EXHIBIT 10.1

MASTER LEASE AGREEMENT

Lessee Full Name and Full Address:

Granite City Food & Brewery Ltd.

5402 Parkdale Drive, Suite #101

Minneapolis, MN  55416

Name and Phone No. of Lessee Contact:

Dan Bauer (952) 215-0668

 

Lessee Form of Organization:

Corporation

Fed Tax I.D. No.

41-1883639

(corporation, partnership, limited liability company,

Date of Master Lease

individual, etc.):

Agreement:

August 16, 2006

 

 

Lessee’s State of Organization:
(if a corporation or registered
organization

MN

Lessee’s State Organization Identification Number:

9S-463

 

For and in consideration of the mutual promises set forth below, Carlton
Financial Corporation (“Lessor”) and the lessee named above (“Lessee”) agree as
follows:

1.              MASTER LEASE.  This Master Lease Agreement (“Master Lease”)
provides terms and conditions the parties hereto intend to be applicable to
various lease transactions.  Each lease contract shall be evidenced by a Lease
Schedule, in the form attached hereto as Exhibit A, executed by Lessor and
Lessee that explicitly incorporates the provisions of this Master Lease
Agreement and sets forth specific terms of that particular lease contract (each
such Lease Schedule, as it incorporates this Master Lease, shall be called “the
Lease”).  Where the provisions of a Lease Schedule conflict with the terms of
this Master Lease, the provisions of the Lease Schedule shall prevail.  Each
Lease Schedule shall constitute a complete and separate lease agreement,
independent of all other Lease Schedules and without any requirement of being
accompanied by an originally executed counterpart of this Master Lease
Agreement. One originally executed counterpart of the Lease Schedule shall be
stamped “Original” and retained by the Lessor.  If more than one counterpart of
the Lease Schedule is executed by Lessor and Lessee, all other counterparts
shall be stamped “Duplicate Original.”  Only transfer of possession or control
by the Lessor of the originally executed counterpart stamped “Original” shall be
effective for purposes of perfecting an interest in the Lease Schedule by
possession.

2.              NO WARRANTIES.  Lessee agrees that it has selected each item of
equipment and other property (the “Equipment”) described in the Lease Schedule
based upon its own judgment and disclaims any reliance upon any statements or
representations made by Lessor.  Lessee acknowledges the supplier of the
Equipment is not Lessor’s agent.  THE EQUIPMENT IS LEASED “AS IS”.  LESSOR MAKES
NO EXPRESS OR IMPLIED WARRANTY WITH RESPECT TO THE EQUIPMENT AND SPECIFICALLY
DISCLAIMS ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR
PURPOSE AND ANY LIABILITY FOR CONSEQUENTIAL DAMAGES ARISING OUT OF THE USE OR
INABILITY TO USE THE EQUIPMENT.  LESSEE AGREES TO PAY THE RENT REQUIRED
HEREUNDER WITHOUT REGARD TO THE CONDITION OF THE EQUIPMENT.  Lessor agrees to
assign the manufacturer’s warranties to Lessee and Lessee has the right to make
warranty claims against the manufacturer under such warranties.  The Lessor is
obligated to be cooperative in permitting such claims against the manufacturer.

3.              FINANCE LEASE.  Lessor and Lessee agree that the Lease is a
“finance lease” within the meaning of Article 2A of the Uniform Commercial
Code.  The parties agree that the Lessor has not selected, manufactured or
supplied the Equipment.  Lessee acknowledges receipt of a copy of the contract
evidencing Lessor’s purchase of the Equipment.  THERE ARE NO WARRANTIES OR OTHER
RIGHTS PROVIDED TO THE LESSEE BY THE LESSOR OR THE SUPPLIER OF THE EQUIPMENT IN
CONNECTION WITH THIS LEASE EXCEPT AS DESCRIBED HEREIN.

4.              NET AND NONCANCELLABLE LEASE.  This is a net Lease and Lessee’s
obligation to pay the rent and other amounts due hereunder is unconditional and
not subject to abatement, reduction or setoff, defense, counterclaim or
interruption of any kind.  The Lease is a non-cancelable lease and will not
terminate in the event of any damage to or destruction of the Equipment.  The

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Lease may be terminated only as expressly provided herein.  To the extent
permitted by law, Lessee waives the right to (i) cancel the Lease; (ii)
repudiate the Lease after the equipment has been Accepted; (iii) reject the
Equipment; (iv) revoke acceptance of the Equipment; (v) recover damages from
Lessor for any breaches of warranty or for any other reason; (vi) grant a
security interest in the Equipment to a third party (vii) deduct from rents all
or any part of claimed damages resulting from Lessor’s default, if any. 
Lessee’s payment of the rent shall not act to waive any claim that Lessee may
have against Lessor under the terms of this Agreement.

