**EXHIBIT10.36**

 

# **LEASE AND OPTION TO PURCHASE**

 

This Lease andOption to Purchase (this “Agreement”) is made this 22ndday of October 2004 between Burger Time Acquisition Corporation, a Minnesotacorporation (“Tenant”), and Mark Fiechtner, an individual resident of the Stateof South Dakota (“Landlord”).

 

RECITALS

 

A.            Landlordowns certain real property located at 24 5th Street SE, Watertown,SD 57201 and legally described as                        ,City of Watertown, County of                        ,State of South Dakota (the “Property”).

 

B.            Landlorddesires to lease the Property to Tenant and to grant Tenant an exclusive optionto purchase the Property; Tenant desires to lease the Property from Landlordand wishes to obtain an exclusive option to purchase the Property.

 

NOW THEREFORE, in consideration of thepromises and mutual covenants set forth below, Landlord and Tenant, intendingto be legally bound, hereby agree for themselves and their successors andassigns as follows:

 

## LEASE

 

1.             Lease.  In consideration of the payment of the rentprovided for in this Agreement, and the keeping and performance of thecovenants and agreements of Tenant herein set forth, Landlord hereby leases theProperty to Tenant.

 

2.             Term.  Tenant may have and hold the Property withall its appurtenances for a term of one (1) year, commencing January 1, 2005,with a right to renew for a further one (1) year term (exercisable upon writtennotice to Landlord not later than December 1, 2005), unless the term herebydemised shall be sooner terminated as provided in this lease.

 

3.             Rent.  Tenant shall pay to Landlord, as monthly rentfor the Property for the term of this lease, the sum of $2,000.00 permonth.  The rent shall be payable inadvance, on or before the fifth day of each month, and without notice at theoffice of Landlord set forth below, or at such other place as Landlord fromtime to time designates in writing.  Thefirst installment of rent payable hereunder shall be payable by Tenant onbefore January 5, 2005.

 

4.             Costsand Expenses.  Landlord shall remainobligated for and shall discharge all ad valorem and similar real estatetaxes against the Property.  Tenant shallbe responsible for all other costs arising from or related to its occupancy ofthe Property, including any and all assessments for water and sewer rents thatmay be levied against the Property during the term of this lease, and allcharges for heating, light, gas, and telephone or other utility services to the

 

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Property, which Tenant shall pay as the same become due andpayable.  Tenant shall further maintainand pay for appropriate levels of insurance related to its occupancy of theProperty in such amounts and pursuant to such policies, naming Landlord as co-insured,as Landlord shall approve, which approval shall not be unreasonably withheld,conditioned, or delayed.  In additionTenant shall reimburse Landlord for $201.41 covering the cost of insurance onthe premises.  Tenant shall also pay$112.97 per month with the monthly rental payment covering the full amount ofthe Wells Fargo Lease on point-of-sale equipment.  Landlord will continuing paying the leasepayments directly.

 

5.             Use.  Tenant agrees to use the Property as arestaurant and for no unlawful or questionable purpose.

 

6.             Alteration.  Except with respect to signage in or aboutthe property, Tenant shall not make any alterations to the Property without theprior written consent of Landlord, which consent shall not be unreasonablywithheld, conditioned, or delayed.

 

7.             Inspection.  Landlord shall have the right at any time toenter the Property to examine the same, or upon reasonable notice to Tenant tomake such repairs as it may in its discretion deem necessary or proper for thesafety, improvement, or preservation thereof.

 

8.             Maintenanceand Repair.  Landlord shall make allnecessary repairs to the outer walls, roof, downspouts, gutters and basicstructural areas of the Property. Subject to the foregoing, Tenant shall keep the Property in good conditionand repair and at the expiration of this lease (and in the absence ofexercising its option to purchase the Property) shall surrender and deliver upthe same in as good order and condition as when entered upon, ordinary wear andtear excepted.

 

9.             OtherCovenants of Tenant.  Tenantcovenants and agrees that nothing shall be done or kept on the Property whichmight impair its value, or which would constitute waste, and further agreesthat no noxious or offensive activities shall be carried on upon the Property,nor shall anything be done or kept on the Property which may be or become apublic or private nuisance, or which may cause embarrassment, disturbance, orannoyance to others on adjacent or nearby premises.  Tenant further covenants and agrees toconduct its business and operations on and from the Property in accordance withall federal, state, and local environmental laws, regulations, executiveorders, ordinances, and directives, and not to cause, suffer, or permit anydamage or impairment to the health, safety, or comfort of any person or to theenvironment at or on the Property, including but not limited to damage orthreatened damage to the soil, surface or ground water resources at or near theProperty.

