Document:

Exhibit
10.31

 

FIRST AMENDMENT TO AMENDED MASTER LEASE AGREEMENT

 

This FIRST AMENDMENT TO AMENDED MASTER LEASE AGREEMENT
(this “Amendment”) is made and entered into as of October 1, 2002 by and
among (i) each of the parties identified on the signature page hereof as
landlord (collectively, “Landlord”), and (ii) FS TENANT HOLDING COMPANY
TRUST, a Maryland business trust, and FS TENANT POOL III TRUST,
a Maryland business trust, as tenant (collectively, “Tenant”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to that certain Master
Lease Agreement, dated as of January 7, 2002 (the “Lease”), by and among
CCC Ohio Healthcare, Inc. and Leisure Park Venture Limited Partnership, as
landlord (collectively, “Original Landlord”), and FS Tenant Holding
Company Trust, as tenant (“Original Tenant”), Original Landlord leased
the two (2) properties described in the Lease (the “Original Properties”)
to Original Tenant and Original Tenant leased the Original Properties from
Original Landlord; and

 

WHEREAS, pursuant to that certain Amended
Master Lease, dated as of January 11, 2002, Landlord (including, without
limitation, Original Landlord) and Tenant (including, without limitation,
Original Tenant) amended the Lease to include an additional twenty-nine (29)
properties; and

 

WHEREAS, Landlord and Tenant now wish to
amend the Lease to modify certain provisions therein regarding the ownership of
the FF&E Reserve (this and other capitalized terms having the meanings
ascribed thereto in the Lease), subject to and upon the terms and conditions
hereinafter provided;

 

NOW, THEREFORE, in consideration of the
mutual covenants herein contained and other good and valuable consideration,
the mutual receipt and legal sufficiency of which are hereby acknowledged,
Landlord and Tenant hereby agree that, as of the date hereof, the Lease is
hereby amended as follows:

 

1.             New
Defined Term: FF&E Reserve Pledge. 
Article 1 of the Lease is hereby amended by inserting the following
definition as Section 1.40 and renumbering all subsequent definitions
accordingly:

 

 

“FF&E Reserve Pledge” shall mean the
Assignment and Security Agreement, dated as of October 1, 2002, made by Tenant
for the benefit of Landlord with respect to the FF&E Reserve, as it may be
amended, restated, supplemented or otherwise modified from time to time.

 

2.             Revised
Defined Term:  Incidental Documents.  Section 1.52 of the Lease (Section
1.53 after giving effect to the renumbering of Section 1 as described
hereinabove) is hereby deleted in its entirety and replaced with the following:

 

“Incidental Documents” shall mean the FF&E
Reserve Pledge, the Guaranty, the Security Agreement and the Stock Pledge
Agreement.

 

3.             FF&E
Reserve.  Section 5.1.2 of
the Lease is hereby amended by deleting the last paragraph thereof and
replacing it with the following paragraphs:

 

On and before September
30, 2002, funds in the FF&E Reserve and all property purchased with those
funds shall be the property of Landlord and all FF&E Reserve Payments shall
constitute Additional Charges.  After
September 30, 2002, funds deposited in the FF&E Reserve and all property
purchased with those funds deposited after September 30, 2002 shall be the
property of Tenant.  Upon the expiration
or sooner termination of this Agreement, funds in the FF&E Reserve and all
property purchased with those funds during the Term shall be paid, granted and
assigned to Landlord as Additional Charges.

 

Tenant agrees that it
will, from time to time, execute such reasonable documentation as may be
requested by Landlord and/or any Superior Mortgagee to assist Landlord and/or
any Superior Mortgagee in establishing or perfecting the Superior Mortgagee’s
security interest in Landlord’s residual interest in the funds which are in the
FF&E Reserve; provided, however, that no such documentation
shall contain any amendment to or modification of any of the provisions of this
Agreement.

 

4.             Scope
of Amendment.  The parties hereto
acknowledge and agree that the purpose of this Amendment is merely to change
the name on the account into which the FF&E Reserve Payments are deposited
by Manager and is not intended to, and does not have the effect of, increasing
or expanding the obligations of Tenant to provide funds or pay any obligations
under the Lease.

 

2

 

5.             Security
Agreement.  Subtenant hereby
confirms that all references to the “Master Lease” in that certain Security
Agreement, dated as of January 7, 2002, made by Subtenant in favor of Landlord
shall refer to the Lease as amended by this Amendment.

 

6.             Stock
Pledge Agreement.  FS Tenant Holding
Company Trust hereby confirms that all references to the “Master Lease” in that
certain Pledge of Shares of Beneficial Interest Agreement, dated as of January
7, 2002, made by FS Tenant Holding Company Trust in favor of Landlord shall
refer to the Lease as amended by this Amendment.

 

7.             As
amended hereby, the Lease is hereby ratified and confirmed.

 

[Signatures on following
pages]

 

3

 

IN WITNESS WHEREOF, the parties hereto have
duly executed this Amendment as of the day and year first above written.

 

	
   

  	
  CCC FINANCING I TRUST,

  a Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CCC FINANCING LIMITED, L.P.,

  a Delaware limited partnership

  
	
   

  	
   

  
	
   

  	
  By: CCC RETIREMENT
  TRUST, its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CCC INVESTMENTS I, L.L.C.,

  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CCC OF KENTUCKY TRUST,

  a Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CCC OHIO HEALTHCARE TRUST,

  a Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CCC PUEBLO NORTE TRUST,

  a Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  	
   

  

 

4

 

	
   

  	
  CCC RETIREMENT COMMUNITIES II, L.P.,

  a Delaware partnership

  
	
   

  	
   

  
	
   

  	
  By: CRESTLINE VENTURES
  LLC, its General Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  
	
   

  
	
   

  	
  CCCP SENIOR LIVING LLC,

  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CCDE SENIOR LIVING LLC,

  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CCFL SENIOR LIVING LLC,

  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CCOP SENIOR LIVING LLC,

  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President

  	
   

  
										

 

5

 

	
   

  	
  CCSL SENIOR LIVING LLC,

  a Delaware limited liability company

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  	 

	
   

  	
   

  	
  Its:

  	
  President

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  LEISURE PARK VENTURE LIMITED
  PARTNERSHIP,

  a Delaware limited partnership

  	 

	
   

  	
   

  	 

	
   

  	
  By: CCC LEISURE PARK
  CORPORATION, its General Partner

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  	 

	
   

  	
   

  	
  Its:

  	
  President

  	
   

  	 

	
   

  	 

	
   

  	 

	
   

  	
  LTJ SENIOR COMMUNITIES LLC,

  a Delaware limited liability company

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  	 

	
   

  	
   

  	
  Its:

  	
  President

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  PANTHER HOLDINGS LEVEL I, L.P.,

  a Delaware limited partnership

  	 

	
   

  	
   

  	 

	
   

  	
  By: PANTHER GENPAR
  TRUST, its General Partner

  	 

	
   

  	
   

  	 

	
   

  	
   

  	 

	
   

  	
  By:

  	
  /s/ David J. Hegarty

  	
   

  	 

	
   

  	
   

  	
  Its:

  	
   President

  	
   

  
																	

 

6

 

	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  FS TENANT HOLDING COMPANY TRUST,

  a Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J Mackey Jr.

