged by fire or other casualty, the
Lessee shall have the right to terminate this Lease in accordance with this
Article 15, and the Lessor shall have the right to terminate this Lease in
accordance with this Article 15 if fewer than five (5) years remain for the
balance of this Lease and any renewals at such time. Upon such event, any party
entitled to terminate the Lease must do so by giving written notice to the
other party within thirty (30) days of the date that the damaged was sustained
by the leased premises. If the parties do not exercise any right they have to
terminate the Lease, or if less than fifty percent (50%) of the leased premises
is destroyed or significantly damaged by fire or other casualty, then the Lease
will not terminate and in that event Lessor shall be obligated to restore the
leased premises to substantially the same condition as before the damage was
sustained thereto, provided that Lessor shall not be obligated to spend any
amount to restore the leased premises that exceeds the amount of insurance
proceeds that Lessor receives as a result of the damage sustained to the leased
premises. Lessor shall not be obligated to begin restoring the leased premises
until Lessor has received the insurance proceeds payable as a result of the
damage. So long as the damage to the leased premises was not caused of Lessee's
negligence or intentional act, then the rent payable hereunder shall be abated
during such time that the Lessee is unable to use the leased premises until
they have been restored. Lessee shall not be entitled to any abatement of rent
if the damage to the leased premises was caused by Lessee's negligence or
intentional act.
Regardless of the cause of any damage sustained by the leased
premises, in no event shall Lessee receive or be entitled to compensation or
damages from Lessor on account of any loss, whether of business, profits,
property, or otherwise, or for inconvenience, annoyance or personal injury
resulting from such destruction, or from or in the course of restoration,
repair or reconstruction of all or any part of the buildings or improvements,
nor for any loss, injury to or damage to persons or property in, upon or from
the leased premises from any cause or from the termination of this Lease, as
herein provided.
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ARTICLE 16
Each and all of the terms, conditions, covenants and obligations
hereof shall inure to the benefit of and bind the successors in interest of the
parties hereto, provided that these provisions shall not be deemed to alter the
provisions of Article 6 hereof.
ARTICLE 17
17.1 Total Taking. If all or substantially all of the improvements
on the Leased Premises or the Leased Premises shall be taken by condemnation or
in any other manner for any public or quasi-public use or purpose (other than
for temporary use or occupancy), the term of this Lease shall terminate as of
the date of vesting of title (the "Date of the Taking") and, subject to a
proration and apportionment of all rental and other sums due hereunder as of
the Date of the Taking, no further rent shall be due hereunder.
17.2 Partial Taking. If a part of the Leased Premises shall be so
taken by condemnation, then Lessor shall give Lessee prompt written notice
thereof and the part so taken shall no longer constitute part of the Leased
Premises, but this Lease shall continue in force and effect as to the part not
so taken; provided, however, that Lessee may elect to terminate this Lease (i)
if a partial taking is more than fifty percent (50%) of the Leased Premises;
(ii) if the partial taking lasts for more than one (1) year; or (iii) if, in
the good faith and mutual judgment of Lessee and Lessor, the remaining portion
of the Leased Premises cannot be economically and practicably used by Lessee
for the conduct of its business. Lessee shall give notice of any election to
terminate to Lessor not later than sixty (60) days after notice of such taking
is given by Lessor to Lessee. Upon the date specified in Lessee's notice (which
shall not be more than one hundred eighty (180) days thereafter), the term of
this Lease shall terminate and, subject to a proration and apportionment of all
rental and other sums due hereunder as of the Date of the Taking and such date,
as applicable, no further rent shall be due hereunder. Upon a partial taking
and the term of this Lease continuing in force as to any part of the Leased
Premises, the rental shall be reduced proportionately based upon the part or
parts of the Leased Premises and/or other parts of the improvements so taken.
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17.3 Award. Lessor shall be entitled to receive the entire award in
any proceeding with respect to any taking (other than for temporary use and
occupancy) provided for in this Article without deduction therefrom for any
estate vested in Lessee by this Lease and Lessee shall receive no part of such
award, except as hereinafter expressly provided. Lessee shall have the right to
make a separate claim with the condemning authority for (i) any moving expenses
incurred by Lessee as a result of such condemnation; (ii) any costs incurred
and paid by Lessee in connection with any alteration or improvement made by
Lessee to the Leased Premises; (iii) the value of any of Lessee's property
taken; and (iv) any other separate claim which Lessee may hereafter be
permitted to make, provided, however, that such separate claim shall not reduce
or adversely affect the amount of the award (as hereinafter defined) to which
Lessor is entitled. If Lessee shall not be permitted to make a separate claim
in such proceeding, Lessor shall prosecute all claims in such proceeding on
behalf of both Lessor and Lessee in which event Lessee may, if it so elects and
at its expense, attend hearings, present arguments and generally participate in
the conduct of the proceeding; provided, however, that if Lessor incurs any
additional expense because of Lessee's exercising its rights under this
sentence, Lessee will bear such additional expense.
17.4 Temporary Taking. If all or any part of the Leased Premises
shall be temporarily taken by condemnation or otherwise for any public or
quasi-public use or purpose (unless Lessee shall have elected to terminate the
term of this Lease in accordance with the option provided in the last sentence
of this section), this Lease shall nevertheless remain in full force and
effect. Lessee shall continue to be responsible for all of its obligations
hereunder insofar as such obligations are not affected by such taking;
provided, however, that Lessee shall not be liable for the payment of rental or
other sums for the part of the Leased Premises so temporarily taken.
ARTICLE 18
No express or implied waiver of Lessor or of any default hereunder
shall be in any way construed to be a waiver of any future or subsequent
default of Lessee, or a waiver of any of the rights of Lessor under the terms
of this Lease. If any clause or provision of this Lease is invalid or
unenforceable for any
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reason, such clause or provision shall be deemed severable and the other
clauses and provisions hereof shall remain in full force and effect and shall
be enforceable to the full extent permitted by law.
ARTICLE 19
Notices and demands by either party hereto may be given by certified
or registered mail, postage prepaid, addressed as follows:
LESSOR: Casa Ole of Beaumont, Inc.
0000 Xxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
LESSEE: Casa Ole Restaurants, Inc.
0000 Xxxxxxxxx
Xxxxxxx, XX 00000
subject to the right of either party to designate, by notice in writing, any
new address to which said notices or demands must be sent.
