EXHIBIT 10.5
THIRD ADDENDUM TO OFFICE LEASE
THIS THIRD ADDENDUM TO LEASE (the "Third Addendum"), dated October l,
1999, is made by and between XXXXXXX XXXXXX JOINT VENTURE, a California general
partnership, as predecessor-in-interest to Pinkwood Properties Corp., a New York
corporation ("Landlord"), with offices at 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000,
Xxx Xxxxxxx, Xxxxxxxxxx 00000, and GRAND HAVANA ENTERPRISES, INC., a Delaware
corporation (formerly known as United Restaurants, Inc.) ("Tenant"), with
offices at 000 Xxxxx Xxxxx Xxxxx, Xxxxx X-00, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000.
WHEREAS,
A. Landlord, pursuant to the provisions of that certain written Office
Lease, dated July 1, 1994, as amended by the First Addendum to Office Lease,
dated October 10, 1994, and as amended by the Second Addendum to Office Lease,
dated November 23, 1994 (collectively, the "Lease"), leased to Tenant and Tenant
leased from Landlord space in the property located at 000 Xxxxx Xxxxx Xxxxx,
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000 (tile "Building"), commonly known as Suites R-01
and R-01A (the "Premises");
B. The Term of said Lease expires November 30, 1999, which Term Landlord
and Tenant wish to hereby extend;
C. Landlord and Tenant, for their mutual benefit, wish to revise certain
other covenants and provisions of this Lease.
NOW, THEREFORE, IN CONSIDERATION of the covenants and provisions contained
herein, and other good and valuable consideration, the sufficiency of which
Landlord and Tenant hereby acknowledge, Landlord and Tenant agree:
1. CONFIRMATION OF DEFINED TERMS. Unless modified herein, all terms
previously defined and capitalized in the Lease shall hold the same
meaning for the purposes of this Third Addendum.
2. EXTENSION OF TERM. The Term is hereby extended five (5) years (the
"Extended Term"), from and including December 1, 1999, through and
including November 30, 2004 (the "Termination Date").
3. REVISION IN MONTHLY BASE RENT. Tenant acknowledges and agrees that,
commencing December 1, 1999, and continuing through November 30, 2000,
Tenant shall pay the Monthly Base Rent of $23,309.65 per month.
Commencing December 1, 2000, and continuing through November 30,
2001, the Monthly Base Rent payable by Tenant shall increase from
$23,309.65 per month to $24,008.94 per month;
Commencing December 1, 2001, and continuing through November 30,
2002, the Monthly Base Rent payable by Tenant shall increase from
$24,008.94 per month to $24,729.21 per month;
Commencing December 1, 2002, and continuing through November 30,
2003, the Monthly Base Rent payable by Tenant shall increase from
$24,729.21 per month to $25,471.08 per month; and
Commencing December 1, 2003, and continuing throughout the remainder
of the Extended Term, the Monthly Base Rent payable by Tenant shall
increase from $25,471.08 per month to $26,235.22 per month.
4. REVISION OF BASE YEAR. Effective as of December 1, 1999, the Base Year for
Tenant's payment of increases in (i) Operating Costs (as defined in
Section 3.A.(ii) of the Lease) for the retail space Operating Cost pool,
and (ii) Taxes (as defined in Section 3.A.(i) of the Lease) for the
Project, shall be changed to calendar year 2000. With respect only to
Operating Costs, the amounts payable by Tenant under Section 3 of the
Lease for each calendar year commencing with calendar year 2002 shall not
exceed by more than ten percent (10%) the amounts payable by Tenant
thereunder for the immediately preceding calendar year, exclusive of
increases in insurance premiums.
5. ACCEPTANCE OF PREMISES AND COMPLETION OF IMPROVEMENTS. Tenant acknowledges
that it has been in possession of the Premises for over five (5) years;
has failed to make any claim against Landlord for the repair of latent
defects in the Premises; and has made its own inspection of and inquiries
regarding the Premises, which are already improved. Therefore, Tenant
accepts the Premises in their "as-is" condition. Tenant further
acknowledges that Landlord has made no representation or warranty, express
or implied, except as are contained in this Lease and its Exhibits,
regarding the condition, suitability or usability of the Premises or the
Building for the purposes intended by Tenant.