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Treasurer and Chief
  Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FS TENANT POOL III TRUST,

  a Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J Mackey Jr.

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Treasurer and Chief
  Financial Officer

  	
   

  

 

7

 

ACKNOWLEDGMENTS AND CONSENTS

 

The undersigned subtenants under the Lease hereby join
in the execution and delivery of this Amendment for the limited purpose of
acknowledging their consent to the execution and delivery of this Amendment.

 

	
   

  	
  FS
  TENANT POOL I TRUST,

  a Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J Mackey Jr.

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Treasurer and Chief
  Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FS
  TENANT POOL II TRUST,

  a Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J Mackey Jr.

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Treasurer and Chief
  Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FS
  TENANT POOL III TRUST,

  a Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J Mackey Jr.

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Treasurer and Chief
  Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FS
  TENANT POOL IV TRUST,

  a Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J Mackey Jr.

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Treasurer and Chief
  Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FS
  LAFAYETTE TENANT TRUST,

  a Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J Mackey Jr.

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Treasurer and Chief
  Financial Officer

  	
   

  

 

8

 

	
   

  	
  FS
  LEISURE PARK TENANT TRUST,

  a Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J Mackey Jr.

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Treasurer and Chief
  Financial Officer

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FS
  LEXINGTON TENANT TRUST,

  a Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J Mackey Jr.

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Treasurer and Chief
  Financial Officer

  	
   

  

 

FSQ, Inc. hereby joins in the execution and delivery
of this Amendment for the limited purposes of (i) acknowledging its consent to
the execution and delivery of this Amendment and (ii) confirming that all
references to the “Master Lease” in that certain Pledge of Shares of Beneficial
Interest Agreement, dated as of January 11, 2002, made by FSQ, Inc. in favor of
Landlord shall refer to the Lease as amended by this Amendment.

 

	
   

  	
  FSQ, INC., a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J Mackey Jr.

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Treasurer and Chief
  Financial Officer

  	
   

  
					

 

Five Star hereby joins in the execution and delivery
of this Amendment for the limited purposes of (i) acknowledging its consent to
the execution and delivery of this Amendment and (ii) confirming that all
references to the “Master Lease” in that certain Guaranty Agreement, dated as
of January 11, 2002, made by Five Star in favor of Landlord shall refer to the
Lease as amended by this Amendment.

 

	
   

  	
  FIVE STAR QUALITY CARE, INC.,

  a Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Bruce J Mackey Jr.

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Treasurer and Chief
  Financial Officer

  	
   

  
					

 

9Exhibit 10.22

 

LEASE AGREEMENT

 

 

Between

 

 

Paris Court Holdings, Ltd.

 

as Landlord

 

and

 

Chicago Pizza & Brewery, Inc. d/b/a BJ’s restaurant & Brewery

 

as Tenant

 

 

SUMMARY OF BASIC LEASE PROVISIONS

 

	
  1.

  	
  LOCATION:

  	
  515 West Bay
  Area Blvd.

  
	
   

  	
   

  	
   

  
	
  2.

  	
  COMMENCEMENT DATE:

  	
  Article I,
  Section 5.

  
	
   

  	
   

  	
   

  
	
  3.

  	
  LANDLORD’S ADDRESS:

  	
  Paris Court
  Holdings, Ltd.

  One Greenway Plaza, Suite 930

  Houston, Texas 77046

  
	
   

  	
   

  	
  Attention:

  Telephone:

  Fax:

  	
  Charles W.
  Shears

  (713) 892-5200 X.104

  (713) 892-5032

  
	
   

  	
   

  	
   

  
	
  4.

  	
  TENANT’S ADDRESS:

  	
  Chicago Pizza
  & Brewery

  16162 Beach Blvd., Suite 100

  Huntington Beach, CA 92647

  Attention: Real Estate Dept.

  Telephone: (714) 848-3747

  
	
   

  	
   

  	
   

  
	
  5.

  	
  SIZE OF STORE:

  	
  Approximately
  10,000 Square Feet.

  
	
   

  	
   

  	
   

  
	
  6.

  	
  PRIMARY TERM:

  	
  (15) Years

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  EXTENSION OPTIONS:

  	
  (2)

  	
  (5yr) Options

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  BASE RENT:

  	
  Years 1-5 

  	
  $12,916.67/Mo;
  $155,000.00/Yr

  
	
   

  	
   

  	
  Years 6-10

  	
  $13,750.00/Mo;
  $165,000.00/Yr

  
	
   

  	
   

  	
  Years 11-15

  	
  $15,416.67/Mo;
  $185,000.00/Yr

  
	
   

  	
  Option

  	
  Years 16-20

  	
  $16,666.70/Mo;
  $200,000.00/Yr

  
	
   

  	
  Option

  	
  Years 21-25

  	
  $18,333.34/Mo;
  $220,000.00/Yr

  
	
   

  	
   

  	
   

  
	
  9.

  	
  PERCENTAGE RENT:

  	
  3% of sales
  above natural breakpoints

  
	
   

  	
   

  	
   

  
	
  10.

  	
  SECURITY DEPOSIT:

  	
  N/A

  
	
   

  	
   

  	
   

  
	
  11.