ARTICLE 20
Lessor shall have the right to mortgage the leased premises and this
Lease shall be subordinate to any existing or future mortgage; provided,
however, that the mortgage holder must agree to enter into a nondisturbance
agreement with Lessee on terms reasonably acceptable to Lessee and the mortgage
holder.
ARTICLE 21
This Lease shall be binding upon and inure to the benefit of the
successors, assigns, heirs, administrators and executors of each of the parties
hereto. The parties may concurrently herewith for recording purposes execute a
short form of the within lease, the same to be acknowledged by all parties
before a Notary Public. Whenever in this Lease the word "mortgage" is used, it
shall be deemed to include in its use a "Deed of Trust" and shall also be
deemed to include interim mortgages during construction and permanent mortgages
after completion of construction.
ARTICLE 22
This Lease is subject in all events to all easements, restrictions,
rights-of-way, and covenants of record affecting the leased premises, and
Lessee hereby covenants to abide by all such covenants and restrictions.
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IN WITNESS WHEREOF, the parties have hereunto set their hands
effective as of the _____ day of _______________, 199__.
CASA OLE OF BEAUMONT, INC.
By:
------------------------------
Xxx Xxxxxx, President
LESSOR
CASA OLE RESTAURANTS, INC.
By:
------------------------------
Title:
------------------------------
LESSEE
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00
XXX XXXXX XX XXXXX )
)
COUNTY OF JEFFERSON )
This instrument was acknowledged before me on the _______ day of
__________________, 199___, by Xxx Xxxxxx, President of Casa Ole of Beaumont,
Inc., a Texas corporation, on behalf of said corporation.
------------------------------
Notary Public, State of Texas
THE STATE OF TEXAS )
)
COUNTY OF JEFFERSON )
This instrument was acknowledged before me on the _______ day of
_____________________, 199___, by ___________________, ________________ of Casa
Ole Restaurants, Inc., a Texas corporation, on behalf of said corporation.
------------------------------
Notary Public, State of Texas
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EXHIBIT "A"
DESCRIPTION OF LEASED PREMISES
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EXHIBIT "E" TO OPTION CONTRACT AND AGREEMENT
FORM OF JASPER LAND LEASE
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JASPER LAND LEASE AGREEMENT
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF JASPER )
WITNESS THIS LEASE AGREEMENT made and entered into by and between
Harken Real Estate Company, Inc., a Texas general business (hereinafter
referred to as "Landlord" or "Lessor"), and Casa Ole Restaurants, Inc., a Texas
general business (hereinafter referred to as "Tenant" or "Lessee").
WHEREAS, Lessee desires to lease certain property from Lessor for the
conduct of its business;
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE 1
Lessor has leased, demised and rented, and by these presents does
lease, demise and rent to Lessee the land, including expressly Lessor's
interest in the parking and delivery areas and all interests and rights
appurtenant to the premises, and easements for pedestrian and vehicular ingress
and egress over and across the relevant paved areas as exist from time to time,
situated in Jasper, Jasper County, Texas, as more fully described in Exhibit A
attached hereto, which exhibit is hereby incorporated for all purposes,
hereinafter referred to as the "leased premises", but in all events subject to
the provisions of Article 23 hereof.
ARTICLE 2
2.1 The primary term ("Primary Term") of this Lease shall be for
fifteen (15) years and shall commence on ______________, 199___ (the "Date of
Commencement") and shall expire on _______________, 200___.
2.2 Lessee is hereby granted and shall, if not at the time in
default under this Lease, have an option to renew and extend the term of this
Lease for three (3) additional terms of five (5) years each (each such five
year renewal term referred to herein as a "Renewal Term"), otherwise on the
same terms, covenants and conditions and, subject to the same exceptions and
reservations herein contained.
2.3 The renewal options set forth in paragraph 2.02 above shall be
exercised only by Lessee's delivering to Lessor in person or by United States
mail not less than two hundred seventy (270) days prior
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to the commencement of each the Renewal Term, written notice of Lessee's
intention to exercise such option as herein provided. If mailed, notice shall
be deemed given when it is deposited in the U.S. mail, postage prepaid,
addressed to Lessor at the address provided herein for the giving of notice.
2.4 If Lessee shall fail to appropriately exercise the renewal
options set forth above, then the Lease shall expire at the end of the current
term of the Lease then in effect.
ARTICLE 3
3.1 During the Primary Term of this Lease, Lessee agrees and
obligates itself to pay to Lessor rental in the amount set forth herein, which
shall be due and payable as hereinafter provided.
3.2 Lessee agrees to pay Lessor base rental in monthly
installments of TWO THOUSAND NINE HUNDRED FIFTY AND NO/100 DOLLARS ($2,950.00)
each month, said rent being payable on the first (1st) day of each calendar
month, monthly in advance, beginning the 1st day of _________, 199___, and
continuing monthly thereafter, provided however, upon Lessor's request, Lessee
will pay the first month's rental installment to Lessor upon the execution
hereof, notwithstanding the fact that this Lease Agreement may be signed prior
to the beginning of the Primary Term. At the beginning of each Renewal Term,
the base rent shall increase by the sum of ONE HUNDRED FIFTY DOLLARS ($150.00)
per month.
3.3 The monthly installments of base rent shall be due and payable
by Lessee monthly in advance as above provided, without demand or other notice.
3.4 All rental installments, when due and payable, shall be paid
in lawful money of the United State of America to Lessor at Lessor's address
set forth herein or at such other address as shall be designated by Lessor by
written notice given to Lessee at least ten (10) days prior to the next ensuing
rental payment date. All rental payable hereunder shall be due and payable
without prior demand and without any set-offs or deductions whatsoever.
3.5 (a) In addition to the base rent provided above, Lessee
agrees to pay to Lessor, as additional rent for the use and occupancy of the
leased premises, a sum equal to five percent (5%) of all of
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Lessee's annual gross receipts in excess of ONE MILLION THREE HUNDRED TWENTY
THOUSAND DOLLARS ($1,320,000.00) that Lessee realizes each lease year from
operation of the leased premises. This percentage rent shall be paid monthly,
beginning on the twentieth (20th) day of the month immediately following the
month in which Lessee's gross receipts for the current lease year have reached
ONE MILLION THREE HUNDRED TWENTY THOUSAND DOLLARS ($1,320,000.00), and
continuing on the same day of each succeeding month thereafter for the
remainder of the then current lease year.
(b) The term GROSS RECEIPTS as used in this Lease means
receipts from gross retail sales of Lessee and of all licensees,
concessionaires and lessees of Lessee from all business conducted on or from
the leased premises by Lessee and all others, whether such sales be evidenced
by check, credit, charge account, exchange or otherwise.