 

10.           Conditionof the Property.  The taking ofpossession of the Property by Tenant shall be conclusive evidence as againstTenant that the Property was in satisfactory condition when possession of thesame was taken.

 

11.           Condemnation.  If the whole or a substantial part of theProperty shall be taken for any public or quasi-public use, under any statuteor right of eminent domain or purchase by any governmental authority in lieu ofor under threat of any such taking, then, when possession shall 

 

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be taken of the Property, or any partthereof, the term herein demised and all rights of Tenant hereunder shallimmediately cease and terminate, and the rent shall be adjusted as of the timeof such termination.

 

12.           Casualty.  If during the continuance of this lease theProperty shall be so injured by casualty not arising from the fault ornegligence of Tenant, or those in its employ, so that the Property shallthereby be rendered unfit for use or occupation, then and in such case the rentherein reserved or a just proportionate part thereof, according to the natureand extent of the injury which has been sustained, shall be abated until theProperty shall have been duly repaired and restored.

 

13.           Tenant’sDefault.  If Tenant is in default inperformance of any of its obligations under this lease, and such defaultcontinues for a period of ten (10) days after written notice of such default isgiven by Landlord to Tenant, then, in addition to any other remedy Landlord mayhave against Tenant, Landlord may terminate Tenant’s right to possession andall other rights with respect to the Property under this Agreement, and tore-enter and repossess the Property, and to remove therefrom any personalproperty belonging to Tenant, without prejudice to any claim for rent or forthe breach of covenants hereof.

 

14.           Abandonment.  If Tenant abandons or vacates the Propertybefore the end of the term of this lease, then Landlord may, without beingobliged to do so, re-take possession of the Property.

 

15.           RemediesCumulative.  No reference to norexercise of any specific right or remedy by Landlord shall prejudice orpreclude Landlord from exercising or invoking any other remedy in respectthereof, whether allowed at law or in equity or expressly provided forherein.  No such remedy shall beexclusive or dependent upon any other such remedy, but Landlord may from timeto time exercise any one or more of such remedies independently or incombination.

 

16.           HoldingOver.  It is mutually agreed that if,after the expiration of this lease, Tenant remains in possession of theProperty, without a written agreement as to such holding, then such holdingover shall be deemed and taken to be a holding upon a tenancy from month tomonth at the monthly rental set forth in Section 3, adjusted upward by thepercentage increase in the U.S. Consumer Price Index from the latest indexavailable at expiration of this lease, and payable in advance on or before thefifth day of each calendar month.  Anymonth-to-month tenancy or tenancy at sufferance hereunder shall be subject toall other terms and conditions of this lease and nothing contained in thisSection shall be construed to alter or impair any of Landlord’s rights ofre-entry or eviction or constitute a waiver thereof.  Unless there is a mutal agreement of theparties the option to purchase the property shall terminate at the end of thelease term.

 

17.           NoWaiver.  No waiver of any breach ofany one or more of the conditions or covenants of this lease by either partyshall be deemed to imply or constitute a waiver of any succeeding or otherbreach hereunder.  Failure of eitherparty to insist upon strict performance of the terms, covenants, agreements,and conditions herein contained, or any of them, shall not constitute or beconstrued as a waiver or relinquishment of such party’s right to thereafter 

 

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enforce any such term, covenant, agreement,or condition, but the same shall continue in full force and effect.  Each party acknowledges and agrees that ithas not relied upon any statements, representations, agreements, or warranties,except such as are expressed in this Agreement.

 

18.           LateCharges.  If Tenant fails to timelypay any rent as required under this lease, then and in such event Landlordshall be entitled to collect a late fee of five percent (5%) of any suchinstallment not paid within five (5) days of the due date.

 

19.           Estoppel.  Tenant shall, at any time and from time totime, upon not less than ten days’ prior notice from Landlord, execute,acknowledge, and deliver a written statement ratifying this lease andcertifying any information concerning Tenant’s lease and occupancy of theProperty reasonably required by Landlord.

