LAND AND BUILDING LEASE
between
SKYLINE-FRI 12, XXXXXXXX, X.X.
a Texas limited partnership, as
LANDLORD
and
HOPS OF XXXXXXXX, LTD.
A Florida Limited Partnership
as TENANT
August 29, 2003
INDEX TO MASTER LAND AND BUILDING LEASE
Article
RECITALS
I. Demise of Premises 1
II. Term 2
III. Rent 2
IV. Use 6
V. Acceptance of Demised Premises 6
VI. Alterations 6
VII. Repairs and Maintenance 8
VIII. Compliance with Law 9
IX. Utilities 9
X. Indemnity 9
XI. Insurance 11
XII. Damage or Destruction 14
XIII. Eminent Domain 15
XIV. Covenants of Landlord 17
XV. Insolvency 18
XVI. Default 19
XVII. Unavoidable Delays, Force Majeure 23
XVIII. No Waiver 24
XIX. Notices 24
XX. Access 25
XXI. Signs 26
XXII. Improvements and Fixtures 26
XXIII. End of Term 27
XXIV. Holding Over 28
XXV. Assignment and Subletting 28
XXVI. Landlord's Loan 29
XXVII. Maintenance of Outside Areas 31
XXVIII. Certificates 31
XXIX. Relationship of Parties 32
XXX. Recording 32
XXXI. Captions and Section Numbers 33
XXXII. Applicable Law 33
XXXIII. Entire Agreement 33
XXXIV. Landlord's Liability 33
XXXV. Attorney's Fees 34
XXXVI. Substitution 34
XXXVII. Environmental 34
XXXVIII. Addenda 38
XXXIX. Counterparts 38
Exhibit A Location/Legal Description/Address of the Real Property
Exhibit B Tenant's Personal Property List
Exhibit C Tenant's Estoppel Certificate
Exhibit D Memorandum of Lease
Exhibit E Fixed Rent Allocation
Exhibit F Subordination, Nondisturbance and Attornment Agreement
Exhibit G Avado Brands, Inc. Guaranty
LAND AND BUILDING LEASE
THIS LAND AND BUILDING LEASE (the "Lease") is made and entered into as of
August 29, 2003 (the "Effective Date"), between SKYLINE-FRI 12, XXXXXXXX, X.X.,
a Texas limited partnership("Landlord") and Hops Of Xxxxxxxx, Ltd., a Florida
limited partnership ("Tenant").
R E C I T A L S
A. Landlord is the owner of the tract of real property (the "Real Property"
or "Property"). The Property is more particularly described in Exhibit A
attached hereto and for purposes hereof shall include all of Landlord's right,
title and interest in and to all easements, appurtenances and rights relating to
the Real Property.
B. Tenant desires to lease from Landlord the Property so that Tenant may,
in accordance with and subject to the terms, conditions, and restrictions of the
Lease, operate a Hops Grill & Bar restaurant at the Real Property location. The
buildings and all improvements to or on the tract of Real Property, including
but not limited to all site work, landscaping, fixtures, machinery, equipment
and systems, utilities, and other improvements, is referred to as the
"Building". The personal property and moveable trade fixtures (other than
Landlord's Equipment, as defined in Section 22.03) located at the Demised
Premises are owned by Tenant and/or leased from third parties including, without
limitation, those items generally described on Exhibit B attached hereto, and
are not included in the definition of Building or Real Property leased to Tenant
pursuant to this Lease.
C. The Property and the Building shall be referred to either individually
or collectively as the "Demised Premises."
D. Tenant desires to lease the Demised Premises from Landlord, and Landlord
desires to lease the Demised Premises to Tenant, on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the lease of the Demised Premises and
the rents, covenants and conditions herein set forth, Landlord and Tenant do
hereby covenant, promise and agree as follows:
ARTICLE I
DEMISE OF PREMISES
Landlord does hereby lease unto Tenant, and Tenant does hereby hire from
Landlord, for the term hereinafter provided in Section 2.01, the Demised
Premises for the use thereof by Tenant, Tenant's employees, concessionaires,
licensees, agents, customers and invitees, which use shall be exclusive except
as otherwise provided in Section 3.06 or elsewhere herein.
ARTICLE II
TERM
Section 2.01
(a) The "Commencement Date" of this Lease shall be upon the Effective Date.
The Lease shall continue for a period of twenty (20) years following the
Effective Date (the "Original Lease Term") unless sooner terminated as
hereinafter provided for. The "Lease Term", as such term is used herein, shall
mean the Original Lease Term as extended (or as may be extended) pursuant to
Section 2.02 below unless sooner terminated as hereinafter provided for.
(b) This Lease shall be deemed to be in full force and effect upon the
Effective Date. Tenant shall be deemed in possession of the Demised Premises
upon the Effective Date.
Section 2.02 Tenant shall have the option to extend the term of this Lease
for up to two (2) separate option periods upon and subject to the terms set
forth below in this Section 2.02. The first option period (the "First Option
Period") shall commence at the expiration of the Original Lease Term. The second
option period (the "Second Option Period") shall commence at the expiration of
the First Option Period. The First Option Period and the Second Option Period,
are sometimes referred to herein collectively as the "Option Periods" and
individually as an "Option Period." Each Option Period shall continue for a
period of ten (10) years from the commencement date of such Option Period.
Except as otherwise expressly provided herein, all of the terms and conditions
of this Lease applicable to the Original Lease Term shall continue to apply
during each Option Period. To validly extend the Lease Term beyond the
expiration of the Original Lease Term with the First Option Period (a), Tenant
must and shall deliver to Landlord written notice of Tenant's election to so
extend not later than one (1) year prior to the expiration of the Original Lease
Term and (b)no event shall have occurred and be continuing which, with the
passage of time or the giving of any required notice, would constitute an Event
of Default (such event, a "Default). To validly extend the Lease Term for the
Second Option Period , Tenant (x) must and shall deliver to Landlord written
notice of Tenant's election to so extend not later than six (6) months prior to
the expiration of the First Option Period, and (y) shall not be in default under
any material term or condition of this Lease as of the date of such notice or
the commencement of the Second Option Period. Without limiting anything
contained in Article XXXIII hereof, time is of the essence in the performance of
each provision of this Section 2.02. Either party, upon request of the other,
shall execute and acknowledge, in form suitable for recording, an instrument
confirming any such extension, with Tenant paying all applicable recording
costs.
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ARTICLE III
RENT
Section 3.01 Tenant shall pay to Landlord, from and after the Commencement
Date and thereafter throughout the Lease Term, the sums set forth in this Lease
as "Rent" without prior demand therefore and without offset, deduction, or
abatement except as may be otherwise expressly provided herein. Notwithstanding
the foregoing, any amounts due by Tenant to Landlord hereunder for which no due
date is expressly specified herein (e.g., the first day of each month) shall be
due within ten (10) days following the giving to Tenant by Landlord of written
notice of such amounts due, except if some other period of time following
written notice or demand is otherwise expressly provided below, then such other
period shall apply. As used herein, "Rent" shall be deemed to include not only
Fixed Rent but also all additional sums payable or owed by Tenant under this
Lease, including without limitation as set forth in Sections 3.05 and 3.07
("Additional Rent"). Except as otherwise expressly provided herein, in the event
of nonpayment by Tenant of any Rent, Landlord shall have the same rights and
remedies in respect thereof regardless of whether such Rent constitutes Fixed
Rent or Additional Rent. All payments of Rent to be paid to Landlord shall be
paid to Landlord at its election, in one of the following manners (which shall
be disclosed in writing to Tenant and may be changed only by a writing delivered
to Tenant): (1) by mail at the Landlord's office indicated on the first page
hereof or (2) by mail to any other place designated by Landlord upon at least
thirty (30) days' prior written notice to Tenant. If the Commencement Date shall
not be the first day of a calendar month, then the rent for such month shall be
prorated based upon a Three Hundred Sixty-Five (365) day year.
Section 3.02 Intentionally left blank.
Section 3.03 Fixed Rent: The "Fixed Rent" for the Demised Premises for each
month of the Lease Term prior to the fifth anniversary of the Commencement Date
shall be $14,687.50. On the fifth anniversary of the Commencement Date, and
thereafter, on each fifth anniversary of such date throughout the Lease Term,
(i.e., the fifth, tenth and fifteenth anniversary of the Commencement Date, and
subject to Section 2.02, the twentieth, twenty-fifth, thirtieth and thirty-fifth
anniversary of the Commencement Date) the monthly Fixed Rent shall increase by
ten percent (10%) over the Fixed Rent charged in the immediately preceding month
of the Lease Term, and such increase shall apply for the ensuing five (5) year
period. Tenant shall pay to Landlord Fixed Rent in advance, without demand
therefore, beginning on the Commencement Date and thereafter on the first day of
each calendar month commencing with the Commencement Date.
Section 3.04 Intentionally left blank.
Section 3.05 Additional Rent.
(a) All "Real Estate Taxes" (as hereinafter defined) assessed against, or
allocable or attributable to the Demised Premises (whether accruing prior to, or
after the Effective Date and during the Lease Term) shall be deemed to be
Additional Rent and shall be payable by Tenant as contemplated by Section
3.05(b) below. Real Estate Taxes for the last year of the Lease Term shall be
prorated based upon the most recent tax xxxx and shall be paid by Tenant to
Landlord upon termination of the Lease. As used herein, the term "Real Estate
Taxes" means all taxes and general and special assessments and other impositions
in lieu thereof, as a supplement thereto and any other tax which is measured by
the value of real property and assessed on a uniform basis against the owners of
real property, including excise taxes described in Section 3.05 (d) and any
substitution in whole or in part of any of the foregoing due to a future change
in the method of taxation. Nothing contained in this Lease, however, shall
require the Tenant to pay any estate, inheritance, corporate, profits, transfer,
franchise or income tax of Landlord, nor shall any of same be deemed Real Estate
Taxes, unless same shall be specifically imposed in substitution for, or in lieu
of, Real Estate Taxes, and then only to the extent same are limited to the
Demised Premises as if it were the only property owned by Landlord. If by law,
any general or special assessment or like charge may be paid in installments
without any penalty or interest , then such assessment may be paid by Tenant in
such installments and Tenant shall only be liable for the portion thereof that
is allocable or attributable to the Lease Term or any portion thereof.
(b) Tenant shall pay the Real Estate Taxes directly to the applicable
taxing authority within fifteen (15) days prior to the earlier of (i) the
delinquency thereof, or (ii) the date that any penalty or interest would accrue
on any unpaid installment. Landlord shall have the tax xxxx for the Demised
Premises sent directly by the applicable taxing authority to Tenant, and Tenant
shall pay the tax xxxx directly to the collecting authority, and in such event
Tenant shall provide Landlord a copy of the paid receipt for each installment of
Real Estate Taxes so paid. If Tenant fails to pay the Real Estate Taxes when due
hereunder, then Tenant shall, in addition to all other remedies available to
Landlord, reimburse Landlord for any and all penalties or interest, or portion
thereof, incurred by Landlord as a result of such nonpayment or late payment by
Tenant.
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(c) Tenant shall have the right at its own cost and expense, to seek an
abatement of Real Estate Taxes or a reduction in the valuation of the Demised
Premises and/or contest the applicability of any Real Estate Taxes to the
Demised Premises or the improvements thereon Without limiting the foregoing,
Tenant shall have the right to contest or cause to be contested, by appropriate
legal proceedings conducted in good faith and with due diligence, at Tenant's
sole cost and expense, the amount and validity or application, in whole or in
part, of any Real Estate Taxes or lien therefore, provided that Tenant shall
have deposited with Landlord adequate reserves for the payment of the taxes as
required by Landlord (but in no event less than the amount of Real Estate Taxes
in dispute), unless paid in full under protest or Tenant shall have furnished
such security as may be required in the proceeding. In any instance where any
such action or such proceeding is being undertaken by Tenant, Landlord shall
reasonably cooperate with Tenant, at no cost or expense to Landlord, including
participating (at Tenant's sole cost and expense) in any proceeding in which
Landlord is a necessary party and execute any and all documents approved by
Landlord required in connection therewith. Tenant shall be entitled to any
refund (after the deduction therefrom of all reasonable expenses incurred by
Landlord in connection therewith) of any Real Estate Taxes and penalties or
interest thereon received by Tenant or Landlord, whether or not such refund was
a result of proceedings instituted by Tenant, which have been paid by Tenant or
paid by Landlord for the benefit of Tenant and repaid to Landlord by Tenant.
(d) Tenant shall pay to Landlord, with each payment of Rent due hereunder,
all taxes imposed upon Landlord with respect to rental or other payments in the
nature of a gross receipts tax, sales tax, privilege tax or the like, whether
imposed by a federal, state or local taxing authority, which when added to such
rental or other payment shall yield to Landlord after deduction of all such tax
payable by Landlord with respect to all such payments a net amount which
Landlord would have realized from such payment had no such tax been imposed.