1. The term GROSS RECEIPTS includes, but is not limited
to, the following:
(i) The amounts received from the sale of food,
beverages, merchandise and services sold or performed
in, on or from the leased premises, whether such
orders be filled from the leased premises or
elsewhere.
(ii) Proceeds from all automatic vending and other
machines owned and operated by Lessee in or on the
premises.
(iii) Commissions received by Lessee from automatic vending
and other machines not owned by Lessee but operated
in or on the leased premises.
(iv) Commissions received by Lessee from the operation of
public telephones in or on the leased premises.
(v) Proceeds from sales of merchandise or services based
on orders solicited or taken from, in or on the
leased premises, to be delivered or performed off of
the leased premises or from sources outside of the
leased premises.
2. The term GROSS RECEIPTS does not include the
following items, which may be excluded from gross receipts to the
extent they have been included:
(i) Credits and refunds made to customers for foods,
beverages or merchandise returned or exchanged or for
services performed unsatisfactorily.
(ii) Any sales, use, value added or gross receipts tax
imposed by any federal, state, municipal or
governmental authority directly on sales and
collected from customers, provided that the amount of
the tax is added to the selling price or absorbed in
that price and paid by Lessee to the governmental
authority.
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(c) On or before the twentieth (20th) day following each
month during the term and each renewal term of this Lease, Lessee shall furnish
Lessor with a true and accurate statement, signed by Lessee or by an authorized
representative of Lessee, showing the gross receipts, as defined in paragraph
(b) for the preceding month.
(d) For the purpose of ascertaining the amount payable as
rent, Lessee agrees to prepare and maintain for a period of not less than three
(3) years following the end of each lease year, adequate records that will show
inventories and receipts of food, beverages and merchandise at the leased
premises and daily receipts from all sales and other transactions on or from
the leased premises by Lessee and any other persons conducting any business on
or from the leased premises. At the time of each transaction, Lessee or any
other person conducting the transaction on or from the leased premises will
record all receipts from sales and other transactions, whether for cash or
credit, in a cash register or registers having a cumulative total and sealed in
a manner approved by Lessor and having such other features as approved by
Lessor. Lessee further agrees to maintain on the leased premises, or at its
corporate headquarters, for at least five (5) years following the end of each
lease year, all sales, use, value added, gross receipts and occupation tax
returns with respect to the lease year and all pertinent original sales
records. Pertinent original sales records shall include the following: all cash
register tapes, serially numbered sales slips and originals of all orders
filled by Lessee from the leased premises or processed by Lessee at the leased
premises and filled from some location other than the leased premises.
(e) Lessor and authorized representatives of Lessor shall have
the right to examine the records described in the preceding paragraph at the
leased premises during Lessee's regular business hours. If, on examination of
the books or records of Lessee, an error shall be revealed in favor of Lessor
that results in additional percentage rental due Lessor in excess of $2,500.00,
then the reasonable costs of the examination must be paid by Lessee to Lessor.
Otherwise, Lessor will bear the cost of the examination.
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ARTICLE 4
4.1 Lessee shall pay, in addition to the rent herein required, all
taxes, assessments, and other governmental charges, general or special,
ordinary and extraordinary, and any kind and nature whatsoever applicable to
the leased premises and all improvements, fixtures and equipment thereon,
including but not limited to assessments for public improvements or benefits
which shall, during the term hereof, be laid, assessed, levied or imposed or
become due and payable and a lien upon the leased premises or any part thereof.
4.2 Lessee shall pay all personal property taxes levied upon any
property in or about said premises; provided that Lessee will not be obligated
to pay personal property taxes levied on Lessor's property not utilized by
Lessee in the ordinary course of its business.
4.3 Real property taxes for the fiscal year pertaining to the
commencement of this Lease and for the fiscal year pertaining to the
termination of this Lease shall be prorated as of the date of said commencement
and termination.
4.4 Except as hereinafter provided, all payments to be made by Lessee
pursuant to this article shall be made before any fine, penalty, interest or
cost may be added thereto for the non-payment thereof, and Lessee shall furnish
Lessor, within thirty (30) days after written request thereof by Lessor, with
official receipts or other evidence satisfactory to Lessor that such tax has
been paid.
4.5 Lessee shall have the right in good faith to contest or review by
legal proceedings, or in such other manner as it deems suitable (which
proceedings, if instituted, shall be conducted promptly at Lessee's expense and
free of expense to Lessor) any such charges, real property and personal
property taxes, and assessments, provided that upon the conclusion of such
proceedings Lessee shall pay the amount that shall be finally assessed or
imposed against said premises or be adjudicated or otherwise determined to be
due and payable. Lessor will join in any contest or protest provided for in
this article at the request of Lessee, but at Lessee's sole cost and expense,
and as a condition of such joinder may require reasonable indemnity against
costs or other damages by reason of such joinder.
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ARTICLE 5
5.1 During the term of this Lease, Lessee, at its expense, shall keep
and maintain upon all improvements and fixtures on the leased premises fire
insurance with extended coverage endorsement, written by a responsible
insurance company or companies authorized to do an insurance business in Texas
and acceptable to Lessor in an amount equal to not less than the full insurable
value thereof, excluding foundation and excavation costs. Said policy or
policies of insurance shall provide that payment for any losses covered under
or by said policy or policies shall be made to Lessor and Lessor shall be
entitled to retain the proceeds of any such insurance. A certificate of such
insurance shall be forwarded to Lessor by Lessee or on Lessee's behalf.
5.2 In addition to the insurance required under Section 5.1, Lessee
agrees to carry and maintain, and have in full force and effect throughout the
term of this Lease, workmen's compensation insurance, general comprehensive
liability insurance (which includes, but is not limited to, coverage for
products and completed operations and premises operation), and liquor liability
insurance, with an insurance company or companies authorized to transact
business in the State of Texas, for the benefit of Lessor and Lessee, and for
the protection of all persons who may suffer injury while in, on or about the
premises or from Lessee's activities and conduct of business. The amount and
coverage of such insurance shall be as reasonably approved by Lessor from time
to time. Such liability policies, if available, shall be endorsed to insure
contractual liabilities of Lessee including but not limited to the indemnities
of Lessee to Lessor under this Lease. Lessee agrees to deliver to Lessor, upon
request, a certificate showing that said insurance is in full force and effect.