  	
  TAXES, INSURANCE & MAINTENANCE

  	
  Triple Net

  
						

 

2

 

TABLE OF CONTENTS

 

	
  ARTICLE

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1

  	
   

  	
  DEFINITIONS

  
	
  2

  	
   

  	
  DEMISE OF LEASED PREMISES

  
	
  3

  	
   

  	
  TERM

  
	
  4

  	
   

  	
  RENTAL

  
	
  5

  	
   

  	
  UTILITIES

  
	
  6

  	
   

  	
  USE

  
	
  7

  	
   

  	
  COMMON
  AREA

  
	
  8

  	
   

  	
  ASSIGNMENT
  & SUBLETTING

  
	
  9

  	
   

  	
  REPAIR AND MAINTENANCE

  
	
  10

  	
   

  	
  ADDITIONS & FIXTURES

  
	
  11

  	
   

  	
  FIRE & DESTRUCTION OF PREMISES

  
	
  12

  	
   

  	
  LIABILITY
  & INDEMNIFY

  
	
  13

  	
   

  	
  DIVISION
  OF SALES

  
	
  14

  	
   

  	
  SECURITY
  DEPOSIT

  
	
  15

  	
   

  	
  LANDLORD’S LIEN

  
	
  16

  	
   

  	
  DEFAULT,
  REMEDIES & DETERMINATION OF DAMAGES

  
	
  17

  	
   

  	
  NON-WAIVER

  
	
  18

  	
   

  	
  LANDLORD-TENANT
  RELATION 

  
	
  19

  	
   

  	
  EMINENT
  DOMAIN

  
	
  20

  	
   

  	
  HOLDING OVER

  
	
  21

  	
   

  	
  LANDLORD’S
  MORTGAGES

  
	
  22

  	
   

  	
  ADDITIONAL
  RENT

  
	
  23

  	
   

  	
  NOTICE

  
	
  24

  	
   

  	
  TENANT’S
  SIGNS

  
	
  25

  	
   

  	
  ENVIRONMENTAL

  
	
  26

  	
   

  	
  REGULATIONS

  
	
  27

  	
   

  	
  TERMINOLOGY
  & MISCELLANEOUS

  
	
  28

  	
   

  	
  ENTIRE
  AGREEMENT

  

 

	
   

  	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  •

  	
  Exhibit “A”

  	
  -

  	
  Site Plan Depicting Leased Premises

  
	
  •

  	
  Exhibit “A-1”

  	
  -

  	
  Legal
  Description

  
	
  •

  	
  Exhibit “B”

  	
  -

  	
  Percentage Rent Breakpoints

  
	
  •

  	
  Exhibit “C”

  	
  -

  	
  Additional Area

  
	
  •

  	
  Exhibit “D”

  	
  -

  	
  Attornment/Non-disturbance Letter

  
					

 

3

 

LEASE  CONTRACT

 

This Lease
Contract (the “Lease”) entered into by and between “Landlord” and “Tenant” on
this
                   day
of
                           ,
2002, in accordance with the terms and conditions hereinafter set forth.

 

W  I  T  N
E  S  S  E  T  H:

 

ARTICLE
I

 

SUMMARY OF BASIC LEASE

PROVISIONS AND CERTAIN DEFINED TERMS

 

	
   

  	
  When used herein, the
  following terms shall have the indicated meanings:

  
	
   

  
	
  1.

  	
  “Landlord”:

  	
  Paris Court Holdings, Ltd

  
	
   

  
	
   

  	
  “Notice Address”:

  	
  One Greenway Plaza, Suite
  930

  
	
   

  	
  Houston, Texas 77046

  
	
   

  
	
  2.

  	
  “Tenant”:

  	
  Chicago Pizza &
  Brewery, Inc.

  
	
   

  
	
   

  	
  “Tenant’s Trade Name”
  (D/B/A):  BJ’s Restaurant &
  Brewery

  
	
   

  
	
   

  	
  State Where Incorporated:
  California Corporate I.D.# 33-0485615

  
	
   

  
	
   

  	
  Social Security #: N/A

  	
  Drivers License # &
  State: N/A

  
	
   

  
	
   

  	
  “Notice Address”:

  	
  16162 Beach Boulevard,
  Suite 100

  Huntington Beach California, 92647

  Attn: Real Estate Dept.

  
	
   

  
	
   

  	
  Principal Business Address
  & Phone: (714) 848-3747

  
	
   

  
	
  3.

  	
  “Guarantor”: N/A

  
	
   

  	
  Address & Phone
  Number: 

  	
  N/A

  
	
   

  	
  Social Security #: N/A

  	
  Drivers License # N/A

  
	
   

  
	
  4.

  	
  “Leased Premises”:
  Approximately 10,000 square feet constituting part of the Center as shown on
  Exhibit “A”. “Center” shall be defined as 515 West Bay Area Blvd., Webster,
  Texas, 77598, located on the property described on Exhibit “A- 1”. With
  regard to Exhibit “A”; the parties agree that the exhibit is attached solely
  for the purpose or locating the Center and the Leased Premises within the
  Center and that no representation, warranty, or covenant is to be implied by
  any other information shown on the exhibit (i.e., any information as to
  buildings, tenants or prospective tenants, etc. is subject to change at any
  time).

  
	
   

  
	
  5.

  	
  Lease Term: “Commencement
  Date”: One hundred eighty (180) days after June 1, 2002. “Termination Date”:
  Last day of the 180th full calendar month after the
  Commencement Date.

  
	
   

  
	
  6.

  	
  “Minimum Rent”: Years 1-5
  $12,9l6.67/Mo; Years 6-10 $13,750.00/Mo; Years 11-15 $15,416.67/Mo

  
	
   

  
	
  7.

  	
  “Extension Term”: The word
  “Extension Term” shall mean two (2) additional terms for which Tenant has an
  option to extend this Lease as provided in Section 3.2.

  
					

 

4

 

	
  8.

  	
  “Percentage
  Rent”: 3% of sales above natural breakpoints as set forth in Exhibit “D”

  
	
   

  
	
  9.

  	
  “Permitted
  Use”:  Restaurant & Bar

  
	
   

  
	
  10.

  	
  “Security
  Deposit”:

  	
  N/A

  
	
   

  
	
  11.

  	
  “First
  Month’s Rent and Additional Charges”: $17,750.00 to be paid upon execution of
  this Lease.

  
	
   

  
	
  12.

  	
  Tenant Build
  Out Allowance: Landlord will, after having been provided by Tenant
  certificate(s) of occupancy, proof of insurance, and lien releases from and
  all contractors, and after Tenant opens for business, provide Tenant an
  allowance for build out equaling $15.00 per square foot based on 10,000
  square feet.

  
	
   

  
	
  13.