Tenant shall have the right to contest any such taxes provided for in this
Section 3.05(d) in accordance with provisions relating to contest set forth in
Section 3.05(c) above. Notwithstanding the foregoing, but without limiting the
preceding obligation of Tenant to pay all taxes which are imposed on the rental
or other payments due under this Lease, in no event will Tenant be required to
pay any net income taxes (i.e. taxes which are determined taking into account
deductions for depreciation, interest, taxes and ordinary and necessary business
expenses), franchise taxes of Landlord, any transfer taxes of Landlord or other
tax imposed with respect to the sale, exchange or other disposition by Landlord,
in whole or in part, of the Property or Landlord's interest in the Lease (not
including, in any event, any increase in ad valorem taxes or Real Estate Taxes
resulting from such transfer).
Section 3.06 Matters of Record: Tenant hereby accepts the Demised Premises
in the condition as of the date of possession hereunder, subject to all
applicable zoning, municipal, county, and state laws, ordinances, and
regulations, including private easements and restrictions, (whether or not
evidence thereof is recorded in the public records), governing and regulating
the use of the Demised Premises, and accepts this Lease subject thereto and to
all matters disclosed thereby, and by any exhibits attached hereto. Tenant
acknowledges that neither Landlord nor Landlord's agent has made any
representation or warranty as to the suitability of any Leased Property for the
conduct of the Tenant's business.
Section 3.07 Additional Charges: Tenant and Landlord agree that the rent
accruing under this Lease shall be net to Landlord and that all Real Estate
Taxes (subject to contest rights), costs, promotional fees, common area
maintenance fees, expenses and charges of every kind and nature, including
reasonable attorneys' fees incurred by Landlord in enforcing the provisions of
this Lease, whether or not any legal proceedings are commenced ("Additional
Charges") arising in connection with or relating to the Demised Premises
(excluding, however, (1) taxes other than Real Estate Taxes for which Landlord
is responsible under Section 3.05(a), and (2) any charges resulting solely and
directly from Landlord's gross negligence or willful misconduct and (3) any
payments for interest or principal under any fee mortgage relating to the
Demised Premises) which may arise or become due at any time during the Lease
Term) and that all Additional Charges shall be paid by Tenant. With respect to
any Additional Charges other than Real Estate Taxes, Landlord shall xxxx Tenant
for such charges from time to time by delivery to Tenant of a true and accurate
statement (including reasonable backup documentation) showing in reasonable
detail the Additional Charges. Tenant shall pay such Additional Charges within
ten (10) days after receipt of such xxxx. Landlord will provide reasonable
cooperation to Tenant at Tenant's sole cost and expense in disputing any
Additional Charges that are assessed against Landlord or the Property by third
parties. Tenant hereby indemnifies, defends, protects, and saves Landlord wholly
harmless from and against any and all Additional Charges. As used herein, the
term "Additional Rent" shall include, without limitation, all of the following:
(1) any and all Additional Charges for which Tenant is responsible hereunder, or
which Tenant otherwise assumes or agrees to pay; (2) all interest and penalties
owed to third parties that may accrue on such Additional Charges if Tenant fails
to pay them timely; (3) all other damages, costs and expenses (including,
without limitation, reasonable attorneys' fees and other legal and court costs)
which Landlord may suffer or incur in enforcing this Lease; and (4) any and all
other sums which may become due by reason of Tenant's default or failure to
comply with its obligations under this Lease.
3<
Section 3.08 Late Charge: In addition to all other remedies set forth in
this Lease, any payment of Fixed Rent due to Landlord not received by Landlord
within ten (10) days after such payment is due hereunder, and any payment of
Additional Rent due to Landlord not received by Landlord when due hereunder,
shall be deemed delinquent and cause Tenant to incur a late charge of five
percent (5%) on each delinquent payment (or the applicable portion of such
payment that is delinquent), due and payable immediately with the delinquent
Fixed Rent or delinquent Additional Rent, as the case may be.
Section 3.09 Character of Demised Premises: From the Commencement Date and
thereafter throughout the Lease Term, Tenant shall conduct its business in a
first class and reputable manner consistent with Tenant's prior operating
practices with respect to the Demised Premises. Tenant shall open and operate a
Hops Bar & Grill restaurant at the Demised Premises continuously during all
hours which is customary for similarly situated Hops Bar & Grill restaurants,
subject to temporary closing due to casualty, condemnation, remodeling, Lease
assignment or subletting permitted pursuant to Article XXV, or other force
majeure condition. The character of the occupancy of the Demised Premises is an
additional consideration and inducement for the granting of this Lease.
Section 3.10 Guaranty. Avado Brands, Inc, a Georgia corporation
("Guarantor") shall guaranty Tenant's obligations under this Lease pursuant to
the Guaranty Agreement substantially in the form of Exhibit G, executed as of
the Effective Date.
ARTICLE IV
USE
Tenant may use the Demised Premises to operate a Hops Bar & Grill
restaurant, including beer, wine and liquor sales, and such other incidental
uses related thereto in Tenant's discretion or another nationally branded
restaurant concept. Tenant may use the Demised Premises only for the uses
expressly permitted under this Section, and for no other use without the prior
written consent of Landlord, which approval shall not be unreasonably withheld,
delayed or conditioned. Notwithstanding any other provision of this Article,
Tenant shall not use, or suffer or permit any person or entity to use, the
Demised Premises or any portion thereof for any purpose in violation of any
applicable law, ordinance or regulation applicable to the Demised Premises.
ARTICLE V
ACCEPTANCE OF DEMISED PREMISES
Tenant acknowledges that it has owned the Demised Premises prior to
execution of this Lease and has had the opportunity to perform all tests,
studies and inspections that it desires, and that Tenant is accepting the
Demised Premises in its AS IS condition existing on the date Tenant executes
this Lease.
ARTICLE VI
ALTERATIONS
Subject to the provisions of this Article VI, Tenant shall have no right to
make changes, alterations or additions (collectively, "Alterations") to the
Building in excess of One Hundred Thousand Dollars ($100,000.00) without prior
written consent of Landlord, which Landlord agrees it will not withhold
unreasonably; provided, however, in no event shall any Alterations be made
which, after completion, would: (i) reduce the value of the Building as it
existed prior to the time that said Alterations are made; or (ii) adversely
affect the structural integrity of the Building. Such amount shall increase by
five percent (5%) on each anniversary of the Effective Date of this Lease. Any
and all Alterations made by Tenant shall be at Tenant's sole cost and expense.
Prior to the commencement of construction, Tenant shall deliver promptly to
Landlord detailed cost estimates for any proposed Alterations, as well as all
drawings, plans and other information regarding such Alterations (such
estimates, drawings, plans and other information are collectively referred to
herein as the "Alteration Information"), Landlord's review and/or approval of
any Alteration Information shall in no event constitute any representation or
warranty of Landlord regarding (x) the compliance of any Alteration Information
with any governmental or legal requirements, (y) the presence of absence of any
defects in any Alteration Information, or (z) the safety or quality of any of
the Alterations constructed in accordance with any plans or other Alteration
Information. Landlord's review and/or approval of any of the Alteration
Information shall not preclude recovery by Landlord against Tenant based upon
the Alterations, the Alteration Information, or any defects therein. In making
any and all Alterations, Tenant also shall comply with all of the following
conditions:
(a) No Alterations shall be undertaken until Tenant shall have (i) procured
and paid for, so far as the same may be required, all necessary permits and
authorizations of all governmental authorities having jurisdiction over such
Alterations, and (ii) delivered to Landlord at least fifteen (15) days prior to
commencing any such Alterations written evidence acceptable to Landlord of all
such permits and authorizations. Landlord shall, to the extent necessary (but at
no cost, expense, or risk of loss to Landlord), join in the application for such
permits or authorizations whenever necessary, promptly upon written request of
Tenant.
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(b) Any and all structural Alterations of the Building shall be performed
under the supervision of an architect and/or structural engineer.
(c) Tenant shall notify Landlord at least fifteen (15) days prior to
commencing any Alterations so as to permit, and Tenant shall permit, Landlord
access to the Demised Premises in order to post and keep posted thereon such
notice(s) as may be provided or required by applicable law to disclaim
responsibility for any construction on the Demised Premises.
(d) Any and all Alterations shall be conducted and completed in a
commercially reasonable time period (subject to the terms of Article XVII), in a
good and workmanlike manner, and in compliance with all applicable laws,
municipal ordinances, building codes and permits, and requirements of all
governmental authorities having jurisdiction over the Demised Premises, and of
the local Board of Fire Underwriters, if any; and, within thirty (30) days after
completion of any and all Alterations, Tenant shall obtain and deliver to
Landlord a copy of the amended certificate of occupancy for the Demised
Premises, if required under applicable law or by governmental authority. To the
extent reasonably practicable, any and all Alterations shall be made and
conducted so as not to disrupt Tenant's business; provided however that major
alterations which require closing of the business on a temporary basis may be
made so long as otherwise in compliance with the provisions of this Lease.
(e) The cost of any and all Alterations shall be promptly paid by Tenant so
that the Demised Premises at all times shall be free of any and all liens for
labor and/or materials supplied for any Alterations subject to the next
succeeding sentence. In the event any such lien shall be filed, Tenant shall,
within five (5) days after receipt of notice of such lien, deliver written
notice to Landlord thereof, and Tenant shall, within thirty (30) days after
receipt of notice of such lien, discharge the same by bond or payment of the
amount due the lien claimant. However, Tenant may in good faith contest such
lien provided that within such thirty (30) day period Tenant provides Landlord
with a surety bond reasonably acceptable to Landlord, protecting against said
lien.
ARTICLE VII
REPAIRS AND MAINTENANCE
Tenant, at its sole cost and expense, shall maintain each of the Demised
Premises and each part thereof, structural and non-structural, in good order and
condition, ordinary wear and tear and damage by casualty excepted, and, subject
to the terms and conditions of Article VI, if and as applicable, shall make any
necessary Repairs thereto, interior and exterior, whether extraordinary,
foreseen or unforeseen but subject to the casualty and condemnation provisions
of this Lease. When used in this Article VII, the term "Repairs" shall include
all such replacements, renewals, alterations, additions and betterments
necessary for Tenant to properly maintain the Demised Premises in good order and
condition and in compliance with all applicable laws. The adequacy of, any and
all Repairs to the Demised Premises required or conducted pursuant to this
Article VII shall be measured by and meet, at a minimum, all of the following
standards: (1) at least equal in quality of material and workmanship to the
condition of the Demised Premises prior to the need for such Repairs; (2) at
least equal in quality of material and workmanship to the condition of buildings
and related facilities of similar construction and class in the general
geographic area of the Demised Premises are generally maintained; (3) avoidance
of any and all structural damage or injury to the Building or persons therein;
(4) any and all maintenance, service, operation and repair standards and
requirements set forth by Guarantor for its (or its subsidiaries' or
affiliates') restaurants; (5) any and all repairs, replacements or upgrades
necessary to ensure compliance with the rules and regulations of all
governmental agencies having jurisdiction over the Demised Premises, including
all Environmental Laws (as defined below); and (6) no mold which inhibits or
impairs the intended use of any Demised Premises shall be permitted to remain
unabated at any Demised Premises. Landlord shall have no duty whatsoever to
maintain, replace, upgrade, or repair any portion of the Demised Premises except
in the event the damage necessitating such repair is solely and directly caused
by the gross negligence or willful misconduct of Landlord. If Tenant fails or
neglects to commence and diligently proceed with all necessary Repairs or
fulfill its other obligations as set forth above within twenty (20) days after
receipt of notice of the need therefore or otherwise obtaining knowledge of the
need therefore (except in emergency situations involving risk of further damage
to the Demised Premises or injury to persons in which case no such time period
shall be applicable) and/or fails to diligently make such repairs within a
reasonable time period, then Landlord or its agents may enter the Demised
Premises for the purpose of making such Repairs or fulfilling those obligations.
All costs and expenses incurred as a consequence of Landlord's action shall be
paid by Tenant to Landlord as Additional Rent within fifteen (15) days after
Landlord delivers to Tenant copies of invoices for such Repairs or other
obligations. These invoices shall be prima facie evidence of the payment of the
charges to be paid by Landlord. Except in the case of emergency, Landlord shall
give Tenant ten (10) days' written notice before taking any such action.
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ARTICLE VIII
COMPLIANCE WITH LAW
Tenant shall, throughout the Lease Term, at its sole cost and expense,
comply with all laws and regulations of federal, state, municipal and local
governments, departments, commissions and boards pursuant to law, or directives
or orders issued pursuant thereto, including without limitation all
Environmental Laws and the Americans With Disabilities Act, with respect to,
regarding, or pertaining to the Demised Premises. Notwithstanding the foregoing,
Tenant may, subject to the terms and conditions of this Section, contest or
appeal such requirements or orders. To the extent any such contest or appeal by
Tenant suspends any and all obligations on the part of Tenant, Landlord, or the
Demised Premises to comply with such requirements or orders, and suspends any
and all applicability of such requirements or orders to the Demised Premises,
Tenant shall not be required to comply with any such laws, regulations, orders,
requirements or rules. In no event shall any such appeals, contests or
proceedings pursued by Tenant subject Landlord to criminal liability or any
civil liability. Upon final resolution of any such appeal, proceeding or contest
pursued by Tenant, Tenant shall comply with the judgment, finding or order of
the governmental authority so resolving such appeal, proceeding or contest, and
shall be liable in full for any and all fines, penalties, charges or costs of
any type whatsoever which accrue during the pendency of any contest or appeal.