The obligation of Lessee for the insurance specified herein may be brought
under the provisions of any so-called blanket policies carried by Lessee which
otherwise meet the requirements hereof, provided that all of said policies of
insurance shall name Lessor as co-insured.
5.3 LESSEE AGREES TO PROTECT AND TO INDEMNIFY AND SAVE HARMLESS LESSOR
AGAINST AND FROM ANY AND ALL CLAIMS, DAMAGES, LIABILITIES, COSTS, LOSSES, AND
EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) ARISING OR RESULTING IN ANY
MANNER, DIRECTLY OR INDIRECTLY, (i) FROM THE CONDUCT OF LESSEE'S BUSINESS, OR
(ii) FROM ANY WORK, CONSTRUCTION, REPAIRS, MAINTENANCE, OR THING WHATSOEVER
DONE OR SUFFERED TO BE
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DONE BY LESSEE ON OR ABOUT THE LEASED PREMISES, OR (iii) FROM ANY CONDITION OF
OR DEFECT IN THE LEASED PREMISES CAUSED BY LESSEE OR IN ANY FIXTURES,
IMPROVEMENTS OR EQUIPMENT NOW OR HEREAFTER LOCATED THEREON OR THEREUNDER CAUSED
BY LESSEE, OR (iv) FROM ANY BREACH OR DEFAULT ON THE PART OF LESSEE IN THE
PERFORMANCE OF ANY COVENANT OR AGREEMENT ON THE PART OF LESSEE TO BE PERFORMED
PURSUANT TO THE TERMS OF THIS LEASE, WHETHER OR NOT ACTED UPON BY LESSOR, OR
(v) FROM ANY ACT OR OMISSION OF LESSEE, OR ANY OF ITS AGENTS, DEALERS,
CONTRACTORS, SERVANTS, EMPLOYEES, LICENSEES, OR INVITEES, OR (vi) FROM LEAKS,
DISCHARGES, OR EMISSIONS OF ANY KIND FROM THE LEASED PREMISES CAUSED BY LESSEE
OR ANY FIXTURES, IMPROVEMENTS OR EQUIPMENT THEREON OR THEREUNDER CAUSED BY
LESSEE WHETHER OR NOT SUCH OCCURRENCE CONSTITUTES A VIOLATION OF ANY APPLICABLE
LEGAL REQUIREMENTS OR A NUISANCE, OR (vii) FROM ANY FIRE OR EXPLOSION CAUSED BY
LESSEE OCCURRING ON OR ABOUT THE LEASED PREMISES OR IN CONNECTION WITH THE
OPERATION OF LESSEE'S BUSINESS, OR (viii) FROM ANY NUISANCE CREATED OR SUFFERED
TO EXIST BY LESSEE, ITS AGENTS, DEALERS, CONTRACTORS, SERVANTS, EMPLOYEES,
LICENSEES, OR INVITEES, OR (ix) ANY VIOLATION OF OR FAILURE TO SATISFY ANY
LEGAL REQUIREMENT BY LESSEE DURING THE TERM OF THIS AGREEMENT. THESE
INDEMNITIES SHALL APPLY TO ACTS, OMISSIONS, AND OCCURRENCES DURING THE TERM OF
THIS LEASE. THESE INDEMNITIES BY LESSEE SHALL APPLY REGARDLESS OF THE SOLE OR
ANY CONTRIBUTING NEGLIGENCE OR INTENTIONAL OR NON-NEGLIGENT ACTS OR OMISSIONS
OF OR VIOLATION OR LACK OF COMPLIANCE WITH ANY LEGAL REQUIREMENTS BY LESSOR,
THEIR AGENTS, CONTRACTORS, EMPLOYEES, SERVANTS, DEALERS, OR LICENSEES. FOR
PURPOSES OF THESE INDEMNITIES, DAMAGES SHALL BE DEEMED TO INCLUDE ACTUAL,
CONSEQUENTIAL, TREBLE, AND PUNITIVE DAMAGES AND FINES AND PENALTIES OF ANY KIND
PAYABLE TO THIRD PARTIES. IN NO EVENT SHALL LESSEE BE LIABLE FOR (I) ANY ACT,
OMISSION OR OCCURRENCE OR OTHER LIABILITY (WHETHER CONTRACTUAL OR TORT)
RELATING TO THE LEASED PREMISES ARISING PRIOR TO THE DATE OF THIS LEASE, AND/OR
(ii) ANY CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES TO LESSOR FOR ANY MATERS
ARISING OUT OF OR RELATED TO THIS LEASE.
IN CASE ANY ACTION OR PROCEEDING COVERED BY THE FOREGOING INDEMNITY
SHOULD BE BROUGHT AGAINST LESSOR, LESSEE, UPON NOTICE FROM LESSOR, COVENANTS TO
RESIST OR DEFEND SUCH ACTION OR PROCEEDING BY RETAINING COUNSEL REASONABLY
SATISFACTORY TO LESSOR.
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LESSEE COVENANTS AND AGREES TO PAY, AND TO INDEMNIFY LESSOR AGAINST,
ALL LEGAL COSTS AND CHARGES, INCLUDING COUNSEL FEES, LAWFULLY AND REASONABLY
INCURRED IN OBTAINING POSSESSION OF THE PREMISES AFTER DEFAULT BY LESSEE OR
UPON EXPIRATION OR EARLIER TERMINATION OF THE TERM OF THIS LEASE OR IN
ENFORCING ANY COVENANT OR AGREEMENT OF LESSEE HEREIN CONTAINED.
THE COVENANTS BY LESSEE TO INDEMNIFY LESSOR PROVIDED IN THIS ARTICLE
SHALL SURVIVE THE TERMINATION OF THIS LEASE WITH RESPECT TO ANY CLAIMS,
DAMAGES, LIABILITIES, COSTS, LOSSES AND EXPENSES THEREAFTER ASSERTED OR
INCURRED BASED UPON, ARISING FROM OR TRACEABLE TO (IN WHOLE OR IN PART) ANY
EVENTS, ACTS, OMISSIONS, OR OCCURRENCES DURING THE TERM OF THIS LEASE.
ARTICLE 6
Lessee shall not assign or hypothecate this Lease, or any part
thereof, of the leased premises, either voluntarily or involuntarily, or by
operation of law, without the prior written consent of Lessor, which consent
shall not be unreasonably withheld or delayed. Lessee shall not sublease and
grant concessions on all or any part of the leased premises without the consent
of Lessor and shall in all such cases remain fully and directly responsible for
all of the obligations of Lessee hereunder.