  	
  Additional
  Charges (to commence on “Commencement Date” as defined in Paragraph 5 above):
  “Common Area Payment”: $ $ N/A /month; “Tax Payment”: $4,833.33/month;
  “Insurance Payment”: $ N/A /month; “Water Costs”: $ N/A /month; Sign
  Rental: $ N/A /month. Separately metered and billed monthly for
  overage. Additional charges are subject to change. Landlord reserves the
  right to adjust and set the Additional Charges. It is mutually agreed and
  understood that this is a “triple net” lease. Tenant shall be responsible for
  the payment of all real estate taxes, personal property taxes, parking lot
  maintenance and repair, repairs and maintenance to the premises and property
  insurance

  

 

THE SUBMISSION OF THIS LEASE FOR EXAMINATION BY TENANT AND/OR EXECUTION
THEREOF BY TENANT DOES NOT CONSTITUTE A RESERVATION OF OR OPTION FOR THE LEASED
PREMISES AND THIS LEASE SHALL BECOME EFFECTIVE ONLY UPON EXECUTION BY ALL
PARTIES HERETO AND DELIVERY OF A FULLY EXECUTED COUNTERPART HEREOF BY LANDLORD
TO TENANT.

 

ARTICLE
II

PREMISES

 

Section 2.1. 
Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, the Leased Premises located at 515 West Bay Area Blvd, Webster, Texas
as shown and set forth on Exhibit “A”, which is annexed hereto and incorporated
by reference herein and made part hereof for all purposes, such building to be
constructed or being constructed on a portion of the tract of property described
in Exhibit “A-l” (and any additional land from time to time designated by
Landlord), which tract of property (and any additional land from time to time
designated by Landlord) and any existing and future buildings, parking area,
sidewalks, service area and other improvements now existing or hereafter
erected thereon are sometimes herein referred to as the “Center”. The Center
parking arrangement and number of spaces, positioning of Center on subject
property, location and number of driveways, and location of Tenant in the
Center are subject to change without notice. Landlord reserves the right to
place in, under, over or through the Leased Premises pipes, wires, lines and
facilities serving other areas of the Center provided such right is exercised in
a manner which does not unreasonably interfere with Tenant’s conduct of its
business at the Leased Premises.

 

Section 2.2. 
In determining the floor area of the Leased Premises, distances shall be
measured from the exterior face of all exterior walls and the center of all
partition walls which separate the Leased Premises from any interior area.
Walls separating the Leased Premises from a mall and corridor walls shall be
deemed to be exterior walls of the Leased Premises.

 

Section 2.3. 
Landlord reserves the right to re-measure the Leased Premises to
determine the gross leasable area of the Leased Premises. In the event the
re-measurement discloses that the actual gross leasable area of the Leased
Premises as set forth in the Article I Section 4 is incorrect, Landlord and
Tenant shall execute an amendment to the Lease (i) reflecting the actual gross
leasable area of the Leased Premises, (ii) adjusting the Minimum Rent and
Additional Charges based on the new square footage and (iii) adjusting the
Extension Term(s) Rent and all other charges accruing under the Lease which are
based on the actual gross leasable area of the Leased Premises. In the event of
an adjustment, Tenant will pay any excess Minimum Rent and Additional Charges
owed to Landlord within fifteen (15) days after receipt of a statement, or
Tenant shall take a credit for any  overpayment
against the next Minimum Rent and Additional Charges payments due.

 

Section 2.4. 
In addition, Tenant shall have the exclusive right to use and occupy
that portion of the Center specified in Exhibit C, attached hereto and
incorporated herein by reference, hereinafter referred to as “Additional Area”,
and accepts same in its

 

5

 

current condition, “as is” and “where is”. Provided, however, this
Additional Area is not utilized in determining minimum rent required herein and
is not to be included in any  definition
of “Common Area”. Not withstanding any provision herein to the contrary. Tenant
is solely responsible for the maintenance, repair and any other cost and
expense associated with the Additional Area including but not limited to, any
taxes associated with said Additional Area. Provided further that, Tenant shall
keep the Additional Area in good repair so as not to unreasonably detract from
the Center, subject to the default provisions of Article XVI.

 

ARTICLE
III

TERM

 

Section 3.1. The term of this Lease shall
commence on the Commencement Date and shall terminate on the Termination Date,
unless sooner terminated in accordance with the terms and conditions
hereinafter set forth. At the request of Landlord from time to time made,
Tenant will execute one or more memoranda or letters stating the commencement
and termination dates of the Lease.

 

Section 3.2. Provided that Tenant is not in
default of any material term, covenant or condition, contained in this Lease,
there has not been an assignment of this lease, and Tenant gives written notice
when exercising the “Extension Term” as defined below. Tenant shall have the
option to extend this Lease for two (2) additional period of Five (5) years on
the conditions and terms as provided herein; provided, however, that the Base
Rent payable during the Extension Term shall be increased as follows:

 

	
  Lease Year

  	
   

  	
  Rent Per
  Square foot

  	
   

  	
  Annual
  Rent

  	
   

  	
  Monthly
  Rent

  	
   

  
	
  11-15

  	
   

  	
  $

  	
  18.50

  	
   

  	
  $

  	
  185,000.00

  	
   

  	
  $

  	
  15,416.67

  	
   

  
	
  16-20

  	
   

  	
  $

  	
  20.00

  	
   

  	
  $

  	
  200,000.00

  	
   

  	
  $

  	
  16.666.70

  	
   

  
	
  21-25

  	
   

  	
  $

  	
  22.00

  	
   

  	
  $

  	
  220,000.00

  	
   

  	
  $

  	
  18,333.34

  	
   

  

 

In order to exercise the extension option, Tenant shall notify Landlord
in writing of Tenant’s intention to extend not more than one (1) year nor less
than one hundred and eighty (180) days prior to the end of the Primary Term of
this Lease. In the event that Tenant fails to notify Landlord in writing of
Tenant’s exercise of the Extension Term within the time period specified above,
the Extension Term shall automatically terminate and Tenant shall be deemed to
have irrevocably waived such Extension.

 

ARTICLE
IV

RENTAL

 

Section 4.1. 
Tenant covenants and agrees to pay to Landlord the Minimum Rent and
Additional Charges (collectively “Rent”) in Houston, Harris County, Texas at
One Greenway Plaza Suite 930, Houston, Texas 77046, or at such other address as
Landlord may from time to time designate in writing. All such Rent payments
shall be made on the first day of each calendar month, monthly in advance, for
each and every month in the term of this Lease. Upon commencement of the term
of this Lease, Tenant will pay Landlord Rent for the first full calendar month
of the lease term; but if the lease term does not commence on the first day of
a calendar month, Tenant will, in lieu of a full month’s Rent, pay in advanced
a pro rata part of such sum as Rent for such partial month.