6. LETTER OF CREDIT. Concurrently with Tenant's execution and delivery of
this Third Addendum, Tenant shall deliver to Landlord, as collateral for
the full and faithful performance by Tenant of all of its obligations
under the Lease and for all losses and damages Landlord may suffer as a
result of any default by Tenant under this Lease, an irrevocable and
unconditional negotiable letter of credit (the "LETTER OF CREDIT"), in the
form and containing the terms required herein, payable in the County of
Los Angeles, California, running in favor of Landlord, issued by a solvent
bank under the supervision of the Superintendent of Banks of the State of
California, or a National Banking Association, in the amount of Sixty
Thousand Dollars ($60,000.00) ("LC AMOUNT"). The Letter of Credit shall be
(i) at sight and irrevocable, (ii) subject to the terms of this Section 6,
maintained in effect, whether through replacement, renewal or extension,
for the entire period from the date of execution of this Third Addendum to
Lease through the scheduled expiration of the Extended Term ("LEASE
EXPIRATION DATE") and Tenant shall deliver a new Letter of Credit or
certificate of renewal or extension to Landlord at least fifteen (Ii) days
prior to the expiration of the Letter of Credit, without any action
whatsoever on the part of Landlord, (iii) subject to the Uniform Customs
and
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THIRD ADDENDUM TO OFFICE LEASE (CONTINUED)
Practices for Documentary Credits (1993-Rev) International Chamber of
Commerce Publication #500, and (iv) fully assignable by Landlord in
connection with a transfer of Landlord's interest in this Lease and permit
partial draws. In addition to the foregoing, the form and terms of the
Letter of Credit (and the bank issuing the same) shall be acceptable to
Landlord, in Landlord's reasonable discretion, and shall provide, among
other things, in effect that: (A) Landlord, or its then managing agent,
shall have the right to draw down an amount up to the face amount of the
Letter of Credit upon the presentation to the issuing bank of Landlord's
(or Landlord's then managing agent's) written statement that such amount
is due to Landlord under the terms and conditions of this Lease, it being
understood that if Landlord or its managing agent be a corporation,
partnership or other entity, then such statement shall be signed by an
officer (if a corporation), a general partner (if a partnership), or any
authorized party (if another entity); (B) the Letter of Credit will be
honored by the issuing bank without inquiry as to the accuracy thereof and
regardless of whether the Tenant disputes the content of such statement;
and (C) in the event of a transfer of Landlord's interest in the Building,
Landlord shall transfer the Letter of Credit, in whole or in part (or
cause a substitute letter of credit to be delivered, as applicable) to the
transferee and thereupon the Landlord shall, without any further agreement
between the parties, be released by Tenant from all liability therefor,
and it is agreed that the provisions hereof shall apply to every transfer
or assignment of the whole or any portion of said Letter of Credit to a
new landlord.
If, as a result of any application or use by Landlord of all or any
part of the Letter of Credit (or any "Cash Collateral" as that term is
defined below), the amount of the Letter of Credit and Cash Collateral
shall collectively be less than the LC Amount, Tenant shall, within ten
(10) days thereafter, provide Landlord with either (i) cash (the "CASH
COLLATERAL") to be held and applied by Landlord as collateral in the same
manner as if Landlord held such amount as part of the Letter of Credit, or
(ii) additional letter(s) of credit in an amount equal to the deficiency
(or a replacement letter of credit in the total amount of the LC Amount)
and any such additional (or replacement) letter of credit shall comply
with all of the provisions of this Section 6, and if Tenant fails to
comply with the foregoing, the same shall constitute an uncurable default
by Tenant. Tenant further covenants and warrants that it will neither
assign nor encumber the Letter of Credit or Cash Collateral, as the case
may be, or any part thereof and that neither Landlord nor its successors
or assigns will be bound by any such assignment, encumbrance, attempted
assignment or attempted encumbrance. Without limiting the generality of
the foregoing, if the Letter of Credit expires earlier than the Lease
Expiration Date, Landlord will accept Cash Collateral, a renewal letter of
credit or substitute letter of credit (such renewal or substitute letter
of credit or Cash Collateral to be in effect and delivered to Landlord, as
applicable, not later than fifteen (15) days prior to the expiration of
the Letter of Credit), which with respect to any letter of credit shall be
irrevocable and automatically renewable as above provided through the
Lease Expiration Date upon the same terms as the expiring Letter of Credit
or such other terms as may be acceptable to Landlord in its reasonable
discretion. However, if Cash Collateral is not timely delivered or the
Letter of Credit is not timely renewed or a substitute letter of credit is
not timely received, or if Tenant fails to maintain the Letter of Credit
and/or the Cash Collateral in the amount and in accordance with the terms
set forth in this Section 6, Landlord shall have the right to present the
Letter of Credit to the Bank in a accordance with the terms of this
Section 6, and the entire sum evidenced thereby shall be paid to and held
by Landlord as Cash Collateral for performance of all of Tenant's
obligations under the Lease and for all losses and damages Landlord may
suffer as a result of any default by Tenant under this Lease.
If there shall occur a default under the Lease as set forth in
Section 20 of the Lease, Landlord may, but without obligation to do so,
draw upon the Letter of Credit and/or utilize the Cash Collateral, in part
or in whole, to cure any default of Tenant and/or to compensate Landlord
for any and all damages of any kind or nature sustained or which may be
sustained by Landlord resulting from Tenant's default. Tenant agrees not
to interfere in any way with payment to Landlord of the proceeds of the
Letter of Credit, either prior to or following a "draw" by Landlord of any
portion of the Letter of Credit, regardless of whether any dispute exists
between Tenant and Landlord as to Landlord's right to draw from the Letter
of Credit. No condition or term of the Lease shall be deemed to render the
Letter of Credit conditional to justify the issuer of the Letter of Credit
in failing to honor a drawing upon such Letter of Credit in a timely
manner.