ARTICLE IX
UTILITIES
Without limiting any of Tenant's obligations set forth in Article III,
Tenant shall be solely responsible for, and shall pay the cost of all utility
services provided to the Demised Premises throughout the Lease Term.
ARTICLE X
DISCLAIMER AND INDEMNITY
Section 10.01 As used in this Lease, "Landlord Parties" means,
collectively, Landlord, Landlord's lenders, and Landlord's members, partners,
trustees, ancillary trustees, officers, directors, shareholders, beneficiaries,
agents, employees and independent contractors, succesors, assigns and lenders,
to any of the foregoing. To the extent not prohibited by law, none of the
Landlord Parties shall be (and Tenant hereby agrees that they shall not be)
liable, under any circumstances (except only Landlord (and not any other
Landlord Parties) in the event of, and then only to the extent directly
attributable to, Landlord's gross negligence or willful misconduct) for any
loss, injury, death or damage to person or property (including but not limited
to the business or any loss of income or profit therefrom) of Tenant, Tenant's
members, officers, directors, shareholders, agents, employees, contractors,
customers, invitees or any other person in or about the Demised Premises,
whether the same are caused by (1) fire, explosion, falling plaster, steam,
dampness, electricity, gas, water, or rain or (2) breakage, leakage or other
defects of sprinklers, wires, appliances, plumbing fixtures, water or gas pipes,
roof, air conditioning, lighting fixtures, street improvements, or subsurface
improvements or (3) theft, acts of God, acts of the public enemy, riot, strike,
insurrection, war, court order, requisition or order of governmental body or
authority, or (4) any act or omission of any other occupant of the Demised
Premises or any other party, or (5) operations in construction of any private,
public or quasi-public work, or (6) any other cause, including damage or injury
which arises from the condition of the Demised Premises, from occupants of
adjacent property, from the public, or from any other sources or places, and
regardless of whether the cause of such damage or injury or the means of
repairing the same are inaccessible to Tenant, or which may arise through
repair, alteration or maintenance of any part of the Demised Premises or failure
to make any such repair, from any condition or defect in, on or about the
Demised Premises including any "Environmental Conditions" (as defined in Article
XXXVII) or the presence of any mold or any Hazardous Materials (as defined in
Article XXXVII), or from any other condition or cause whatsoever.
Section 10.02 Tenant hereby fully and forever releases, discharges,
acquits, and agrees to indemnify, protect, defend (with counsel selected by
Tenant and approved by Landlord, such approval not to be unreasonably withheld)
and hold the Demised Premises, and each of the Landlord Parties wholly free and
harmless of, from and against any and all claims, demands, actions, causes of
action, settlements, obligations, duties, indebtedness, debts, controversies,
losses, remedies, chooses in action, liabilities, costs, penalties, fines,
damages, injury, judgments, forfeiture, losses (including without limitation
diminution in the value of the Demised Premises) or expenses (including without
limitation attorneys' fees, consultant fees, testing and investigation fees,
expert fees and court costs), whether known or unknown, whether liquidated or
unliquidated: (a) arising out of or in any way related to or resulting directly
or indirectly from: (i) the use, occupancy or activities of Tenant, its agents,
employees, contractors or invitees in or about the Demised Premises, (ii) any
failure on the part of Tenant to comply with any applicable law, including
without limitation all Environmental Laws; (iii) any default or breach by Tenant
in the performance of any obligation of Tenant under this Lease; and (iv) any
other loss, injury or damage described in Section 10.01 above caused (whether by
action or omission) by Tenant, its agents, employees, contractors or invitees;
and (v) in connection with mold at any Demised Premises; and (b) whether
heretofore now existing or hereafter arising out of or in any way related to or
resulting directly or indirectly from the presence or "Release" (as defined in
Article XXXVII) at, on, under to or from the Demised Premises of any Hazardous
Material; provided, however, that the foregoing indemnity shall not be
applicable to the extent any such claims are directly attributable to the gross
negligence or willful misconduct of such Landlord Party. All of the personal or
any other property of Tenant kept or stored at, on or about the Demised Premises
shall be kept or stored at the risk of Tenant.
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Section 10.03 Tenant hereby fully and forever releases, discharges,
acquits, and agrees to indemnify, protect, defend (with counsel selected by
Tenant and approved by Landlord, such approval not to be unreasonably withheld)
and hold the Demised Premises, and all Landlord Parties wholly free and harmless
of, from and against any and all claims, demands, actions, causes of action,
settlements, obligations, duties, indebtedness, debts, controversies, losses,
remedies, chooses in action, liabilities, costs, penalties, fines, damages,
injury, judgments, forfeiture, losses (including without limitation diminution
in the value of the Demised Premises) or expenses (including without limitation
attorneys' fees, consultant fees, testing and investigation fees, expert fees
and court costs), whether known or unknown, hereafter arising, whether
liquidated or unliquidated, arising out of or in any way related to or resulting
directly or indirectly from work or labor performed, materials or supplies
furnished to or at the request of Tenant or in connection with obligations
incurred by or performance of any work done for the account of Tenant in, on or
about the Demised Premises.
Section 10.04 Landlord and Tenant each (a) represent to the other party
that such representing party has dealt with no broker or brokers in connection
with the negotiation, execution and delivery of this Lease and (b) hereby agrees
to indemnify, defend, protect (with counsel selected by the other party) and
hold such other party wholly free and harmless of, from and against any and all
claims or demands for any and all brokerage commissions and/or finder's fees due
or alleged to be due as a result of any agreement or purported agreement made by
such indemnifying party.
Section 10.05 The provisions of this Article X shall survive the expiration
or sooner termination of this Lease. Tenant hereby waives the provisions of any
applicable laws restricting the release of claims which the releasing parties do
not know or suspect to exist at the time of release, which, if known, would have
materially affected Tenant's decision to agree to this release. In this regard,
Tenant hereby agrees, represents, and warrants to Landlord that Tenant realizes
and acknowledges that factual matters now unknown to Tenant may hereafter give
rise to causes of action, claims, demands, debts, controversies, damages, costs,
losses and expenses which are presently unknown, unanticipated and unsuspected,
and Tenant further agrees, represents and warrants that the release provided
hereunder has been negotiated and agreed upon in light of that realization and
that Tenant nevertheless hereby intends to release, discharge and acquit the
parties set forth herein above from any such unknown causes of action, claims,
demands, debts, controversies, damages, costs, losses and expenses which are in
any manner set forth in or related to this Lease, the Demised Premises and all
dealings in connection therewith.
ARTICLE XI
INSURANCE
Section 11.01 Tenant will maintain, with financially sound and reputable
insurers, public liability, fire and extended coverage and property damage, rent
loss or business interruption and other types of insurance with respect to its
business and the Property (including all Buildings now existing or hereafter
erected thereon) against all losses, hazards, casualties, liabilities and
contingencies as customarily carried or maintained by persons of established
reputation engaged in similar businesses and as Landlord shall require and in
such amounts and for such periods as Landlord shall require. Without limitation
of the foregoing, Tenant shall maintain or cause to be maintained policies of
insurance with respect to the Real Property in the following amounts and
covering the following risks:
(a) Comprehensive "all risk" insurance covering loss or damage to the Real
Property caused by fire, lightning, hail, windstorm, explosion, vandalism,
malicious mischief, and such other losses, hazards, casualties, liabilities and
contingencies as are normally and usually covered by "All Risk" or special
property policies in effect where such Real Property is located endorsed to
include all of the extended coverage perils and other broad form perils,
including the standard "all risks" or Special clauses, with such endorsements as
Landlord may from time to time reasonably require including, without limitation,
building ordinance or law coverage sufficient to provide coverage for costs to
comply with building and zoning codes and ordinances including demolition costs
and increased cost of construction.
(b) The policy(ies) referred to in Subsection (a) above shall be in an
amount equal to one hundred percent (100%) of the full replacement cost of the
Building and the furniture, fixtures and equipment at the Real Property (without
any deduction for depreciation), and shall contain a replacement cost
endorsement and an agreed amount or waiver of co-insurance provisions
endorsement.
(c) Broad form boiler and machinery or breakdown insurance in an amount
equal to the full replacement cost of the Building at the Real Property (without
any deduction for depreciation) in which the boiler or similar vessel is
located, and including coverage against loss or damage from (1) leakage of
sprinkler systems and (2) damage, breakdown or explosion of steam boilers,
electrical machinery and equipment, air conditioning, refrigeration, pressure
vessels or similar apparatus and mechanical objects now or hereafter installed
at the Real Property.
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(d) If the Real Property is located in area prone to geological phenomena,
including, but not limited to, sinkholes, mine subsidence or earthquakes,
insurance covering such risks in amounts, and in form and substance,
satisfactory to Landlord in its sole discretion.
(e) Business interruption or rent loss insurance in an amount equal to the
gross income or rentals from the Real Property for an indemnity period of twelve
(12) months, such amount being adjusted annually.
(f) During any period of construction, reconstruction, renovation or
alteration at the Real Property, a complete value, "All Risks" Builders Risk
form or "Course of Construction" insurance policy in non-reporting form and in
an amount reasonably satisfactory to Landlord.
(g) Commercial General Liability insurance covering claims for personal
injury, bodily injury, death or property damage occurring upon, in or about the
Real Property on an occurence form and in an amount not less than $1,000,000 per
occurrence and $2,000,000 in the aggregate and shall provide coverage for
premises and operations, liquor liability, products and completed operations and
contractual liability, with an umbrella liability policy in the amount of
$25,000,000.
(h) If required by applicable state laws, worker's compensation, employer's
liability insurance in an amount of $1,000,000 per accident, per employee and in
the aggregate, and in accordance with such laws, subject to the statutory limits
of the states in which the Property is located.
(i) Such other insurance and endorsements, if any, with respect to the Real
Property and the operation thereof as Landlord may reasonably require from time
to time, provided same are customarily required by institutional lenders for
similar properties in the general vicinity of the Real Property.
Section 11.02 Each carrier providing any insurance, or portion thereof,
required by this Section shall be licensed to do business in the jurisdiction in
which the Real Property is located, and shall have a claims paying ability
rating by S&P of not less than "A" and an A.M. Best Company, Inc. rating of not
less than A and financial size category of not less than XIII. Except as
otherwise expressly set forth in this Lease, Tenant shall cause all insurance
(except general public liability and workers' compensation insurance) to contain
a mortgagee clause and loss payee clause in favor of Landlord's lender in
accordance with this Section to be payable to Landlord's lender as a mortgagee
and not as a co-insured, as its interest may appear.
Section 11.03 All insurance policies and renewals thereof (i) shall be in a
form reasonably acceptable to Landlord, (ii) shall provide for a term of not
less than one year, (iii) if the same are insurance policies covering any
property (a) shall include a standard non-contributory mortgagee endorsement or
its equivalent in favor of and in form acceptable to Landlord's lender, (b)
shall contain an agreed value clause updated annually (if the amount of coverage
under such policy is based upon the replacement cost of the Property) and (c)
shall designate Landlord's lender as "mortgagee and loss payee." In addition,
all property insurance policies (except for flood and earthquake limits) must
automatically reinstate after each loss, and the commercial general liability
and umbrella policies shall contain an additional insured endorsement in favor
of Landlord's lender.
Section 11.04 Any insurance provided for in this Article may be effected by
a blanket policy or policies of insurance, or under so-called "all-risk" or
"multi-peril" insurance policies, provided that the amount of the total
insurance available with respect to the Demised Premises shall provide coverage
and indemnity at least equivalent to separate policies in the amounts herein
required, and provided further that in other respects, any such policy or
policies shall comply with the provisions of this Article. Any increased
coverage provided by individual or blanket policies shall be satisfactory,
provided the aggregate liability limits covering the Demised Premises under such
policies shall otherwise comply with the provisions of this Article.
Section 11.05 Every insurance policy carried by either party with respect
to the Demised Premises shall (if it can be so written) include provisions
waiving the insurer's subrogation rights against the other party to the extent
such rights can be waived by the insured prior to the occurrence of damage or
loss. Subject to the above, each party hereby waives any rights of recovery
against the other party for any direct damage or consequential loss covered by
said policies against which such party is protected by insurance whether or not
such damage or loss shall have been caused by any acts or omissions of the other
party, but such waiver shall operate only to the extent such waiving party is so
protected by such insurance coverage.
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Section 11.06 Each insurance policy required to be carried by Tenant
hereunder shall include a provision requiring the insurance carrier insuring
such policy to provide Landlord with not less than thirty (30) days' prior
written notice of any threatened or actual lapse, cancellation, reduction, or
other material change in such policy's coverage or its terms. If any insurance
policy required to be and in fact carried by Tenant and covering the Demised
Premises or any part thereof is cancelled or is threatened by the insurer to be
cancelled, or if the coverage thereunder is reduced in any way by the insurer
for any reason, and if Tenant fails to remedy the condition giving rise to
cancellation, threatened cancellation, or reduction of coverage within 48 hours
after notice thereof by Landlord, Landlord may, in addition to all other rights
and remedies available to Landlord, enter the Demised Premises and remedy the
condition giving rise to such cancellation, threatened cancellation or
reduction, and Tenant shall forthwith pay the cost thereof to Landlord (which
cost may be collected by Landlord as Additional Rent) and Landlord shall not be
liable for any damage or injury caused to any property of Tenant or of others
located on the Demised Premises as a result of any such entry. In the event
Tenant fails to procure or maintain any policy of insurance required under
Article XI, Landlord may, at its option, purchase such insurance and charge
Tenant all costs and expenses incurred in procuring and maintaining such
insurance as Additional Rent.