 

Upon execution of this Lease, and as consideration for same, Tenant shall
pay to Landlord the sum of $17,750.00 representing the 1st months
Minimum Rent due hereunder and additional charges as set forth herein.

 

Section 4.2. 
Percentage Rent. As “Percentage Rent” hereunder, Tenant shall pay
to Landlord for each Lease Year, the amount by which three percent (3%) of
Gross Sales (as hereinafter defined) derived from the lease premises during
such Lease Year exceeds the Minimum Rent for such Lease Year as herein set
forth (commonly known as the “natural break point”. Tenant shall pay Percentage
Rent annually within sixty (60) days after the end of each Lease Year at the
address specified in Section 4.1 above, or at such other place as Landlord may
from time to time direct.

 

Section 4.3. 
Gross Sales. The Term “Gross Sales” shall mean the aggregate
amount of all sales (whether for cash, on credit or otherwise) made in or from
the Leased Premises. Gross Sales shall not include any federal, state,
municipal, sales value added, excise or similar taxes paid or accrued by Tenant
on sales to customers, irrespective of whether such taxes are collected from
customers or absorbed by Tenant, amounts charged to Tenant by credit or charge
card companies for processing fees, discounted sales to employees for which no
payment is received, proceeds of insurance policies received by Tenant, bulk
and/or intercompany transfers of food and/or inventory, gratuities and service
charges which arc included on customer’s bills and which are passed directly
through to the service employees without diminution or deduction by Tenant,
proceeds from the sale of used equipment, receipts from cigarette

 

6

 

machines or
pay telephones, sales for which no monetary compensation is received and such
sales are recorded for control purposes only, and sales where the proceeds are
given to or used for charity, public relations or non-profit organizations.

 

Section 4.4. 
Reporting. Within sixty (60) days from the end of each Lease
Year, Tenant shall deliver to Landlord a written statement of the Gross Sales
made during the preceding Lease Year together with the amount of Percentage
Rent due Landlord hereunder for such lease Year. Tenant shall also submit
monthly to Landlord copy of all state sales tax report as required by the state
in which the Leased Premises are located, said copy to be forwarded to Landlord
contemporaneous with the mailing of said report to the state sales tax agency.

 

Section 4.5. 
All rent, including percentage rent, and other sums hereunder provided
to be paid by Tenant shall be due and payable by Tenant without demand,
deduction, abatement or off-set except as expressly provided herein. Past due
rent and other past due payments shall bear interest from maturity at the rate
of twelve percent (12%) per annum from the date due until paid.

 

All other sums and charges of whatsoever nature required to be paid by
Tenant to Landlord pursuant to the terms of this Lease (including, without
limitation, all payments set forth in Article XXII, below entitled “Additional Rent”)
constitute additional rent (whether or not same designated “Additional Rent”)
and failure by Tenant to timely pay such other sums or charges may be treated
by Landlord as failure by Tenant to pay Minimum Rent.

 

ARTICLE V

UTILITIES

 

Section 5.1. 
All utilities shall be the responsibility of Tenant. No interruption or
malfunction of any utility services, unless same result for the act, omission
or negligence of Landlord, shall constitute an eviction or disturbance of
Tenant’s use and possession of the Leased Premises or a breach by Landlord of
any of its obligations hereunder or render Landlord liable for any damages or
entitle Tenant to be relieved from any of its obligations hereunder or grant
Tenant any right of off-set or recoupment.

 

Section 5.2. 
INTENTIONALLY OMITTED

 

ARTICLE VI

USE

 

Section 6.1. 
Tenant will use the Leased Premises solely for the Permitted Use. Tenant
will not use or permit use of the Leased Premises for any other purposes
without the written consent of Landlord. Such facility will be advertised as
and operated solely under the Tenant’s Trade Name. Tenant, at its own expense
(i) will comply with all federal, state, municipal and other laws, codes,
ordinances, rules and regulations applicable to the Leased Premises and the
business conducted therein by Tenant including but not limited to the Americans
with Disabilities Act of 1990 (the “ADA”), and the regulations promulgated
thereunder, as modified and supplemented from time to time, and (ii) will
comply with such regulations as Landlord may promulgate regarding sanitation,
cleanliness and other matters at the Leased Premises or within the Center,
including without limitation regulations regarding the removal of garbage,
trash and other waste. Tenant will not conduct any auction or bankruptcy or
fire or “lost-our-lease” or “going-out-of-business” or similar sale or make any
unlawful use of the Leased Premises or permit any unlawful use thereof.

 

Section 6.2. 
INTENTIONALLY OMITTED

 

Section 6.3. 
Tenant binds and obligates itself to occupy the Leased Premises
continuously during the entire term of this Lease at least six (6) days per
week during reasonable business hours for the purpose provided above and will
operate such business during such period with diligence, in accordance with the
best standards of operation of such business.

 

Section 6.4. 
Tenant shall be responsible, at its sole cost and expense, for the
regular removal of its trash and rubbish. All trash receptacles or dumpsters
installed by Tenant must comply with any statute, ordinance, rule, regulation,
or restrictive covenant now or hereafter in force governing the location or
manner of their placement and must be in a  color
approved by Landlord, who shall have the right to remove from the Center
without notice any such receptacles that do not so comply or that have not been
so approved. Tenant shall be solely responsible for any fine, penalty or damage
that may result from its failure to comply with this Section. Receipt and
delivery of goods and merchandise and the removal of garbage and trash shall be
made only by way of the service entrance, if any, and shall be subject to such
regulations as Landlord may from time to time prescribe.

 

7

 

Section 6.5. 
Tenant shall install and maintain a locking system  for  the
Leased Premises. Tenant specifically acknowledges that Landlord is not
providing security for any portion of the Center, including without limitation
the Leased Premises and the Common Area, and Tenant has assumed sole responsibility
and liability for the security of itself, its employees, contractors, customers
and invitees and their respective property, in, on or about the Center,
including without limitation the Leased Premises and the Common Area.

 

Section 6.6.  Tenant shall conduct its business and
control its visitors, employees, contractors, agents and invitees in such
manner as not to create any nuisance, or interfere with, annoy or disturb
Landlord or any other tenant of the Center. Tenant shall keep the Leased Premises
neat, clean, sanitary and reasonably free from dirt, rubbish, insects and pests
at all times. Tenant shall not operate an incinerator or burn trash or garbage
within the Leased Premises. Tenant will not cause or allow any offensive,
noxious, disturbing odor or fume to be released from or permeate from the
Leased Premises and will not commit any act which is nuisance or annoyance to
Landlord or to other tenants, or which might, in the exclusive judgment of
Landlord, appreciably damage Landlord’s goodwill or reputation, or tend to
injure or depreciate the Leased Premises.