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ARTICLE 7
All improvements erected upon the leased premises shall become a part
thereof and shall become the property of Lessor upon the termination of this
Lease. All trade fixtures installed by and belonging to Lessee may be removed
by Lessee upon termination of this Lease, provided Lessee is not in default
under the terms of this Lease and that same may be so removed without permanent
damage to any building or improvements on the premises, and provided further
that any damage to the said building or improvements occasioned by such removal
shall be promptly repaired by Lessee. In the event said fixtures are not so
removed within sixty (60) days from and after termination of this Lease, the
same shall become the property of Lessor.
ARTICLE 8
Lessee accepts the leased premises as is, in its present condition,
and Lessor has made no representation or warranty as to the condition,
habitability, or fitness for any purpose of the leased premises, and Lessor
shall not be liable for any latent or patent defects therein; provided,
however, Lessor has not received notice of and is not aware of any material
violations of applicable laws that exist at the leased premises.
Lessee agrees that it accepts the premises "as is" and hereby waives
any claim against Lessor for any latent defects which may exist. Any building
and improvements constructed upon the leased premises shall constitute and be a
part of the leased premises for all purposes.
Lessee shall be obligated, at its sole cost and expense, to keep all
of the leased premises, including, but not limited to, all glass, roofs,
fixtures, plumbing, wiring, HVAC equipment, walls and parking and driveway
areas in good order and repair, usual wear and tear and damage by the elements,
earthquake and fires excepted. Lessee may, at its sole cost and expense, make
additional alterations and improvements to any building and improvements as it
deems necessary during the period of said Lease, provided, however, that no
structural improvements, alterations or additions shall be made without
Lessor's written consent, which consent shall not be unreasonably withheld.
Lessee shall hold Lessor harmless for any cost or
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expenses incurred in connection with any such initial or subsequent
improvements or additions. Notwithstanding the foregoing, Lessee shall be
permitted to make any alterations to the leased premises that may be required
from time to time by applicable law without the consent of Lessor; provided,
however, prior to making any alteration Lessee shall notify Lessor and shall be
subject to the reasonable directions of the Lessor in making such alteration,
and all of such alterations shall be made at Lessee's sole expense. If any
repair should be necessitated by reason of an insured casualty, Lessee's
obligation shall be limited to the extent of insurance proceeds received by
Lessee.
Nothing in this article limits the indemnities for third-party
liabilities provided by this Lease.
ARTICLE 9
Lessee shall comply with all laws, ordinances, judgments, injunctions,
orders, regulations, rules, requirements, guidelines, and notices (hereinafter
called "legal requirements") of every kind or nature, applicable in any way to
the conduct of Lessee's business, or any maintenance, repair or construction
work undertaken on the leased premises, or to Lessee's use or occupancy of the
leased premises, and whether the same or any of them relate to ordinary or
extraordinary, structural or nonstructural, changes or requirements to or in
and about said premises, or any improvements thereon or any such property or
changes or requirements incident to or as the result of any use or occupation
thereof and Lessee shall pay any and all costs and expenses incidental to such
compliance with all legal requirements. Without relieving Lessee of its duty to
indemnify Lessor under this Lease or under any other agreement, Lessee shall
have the right to contest the validity of or seek a variance from or review of
said legal requirements by legal proceedings or in any such other manner as it
deems suitable, and may have, if able, said legal requirements cancelled,
removed, or revoked without actual compliance with the same, and if such
actions or proceedings are instituted, they shall be conducted promptly at the
expense of Lessee and free of expense to Lessor. Notwithstanding the foregoing,
Lessee shall not be obligated to indemnify Lessor for any violation of legal
requirements relating to the condition of the leased premises existing on the
date hereof. If and whenever said legal requirements shall become absolute
against Lessee and the leased premises, or against Lessor,
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after contest thereof, Lessee shall then comply with the same with due
diligence. Lessor shall have no duty to inspect, monitor, check or otherwise
supervise, review or enforce any of Lessee's responsibilities hereunder and
Lessor's failure to do so shall in no way limit the liability of Lessee to
indemnify Lessor as provided in this Lease or any other agreement. Lessor will
join in any contest provided for in this article at the request of Lessee, but
at Lessee's sole cost and expense, and as a condition of such joinder may
require reasonable indemnity against costs or other damages by reason of such
joinder.
ARTICLE 10
Lessor shall not be liable for any damage occasioned by failure to
keep the premises in repair and shall not be liable for any damage done or
occasioned by or from plumbing, gas, water, steam, or other pipes or sewerage,
nor for any damages arising from acts of neglect of Lessee, sub-lessees or
other occupants of the premises, with or without Lessor's consent, or of any
owners or occupants of adjacent or contiguous property.
ARTICLE 11
Lessee may use the premises solely for the purpose of operating a
Mexican food restaurant. Lessee shall not permit said premises to be used for
any unlawful purpose or purposes that will injure the reputation of the same or
the improvements thereon and will not permit the same or any portion thereof to
remain vacant or unoccupied for more than one (1) month without the consent of
Lessor, which consent will not be unreasonably withheld.
ARTICLE 12
Lessee shall pay, in addition to the rents above specified, all
utility bills of any nature, and garbage, sewerage, and waste disposal costs
and expenses levied or charged on said premises for and during the time for
which this Lease is granted.
ARTICLE 13
If Lessee shall fail to pay any rental as herein provided when the
same is due and payable, or if Lessee shall fail to observe, keep or perform
any other provisions of this Lease required to be observed,
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kept or performed by Lessee, or if Lessee shall default under the Building
Lease relating to the improvements on the premises entered into between Lessee
and Casa Ole of Beaumont, Inc., Lessee shall be in default under this Lease and
Lessee shall have twenty (20) days from and after written notice of default
within which to cure same; provided if such default is of a nature that it
cannot be cured within twenty (20) days and Lessee commences to cure such
default within such twenty (20) day period and thereafter diligently proceeds
to cure such default, the twenty (20) day period shall be extended for an
additional one hundred twenty (120) days so long as Lessee is diligently
proceeding in good faith to cure such default. If Lessee shall fail to cure any
default as provided herein, Lessor shall have the right at its election and in
addition and without prejudice to any other remedies, to declare the entire
amount of rental due and payable forthwith, and/or to terminate this Lease
and/or enter upon said leased premises or any part thereof either with, or
without, process of law, and Lessee, or any person or persons occupying the
same, may be expelled, removed or put out, using such force as may be necessary
so to do, and repossess and enjoy said premises as before this Lease, without
prejudice to any remedies which might otherwise be used for arrears of rent or
preceding breach of covenants.
