** **

**EXHIBIT10.5**

** **

**AMENDEDAND RESTATEDMASTER LEASE**

 

 

**BETWEEN**

 

 

**ARG PROPERTIES II, LLC,**

 

**as Landlord**

 

**AND**

 

**ARG ENTERPRISES, INC.,**

 

**As Tenant**

 

 

**Dated: May 11, 1998**

 

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**LEASE**

 

In consideration of the rents and covenants set forth below, Landlord(as hereinafter defined) hereby leases to Tenant (as hereinafter defined), andTenant hereby leases from Landlord, the following Premises (as hereinafterdefined) upon the following terms and conditions:

***ARTICLE 1*****FUNDAMENTAL LEASE PROVISIONS**

 

This Amended and Restated Master Lease amends and restates that certainMaster Lease by and between ARG Properties I, LLC, a predecessor in interest toLandlord (as hereinafter defined) and Tenant (as hereinafter defined) datedSeptember 11, 1996, as heretofore amended, as it applies to thePremises (as hereinafter defined), in its entirety.

 
| Date:                       | May 11, 1998                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Commencement Date:          | May 11, 1998                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Landlord:                   | ARG Properties II, LLC, a California limited liability company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Tenant:                     | ARG Enterprises, Inc., a California corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Tenant’s   Trade Name: | Stuart Anderson’s Black Angus or Stuart Anderson’s Cattle Company  restaurants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Guarantor:                  | American Restaurant Group, Inc., a Delaware corporation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Guaranty                    | Guaranty of Lease dated May 11, 1998 by Guarantor in favor  of Landlord                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Lease Term:                 | Twenty-Five (25) years, commencing on the Commencement Date and  ending on June 1, 2023, with three (3) renewal options of five (5) years  each.  (Article 4)                                                                                                                                                                                                                                                                                                                                                                                                              |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| Annual  Rent:               | One Million Nine Hundred Thirty-Seven Thousand Three Hundred Dollars  ($1,937,300), subject to adjustment as hereinafter provided.  (Article 6, Section 6.01)                                                                                                                                                                                                                                                                                                                                                                                                              |
|                        |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                        | The Annual Rent shall be payable on the first day of each month,  commencing on June 1, 1998, in twelve (12) equal installments each in the  amount of One Hundred Sixty-One Thousand Four Hundred Forty-One and 67/100  Dollars ($161,441.67) during each year of the term of this Lease subject to  proration or adjustment as hereinafter provided. Annual Rent is allocated on  Exhibit D attached hereto and made a part hereof among the eight (8)  properties constituting the Premises for certain purposes specified in this  Lease.  This initial allocation  of |

 

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|                   | Annual  Rent shall be subject to proration or adjustment as hereinafter provided.                                                                                                                                                                                                                                                                                                                                                                                                                     |
|------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Addresses for  Notice: | To Landlord:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | ARG Properties II, LLC  c/o Griffin Capital  10940 Wilshire Blvd., Suite 1600  Los Angeles, California 90024  Attn:       Kevin  A. Shields  Fax:         (310)  443-4117

  |
| To Tenant:             | ARG Enterprises, Inc.  6th Floor  450 Newport Center Drive  Newport Beach, CA  92660  Attn:       Chief  Financial Officer  Fax:         (949)  721-8941

                                                                                                                                                                                                                                                            |
| With a copy to:        | American Restaurant Group, Inc.  Suite 201  4410 El Camino Real  Los Altos, CA  94022  Attn:       Legal  Department  Fax:         (650)  949-6420

                                                                                                                                                                                                                                                                  |
| With a copy to:        | Stuart Anderson’s Restaurants  4410 El Camino Real, Suite 201  Los Altos, California 94022  Attn:       Director  of Real Estate  Fax:         (650)  949-6425

                                                                                                                                                                                                                                                      |
|                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Premises:              | That certain real property  described in Exhibit A attached hereto, and all appurtenances, easements and  rights of way now or subsequently pertaining thereto, together with all  improvements now or hereafter located thereon, consisting of eight (8)  restaurants known as either Stuart Anderson*s Black Angus or Stuart  Anderson*s Cattle Company restaurants.   References to the “Premises” shall refer to one location, or to all  locations, as the context shall require. |

 

 

References in this Article 1 to other Articles are for convenience anddesignate some of the other Articles where references to the Fundamental LeaseProvisions appear.  Each referencein this Lease to any of the Fundamental Lease Provisions contained in thisArticle 1 shall be construed to incorporate all of the terms provided undersuch Fundamental Lease Provisions. In the event of any conflict between any Fundamental Lease Provision andthe balance of this Lease, the latter shall control.

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***ARTICLE 2***

**EXHIB****ITS**

 

Thefollowing are attached hereto as Exhibits and made a part of this Lease:

 

EXHIBIT A’Description of the Premises

 

EXHIBIT B’Form of Subordination, Non-Disturbance and AttornmentAgreement

 

EXHIBIT C’Form of Notice of Non-Responsibility

 

EXHIBIT D’Allocated Rent Schedule

 

In the event of any conflict between any of the above-referencedExhibits and the balance of this Lease, the Exhibit shall control.

 

***ARTICLE 3*****PREMISES**

** **

Landlord hereby leases and demises unto Tenant and Tenant hereby leasesand takes from Landlord, for the term, at the rental, and upon the terms,covenants, and conditions hereinafter set forth, the property referred to inArticle 1 as the Premises and described on Exhibit A attached hereto.

 

***ARTICLE 4*****TERM**

 

4.01         Term.  The term of this Lease shall be theterm specified in Article 1 hereof (the initial term and any extensionsexercised by Tenant thereof are hereinafter referred to as the “Lease Term”)and shall commence on the Commencement Date.

 

4.02         Option to Extend Lease Term.  Tenant shall have the option to extendthe initial term of this Lease with respect to any of the Premises that Tenantmay elect to continue to lease from Landlord for three (3) additional,successive periods of five (5) years each (each, an “Extension Period”) on thesame terms, covenants and conditions of this Lease. In the event Tenant electsto exercise the option(s), Tenant shall provide Landlord written notice ofTenant’s exercise of the option(s) not less than ninety (90) days prior to theend of the then-current term, such notice shall identify each of the Premiseswhich Tenant has elected to remain subject to this Lease during the applicableExtension Period and is to be given in the manner provided in Section 25.04 ofthis Lease.  Provided that Tenanthas duly execised its option to extend the term of this Lease as set forthherein and further provided that Tenant is not in default under this Lease atthe end of the then current term of this Lease, this Lease shall be amended toreflect the exclusion of any of the Premises from the Lease and thecorresponding reduction in the Annual Rent in connection with Tenant’s exerciseof the applicable extension option. Tenant’s right to exercise the foregoing option(s) is conditioned uponTenant’s performance of all of the duties and obligations on its part to beperformed under this Lease so that, at the time of the exercise of suchoptions, Tenant shall not be in default hereunder.  In the event that Tenant elects to extend

 

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the initial term of this Lease, the Annual Rent shall continue to beadjusted as provided in Section 6.02 of this Lease.

 

***ARTICLE 5*****LIENS**

 

Tenant shall do all things necessary to prevent the filing of anymechanics’ or other liens or encumbrances against the Premises, or any partthereof, or upon any interest of Landlord or any mortgagee or beneficiary undera deed of trust or any ground or underlying lessor in any portion of thePremises, by reason of work, labor, services, or materials supplied or claimedto have been supplied to Tenant, or anyone holding the Premises, or any partthereof, through or under Tenant. If any such lien or encumbrance shall at any time be filed against thePremises, or any portion thereof, Tenant shall either cause same to bedischarged of record within thirty (30) days after the date of filing of sameor, if Tenant in good faith determines that such lien should be contested,Tenant will give Landlord prior notice of Tenant’s intention to contest anysuch lien and, upon demand by Landlord, will procure and record a lien releasebond under applicable law in the amount prescribed by applicable law or if noamount is prescribed by applicable law in an amount equal to 150% of the lienamount.  If a final judgment isrendered against Tenant by a court of competent jurisdiction, or if thePremises or any portion thereof are in danger of being foreclosed upon as aresult of any such lien, Tenant will satisfy such judgment or lien atonce.  If Tenant does not post therelease bond or fails to pay any such adverse judgment or to discharge any lienin the event of any imminent foreclosure, then Landlord may post the bond orpay the judgment or discharge the lien, as applicable, and Tenant will promptlyreimburse Landlord for all sums paid by it in connection therewith, togetherwith the applicable Administrative Fee (as hereinafter defined).  Tenant shall give Landlord notice ofthe intended commencement date of any work, labor, services or material to beperformed or provided to any of the Premises or any portion thereof involvingtotal expenditures for any project in excess of one and twenty-five one hundredthspercent (1.25%) of the Annual Rent, as it may be adjusted from time to time asprovided herein, at least ten (10) days before said date, and in connectionwith the performance or provision of any such work, labor, services ormaterials, Tenant shall file and post onthe applicable Premises a notice of nonresponsibility on behalf of Landlord inthe form attached hereto as Exhibit C within any time period and in the mannerprescribed under the laws of the state(s) in which the Premises or applicableportion thereof is located in order to protect Landlord from responsibilityfor, and evidencing Tenant’s obligations with respect to, any of the matterscovered by this Article, and shall provide Landlord with a copy thereof.  Landlord shall also have theright and opportunity, to post and maintain on the Premises such notices,including notices of nonresponsibility and other similar notices, as areprovided for under the Laws of the state(s) in which the Premises are located,evidencing Tenant’s obligations with respect to any of the matters covered bythis Article and Landlord shall have the right to enter the Premises and postsuch notices at any reasonable time.

*** ***

***ARTICLE 6*****RENT**

 

6.01         Rent. Tenant covenants and agrees to pay for the use and occupancy of the Premises,the Annual Rent specified in Article 1 hereof, subject to increase pursuant tothe provisions of Section 6.02 hereof, in twelve (12) equal monthlyinstallments during each year of

 

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the Lease Term, in advance, on the first day of each calendar month,without any offset or deduction. Should the Lease Term commence on a day other than the first day of acalendar month, then the rental for such first fractional month shall becomputed on a daily basis for the period from the Commencement Date to the endof such calendar month at an amount equal to one three hundred sixty-fifth(1/365) of the Annual Rent for each day. Should the Lease Term end on a day other than the last day of a calendarmonth, then the rental for such fractional month shall be computed on a dailybasis at an amount equal to one three hundred sixty-fifth (1/365) of the AnnualRent for each day.  Rent shall bepaid in lawful money of the United States to Landlord at the address stated inArticle 1 or to such other persons or at such other places as Landlord maydesignate in writing to Tenant.

 

6.02        Rental Adjustments.  The Annual Rent payable under this Lease shall be increasedon October 1, 2001 and every five (5) years thereafter (each, an “IncreaseDate”) during the Lease Term as follows:

 

(a)           Thebasis for computing the increase shall be the Consumer Price Index for allUrban Consumers - All Items U.S. Cities Average, published monthly by theBureau of Labor Statistics of the United States Department of Labor (BasePeriod 1982-1984=100) (“Index”), published on September 20, 1996 forAugust, 1996, i.e., 157.3 (the “Beginning Index”).

 

(b)           Ifthe Index published for the date nearest the applicable Increase Date (the“Extension Index”) has increased over the Beginning Index, the Annual Rent willbe calculated by multiplying the then Annual Rent by a fraction, the numeratorof which is the Extension Index and the denominator of which is the BeginningIndex, not to exceed an increase equal to 10% of the Annual Rent in effectduring the five-year period immediately preceding the applicable Increase Date.

 

(c)           Inthe event the Extension Index is not available on the applicable Increase Date,Tenant will continue to pay the Annual Rent in effect immediately prior to theIncrease Date.  As soon aspracticable, Landlord will furnish Tenant with a true copy of the ExtensionIndex figure together with a computation of the increase in the Annual Rent forthe ensuing five-year period, if any, and an appropriate adjustment will bepaid within 30 days of Tenant’s receipt of Landlord’s statement.

 

(d)           Ifthe Index is changed so that the base year differs from that in effect on theCommencement Date, the Index shall be converted in accordance with theconversion factor published by the Bureau of Labor Statistics.  If the Index is discontinued or revisedduring the Lease Term, such other governmental index or computation with whichit is replaced will be used in order to obtain substantially the same result aswould be obtained if the Index had not been discontinued or revised.

 

6.03         Net Lease; Impositions.  This Lease is what is commonly called a“triple net lease,” it being understood that Landlord shall receive the AnnualRent set forth in Article 1 hereof, as increased pursuant to Section 6.02, freeand clear of any and all other impositions, taxes, liens, charges, or expensesof any nature whatsoever incurred in connection with the ownership andoperation of any of the Premises. In addition to the Annual Rent reserved by

 

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Article 1 hereof, as increased pursuant to Section 6.02, Tenant shallpay to the appropriate parties all impositions, insurance premiums, RealProperty Taxes (as defined below), operating charges, maintenance charges,construction costs, accounting and legal fees, and any other charges, costs andexpenses which arise or may be contemplated under any provision of this Leaseduring the Lease Term (collectively “Impositions”).  All of such Impositions shall constitute additional rent,and upon the failure of Tenant to pay any of such Impositions, Landlord shallhave the same rights and remedies as otherwise provided in this Lease for thefailure of Tenant to pay rent. Tenant shall furnish to Landlord, promptly upon the reasonable requestof Landlord, official receipts or other satisfactory proof evidencing paymentof any such Impositions.  UponTenant’s failure to pay any Real Property Taxes as provided herein, Landlordshall have the right, at Landlord’s option, to require Tenant to (a) promptlydeposit with Landlord funds sufficient for the payment of the current RealProperty Taxes required to be paid by Tenant hereunder; and (b) also depositone-twelfth of the current annual or annualized Real Property Taxes (or thoseof the preceding years if the current amounts thereof have not been fixed), onthe first day of each month in advance. It is the intention of the parties hereto that this Lease shall not beterminable for any reason by Tenant, and that Tenant shall in no event beentitled to any abatement of, deductions of any kind, offset or reduction inrent payable under this Lease, except as may otherwise be expressly set forthin this Lease.  Any present orfuture Law to the contrary shall not alter this agreement of the parties.

 

***ARTICLE 7*****USE OF THE PREMISES**

 

7.01         Use.  Tenantshall occupy and use each of the Premises solely for the operation of a StuartAnderson’s Black Angus or Cattle Company restaurant or any other lawful use,provided such other use does not decrease the market value of the Premises.

 

7.02         Compliance With Laws.

 

(a)           Tenantaccepts the Premises in its “AS IS” condition.  Tenant accepts each of the Premises “AS IS” in reliance uponTenant’s own knowledge as owner and/or occupier of the Premises prior tocommencement of this Lease. Landlord makes no representations or warranties of any type whatsoever,including without limitation, whether there has been or are currently anyviolations of any covenants or restrictions of record, or any applicable Lawsin effect regarding any of the Premises on the Commencement Date.

 

(b)           Tenantshall, at Tenant’s sole expense, comply in all material respects with allapplicable laws, ordinances, building codes, orders, zoning ordinances, rules,and regulations of any governmental authorities and with any directive of anypublic officer which shall impose any order or duty upon Landlord or Tenantwith respect to any of the Premises or the use or occupation thereof orrelating to the environment, health or safety with respect to any of thePremises or the use or occupation thereof (including, without limitation, anyrule of common law and judicial decisions and The Americans With DisabilitiesAct), and any covenants, conditions or restrictions of record relating to thePremises or the use or occupation thereof, in each case as now or hereafter ineffect (collectively, “Laws”).

 

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(c)           Notwithstandingany other provision of this Lease, Tenant shall not use or permit any of thePremises to be used in any manner which will result in waste or the creation ofa nuisance, and Tenant shall maintain each of the Premises free of anyobjectionable noises, odors, or disturbances; provided that, as betweenLandlord and Tenant only, odors and exhaust incidental to a restaurant,excluding odors of deteriorating food, will not be deemed a nuisance orobjectionable provided the same do not violate applicable Laws and do notsubject Landlord to any civil liability.

 

(d)           Notwithstandingany other provision of this Lease, in the event that any new Law which goesinto effect during any Extension Period requires an investment in any of thePremises in excess of 30% of the replacement cost of such Premises (exclusiveof land, foundations and footings), and which has an economic life in excess offive (5) years, Tenant, at its option, may elect to terminate this Lease as tosuch Premises only at any time during such Extension Period written notice toLandlord and payment to Landlord of all accrued rent and other obligationshereunder with respect to such Premises through the date of such termination,except as to obligations hereunder which expressly survive any termination ofthis Lease.

 

7.03         Permits and Licenses.  As between Landlord and Tenant, Tenantshall be solely responsible to apply for and secure any building permit orpermission of any duly constituted authority for the purpose of doing any ofthe things which Tenant is required or permitted to do under the provisions ofthis Lease.  Landlord shallcooperate as reasonably requested by Tenant to facilitate Tenant’s compliancewith this obligation but at no cost to Landlord.

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***ARTICLE 8*****UTILITIES**

 

8.01         Payment. Tenant shall pay to the utility companies or other parties entitled topayment the cost of all water, sewer, heat, air conditioning, gas, electricity,garbage collection, telephone, and other utilities and services provided to orfor any of the Premises, including connection fees and taxes thereon.