 

Section 6.7.  So long as Tenant operates in the Leased
Premises as a pizza and brewery type restaurant and is not in default of any of
the terms of this Lease (beyond any applicable cure period), Landlord shall not
lease or sell to any Tenant or buyer whose primary business is the same as that
of Tenant. Tenant acknowledges that this exclusive use clause shall not apply
to any existing tenants or purchasers before the execution date of this lease.
Not withstanding anything to the contrary in this Lease, in the event Tenant
closes its business in the Leased Premises and remains closed for ninety (90)
days or more, Landlord shall have the right to cancel this Lease with thirty
(30) days prior written notice to Tenant.

 

ARTICLE VII

COMMON AREA

 

Section 7.1.

 

A. 
Landlord will provide a “Common Area” (as hereinafter defined) in the
drive ways and parking areas and make necessary repairs thereto. Tenant, its
employees, customers and invitees shall have the non-exclusive right to use,
along with others, the Common Area. Landlord shall have the right, from time to
time, to change the arrangement, layout, location and/or size  of the Common Area, and designate
employee parking spaces and tenant truck loading zones and to do and perform
such other acts in the Common Area as Landlord and shall, in its good faith
judgment, determine to be advisable. Landlord reserves the right to modify or
change the Tenants location in the Center. Landlord shall have the right, from
time to time, to establish, modify and enforce rules and regulations with
respect to the Common Area and to police compliance with same.

 

B. 
For purposes of this Lease, the phrase “Common Area” includes the
parking area, service drives and service roads, traffic islands, landscaped
areas, loading and service areas and sidewalks.

 

Section 7.2. 
Tenant will at all times keep all merchandise and displays within the
Leased Premises and will not at any time display any merchandise or offer it for
sale or permit it to be on adjacent sidewalks or at any other point outside the
Leased Premises. Tenant shall not locate or install or cause to be located or
installed on the sidewalks, service area, service corridors, fire corridors or
other portions of the Common Area immediately adjoining the Premises or on the
storefront any bicycle racks, newspaper holder stands, vending machines of any
kind, mailboxes, telephone booths, trash or refuse receptacles, “no parking”
signs or any other device of a similar nature that would impede or obstruct the
sidewalk, service area or any of the Common Area. Tenant shall keep the Leased
Premises, including windows and signs and sidewalks, service ways, loading
areas and other portions of the Common Area immediately adjacent to the Leased
Premises neat, clean, and free from dirt or rubbish at all times.

 

Section 7.3. 
Nothing in this Article or elsewhere in this Lease shall be construed as
constituting the Common Area, or any part thereof, as part of the Leased
Premises.

 

8

 

ARTlCLE
VIII

ASSIGNMENT AND SUBLETTING

 

Section 8.1. 
Tenant shall not assign or in any manner transfer this lease or any
estate or interest herein, by operation of law or otherwise, or sublet the Leased
Premises or any part thereof, or grant any license, concession or other right
of occupancy of any portion of the Leased Premises without the prior written
consent of Landlord. Upon any violation of this provision, this Lease shall
terminate, at Landlord’s option. Landlord agrees that it will not withhold
consent in a wholly unreasonable and arbitrary manner (as further explained in
Section 27.15 of this Lease); however, in determining whether or not to grant
its consent, Landlord shall be entitled to take into consideration factors such
as Landlord’s desired tenant mix, the reputation and net worth of the proposed
transferee, and the then current market conditions (including market rentals).
In addition, Landlord shall also be entitled to charge Tenant a reasonable fee
for processing Tenant’s request. Consent by Landlord to one or more assignments
or subletting shall not operate as a waiver of Landlord’s rights as to any
subsequent assignments and sublettings. Any assignment or sublease proposed by
Tenant shall be only for the purposes specified in Article I Section 9 hereof
and for no other purpose, it being stipulated and agreed that Tenant’s
agreement to use the Leased Premises for such purposes constitutes a material
inducement to Landlord to enter into this Lease and that the use of the Leased
Premises for any other purpose (without Landlord’s consent) will substantially
disrupt the tenant mix or balance in the Center. In no event shall any
assignment or sublease of the Leased Premises relieve or release Tenant or any
guarantor of this Lease from any obligations under this Lease.

 

(a)  Prior to proposing any
assignment or sublease to Landlord, Tenant shall give Landlord prior written
notice of at least one hundred twenty (120) days that Tenant anticipates
assigning the Lease or subletting the Leased Premises or any portion thereof
(such 120-day period being herein referred to as the “Waiting Period”) and
Tenant shall have no right to assign or sublet the Leased Premises or any
portion thereof until after the expiration of said Waiting Period.

 

(b)  Upon receipt by Landlord of
notice of Tenant’s intention to assign this Lease or sublet all or any portion
of the Leased Premises, without the prior written notice to Landlord as
required herein, Landlord shall have the right, at any time thereafter, to
terminate this Lease on thirty (30) days prior notice to Tenant unless, within
said 30-day period Tenant withdraws its notice of assignment or subletting, or
gives Landlord notice of a proposed assignee or sublessee in accordance with
the provisions of (c).

 

(c)  In the event that Tenant
gives Landlord notice of a proposed assignee or sublessee, such notice shall
contain the name of such proposed assignee or sublessee, current audited
financial statements (or such other reasonable financial information as Tenant
is able to secure) with respect thereto, the use to which the Leased Premises
are to be put, the names and background operating experience (to the extent
reasonably available) of the principals of the proposed assignee or sublessee
and the proposed terms and provisions of such sublease or assignment. Provided
that the use to which the Leased Premises are proposed to be put by such
proposed assignee or sublessee does not violate any existing usage rights of other
tenants of the Center, Landlord shall have the following options exercisable
not later than twenty (20) days following receipt by Landlord of all of the
information referred to in the preceding sentence relative to the notice of
such proposed assignment or subletting: (a) to terminate the lease effective as
of the expiration of such 20-day period, in which event Tenant and all
guarantors shall be relieved of all further liability hereunder; or (b) to
approve such assignment or subletting in accordance with the notice thereof.
Failure of Landlord to so terminate or so approve within such 20-day period
shall be deemed approval by Landlord of such assignment or subletting.