5.              TERM.  The initial term of the Lease (the “Initial Term”)
respecting the Equipment shall commence on the 1st day of the month following
acceptance of the equipment by Lessee and end upon the full performance and
observance by Lessee of each and every term, condition and covenant set forth in
the Lease.  Except as otherwise provided in the Lease Schedule or any amendment
thereto, Lessee or Lessor may terminate the Lease at the expiration of the
Initial Term by giving the other at least 90 days prior written notice of
termination.  If neither Lessee nor Lessor gives such notice, then the term of
the Lease shall be extended automatically on the same rental and other terms set
forth herein until terminated by either Lessee or Lessor giving the other at
least 90 days prior written notice of termination.

6.              SECURITY DEPOSIT AND ADVANCE RENTALS.  The Security Deposit or
Advance Rentals specified on each Lease Schedule shall be paid by Lessee to
Lessor upon the signing of the Lease Schedule and may be deposited in Lessor’s
general operating account.  During the term the Security Deposit is held, Lessor
shall pay Lessee interest on the Deposit semi-annually, at a current market rate
for a 12 month CD.  Following completion of the term of the Lease for that
Equipment, and provided there has been no breach of the Lease by Lessee, Lessor
shall refund Lessee the Security Deposit that relates to Equipment whose lease
term has expired.  No security deposit shall be applied by the Lessee to the
last rent payment.  Any Advance Rentals paid by Lessee shall be applied to the
last rent payments due during the Initial Term of the Lease, except as otherwise
agreed by Lessor.

7.              COMMENCEMENT; RENTAL PAYMENTS; INTERIM RENTAL; LATE FEES.  The
Lease shall commence upon the written acceptance hereof by Lessor and shall end
upon full performance in observance by Lessee of each and every term, condition,
and covenant set forth in the Lease and any extensions thereof.  The monthly
rental payments shall be in advance and shall be in the amount and frequency as
provided in the Lease Schedule.  The first such rental payment shall be made on
the 1st day of the month following the date on which the equipment is accepted
by the Lessee.  In addition to regular rentals, Lessee shall pay to Lessor
interim rent, which shall be a pro rata portion of the monthly rental charges
based on a daily rental charge of one-thirtieth (1/30th) of the monthly rental
calculated from the date of which the equipment is accepted by Lessee to the end
of the month and shall be due and payable upon Lessee’s receipt of invoice from
Lessor.  Lessee agrees to pay Lessor late charges equal to five percent (5%) of
the amount due for scheduled payments not made when due.

8.              TITLE.  Title to the Equipment shall at all times remain in
Lessor and Lessee shall protect and defend the title of Lessor and keep it free
of all claims and liens other than those of Lessee hereunder or created by
Lessor.  If the Lease shall be construed by a court to be a lease “intended as
security” and not a “true” lease, then Lessee, to secure all of Lessee’s payment
and performance obligations under the Lease, hereby grants to Lessor a first
priority security interest in the Equipment (including, without limitation, all
inventory, fixtures or other property comprising the same) together with all
related software (embedded therein or otherwise) and general intangibles, all
additions, attachments, accessories thereto whether or not furnished by the
supplier of the Equipment, all subleases, chattel paper, security deposits
relating thereto, and any and all substitutions, replacements or exchanges for
any such item of Equipment or other collateral and any and all insurance or
other proceeds of the property and other collateral to which a security interest
is granted.  Lessor hereby warrants and covenants to Lessee that Lessee shall
and may quietly have hold and enjoy the Equipment free from anyone claiming
through Lessor.