ARTICLE XII
DAMAGE OR DESTRUCTION
Section 12.01 Subject to the provisions of Section 12.04 and Section 12.05
below, if at any time during the Lease Term, the Demised Premises or any part
thereof shall be damaged or destroyed by fire or other casualty of any kind or
nature, Tenant shall commence within Forty-Five (45) days after the first date
of such damage or destruction and thereafter diligently proceed to repair,
replace or rebuild such Demised Premises as nearly as possible to its condition
and character immediately prior to such damage with such variations and
Alterations requested by Tenant as may be permitted under (and subject to the
provisions of) Article VI (the "Restoration Work").
Section 12.02 All property and casualty insurance proceeds payable to
Landlord or Tenant (except (i) insurance proceeds payable to Tenant on account
of Tenant's trade fixtures or inventory and business interruption insurance
carried by Tenant and (ii) insurance proceeds payable from comprehensive general
public liability, or any other liability insurance) at any time as a result of
casualty to the Demised Premises shall be paid jointly to Landlord and Tenant
for purposes of payment for the cost of the Restoration Work, except as may be
otherwise expressly set forth herein, and advanced from time to time for such
purposes as the work progresses upon certified request of Tenant's architect.
Landlord and Tenant shall cooperate in order to obtain the largest possible
insurance award lawfully obtainable and shall execute any and all consents and
other instruments and take all other actions necessary or desirable in order to
effectuate same and to cause such proceeds to be paid as hereinbefore provided.
The proceeds of any such insurance in the case of loss shall, to the extent
necessary, be used first for the Restoration Work with the balance, if any,
payable to Tenant. If insurance proceeds as a result of a casualty to the
Demised Premises are insufficient to complete the Restoration Work necessary by
reason of such casualty, then Tenant shall promptly pay to Landlord the amount
which, in Landlord's sole discretion will be required to complete such work, and
Landlord will deposit such amount in an escrow account (or as otherwise required
by Landlord's lender) to be used for required Restoration Work. The escrowed
funds deposited by Tenant shall first be used in their entirety for the
Restoration Work, and only after all such funds have been fully expended shall
the insurance proceeds collected by reason of such casualty be used and
expended.
Section 12.03 Except as provided for in Section 12.04, this Lease shall not
be affected in any manner by reason of the total or partial destruction to any
Demised Premises or any part thereof, or any reason whatsoever, and Tenant,
notwithstanding any law or statute, present or future, waives all rights to quit
or surrender any Demised Premises or any part thereof. Fixed Rent and Additional
Rent required to be paid by Tenant hereunder shall not xxxxx as a result of any
casualty.
Section 12.04
(a) Notwithstanding Section 12.01 above, if the Building is destroyed or
damaged in excess of Twenty-Five percent (25%) of the replacement cost thereof
(the Demised Premises at which the Building is located is hereafter referred to
as the "Casualty Property"), exclusive of foundation and footings, by fire or
other insured casualty at any time during the last twelve (12) months of the
Lease Term, then Landlord shall have the right, at its election, to terminate
this Lease as to the Casualty Property by giving Tenant written notice of
termination within sixty (60) days after the date on which such damage or
destruction occurs. Such termination shall be effective on the last day of the
month following the month in which Landlord gives Tenant notice of its election
to so terminate. In such event, Landlord shall be entitled to all insurance
proceeds payable pursuant to the policy carried by Tenant pursuant to Section
11.01(b) above, except amounts payable with respect to Tenant's inventory,
equipment and/or trade fixtures or moveable trade fixtures.
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(b) In the event of the termination of the Lease as to a Casualty Property
pursuant to Section 12.04(a) above, Tenant shall pay to Landlord, prior to such
termination date, an amount equal to the Fixed Rent and any then accrued
Additional Rent in each case payable under this Lease to the date of such
termination. With respect to any amounts of Additional Rent which are payable by
Tenant in the event of such termination, but which are not then ascertainable,
Tenant shall pay to Landlord an amount equal to such Additional Rent as and when
the same is determined. This Section 12.04 shall survive expiration or
termination of the Lease.
ARTICLE XIII
EMINENT DOMAIN
Section 13.01 If more than fifty percent (50%) of any Demised Premises, or
more than fifty percent (50%) of the existing access to or from any Demised
Premises, shall be taken for any public or quasi-public use under any statute or
by right of eminent domain, or by purchase in lieu thereof and such taking makes
the Demised Premises unusable for the purposes set forth in Article IV, then
this Lease shall terminate as of the date that possession has been so taken (the
"Vesting Date").
Section 13.02
(a) In the event of a taking of less than fifty percent (50%) of any
Demised Premises or fifty percent (50%) of the access thereto, Tenant may elect
to terminate this Lease and not restore such Demised Premises if, by reason of
the taking, the taking shall result in a diminution in value of more than 20% of
the Demised Premises and as a result of such taking Tenant's business at the
Demised Premises has been materially and adversely affected. Tenant's business
at the Demised Premises will be deemed materially adversely affected only if
there is (i) a taking of a portion of the building located at the Premises
making reconfiguration uneconomical, (ii) a taking of access to the Demised
Premises in which an alternative access provides significantly reduced traffic
counts (iii) a taking of a significant number of parking spaces where
alternative parking spaces are not available, or (iv) a taking that would
preclude use of the Property for its current use under applicable zoning or
other use regulations.
(b) In the event Tenant elects by reason of any of the foregoing events
described in this Article XIII to terminate the Lease to the Demised Premises
("Condemned Property"), Tenant shall give written notice to Landlord of its
intention to so terminate within ninety (90) days after formal notice of the
proposed taking is given to Tenant, and this Lease shall terminate as of the
last day of the calendar month following the month in which such notice is
given. In the event the condemning authority revokes or terminates its
condemnation proceeding, (i) Landlord, prior to the date set for termination of
this Lease with respect to the Condemned Property, may, by notice to Tenant,
elect to rescind such termination; and (ii) if Landlord has not re-leased or
otherwise entered into an agreement with a third party regarding Tenant's
leasehold interest on or before such date, Tenant may, by written notice to
Landlord prior to the date set for termination, elect to rescind such
termination. In the event of such termination, however, Tenant shall pay to
Landlord, prior to such termination date, an amount equal to the Fixed Rent and
any then accrued Additional Rent in each case payable under this Lease to the
date of such termination, and neither party shall have any further rights or
liabilities under this Lease (except for rights and liabilities that explicitly
survive termination or expiration of the Lease as set forth herein). With
respect to any items of Additional Rent which are payable by Tenant in the event
of such termination, but which are not then ascertainable, Tenant shall pay to
Landlord an amount equal to such Additional Rent as and when the same is
determined. The covenants and agreements with respect to the adjustment and
payment of items of Additional Rent shall survive the termination of this Lease.
Section 13.03 In the event of a taking resulting in the termination of this
Lease with respect to a Condemned Property pursuant to the provisions of
Sections 13.01 or 13.02, the parties hereto agree to cooperate in applying for
and in prosecuting any claim for such taking and further agree that the
aggregate net award shall be distributed as follows:
(a) Landlord shall be entitled to the entire award for the Condemned
Property.
(b) Tenant shall be entitled to any award that may be made for the taking
of, or injury to or on account of, any cost or loss Tenant may sustain in the
removal of its merchandise, fixtures, moveable trade fixtures and equipment and
furnishings, and so long as it does not diminish the amount of the award
otherwise available to Landlord for the Condemned Property, the award for loss
of business and goodwill.
Section 13.04
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(a) In case of a taking of less than fifty percent (50%) of the Demised
Premises or fifty percent (50%) of the access thereto, and if this Lease is not
terminated as provided in Section 13.02 above, Tenant shall proceed with
diligence (subject to reasonable time periods for purposes of adjustment of any
award and unavoidable delays) to repair or reconstruct the affected Building to
a complete architectural unit (all such repair, reconstruction and work being
referred to in this Article as "Reconstruction Work"). Landlord shall reimburse
Tenant for the cost of the Reconstruction Work up to and not exceeding the net
compensation amount realized by Landlord as a result of such taking (i.e., the
gross amount of the compensation received by Landlord from the taking authority
less all costs and expenses reasonably incurred by Landlord in pursuing,
prosecuting, and/or recovering its claim to such award). All Reconstruction Work
shall be performed pursuant to (and subject to) the requirements for Alterations
set forth in Article VI.
(b) In case of a taking of less than fifty percent (50%) Demised Premises,
or less than fifty percent (50%) of the access thereto, and if this Lease is not
terminated as provided in Section 13.02 above, the Fixed Rent payable hereunder
shall, from and after the date of such taking, be reduced by an amount equal to
the product of (i) 1/12 multiplied by (ii) 9% multiplied by (iii) the net
condemnation proceeds retained by Landlord after the application of any such
proceeds to the repair, restoration or replacement necessitated by the
condemnation taking.
(c) As more particularly set forth in Section 13.03(b) above, Tenant shall
be entitled to claim, prove and receive in any condemnation proceeding such
awards as may be allowed for loss of business and goodwill, provided such award
shall not diminish the amount of the award otherwise available to Landlord for
the Demised Premises hereunder.
(d) Any compensation for a temporary taking shall be payable to Tenant
without participation by Landlord, except to the proportionate extent such
temporary taking extends beyond the end of the Lease Term, and there shall be no
abatement of Rent as a result thereof.
ARTICLE XIV
COVENANTS OF LANDLORD AND TENANT
Section 14.01 Landlord and Tenant represent, warrant and covenant to the
other that each such party currently has, and as of the Effective Date will
continue to have, the right and lawful authority to enter into this Lease and
perform their respective obligations hereunder. Landlord further represents,
warrants and covenants to Tenant that, from and after the Effective Date until
the termination of the Lease Term, and provided Tenant is not in default under
this Lease, Tenant shall have quiet enjoyment of the Demised Premises as against
any adverse claim of Landlord or any party claiming under Landlord subject,
however, to the terms of the Lease and any agreement between Tenant and any such
party claiming under Landlord.
Section 14.02 Tenant may from time to time in writing request Landlord to
join with Tenant (at Tenant's cost and expense), (i) to grant, modify or amend
easements, licenses, rights of way and other rights and privileges in the nature
of easements for the purposes of providing utilities and the like to the Demised
Premises, (ii) release existing easements and appurtenances relating to the
provision of utilities and the like to the Demised Premises, (iii) grant,
modify, amend or release reciprocal easement agreements, restrictive covenants,
subdivisions, annexations and the like, (iv) grant immaterial portions of the
Demised Premises in connection with, or in lieu of, takings or dedications for
public use, and (v) execute and deliver any instrument, in form and substance
reasonably acceptable to Landlord, necessary or appropriate to make or confirm
such actions to any person. Landlord shall not unreasonably refuse to join in
any such action and shall not unreasonably withhold its consent thereto in
writing, provided that no Default or Event of Default shall have occurred and be
continuing hereunder and provided that an officer of Tenant shall have certified
to Landlord that such action is being taken in the ordinary course of Tenant's
business, does not interfere with and is not detrimental to the conduct of
business on the Demised Premises, does not impair the usefulness or fair market
value of the Demised Premises or any contemplated future use by Landlord of the
Demised Premises, and was made for no or only nominal consideration.
Notwithstanding the foregoing, Landlord shall have no obligation to join in, or
consent to, any such action if such action presents a material risk of
liability, expense or adverse tax consequences to Landlord.
ARTICLE XV
INSOLVENCY
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Section 15.01 If at any time during the Lease Term, (1) proceedings in
bankruptcy shall be instituted (voluntarily or involuntarily) by or against
Tenant or Guarantor which result in an adjudication of bankruptcy, and with
respect to any involuntary proceeding, Tenant or Guarantor shall consent to the
commencement thereof or any such proceeding not so consented to by Tenant or
Guarantor is not stayed or withdrawn within sixty (60) days after commencement
thereof or (2) if Tenant or Guarantor shall file, or any creditor or other
person shall file against Tenant or Guarantor, any petition in bankruptcy (i.e.,
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief) under the Bankruptcy Act of the United States of
America (or under any other present or future statute, law or regulation), and
such filing is not vacated or withdrawn within sixty (60) days thereafter, or
(3) if a trustee or receiver shall be appointed to take possession of the
Demised Premises, or of all or substantially all of the business or assets of
Tenant, or Guarantor and such appointment is not vacated or withdrawn and
possession restored to Tenant or Guarantor, as the case may be, within thirty
(30) days thereafter, or (4) if a general assignment or arrangement is made by
Tenant or Guarantor for the benefit of creditors, or (5) if any sheriff,
marshal, constable or other duly-constituted public official takes possession of
the Demised Premises, or of all or substantially all of the business or assets
of Tenant or Guarantor by authority of any attachment, execution, or other
judicial seizure proceedings, and if such attachment or other seizure remains
undismissed or undischarged for a period of thirty (30) days after the levy
thereof, or (6) if Tenant or Guarantor shall admit in writing Tenant's inability
to pay its debts as they become due; the filing by Tenant or Guarantor of an
answer admitting or failing timely to contest a material allegation of a
petition filed against Tenant or Guarantor in any such proceeding; or, if within
sixty (60) days after the commencement of any proceeding against Tenant or
Guarantor seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such proceeding shall not have been dismissed, then an Event
of Default under this Lease shall have occurred on the part of Tenant and
Landlord may, at its option in any of such events, on thirty (30) days notice to
Tenant, if such action is not vacated or withdrawn during such thirty (30) day
period, immediately recapture and take possession of the Demised Premises and
terminate this Lease pursuant to process of law.