Any repossession of said premises shall not constitute a termination
of this Lease unless Lessor so notified Lessee in writing, and Lessor shall
have the right, at its option, to lease the premises so repossessed to any
other person or persons upon such terms and conditions as Lessor shall
determine. In such event, Lessee shall be and remain liable to Lessor for the
difference between the rental provided herein and the rentals so obtained from
any third person, plus all costs and expenses to Lessor of repossessing and
releasing said premises, and of transporting, repairing and/or otherwise
handling the fixtures and equipment located thereon.
ARTICLE 14
If at any time during the term hereof, proceedings in bankruptcy shall
be instituted by or against Lessee and result in an adjudication of bankruptcy,
or if Lessee shall file, or any creditor shall file, or any other person shall
file, any petition in bankruptcy, under the Bankruptcy Act of the United States
of
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America as such act is now in force, or the same may be amended or superseded,
and shall be judicially approved, or a receiver of the business or assets of
Lessee shall be appointed, and if such appointment be not vacated within twenty
(20) days after notice thereof to Lessee, or if a general assignment is made by
Lessee or sub-lessee for the benefit of creditors, any sheriff, marshal,
constable or keeper take possession thereof by authority of any attachment or
execution proceedings, Lessor may at its option, in either or any of such
events, without notice to Lessee or any other person or persons, immediately
recapture and take possession of the leased premises and terminate this Lease,
with or without process of law; such process being expressly waived by Lessee.
ARTICLE 15
In the event that greater than fifty percent (50%) of the leased
premises is destroyed or significantly damaged by fire or other casualty, the
Lessee shall have the right to terminate this Lease in accordance with this
Article 15, and the Lessor shall have the right to terminate this Lease in
accordance with this Article 15 if fewer than five (5) years remain for the
balance of this Lease and any renewals at such time. Upon such event, any party
entitled to terminate the Lease must do so by giving written notice to the
other party within thirty (30) days of the date that the damaged was sustained
by the leased premises. If the parties do not exercise any right they have to
terminate the Lease, or if less than fifty percent (50%) of the leased premises
is destroyed or significantly damaged by fire or other casualty, then the Lease
will not terminate and in that event Lessor shall be obligated to restore the
leased premises to substantially the same condition as before the damage was
sustained thereto, provided that Lessor shall not be obligated to spend any
amount to restore the leased premises that exceeds the amount of insurance
proceeds that Lessor receives as a result of the damage sustained to the leased
premises. Lessor shall not be obligated to begin restoring the leased premises
until Lessor has received the insurance proceeds payable as a result of the
damage. So long as the damage to the leased premises was not caused of Lessee's
negligence or intentional act, then the rent payable hereunder shall be abated
during such time that the Lessee is unable to use the leased premises
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until they have been restored. Lessee shall not be entitled to any abatement of
rent if the damage to the leased premises was caused by Lessee's negligence or
intentional act.
Regardless of the cause of any damage sustained by the leased
premises, in no event shall Lessee receive or be entitled to compensation or
damages from Lessor on account of any loss, whether of business, profits,
property, or otherwise, or for inconvenience, annoyance or personal injury
resulting from such destruction, or from or in the course of restoration,
repair or reconstruction of all or any part of the buildings or improvements,
nor for any loss, injury to or damage to persons or property in, upon or from
the leased premises from any cause or from the termination of this Lease, as
herein provided.
ARTICLE 16
Each and all of the terms, conditions, covenants and obligations
hereof shall inure to the benefit of and bind the successors in interest of the
parties hereto, provided that these provisions shall not be deemed to alter the
provisions of Article 6 hereof.
ARTICLE 17
17.1 Total Taking. If all or substantially all of the improvements
on the Leased Premises or the Leased Premises shall be taken by condemnation or
in any other manner for any public or quasi-public use or purpose (other than
for temporary use or occupancy), the term of this Lease shall terminate as of
the date of vesting of title (the "Date of the Taking") and, subject to a
proration and apportionment of all rental and other sums due hereunder as of
the Date of the Taking, no further rent shall be due hereunder.
17.2 Partial Taking. If a part of the Leased Premises shall be so
taken by condemnation, then Lessor shall give Lessee prompt written notice
thereof and the part so taken shall no longer constitute part of the Leased
Premises, but this Lease shall continue in force and effect as to the part not
so taken; provided, however, that Lessee may elect to terminate this Lease (i)
if a partial taking is more than fifty percent (50%) of the Leased Premises;
(ii) if the partial taking lasts for more than one (1) year; or (iii) if, in
the good faith and mutual judgment of Lessee and Lessor, the remaining portion
of the Leased Premises cannot be economically and practicably used by Lessee
for the conduct of its business. Lessee shall give
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notice of any election to terminate to Lessor not later than sixty (60) days
after notice of such taking is given by Lessor to Lessee. Upon the date
specified in Lessee's notice (which shall not be more than one hundred eighty
(180) days thereafter), the term of this Lease shall terminate and, subject to
a proration and apportionment of all rental and other sums due hereunder as of
the Date of the Taking and such date, as applicable, no further rent shall be
due hereunder. Upon a partial taking and the term of this Lease continuing in
force as to any part of the Leased Premises, the rental shall be reduced
proportionately based upon the part or parts of the Leased Premises and/or
other parts of the improvements so taken.
17.3 Award. Lessor shall be entitled to receive the entire award in
any proceeding with respect to any taking (other than for temporary use and
occupancy) provided for in this Article without deduction therefrom for any
estate vested in Lessee by this Lease and Lessee shall receive no part of such
award, except as hereinafter expressly provided. Lessee shall have the right to
make a separate claim with the condemning authority for (i) any moving expenses
incurred by Lessee as a result of such condemnation; (ii) any costs incurred
and paid by Lessee in connection with any alteration or improvement made by
Lessee to the Leased Premises; (iii) the value of any of Lessee's property
taken; and (iv) any other separate claim which Lessee may hereafter be
permitted to make, provided, however, that such separate claim shall not reduce
or adversely affect the amount of the award (as hereinafter defined) to which
Lessor is entitled. If Lessee shall not be permitted to make a separate claim
in such proceeding, Lessor shall prosecute all claims in such proceeding on
behalf of both Lessor and Lessee in which event Lessee may, if it so elects and
at its expense, attend hearings, present arguments and generally participate in
the conduct of the proceeding; provided, however, that if Lessor incurs any
additional expense because of Lessee's exercising its rights under this
sentence, Lessee will bear such additional expense.