Landlord and Tenant acknowledge and agree that in no event or
circumstance shall the Letter of Credit or any renewal thereof or
substitute therefor or Cash Collateral be (i) deemed to be or treated as a
"security deposit" within the meaning of California Civil Code Section
1950.7, (ii) subject to the terms of such Section 1950.7, or (iii)
intended to serve as a "security deposit" within the meaning of such
Section 1950.7. The parties hereto (A) recite that the Letter of Credit
and/or Cash Collateral, as the case may be, is not intended to serve as a
security deposit and such Section 1950.7 and any and all other laws, rules
and regulations applicable to security deposits in the commercial context
("SECURITY DEPOSIT LAWS") shall have no applicability or relevancy thereto
and (B) waive any and all rights, duties and obligations either party may
now or, in the future, will have relating to or arising from the Security
Deposit Laws.
7. WARRANTY OF AUTHORITY. If Landlord or Tenant signs as a corporation or a
partnership, each of the persons executing this Third Addendum on behalf
of Landlord of tenant hereby covenants and warrants that the corporation
executing hereinbelow is a duly authorized and existing entity that is
qualified to do business in California; that the person(s) signing on
behalf of either Landlord or Tenant have full right and authority to enter
into this Third Addendum; and that each and every person signing on behalf
of either Landlord or Tenant are authorized in writing to do so.
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If either signatory hereto is a corporation, the person(s) executing
on behalf of said entity shall affix the appropriate corporate seal to
each area in the document where request therefor is noted, and the other
party shall be entitled to conclusively presume that by doing so the
entity for which said corporate seal has been affixed is attesting to and
ratifying this Third Addendum.
8. BROKER REPRESENTATION. Landlord and Tenant represent to one another that
it has dealt with no broker in connection with this Lease other than
XXXXXXX, XXXXXX & COMPANY. Landlord and Tenant shall hold one another
harmless from and against any and all liability, loss, damage, expense,
claim, action, demand, suit or obligation arising out of or relating to a
breach by the indemnifying party of such representation. Landlord agrees
to pay all commissions due to the brokers listed above created by Tenant's
execution of this Amendment.
9. SUCCESSORS AND HEIRS. The provisions of this Third Addendum shall inure to
the benefit of Landlord's and Tenant's respective successors, assigns,
heirs and all persons claiming by, through or under them.
10. CONFIDENTIALITY. Landlord and Tenant agree that the covenants and
provisions of this Third Addendum shall not be divulged to anyone not
directly involved in the management, administration, ownership, lending
against, or subleasing of the, other than Tenant's or Landlord's
counsel-of-record or leasing or sub-leasing broker of record.
11. SUBMISSION OF DOCUMENT. No expanded contractual or other rights shall
exist between Landlord and Tenant with respect to the, as contemplated
under this Third Addendum, until both Landlord and Tenant have executed
and delivered this Third Addendum, whether or not any additional rental or
security deposits have been received by Landlord, and notwithstanding that
Landlord has delivered to Tenant an unexecuted copy of this Third
Addendum.
The submission of this Third Addendum to Tenant shall be for
examination purposes only, and does not and shall not constitute a
reservation of or an option for the Tenant to lease, or otherwise create
any interest by Tenant in, any portion of the Building other than the
Premises. Execution of this Third Addendum by Tenant and its return to
Landlord shall not be binding upon Landlord, notwithstanding any time
interval, until Landlord has in fact executed and delivered this Third
Addendum to Tenant.
12. DISCLOSURE. Landlord and Tenant acknowledge that principals of Landlord
have a financial interest in Xxxxxxx Xxxxxx Realty Advisors, Xxxxxxx
Xxxxxx & Company, and P.L.E. Builders.
13. GOVERNING LAW. The provisions of this Third Addendum shall be governed by
the laws of the State of California.
14. REAFFIRMATION. Landlord and Tenant acknowledge and agree that the Lease,
as amended herein, constitutes the entire agreement by and between
Landlord and Tenant, and supersedes any and all other agreements written
or oral between the parties hereto. Furthermore, except as modified
herein, all other covenants and provisions of the Lease shall remain
unmodified and in full force and effect.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this document as of
the day and year written below.
LANDLORD: TENANT:
XXXXXXX XXXXXX JOINT VENTURE, GRAND HAVANA ENTERPRISES, INC.,
a California general partnership a Delaware corporation
By: XXXXXXX, XXXXXX & COMPANY,
its agent By: /s/ Xxxxxxx Xxxxxxx
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Signer's Name: Xxxxxxx Xxxxxxx
By: /s/ Xxxxxxx Xxxxxx -------------------
---------------------- |X| President
Xxxxxxx Xxxxxx |_| Vice President or
|_| Chief Executive Officer
Dated: 10/21/99
------------------- (Check Title Above)
AND
By:
--------------------------------
Signer's Name:
---------------------
|_| Secretary |_| Treasurer or
|_| Chief Financial Officer
(Check Title Above)
AFFIX CORPORATE SEAL HERE
Dated:
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