 

8.02         Interruption in Service.  Landlord shall not be liable in damagesor otherwise for any failure or interruption of any utility or other servicebeing furnished to any of the Premises subject to the provisions of Section11.04(b) hereof, and no such failure or interruption shall entitle Tenant toany abatement of, setoff of or reduction in the amounts payable to Landlordhereunder or otherwise entitle Tenant to terminate this Lease.

***ARTICLE 9*****TAXES**

 

9.01         Payment of Taxes.  Tenant shall pay the Real Property Taxes (as defined inSection 9.02) applicable to each of the Premises during the Lease Term.  Landlord and Tenant agree to cooperateto ensure that all tax bills applicable to each of the Premises are sentdirectly to Tenant by the taxing authority.  All such payments shall be made prior to delinquency.  Upon Landlord’s request, Tenant shallpromptly furnish Landlord with satisfactory evidence that such Real PropertyTaxes have been paid.  If any suchReal Property Taxes paid by Tenant shall cover any period of time prior to orafter the expiration of the Lease Term, Landlord shall promptly

 

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reimburse Tenant to the extent required.  If Tenant shall fail to pay any such Real Property Taxes,Landlord shall have the right but not the obligation to pay the same in whichcase Tenant shall repay such amount plus any penalties and interest resultingtherefrom to Landlord with Tenant’s next Annual Rental installment togetherwith the applicable Administrative Fee.

 

9.02         Definition of “Real Property Taxes”.  As used herein, the term “Real PropertyTaxes” shall mean any form of real estate tax or assessment, ad valorem orvalue-added tax or occupancy tax or gross receipts tax, fee, levy, penalty,interest or other charge, imposed by any authority having the direct orindirect power to tax, including any city, county, state, or federalgovernment, or any school, agricultural, sanitary, fire, street, drainage, orother improvement district thereof, on, against or with respect to any of thePremises, this Lease, any legal or equitable interest of Landlord or anysuperior landlord or any mortgagee of Landlord in the Premises or in the realproperty of which any of the Premises are a part, and Landlord’s right to rent.  The term “Real Property Taxes” shallalso include any tax, fee, levy, assessment, penalty, interest or other charge(i) in substitution of, partially or totally, any tax, fee, levy,assessment, or charge included within the foregoing definition of Real PropertyTaxes, (ii) the nature of which was included within the foregoingdefinition of Real Property Taxes, or (iii) any tax or increase in any taxwhich is imposed as a result of a transfer, either partial or total, ofLandlord’s interest in the Premises or which is added to a tax or chargehereinbefore included within the definition of Real Property Taxes by reason ofsuch transfer (other than documentary, stamp or other transfer taxes resultingfrom any such transfer but including any increase in any Real Property Taxesattributable to any such transfer), or which is imposed by reason of thetransfer of any of the Premises to Landlord or this transaction, anymodifications or changes hereto, or any other transfers hereof.  Notwithstanding the foregoing, the term“Real Property Taxes” shall not include any general income taxes, inheritancetaxes, and estate taxes imposed upon Landlord or any superior landlord or anymortgagee or beneficiary of Landlord or any taxes attributable to the recordingof any mortgage or deed of trust on Landlord’s interest in the Premises.

 

9.03         Personal Property Taxes.  Tenant shall pay, prior to delinquency,all taxes assessed against and levied upon trade fixtures, furnishings,equipment, and all other personal property of Tenant contained in any of thePremises or elsewhere.  Tenantshall seek to cause said trade fixtures, furnishings, equipment, and all otherpersonal property to be assessed and billed separately from the real propertyof Landlord.

 

9.04         Tenant’s Right to Contest Taxes.

 

(a)           Tenantshall have the right, at its cost and expense, to contest the amount orvalidity, in whole or in part, of any Real Property Taxes of any kind byappropriate proceedings diligently conducted in good faith, but no such contestshall be carried on or maintained by Tenant after the time limit for thepayment of any Real Property Taxes unless Tenant, at its option: (i) shallpay the amount involved under protest; or (ii) shall procure and maintaina stay of all proceedings to enforce any collection of any Real Property Taxes,together with all penalties, interest, costs and expenses, by a deposit of asufficient sum of money, or by such undertaking, as may be required orpermitted by law to accomplish such stay; or (iii) shall deposit withLandlord, as security for the performance by Tenant of its obligationshereunder with respect to such Real Property Taxes, security in the amount, ifany, prescribed by applicable law, or if no amount is prescribed by applicablelaw, in amounts equal to one hundred fifty

 

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percent (150%) of the contested amount or such other reasonablesecurity as may be demanded by Landlord to ensure payment of such contestedReal Property Taxes and all penalties, interest, costs and expenses which mayaccrue during the period of the contest. Upon the termination of any such proceedings, it shall be the obligationof Tenant to pay the amount of such Real Property Taxes or part thereof, asfinally determined in such proceedings, together with any costs, fees(including attorneys’ fees), penalties or other liabilities in connectiontherewith; provided, however, that if Tenant has deposited cash or cashequivalents with Landlord as security under clause (iii) above, then, so longas no material default exists under this Lease, Landlord shall pay such RealProperty Taxes (or part thereof) together with the applicable costs, fees andliabilities as described above out of such cash or cash equivalents and returnany unused balance, if any, to Tenant. Otherwise, Landlord shall return or cause to have returned to Tenant allamounts, if any, held by or on behalf of Landlord which were deposited byTenant in accordance with the provisions hereof.

 

(b)           Tenantshall have the right, at its cost and expense, to seek a reduction in thevaluation of the Premises as assessed for tax purposes and to prosecute anyaction or proceeding in connection therewith.  Provided Tenant is not in material default hereunder, Tenantshall be authorized to collect any tax refund of any tax paid by Tenantobtained by reason thereof and to retain the same.

 

(c)           Landlordagrees that whenever Landlord’s cooperation is required in any of theproceedings brought by Tenant as aforesaid, Landlord will reasonably cooperatetherein, provided same shall not entail any cost, liability or expense toLandlord, and Tenant will pay, indemnify and save Landlord harmless of andfrom, any and all liabilities, losses, judgments, decrees, costs and expenses(including all reasonable attorneys’ fees and expenses) in connection with anysuch contest and will, promptly after the final settlement, fully pay anddischarge the amounts which shall be levied, assessed, charged or imposed or bedetermined to be payable therein or in connection therewith, and Tenant shallperform and observe all acts and obligations, the performance of which shall beordered or decreed as a result thereof. No such contest shall subject Landlord to the risk of any civilliability or the risk of any criminal liability, and Tenant shall give suchreasonable indemnity or security to Landlord, as may reasonably be demanded byLandlord, to ensure compliance with the foregoing provisions of this Section9.04.

 

9.05         Survival of Tenant’s Tax Obligations.  Tenant’s obligationspursuant to this Article 9 shall survive the termination or expiration ofthis Lease, in whole or in part, such that, notwithstanding such termination orexpiration of this Lease, such that Tenant shall continue to be responsible forthat portion of the Real Property Taxes and/or personal property taxes whichpertain to the period prior to the date of such termination or expiration ofthis Lease, which taxes shall be prorated and apportioned in accordance withthe number of days elapsed in the applicable tax year.

 

***ARTICLE 10*****MAINTENANCEAND REPAIRS**

 

10.01       Tenant’s Obligations.

 

(a)           Tenantshall, at Tenant’s expense, maintain in good repair, order, and serviceablecondition, reasonable wear and tear excepted, the Premises and every partthereof,

 

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including but not limited to all plumbing, ventilation, heating, airconditioning, and electrical systems and equipment in, on, or exclusivelyserving any of the Premises, and windows, doors, storefronts, plate glass,interior walls, and ceilings which are part of any of the Premises.

 

(b)           Tenantshall not commit or suffer to be committed any waste upon or about thePremises, and shall promptly at Tenant’s cost and expense, make all necessary replacements,restorations, renewals and repairs to each of the Premises and allappurtenances thereto which are material to the operation of any of thePremises, whether interior or exterior, structural or non-structural, ordinaryor extraordinary, and foreseen or unforeseen; provided that with respect toappurtenances to the Premises which are material to the operation of thePremises, if third parties are obligated to repair or maintain suchappurtenances, Tenant shall use commercially reasonable efforts to enforce suchobligations of third parties or, if such third parties fail to perform suchobligations, Tenant shall perform such obligations to the extent Tenant has thelegal right to do so.  Tenant shallpay to the appropriate parties Tenant’s pro rata share of any maintenance,repair or other costs to the extent required under any appurtenances to any ofthe Premises.  Repairs,restorations, renewals and replacements shall be at least equivalent in qualityto the original work or the property replaced, as the case may be.  Tenant shall not make any claim ordemand upon or bring any action against Landlord for any loss, cost, injury,damage or other expense caused by any failure or defect, structural or non-structural,of the Premises or any part thereof.

 

(c)           Uponthe expiration or earlier termination of this Lease, Tenant shall return eachof the Premises to Landlord in good and clean condition and repair, reasonablewear and tear excepted.  Any damageto any of the Premises, including any structural damage, resulting fromTenant’s use or from the removal of Tenant’s fixtures, furnishings, andequipment pursuant to Section 12.04 hereof, shall be repaired by Tenant atTenant’s expense.

 

10.02       Landlord’s Obligations.  Except for the obligations of Landlordunder Article 14 hereof (relating to destruction of the Premises), and underArticle 15 hereof (relating to the condemnation of the Premises), it isintended by the parties hereto that Landlord have no obligation, in any mannerwhatsoever, to repair and maintain any of the Premises nor any building locatedthereon nor any fixtures thereon or equipment or personal property therein,whether interior or exterior, structural or nonstructural, ordinary orextraordinary, all of which obligations are that of Tenant under Section 10.01hereof.  Tenant expressly waivesthe benefit of any statute or law now or hereafter in effect which wouldotherwise afford Tenant the right to terminate this Lease because of Landlord’sfailure to keep the Premises or any part thereof or any building locatedthereon or fixtures thereon or equipment or personal property therein in goodorder, condition, and repair, or the right to repair and offset the costrelated thereto against rent.

 

10.03       Landlord’s Rights.  If Tenant refuses or neglects to make repairs or maintainthe Premises, or any part thereof, or any appurtenances thereto material to theoperation of the Premises or to enforce maintenance or repair obligations ofthird parties with respect to any such appurtenances, as provided above, in amanner reasonably satisfactory to Landlord, without prejudice to any otherremedy Landlord may have hereunder, upon giving Tenant ten (10) days’ priorwritten notice, Landlord shall have the right to enter such Premises andperform such maintenance or make such repairs on behalf of and for the accountof Tenant.  In the event Landlordso elects, Tenant shall pay the cost of such repairs, maintenance, orreplacements

 

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promptly following Tenant’s receipt of a bill therefor, together withthe applicable Administrative Fee. Tenant agrees to permit Landlord or its agent to enter the Premises,upon reasonable notice by Landlord, during normal business hours for thepurpose of inspecting the Premises.

 

***ARTICLE 11*****INSURANCEAND INDEMNIFICATION**

 

11.01       Tenant’s Insurance Obligation.  Tenant covenants and agrees that Tenantwill carry and maintain, at its sole cost and expense, the following types ofinsurance with respect to each of the Premises, in the amounts specified and inthe form hereinafter provided for:

 

(a)           COMMERCIALGENERAL LIABILITY.  Commercialgeneral liability insurance (including liquor liability insurance) against anyloss, liability or damage on or relating to the Premises, with limits of notless than Two Million Dollars ($2,000,000) in any one occurrence for death orinjuries to one or more persons and/or for damage to property.

 

(b)           WORKERS’COMPENSATION.  Worker’scompensation insurance or self insurance as required by the jurisdiction inwhich the Premises are located.

 

(c)           PROPERTYDAMAGE.  Insurance covering allimprovements located on the Premises and all of Tenant’s fixtures, merchandise,and personal property from time to time in, on or upon each of the Premises, inan amount not less than one hundred percent (100%) of their full replacementvalue providing protection against perils commonly included within theclassification “All Risk”.  Anypolicy proceeds shall be used for the repair or replacement of the property damagedor destroyed to the extent necessary to maintain the standard of operation ofthe Premises and the business operated thereon existing prior to the damage ordestruction except as provided in Article 14.

 

(d)           POLICYFORM.

 

(i)            Allpolicies of insurance provided for herein shall be issued by reputable andfinancially sound insurance companies reasonably satisfactory to Landlord, andsuch insurance companies shall be qualified to do business in the jurisdictionwhere the applicable Premises are situated.  All such policies shall be issued in Tenant’s name, withLandlord named as an additional insured and/or loss payee as applicable, and,if requested by Landlord, name any superior landlord and any mortgagee orbeneficiary of Landlord as an additional insured or loss payee.  The policies shall be for the mutualand joint benefit and protection of Landlord, Tenant, any superior landlord andany mortgagee or beneficiary of Landlord. Certificates of insurance shall be delivered to Landlord prior toLandlord’s execution of this Lease, and thereafter certificates or otherevidence of renewal or replacement coverage shall be delivered to Landlordwithin five (5) days prior to the expiration of the term of each such policy.  As often as any such policy shall expireor terminate, renewal or additional policies shall be procured and maintainedby Tenant in like manner and to like extent.  All certificates of insurance delivered to Landlord mustcontain a provision giving Landlord, any superior landlord, and any mortgageeor beneficiary of Landlord thirty (30) days’ notice in writing in advance ofany cancellation or lapse, except only ten (10) days’ notice will be providedfor cancellation due

 

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to premium non-payment, of insurance.  All public liability, property damage, and other casualtypolicies shall be written on an occurrence basis as primary policies, notcontributing with or in excess of coverage which Landlord may carry.

 

(ii)           Tenant’sobligations to carry the insurance provided for above may be brought within thecoverage of a so-called blanket policy or policies of insurance carried andmaintained by Tenant; provided, however, that such policy or policies must havelimits of not less than Five Million and 00/100 Dollars ($5,000,000) for anyone occurrence and that Landlord, any superior landlord and any mortgagee orbeneficiary of Landlord shall be named as an additional insured or loss payeethereunder as their interests may appear and that the coverage affordedLandlord will not be reduced or diminished by reason of the use of such blanketpolicies and the requirements set forth herein are otherwise satisfied.

 

11.02       Subrogation Waiver.  Landlord (for itself and its insurer) hereby waives anyrights, including rights of subrogation, and Tenant (for itself and itsinsurer) hereby waives any rights, including rights of subrogation, each mayhave against the other on account of any loss or damage occasioned to Landlordor Tenant, as the case may be, to their respective property, any of thePremises or their respective contents that are caused by or result from risksinsured against under any property insurance policies carried by the partieshereto and in force at the time of any such damage.  The foregoing waivers of subrogation shall be operative onlyso long as available in the jurisdiction where the Premises are located and solong as no policy of insurance is invalidated thereby.

 

11.03       Insurance Use Restrictions.  Tenant agrees that it will not carry anystock or goods or do anything in, on, or about the Premises outside of theordinary course of Tenant’s business which will substantially increase theinsurance rates upon the building of which any of the Premises are a part.

 

11.04       Indemnification.  (a) Tenant shall at all times indemnify Landlord andany mortgagee or beneficiary of Landlord for, defend (with counsel reasonablysatisfactory to Landlord) Landlord against, and save Landlord and any mortgageeor beneficiary of Landlord harmless from, any liability, loss, cost, injury,damage or other expense or risk (including without limitation reasonableattorneys’ fees) whatsoever that may occur or be claimed by or with respect toany person(s) or property on or relating to any of the Premises and resultingdirectly or indirectly from the use, misuse, occupancy, possession or disuse ofany of the Premises by Tenant or other persons claiming through or underTenant, or their respective agents, employees, licensees, invitees, guests orother such persons, or from the condition of any of the Premises.  Tenant shall, at its cost and expense,defend against any and all such actions, claims and demands and shall indemnifyLandlord and any mortgage or beneficiary of Landlord for all costs, expensesand liabilities (including, without limitation, reasonable attorneys’ fees) itmay incur in connection therewith. Neither Landlord nor any mortgagee or beneficiary of Landlord shall inany event whatsoever be liable for any injury or damage to any of the Premisesor to the Tenant or to any other persons claiming through or under Tenant, ortheir respective agents, employees, licensees, invitees, guests or other suchpersons or to any property of any such persons except as provided insubparagraph (b) below.  Tenantshall not make any claim or demand upon or institute any action againstLandlord as a result of such injury or damage except as provided insubparagraph (b) below.  Tenantcovenants and agrees during the Lease Term

 

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hereof to pay when due or reimburse and indemnify and hold Landlord andany mortgagee or beneficiary of Landlord harmless from and against allinspection fees, taxes, bonds, permits, certificates, assessments and sales,use, property or other taxes, fees or tolls of any nature whatsoever (togetherwith any related interest or penalties) now or hereafter imposed againstLandlord, any superior landlord or any mortgagee or beneficiary of Landlord orTenant by any federal, state, county or local governmental authority upon orwith respect to any of the Premises or the use thereof or upon the possession,leasing, use, operation or other disposition of any thereof or upon the rents,receipts or earnings arising therefrom or upon or with respect to this Lease(excepting only federal, state, and local net income taxes on the income ofLandlord or any superior landlord or any mortgagee or beneficiary of Landlordor any taxes attributable to the recording of any mortgage or deed of trust onLandlord’s interest in the Premises.