9.              LAWS AND TAXES.  LESSEE SHALL COMPLY WITH ALL LAWS AND
REGULATIONS RELATING TO THE EQUIPMENT AND ITS USE AND SHALL PROMPTLY PAY WHEN
DUE ALL SALES, USE, PROPERTY, EXCISE AND OTHER TAXES AND ALL LICENSE AND
REGISTRATION FEES NOW OR HEREAFTER IMPOSED BY ANY GOVERNMENTAL BODY OR AGENCY
UPON THE EQUIPMENT OR ITS USE OR THE RENTALS HEREUNDER.  Lessee shall prepare
and file all tax returns relating to taxes for which Lessee is responsible
hereunder which Lessee is permitted to file under the laws of the applicable
taxing jurisdiction.  Lessee agrees to indemnify and hold Lessor and any
Assignee (as defined below) harmless from, against and in respect of any and all
such taxes, with the exception of Lessors normal income taxes associated with
the Lease.

10.       TAX BENEFIT INDEMNITY.  If (a) Lessor incurs a disallowance,
elimination, recapture, reduction or disqualification, in whole or in part, or
any deduction, credit or other tax benefit claimed by Lessor for federal, state,
or local income tax purposes in any tax law change), (b) Lessor shall lose the
right to claim any Tax Benefit for any reason (including any tax law change),
(c) any tax law change should adversely affect Lessor’s anticipated net after
tax rate of return over the term of this Lease (any

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one or more of the occurrences in (a), (b) or (c) above being hereafter called a
“Tax Loss”), then, upon demand by Lessor, the Lessee shall immediately pay to
Lessor as additional rent the amount which will (after deduction therefrom of
all taxes, interest, additions to tax or penalties that have been or will be
required to be paid by Lessor at the highest marginal corporate tax rate under
all applicable federal, state, and local laws), in Lessor’s reasonable opinion,
compensate Lessor for the Tax Loss.  In any event, Lessees obligation shall be
limited to 5% of the rent otherwise payable to Lessor.

11.       INSPECTION.  With reasonable notice, Lessor shall have the right
during normal business hours to enter into and upon the premises where the
Equipment is located for the purpose of inspecting the same or observing its
use.

12.       ALTERATIONS.  Without the prior written consent of Lessor, Lessee
shall not make any alterations, additions or improvements to the Equipment.  Any
alteration, addition or improvement shall become the property of Lessor and part
of the Equipment for all purposes hereunder.

13.       REPAIRS.  Lessee, at its own cost and expense, shall keep the
Equipment in good repair, condition and working order and shall furnish or
purchase any and all parts, mechanisms, devices and labor required to keep the
Equipment in good mechanical and working order.  If indicated on the applicable
Lease Schedule, Lessee shall at its own expense cause the Equipment to be
covered by a maintenance contract, with a service organization acceptable to
Lessor, at all times during the lease term and until the Equipment has been
returned to Lessor.

14.       LOSS OR DAMAGE.  From the date the supplier ships the Equipment to
Lessee or the date Lessor confirms Lessee’s purchase order or contract to
Supplier, Lessee hereby assumes and shall bear the entire risk of loss for
theft, damage, destruction or other injury to the Equipment from any and every
cause whatsoever.  NO SUCH LOSS OR DAMAGE SHALL IMPAIR ANY OBLIGATION OF LESSEE
UNDER THE LEASE WHICH SHALL CONTINUE IN FULL FORCE AND EFFECT.  In the event any
item of Equipment shall become lost, stolen, destroyed, damaged beyond repair or
rendered permanently unfit for any reason, or in the event of condemnation or
seizure of the Equipment (or any part thereof) and irrespective of payment from
any insurance coverage maintained by Lessee, but applying full credit there for,
Lessee shall at the option of Lessor, (a) place the Equipment in good repair,
condition and working order and otherwise acceptable to Lessor; or (b) replace
the Equipment (or any part thereof) with like equipment having a fair market
value equal to that of the replaced equipment prior to it being so affected and
in good repair, condition and working order and transfer clear title to such
replacement equipment to Lessor whereupon such replacement equipment shall be
deemed the Equipment for all purposes; or (c) pay to Lessor the following
amounts: (i) if the Lease provides for a Casualty Loss Value of the Equipment,
the total rent due and owing at the time of such payment plus an amount
calculated by Lessor which is equal to the Casualty Loss Value as defined in and
attached to each Lease Schedule; (ii) if the Lease does not provide for a
Casualty Loss Value of the Equipment, not as a penalty, but herein liquidated
for all purposes, an amount equal to the sum of (A) any accrued and unpaid rent
as of the date the loss, theft, damage or destruction occurred (“Date of Loss”)
plus interest at the rate of eighteen percent (18%) per annum; (B) the present
value of all future rentals reserved in the Lease and contracted to be paid over
the unexpired term of the Lease using a discount rate of six percent (6%) per
annum; (C) the present value of the agreed upon or estimated residual value of
the Equipment as of the expiration of this Lease or any renewal thereof using a
discount rate of six percent (6%) per annum; and (D) any other amount otherwise
then due and owing under the Lease or which otherwise will become due and owing
irrespective of the fact that the Equipment has been damaged, destroyed, lost or
stolen including any additional taxes or other charges that may otherwise arise
by reason of the damage, destruction, loss or theft of the Equipment.  Upon
Lessor’s receipt of such payment, Lessee shall be entitled to the proceeds of
any recovery in respect of any such item of Equipment from insurance or
otherwise to the extent that said proceeds do not exceed the Casualty Loss Value
of such item of Equipment, and any excess shall be retained by Lessor.