 

## OPTION TO PURCHASE

 

20.           Optionto Purchase.  For and inconsideration of its entering into the lease, Landlord grants to Tenant theexclusive right and option to purchase the Property on the terms and subject tothe conditions of this Agreement.  ThePurchase Price for the Property shall be $275,000.00.  Seller shall be responsible for pro-rataproperty taxes and for full payment of any special assessments.

 

21.           OptionPeriod.  Tenant’s right and option topurchase the Property shall commence upon commencement of the lease, and expireat the close of business, Central Time time, on the date on which the leaseexpires (including any renewal hereof) (the “Option Period”).

 

22.           OptionExercise.  At any time during theOption Period, Tenant may elect to exercise its option to purchase the Propertyby delivering to Landlord written notice of such election.  If Tenant does not deliver to Landlord suchnotice prior to the expiration of the Option Period, the option to purchaseshall terminate, shall be of no further force and effect, and Landlord shallhave no further obligation or liability whatsoever to Tenant.

 

23.           Closing.  If Tenant timely and properly exercises hisoption to purchase the Property, the parties shall proceed diligently toclosing and complete closing within sixty (60) days following the option exercise.  Tenant shall pay the Purchase Price atclosing in immediately available funds. The time and place of closing shall be designated by agreement of theparties, and at the closing Landlord shall convey merchantable title by goodand sufficient general warranty deed, at such time free and clear of all taxesand encumbrances except those of record which do not materially adverselyaffect the title to the Property. Landlord will promptly obtain a title commitment and furnish it toTenant after it exercises the option as provided herein, and will furnish atitle insurance policy to Tenant after the Closing and pay the premiumthereon.  If title is not satisfactory toTenant, Tenant may rescind exercise of its option to purchase theProperty.  Taxes, as determined by themost recently available levy and assessment, and all pre-paid items shall beapportioned to the date of Closing when the deed and possession of the Propertyshall be delivered to Tenant.  Other customaryclosing costs shall be split fifty percent (50%) to Landlord and fifty percent(50%) to Tenant.

 

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24.           Default.  If Landlord defaults under the terms andconditions of this option, Tenant may have the right to an action for specificperformance of its option to purchase the Property, in addition to any otherremedies available at law or in equity.

 

25.           Accessto Information.  During the OptionPeriod, Landlord agrees to afford tp Tenant and to Tenant’s authorizedrepresentatives reasonable access during normal business hours to the recordsof Landlord relating to the Property, and to make available to Tenant suchother information pertaining to the Property in its possession or under itscontrol.

 

## MISCELLANEOUS

 

26.           Inurement.  This Agreement shall bind and inure to thebenefit of the successors and assigns of the respective parties.

 

27.           EntireAgreement; Applicable Law.  ThisAgreement contains the entire understanding between the parties with respect tothe subject matter hereof.  Tenant andLandlord each acknowledge that no representations of any kind whatsoever havebeen made to induce its or his execution hereof, except such as are herein setforth, and that the sole consideration for this Agreement is specificallystated herein.  Neither this Agreementnor any modification hereof (which must be in writing) shall be binding uponany party until executed by the parties. Failure of any party to exercise any right hereunder, upon default ofany other party, shall not constitute a waiver of any such rights and shall notpermit such party from exercising any of its rights at any time thereafter orupon any subsequent default.  ThisAgreement and the rights and obligations of the parties shall be governed byand construed pursuant to the applicable laws of the State of South Dakota, andif any portion of this Agreement shall be held invalid or contrary to law, suchportion shall be severable from this Agreement and the remainder shall be validand enforceable.

 

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IN WITNESS WHEREOF, the parties have settheir hands and seals as of the day and year first above written.

 

 
| Tenant:   | BURGER TIME ACQUISITION  CORPORATION |
|-----------|--------------------------------------|
|      |                                 |
|      |                                 |
|      | By                                   |   |   |
|      | Its                                  |   |   |
|      | Address:                             |   |   |
|      |                                 |   |
|      | Telephone:                           |   |   |
|      | Facsimile:                           |   |   |
|      |                                 |   |
|      |                                 |   |
| Landlord: |                                 |   |
|      | MARK FIECHTER                        |   |   |
|      |                                 |   |
|      | Address:                             |   |   |
|      |                                 |   |
|      | Telephone:                           |   |   |
|      | Facsimile:                           |   |   |
|           |                                      |  |  |  |  |  |  |

 

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