 

(b)           Notwithstandingthe waiver of subrogation under Section 11.02, Landlord shall indemnify, holdharmless and defend (with counsel reasonably satisfactory to Tenant) Tenantfrom and against any liability, loss, cost, injury, damage or other expense orrisk (including, without limitation, reasonable attorneys’ fees) whatsoever tothe extent arising out of the negligence or willful misconduct of Landlord orits representatives in connection with any entry by Landlord or itsrepresentatives on the Premises or in connection with any maintenance,construction, or other activity of Landlord on any adjacent property, except tothe extent arising from the negligence or willful misconduct of Tenant, itsrepresentatives, or their respective agents, employees, licensees, invitees orguests, or from the condition of any of the Premises.

 

11.05       Payment of Insurance.  In the event that Tenant shall fail toobtain the insurance policies required hereunder, Landlord shall have theright, but not the obligation, to purchase the same in which case Tenant shallrepay the cost thereof to Landlord with Tenant’s next Annual Rent installmenttogether with the applicable Administrative Fee.

 

***ARTICLE 12***

**ALTERATIONS**

 

12.01       Permitted Improvements.  Except as provided in Section 12.03hereof, and subject to the provisions of this Article 12, at Tenant’s ownexpense and after giving Landlord notice in writing of its intention to do soas required under Article 5, Tenant may from time to time make alterations,replacements, additions, changes, and improvements (collectively referred to inthis Article 12 as “Alterations”) in and to any of the Premises as it may findnecessary or convenient for its purposes; provided, however, that no suchAlterations shall decrease the value of any of the Premises.

 

12.02       Liens.  Tenant shall pay the costs of anyAlterations done on any of the Premises pursuant to Section 12.01, and shallkeep each of the Premises free and clear of liens of any kind as required underArticle 5.  Tenant shall indemnifyand defend Landlord from and against any liability, loss, damage, costs,attorneys’ fees, and any other expense incurred as a result of claims of lienby any person performing work or furnishing materials or supplies for Tenant orany person claiming under Tenant.

 

12.03       Structural Alterations.  Tenant shall not make any Alterationsto any of the foundations, perimeter or load bearing walls, or roof structureinvolving expenditures in excess

 

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of the amounts specified in Article 5, other than minor repairs made inthe ordinary course of Tenant’s business which do not decrease the value of anyof the Premises, without obtaining the prior written consent of Landlord, whichconsent shall not be unreasonably withheld.  All work with respect to any Alteration shall be done in agood and workmanlike manner by properly qualified and licensed personnel, andsuch work shall be diligently prosecuted to completion.

 

12.04       Removal of Alterations.  All Alterations made on any of thePremises shall become the property of Landlord at the expiration or terminationof the Lease Term and shall be surrendered with such Premises; provided,however, that if Tenant is not in default at the time of such expiration ortermination, (i) Tenant shall have the right to remove any Alterationsmade in accordance with this Article 12 provided the removal thereof does notdecrease the value of any of the Premises as reasonably determined by Landlordand provided Tenant repairs any damage to any of the Premises caused by suchremoval, and (ii) Tenant’s equipment, machinery, and trade fixtures shallremain the property of Tenant and may be removed by Tenant, provided Tenantshall repair any damage caused by its removal of any such equipment, machinery,and trade fixtures.

 

Landlord agrees from time to time during the term of this Lease, uponwritten request from Tenant, to execute and deliver any instrument, release, orother document that may be reasonably required by any equipment supplier orvendor and in form and substance reasonably satisfactory to Landlord wherebyLandlord waives and/or releases any rights it may have or acquire with respectto any such equipment or trade fixtures which may be affixed to any of thePremises and which is subject to a security interest or equipment lease infavor of such supplier or vendor and agrees that the same do not constituterealty regardless of the manner same are attached.

 

12.05       Alterations Required by Law.  Any Alteration, structural orotherwise, to or on any of the Premises, or any part thereof, which may benecessary or required by reason of any applicable Laws, shall be made by and atthe sole cost and expense of Tenant, subject to the provisions of Section7.02(d).

 

12.06       General Conditions Relating toAlterations.  AnyAlteration, structural or otherwise, to or on the Premises, shall be subject tothe following conditions:

 

(a)           NoAlteration shall be undertaken until Tenant shall have procured and paid forall required permits and authorizations of all municipal departments andgovernmental subdivisions having jurisdiction.

 

(b)           Anystructural Alteration involving an estimated cost of more than One HundredThousand and 00/100 Dollars ($100,000) (which amount shall be subject toperiodic increase in the same manner as Annual Rent under Section 6.02) shall,at Landlord’s reasonable request, be conducted under the supervision of alicensed architect or engineer selected by Tenant and satisfactory to Landlordand shall be made in accordance with detailed plans and specifications (the“Plans and Specifications”) and cost estimates prepared by such architect orengineer and approved in writing in advance by Landlord.

 

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(c)           AnyAlteration shall be made promptly and in a good workmanlike manner and incompliance with all applicable Laws.

 

(d)           NoAlteration shall tie-in or connect any of the Premises or any improvementsthereon with any property outside such Premises without the prior writtenconsent of Landlord.

 

(e)           NoAlteration shall reduce the value of any of the Premises or impair thestructural integrity of any building comprising a part of any of the Premises.

 

***ARTICLE 13*SIGNS**

 

In addition to those signs already existing at the Premises, Tenantshall have the right to erect or affix signs on the Premises of such sizes,colors, and designs as required by Tenant.  All signs on the Premises shall fully comply with allapplicable Laws.

 

***ARTICLE 14*****DAMAG****E, DESTRUCTION, OBLIGATION TO REBUILD**

 

14.01       Obligationto Rebuild. If any portion of the Premises is damaged or destroyed by fire or othercasualty, Tenant shall forthwith give notice thereof to Landlord.  Tenant shall, at its sole cost andexpense, diligently repair, restore, rebuild or replace the damaged ordestroyed improvements, fixtures or equipment, and diligently complete the sameas soon as reasonably possible, to the condition they were in prior to suchdamage or destruction, except for permitted Alterations and such changes indesign or materials as may then be required by applicable Laws.  Landlord, in such event, shall, to theextent and at the times the proceeds of the insurance are made available toLandlord, reimburse Tenant for the costs of making such repairs, restoration,rebuilding and replacements on such terms as Landlord may reasonablyrequire.  To the extent thatavailable proceeds of insurance are insufficient to pay the entire cost ofmaking such repairs, restoration, rebuilding and replacements, and notwithstandingthe expiration or termination of the Lease Term of this Lease, Tenant shall paythe amount by which such costs exceed the available insurance proceeds.  Any surplus of insurance proceeds overthe cost of restoration, net of all reasonable out-of-pocket expenses incurredby Landlord in connection with the administration thereof, shall be promptlypaid over to Tenant.

 

Notwithstanding the foregoing, if any such damage or destruction occursduring any Extension Period, Tenant may elect to terminate this Lease uponwritten notice to Landlord within sixty (60) days after the occurrence of suchdamage or destruction provided Tenant pays to Landlord all rent and otheramounts accruing under this Lease through the date of termination, and exceptas to obligations hereunder which expressly survive any termination of thisLease.  In the event of any suchtermination of this Lease, Landlord shall be entitled to retain all proceeds ofinsurance relating to such damage and destruction, and Tenant shall promptly payto Landlord any such insurance proceeds received by Tenant and hereby assignsto Landlord all rights of Tenant to receive such insurance proceeds.

 

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14.02       No Abatement of Rent.  Notwithstanding the partial or totaldestruction of any of the Premises, there shall be no abatement of rent or ofany other obligation of Tenant hereunder by reason of such damage ordestruction.

*** ***

***ARTICLE 15*EMINENT DOMAIN**

 

15.01       Total Taking. If any of the Premises are taken in their entirety under the power ofeminent domain, this Lease shall terminate with respect to such taken Premisesas of the date of such taking, and upon Tenant’s payment to Landlord of allrents and other amounts accruing hereunder through such date, Landlord andTenant shall each thereafter be released from accruing any further liabilityunder this Lease with respect to the Premises so taken subject to the rights ofLandlord and Tenant to receive condemnation awards to which each is entitled asprovided in Section 15.03, and except as to obligations under this Lease whichsurvive the termination hereof. Upon any such taking, the Annual Rent shall be adjusted pursuant toSection 15.05 below.

 

15.02       Partial Taking.  In the event that (a) more than twenty-five percent(25%) of the floor area of any of the Premises is taken under the power ofeminent domain; or (b) by reason of any appropriation or taking,regardless of the amount so taken, the remainder of any of the Premises is notone undivided parcel of property; or (c) as a result of any taking,regardless of the amount so taken, the remainder of any of the Premises isrendered unsuitable for the continued operation of Tenant’s business asdetermined by Tenant in good faith and based on commercially reasonablestandards and criteria, Tenant shall have the right, in addition to its rightsunder Article 24, to terminate this Lease with respect to such taken Premises,upon giving notice in writing of such election within sixty (60) days afterreceipt by Tenant from Landlord of written notice that said Premises have beenso appropriated or taken (with the understanding that such period of time maybe extended as reasonably necessary for Tenant to assess the effect of suchpartial taking on Tenant’s continued operation of its business at the Premises,subject to Landlord’s prior written consent, which consent shall not beunreasonably withheld) provided Tenant shall continue to pay Annual Rent andother amounts accruing hereunder through the date of termination.  In the event of such termination, uponTenant’s payment to Landlord of all rents and other amounts accruing hereunderthrough such date and in connection with such termination as set forth herein,both Landlord and Tenant shall thereupon be released from any liabilitythereafter accruing hereunder, except as to obligations hereunder which survivethe termination hereof and the Annual Rent shall be adjusted as set forth inSection 15.05 below.  Each Partyagrees immediately after learning of any actual or contemplated appropriationor taking to give to the other party notice in writing thereof.  If this Lease is not terminated, Tenantshall remain in that portion of the Premises not so taken and Tenant, at Tenant’ssole cost and expense, shall restore the remaining portion of the Premises assoon as possible to a complete unit of the quality and character as existedprior to such taking.  Landlordagrees to reimburse Tenant for the cost of restoration, but in no event shallLandlord’s obligation to reimburse Tenant for the cost of restoring theremaining portion of the Premises exceed the amount of award of compensationthat Landlord receives for a partial taking of that portion of the Premisesresulting in the need for restoration. So long as this Lease is not terminated in the manner provided above,there shall be an adjustment of the Annual Rent payable by Tenant hereunder forthe Premises by reason of any partial taking as set forth in Section 15.05below.  Tenant hereby waives any

 

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statutory rights of termination which may arise by reason of anypartial taking of any of the Premises under the power of eminent domain.

 

15.03       Award.  In the event of any taking, the entireaward or compensation in any eminent domain proceeding affecting the Premises,whether awarded to Tenant or Landlord for a total or partial taking and subjectto the remaining provisions of this Section 15.03,, shall be distributed toLandlord, provided, however, that in all instances Tenant will be entitled toreceive, and Landlord will have no right to pursue for itself, any award forclaims based on (a) the value of Tenant’s Alterations to the Premiseswhich Tenant has the right to remove pursuant to the provisions of this Leasebut elects not to remove, (b) loss of or damage to Tenant’s personalproperty, (c) loss to Tenant because of interruption of business,(d) Tenant’s loss of goodwill, and (e) Tenant’s cost of removal andrelocation and any rent differential payable by Tenant for replacement premisesas a result of any relocation necessitated by the taking (collectively, the“Tenant Award”).  Landlord andTenant may separately pursue their claims against the condemning authority, provided,however, that notwithstanding anything to the contrary contained in this Lease,Tenant will have no right to pursue a claim based upon the residual value ofthe real property comprising the Premises after expiration of the Lease Term orpursue claims or retain any award to which Landlord is entitled so asinequitably to diminish Landlord’s award. Landlord and Tenant shall cooperate to maximize the award payable by thecondemning authority.  Tenanthereby assigns to Landlord all rights of Tenant to receive any award ofcompensation as a result of any taking except the Tenant Award. In the eventthat Tenant elects to terminate this Lease with respect to any of the Premisespursuant to Section 15.01, and after the application of the proceeds of suchcondemnation action award (excluding any Tenant Award) and payment of all feesand expenses set forth in Section 15.05, Landlord shall, to the extent thatthere are any excess net condemnation award proceeds, pay to Tenant fiftypercent (50%) of any such excess net condemnation award proceeds. In the eventthat Tenant elects to terminate this Lease with respect to any of the Premisespursuant to Section 15.02, and after the application of the proceeds of suchcondemnation action award (excluding any Tenant Award) and payment of all feesand expenses set forth in Section 15.05, then (i) Landlord shall, to the extentthat there are any excess net condemnation award proceeds, pay to Tenant fiftypercent (50%) of any such excess net condemnation award proceeds and (ii)Landlord shall sell or otherwise transfer the Premises, which sale or transfershall be pursued diligently by Landlord, which were the subject of such takingand, after the payment of all costs and expenses of Landlord in connection withholding, preparing for sale and selling such Premises from the proceeds of suchsale, Landlord shall pay to Tenant fifty percent (50%) of any remaining saleproceeds.

 

15.04       Transfer Under Threat of Taking.  For the purposes of this Article only,a voluntary sale or conveyance under threat and in lieu of condemnation shallbe deemed an appropriation or taking under the power of eminent domain.

 

15.05       Adjustment of Annual Rent inconnection with Takings.

 

(a)           Inthe event that Tenant elects to terminate this Lease with respect to any of thePremises pursuant to Section 15.01 or 15.02, upon receipt by Landlord of fundsfrom the condemnation action award pursuant to Section 15.03 plus funds fromTenant in the total amount equal to the sum of (i) the loan balance allocatedto the Premises which are the subject of such 

 

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termination at the time of such termination as set forth on theapplicable Financing Schedule (defined below), (ii) any prepayment penalties orpremiums and/or defeasance costs required to be paid by Landlord under anyFinancing Documents (defined below) in connection with such termination and(iii) all reasonable costs and expenses of Landlord in connection with suchtermination, including, reasonable attorneys’ fees, the Annual Rent hereundershall be reduced by the amount of the then current Annual Rent allocated to thePremises which are the subject of such termination.

 

(b)           Inthe event that the Lease with respect to any of the Premises is not terminatedpursuant to Section 15.02, upon receipt by Landlord of funds from thecondemnation action award pursuant to Section 15.03 plus funds from Tenant inthe total amount equal to the sum of (i) the loan balance allocated to thePremises which are the subject of such condemnation at the time of such condemnationas set forth on the applicable Financing Schedule, (ii) any prepaymentpenalties or premiums and/or defeasance costs required to be paid by Landlordunder any Financing Documents in connection with such condemnation and (iii)all reasonable costs and expenses of Landlord in connection with suchcondemnation, including, reasonable attorneys’ fees and expenses, less thecosts to restore the affected Premises, the Annual Rent hereunder shall bereduced by an amount equal to the product of (i) the percentage of the Premisesso taken multiplied by (ii) the then current Annual Rent allocated to thePremises which are the subject of such condemnation; provided, however, thatsaid Annual Rent shall not be reduced below an amount which bears the same ratioto the annual scheduled payments of principal and interest due by Landlordunder the Financing Documents with respect to the portion of the loan which isnot prepaid or defeased with the proceeds of said condemnation received byLandlord as the ratio between the Annual Rent before such reduction bears tothe total annual scheduled payments of principal and interest payable undersuch Financing Documents prior to such prepayment or defeasance.

 

In connection with any loan, mortgage or other debt obtained byLandlord that is to be secured by Landlord’s interest in the Premises or thisLease, Landlord shall deliver to Tenant concurrently with the closing of anysuch transaction a schedule (a “Financing Schedule”) containing (i) anallocation of the original loan balance to each of the Premises, and (ii) anamortization schedule of such loan with respect to each of the Premises and thecorresponding loan balance allocation. As used herein, the term “Financing Documents” shall mean any mortgageor deed of trust or other document evidencing or securing a loan or loans toLandlord secured by Landlord’s interest in the Premises or this Lease.

*** ***

***ARTICLE 16*****ASSIGNMENTAND SUBLETTING**

 

16.01       Landlord’s Consent Required.  For purposes of this Article 16, theterms “assign” and “assignment” shall include and mean any act attempting to,or document purporting to, assign, transfer, sublet, change ownership ofTenant’s interest in and to any of the Premises or any part thereof, or enterinto license or concession agreements for a material portion of any of thePremises or any part thereof. Tenant shall not assign this Lease or Tenant’s interest in and to thePremises without obtaining the prior written consent of Landlord, such consentnot to be unreasonably withheld. Any attempted assignment without such consent shall be void, and shall

 

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constitute a breach of this Lease.  Notwithstanding the foregoing, Tenant may at any timeencumber its leasehold interest, by deed of trust, mortgage, assignment, orother security agreement, without the consent of Landlord, but no suchencumbrance will constitute a lien on Landlord’s estate.