15.       DELIVERY AND ACCEPTANCE.  Unless otherwise provided in a Lease
Schedule, Lessee shall pay the cost of transportation of the Equipment to
Lessee.  Lessee shall bear the risk of loss during such transportation.  Upon
delivery Lessee shall sign and deliver to Lessor an acceptance certificate
satisfactory to Lessor.

16.       LOCATION OF USE.  Unless otherwise stated on a Lease Schedule, the
Lessee will cause the Equipment subject to that Lease Schedule to be located
(after initial delivery to Lessee) at Lessee’s address stated at the heading of
this Agreement until such time as that Equipment is returned to Lessor or
returned in accordance with Lessor’s instructions.

17.       RETURN OF EQUIPMENT.  Upon the expiration of or earlier termination of
this Lease with respect to an item of Equipment, Lessee shall return the same
directly to Lessor at its offices in Minneapolis, Minnesota, or such other
location as Lessor designates, in good repair, condition and working order
(ordinary wear and tear resulting from proper use thereof alone excepted),
completed and ready for further use.  Lessee shall pay all transportation and
other expenses relating to such return.  Lessee authorizes Lessor to sell the
Equipment while located upon Lessee’s premises.  In the event Lessee breaches
this

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section, Lessor may, in lieu of its other remedies, require Lessee to purchase
the items of Equipment as to which the breach as occurred on the same terms as
if Lessee were exercising an option to purchase such Equipment under this Master
Lease Agreement (and whether or not such an option was granted to Lessee).

18.       INSURANCE.  Lessee at its expense shall provide insurance coverage in
amounts and with insurance carriers acceptable to Lessor for all risks of:  (a)
loss, theft, damage or destruction to the Equipment, with coverage not less than
the original cost of the Equipment (excluding depreciation); and (b) public
liability and property damage covering personal injuries, death or property
damage resulting from the ownership, maintenance, use, operation or
transportation of the Equipment, with coverage of not less than $1,000,000 per
occurrence.  Each of the insurance policies providing said coverage shall name
Lessor and any Assignee as loss payee and additional insured, provide that the
policy may not be canceled or materially altered without thirty (30) days prior
written notice to Lessor, and be primary without right of contribution from any
insurance carried by Lessor.  Lessee shall, if requested by Lessor, provide
Lessor with a certificate(s) evidencing said coverage prior to taking possession
of the Equipment.  Lessee hereby irrevocably appoints Lessor as Lessee’s
attorney-in-fact, limited to a time period in which Lessee is in default, to
make claim for, receive payment of, and execute and endorse all instruments,
checks or drafts for loss or damage or returned premium under any insurance
policy of Lessee’s.

19.       INDEMNITY.  Lessee shall and does hereby agree to indemnify, defend
and hold harmless Lessor and any Assignee, and each of their directors,
officers, employees, agents or affiliates from any and all claims, demands,
actions, suits, proceedings, costs, expenses, damages, and liabilities
(including attorneys’ fees) arising out of, connected with or resulting from the
delivery, possession, use, operation, maintenance, repair or return of Equipment
by Lessee or its employees, agents, customers or invitees or vendors.  Lessee’s
obligations under the preceding sentence shall survive expiration of any rental
term or the termination of the Lease.  Indemnity shall not apply to occurrences
that take place after the surrender and acceptance of the equipment to Lessor.