17.4 Temporary Taking. If all or any part of the Leased Premises
shall be temporarily taken by condemnation or otherwise for any public or
quasi-public use or purpose (unless Lessee shall have elected to terminate the
term of this Lease in accordance with the option provided in the last sentence
of this section), this Lease shall nevertheless remain in full force and
effect. Lessee shall continue to be
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responsible for all of its obligations hereunder insofar as such obligations
are not affected by such taking; provided, however, that Lessee shall not be
liable for the payment of rental or other sums for the part of the Leased
Premises so temporarily taken.
ARTICLE 18
No express or implied waiver of Lessor or of any default hereunder
shall be in any way construed to be a waiver of any future or subsequent
default of Lessee, or a waiver of any of the rights of Lessor under the terms
of this Lease. If any clause or provision of this Lease is invalid or
unenforceable for any reason, such clause or provision shall be deemed
severable and the other clauses and provisions hereof shall remain in full
force and effect and shall be enforceable to the full extent permitted by law.
ARTICLE 19
Notices and demands by either party hereto may be given by certified
or registered mail, postage prepaid, addressed as follows:
LESSOR: Harken Real Estate Company, Inc.
0000 Xxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
LESSEE: Casa Ole Restaurants, Inc.
0000 Xxxxxxxxx
Xxxxxxx, XX 00000
subject to the right of either party to designate, by notice in writing, any
new address to which said notices or demands must be sent.
ARTICLE 20
Lessor shall have the right to mortgage the leased premises and this
Lease shall be subordinate to any existing or future mortgage; provided,
however, that the mortgage holder must agree to enter into a nondisturbance
agreement with Lessee on terms reasonably acceptable to Lessee and the mortgage
holder.
ARTICLE 21
This Lease shall be binding upon and inure to the benefit of the
successors, assigns, heirs, administrators and executors of each of the parties
hereto. The parties may concurrently herewith for
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recording purposes execute a short form of the within lease, the same to be
acknowledged by all parties before a Notary Public. Whenever in this Lease the
word "mortgage" is used, it shall be deemed to include in its use a "Deed of
Trust" and shall also be deemed to include interim mortgages during
construction and permanent mortgages after completion of construction.
ARTICLE 22
This Lease is subject in all events to all easements, restrictions,
rights-of-way, and covenants of record affecting the leased premises, and
Lessee hereby covenants to abide by all such covenants and restrictions.
ARTICLE 23
Lessor expressly reserves in favor of Lessor and its assigns a
nonexclusive ingress and egress easement across the existing driveway located
on the leased premises for purpose of providing Lessor and its assigns and
invitees with ingress and egress to and from Lessor's property located adjacent
to the leased premises. Lessee consents to and agrees to such nonexclusive
easement in favor of Lessor and Lessor's assigns.
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IN WITNESS WHEREOF, the parties have hereunto set their hands
effective as of the _____ day of _______________, 199__.
HARKEN REAL ESTATE COMPANY, INC.
By:
------------------------------
Xxx Xxxxxx, President
LESSOR
CASA OLE RESTAURANTS, INC.
By:
------------------------------
Title:
---------------------------
LESSEE
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00
XXX XXXXX XX XXXXX )
)
COUNTY OF JEFFERSON )
This instrument was acknowledged before me on the _______ day of
__________________, 199___, by Xxx Xxxxxx, President of Harken Real Estate
Company, Inc., a Texas corporation, on behalf of said corporation.
------------------------------
Notary Public, State of Texas
THE STATE OF TEXAS )
)
COUNTY OF JEFFERSON )
This instrument was acknowledged before me on the _______ day of
_____________________, 199___, by ___________________, ________________ of Casa
Ole Restaurants, Inc., a Texas corporation, on behalf of said corporation.
------------------------------
Notary Public, State of Texas
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EXHIBIT "A"
DESCRIPTION OF LEASED PREMISES
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EXHIBIT "F" TO OPTION CONTRACT AND AGREEMENT
FORM OF XXXX OF SALE
Page 79 of 87
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XXXX OF SALE
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF JEFFERSON )
That CASA OLE OF BEAUMONT, INC., in consideration of the sum of TEN
AND NO/100 DOLLARS ($10.00) and other good and valuable consideration to
Grantor in hand paid by Grantee hereinafter named, the receipt of which is
hereby acknowledged has, subject to all of the matters set forth or referred to
herein, has BARGAINED, SOLD and DELIVERED, and by these presents does BARGAIN,
SELL and DELIVER unto CASA OLE RESTAURANTS, INC., Grantee herein, all of the
equipment, assets and property of Grantor's Casa Ole Restaurants located in
Jasper, Texas, and in Silsbee, Texas, as more fully described in Exhibit "A"
attached hereto and incorporated herein by reference (the "Property"), BUT
EXCLUDING any of Grantor's existing bank accounts and cash, the land and
buildings on which the restaurants are located, any of the equipment or
property of Grantor located at 0000 Xxxxxx Xxxxxxx, and the cash registers
located in such restaurants.
Ad valorem taxes with respect to the Property for the current year
have been prorated as of the date hereof and Grantee assumes and agrees to pay
same and to indemnify and hold Grantor harmless in respect thereof.
BY THE ACCEPTANCE OF THIS XXXX OF SALE, GRANTEE TAKES THE PROPERTY "AS
IS", AND WITH ALL FAULTS, EXCEPT FOR THE WARRANTIES OF TITLE AS PROVIDED AND
LIMITED HEREIN. GRANTOR HAS NOT MADE AND DOES NOT MAKE ANY REPRESENTATIONS AS
TO THE PHYSICAL CONDITION, MECHANICAL OPERATION, WORKING ORDER OR ANY OTHER
MATTER AFFECTING OR RELATED TO THE PROPERTY AND GRANTEE HEREBY EXPRESSLY
ACKNOWLEDGES THAT NO SUCH REPRESENTATIONS HAVE BEEN MADE. GRANTOR MAKES NO
OTHER WARRANTIES, EXPRESS OR IMPLIED, AS TO THE MERCHANTABILITY,
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MARKETABILITY, FITNESS OR SUITABILITY FOR A PARTICULAR PURPOSE OF OR RELATING
TO THE PROPERTY. ANY IMPLIED WARRANTIES ARE EXPRESSLY DISCLAIMED AND EXCLUDED.