 

16.02       Assumption of Obligations.  Any assignment to which Landlord hasconsented shall be evidenced by an instrument in writing and any assignee ortransferee shall agree for the benefit of Landlord to be bound by, assume, andperform all of the terms, covenants, and conditions of this Lease.  Consent by Landlord to any assignmentshall not constitute consent to any subsequent assignment.

 

16.03       Assignment to Affiliate.  Notwithstanding anything to thecontrary contained in this Article 16, Tenant shall have the right to assignthis Lease, or sublet the Premises or any portion thereof, without the consentof, but with notice to, Landlord, to any corporation (a) with which Tenantmay merge or consolidate, (b) which is a parent or subsidiary of Tenant atany tier, (c) which is the successor corporation to Tenant in the event ofa corporate reorganization, or (d) which acquires all or substantially allof the voting stock of Tenant or all or substantially all of the assets ofTenant, provided that said assignee assumes, in full, the obligations of Tenantunder this Lease and Tenant remains primarily liable under this Lease.  In addition, nothing contained hereinshall prohibit the public offering of or subsequent sale of shares of stock inTenant in the public markets.

 

16.04       No Release of Tenant.  Regardless of Landlord’s consent, noassignment shall release Tenant of Tenant’s obligation or alter the primaryliability of Tenant to pay the rent and to perform all other obligations to beperformed by Tenant hereunder.  Theacceptance of rent by Landlord from any other person shall not be deemed to bea waiver by Landlord of any provision hereof.  Consent to one assignment shall not be deemed consent to anysubsequent assignment.  In theevent of default by any assignee of Tenant or any successor to Tenant, in theperformance of any of the terms hereof, Landlord may proceed directly againstTenant without the necessity of exhausting remedies against said assignee.  Landlord may consent to subsequentassignments of this Lease or amendments or modifications to this Lease withassignees of Tenant, without notifying Tenant, or any successor of Tenant, andwithout obtaining its or their consent thereto and such action shall notrelieve Tenant of liability under this Lease, provided that Tenant shall not beliable to the extent of amendments or modifications made to this Lease, withassignees not affiliated with Tenant without Tenant’s consent, which consentshall not be unreasonably withheld, which materially increase Tenant’s monetaryobligations under this Lease (such as an increase in the Annual Rent payablehereunder or extension of the Lease Term beyond the original term hereof andany renewal options hereunder).

 

***ARTICLE 17*DEFAULT; REMEDIES**

 

17.01       Default.  The occurrence of any one or more ofthe following events shall constitute a material default under this Lease byTenant:

 

(a)           Thevacating or abandonment of the Premises by Tenant.

 

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(b)           Thefailure by Tenant to make any payment when due of Annual Rent, Impositions orany other payment required to be made by Tenant hereunder, where such failureshall continue for a period of ten (10) days after written notice fromLandlord.

(c)           Exceptas otherwise provided in this Lease, the failure by Tenant to observe orperform any of the covenants, conditions, or provisions of this Lease to beobserved or performed by Tenant, other than described in subparagraph (b)above, where such failure shall continue for a period of thirty (30) days afterwritten notice thereof from Landlord to Tenant; provided, however, that if thenature of Tenant’s noncompliance is such that more than thirty (30) days arereasonably required for its cure, then Tenant shall not be deemed to be indefault if Tenant commences such cure within said thirty (30)-day period andthereafter diligently and in good faith prosecutes such cure to completion.

 

(d)           (i) Themaking by Tenant of any general arrangement or general assignment for thebenefit of creditors; (ii) Tenant becomes a “debtor” as defined in 11U.S.C. Section 101 or any successor statute thereto (unless, in the case of apetition filed against Tenant, the same is dismissed within sixty (60) days);(iii) the appointment of a trustee or receiver to take possession ofsubstantially all of Tenant’s assets located at the Premises or of Tenant’s interestin this Lease, where possession is not restored to Tenant within sixty (60)days; or (iv) the attachment, execution, or other judicial seizure ofsubstantially all of Tenant’s assets or of Tenant’s interest in this Lease,where such seizure is not discharged within sixty (60) days.  In the event that any provision of thisSection 17.01(d) is contrary to any applicable Law, such provision shall be ofno force or effect.

 

(e)           Thebreach of any representation or warranty by Tenant hereunder in any materialrespect.

 

(f)            Thedefault, breach or insolvency of any guarantor of this Lease beyond anyapplicable notice and/or grace period under its guarantee.

 

(g)           AtLandlord’s option, a default by Tenant under that certain Amended and RestatedMaster Lease of even date herewith by and between Tenant and ARG Properties I,LLC, a California limited liability company; provided, however, that thisSection 17.01(g) shall terminate and be of no force and effect if (i)forty-nine percent (49%) or more of the beneficial ownership interest inLandlord shall be sold or otherwise transferred or (ii) a sale or transfer ofless than forty-nine percent (49%) of the beneficial ownership interest inLandlord shall occur and such sale or transfer shall cause a reassessment orrevaluation of the Premises for purposes of any ad valorem or other propertytax.

 

17.02       Remedies. In the event of any such material default by Tenant, Landlord may at anytime thereafter, with or without notice or demand and without limiting Landlordin the exercise of any right or remedy which Landlord may have by reason ofsuch default:

 

(a)           TerminateTenant’s right to possession of any of the Premises by any lawful means, inwhich case this Lease shall terminate as to such Premises and Tenant shallimmediately surrender possession of the Premises to Landlord.  In such event, Landlord shall beentitled to recover from Tenant all damages incurred by Landlord by reason ofTenant’s default

 

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including, but not limited to, the cost of recovering possession of thePremises, expenses of reletting, including reasonable and necessary renovationand alteration of the Premises, reasonable attorneys’ fees, and any real estatecommission actually paid; and the worth at the time of award by the courthaving jurisdiction thereof of the amount by which the unpaid rent for thebalance of the term after the time of such award exceeds the amount of suchunpaid rent for the same period that Tenant proves could be reasonably avoided.

 

(b)           MaintainTenant’s right to possession of any of the Premises by any lawful means, inwhich case this Lease and the term hereof shall continue in effect with respectto such Premises whether or not Tenant shall have vacated or abandoned suchPremises.  In such event Landlordshall be entitled to enforce all of Landlord’s rights and remedies under theLease with respect to such Premises, including the right to recover the rent asit becomes due hereunder.

 

(c)           Pursueany other remedy now or hereafter available to Landlord under the Laws of thejurisdiction where the Premises are located.

 

(d)           Tothe extent permitted by applicable Law, the rights and provided remedies underthis Lease shall be cumulative, and the exercise of any one right or remedyshall not preclude the exercise of or act as a waiver of any other right orremedy of Landlord hereunder, or which may be existing at law, or in equity orby statute or otherwise.

 

(e)           Inaddition to the foregoing, Tenant, and its successors and assigns, shall at alltimes indemnify Landlord for, defend Landlord against and save Landlordharmless from any liability, loss, cost, injury, damage or other expense orrisk (including, without limitation, reasonable attorney’s fees) whatsoever,directly or indirectly, arising out of, resulting from or otherwise inconnection with (i) the failure for any reason on the part of Tenant toperform, observe or comply with any of the covenants, conditions andobligations under this Lease to be performed, observed or complied with byTenant, and/or (ii) the failure for any reason of any representation orwarranty given by Tenant in connection with the execution of this Lease byLandlord to be materially true, complete and accurate.

 

17.03       Administrative Fee.  Tenant hereby acknowledges that late payment by Tenant toLandlord of rent and other sums due hereunder may cause Landlord to incuradministrative costs not contemplated by this Lease, the exact amount of whichwill be extremely difficult to ascertain. Such administrative costs may include, but are not limited to,processing and accounting charges and late charges which may be imposed onLandlord by the terms of any superior lease, mortgage or trust deed coveringthe Premises.  Accordingly, if anyinstallment of rent or any other sum due from Tenant is not received byLandlord or Landlord’s designee within ten (10) days after written notice fromLandlord, then, without any requirement for further notice to Tenant, Tenantshall pay to Landlord an administrative fee equal to the Bank of America, NT& SA, reference rate plus four percent (4%) per annum (but in no eventhigher than the maximum rate permitted by Law) multiplied by such overdueamount from the date such overdue amount was due until paid (the “AdministrativeFee”).  The parties hereby agreethat such Administrative Fee represents a fair and reasonable estimate of thecosts Landlord will incur by reason of late payment by Tenant.  Acceptance of such Administrative Feeby Landlord shall in no event constitute a waiver of Tenant’s default withrespect to such overdue amount, nor prevent Landlord from exercising any of theother rights and remedies granted hereunder.

 

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17.04       Default by Landlord.  Landlord will commit a default ifLandlord fails to perform any provision of this Lease required of it and thefailure is not cured within 30 days after notice has been given toLandlord.  If, however, the failurecannot reasonably be cured within the cure period, Landlord will not be indefault of this Lease if Landlord commences to cure the failure within the cureperiod and diligently and in good faith continues to cure the failure.  Notices given under this Section 17.04will specify the alleged breach and the applicable Lease provisions.  Tenant may, after expiration of thecure period unless there is an emergency, correct or remedy any failure ofLandlord not timely cured and deduct the reasonable cost paid by Tenant fromfuture rent as it becomes due.

 

17.05       Mitigation. Landlord and Tenant will each exercise best efforts to mitigate thedamages caused by the other party’s breach of this Lease.  Efforts to mitigate damages will not beconstrued as a waiver of the nonbreaching party’s right to recover damages.

 

17.06       Lender’s Right to Cure.  The respective lenders of each partywill have the right, in the party’s behalf, to cure the party’s alleged breachwithin the same time period allocated under this Lease, Landlord shall uponwritten request from Tenant provide copies of any notices of default given toTenant hereunder to lenders of Tenant as specified in such written request,provided, however, that Landlord shall not be deemed to be in default hereunderif Landlord fails to provide any such notices to any of Tenant’s lenders norshall any such failure relieve Tenant from any liability hereunder or affectany of Landlord’s rights or remedies hereunder.

*** ***

***ARTICLE 18*****SUBORDINATION**

 

At Landlord’s option, this Lease shall be subordinate to any superiorlease, mortgage, deed of trust, or any other hypothecation or security now orhereafter placed upon any of the Premises and to any and all advances made onthe security thereof and to all renewals, modifications, consolidations,replacements, and extensions thereof, provided that Landlord and any mortgageeor beneficiary of Landlord shall execute the Subordination Agreement (asdefined below) with Tenant.  Infurtherance thereof, Tenant hereby agrees, upon request by Landlord, to executeand deliver a subordination, non-disturbance and attornment agreementsubstantially in the form attached hereto as Exhibit B (a “SubordinationAgreement”) with respect to any such superior lease, mortgage, deed of trust,hypothecation, or security.

 

***ARTICLE 19*QUIET ENJOYMENT**

 

Subject to the terms and conditions of this Lease and conditional uponthe performance of all of the provisions to be performed by Tenant hereunder,Landlord agrees to secure to Tenant during the Lease Term and any and allextensions thereof, the quiet and peaceful possession of each of the Premisesand all rights and privileges appertaining thereto and under this Lease.

 

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***ARTICLE 20*****REPRESENTATIONSAND WARRANTIES**

 

20.01       Representations and Warranties.  To induce Landlord to enter into thisLease, Tenant represents and warrants to Landlord and any mortgagee orbeneficiary of Landlord as follows:

 

(a)           Itis a corporation duly organized and validly existing, in good standing underthe laws of California, has stock outstanding which has been duly and validlyissued, and is qualified to do business and is in good standing in thejurisdiction in which any of the Premises are located with full power andauthority to consummate the transactions contemplated hereby.

 

(b)           Theexecution and delivery of this Lease has been duly authorized by all action asmay be required under the terms and provisions of its governing instruments andthe laws of the jurisdiction where each of the Premises is located; this Leasewill not violate or result in any breach of, or constitute a default under, orresult in the creation of any lien, encumbrance, attachment, charge or otherright or claim of any other party upon any assets of Tenant or upon Tenant’sbeneficiary interest under the terms of this Lease pursuant to any instrumentor applicable Laws to which Tenant is a party or by which it may be bound orcreate in favor of or grant to any third party any interest whatsoever inTenant’s interest under the terms of this Lease; this Lease is valid andenforceable in accordance with its terms, and the execution and delivery ofthis Lease, and the consummation of the transactions contemplated hereby, donot require the approval or consent of any governmental authority havingjurisdiction over Tenant or its property, or if such approval or consent isrequired, it has been obtained.

 

(c)           Tenant’sfinancial statements and, if applicable, the guarantors’ financial statementsheretofore delivered to Landlord are true and correct in all material respects,have been prepared in accordance with generally accepted accounting principles,and fairly present the respective financial conditions of the subjects thereofas of the respective dates thereof. No materially adverse change has occurred in the financial conditionsreflected therein since the respective dates thereof.

 

(d)           Thereare no actions, suits or proceedings pending, or to the best of Tenant’sknowledge, threatened, against or affecting it or any of the Premises or anyguarantor of this Lease, or involving the validity or enforceability of thisLease, at law or in equity, or before or by any governmental authority exceptactions, suits and proceedings fully covered by insurance or which, ifadversely determined, would not materially impair the ability of Tenant or anyguarantor of this Lease to satisfy their obligations under this Lease or anyguarantee of this Lease.

 

(e)           Tenantis not in default under any obligation for the payment of borrowed money, forthe deferred purchase price of property or for the payment of any rent underany lease agreement, which, either individually or in the aggregate, wouldadversely affect the financial condition of Tenant, or the ability of Tenant toperform its obligations hereunder, or comply with the terms of this Lease.

*** ***

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***ARTICLE 21*SURRENDER OF PREMISES**

 

Except for changes resulting from eminent domain proceedings, at theexpiration or sooner termination of the Lease Term, Tenant shall surrender thePremises in good and clean condition, reasonable wear and tear excepted, andshall surrender all keys for each of the Premises to Landlord at the place thenfixed for the payment of rent and shall inform Landlord of all combinations onlocks, safes and vaults, if any, in each of the Premises.  Tenant shall at such time remove all ofTenant’s property, as well as any alterations or improvements other thanpermitted Alterations made in accordance with Article 12, if requested to do soby Landlord, and shall repair any damage to any of the Premises caused thereby,and any or all of such property not so removed shall, at Landlord’s option,become the exclusive property of Landlord or be disposed of by Landlord, atTenant’s cost and expense, without further notice to or demand uponTenant.  If any of the Premises arenot so surrendered, Tenant shall indemnify Landlord against loss or liabilityresulting from the delay by Tenant in so surrendering such Premises including,without limitation, any claims made by any succeeding occupant founded on suchdelay.  Tenant’s obligation toobserve or perform this covenant shall survive the expiration or othertermination of the Lease Term with respect to all or any of the Premises.

 

***ARTICLE 22*****BANKRUPTCYOR INSOLVENCY**

 

22.01       Bankruptcy or Insolvency.  Subject to applicable Law, Landlord andTenant acknowledge and agree that (i) the provisions of this Section 22.01shall control notwithstanding anything to the contrary contained in this Lease,and (ii) with respect to the rights of Tenant and Landlord in any bankruptcy orinsolvency proceeding relating to Tenant, this Lease shall be interpreted as ifeach of the Premises were subject to a separate lease on terms and conditionsidentical to those set forth in this Lease and the Annual Rent allocable to thePremises covered by each separate lease and each such separate lease providingthat a default under any such separate lease constitutes a default under allother such separate leases.

 

(a)           Inthe event that Tenant shall become a debtor under Chapter 7 of the BankruptcyReform Act of 1978, 11 U.S.C. 1 et seq (“Bankruptcy Code”), and Tenant’strustee or Tenant shall elect to assume this Lease for the purpose of assigningthe same or otherwise, such election and assignment may be made only if theprovisions of this Section 22.01 are satisfied.  If Tenant or Tenant’s trustee shall fail to assume thisLease within sixty (60) days after the entry of an order for relief, this Leaseshall be deemed to have been rejected. Immediately thereupon Landlord shall be entitled to possession of eachof the Premises without further obligation to Tenant or Tenant’s trustee andthis Lease, upon the election of Landlord, shall terminate, but Landlord’sright to be compensated for damages shall survive, whether or not this Leaseshall be terminated.

 

(b)           Inthe event that a voluntary petition for reorganization is filed by Tenant, oran involuntary petition is filed against Tenant under Chapter 11 of theBankruptcy Code, or in the event of the entry of an order for relief underChapter 7 in a case which is then transferred to Chapter 11, Tenant’s trusteeor Tenant, as debtor-in-possession, must elect to assume this Lease withinsixty (60) days from the date of the filing of the petition under Chapter 11 orthe transfer

 

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thereto, or Tenant’s trustee or the debtor-in-possession shall bedeemed to have rejected this Lease. Immediately thereupon Landlord shall be entitled to possession of eachof the Premises without further obligation to Tenant or Tenant’s trustee andthis Lease, upon the election of Landlord, shall terminate, but Landlord’sright to be compensated for damages, shall survive, whether or not this Leaseshall be terminated.