20.       REPRESENTATIONS AND WARRANTIES BY LESSEE.  Lessee represents and
warrants to Lessor that:  (a) the Lease constitutes the Lessee’s legal, valid
and binding obligation and is enforceable against Lessee in accordance with its
terms; (b) Lessee’s entry into and performance under the Lease will not result
in any breach, default or violation under Lessee’s charter documents (articles
of incorporation and bylaws in the case of a corporation or partnership
agreement in the case of a partnership or articles of organization and operating
agreement in the case of a limited liability company) or any other agreement to
which Lessee is a party or to which it or its property is subject; (c) there are
no suits or proceedings pending or threatened before any court, government
agency or arbitrator which, if determined adversely to Lessee, would have a
material adverse effect on its financial condition or ability to perform its
obligations under the Lease; (d) that any financial statements or other
information which Lessee has furnished Lessor concerning the business or
condition of Lessee was true, correct and complete at the time furnished or as
of the date of such financial statements; (e) the Equipment shall remain
personal property; with respect to any Equipment that is the subject of any sale
and leaseback transaction pursuant hereto, Lessee has good title to, rights in,
and/or power to transfer all of the same.  The Equipment is removable from and
is not essential to the premises upon which it is located regardless of its
attachment to realty, and Lessee agrees to take such action at its expense as
may be necessary to prevent any third party from acquiring any interest in the
Equipment as a result of its attachment to realty with respect to all of the
Equipment leased hereto.

21.       FINANCIAL STATEMENTS.  Upon request by Lessor, Lessee will promptly
provide statements for its most recently completed fiscal year end or quarter
and any other financial information reasonably requested.

22.       ASSIGNMENT BY LESSOR.  Lessor may from time to time without notice to
Lessee sell, assign, pledge, transfer or convey to a third party (each an
“Assignee”) all or part of Lessor’s right, title and interest in the Lease, the
Equipment, or any sums payable therefor.  Lessor may grant a security interest
in the same to such Assignee as collateral security for any loans or advances
made or to be made to Lessor by such Assignee.  Lessee, upon receipt of notice
of any such transfer, assignment or security interest and instructions from
Lessor shall pay its obligations under the Lease to the Assignee (or to any
other party designated by the Assignee).  Upon any such transfer, assignment or
granting of a security interest by Lessor, Lessee’s obligations hereunder with
respect to Assignee, including, without limit, its obligation to pay the
Assignee rents and other sums due and to become due under the Lease, shall be
absolute and unconditional, and shall not be subject to any abatement,
reduction, recoupment, defense, offset or counterclaim for any reason, including
but not limited to any defect in the Equipment, the condition, design, operation
or fitness for use or any loss or destruction of the Equipment or any part
thereof, the prohibition of or other restriction against Lessee’s use of the
Equipment, the interference with such use by any person or entity, any failure
by Lessor to perform any of its obligations herein contained, or any other
cause, whether similar or dissimilar to the foregoing.  Upon notice of any
intended transfer, assignment, or granting of a security interest: (a) Lessee
shall promptly submit to Lessor such documents as may be reasonably required by
the intended Assignee, in form and substance satisfactory to the intended
Assignee, including without limitation:  (1) a certificate that the Equipment
was delivered and accepted; (2) if

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Lessee is a corporation, a certified copy of resolutions adopted by Lessee’s
Board of Directors authorizing execution of the Lease; (3) an acknowledgment to
the Lessor’s transfer, assignment or granting of a security interest; (4) a UCC
Financing Statement;  (b) in the event of any such assignment, transfer, or
granting of a security interest:  (1) Lessee shall send copies of any notices
which are required hereunder to be sent to Lessor to the Assignee as well as to
Lessor; (2) Lessee shall not permit the Lease to be amended or any provisions
thereof to be waived without the prior written consent of the Assignee; (3)
Lessee agrees not to look to the Assignee to perform any of Lessor’s obligations
hereunder; (4) Lessee agrees that Assignee shall be exclusively entitled to all
of the rights and remedies provided to the Lessor under the Lease; (c) no such
transfer, assignment or granting of a security agreement by Lessor shall relieve
Lessor of any of its obligations under the Lease or shall limit Lessee’s rights
to look to Lessor for the performance of such obligations.