When this Xxxx of Sale is executed by more than one person or when
Grantee is more than one person, the instrument shall read as though pertinent
verbs, nouns and pronouns were changed correspondingly and when executed by or
to a corporation or other entity other than a natural person, the words
"heirs", "executors" and "administrators" or "heirs and assigns" shall be
construed to mean "successors and assigns".
IN WITNESS WHEREOF, this Xxxx of Sale is executed by Grantor to be
effective as of the ____ day of_________________, 199__.
CASA OLE OF BEAUMONT, INC.
By:
------------------------------
Title:
---------------------------
RECEIVED, ACCEPTED AND AGREED TO
BY GRANTEE:
CASA OLE RESTAURANTS, INC.
By:
--------------------------
Title:
-----------------------
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00
XXX XXXXX XX XXXXX )
)
COUNTY OF JEFFERSON )
This instrument was acknowledged before me by XXX XXXXXX, President of
Casa Ole of Beaumont, Inc. on this _____ day of _________________, 199__.
---------------------------------
Notary Public, State of
---------
THE STATE OF )
------------ )
COUNTY OF )
--------------
This instrument was acknowledged before me by _____________,
_____________ of Casa Ole Restaurants, Inc., on this _____ day of
_________________, 199__.
---------------------------------
Notary Public, State of Texas
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EXHIBIT "G" TO OPTION CONTRACT AND AGREEMENT
FORM OF PURCHASER'S CLOSING CERTIFICATE
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PURCHASER'S CLOSING CERTIFICATE
THE STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF JEFFERSON )
WHEREAS, Casa Ole of Beaumont, Inc., Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxxx
and Xxxxxx X. Xxxxxxxx (herein referred to collectively as "Sellers"), have
heretofore entered into a certain Option Contract and Agreement the "Contract")
with Casa Ole Restaurants, Inc. ("Purchaser"), pursuant to which Sellers have
agreed to sell to Purchaser certain assets of Sellers' Casa Ole restaurants
located in Jasper, Texas, and Silsbee, Texas (the "Restaurants"); and
WHEREAS, Purchaser and Sellers now desire to consummate the
transaction contemplated in the Contract.
NOW, THEREFORE, in consideration of the premises and in compliance
with the provisions of the Contract and in order to induce Sellers to
consummate the transaction contemplated thereby, Purchaser hereby represents,
warrants, covenants, acknowledges and agrees to and with Sellers as follows:
1. To the best of Purchaser's knowledge, Sellers have fully and
completely performed, fulfilled, accomplished, complied with and satisfied all
duties, obligations, requirements, undertakings, covenants, agreements,
prerequisites and conditions precedent to consummation of the transaction
contemplated in the Contract which are required thereby or by law to be
performed, fulfilled, accomplished, complied with or satisfied by Sellers
through and including the Closing (as defined in the Contract).
2. Purchaser hereby acknowledges timely and complete receipt of
and full satisfaction with all instruments, documents and other writings
required by the Contract or applicable law to be produced, provided, delivered
or furnished by Sellers or any officer, director, employee, agent,
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attorney, principal or independent contractor of Sellers; Purchaser and
Purchaser's counsel have had ample opportunity to and have examined each and
every such instrument, document and other writing and all such instruments,
documents and other writings are acceptable to Purchaser and Purchaser's
counsel in all respects.
3. Purchaser and Purchaser's counsel have had ample opportunity
to examine and have examined each and every instrument, document and other
writing required to be executed, sworn to, acknowledged and/or delivered by or
on behalf of Sellers pursuant to the provisions of the Contract and all such
instruments, documents and other writings are acceptable to Purchaser and
Purchaser's counsel in form and content and fully comply with all requirements
therefor under the Contract.
4. Purchaser and Purchaser's counsel have received and have had
ample opportunity to review, question, examine and verify Purchaser's closing
statement and the information and documentation supporting each and every entry
on such closing statement and all other instruments, documents and other
writings prepared by or otherwise required by the Contract to be executed,
sworn to, acknowledged and/or delivered by Purchaser and Purchaser and
Purchaser's counsel have approved all of same and have no questions about same
or objections thereto and Purchaser will execute, swear to, acknowledge and/or
deliver all of same as applicable.
5. Upon delivery by Sellers of the instruments, documents and
other writings required by the Contract to be executed, sworn to, acknowledged
and delivered by Sellers and payment by Sellers of the fees, costs and expenses
required by the Contract to be paid by Sellers, Purchaser hereby acknowledges
and agrees that Sellers have no continuing duty to Purchaser under the Contract
except for those covenants, representations, warranties and agreements of
Sellers which are specifically provided in the Contract to survive the Closing.
6. Purchaser is not consummating the transaction contemplated in
the Contract and is not purchasing the Business in reliance upon any
representations, warranties, agreements, statements or
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expressions of opinions, oral or written, by any person or entity whatsoever,
including, without limitation, any agent or broker, property manager, tenant,
governmental official, Sellers or Sellers' employees, agents, attorneys,
principals or independent contractors, unless each such representation,
warranty, agreement, statement or expression of opinion is set forth in writing
and signed by the person or entity responsible for or making the
representation, warranty, agreement, statement or expression of opinion.
7. Purchaser acknowledges that Sellers are relying upon each and
all of the representations, statements and agreements of Purchaser set forth in
this Purchaser's Closing Certificate and that but for such and all of such
representations, statements and agreements and the truth and accuracy thereof,
Sellers would not consummate the transaction contemplated in the Contract.
8. All of the representations, statements and agreements of
Purchaser set forth in this Purchaser's Closing Certificate are now and shall
continue to be binding upon Purchaser and all of Purchaser's successors,
assigns, officers, directors, employees, agents, principals, attorneys,
independent contractors and all other persons and entities claiming by, through
or under Purchaser or asserting, claiming or receiving any interest of any
kind, type, nature or description in or to the Property or any part thereof.
All of the representations, warranties, statements and agreements of Purchaser
set forth in this Purchaser's Closing Certificate do now and shall continue to
inure to the benefit of Sellers and all Sellers' employees, agents, principals,
attorneys and independent contractors and their respective heirs, executors,
administrators, successors, legal representatives and assigns.
9. Purchaser acknowledges that Sellers have employed the law firm
of Xxxxxx, Xxxx & Xxxxxx, L.L.P. to act as Sellers' attorneys in this
transaction and that such attorneys have not given legal advice to Purchaser
nor have they in any manner represented or attempted to represent Purchaser in
this transaction.
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EXECUTED AND DELIVERED this _____ day of __________________, 199___.
Casa Ole Restaurants, Inc.
By:
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Title:
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