 

(c)           Noelection by Tenant’s trustee or the debtor-in-possession to assume this Lease,whether under Chapter 7 or Chapter 11, shall be effective unless each of thefollowing conditions has been satisfied:

 

(i)            Tenant’strustee or the debtor-in-possession has cured all defaults under this Lease, orhas provided Landlord with evidence satisfactory to Landlord that it will cureall defaults susceptible of being cured by the payment of money within ten (10)days from the date of such assumption and that it will cure all other defaultsunder this Lease which are susceptible of being cured by the performance of anyact within thirty (30) days after the date of such assumption.

 

(ii)           Tenant’strustee or the debtor-in-possession has compensated, or has provided Landlordwith evidence satisfactory to Landlord that, within ten (10) days from the dateof such assumption, that it will compensate Landlord for any actual pecuniaryloss incurred by Landlord arising from the default of Tenant, Tenant’s trustee,or the debtor-in-possession as indicated in any statement of actual pecuniaryloss sent by Landlord to Tenant’s trustee or the debtor-in-possession.

 

(iii)          Tenant’strustee or the debtor-in-possession (A) has provided Landlord with“Assurance”, as hereinbelow defined, of the future performance of each of theobligations under this Lease of Tenant, Tenant’s trustee, or thedebtor-in-possession, and (B) shall, in addition to any other securitydeposits held by Landlord, deposit with Landlord, as security for the timelypayment of Annual Rent and for the performance of all other obligations ofTenant under this Lease, an amount equal to three (3) monthly installments ofAnnual Rent (at the rate then payable), and (C) pay in advance to Landlordon the date each installment of Annual Rent is due and payable, one-twelfth ofTenant’s annual obligations for Impositions to be made by Tenant pursuant tothis Lease.  The obligationsimposed upon Tenant’s trustee or the debtor-in-possession by this Section 22.01shall continue with respect to Tenant or any assignee of this Lease, after theconclusion of proceedings under the Bankruptcy Code.

 

(iv)          Suchassumption will not breach or cause a default under any provision of any otherlease, mortgage, financing agreement or other agreement by which Landlord isbound, relating to the Premises.

 

(d)           Forpurposes of Section 22.01(c)(iii) hereof, Landlord and Tenant shall acknowledgethat “Assurance” shall mean no less than:

 

(i)            Tenant’strustee or the debtor-in-possession has and will continue to have sufficientunencumbered assets after the payment of all secured obligations and

 

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administrative expensesto assure Landlord that sufficient funds will be available to fulfill theobligations of Tenant under this Lease; and

 

(ii)           Tosecure to Landlord the obligations of Tenant, Tenant’s trustee or thedebtor-in-possession and to assure the ability of Tenant, Tenant’s trustee orthe debtor-in-possession to cure the defaults under this Lease, monetary and/ornonmonetary, there shall have been: (A) sufficient cash deposited withLandlord, or (B) the bankruptcy court shall have entered an ordersegregating sufficient cash payable to Landlord, and/or (C) Tenant’strustee or the debtor-in-possession shall have granted to Landlord a valid andperfected first lien and security interest and/or mortgage in property ofTenant, Tenant’s trustee or the debtor-in-possession, acceptable as to valueand kind to Landlord.

 

(e)           Inthe event that this Lease is assumed in accordance with Section 22.01(b) hereofand thereafter Tenant is liquidated or files, or has filed against it, asubsequent petition under any provision of the Bankruptcy Code or any similarstatute for relief of debtors, Landlord may, at its option, terminate thisLease and all rights of Tenant hereunder, by giving Tenant notice of itselection to so terminate within thirty (30) days after the occurrence of eitherof such events.

 

(f)            IfTenant’s trustee or the debtor-in-possession has assumed this Lease pursuant tothe terms and provisions of this Section 22.01 for the purpose of assigning (orelects to assign) this Lease, this Lease may be so assigned only if theproposed assignee has provided adequate assurance of future performance of allof the terms, covenants and conditions of this Lease to be performed byTenant.  Landlord shall be entitledto receive all consideration for such assignment, whether cash orotherwise.  As used in this Section22.01(f) “adequate assurance of future performance” shall mean at least thatclauses (B) and (C) of Section 22.01(c)(iii)hereof and each of the followingconditions, has been satisfied:

 

(i)            Theproposed assignee has furnished Landlord with a current financial statementaudited by a certified public accountant determined in accordance withgenerally accepted accounting principles consistently applied indicating acredit rating, net worth and working capital in amounts which Landlordreasonably determines to be sufficient to assure the future performance of suchassignee of Tenant’s obligations under this Lease, but in no event indicating anet worth less than the net worth of the Tenant and any guarantors of thisLease, on the date of execution hereof.

 

(ii)           Suchassignment will not breach or cause a default under any provision of any otherlease, mortgage, financing agreement or other agreement by which Landlord isbound, relating to the Premises.

 

(iii)          Theproposed assignment will not release or impair any guarantee under this Lease.

 

(g)           When,pursuant to the Bankruptcy Code, Tenant’s trustee or the debtor-in-possessionshall be obligated to pay reasonable use and occupancy charges for the use ofthe Premises, such charges shall not be less than the Annual Rent and alladditional rent payable by

 

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Tenant under this Lease and shall be paid at the times and when due asthough such charges were Annual Rent and additional rent.

 

(h)           Anythingin this Lease to the contrary notwithstanding, neither the whole nor any portionof Tenant’s interest in this Lease or its estate in the Premises shall pass toany trustee, receiver, assignee for the benefit of creditors, or any othersimilar person or entity, or otherwise by operation of law under the BankruptcyCode or any similar federal statute now or hereinafter enacted, or under thelaws of any state, district or municipality having jurisdiction of the personor property of Tenant unless Landlord shall have consented to such transfer inwriting.  No acceptance by Landlordof rent or any other payments from any such trustee, receiver, assignee, personor other entity shall be deemed to constitute such consent by Landlord norshall it be deemed a waiver of Landlord’s right to terminate this Lease for anytransfer of Tenant’s interest under this Lease without such consent.

*** ***

***ARTICLE 23*****HAZARDOUSMATERIALS**

 

23.01       Representations and Warranties.  Notwithstanding anything to thecontrary which may be contained in this Lease, Tenant represents, warrants andcovenants to Landlord and any mortgagee or beneficiary of Landlord as follows:

 

(a)           Tothe best of Tenant’s Knowledge (as defined below), except as set forth in theenvironmental and engineering reports for the Premises previously delivered byTenant or its affiliates to Landlord and any environmental and engineeringreports for the Premises prepared by Landlord in connection herewith(collectively, the “Reports”), there are no and have been no violations of theRelevant Environmental Laws (as hereinafter defined) respecting any of thePremises and no consent orders have been entered with respect thereto, exceptwhere noncompliance could not reasonably be expected to have a materiallyadverse effect on the value or the use or operation of the Premises for itsintended purpose or the ability of Tenant to perform its obligations under thisLease (a “Material Adverse Effect”).

 

(b)           Tothe best of Tenant’s Knowledge and except as set forth in the Reports, thereare no and have been no Hazardous Wastes (as hereinafter defined) or Asbestos(as hereinafter defined) either at, upon, under or within, or discharged oremitted at or from, any of the Premises, including, but not limited to, theair, soil, surface, and ground water; no Hazardous Wastes or Asbestos haveflowed, blown or otherwise become present at any of the Premises fromneighboring land; and no Hazardous Wastes or Asbestos have been removed fromany of the Premises other than those Hazardous Wastes or Asbestos which areused and/or incidental to the ordinary course of Tenant’s business providedthat the same are used, stored, handled and disposed of in accordance with allRelevant Environmental Laws and all other applicable Laws, industry standardsand manufacturers specifications.

 

(c)           Noneof the Premises will be used for the purpose of storing Hazardous Wastes, andno such storage or use will otherwise be allowed on any of the Premises whichwill cause or increase the likelihood of causing the release of HazardousWastes onto any of the Premises other than those Hazardous Wastes which areused and/or incidental to the ordinary course of Tenant’s business providedthat the same are used, stored, handled and disposed of in

 

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accordance with all Relevant Environmental Laws and all otherapplicable Laws, industry standards and manufacturers specifications.  Neither Tenant, nor to the best ofTenant’s Knowledge and except as set forth in the Reports any third party, hasinstalled, used or removed any storage tanks on, from or in connection with thePremises except in full compliance with all Relevant Environmental Laws, and tothe best of Tenant’s Knowledge, there are no storage tanks or wells (whetherexisting or abandoned) located on, under or about the Premises.  To the best of Tenant’s Knowledge,except as set forth in the Reports, the Property does not consist of anybuilding materials that contain Hazardous Wastes or Asbestos.

 

(d)           Tenantis not aware of any claims or litigation, and has not received anycommunication from any person (including any governmental authority),concerning the presence or possible presence of Hazardous Wastes or Asbestos ator adjacent to any of the Premises or concerning any violation or allegedviolation of the Relevant Environmental Laws respecting any of thePremises.  Tenant shall promptlynotify Landlord of any such claims and shall furnish Landlord with a copy ofany such communications received by Tenant.

 

(e)           Tenantshall notify Landlord promptly and in reasonable detail in the event that Tenantbecomes aware of or suspects the presence of Hazardous Wastes or Asbestos(other than those Hazardous Wastes or Asbestos which are used and/or incidentalto the ordinary course of Tenant’s business provided that the same are used,stored, handled and disposed of in accordance with all Relevant EnvironmentalLaws and all other applicable Laws, industry standards and manufacturersspecifications) or a violation of the Relevant Environmental Laws, at oradjacent to any of the Premises.

 

(f)            Tenantshall ensure that the Premises complies and continues to comply in all respectswith all Relevant Environmental Laws.

 

(g)           Ifthe Premises or any part thereof are used or maintained so as to subjectTenant, Landlord or any mortgagee or beneficiary of Landlord or the user of anyof the Premises to a claim of violation of the Relevant Environmental Laws(unless contested in good faith by appropriate proceedings), Tenant shallimmediately cease or cause a cessation of such use or operations and shallremedy and fully cure any conditions arising therefrom, at its own cost andexpense.

 

(h)           UponLandlord’s reasonable belief that there is a material breach of one of theenvironmental representations or warranties set forth above, Tenant shallpermit Landlord, at its option, at any time upon five (5) days’ prior writtennotice to Tenant, to cause or conduct a complete environmental audit to beperformed.  The audit shall be atTenant’s sole cost and expense.

 

23.02       Definitions.

 

(a)           The“Relevant Environmental Laws,” as referred to herein, shall mean all applicablefederal, state and local laws, rules, regulations, orders, judicialdeterminations, and decisions or determinations by any judicial, legislative orexecutive body of any governmental or quasi-governmental entity, whether in thepast, the present or the future, with respect to: (A) the installation,existence, or removal of, or exposure to, Asbestos on any of the Premises;(B) the

 

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existence on, discharge from, or removal from any of the Premises ofHazardous Wastes; or (C) the effects on the environment of any of thePremises or of any activity now, previously, or hereafter conducted on any ofthe Premises.  The RelevantEnvironmental Laws shall include, but not be limited to, the following:(1) the Comprehensive Environmental Response, Compensation, and LiabilityAct, 42 U.S.C. Sections 9601 et seq.; the Superfund Amendments andReauthorization Act, Public Law 99-499, 100 Stat. 1613; the Resource Conservationand Recovery Act, 42 U.S.C. Sections 6901 et seq.; the National EnvironmentalPolicy Act, 42 U.S.C. Section 4321; the Safe Drinking Water Act, 42 U.S.C.Sections 300F et seq.; the Toxic Substances Control Act, 15 U.S.C. Section2601; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801; theFederal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq.; the CleanAir Act, 42 U.S.C. Sections 7401 et seq.; and the regulations promulgated inconnection therewith; (2) Environmental Protection Agency regulationspertaining to Asbestos (including 40 C.F.R. Part 61, Subpart M); OccupationalSafety and Health Administration regulations pertaining to Asbestos (including29 C.F.R. Sections 1910. 1001 and 1926.58); as each may now or hereafter be amended;and (3) any other federal, state and local laws and regulations pertainingto Hazardous Wastes and/or Asbestos;

 

(b)            “Asbestos,” as referred to herein, shallhave the meanings provided under the Relevant Environmental Laws, and shallinclude, but not be limited to, asbestos fibers and friable asbestos, as suchterms are defined under the, Relevant Environmental Laws; and

 

(c)            “Hazardous Wastes,” as referred toherein, shall mean any of the following as defined by the RelevantEnvironmental Laws: solid wastes; petroleum and petroleum derivatives; naturalor synthetic gas; radon gas; toxic or hazardous substances, wastes, pollutantsor contaminants (including, but not limited to, polychlorinated biphenyls(“PCB’s”, paint containing lead, and urea formaldehyde); and discharges ofsewage or effluent.

 

(d)            “Knowledge” shall mean the actualknowledge of any executive officer after due inquiry of property management.

 

23.03       Tenant’s Obligation. At its sole cost andexpense, Tenant shall:

 

(a)           Payimmediately when due the cost of compliance with the Relevant EnvironmentalLaws.

 

(b)           Keepeach of the Premises free of any lien imposed pursuant to the RelevantEnvironmental Laws.

 

23.04       Landlord Options.  In the event that Tenant fails to comply with the requirementsof this Article 23, after notice to Tenant and the earlier of the expiration ofany applicable cure period hereunder, or the expiration of the cure periodpermitted under the Relevant Environmental Laws, if any, or such earlier timeif Landlord determines that life, person or property is in jeopardy, Landlordmay, but shall not be obligated to, exercise its right to do one or more of thefollowing: (a) declare that such failure constitutes a default; and/or(b) take any and all actions, at Tenant’s expense, that Landlordreasonably deems necessary or desirable to cure said failure ofcompliance.  Any costs incurredpursuant to this Section 23.04 shall become

 

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immediately due and payable by Tenant together with the applicableAdministrative Fee, and shall be paid or reimbursed to Landlord promptly uponwritten notice from Landlord.

 

23.05       Indemnity. Landlord shall not be liable for and Tenant shall immediately pay toLandlord when incurred and shall indemnify, defend and hold Landlord and anymortgagee or beneficiary of Landlord harmless from and against, all loss, cost,liability, damage and expense (including, but not limited to, attorneys’ feesand costs incurred in the investigation, defense and settlement of claims) thatLandlord or any mortgagee or beneficiary of Landlord may suffer or incur as aresult of or in connection in any way with any Asbestos or Hazardous Wastes nowor hereafter present, discharged, released, generated, disposed, transported oremitted to, from, in on or under any of the Premises or in connection with anyviolation of any of the Relevant Environmental Laws, or any environmentalassessment or study from time to time undertaken or requested by Tenant orLandlord, or any breach of any representation, covenant or undertaking byTenant herein.

 

23.06       Survival. The provisions of this Article 23 shall survive the expiration ortermination of the Lease Term.

*** ***

***ARTICLE 24*****SUBSTITUTEPREMISES**

 

Tenant shall have the right, from time to time, to substitute aproperty for any one of the Premises (collectively, “Substitute Premises”) onthe terms and conditions set forth below provided that Tenant, at Tenant’s solecost and expense (except with respect to costs and expenses relating to Clauses(xiii), (xiv) and (xv), which shall be borne by Landlord and for which Landlordshall be required to provide satisfactory evidence to Landlord’s Mortgagee(defined below) of Landlord’s ability to pay such costs as a condition to suchsubstitution, failure of which shall not constitute a default by Landlord underthis Lease, but shall give Tenant the option to pay for such costs and expensesand if so paid by Tenant, Tenant shall have the right to offset on the nextIncrease Date (and on subsequent Annual Rent payment dates if necessary) anyamount so paid plus interest at the rate set forth in Section 17.03 only fromthe amount by which the Annual Rent is increased on such Increase Date pursuant to Section 6.02), deliversto Landlord and any mortgagee or beneficiary of Landlord (“Landlord’sMortgagee”) all of the following:

 

(i)            Writtennotice of Tenant’s election to provide a Substitute Premises (a “SubstitutionNotice”) at least sixty (60) days prior to the date on which the substitution transaction is to close (the“Substitution Date”).  SuchSubstitution Notice shall identify the Substitute Premises, the Premises forwhich the Substitute Premises is offered as a substitute and the scheduled SubstitutionDate;

 

(ii)           Onor prior to the date that is twenty (20) days prior to the Substitution Date,an appraisal by an independent appraisal firm which is a member of the AmericanInstitute of Real Estate Appraisers of the National Association of Realtors,with at least ten years’ experience in the valuation of commercial real estatein the metropolitan area in which the Substitute Premises is located andotherwise who is reasonably acceptable to the Landlord and the Landlord’sMortgagee (x) indicating that the fair market value of the Substitute Premises(taking into account utility and the remaining useful life of the land andimprovements as if encumbered by this Lease and as vacant assuming a usecomparable to Tenant’s use of the Premises) (the

 