23.       ASSIGNMENT BY LESSEE.  LESSEE SHALL NOT ASSIGN, TRANSFER, PLEDGE, OR
HYPOTHECATE THE LEASE, THE EQUIPMENT OR ANY PART THEREOF, OR ANY INTEREST
THEREIN.  LESSEE SHALL NOT SUBLET OR LEND THE EQUIPMENT, OR ANY PART THEREOF, OR
PERMIT THE EQUIPMENT OR ANY PART THEREOF TO BE USED BY ANYONE OTHER THAN LESSEE
WITHOUT THE PRIOR WRITTEN CONSENT OF LESSOR (OR FOLLOWING AN ASSIGNMENT, ANY
ASSIGNEE OF WHICH THE LESSEE HAS KNOWLEDGE OF) WHICH CONSENT WILL NOT BE
UNREASONABLY WITHHELD.  If Lessee is a corporation or a partnership, the change
in ownership of 50% or more of the ownership interest in Lessee during the term
of the Lease without the written consent of Lessor constitutes a prohibited
assignment hereunder.  Subject always to the foregoing, the Lease inures to the
benefit of, and is binding upon the heirs, legatees, personal representatives,
successors, and assigns of the parties hereto.  No sale, assignment or sublease,
whether authorized by Lessor or in violation of the terms hereof, shall relieve
Lessee of its obligations and Lessee shall remain primarily liable hereunder and
under each Lease Schedule.  Assigns shall become bound as a “new debtor” to the
Lease as set forth under UCC § 9-203(e).  Lessor will consider such Assignment
if the Assignee’s financial condition is equal to or superior to that of Lessee
as may be determined by Lessor’s Chief Financial Officer and accountants.

24.       DEFAULT.  Any one of the following events shall constitute an “Event
of Default” hereunder:  (a) Lessee shall fail to pay when due any installment of
rent or other amount due hereunder; (b) Lessee shall fail to observe or perform
any other agreement to be observed or performed by Lessee hereunder; (c) Lessee,
any guarantor of the Lease, or any partner of Lessee if Lessee is a partnership
shall cease doing business as a going concern or make an assignment for the
benefit of creditors; (d) Lessee, any guarantor of the Lease, or any partner of
Lessee if Lessee is a partnership shall voluntarily file, take any action to
authorize the filing, or have filed against it involuntarily, a petition for
liquidation, reorganization, adjustment of debt or similar relief under the
federal or state bankruptcy or insolvency law; (e) a trustee, receiver, or
liquidator be appointed for Lessee, any guarantor of the Lease, or for all or a
substantial part of the assets of Lessee or any guarantor; (f) any individual
Lessee or individual guarantor of the Lease, or partner of Lessee if Lessee is a
partnership, shall die; (g) an event of default shall occur under any other
obligation Lessee or any guarantor of the Lease owes to Lessor; (h) an event of
default by Lessee shall occur under any agreement involving Lessee’s or a
guarantor’s indebtedness to a lender for borrowed money; or (i) Lessee shall
have terminated its corporate existence, consolidated with, merged into, or
conveyed or leased substantially all of its assets as an entity to any person
unless:(i) such person executes and delivers to Lessor an agreement satisfactory
in form and substance to Lessor, in its sole discretion, containing such
person’s effective assumption and its agreement to pay, perform, comply with and
otherwise be liable for all of Lessee’s obligations having previously arisen, or
then or thereafter arising, under the Lease together with any documents,
agreements, certificates, opinions and filings by Lessor; and (ii) Lessor (and
any Assignee) is satisfied as to the creditworthiness of such person.

25.       REMEDIES.  Upon the occurrence of an Event of Default and at any time
thereafter, Lessor or Assignee may exercise from time to time any one or more of
the following remedies:  (a) terminate this Lease as to any portion or all of
the Equipment; (b) take immediate possession of any or all of the Equipment;
wherever situated, and for such purpose enter upon any premises without
liability for so doing or requirement to post bond in any legal proceeding; (c)
hold, use, lease, sell or otherwise dispose of any or all of the Equipment in
such manner as Lessor in its sole discretion may decide.  With respect to any
exercise of its rights to recover and/or dispose of any Equipment, Lessee
acknowledges and agrees that Lessor shall have no obligation, subject to the
requirements of commercial reasonableness, to clean up or otherwise prepare the
Equipment for disposition; (d) accelerate the due date of all remaining rent
payments due hereunder for the entire remaining Initial Term of this Lease or
any amendment thereto, including any renewal term then in effect, whereupon said
amounts shall be immediately due and payable; (e) recover the sum of: (i) any
accrued and unpaid rent, plus (ii) the present value of all future rentals
reserved in this Lease and contracted to be paid over the unexpired Initial Term
of this Lease (or any renewal period then in effect), discounted at the rate of
four percent (4%) per annum; plus (iii) the anticipated residual value of the
Equipment as of the expiration of this Lease or any renewal thereof discounted
at the rate of four percent (4%) per annum, (iv) any indemnity payment, if then
determinable; (v) all reasonable costs and expenses incurred by Lessor in any
repossession, recovery, storage, repair, sale, re-lease or other disposition of
the Equipment, including but not limited to costs of transportation, possession,
storage, refurbishing, advertising and broker’s fees together with all
attorney’s fees and cost incurred in connection therewith or