ARTICLE XVI
DEFAULT
Section 16.01 Events Of Default. The occurrence of any of the following
shall constitute an event of default ("Event of Default") on the part of Tenant:
(a) Nonpayment Of Rent. Failure to pay any installment of Fixed Rent or
Additional Rent due and payable hereunder on the date when payment is due
pursuant to the terms of this Lease, and such failure shall continue until the
earlier of (i) three (3) days after written notice from Landlord, or (ii) ten
(10) days following the date when such Fixed Rent or Additional Rent is due.
(b) Insolvency. The occurrence of any event described in Article XV above.
In the event that under applicable law the trustee in bankruptcy or Tenant has
the right to affirm this Lease and continue to perform the obligations of Tenant
hereunder, such trustee or Tenant shall, within such time period as may be
permitted by the bankruptcy court having jurisdiction, cure all defaults of
Tenant hereunder outstanding as of the date of the affirmance of this Lease and
provide to Landlord such adequate assurances as may be necessary to ensure
Landlord of the continued performance of Tenant's obligations under this Lease.
(c) Misrepresentation. The discovery by Landlord that any representation,
warranty or financial statement given to Landlord by Tenant or any guarantor of
Tenant's obligations under this Lease (including, without limitation, Guarantor)
was materially false or misleading when given.
(d) Certificate. The failure by Tenant to give timely any certificate in
accordance with terms, provisions, and requirements of this Lease (provided,
however that the foregoing shall only be an Event of Default at the option of
Landlord), and such failure continues for ten (10) days after written notice
from Landlord, unless any shorter notice period is specifically provided under
this Lease, in which case such shorter notice period shall apply, in lieu of
such ten (10) day period.
(e) Environmental. Tenant's violations of any Environmental Laws or the
Release of any Hazardous Materials, or the failure to xxxxx the presence of mold
which would inhibit or impair the intended use of any Demised Premises, such
failure continuing for a period of thirty (30) days after written notice of such
failure, or such longer period as is reasonably necessary to remedy such
default, provided that Tenant commences an appropriate response action for such
violation or Release within such thirty (30) day period and continuously and
diligently pursues such remedy at all times until complete.
(f) Delivery of Documents. The failure by Tenant to deliver any of the
documents required pursuant to Section 26.01 or 28.01 within the time periods
required pursuant to such sections.
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(g) Other Obligations. The failure by Tenant to timely perform any
obligation, agreement or covenant under this Lease, other than those matters
specified in Sections 16.01(a)-(f) above, and such failure continuing for a
period of thirty (30) days after written notice of such failure is delivered to
Tenant (or such longer period, up to but not exceeding an additional ninety (90)
days, as is reasonably necessary to remedy such default, provided that Tenant
commences the remedy within such thirty (30) day period and continuously and
diligently pursues such remedy at all times during the additional ninety (90)
day period.)
Section 16.02 Remedies Upon Default. If an Event of Default by Tenant
occurs, then, in addition to any other remedies available to Landlord at law or
in equity or elsewhere hereunder, Landlord shall have the following remedies:
(a) Termination. Landlord shall have the right, with or without notice or
demand, immediately upon expiration of any applicable grace period specified
herein, to terminate this Lease, and at any time thereafter recover possession
of all or any portion of the Demised Premises or any part thereof and expel and
remove therefrom Tenant and any other person occupying the same by any lawful
means, and repossess and enjoy all or any portion of the Demised Premises
without prejudice to any of the remedies that Landlord may have under this
Lease. If Landlord elects to terminate the Lease, Landlord shall also have the
right to reenter the Demised Premises and take possession of and remove all
equipment and fixtures of Tenant, if any, in such Demised Premises. In
connection with any such repossession, Tenant (and any affiliate of Tenant
holding a liquor license with respect to the Demised Premises) shall provide
reasonable cooperation in transferring its liquor license to Landlord, or in
assisting Landlord in obtaining a liquor license. Tenant (and Tenant's
affiliate) agree upon Landlord's written request, to grant a security interest
to Landlord in the liquor license at the Demised Premises to secure Tenant's
obligations hereunder, provided that the grant of such security interest does
not violate any state or local law or ordinance. Upon any assumption or
successful foreclosure of Tenant's liquor license, Tenant's liability to
Landlord on account of any default under this Lease shall be reduced by the fair
market value of the liquor license so transferred to Landlord. If Landlord
elects to terminate this Lease and Tenant's right to possession, or if Tenant's
right to possession is otherwise terminated by operation of law, Landlord may
recover as damages from Tenant the following: (i) all Rent then due under the
Lease through the date of termination; (ii) the Fixed Rent due for the remainder
of the Lease Term in excess of the fair market rental value of the Demised
Premises for the remainder of the Lease Term (each discounted by the discount
rate of the Federal Reserve Bank of San Francisco plus one percent (1%); (iii)
the cost of reletting the Demised Premises; and (iv) any other costs and
expenses that Landlord may reasonably incur in connection with the Event of
Default. Landlord shall use commercially[,] reasonable efforts to mitigate
Tenant's damages for any such default; provided, however, that Landlord's
efforts to mitigate shall not waive Landlord's right to recover damages which
are calculated consistent with Landlord's duty to mitigate.
(b) Continuation After Default. If Landlord does not elect to terminate
this Lease, then this Lease shall continue in effect, and Landlord may enforce
all of its rights and remedies under this Lease, including, without limitation,
the right to recover Rent as it becomes due, and Landlord, without terminating
this Lease, may exercise all of the rights and remedies of a landlord under
Texas law, subject to Article 32 hereof. Landlord shall not be deemed to have
terminated this Lease except by an express statement in writing. Acts of
maintenance or preservation, efforts to relet the Demised Premises, or the
appointment of a receiver upon application of Landlord to protect Landlord's
interest under this Lease shall not constitute an election to terminate Tenant's
right to possession unless such election is expressly stated in writing by
Landlord. Notwithstanding any such reletting without such termination, Landlord
may at any time thereafter elect to terminate Tenant's right to possession and
this Lease. If Landlord elects to relet the Demised Premises for the account of
Tenant, the rent received by Landlord from such reletting shall be applied as
follows: first, to the payment of any and all costs of such reletting
(including, without limitation, attorneys' fees, brokers' fees, alterations and
repairs to the Demised Premises, and tenant improvement costs); second, to the
payment of any and all indebtedness other than Rent due hereunder from Tenant to
Landlord; third, to the payment of any and all Rent due and unpaid hereunder;
and the balance, if any, shall be held by Landlord and applied in payment of
future Rent as it becomes due. If the rent received from the reletting is less
than the sum of the costs of reletting, other indebtedness due by Tenant, and
the Rent due by Tenant, then Tenant shall pay the deficiency to Landlord
promptly upon demand by Landlord. Such deficiency shall be calculated and paid
monthly.
(c) Confession of Judgment for Possession of Demised Premises. Tenant
hereby expressly authorizes the prothonotary, clerk or any attorney or any court
of record to accept service of process for, to appear for, and to confess
judgment against tenant and all persons claiming under tenant in any and all
actions brought hereunder by landlord against Tenant to recover possession of
the Demised Premises (in ejectment or otherwise), without any liability on the
part of said attorney, for which this lease shall be sufficient warrant, and
Tenant agrees that upon the entry of such judgment, a writ of possession or
other appropriate process may issue forthwith (without any prior writ or
proceeding whatsoever).
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In any such action, Landlord shall first cause to be filed in such action
an affidavit made by Landlord or someone acting for it setting forth facts
necessary to authorize the entry of judgment, of which facts such affidavit
shall be conclusive evidence, and if a true copy of this lease be filed in such
action (and of the truth of the copy such affidavit shall be sufficient
evidence), it shall not be necessary to file the original, as a warrant of
attorney, any rule of court, custom or practice to the contrary notwithstanding.
Tenant and all persons claiming under tenant hereby release landlord from any
claims arising from any errors or defects whatsoever in entering such action or
judgment, in causing such writ of possession or other process to be issued or in
any proceeding thereon or concerning the same, and hereby agree that no writ of
error or objection shall be made or taken thereto.
This warrant of attorney shall not be exhausted by one exercise, but
judgment may be confessed from time to time, as often as occasion therefore
shall exist. Such powers may be exercised during as well as after the expiration
or termination of the term and during and at any time after any extension or
renewal of the term.
This section 16.02(c) sets forth a warrant of attorney for an attorney to
confess judgment against tenant. In granting this warrant of attorney to confess
judgment against tenant, tenant, following consultation with (or decision not to
consult with) separate counsel for tenant and with knowledge of the legal effect
hereof, hereby knowingly, intelligently and voluntarily waives unconditionally
any and all rights tenant has or may have to pre-judgment and pre-execution
notice and an opportunity for hearing under the respective constitutions and
laws of the United States of America, the Commonwealth of Pennsylvania, or
elsewhere.
Tenant specifically acknowledges that landlord has relied on the warrant of
attorney set forth in this section 16.02(c) in entering into this lease with
tenant and that the landlord-tenant relationship created hereby is commercial in
nature.
Section 16.03 Indemnification. Nothing in this Section shall be deemed to
affect Tenant's obligation to indemnify, defend, protect and hold harmless
Landlord and the other Landlord Parties under Article X of this Lease, and such
obligation shall survive the termination or expiration of this Lease.
Section 16.04 Waiver of Notice/ Performance by Landlord. Notwithstanding
any provision herein, (a) if Tenant is required to comply with any governmental
requirement, Tenant shall not be entitled to notice of default from Landlord and
right to cure beyond the period within which such compliance may be required by
applicable law or government agency; or (b) if in Landlord's reasonable
determination the continuance of any default by Tenant for the full period of
notice provided for herein will constitute a threat of injury or harm to persons
or property, Landlord may, with or without notice, elect to perform those acts
with respect to which Tenant is in default for the account and at the expense of
Tenant. If by reason of such governmental requirement or default by Tenant,
Landlord is compelled or elects to pay any sum of money, (including without
limitation attorneys' fees, consultant fees, testing and investigation fees,
expert fees and court costs), such sums so paid by Landlord, plus an
administrative charge of fifteen percent (15%) of such sums, shall be due as
Additional Rent from Tenant within ten (10) days of written demand therefore
from Landlord.
Section 16.05 Interest. Tenant hereby acknowledges that late payment by
Tenant to Landlord of Fixed Rent and any Additional Rent will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed covering the Demised
Premises. Accordingly, any sum due by Tenant to Landlord under this Lease which
is not paid when due shall bear interest at the lesser of the prime rate
announced from time to time by Xxxxx Fargo Bank, N.A., plus five percent (5%)
per annum or the maximum rate allowed under Texas law, from the date such sum
becomes due and payable by Tenant hereunder until paid, unless otherwise
expressly provided in this Lease. The foregoing shall be in addition to, and not
in lieu of, any other rights, remedies and charges as a result of any such late
payment by Tenant set forth in this Lease, including without limitation any late
charge imposed on any such amount as set forth in Section 3.08.
Section 16.06 Tenant's Subleases. If Landlord elects to terminate this
Lease on account of any Event of Default, then Landlord may: (i) terminate any
sublease by a subtenant and any license, concession, or other consensual
arrangement for possession entered into by Tenant and affecting the Demised
Premises which are not the subject of a nondisturbance agreement executed by
Landlord; or (ii) choose to succeed to Tenant's interest in such arrangement.
Absent a nondisturbance agreement between Landlord and subtenant, no payment by
a subtenant with respect to a sublease shall entitle such subtenant to
possession of any Property after termination of this Lease and Landlord's
election to terminate the sublease by the subtenant. If Landlord elects to
succeed to Tenant's interest in such arrangement, then Tenant shall, as of the
Effective Date of notice given by Landlord to Tenant of such election, have no
further right to, or interest in, any rent or other consideration receivable
under that arrangement.
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Section 16.07 Form of Payment After Default. Without limiting any other
obligation of Tenant under this Lease, if Tenant fails to pay any amount due to
Landlord under this Lease within five (5) days after written notice of such
failure is given to Tenant by Landlord, or if Tenant attempts to pay any such
amount by drawing a check on an account with insufficient funds, then Landlord
shall have the right to require that any and all subsequent amounts paid by
Tenant to Landlord under this Lease (to cure a default or otherwise) be paid in
the form of cashier's or certified check drawn on an institution acceptable to
Landlord, or any other form approved by Landlord in its sole and absolute
discretion, notwithstanding that Landlord may have previously accepted payments
from Tenant in a different form.