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“Substitute Premises Value”) is not less than the fair market value ofthe Premises (taking into account utility and the remaining useful life of theland and improvements constituting the Premises as encumbered by this Lease andas vacant assuming a use comparable to Tenant’s use of the Premises) for whichthe Substitute Premises is offered as a substitute (the “Premises Value”) and(y) otherwise reasonably satisfactory in all respects to the Landlord and theLandlord’s Mortgagee.  In the eventthat the Substitute Premises Value is less than the Premises Value, providedthat such differential in value does not exceed ten percent (10%) of thePremises Value and further provided that all other requirements of this Article24 are satisfied, Tenant shall deposit with Landlord’s Mortgagee, as additionalcollateral for Landlord’s Mortgagee’s loan to Landlord, funds in an amountequal to the difference between the Substitute Premises Value and the PremisesValue (an “Appraisal Shortfall Deposit”) and the requirement in (x) above shallbe deemed satisfied.  Upon the fullsatisfaction of the Landlord’s Mortgagee’s loan, any Appraisal ShortfallDeposit shall be returned by Landlord’s Mortgagee to Tenant;

 

(iii)          Specialwarranty deed (or the approximate local equivalent) in form and substancesatisfactory to the Landlord and the Landlord’s Mortgagee, duly executed andacknowledged by the Tenant, conveying to the Landlord good and marketable feesimple title to the land and improvements constituting the Substitute Premises,subject only to liens and matters of record which are reasonably approved byLandlord and Landlord’s Mortgagee;

 

(iv)          Anamendment to this Lease duly executed by the Tenant providing for the lease ofthe Substitute Premises by the Landlord to the Tenant upon all of the terms andconditions set forth in this Lease, except that the term shall be equal to thethen remaining term under this Lease, and the Annual Rent for all of thePremises (including the Substitute Premises and excluding the Premises forwhich the Substitute Premises is a substitute) shall be equal to the AnnualRent under this Lease immediately prior to the substitution;

 

(v)           Amemorandum of lease (or the approximate local equivalent) with respect to theSubstitute Premises, duly executed and acknowledged by the Tenant and in properform for recording;

 

(vi)          Suchamendments, supplements and/or confirmations of the Guaranty and of any otherrelated documents as the Landlord or the Landlord’s Mortgagee reasonably mayrequire in connection with such substitution, including without limiting thegenerality of the foregoing, amendments, supplements and/or confirmations toany loan agreement, promissory note, mortgage or deed of trust by and betweenLandlord and Landlord’s Mortgagee or by Landlord in favor of Landlord’sMortgagee (all of the documents in this Clause (vi) and in Clauses (ii) through(v) above, being referred collectively as the “Substitution Documents”);

 

(vii)         Opinion(s)of counsel to Tenant, including local counsel in the jurisdiction in which theSubstitute Premises is located, opining, subject only to reasonable andcustomary assumptions, exceptions and qualifications (A) that the execution anddelivery by the Tenant of the Substitution Documents and the performance by theTenant of its obligations under the Substitution Documents have been dulyauthorized by all necessary corporate actions on the part of the Tenant, (B)that the Substitution Documents have been validly executed and delivered by theTenant, (C) that the Substitution Documents constitute the legal, valid andbinding obligations of the Tenant enforceable against the Tenant in accordancewith their respective

 

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terms, (D) that each of the Substitution Documents to be recorded orfiled in the jurisdiction in which the Substitute Premises is located is inproper form for recording or filing in the appropriate land records or in theappropriate filing office, as the case may be, in such jurisdiction and, whenrecorded or filed, as the case may be, will be effective (x) to validlytransfer legal fee title in the Substitute Premises to the Landlord, (y) tocreate a valid leasehold estate in the Substitute Premises in favor of theTenant and (z) to create a valid and perfected mortgage lien on the SubstitutePremises in favor of the Landlord’s Mortgagee, and (E) as to such other mattersas the Landlord or the Landlord’s Mortgagee reasonably may require inconnection with the Substitute Premises and the Substitution Documents;

 

(viii)        (A)to the Landlord’s Mortgagee, a reissued ALTA extended coverage Lender’s Policyof Title Insurance or an endorsement to the Landlord’s Mortgagee’s ALTAextended coverage Lender’s Policy of Title Insurance, as applicable, in formreasonably acceptable to the Landlord’s Mortgagee, issued by the titleinsurance company, its successor and/or assigns, which issued Landlord’sMortgagee’s existing ALTA extended coverage Lender’s Policy of Title Insurance,ensuring that the lien of the mortgage or deed of trust in favor of Landlord’sMortgagee continues to be a valid first priority mortgage lien on the Premisesand is a valid first priority lien on the Substitute Premises, subject only toliens and other matters of record reasonably acceptable to Landlord’s Mortgageeand (B) to the Landlord, an ALTA extended coverage Owner’s Policy of TitleInsurance, issued by a title insurance company reasonably acceptable toLandlord’s Mortgagee in an amount equal to the fair market value of theSubstitute Premises, and ensuring that the Landlord has good and marketable feesimple title to the Substitute Premises, subject only to liens and othermatters of record reasonably acceptable to Landlord;

 

(ix)           AnALTA survey of the Substitute Premises, dated no more than (90) days before theSubstitution Date, certified to the Landlord, the title insurance companyissuing the title insurance or title endorsement referred to in Clause (viii)above and the Landlord’s Mortgagee, by land surveyor duly registered and licensedin the state where the Substitute Premises is located and in form and substancesimilar to the surveys delivered in connection with the closing of the loanfrom Landlord’s Mortgagee to Landlord and otherwise reasonably acceptable tothe Landlord and the Landlord’s Mortgagee;

 

(x)            APhase I environmental study in respect of the Substitute Premises by aqualified, independent environmental consulting firm reasonably acceptable tothe Landlord and the Landlord’s Mortgagee showing that the Substitute Premisesis in full compliance with all applicable environmental laws or otherwiseshowing such manner of environmental noncompliance or risk as shall beacceptable in the reasonable discretion of the Landlord and the Landlord’sMortgagee;

 

(xi)           Anengineering study in respect of the Substitute Premises by a qualified,independent engineering firm reasonably acceptable to the Landlord and theLandlord’s Mortgagee, reasonably acceptable in form and substance to theLandlord and the Landlord’s Mortgagee;

 

(xii)          (A)evidence that Tenant has paid any and all transfer taxes, recording fees,mortgage recording taxes, intangible taxes and similar charges in connectionwith such

 

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substitution and (B) a commitment by the Tenant to pay all of thereasonable costs and expenses (including reasonable attorney’s fees) incurredby the Landlord and the Landlord’s Mortgagee and such other persons party toany Substitution Documents or that shall have provided services in connectionwith such substitution;

 

(xiii)         Inthe event that the debt of Landlord to Landlord’s Mortgagee shall have beendeposited with a trust or other entity, which trust or other entity shall havesold certificates to investors evidencing an ownership interest in the assetsof such trust or other entity, or securities collateralized by such debt shallhave been sold to one or more investors (in either event, a “Secondary MarketTransaction”), Standard & Poor’s Ratings Service (and/or any other rating agencythen rating such certificates or securities) shall have confirmed in writing orLandlord’s Mortgagee has determined to its reasonable satisfaction that thesubstitution of the Substitute Premises for the Premises being substituted willnot result in a downgrade, withdrawal or qualification of the rating thenassigned to such certificates or securities;

 

(xiv)        Ifrequested by Landlord’s Mortgagee, an opinion of tax counsel selected byLandlord and reasonably acceptable to the Tenant and Landlord’s Mortgageeconfirming that neither the Landlord nor the Landlord’s Mortgagee will sufferor incur any adverse tax consequences in connection with the substitution;

 

(xv)         Inthe event that a Secondary Market Transaction shall have occurred, and if thedebt of the Landlord to the Landlord’s Mortgagee is at such time held by a realestate mortgage investment conduit (“REMIC”) as defined in Section 860D of theInternal Revenue Code of 1986, as amended (the “Code”) or a financial assetsecuritization investment trust (“FASIT”) as defined in Section 860L of theCode, an opinion of tax counsel selected by Landlord’s Mortgagee or itssuccessor in interest confirming that such REMIC or FASIT, as the case may be,will not fail to maintain its status as a REMIC or FASIT as the result of suchsubstitution; and

 

(xvi)        Suchother documents, instruments, due diligence, reports and information as theLandlord or the Landlord’s Mortgagee may reasonably request, it beingunderstood that a request for documents, instruments, due diligence, reportsand information similar to that delivered at or in connection with the closingof the loan by Landlord’s Mortgagee to Landlord are deemed reasonable.

 

Upon the satisfaction of all of the conditions contained in Clauses (i)through (xvi) above and the payment by Tenant to Landlord of any accrued butunpaid Annual Rent and other amounts, if any, due under this Lease as of theclosing date of such substitution, (x) the Landlord shall convey the Premisesfor which the Substitute Premises is a substitute on an “as is, where is” basisand without recourse to or warranty by the Landlord, except as to the absenceof liens caused or imposed by the Landlord without the knowledge and consent ofthe Tenant and subject to the same disclaimers as set forth above, (y)Landlord’s Mortgagee shall reconvey or release the lien of Landlord’sMortgagee’s mortgage or deed of trust with respect to the Premises for whichsuch substitution is being effectuated, and (z) Tenant shall convey theSubstitute Premises to the Landlord.

 

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***ARTICLE 25*****GENERALPROVISIONS**

 

25.01       Estoppel Certificates.  Each party (“Responding Party”) shallat any time upon not less than fifteen (15) business days’ prior written noticefrom the other party (“Requesting Party”) execute, acknowledge, and deliver tothe Requesting Party a statement reasonably satisfactory to Landlord certifyingand acknowledging the following: (i) that this Lease represents the entireagreement between Landlord and Tenant, and is unmodified and in full force andeffect (or, if modified, stating the nature of such modification and certifyingthat this Lease, as so modified, is in full force and effect) and the date towhich the Annual Rent and other charges are paid in advance, if any; and(ii) that there are not, to the Responding Party’s knowledge, any uncureddefaults on the part of the Requesting Party, or specifying such defaults ifany are claimed.  Any such statementmay be conclusively relied upon by any prospective purchaser, mortgagee orencumbrancer of the Premises or of the business of the Requesting Party.

 

25.02       Severability.  The invalidity of any provision of this Lease as determinedby a court of competent jurisdiction shall in no way affect the validity of anyother provision hereof.

 

25.03       Entire Agreement.  It is understood that there are no oral or other writtenagreements or representations between the parties hereto concerning the subjectmatter of this Lease, and that this Lease and the Exhibits hereto supersede andcancel any and all previous negotiations, arrangements, representations,brochures, displays, projections, estimates, agreements, and understandings, ifany, made by Landlord or Tenant with respect to the subject matter hereof, andnone thereof shall be used to interpret, construe, supplement, or contradictthis Lease.  This Lease, and theExhibits hereto, and all amendments hereto, constitute and shall be consideredto be the only agreement between the parties hereto and their representativesand agents.  All negotiations andoral agreements acceptable to both parties have been merged into and areincluded herein and in the Exhibits hereto.

 

25.04       Notices.  Any notice required or permitted to begiven hereunder shall be in writing and may be given by personal delivery,certified mail, return-receipt requested or by nationally recognized overnightcourier service and, if given by mail or courier service, shall be deemedsufficiently given if addressed to Tenant or to Landlord, as the case may be,at the addresses noted in Article 1 hereof.  Delivery by courier will be deemed given on the dateindicated in the courier’s records; delivery by certified mail will be deemedgiven on the date indicated on the return receipt.  Either party may by notice to the other specify a differentstreet address for notice purposes. A copy of all notices required or permitted to be given hereunder shallbe concurrently transmitted to such party or parties at such addresses as mayfrom time to time hereafter be designated by notice.

 

25.05       Waivers.  No waiver by a party of any provisionhereof shall be deemed a waiver of any other provision hereof or of anysubsequent breach by the other party of the same of any other provision.  Landlord’s consent to, or approval of,any act shall not be deemed to render unnecessary the obtaining of Landlord’sconsent to or approval of any subsequent act by Tenant.  The acceptance of rent hereunder byLandlord shall not be a waiver of any preceding breach by Tenant of any provisionhereof, other than the failure of Tenant to pay the particular rent so

 

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accepted, regardless of Landlord’s knowledge of such preceding breachat the time of acceptance of such rent.

 

25.06       Recording. Either Landlord or Tenant shall, upon request of the other, execute,acknowledge, and deliver to the other a “short form” memorandum of this Leasefor recording purposes in each county where any of the Premises islocated.  Such memorandum shall bein a form reasonably acceptable to Landlord and sufficient for Tenant to obtaina leasehold policy of title insurance based thereon.  In the event of any termination of this Lease, Tenant agreesto execute and deliver to Landlord one or more termination agreementssatisfactory to Landlord, which termination agreement shall be similarlyrecorded.

 

25.07       Holding Over.  If Tenant remains in possession of the Premises or any partthereof after the expiration or termination of the Lease Term, such occupancyshall be a tenancy from month-to-month upon all the provisions of this Leasepertaining to the obligations of Tenant and Tenant shall thereby waive itsrights to any additional notice to quit, but all options, if any, granted underthe terms of this Lease shall be deemed terminated and be of no further forceor effect.  The monthly rentalduring such hold-over period shall be equal to one hundred ten percent (110%)of the monthly installment of Annual Rent payable immediately prior toexpiration or termination of the Lease Term.  In addition, Tenant shall continue to be obligated to payall Impositions and other amounts required to be paid by the terms of thisLease.

 

25.08       Cumulative Remedies.  No remedy or election hereunder shallbe deemed exclusive but shall, wherever possible, be cumulative with all otherremedies at law or in equity.

 

25.09       Choice of Law This Lease shall be governed by the laws of the State of Californiawithout regard to conflicts of laws, provided that the laws of the jurisdictionin which a particular Premises is located shall, to the extent mandated by theLaws of such jurisdiction, govern the exercise by Landlord of its remediesunder this Lease with respect to such Premises.  Except as may otherwise be required by the Laws of the jurisdictionin which any of the Premises is located, the parties hereto (i) submit andconsent in advance to the exclusive and in personam jurisdiction of any stateor federal court located within Los Angeles County, California, in any actionor suit pertaining to this Lease or to any matter arising out of or related tothis Lease, (ii) waives any right to transfer or change the venue oflitigation brought under this Lease, and (iii) agrees to service ofprocess, to the extent permitted by law, by mail.

 

25.10       Attorneys’ Fees.  Should either party institute any action or proceeding toenforce any provision hereof or for a declaration of such party’s rights orobligations hereunder, the prevailing party shall be entitled to receive fromthe losing party such amounts as the court may adjudge to be reasonableattorneys’ fees for services rendered to the party prevailing in any suchaction or proceeding, and such fees shall be deemed to have accrued upon thecommencement of such action or proceeding.

 

25.11       Force Majeure.  Except for payment obligations imposed pursuant to thisLease, if there is any prevention, delay, or stoppage of an act required of aparty pursuant to this Lease because of strikes, lockouts, other labor disputes,material shortages, embargoes, civil unrest, governmental regulations,governmental controls, enemy or hostile governmental action, judicial order,public emergency, fire, earthquake, other Acts of God, and other causes (otherthan

 

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financial condition beyond the reasonable control of the partyobligated to perform, performance of the act will be excused for the period ofthe delay.

 

25.12       Consent.  Whenever the consent or approval ofeither party is required pursuant to this Lease, such consent or approval willnot be unreasonably withheld or delayed except as otherwise expressly providedherein.

 

25.13       Liability of Landlord.

 

(a)           Inthe event of any sale or other transfer of Landlord’s interest in any of thePremises, Landlord shall be and hereby is entirely freed and relieved of allliabilities and obligations of Landlord hereunder with respect to such Premisesto the extent accruing after the date of such transfer.

 

(b)           Notwithstandinganything contained herein to the contrary, it is specifically understood andagreed that there shall be no personal liability of Landlord or any of itsshareholders, members, officers or directors in respect of any of the terms,covenants, conditions or provisions of this Lease, and in the event of a breachor default by Landlord of any of its liabilities and obligations under thisLease, Tenant and any persons claiming by, through or under Tenant shall looksolely to the equity of Landlord in the Premises for the satisfaction ofTenant’s and/or such persons’ remedies and claims for damages.

 

25.14       NoMerger.  There shall be nomerger of this Lease, or the leasehold estate created by this Lease, with anyother estate or interest in the Premises, or any part thereof, by reason of thefact that the same person, firm, corporation or other entity may acquire or ownor hold, directly or indirectly, (a) this Lease or the leasehold estatecreated by this Lease, or any interest in this Lease or in any such leaseholdestate, and (b) any such other estate or interest in the Premises or anypart thereof, and no such merger shall occur unless and until all persons,corporations, firms, and other entities having an interest (including asecurity interest) in (i) this Lease or the leasehold estate created by thisLease; and (ii) any such other estate or interest in the Premises, or anypart thereof, shall join in a written instrument effecting such merger andshall duly record the same.

 

25.15       Reports.  Tenant agrees to furnish to Landlord,with reasonable promptness upon Landlord’s request:  financial statements, reports and documents which Tenant andeach guarantor of this Lease sends to or makes available to its shareholders,noteholders or bondholders.

 

25.16       Definition of Rent.  All monetary obligations of Tenant to Landlord under theterms of this Lease, including, without limitation, all Impositions, RealProperty Taxes and insurance premiums payable hereunder, shall be deemed to be“rent”.