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otherwise resulting from Lessee’s default (including any incurred at trial, on
appeal or any other proceeding); and (vi) the value of all Tax Benefits lost to
Lessor as a result of Lessee’s default or the enforcement by Lessor of any
remedy; plus interest on each of the foregoing at the rate of one and one-half
(1½%) per month (“default interest”) (f) expend such monies as Lessor deems
appropriate to cure or mitigate the effect of the Event of Default, or to
protect the Lessor’s interest in the Equipment and this Lease, with all such
sums to be immediately reimbursed to Lessor by Lessee; (g) setoff Lessee’s
Security Deposit or any other property of Lessee held by Lessor against any
amount owed by Lessee to Lessor; and (h) exercise any other remedy permitted by
law, equity or any other agreements with Lessee or any guarantor of this Lease. 
No remedy given in this paragraph is intended to be exclusive and each shall be
cumulative.  No express or implied waiver by Lessor of any Event of Default
shall constitute a waiver of any subsequent Event of Default.

26.       NOTICES.  Any written notices hereunder shall be deemed to have been
given when delivered personally or deposited in the United States mails, postage
prepaid, certified mail, return receipt requested, and if to Lessee, mailed to
its address set forth at the heading of this Agreement or to such other address
as may be last known to Lessor, and if to Lessor, addressed to Carlton Financial
Corporation, 1907 E. Wayzata Boulevard, Suite 180, Wayzata, MN 55391 or such
other address as Lessor may hereafter specify in a written notice to Lessee.

27.       LABELING.  Lessee shall keep all Equipment free from any marking or
labeling which might be interpreted as a claim or ownership thereof by Lessee or
any party other than Lessor or anyone so claiming through Lessor.  If Lessor
requests Lessee shall cause the Equipment to be plainly marked or tagged to
indicate Lessor’s interest in the Equipment.

28.       FURTHER ASSURANCES.  Lessee agrees to execute or otherwise
authenticate and deliver such other documents, records, financing statements or
instruments necessary to effect the transactions contemplated by this Lease or
requested by Lessor to document or protect Lessor’s ownership interest in the
Equipment.  Lessee authorizes Lessor to file all documents (including all UCC
financing statements and amendments thereto) that Lessor deems necessary to
perfect its interest in the Lease and Equipment.  Lessee shall provide written
notice to Lessor not less than thirty (30) days prior to any contemplated change
in the name, jurisdiction of organization or address of the chief executive
officer of Lessee, or any change in its state organizational identification
number (if applicable).

29.       ENTIRE AGREEMENT.  The Lease shall not be amended, altered, or
changed, or any obligation hereunder waived, except by written agreement signed
by the parties hereto.  No agent or employee of Lessor shall have the power to
waive any of the terms or provisions hereof, or to incur additional obligations
on behalf of Lessor, unless such waiver or additional obligations are evidenced
by an agreement in writing signed by a duly authorized officer of Lessor and by
the Lessee.  No agent or employee of Lessor shall have the authority to receive
any payment of rentals or other sums accruing hereunder except remittances made
payable to the order of Lessor for purposes of forwarding same to Lessor, and no
agent or employee shall have any power to endorse for collection or otherwise
any of those remittances.

30.       SEVERABILITY.  If any provision of the Lease is held invalid, that
invalidity shall not affect the other provisions that can be given without the
invalid provisions, and to this end the provisions of the Lease are declared to
be severable.