 

Section 8.2. 
If Tenant is a corporation and if at any time during the primary term of
this Lease or any renewal or extensions hereof, the person or persons who own a
majority of either the outstanding voting shares or all outstanding shares of
capital stock of Tenant at the time of the execution of this Lease cease to own
a majority of such shares (except as the result of transfers by devise or
descent), the loss of a majority of such shares shall be deemed an assignment
of this Lease by Tenant and therefore subject in all respects to the provisions
of Section 8.2 above. The previous sentence shall not apply, however, if at the
time of the execution of this Lease the outstanding voting shares of capital
stock of Tenant are listed on a recognized security exchange or
over-the-counter market.

 

Section 8.3. 
Notwithstanding any assignment or subletting, Tenant and any guarantor
of Tenant’s obligations under this Lease shall at all times remain fully
responsible and liable for the payment of the rent herein specified and for
compliance with all of Tenant’s other obligations under this Lease (even if
future assignments and sublettings occur subsequent to the assignment or
subletting by Tenant, and regardless of whether or not Landlord’s approval has
been obtained for any assignments and sublettings). Moreover, in the event that
the rental due and payable by a sublessee (or a combination of rental payable
under such sublease plus any bonus or other consideration thereof or incident
thereto) exceeds the rental payable under this Lease, or if with respect to a
permitted assignment, permitted license or other transfer by Tenant permitted
by Landlord, the consideration payable to Tenant by the assignee, licensee or
other transferee exceeds the rental payable under this Lease, then Tenant shall
be bound and obligated to pay Landlord all such excess rental and other excess
consideration within ten (10) days following receipt thereof by Tenant from
such sublessee, assignee, licensee or other transferee, as the case may be.
Finally, in the event of any assignment or subletting, it is understood and
agreed that all rentals paid to Tenant by an assignee or sublessee shall be
received by Tenant in trust for Landlord, to be forwarded immediately to
Landlord

 

9

 

without offset
or reduction of any kind; and upon election by Landlord such rentals shall be
paid directly to Landlord as specified in Section 4 of this Lease (to be
applied as a credit and offset to Tenant’s rental obligations).

 

Section 8.4. 
Tenant shall not mortgage, pledge or otherwise encumber or cause to be
encumbered the Leased Premises or Tenant’s interest in this Lease or in the
Leased Premises. Provided, however, Landlord agrees to enter into a
subordination agreement, inform a acceptable by Landlord’s mortgage holder, for
any improvements made by Tenant to the Leased Premises.

 

Section 8.5. 
In the event of the transfer and assignment by Landlord of its interest
in this Lease and in the building containing the Leased Premises to a  person expressly assuming landlord’s
obligations under this Lease, Landlord shall thereby be released from any
further obligations hereunder, and Tenant agrees to look solely to such
successor in interest of Landlord for performance of such obligations. Any
security given by Tenant to secure performance of Tenant’s obligations
hereunder may be assigned and transferred by Landlord to such successor in
interest, and Landlord shall thereby be discharged of any further obligation
relating thereto.

 

Section 8.6. 
If Tenant assigns or sublets the demised premises, then any future options
or extension terms defined in the Lease Agreement shall terminate with such
assignment or sublease except as may be negotiated and agreed, in writing, by
Landlord and any subtenant or assignee.

 

ARTICLE IX

REPAIR AND MAINTENANCE

 

Section 9.1. 
Tenant is responsible for all repairs to, and maintenance of, the Leased
Premises and parking areas and including, but not limited to;

 

(i)    damage to the and damage to structural portions of the Leased
Premises (said “structural portions” consisting only of the foundation and
members supporting the roof but excluding, by way of example, but not
limitation, any exterior wall at which there is an entrance to or exit from the
Leased Premises, all interior partition walls and the interior side of building
perimeter walls enclosing the Leased Premises, all doors, moldings, trim,
window frames, door frames, closure devices, hardware and plate and window
glass): and

 

(ii)   damage to any utility lines (sewer, water, gas or electrical)
located outside the boundaries of the Leased Premises: provided however, in the
event any of the foregoing damage is caused by one or more acts or omissions or
commissions of Landlord, its agents or employees, or if a damaged utility line
exclusively serves the Leased Premises, then (in either of such events)
Landlord shall be responsible for the repairs. However, I under no circumstance
shall Landlord be liable to tenant for any disruption of business, lost
profits/income from the business of Tenant or any other incidental or
consequential damage of any type resulting from damage to any utility lines,
regardless of the cause of such damage.

 

Section 9.2. 
All damage, other than that which Landlord undertakes to repair as
expressly provided in Section 9.1. or Article XI or XIX will be repaired
and all maintenance will be performed and replacements and renewals will be
made by Tenant at Tenant’s cost and expense including without limitation all
other maintenance and repairs necessary or appropriate to cause the Leased
Premises to be suitable for Tenant’s intended commercial purpose and occupancy;
and Tenant will make all repairs, perform all maintenance and provide all
renewals and replacements at the Leased Premises, including but not limited to
heating and air conditioning equipment (whether any such equipment is roof
mounted or otherwise affixed outside the Leased Premises), electrical equipment
and fixtures, plumbing fixtures and equipment, elevators, wiring including that
within walls or ceiling or under flooring or floor covering), and plumbing
lines (including water lines and gas lines) within walls or ceiling and under
flooring or floor covering. Tenant will repair any water lines and water leak
damage that may occur in the Leased Premises and should the waterline leak
cause damage in an area outside the Leased Premises then Tenant will repair
said area. Tenant will replace all broken or cracked plate glass and glass
windows. Tenant shall not make, or permit to be made, any penetration in the
roof or the building of which the Leased Premises are a part, but shall be
responsible for all rooftop flashing around the rooftop air conditioning unit.
In the event that any such roof penetration is required in connection with any
repairs, maintenance, renewals or replacements required to be made by Tenant
hereunder, Landlord shall perform such roof penetration at Tenant’s cost within
reasonable time after notice from Tenant, and Tenant shall pay the cost thereof
upon demand.

 

If Landlord considers necessary and such repairs, maintenance, renewals
or replacements are required by the provisions of this Lease to be made or
provided by Tenant and Tenant refuses or neglects to make same after reasonable
notice (except in the event

 

10

 

of an
emergency in which event no prior notice shall be required). Landlord shall
have the right (but shall not be obligated), to make such repairs, perform such
maintenance or provide such renewal or replacement. Tenant will, on demand pay
the cost thereby incurred by Landlord with interest at the rate of 12% per
annum from the date Landlord incurred such cost until paid.