 

25.17       Interpretation.  The captions by which the Articles andSections of this Lease are identified are for convenience only and shall haveno effect upon the interpretation of this Lease.  Whenever the context so requires, singular numbers shallinclude the plural, the plural shall refer to the singular, the neuter gendershall include the masculine and feminine genders, and the words “Landlord” and“Tenant” and “person” shall include corporations, partnerships, associations,other legal entities, and individuals.

 

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25.18       Relationship of the Parties.  Nothing in this Lease shall create apartnership, joint venture, employment relationship, borrower and lenderrelationship, or any other relationship between Landlord and Tenant other thanthe relationship of landlord and tenant.

 

25.19       Successors. This Lease shall be binding upon and inure to the benefit of the partieshereto and their respective personal and legal representatives, heirs,successors, and assigns.

 

25.20       Modifications. This Lease may not be altered,amended, changed, terminated, or modified in any manner unless the same shallbe in writing and signed by or on behalf of the party to be bound.  No waiver of any provision of thisLease of any right of Landlord hereunder shall be effective unless in writingsigned by or on behalf of the person to be bound.

 

25.21       Brokerage Fees.  Landlord and Tenant each represent and warrant that theyhave not employed a broker in connection with the execution of this Lease.  Landlord and Tenant shall eachindemnify and hold the other harmless from and against any claim or claims forbrokerage or other commissions arising from such party having employed a brokercontrary to its representation in this Section 25.21.

 

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25.22       Not Binding Until Executed.  This Lease does not constitute an“offer” and is not binding until fully executed and delivered by Landlord.

 
|   | LANDLORD:                                                            |
|--------|----------------------------------------------------------------------|
|   |                                                                 |
|   | **ARG  PROPERTIES II, LLC, a California  limited liability company** |
|   |                                                                 |
|   | By:                                                                  | ARG Properties (DE) Corporation II,  a Delaware corporation, its Manager |
|   |                                                                 |   |
|   |                                                                 | By |   |   |
|   |                                                                 | Kevin A. Shields, President |   |
|   |                                                                 | Date: |   |   |
|        |                                                                      |  |  |  |  |  |  |

 
|   | TENANT:                                               |
|--------|-------------------------------------------------------|
|   |                                                  |
|   | **ARG  Enterprises, Inc., a California  corporation** |
|   |                                                  |
|   | By                                                    |   |   |
|   | Its                                                   |   |   |
|   | Date:                                                 |   |   |
|        |                                                       |  |  |  |  |

 

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| STATE OF CALIFORNIA | )      |   |
|---------------------|--------|--------|
|                | ) ss.  |   |
| COUNTY OF           |   | )      |   |
|                     |        |        |  |

 

The foregoing instrument was acknowledged before me this                      day of                     , 199    , by                          , as                      of                                   , a                              ,on behalf of                                     ..

 
|   |                           |
|--------|--------------------------------|
|   | Notary Public                  |
|   | Los Angeles County, California |
|   | My Commission Expires:         |   |
|   | [Notary Public’s Seal]    |

 
| STATE OF CALIFORNIA | )      |   |
|---------------------|--------|--------|
|                | ) ss.  |   |
| COUNTY OF           |   | )      |   |
|                     |        |        |  |

 

The foregoing instrument was acknowledged before me this                      day of                      , 199     , by                      , as                       of ARG Enterprises, Inc., a California corporation, on behalf of ARGEnterprises, Inc.

 
|   |                           |
|--------|--------------------------------|
|   | Notary Public                  |
|   | Los Angeles County, California |
|   | My Commission Expires:         |   |
|   | [Notary Public’s Seal]    |

 

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**EXHIBITATOLEASE**

 

[Insertlegal description of Premises]

 

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**EXHIBITBTOLEASE**

 

RecordingRequested Byand When Recorded Mail To:

 

AmericanRestaurant Group, Inc.Attn:  Law Department4410 El Camino Real, Suite 201Los Altos, California  94022

 

 

**SUBORDINATION,NON-DISTURBANCE ANDATTORNMENT AGREEMENT[ AND NOTICE OF NON-RESPONSIBILITY]**

 

THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT[ ANDNOTICE OF NON-RESPONSIBILITY] (this “Agreement”) is made and entered into as ofthe               day of                                 , 199     ,by and among (i) ARG Enterprises, Inc., a California corporation (“Tenant”);(ii) ARG Properties II, LLC, a California limited liability company(“Landlord”); and (iii) [LENDER], [ENTITY] (“Lender”).

 

**WITNESSETH:**

 

WHEREAS, Lender is the holder of that certain mortgage/deed of trust,dated                                          ,             (“Mortgage/Deed of Trust”) encumbering those certain parcels of realproperty and the improvements thereon, relating to                     (      ) restaurant assets commonly known as either Stuart Anderson’s BlackAngus or Stuart Anderson’s Cattle Company restaurant(s) located at and moreparticularly described in Exhibit 1 attached hereto and incorporated herein bythis reference (individually and collectively, “Property”);

 

WHEREAS, Lender and Landlord are parties to the Mortgage/Deed of Trust,pursuant to which Landlord financed the Property with Lender; and

 

WHEREAS, Landlord and Tenant are parties to that certain Lease,dated                    , 1996 (the “Lease”), pursuant to which Tenant leased the Property fromLandlord.

 

NOW, THEREFORE, in consideration for the mutual covenants andagreements contained herein, the sufficiency of which is hereby acknowledged,the parties hereto hereby agree as follows:

 

1.             Subordination.  Subject to the terms of this Agreement,the Lease, and the rights of Tenant in, to and under the Lease and theProperty, are hereby made subject, junior, and subordinate in all respects tothe Mortgage/Deed of Trust and to all renewals, modifications, consolidations,replacements, and extensions thereof and to the respective rights of Lenderthereunder as if all such instruments had been executed, delivered and recordedprior to the

 

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execution of the Lease. This clause shall be self-operative, and no further instrument shall berequired.  However, Tenantcovenants and agrees that if requested by Lender it will execute, acknowledgeand deliver any instrument or document reasonably requested to confirm the foregoingsubordination of the Lease within twenty (20) days after receipt of writtenrequest therefor.

 

2.             Non-Disturbance.  So long as Tenant is not in defaultbeyond any applicable grace or cure period in the payment of rent or any othersums payable under the Lease or in the performance of any of the other terms,covenants or conditions of the Lease on Tenant’s part to be performed, then:(a) Tenant’s possession of the Property shall not be diminished orinterfered with by Lender or any third-party purchaser; (b) the Leaseshall not be terminated or affected by the foreclosure of the Mortgage/Deed ofTrust or the Lender’s exercise of any remedy provided for in the Mortgage/Deedof Trust; and (c) in the event that Lender forecloses upon the Property,Lender shall elect to preserve the Lease as a lease between Lender and Tenantin accordance with the terms of this Agreement.

 

3.             Attornment.  In the event that the Lender foreclosesupon the Property, then:

 

(a)           Tenantshall be bound to Lender, and Lender shall be bound to Tenant, under all of theterms, covenants and conditions of the Lease for the balance of the termthereof remaining, and any extensions or renewals thereof which may be effectedin accordance with any option therefor contained in the Lease, with the sameforce and effect as if Lender were the original landlord under the Lease,except that Paragraph 3(b) below and the other provisions of this Agreementshall modify the Lease, and Tenant does hereby attorn to Lender as itslandlord, said attornment to be effective and self-operative without theexecution of any further instruments; provided, however, that within twenty(20) days after receipt of written request therefor from Lender, Tenant willexecute and deliver to Lender any instrument or other documents reasonablyrequested by Lender to confirm Tenant’s attornment to Lender.

 

(b)           Itis agreed that in no event shall Lender:

 

(1)                                beliable for any act or omission of any prior landlord (including Landlord);

 

(2)                                beobligated to cure any defaults of any prior landlord (including Landlord) whichoccurred prior to the date that Lender succeeded to the interest of such priorlandlord under the Lease; provided that from and after the date Lender becomesowner of the Property, Lender shall be obligated to cure any continuing defaultof the landlord under the Lease to the extent such default is capable of beingcured by Lender;

 

(3)                                besubject to any offsets or defenses which Tenant may be entitled to assertagainst any prior landlord (including Landlord) with respect to eventsoccurring prior to the date Lender succeeded to Landlord’s interest;

 

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(4)                                bebound by any Annual Rent or other amounts paid by Tenant to any prior landlord(including Landlord) more than one (1) month in advance of the date that Lendersucceeded to the interest of such prior landlord under the Lease; or

 

(5)                                bebound by any amendment or modification of the Lease or any supplementalagreement made without the written consent of Lender, such consent not to beunreasonably withheld.

 

4.             Paymentof Rent to Lender.  Tenantagrees to pay the Annual Rent and any other payments due under the Lease toLender upon receipt of written notice from Lender that it has succeeded to theinterest of Landlord under the Lease, and Landlord agrees that Tenant isentitled to rely conclusively upon such notice without any duty of inquiry.

 

5.             Limitationon Liability of Lender.  Thereshall be no personal liability on the part of Lender or any officer, director,employee, shareholder or partner of Lender for the performance of the Lease orany covenant or agreement contained therein or in this Agreement.  Tenant shall look solely to Lender’sestate and interest in the Property for the satisfaction of every remedy ofTenant for any breach by Lender under the Lease or this Agreement or otherwisearising out of or in connection with the Lease, and Tenant will not collect orattempt to collect any such claim out of any other assets of Lender.

 

6.             Performanceby Lender: Conflict.  Nothingin this Agreement shall be or be deemed to be an agreement by Lender to performany obligation of Landlord under the Lease unless and until the Lender acquiresthe Property, and then only if required to do so by the terms of the Lease, asmodified and limited by this Agreement. In the event of any conflict between the terms of this Agreement and theterms of the Lease, the terms of this Agreement shall control.

 

7.             Notices.  Any notice required or permitted to begiven hereunder shall be in writing and may be given by personal delivery,certified mail, return receipt requested or by nationally recognized overnightcourier service and, if given by mail or by courier service, shall be deemedsufficiently given if addressed to the parties at the addresses set forth below.  Delivery by courier will be deemedgiven on the date indicated in the courier’s records; delivery by certifiedmail will be deemed given on the date indicated on the return receipt.  Any party may by notice specify adifferent street address for notice purposes.

 

Addresses for Notices:

 

To Lender:                                                                                                                                      [LENDER]_________________________________________________________________________________

 

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To Landlord:                                                                                                                           ARGProperties II, LLCc/o Griffin Capital10940 Wilshire Blvd., Suite 1600Los Angeles, CA 90024Attn:       KevinA. ShieldsFax:         (310)443-4117

 

To Tenant:                                                                                                                                     ARGEnterprises, Inc.6th Floor450 Newport Center DriveNewport Beach, CA  92660Attn:       Directorof Real EstateFax:         (949)721-8941

 

With a copy to:                                                                                                             AmericanRestaurant Group, Inc.Suite 2014410 El Camino RealLos Altos, CA  94022Attn:       LegalDepartmentFax:         (650)949-6420

 

With a copy to:                                                                                                             StuartAnderson’s Restaurants4410 El Camino Real, Suite 201Los Altos, California  94022Attn:       Directorof Real EstateFax:         (650)949-6245

 

8.             Successorsand Assigns.  This Agreementand each and every covenant and provision contained herein shall be bindingupon and shall inure to the benefit of the parties hereto and their respectiverepresentatives, successors and assigns.

 

9.             Modifications,Counterparts.  This Agreementshall not be modified or amended in whole or in part except by a writingexecuted by all of the parties hereto or their respective representatives,successors or assigns.  ThisAgreement may be executed in one or more counterparts, each of which shall bedeemed to be an original and all of which shall constitute one and the sameinstrument.

 

10.           GoverningLaw; Jurisdiction.  ThisAgreement shall be governed by and construed in accordance with the laws of thejurisdiction in which the Property is located.

 

11. [         NOTICEOF NON-RESPONSIBILITY.  NOTICEIS HEREBY GIVEN THAT NEITHER LANDLORD NOR ANY LENDER WILL BE LIABLE ORRESPONSIBLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TOTENANT, OR TO ANYONE HOLDING AN INTEREST IN THE PROPERTY OR ANY PART THEREOFTHROUGH OR UNDER TENANT, AND THAT NO MECHANIC’S OR OTHER LIENS FOR ANY SUCHLABOR, SERVICES OR MATERIALS SHALL ATTACH

 

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TO OR AFFECT THE INTEREST OF LANDLORD OR ANY LENDER IN AND TO THEPROPERTY.]

 

[SIGNATUREPAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to beexecuted and delivered as of the date set forth below.

 
|   | TENANT:                    |
|--------|----------------------------|
|   |                       |
|   | **ARG  Enterprises, Inc.** |
|   |                       |
|   | By                         |   |
|   | Its                        |   |
|   | Dated:                     |   |
|        |                            |  |  |

 

 
|   | LANDLORD:                         |
|--------|-----------------------------------|
|   |                              |
|   | **ARG  PROPERTIES II, LLC**  |
|   |                              |
|   |                              |
|   | By:                               | ARG Properties (DE) Corporation II,  its Manager |
|   |                              |
|   |                              | By |   |
|   |                              | Its |   |
|   |                              | Dated: |   |
|        |                                   |  |  |  |

 

 
|   | LENDER:      |
|--------|--------------|
|   |         |
|   | **[LENDER]** |
|   |         |
|   | By           |   |
|   | Its          |   |
|   | Dated:       |   |
|        |              |  |  |

 

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**CALIFORNIA ALL-PURPOSE NOTARYACKNOWLEDGMENT**

 
| State of                             

County of                               

On this              day of,                             199       , before me, | ***** OPTIONAL  SECTION *****

**CAPACITY  CLAIMED BY SIGNER**                                                                                                                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Through statute does not  require the Notary to fill in the                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | data below, doing so may prove  invaluable to persons                                                                                                                                                                                                             |
| **,**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | relying on the document                                                                                                                                                                                                                                           |
| Name,  Title of Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  o     INDIVIDUAL                                                                                                                                                                                                                        |
| personally appeared                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | **,**                                                                                                                                                                                                                                                             |  o     CORPORATE OFFICERS(S) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Name(s)  of Signer(s)                                                                                                                                                                                                                                             |  o     PARTNER(S)     o      LIMITED |
| o personally known to me -**OR -**o proved to me on the basis of  satisfactory evidence to be the  person(s) whose name(s) is/are subscribed to the within instrument and  acknowledged to me that he/she/they executed the same in his/her/their  authorized capacity(ies), and that by his/her/their signature(s) on the  instrument the person(s), or the entity upon behalf of which the person(s)  acted, executed the instrument.                                                                                                                                                                                                                                         |                                       o      GENERAL |
|  o     ATTORNEY-IN-FACT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|  o     TRUSTEE(S)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|  o     GUARDIAN/CONSERVATOR                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|  o     OTHER:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                              |   |
| WITNESS my hand and official  seal.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | **SIGNER IS REPRESENTING:**                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | NAME OF PERSON(S) OR ENTITY(IES)                                                                                                                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                              |
| SIGNATURE  OF NOTARY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                              |

 

 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
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| *********************************  OPTIONAL SECTION *******************************                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| THIS CERTIFICATE MUST BE  ATTACHED TO THE DOCUMENT DESCRIBED BELOW:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| TITLE OR TYPE OF DOCUMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| NUMBER OF PAGES                       DATE OF DOCUMENT                                                                                         |
| SIGNER(S) OTHER THAN NAMED  ABOVE                                                                                                    |
| Though the data requested here  is not required by law, it could prevent fraudulent reattachment of this  form.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

 

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**CALIFORNIA ALL-PURPOSE NOTARYACKNOWLEDGMENT**

 
| State of                             

County of                               

On this              day of,                             199      , before me, | ***** OPTIONAL  SECTION *****

**CAPACITY  CLAIMED BY SIGNER**                                                                                                                                                                                                    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Through statute does not  require the Notary to fill in the data below, doing so may prove invaluable  to persons  relying on the  document                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| **,**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Name,  Title of Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  o     INDIVIDUAL                                                                                                                                                                                                                        |
| personally appeared                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | **,**                                                                                                                                                                                                                                                             |  o     CORPORATE OFFICERS(S) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | Name(s)  of Signer(s)                                                                                                                                                                                                                                             |  o     PARTNER(S)     o      LIMITED |
| o personally known to me -**OR -**o proved to me on the basis of satisfactory  evidence to be the person(s) whose name(s) is/are subscribed to the within  instrument and acknowledged to me that he/she/they executed the same in  his/her/their authorized capacity(ies), and that by his/her/their  signature(s) on the instrument the person(s), or the entity upon behalf of  which the person(s) acted, executed the instrument.                                                                                                                                                                                                                                              |                                       o      GENERAL |
|  o     ATTORNEY-IN-FACT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|  o     TRUSTEE(S)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|  o     GUARDIAN/CONSERVATOR                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|  o     OTHER:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                              |   |
| WITNESS my hand and official  seal.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | **SIGNER IS REPRESENTING:**                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | NAME OF PERSON(S) OR  ENTITY(IES)                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                              |
| SIGNATURE  OF NOTARY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                                                                                                                                                                                                              |

 

 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *********************************  OPTIONAL SECTION *******************************                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| THIS CERTIFICATE MUST BE  ATTACHED TO THE DOCUMENT DESCRIBED BELOW:                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| TITLE OR TYPE OF DOCUMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| NUMBER OF PAGES                       DATE OF  DOCUMENT                                                                                 |
| SIGNER(S) OTHER THAN NAMED  ABOVE                                                                              |
| Though the data requested here  is not required by law, it could prevent fraudulent reattachment of this  form.                                                                                                                                                                                                                                                                                                                                                                                                 |

 

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**CALIFORNIA ALL-PURPOSE NOTARYACKNOWLEDGMENT**

 
| State of                             

County of                               

On this              day of,                             199       , before me, | ***** OPTIONAL  SECTION *****

**CAPACITY  CLAIMED BY SIGNER**                                                                                                                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Through statute does not  require the Notary to fill in the data below, doing so may prove invaluable  to persons relying on the document                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **,**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Name,  Title of Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  o     INDIVIDUAL                                                                                                                                                                                                                        |
| personally appeared                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | **,**                                                                                                                                                                                                                                                             |  o     CORPORATE OFFICERS(S) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Name(s)  of Signer(s)                                                                                                                                                                                                                                             |  o     PARTNER(S)     o      LIMITED |
| o personally known to me -**OR -**o proved to me on the basis of satisfactory  evidence to be the person(s) whose name(s) is/are subscribed to the within  instrument and acknowledged to me that he/she/they executed the same in  his/her/their authorized capacity(ies), and that by his/her/their  signature(s) on the instrument the person(s), or the entity upon behalf of  which the person(s) acted, executed the instrument.                                                                                                                                                                                                                                               |                                       o      GENERAL |
|  o     ATTORNEY-IN-FACT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|  o     TRUSTEE(S)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|  o     GUARDIAN/CONSERVATOR                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|  o     OTHER:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                              |   |
| WITNESS my hand and official  seal.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | **SIGNER IS REPRESENTING:**                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | NAME OF PERSON(S) OR  ENTITY(IES)                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                              |
| SIGNATURE  OF NOTARY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                              |

 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
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| *********************************  OPTIONAL SECTION *******************************                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| THIS CERTIFICATE MUST BE  ATTACHED TO THE DOCUMENT DESCRIBED BELOW:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| TITLE OR TYPE OF DOCUMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| NUMBER OF PAGES                       DATE OF DOCUMENT                                                                           |
| SIGNER(S) OTHER THAN NAMED  ABOVE                                                                                      |
| Though the data requested here  is not required by law, it could prevent fraudulent reattachment of this  form.                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

 

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EXHIBIT1 to**SUBORDINATION,NONDISTURBANCE AND ATTORNMENT AGREEMENT**[Insert legal description of the Premises.]