Section 16.08 Acceptance of Rent Without Waiving Rights. No payment by
Tenant shall be deemed to be other than on account of the earliest sum due from
Tenant hereunder, nor shall any endorsement or statement by Tenant on any check
or any letter accompanying such payment be deemed an accord and satisfaction of
any amount in dispute between Tenant and Landlord or otherwise. Landlord may
accept any and all of Tenant's payments without waiving any right or remedy
under this Lease, including but not limited to the right to commence and pursue
an action to enforce rights and remedies under a previously served notice of
default, without giving Tenant any further notice or demand.
Section 16.09 Waiver by Tenant. Tenant hereby waives all claims for damages
that may be caused by Landlord's lawful reentering and taking possession of the
Demised Premises following the occurrence at an Event of Default in accordance
with the provisions of this Lease or removing and storing the property of Tenant
as herein provided.
Section 16.10 Remedies Cumulative. All rights, privileges, elections, and
remedies of Landlord are cumulative and not alternative with all other rights
and remedies hereunder, at law or in equity to the fullest extent permitted by
law. The exercise of one or more rights or remedies by Landlord shall not impair
Landlord's rights to exercise any other right or remedy to the fullest extent
permitted by law.
ARTICLE XVII
UNAVOIDABLE DELAYS, FORCE MAJEURE
If either party shall be prevented or delayed from punctually performing
any obligation or satisfying any condition under this Lease by any strike,
lockout, labor dispute, inability to obtain labor, materials or reasonable
substitutes thereof, Acts of God, present or future governmental restrictions,
regulations or control, insurrection, sabotage, fire or other casualty, final
determination of insurance and condemnation claims, or any other condition
beyond the control of the party, exclusive of financial inability of a party,
then the time to perform such obligation or satisfy such condition shall be
extended by the delay caused by such event, but only for a reasonable period of
time not to exceed, in any event, 180 days. The provisions of this Article shall
in no event, however, operate to delay the Commencement Date or to excuse Tenant
from the prompt payment of Fixed Rent, or Additional Rent.
ARTICLE XVIII
NO WAIVER
The failure of Landlord or Tenant to insist upon strict performance of any
of the terms and conditions hereof shall not be deemed a waiver of any rights or
remedies that party or any other such party may have, and shall not be deemed a
waiver of any subsequent breach or default in any of such terms, covenants or
conditions.
ARTICLE XIX
NOTICES
Whenever it is provided herein that notice, demand, request or other
communication shall or may be given to either of the parties by the other, it
shall be in writing and, any law or statute to the contrary notwithstanding,
shall not be effective for any purpose unless same shall be given or served as
follows:
(a) If given or served by Landlord, (1) by hand delivery to Tenant, (2) by
mailing same to Tenant by registered or certified mail, postage prepaid, return
receipt requested, or (3) by delivery by overnight courier such as Federal
Express, all delivered and addressed to Tenant at the following address:
Hops Of Xxxxxxxx, Ltd.
Xxxxxxx at Xxxxxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxx
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
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With copies (which shall not constitute notice hereunder) to:
Xxxxxx Sieffert, P.A.
000-X Xxxxx Xxxxxxxxxxxx Xxxxx (29607)
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx, Xx.
Telephone (000) 000-0000
Facsimile No. (000) 000-0000
(b) If given or served by Tenant, (1) by hand delivery to Landlord, (2) by
mailing same to Landlord by U.S. registered or certified mail, postage prepaid,
return receipt requested, or (3) by delivery by overnight courier such as
Federal Express, all delivered and addressed to Landlord at the following
address:
Skyline-FRI 12, Xxxxxxxx, X.X.
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 0000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attn: Xxxxxxx X. Xxxxxx
With copies (which shall not constitute notice hereunder) to:
Xxxxxxx X. Xxxxxxxx
00000 Xxxxxx Xxxx Xxxxx 000
Xxxxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
(c) All notices, demands, requests or other communications hereunder shall
be deemed to have been given or served: (1) if hand delivered, on the date
received (or the date delivery is refused) by the recipient party; (2) if
delivered by registered or certified mail, three (3) days after the date of
posting as marked on the U.S. postage receipt; and (3) if by Federal Express or
similar overnight courier service, on the date of receipt (or the date delivery
is refused) by the recipient party.
(d) Either Landlord or Tenant may at any time during the Lease Term
designate one additional party to whom copies of notices must be sent.
(e) Either Landlord or Tenant may from time to time change its address for
receiving notices under this Lease by providing written notice to the other
party in accordance with this Article XIX.
ARTICLE XX
ACCESS
Section 20.01 Landlord and its designees shall have the right on not less
than Twenty-Four (24) hours' prior written notice (except in the event of an
emergency, where no prior notice shall be required) to Tenant to enter upon the
Demised Premises at reasonable hours accompanied by an employee of Tenant to
inspect such Demised Premises or, during the period commencing one hundred
eighty (180) days prior to the end of the Lease Term, for the purpose of
exhibiting same to prospective tenants. Landlord's right to enter and inspect
the Demised Premises shall include the right to take samples of Environmental
Media (as defined in Article XXXVII) as necessary to confirm the presence or
absence of Hazardous Materials. Such entry and/or inspection shall not
unreasonably interfere with Tenant's ability to conduct its business operations
from the Demised Premises and Landlord shall indemnify Tenant from and against
any and all claims, losses or liability incurred by Tenant as a result of
injuries to persons or property caused by the gross negligence or willful
misconduct of Landlord in connection with such entry and inspection, unless an
Event of Default has occurred, or Landlord's entry is a result of an emergency
at the applicable Property.
ARTICLE XXI
SIGNS
No sign shall be installed on the Demised Premises until all governmental
approvals and permits required therefore are first obtained and all fees
pertaining thereto have been paid by Tenant. Except as set forth in the
preceding sentence, Tenant may install or erect signs of any height or
dimensions and bearing such inscription as Tenant shall reasonably determine.
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ARTICLE XXII
IMPROVEMENTS AND FIXTURES
Section 22.01 Any and all portions of the Building, all other improvements
on the Real Property at the Commencement Date and all fixtures on the Demised
Premises at the Commencement Date shall be the property of Landlord. In the
event that Tenant installs or erects fixtures or improvements to the Demised
Premises after the Commencement Date, such fixtures or improvements shall at the
expiration or earlier termination of the Lease, become the property of Landlord
and remain upon and be surrendered with the Demised Premises. Notwithstanding
the foregoing provisions, Tenant shall be liable for all property taxes,
assessments, and similar charges assessed against or allocable to any fixtures
or equipment at the Demised Premises (irrespective of whether such fixtures are
owned by Landlord or Tenant) and which are attributable to any period of time
during the Lease Term. This Section 22.01 is subject to Section 22.02 below such
that the foregoing shall not be deemed to apply to Tenant's moveable trade
fixtures.
Section 22.02 Moveable trade fixtures , furnished or installed by Tenant
and/or located on the Demised Premises (including those items generally
described on Exhibit B hereto), shall be and remain the property of Tenant and
may be removed by Tenant or others entitled to remove same at any time during
the Lease Term provided that Tenant is not in default of this Lease, and that
such removal shall in no way affect Tenant's covenants with respect to the
operation of the Demised Premises pursuant to Section 3.09. Such moveable trade
fixtures shall include all personal property located on the Demised Premises in
which Tenant has any interest, excluding only Landlord's Equipment (as defined
in Section 22.03 below). Tenant shall repair all damage to the Demised Premises
caused by removal of any such trade fixtures by Tenant or its subtenants,
licensees or mortgagees. Upon default of this Lease by Tenant, Landlord shall
have the option to purchase any or all of such trade fixtures, and equipment for
$1.00, which option is assignable by Landlord. If any of Tenant's trade fixtures
or equipment after the date hereof become subject to the lien of an
institutional lender, Landlord will subordinate any statutory or contractual
lien it may hold to such trade fixtures or equipment to the lien of such lender,
if such lender agrees, in form reasonably acceptable to Landlord, to sell to
Landlord, at Landlord's election, the trade fixtures and equipment at the Real
Property at Liquidation Value upon foreclosure or other acquisition by such
lender of the trade fixtures or equipment. For purposes hereof, Liquidation
Value shall be the value of the assets if sold at public auction, as established
by the average of the two closest appraisals in dollar amount made by three
qualified appraisers, one selected by Landlord, one selected by such lender and
the third selected by the two (2) appraisers so selected. A qualified appraiser
is an appraiser with at least five (5) years experience in evaluating restaurant
equipment and assets, who has no relationship to either Landlord or the lender.
The cost of the appraisal process shall be shared equally by Landlord and
lender.
Section 22.03 During the Lease Term, Tenant shall be entitled to use
Landlord's equipment ("Landlord's Equipment") in Tenant's operations at the
Demised Premises. Landlord's Equipment shall include the following items located
at each Demised Premises on the Commencement Date: coolers, walk-in freezers,
HVAC systems and ventilation units. Tenant shall keep the Landlord's Equipment
in good working order and repair (normal wear and tear excepted), shall not
remove Landlord's Equipment from the Demised Premises and shall not permit any
lien or other encumbrance to attach to Landlord's Equipment except any such
liens that are being contested by Tenant in good faith by appropriate
proceedings and that have been bonded over by Tenant to the satisfaction of
Landlord. Tenant shall keep the equipment insured and shall be responsible for
any casualty or other loss to Landlord's Equipment or occasioned by Landlord's
Equipment. Tenant shall at all times have a system in place to identify the
Landlord's Equipment from any trade fixtures or equipment of Tenant, and any
items of equipment not so identified shall conclusively be presumed to be the
property of Landlord. At the expiration or termination of the Lease, if Tenant
is in default hereunder, Tenant shall, upon Landlord's written request, assign
its interest as lessee in the equipment leases for the Equipment Lease and other
items of leased equipment, to the extent assignable. Tenant may, from time to
time, retire or replace Landlord's Equipment with new items of equipment
purchased by Tenant, in which event such replaced equipment shall constitute
Landlord's Equipment. All Landlord's Equipment shall be the property of
Landlord, and Tenant shall execute such instruments and documents as Landlord
may require to evidence such ownership by Landlord.
Section 22.04 Tenant hereby authorizes Landlord to take all steps necessary
in Landlord's reasonable judgment to perfect any security interest granted by
Tenant to Landlord under this Lease, including without limitation by filing or
recording financing statements regarding the subject property.
ARTICLE XXIII
END OF TERM
Upon the expiration or earlier termination of the Lease Term, Tenant shall
peaceably and quietly quit and surrender the Demised Premises, and all
Alterations which are then part of the Demised Premises, broom clean and in good
order and condition, subject to reasonable wear and tear and except as provided
in Articles XII and XIII. Tenant shall, within thirty (30) days prior to the end
of the Lease Term, transfer to Landlord all plans, drawings, other Alteration
Information, and technical descriptions of the Property, and shall assign to
Landlord all assignable permits, licenses, authorizations and warranties with
respect to the Property (in each case to the extent not previously transferred
or assigned to Landlord). This Article XXIII shall survive the expiration or
termination of the Lease.
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ARTICLE XXIV
HOLDING OVER
If Tenant holds over in possession after the expiration of the Lease Term,
then such holding over shall not be deemed to extend the Lease Term or renew
this Lease, but rather the tenancy thereafter shall continue as a tenancy at
sufferance pursuant to the terms and conditions herein contained, at One Hundred
Twenty-Five percent (125%) of the Fixed Rent; and Tenant shall be responsible
for the consequences of any unauthorized holdover and shall indemnify, defend,
protect (with counsel selected by Landlord) and hold Landlord Parties wholly
free and harmless of, from and against any and all damages, losses, costs,
expenses and claims arising therefrom, including reasonable attorneys fees and
costs.
ARTICLE XXV
ASSIGNMENT AND SUBLETTING
Section 25.01 This Lease shall be fully assignable by the Landlord or its
assigns, subject to the terms of Article XXXIV.
Section 25.02
(a) Neither Tenant, nor Tenant's successors or assigns, shall assign in
whole or in part, by operation of law or otherwise, this Lease, or sublet the
Demised Premises, in whole or in part, or permit the Demised Premises or any
portion of it to be used or occupied by others, or enter into a management
contract or other arrangement whereby the Demised Premises shall be managed or
operated by anyone other than the owner of the Tenant's leasehold estate,
without the prior written consent of Landlord in each instance. Any disposition
of an ownership interest in Tenant, either directly or indirectly, in such a
manner that the ultimate beneficial owners of Tenant, through one or more tiers
of ownership, transfer "control" of Tenant, shall be deemed to be an assignment
of this Lease. "Control" shall mean ownership of voting securities sufficient to
elect a majority of the board of directors of a corporation, or analogous
ownership interests of non-corporate entities. Provided Tenant remains liable
for all its obligations under this Lease and any guarantor remains liable under
any guaranty of this Lease, Landlord shall not unreasonably withhold consent to
an assignment of this Lease to an individual, partnership or corporation if such
individual, partnership or corporation has, in the reasonable opinion of
Landlord, a record of timely payment of obligations and compliance with
applicable laws and is a commercially and financially sound individual,
partnership, or corporation. Tenant may assign or sublease the Demised Premises
without the consent of Landlord if such assignment or sublease is to a
partnership of which Tenant is a general partner or a corporation of which
Tenant is the majority shareholder or to the parent corporation of Tenant (not
including, in any event, Guarantor) or an affiliate under common control of the
parent corporation of Tenant; provided further that no such assignment or
sublease shall relieve Tenant of any liability hereunder, and Tenant shall not
transfer its interest as a general partner (or as a majority shareholder as the
case may be) without the prior written consent of Landlord in each instance,
which consent shall not be unreasonably withheld.