31.       GOVERNING LAW; FORUM; WAIVER OF JURY TRIAL.  This Lease shall be
deemed entered into in Minnesota and governed by the laws of the State of
Minnesota without regard to the conflicts of laws principal of that state. 
Lessor and Lessee hereby irrevocably consent to the nonexclusive personal
jurisdiction of and venue in any United States or State of Minnesota court
sitting in Minneapolis or St. Paul, Minnesota over any dispute arising under or
involving this Lease or any guaranty of the Lessee’s obligations under the
Lease.  LESSOR AND LESSEE EACH WAIVES ITS RIGHTS, IF ANY, TO A JURY TRIAL.

32.       POWER OF ATTORNEY.  Lessee irrevocably authorizes and appoints Lessor
as its attorney in fact solely to complete, amend and execute on Lessee’s behalf
financing statements in connection with the Lease and to conform the description
of the property (including serial numbers) and any such financing statements or
other documentation.  Lessee will also promptly execute and deliver to Lessor
such further documents and take further action as Lessor may request to more
effectively carry out the intent and purpose of the Lease.

IN WITNESS WHEREOF, the parties hereunto set their hands as of the date first
written above.

LESSOR:

LESSEE:

CARLTON FINANCIAL CORPORATION

GRANITE CITY FOOD & BREWERY LTD.

 

 

 

 

By:

/s/ Cheryl VanBrunt

 

By:

/s/ Steven J. Wagenheim

 

 

 

Title:

Corporate Secretary

 

Title:

President and Chief Executive Officer

 

 

 

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Exhibit A

 

LEASE SCHEDULE

 

Master Lease Agreement dated:

 

Lease Schedule No.

 

 

 

Lessor:

 

Carlton Financial Corporation

 

 

1907 E. Wayzata Blvd., Suite 180

 

 

Wayzata, MN 55391

 

 

 

Lessee:

 

 

 

 

 

Supplier:

 

Various

 

 

 

Description of Equipment:

 

 

 

QUANTITY

 

SERIAL NUMBER

TYPE & MODEL NUMBER

 

 

 

 

 

Location of Equipment (if different from Lessee’s address):

 

 

 

 

 

 

Total Cost

 

 

 

 

 

 

$

 

 

 

 

 

 

 

Lease Commencement Date:

 

 

 

 

 

 

 

 

Schedule of Payments

 

Total Basic Rent

 

 

 

 

$

 

Initial Term in months:  

 

 

 

 

 

 

 

 

Initial Payment

 

Basic Rental Payment

 

Advanced Payment

Rental Payment Period

 

Due Date: UPON RECEIPT

 

No.

 

$

 

 

Amount: $

 

at: $

 

 

 

 

 

 

Due on the 1st of the month

 

Security Deposit

 

 

Plus applicable sales & use tax

 

Plus applicable sales & use tax

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

x Monthly

 

o Annually

 

 

 

 

o Quarterly

 

o Other-see additional provisions

o Semi-annually

 

 

 

 

 

 

 

ADDITIONAL PROVISIONS:

 

1.     INCORPORATION OF THE STANDARD TERMS AND CONDITIONS.  This Lease Schedule
incorporates the terms and conditions of the Master Lease Agreement dated
                            between Lessor and Lessee.  Capitalized terms used
in this Lease Schedule and not otherwise defined shall have the meanings
ascribed thereto in the Master Lease Agreement.

 

2.     ENTIRE AGREEMENT.  This Lease Schedule, together with the incorporated
terms and conditions contained in the Master Lease Agreement, constitutes the
entire agreement between Lessee and Lessor and supersedes all prior and
contemporaneous writings, understandings, and agreements.  No waiver, consent,
modification or change of terms of this Lease shall bind either party unless in
writing signed by both parties, and then such waiver, consent, modification, or
change shall be effective only in the specific instance and for the specific
purpose given.  Any terms and conditions of any purchase order or other
documents submitted by Lessee in connection with this Lease which are in
addition to or inconsistent with the terms and conditions of this Lease will not
be binding on Lessor and will not apply to this Lease.   

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Lessee by the signature below of its authorized representative acknowledges that
it has read this Lease Agreement, understands it, and agrees to be bound by its
terms and conditions.

 

DATED:

 

 

 

 

 

 

 

Lessor: Carlton Financial Corporation

 

Lessee:

 

 

 

By:

 

 

 

By:

 

 

Its:

 

 

 

Its:

 

 

 

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