 

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EXHIBIT C(Article 5)

 
| RECORDING  REQUESTED BY AND  WHEN RECORDED RETURN TO:

 

 

Orrick,  Herrington & Sutcliffe LLP  777 South Figueroa Street  Suite 3200  Los Angeles, California  90017  Attn:  Michael A. McAndrews, Esq.

  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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(Spaceabove this line for Recorder’s use)

 

 

NOTICEOF NON-RESPONSIBILITY OF OWNER

 

NOTICE IS HEREBY GIVEN that the undersigned, ARG Properties II, LLC, aCalifornia limited liability company (“Owner”), is the owner of the realproperty located in the City of                           , County of                           , commonly identified as                                                                                                               ,and more particularly described in Exhibit A attached hereto (the“Property”).

 

That ARG Enterprises, Inc., a California corporation (“Tenant”), is thelessee of the Property.

 

That on                                   ,the undersigned first obtained knowledge that certain remodeling, construction,repair, or other work of or to the building or other improvements located onthe Property was being performed on the Property, and that materials,equipment, labor, services and supplies were being supplied in connectiontherewith.

 

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That neither the Owner nor any mortgagee or beneficiary of Owner willbe responsible for such work, materials, equipment, labor, services or suppliesor for any mechanics’, materialmens’ or other lien that may be claimed inconnection therewith.

 
|   | Dated:                                                           |                                         | .      |   |
|--------|------------------------------------------------------------------|----------------------------------------------|--------|--------|
|   |                                                             |                                         |
|   | ARG PROPERTIES II, LLC,  a California limited

liability company |
|   |                                                             |                                         |   |
|   | By:                                                              | ARG Properties (DE)  Corporation II, Manager |   |
|   |                                                             |                                         |   |
|   |                                                             | By:                                          |   |   |   |
|   |                                                             | Its:                                         |   |   |   |
|        |                                                                  |                                              |        |        |  |  |  |  |

 

 

The undersigned acknowledges that it has read the foregoing Notice ofNon-Responsibility and knows its contents, and it is true to the undersigned’sown knowledge.

 

Executed at Los Angeles, California on                                   ..

 

The undersigned declares under penalty of perjury that the foregoing istrue and correct.

 
|   | ARG ENTERPRISES, INC.,  a California

corporation |
|--------|---------------------------------------------------|
|   |                                              |
|   | By:                                               |   |   |
|   | Its:                                              |   |   |

 

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**CALIFORNIA ALL-PURPOSE NOTARYACKNOWLEDGMENT**

 
| State of                             

County of                               

On this              day of,                             199       , before me, | ***** OPTIONAL  SECTION *****

**CAPACITY  CLAIMED BY SIGNER**                                                                                                                                                                                                    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Through statute does not  require the Notary to fill in the data below, doing so may prove invaluable  to persons relying on the document                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
| **,**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Name,  Title of Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  o     INDIVIDUAL                                                                                                                                                                                                                        |
| personally appeared                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | **,**                                                                                                                                                                                                                                                             |  o     CORPORATE OFFICERS(S) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | Name(s)  of Signer(s)                                                                                                                                                                                                                                             |  o     PARTNER(S)     o      LIMITED |
| o personally known to me -**OR -**o proved to me on the basis of satisfactory  evidence to be the person(s) whose name(s) is/are subscribed to the within  instrument and acknowledged to me that he/she/they executed the same in  his/her/their authorized capacity(ies), and that by his/her/their  signature(s) on the instrument the person(s), or the entity upon behalf of  which the person(s) acted, executed the instrument.                                                                                                                                                                                                                                               |                                       o      GENERAL |
|  o     ATTORNEY-IN-FACT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|  o     TRUSTEE(S)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|  o     GUARDIAN/CONSERVATOR                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|  o     OTHER:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                              |
| WITNESS my hand and official  seal.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | **SIGNER IS REPRESENTING:**                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | NAME OF PERSON(S) OR  ENTITY(IES)                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                              |
| SIGNATURE  OF NOTARY                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                                                                                                                                                                                                              |

 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| *********************************  OPTIONAL SECTION *******************************                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| THIS CERTIFICATE MUST BE  ATTACHED TO THE DOCUMENT DESCRIBED BELOW:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| TITLE OR TYPE OF DOCUMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| NUMBER OF PAGES                       DATE OF DOCUMENT                                                                                              |
| SIGNER(S) OTHER THAN NAMED  ABOVE                                                                                                         |
| Though the data requested here  is not required by law, it could prevent fraudulent reattachment of this  form.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

 

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**EXHIBIT D**

 

**ARG PROPERTIES II, LLC**

 

**Allocated Rent Schedule**

 
| **Prop.  Num.** |                  |                                  |       |   |   | **Allocated  Rent Amount** |    |
|-----------------|-----------------------|---------------------------------------|------------|--------|--------|----------------------------|---------|
|            | **Property  Address** | ** **                            | ** ** |
| 1014            |                  | 6601 Florin Road, Sacramento          |       | CA     |   | $                          | 175,325 |   |
| 1015            |                  | 1000 Graves Avenue, El Cajon          |       | CA     |   | $                          | 255,925 |   |
| 1025            |                  | 707 E Street, Chula Vista             |       | CA     |   | $                          | 260,000 |   |
| 1065            |                  | 1616 Sisk Road, Modesto               |       | CA     |   | $                          | 250,000 |   |
| 1067            |                  | 3610 Park Sierra Boulevard, Riverside |       | CA     |   | $                          | 255,000 |   |
| 1069            |                  | 7111 Beach Boulevard, Buena Park      |       | CA     |   | $                          | 225,000 |   |
| 1075            |                  | 23221 Lake Center Drive, Lake Forest  |       | CA     |   | $                          | 240,000 |   |
| 1087            |                  | 3601 Rosedale Highway, Bakersfield    |       | CA     |   | $                          | 276,050 |   |
|            |                  |                                  |       |   |   |                       |    |
|            | **Total**             |                                  |       |   | **$**  | **1,937,300**              |    |
|                 |                       |                                       |            |        |        |                            |         |  |  |

 

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**TABLE OFCONTENTS**

 
| ARTICLE 1   | FUNDAMENTAL LEASE  PROVISIONS   |                                           |
|------------------|-------------------------------------------|------------------------------------------------|
|             |                                      |
| ARTICLE  2  | EXHIBITS                                  |
|             |                                      |
| ARTICLE  3  | PREMISES                                  |
|             |                                      |
| ARTICLE  4  | TERM                                      |
|             |                                      |
|             | 4.01                                      | Term                                           |
|             |                                      |                                           |
|             | 4.02                                 | Option to Extend Lease Term                    |
|             |                                      |                                           |
| ARTICLE  5  | LIENS                                     |
|             |                                      |
| ARTICLE  6       | RENT                                      |
|             |                                      |
|             | 6.01                                      | Rent                                           |
|             |                                      |                                           |
|             | 6.02                                      | Rental Adjustments                             |
|             |                                      |                                           |
|             | 6.03                                      | Net Lease; Impositions                    |
|             |                                      |                                           |
| ARTICLE  7       | USE  OF THE PREMISES                      |
|             |                                      |
|             | 7.01                                      | Use                                            |
|             |                                      |                                           |
|             | 7.02                                      | Compliance With Laws                           |
|             |                                      |                                           |
|             | 7.03                                      | Permits and Licenses                           |
|             |                                      |                                           |
| ARTICLE  8       | UTILITIES                                 |
|             |                                      |
|             | 8.01                                      | Payment                                        |
|             |                                      |                                           |
|             | 8.02                                      | Interruption in Service                        |
|             |                                      |                                           |
| ARTICLE  9       | TAXES                                     |
|             |                                      |
|             | 9.01                                      | Payment of Taxes                               |
|             |                                      |                                           |
|             | 9.02                                      | Definition of  “Real Property Taxes” |
|             |                                      |                                           |
|             | 9.03                                      | Personal Property Taxes                        |
|             |                                      |                                           |
|             | 9.04                                      | Tenant’s Right to  Contest Taxes          |
|             |                                      |                                           |
|             | 9.05                                      | Survival of  Tenant’s Tax Obligations.    |
|             |                                      |                                           |
| ARTICLE 10       | MAINTENANCE AND  REPAIRS                  |
|             |                                      |
|             | 10.01                                     | Tenant’s Obligations                      |
|             |                                      |                                           |
|             | 10.02                                     | Landlord’s Obligations                    |
|             |                                      |                                           |
|             | 10.03                                     | Landlord’s Rights                         |
|             |                                      |                                           |
| ARTICLE 11       | INSURANCE AND  INDEMNIFICATION            |
|             |                                      |
|             | 11.01                                     | Tenant’s Insurance  Obligation            |
|             |                                      |                                           |
|             | 11.02                                     | Subrogation Waiver                             |
|                  |                                           |                                                |  |

 

i

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|        | 11.03                                       | Insurance Use Restrictions                             |
|-------------|---------------------------------------------|--------------------------------------------------------|
|        |                                        |                                                   |
|        | 11.04                                       | Indemnification                                        |
|        |                                        |                                                   |
|        | 11.05                                       | Payment of Insurance                                   |
|        |                                        |                                                   |
| ARTICLE 12  | ALTERATIONS                                 |
|        |                                        |
|        | 12.01                                       | Permitted Improvements                                 |
|        |                                        |                                                   |
|        | 12.02                                       | Liens                                                  |
|        |                                        |                                                   |
|        | 12.03                                       | Structural Alterations                                 |
|        |                                        |                                                   |
|        | 12.04                                       | Removal of Alterations                                 |
|        |                                        |                                                   |
|        | 12.05                                       | Alterations Required by Law                            |
|        |                                        |                                                   |
|        | 12.06                                       | General  Conditions Relating to Alterations            |
|        |                                        |                                                   |
| ARTICLE  13 | SIGNS                                       |
|        |                                        |
| ARTICLE 14  | DAMAGE,  DESTRUCTION, OBLIGATION TO REBUILD |
|        |                                        |
|        | 14.01                                       | Obligation to Rebuild                                  |
|        |                                        |                                                   |
|        | 14.02                                       | No Abatement of Rent                                   |
|        |                                        |                                                   |
|        |                                        |                                                   |
| ARTICLE 15  | EMINENT DOMAIN                              |
|        |                                        |
|        | 15.01                                       | Total  Taking                                          |
|        |                                        |                                                   |
|        | 15.02                                       | Partial  Taking                                        |
|        |                                        |                                                   |
|        | 15.03                                       | Award                                                  |
|        |                                        |                                                   |
|        | 15.04                                       | Transfer Under Threat  of Taking                       |
|        |                                        |                                                   |
|        | 15.05                                       | Adjustment  of Annual Rent in connection with Takings. |
|        |                                        |                                                   |
| ARTICLE 16  | ASSIGNMENT AND  SUBLETTING                  |
|        |                                        |
|        | 16.01                                       | Landlord’s Consent  Required                      |
|        |                                        |                                                   |
|        | 16.02                                       | Assumption of Obligations                              |
|        |                                        |                                                   |
|        | 16.03                                       | Assignment to Affiliate                                |
|        |                                        |                                                   |
|        | 16.04                                       | No Release of Tenant                                   |
|        |                                        |                                                   |
| ARTICLE 17  | DEFAULT; REMEDIES                           |
|        |                                        |
|        | 17.01                                       | Default                                                |
|        |                                        |                                                   |
|        | 17.02                                       | Remedies                                               |
|        |                                        |                                                   |
|        | 17.03                                       | Administrative  Fee                                    |
|        |                                        |                                                   |
|        | 17.04                                       | Default by Landlord                                    |
|        |                                        |                                                   |
|        | 17.05                                       | Mitigation                                             |
|             |                                             |                                                        |  |

 

ii

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|       | 17.06                           | Lender’s Right to Cure     |
|------------|---------------------------------|---------------------------------|
|       |                            |                            |
| ARTICLE 18 | SUBORDINATION                   |
|       |                            |
| ARTICLE 19 | QUIET ENJOYMENT                 |
|       |                            |
| ARTICLE 20 | REPRESENTATIONS  AND WARRANTIES |
|       |                            |
|       | 20.01                           | Representation and Warranties   |
|       |                            |
| ARTICLE 21 | SURRENDER OF PREMISES           |
|       |                            |
| ARTICLE 22 | BANKRUPTCY OR  INSOLVENCY       |
|       |                            |
|       | 22.01                           | Bankruptcy or Insolvency        |
|       |                            |                            |
| ARTICLE 23 | HAZARDOUS MATERIALS             |
|       |                            |
|       | 23.01                           | Representations and  Warranties |
|       |                            |                            |
|       | 23.02                           | Definitions                     |
|       |                            |                            |
|       | 23.03                           | Tenant’s  Obligation       |
|       |                            |                            |
|       | 23.04                           | Landlord  Options               |
|       |                            |                            |
|       | 23.05                           | Indemnity                       |
|       |                            |                            |
|       | 23.06                           | Survival                        |
|       |                            |                            |
| ARTICLE 24 | SUBSTITUTE PREMISES             |
|       |                            |
| ARTICLE 25 | GENERAL PROVISIONS              |
|       |                            |
|       | 25.01                           | Estoppel Certificates           |
|       |                            |                            |
|       | 25.02                           | Severability                    |
|       |                            |                            |
|       | 25.03                           | Entire  Agreement               |
|       |                            |                            |
|       | 25.04                           | Notices                         |
|       |                            |                            |
|       | 25.05                           | Waivers                         |
|       |                            |                            |
|       | 25.06                           | Recording                       |
|       |                            |                            |
|       | 25.07                           | Holding  Over                   |
|       |                            |                            |
|       | 25.08                           | Cumulative Remedies             |
|       |                            |                            |
|       | 25.09                           | Choice of  Law                  |
|       |                            |                            |
|       | 25.10                           | Attorneys’  Fees           |
|       |                            |                            |
|       | 25.11                           | Force  Majeure                  |
|       |                            |                            |
|       | 25.12                           | Consent                         |
|       |                            |                            |
|       | 25.13                           | Liability of Landlord           |
|       |                            |                            |
|       | 25.14                           | No Merger                       |
|            |                                 |                                 |  |  |

 

iii

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|   | 25.15  | Reports                     |
|--------|--------|-----------------------------|
|   |   |                        |
|   | 25.16  | Definition  of Rent         |
|   |   |                        |
|   | 25.17  | Interpretation              |
|   |   |                        |
|   | 25.18  | Relationship of the Parties |
|   |   |                        |
|   | 25.19  | Successors                  |
|   |   |                        |
|   | 25.20  | Modifications               |
|   |   |                        |
|   | 25.21  | Brokerage  Fees             |
|   |   |                        |
|   | 25.22  | Not Binding Until Executed  |

 

iv

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