(b) Tenant shall submit current financial statements of any proposed
assignee or sublessee together with Tenant's request for Landlord's approval of
any proposed assignment or sublease, except if (i) the proposed assignee or
sublessee is a partnership of which Tenant or Guarantor is a general partner, or
is a corporation or limited liability company of which Tenant or Guarantor is a
major shareholder, parent company or an affiliate under common control, and (ii)
the financial statements of such proposed assignee or sublessee are consolidated
with Guarantor. Tenant shall reimburse Landlord for all costs and expenses
actually paid by Landlord in connection with any requested assignment or
sublease in an amount not to exceed Two Thousand Five Hundred Dollars
($2,500.00). Such amount shall increase by three percent (3%) on each
anniversary of the Effective Date of this Lease.
(c) If this Lease is assigned or transferred, or if all or any part of the
Demised Premises is sublet or occupied by any party other than Tenant, Landlord
may collect rent from the assignee, transferee, subtenant or occupant, and apply
the net amount collected to the Rent reserved in this Lease, but no such
assignment, subletting, occupancy or collection shall be deemed a waiver of any
covenant or condition of this Lease, or the acceptance of the assignee,
transferee, subtenant or occupant as tenant, or a release of Tenant from the
performance or further performance by Tenant of its obligations under this
Lease. Without limiting the generality of the forgoing, Tenant expressly
acknowledges and agrees that in the event of an assignment of this Lease, Tenant
shall remain joint and severally liable with the assignee for all of the
obligations under this Lease, and in all other cases of any transfer of Tenant's
interest under this Lease, Tenant shall remain primarily liable for such
obligations, unless released by Landlord in writing pursuant to Section 25.03.
Subject to the foregoing, the consent by Landlord to an assignment, transfer,
management contract or subletting shall not in any way be construed to relieve
Tenant from obtaining the express written consent of Landlord in each instance
to any subsequent similar action that Tenant may intend to take.
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Section 25.03 Notwithstanding anything contained in Section 25.02 to the
contrary (but without limiting anything contained in Article IV hereof): (i)
Tenant shall have the right to sublease the Demised Premises in the ordinary
course of Tenant's business without Landlord's consent, and (ii) Tenant may
assign all, but not less than all, of its interest in this Lease, and Tenant and
Guarantor shall be relieved of any liability accruing under this Lease after the
date of such assignment, provided that the proposed assignee has a Credit Rating
of BB+ or greater; provided that, in each case, Tenant delivers to Landlord
copies of such sublease agreement or assignment contemporaneous with its
effectiveness, and Tenant remains primarily liable for all obligations under
this Lease. For purposes hereof, Credit Rating means the credit rating assigned
by Standard Poors Rating Group to the highest rated publicly issued debt
securities of the assignee.
Section 25.04 An assignment made with Landlord's consent or as otherwise
permitted hereunder shall not be effective until Tenant delivers to Landlord an
executed counterpart of such assignment containing an agreement, in recordable
form, executed by the assignor and the proposed assignee, in which the assignee
assumes the performance of the obligations of the assignor under this Lease
throughout the Lease Term.
Section 25.05 This Lease shall be binding upon, enforceable by, and inure
to the benefit of the parties hereto and their respective heirs, successors,
representatives and assigns.
ARTICLE XXVI
LANDLORD'S LOAN; TENANT'S LOAN
Section 26.01 This Lease shall be subject and subordinate to all ground
leases and the lien of all mortgages and deeds of trust which now or hereafter
affect Landlord's interest in the Demised Premises, and all amendments thereto,
all without the necessity of Tenant's executing further instruments to effect
subordination. The interest in the Demised Premises of any such future ground
lessee or lien holder shall have priority over the interest of Tenant in this
Lease and in the Demised Premises provided that such ground lessee or lien
holder executes a non-disturbance and attornment agreement in the form of the
Subordination, Nondisturbance and Attornment Agreement attached as Exhibit F
hereto. Tenant shall execute and deliver to Landlord on the Commencement Date a
Subordination, Nondisturbance and Attornment Agreement in the form of Exhibit F,
and shall upon five business days' written notice from Landlord, execute
additional subordination, nondisturbance and attornment agreements substantially
in the form of Exhibit F.
Section 26.02 In the event of a foreclosure proceeding, the exercise of the
power of sale under any mortgage or deed of trust or the termination of a ground
lease, Tenant shall, if requested, attorn to the purchaser thereupon and
recognize such purchaser as Landlord under this Lease; provided, however,
Tenant's obligation to attorn to such purchaser shall be conditioned upon such
purchaser's written agreement not to disturb Tenant's interest in this Lease,
except that such purchaser shall be entitled to enforce all rights and remedies
of Landlord hereunder.
Section 26.03 Tenant shall provide to Landlord, within ten (10) days after
written request from Landlord, the most recent quarterly unaudited financial
statement for Tenant and Guarantor (consolidated, if applicable) prepared
according to generally accepted accounting practices consistently applied, and
such other financial information or tax returns as may be reasonably required by
Landlord.
Section 26.04 Provided that Tenant and Landlord shall secure any required
consent from Landlord's lenders, Tenant shall have the right to encumber or
hypothecate Tenant's interest in the leasehold estate created by this Lease but
only with a leasehold deed of trust securing a loan from a lender (a "Lender"),
leasehold mortgage, assignment of leases, assignment, security agreement, and/or
other security document (collectively, a "Leasehold Mortgage"). All proceeds
from such Leasehold Mortgage shall remain the property of Tenant.
Section 26.05 A Leasehold Mortgage shall encumber only Tenant's leasehold
interest in the Demised Premises, and shall not encumber Landlord's right title
or interest in the Demised Premises. Landlord shall have no liability whatsoever
for the payment of the note or any obligation secured by any Leasehold Mortgage
or any other provisions of such note or the Leasehold Mortgage or related
obligations. Should there be any conflict between the provisions of this Lease
and of any Leasehold Mortgage, the provisions of this Lease shall control. No
Leasehold Mortgage will be for a term longer than the Term of this Lease, as and
if extended as provided herein. Either prior to or concurrently with the
recordation of the Leasehold Mortgage, Tenant shall cause a fully conformed copy
thereof and of the note secured thereby to be delivered to Landlord, together
with a written notice containing the name and post office address of the Lender
(as defined herein).
Section 26.06 If Landlord declares a default under this Lease, Landlord
shall notify any Lender who has given Landlord a prior written request for such
notice of such default by sending a copy of the default notice required under
this Lease to the Lender.
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Section 26.07 Immediately upon the recording of the Leasehold Mortgage,
Tenant, at Tenant's expense, shall cause to be recorded in the office of the
County Recorder of each county in which each of the Demised Premises are
located, a written request duly executed and acknowledged by Landlord for a copy
of any notice of default and of any notice of sale under the Leasehold Mortgage,
as provided by the law in which the Demised Premises are located.
Section 26.8 If title to Landlord's estate and to Tenant's estate are
acquired by the same person or entity, other than as a result of termination of
this Lease, no merger shall occur if the effect of such merger would impair the
lien of any Leasehold Mortgage.
ARTICLE XXVII
MAINTENANCE OF OUTSIDE AREAS
Section 27.01 The term "Outside Areas" shall refer to all areas outside of
the Buildings including all sidewalks, driveways, landscaping, trash enclosures,
and trash compacting and loading areas on the Demised Premises.
Section 27.02 Tenant shall be responsible for maintaining the Outside Areas
in a neat and clean condition, and shall ensure that debris from the operation
of each restaurant on the Demised Premises are cleaned on a regular basis.
ARTICLE XXVIII
CERTIFICATES
Section 28.01
(a) Each party shall, at its sole cost and expense, at any time and from
time to time, within ten (10) days after request by the other party, deliver a
written instrument to Landlord or any other person, firm or corporation
specified by the other party, duly executed and acknowledged, certifying that:
(i) This Lease is unmodified and in full force and effect, or if there has
been any modification, that the Lease is in full force and effect as modified
and stating any such modification;
(ii) Whether or not there are then existing, to the knowledge of the
executing officer, any defenses against the enforcement of any of the
agreements, terms, covenants or conditions of this Lease upon the part of such
party to be performed or complied with, and, if so, specifying same (including,
without limitation, whether such party knows or does not know of any default by
the other party in such other party's performance of all agreements, terms,
covenants and conditions to be performed by such other party, and if such
default does exist, specifying same);
(iii) The amounts and dates to which the Fixed Rent, and Additional Rent
have been paid, the amounts of any and all outstanding balances of such items,
if any, known to such party; and
(iv) Such other information reasonably requested by Landlord.
(b) Either party's failure to timely so deliver said certificate shall
constitute an a default by such party at the sole option of the other party and
shall be conclusive as to the truthfulness of the items stated in the other
party's request. Delivery of a completed Estoppel Certificate in substantially
the form as set forth on Exhibit C attached hereto ( "Estoppel Certificate")
shall satisfy this requirement.
ARTICLE XXIX
RELATIONSHIP OF PARTIES
Nothing contained in this Lease shall be construed to create the
relationship of principal and agent, partnership, joint venture or any other
relationship between the parties hereto other than the relationship of Landlord
and Tenant. Except as otherwise expressly provided herein, this Lease shall not
in any way impose any liability upon the members, stockholders, officers,
directors or trustees of Landlord or Tenant if Landlord or Tenant should be a
limited liability company, corporate entity, or trust, or upon the stockholders,
officers, directors or trustees of Landlord or Tenant if Landlord or Tenant
should be a corporate entity or trust. If more than one person or entity is
named as the Tenant hereunder, the obligations under this Lease of all such
persons and entities as Tenant shall be joint and several.
ARTICLE XXX
RECORDING
Neither Landlord nor Tenant shall record this Lease; however, upon the
request of either party hereto, the other party shall join in the execution of a
memorandum of lease for the purposes of recordation in the form attached hereto
as Exhibit D and by this reference incorporated herein (the "Memorandum"). The
Memorandum shall describe the parties, the Demised Premises, the term of this
Lease, any special provisions other than those pertaining to Rent and shall
incorporate this Lease by reference. Tenant shall pay all costs charged or
collected by the County Recorders to record the Memoranda.
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ARTICLE XXXI
CAPTIONS AND SECTION NUMBERS
The captions, section numbers, and index appearing in this Lease are
inserted only as a matter of convenience and in no way define, limit, construe
or describe the scope or intent of such sections or articles nor in any way
affect this Lease.
ARTICLE XXXII
APPLICABLE LAW
This Lease shall be governed by, and construed in accordance with the laws
of the State of Texas; provided, however, that any forcible entry and detainer
action or similar proceeding shall be governed by the laws of the state in which
the applicable Real Property is located. If any provision of this Lease or the
application thereof to any person or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Lease shall not be affected
thereby, and each provision of the Lease shall be valid and enforceable to the
fullest extent permitted by the law.
ARTICLE XXXIII
ENTIRE AGREEMENT
This Lease and the Exhibits attached hereto, all of which form a part
hereof, set forth all the covenants, promises, agreements, conditions and
understandings between Landlord and Tenant concerning the Demised Premises, and
there are no covenants, promises, agreements, conditions or understandings
heretofore made, either oral or written, between them other than as herein set
forth. No modification, amendment, change or addition to this Lease shall be
binding upon Landlord or Tenant unless reduced to writing and signed by each
party. Time is of the essence of this Lease.
ARTICLE XXXIV
LIABILITY OF THE PARTIES
Without limiting any guaranty of Tenant's obligations hereunder, the
obligations of Landlord and Tenant under this Lease are not personal obligations
of the individual members, partners, directors, officers, shareholders, agents
or employees of Landlord or Tenant. Tenant shall look solely to the Demised
Premises for satisfaction of any liability of Landlord and shall not look to
other assets of Landlord nor seek recourse against the assets of the individual
members, partners, directors, officers, shareholders, agents or employees of
Landlord. Whenever Landlord transfers its interest, Landlord shall be
automatically released from further performance under this Lease and from all
further liabilities and expenses hereunder, provided the transferee of
Landlord's interest assumes all liabilities and obligations of Landlord
hereunder from the date of such transfer.
ARTICLE XXXV
ATTORNEYS' FEES
If any legal action should be commenced in any court regarding any dispute
arising between the parties hereto, or their successors and assigns, concerning
any provision of this Lease or the rights and duties of any person in relation
thereto, then the prevailing party therein shall be entitled to collect its
reasonable expenses, attorneys' fee and court costs, including the same on
appeal. As used herein, the term "prevailing party" means the party who, in
light of the claims, causes of action, and defenses asserted, is afforded
greater relief.
ARTICLE XXXVI
CHARACTERIZATION AS LEASE
Section 36.01 Landlord and Tenant each waive any claim or defense based
upon the characterization of this Lease as anything other than a true lease and
irrevocably waive any claim or defense which asserts that the Lease is anything
other than a true Lease. Landlord and Tenant covenant and agree that they will
not assert that this Lease is anything but a true Lease. Landlord and Tenant
each stipulate and agree not to challenge the validity, enforceability or
characterization of the Lease of the Property as a true lease and further
stipulate and agree that nothing contained in this Lease creates or is intended
to create a joint venture, partnership (either de jure or de facto), equitable
mortgage, trust, financing device or arrangement, security interest or the like.
Landlord and Tenant each shall support the intent of the parties that the Lease
of the Properties pursuant to this Lease is a true lease and does not create a
joint venture, partnership (either de jure or de facto), equitable mortgage,
trust, financing device or arrangement, security interest or the like, if, and
to the extent that, any challenge occurs.
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ARTICLE XXXVII
ENVIRONMENTAL
Section 37.01
(a) For the purpose of this Lease, the following definitions pertaining to
environmental matters shall apply:
"De Minimis Amounts" means, with respect to any given level of Hazardous
Materials, that level or quantity of Hazardous Materials in any form or
combination of forms, the use, storage or release of which does not constitute a
violation of, or require regulation or remediation under, any Environmental Laws
and is customarily employed in the ordinary course of, or associated with,
similar business located in the states in which the Demised Premises is located.
"Environmental Conditions" means the conditions of "Environmental Media"
(as defined below), and the conditions of any part of the Demised Premises,
including but not limited to building materials, which affect or may affect
Environmental Media.
"Environmental Laws" shall mean any federal, state or local law, statute,
ordinance, permit condition or regulation pertaining to public health,
occupational health and safety, natural resources or environmental protection,
including, without limitation: (1) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S. C. ? 9601 et seq. as amended
("CERCLA"), the Solid Waste Disposal Act, 42 U.S.C. ? 6901 et seq. as amended
("RCRA"), the Federal Water Pollution Control Act of 1972, as amended by the
Clean Water Act of 1977, as amended, 33 U.S.C. 1251 et seq.; the Toxic
Substances Control Act of 1976, as amended, 15 U.S.C. 2601 et seq.; the
Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. 11001 et
seq.; the Clean Air Act of 1966, as amended by the Clean Air Act Amendments of
1990, 42 USC 7401 et seq.; the National Environmental Policy Act of 1970, as
amended, 42 USC 4321 et seq.; the Rivers and Harbors Act of 1899, as amended, 33
USC 401 et seq.; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C.
Section 801 et seq. the Endangered Species Act of 1973, as amended, 16 U.S.C.
1531, et seq.; the Occupational Safety and Health Act of 1970, as amended 29
U.S.C. 651, et seq.; the Safe Drinking Water Act of 1974, as amended, 42 U.S.C.
300(f) et seq., the Hazardous Materials Transportation Act, 49 U.S.C. Sections
1801 et seq. as amended, and all regulations, published governmental policies,
and administrative or judicial orders promulgated under said laws; (2) all state
or local laws which implement the foregoing federal laws or which pertain to
public health and safety, occupational health and safety, natural resources or
environmental protection: all as amended from time to time, and all regulations,
published governmental policies, and administrative or judicial orders
promulgated under the foregoing laws; (3) all federal and state common law,
including but not limited to the common law of public or private nuisance,
trespass, negligence or strict liability, where such common law pertains to
public health and safety, occupational health and safety, natural resources,
environmental protection, or the use and enjoyment of property, and all judicial
orders promulgated under said laws; and (4) all comparable local laws and
comparable laws of other jurisdictions.
"Environmental Media" means soil, fill material, or other geologic
materials at all depths, groundwater at all depths, surface water including
storm water and sewerage, indoor and outdoor air, and all living organisms,
including without limitation all animals and plants, whether such Environmental
Media are located on or off the Demised Premises.
"Hazardous Materials" means any ignitable, reactive, explosive, corrosive,
carcinogenic, mutagenic, toxic or radioactive material, whether virgin material,
secondary material, by-product, waste or recycled material, defined, regulated
or designated as a contaminant, pollutant, hazardous or toxic substance,
material, waste, contaminant or pollutant under any Environmental Laws or any
other federal, state or local law, statute, regulation, ordinance, or
governmental policy presently in effect or as amended or promulgated in the
future, and shall specifically include, without limitation: (a) those materials
included within the definitions of "hazardous substances," "extremely hazardous
substances," "hazardous materials," "toxic substances" "toxic pollutants,"
"hazardous air pollutants" "toxic air contaminants," "solid waste," "hazardous
waste," "pollutants," contaminants" or similar categories under any
Environmental Laws; (b) those materials which create liability under common law
theories of public or private nuisance, negligence, trespass or strict
liability; and (c) specifically including, without limitation, any material,
waste or substance which contains: (i) petroleum or petroleum derivatives
byproducts, including crude oil and any fraction thereof and waste oil; (ii)
asbestos; (iii) polychlorinated biphenyls; (iv) formaldehyde; and (v) radon.
"Release" means any active or passive spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into any Environmental Media. For the purposes of this Lease,
"Release" also includes any threatened Release.
"Remedial Activities" means any investigation, work plan preparation
removal, repair, cleanup, abatement, remediation, monitored natural attenuation,
natural resource damage assessment and restoration, closure, post-closure,
detoxification or remedial activity of any kind whatsoever necessary to address
Environmental Conditions.
"Use" means the receipt, handling, generation, storage, treatment,
recycling, transfer, transportation, introduction, or incorporation into, on,
about, under or from the Demised Premises.
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(b) Tenant acknowledges that it owned and operated the Demised Premises
prior to selling the Demised Premises to Landlord and that Landlord makes no
warranties or representations of any kind, or in any manner or in any form
whatsoever, as to the status of Environmental Conditions or Hazardous Materials
at the Demised Premises. Landlord has granted Tenant the absolute right to
inquire with regard to the Environmental Conditions of the Demised Premises,
including the right to inquire and obtain from Landlord or Landlord's
predecessor copies of any and all existing environmental assessments. Landlord
agrees to furnish Tenant with all copies of non-legally privileged environmental
reports covering the Demised Premises, if any, which are in the possession of
Landlord. Tenant will conduct at its own expense any and all investigations
regarding Environmental Conditions of the Demised Premises and will satisfy
itself as to the absence or existence of Hazardous Materials contamination of
the Demised Premises. Tenant's entry into this Lease shall be made at its sole
risk.
Section 37.02 From and after the Effective Date, Tenant shall not be
entitled to the Use of any Hazardous Materials at the Demised Premises other
than De Minimis Amounts, unless performed in full compliance with all
Environmental Laws and any other applicable local, state and federal statutes,
orders, ordinances, rules and regulations. Tenant shall be prohibited from
conducting or allowing the Release of Hazardous Materials onto, on, about, under
or from the Demised Premises, the exception being sewer or other permitted
discharges or Releases or other De Minimis Amounts, in full compliance with all
Environmental Laws and any other applicable laws. Subject to any right to
contest the applicability or effect of any Environmental Law as contemplated by
Article VIII above, from and after the date of this Lease, Tenant covenants to,
and shall, undertake all Remedial Activities necessary to address any Use or
Release of Hazardous Materials after the date of this Lease, by Tenant or its
agents, employees, representatives, invitees, licensees, subtenants, customers
or contractors ("Other Parties"), or otherwise adversely affecting any Demised
Premises at Tenant's sole cost and expense, and shall give immediate written
notice of same to Landlord. If any Remedial Activities are required to be
performed at any location other than the Demised Premises, Tenant shall use its
best efforts to obtain any required access agreements from third parties
Section 37.03 In addition to any other obligation herein, Tenant shall
defend, indemnify and hold Landlord Parties free and harmless from any and all
claims, losses, liabilities and other obligations of any kind whatsoever that
may be made against or incurred by Landlord Parties in connection with (i) the
violation of any Environmental Law, or (ii) Hazardous Materials or Environmental
Conditions at or from the Demised Premises whether heretofore now existing or
hereafter arising, and whether in connection with or as a result of Tenant's
operations at the Demised Premises, including without limitation any and all
costs and fees of attorneys or experts incurred by Landlord in defending against
same; provided, however, that the foregoing indemnity shall not be applicable to
any claim directly attributed to the gross negligence or willful misconduct of
Landlord or any Landlord Party. This and any other right of Landlord may be
assigned to its successors in interest under the terms of this Lease.
Section 37.04 Within fifteen (15) days after notification to Tenant, Tenant
shall inform Landlord in writing of (i) any and all enforcement actions,
initiation of Remedial Activities where no Remedial Activities are currently
being conducted upon receipt of such notification, or other governmental or
regulatory actions (excluding routine actions such as permit renewals)
instituted, completed or threatened pursuant to any Environmental Laws affecting
the Demised Premises; (ii) all claims made or threatened by any third person
against Tenant or the Demised Premises relating in any way whatsoever to
Hazardous Materials or Environmental Conditions (the matters set forth in
clauses (i) and (ii) are hereinafter referred to as "Environmental Claims");
(iii) Tenant's knowledge of any material Release of Hazardous Materials at, on,
in, under to or from the Demised Premises or on, in or under any adjoining
property. Tenant shall also supply to Landlord within three (3) business days
after Tenant first receives or sends the same, copies of all claims, reports,
complaints, notices, warnings, asserted violations or other communications
relating in any way to the matters described in this Section.
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Section 37.05 In addition to any other obligations herein, Tenant shall be
solely responsible for and shall indemnify and hold harmless all Landlord
Parties from and against any and all private or governmental claims, lawsuits,
administrative proceedings, judgments, penalties, fines, proceedings, loss,
damage, cost, expense or liability directly or indirectly arising out of or
associated in any manner whatsoever with Tenant's Use or the presence of
Hazardous Materials (which may have occurred at any time including prior to the
term hereof) or Release of Hazardous Materials at, on, under, about or from the
Demised Premises during the term hereof, including any extensions. Tenant's
indemnity and release includes, without limitation: (i) the costs associated
with Remedial Activities, including all necessary plans and reports, incurred by
the U.S. Environmental Protection Agency, or any other federal, state or local
governmental agency or entity or by any other person, incurred pursuant to the
CERCLA, RCRA, or any other applicable Environmental Laws; (ii) any oversight
charges, fines, damages or penalties arising from the presence or Release of
Hazardous Materials, and any related Remedial Activities, incurred pursuant to
the provisions of CERCLA, RCRA, or any other applicable Environmental Laws;
(iii) any liability to third parties arising out of the presence or Release of
Hazardous Materials for personal injury, bodily injury, or property damage
arising under any statutory or common law theory, including damages assessed for
the maintenance of a public or private nuisance, the costs of Remedial
Activities, or for the carrying on of an abnormally dangerous activity; (iv) all
direct or indirect compensatory, consequential, or punitive damages arising out
of any claim based on the presence or Release of Hazardous Materials or damage
or threatened damage to Environmental Conditions; (v) any and all reasonable
costs, fees and expenses of attorneys, consultants and experts incurred or
sustained in making any investigation on account of any claim, in prosecuting or
defending any action brought in connection therewith, in obtaining or seeking to
obtain a release therefrom, or in enforcing any of the agreements herein
contained; and (vi) Rent during any period of Remedial Activities equal to the
Base Rent then in effect, or if the Lease has terminated, the Base Monthly Rent
which was in effect on the Termination Date; provided, however, that the
foregoing indemnity shall not be applicable to any claim directly attributable
to the gross negligence or willful misconduct of Landlord or any Landlord Party.
The foregoing indemnity shall apply to Tenant's Use of Hazardous Materials
irrespective of whether any of Tenant's activities were or will be undertaken in
accordance with Environmental Laws or other applicable laws, regulations, codes
and ordinances. This indemnity is intended to be operable under 42 U.S. C.?
9607(e)(1). Tenant specifically agrees that it shall not xxx or seek
contribution from any indemnity or any successors or assigns thereof in any
matter relating to any Hazardous Material liability except as a result of the
gross negligence of Landlord or other Landlord Parties on the Demised Premises.
All costs and expenses related to this paragraph incurred by Landlord shall be
repaid by Tenant to Landlord as Additional Rent. This indemnity shall survive
termination of the Lease.
ARTICLE XXXVIII
ADDENDA
Section 38.01 The following exhibits have been agreed to by the parties and
attached hereto or initialed by the parties prior to the execution hereof, it
being the intention of the parties that they shall become a binding part of this
Lease as if fully set forth herein.
Exhibit A Location/Legal Description/Address of the Real Property
Exhibit B Tenant's Personal Property List
Exhibit C Tenant's Estoppel Certificate
Exhibit D Memorandum of Lease Exhibit E Fixed Rent Allocation
Exhibit F Subordination,Nondisturbance and Attornment Agreement
Exhibit G Guaranty Agreement
ARTICLE XXXIX
COUNTERPARTS
Section 39.01 This Lease may be executed in counterparts and shall be
binding on all the parties hereto as if one document had been signed. The
delivery of an executed copy of this Lease by facsimile transmission shall have
the same force and effect as the delivery of the original, signed copy of this
Lease.
IN WITNESS WHEREOF, the parties have executed this Lease to be effective as
of the date first above written.
[SIGNATURES ON FOLLOWING PAGE]
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LANDLORD:
SKYLINE-FRI 12, XXXXXXXX, X.X.
By: Skyline Pacific Properties, LLC
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
TENANT:
HOPS OF XXXXXXXX, LTD..
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
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