 

Section 9.3. 
Tenant will not commit waste and will not injure the Leased Premises or
the building of which they are a part, but will maintain the Leased Premises in
a clean, attractive condition and in good repair, and shall also keep adjacent
sidewalks clean. Upon termination of this Lease, Tenant will surrender and
deliver up the Leased Premises to Landlord in a restored, “plain-vanilla”
condition, such term meaning demolition of all partition walls which Tenant has
erected, removal of all plumbing fixtures with the exception of those in the
restroom on the date of this Lease, and repair of holes in walk and/or floors
and other work as necessary to deliver the space in good retail condition,
excepting only ordinary wear and tear and damage arising from acts of God, and
excepting also any damage required hereunder to be repaired by Landlord. Upon
termination of this Lease, Tenant will also surrender to Landlord all keys to
the Leased Premises at the place stated herein for the payment of rent and
inform Landlord, in writing, of all combinations on locks, safes and vaults, if
any, at the Leased Premises.

 

Section 9.4. 
Landlord will have a right to enter the Leased Premises at any
reasonable time (including during Tenant’s business hours) to inspect the
condition thereof and to make necessary repairs and improvements to the Leased
Premises or other premises in the Center of Landlord’s nearby property, to show
the Leased Premises to prospective purchasers, mortgagees or tenants, and for
other lawful purposes. Landlord may enter into the Leased Premises to alter,
improve and repair the Leased Premises and any portion of the building of which
the Leased Premises are a part, without abatement of rent, and may for that
purpose erect, use, and maintain scaffolding, pipes, conduits, and other
necessary structures in and through the building and the Leased Premises where
reasonably required by the character or the scope of the work to be performed,
provided entrance to the Leased Premises shall not be blocked thereby, and
further provided that the Permitted Use shall not be interfered with
unreasonably.  In the event that
Landlord requires access to any underfloor duct, Landlord’s liability for
carpet or other floor covering replacement shall be limited to replacement of
the piece removed. Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant’s Permitted Use or business, any loss
of occupancy or quiet enjoyment of the Leased Premises and any other loss
occasioned thereby, unless Landlord unreasonably interferes with the Permitted
Use. For each of the aforesaid purposes, Landlord shall at all times have the
right to use any and all means which Landlord may deem proper to open doors and
in an emergency to obtain entry to any portion of the Leased Premises. Landlord
shall also have the right at any time to change the arrangement and/or location
of entrances or passageways, doors and doorways, corridors, elevators, stairs,
toilets or other public parts of the Center, and change the name, number or
designation by which the Center is commonly known.

 

Section 9.5. 
Should any mechanic’s liens or other liens or affidavits claiming liens
be filed against the Leased Premises or any portion thereof or any interest
therein for any reason whatsoever incident to the acts or omissions of Tenant,
its agents or contractors, Tenant shall cause the same to be canceled and
discharged of record by payment, bonding or otherwise, within fifteen (15) days
after Tenant has received notice of such filing.

 

ARTICLE X

ADDITIONS AND FIXTURES

 

Section 10.1. 
Tenant will make no alterations or additions to the Leased Premises
without the prior written consent of Landlord. Tenant shall submit to Landlord
plans and specifications in a form acceptable to Landlord for such alterations
or additions.

 

Section 10.2. 
Subject to the lien and security interest and other rights of Landlord
referred to in Article XV, Tenant shall remove only “Removable Trade Fixtures”,
as hereinafter defined, (excluding all components of the HVAC system, pipes,
paneling or other wall covering or floor covering), and, in addition to other
applicable provisions of this Lease regarding such removal, the following shall
apply: (1) such removal must be made prior to the termination of this Lease
however and whenever brought about or the termination of Tenant’s right to
possession of the Leased Premises; (2) Tenant must not be in default of any obligation
or covenant under this Lease at the time of such removal; and (3) such removal
must be effected without damage to the Leased Premises or the building of which
the Leased Premises are a part and Tenant must promptly repair all damage
caused by such removal. For the purpose hereof, the phrase “Removable Trade
Fixtures” means the following: all of Tenant’s signs, counters, tables, chairs,
desks, racks, merchandisers and displayers, standards, wall brackets,
hand-rods, shelves, mirrors, marking equipment, cash registers, and other
business machines.

 

11

 

All plumbing or electrical wiring connections exposed as a result of
the removal of Tenant’s Removable Trade Fixtures, or other alterations,
additions, fixtures, equipment or property installed or placed by Tenant in the
Leased Premises (if such removal is so requested by Landlord) shall be capped
by Tenant in a safe and workmanlike manner.

 

Section 10.3. 
Tenant shall pay the full amount of all taxes, assessments, impositions,
levies, charges, excises, fees, licenses and other sums levied, assessed,
charged or imposed by any governmental authority or other taxing authority upon
Tenant’s leasehold interest under this Lease and all alterations, additions, fixtures
(including Removable Trade Fixtures), inventory and other property installed or
placed or permitted at the Leased Premises by Tenant. Within thirty (30) days
after notice from Landlord, Tenant shall furnish Landlord a true copy of
receipts evidencing such payment by Tenant to any governmental authority or
other taxing authority assessing such charges.

 

ARTICLE XI

FIRE AND DESTRUCTION OF PREMISES

 

Section 11.1. 
If at any time during the lease term, the Leased Premises or any portion
of the Building should be destroyed or damaged by fire or other casualty,
Tenant shall have the obligation to repair and reconstruct the damaged portion
of the Leased Premises and/or the Building to substantially the condition which
existed at the time of Landlord’s tender of possession of the Leased Premises
to Tenant. However, Tenant shall have no obligation to repair and reconstruct
the damaged portion of the Leased Premises and/or the Building if the fire or
other casualty results from the negligence of Landlord, its employees or
agents.

 

Section 11.2. 
INTENTIONALLY OMITTED

 

ARTICLE XII

LIABILITY AND INDEMNITY

 

Section 12.1. 
Tenant and Landlord each agree to indemnify and hold the other, and
their employees harmless from any and all claims, actions, damages, liabilities
and expenses (including but not limited to costs and expenses of defending
against all the aforesaid including but not limited to attorneys’ fees) arising
(or alleged to arise) out of or in connection with any injury to or death of
any person or persons or damage to or destruction of the property of any person
or persons occurring in or about the Leased Premises or the Center arising from
any act or omission of the other party, their agents, employees, assignees,
sublessees, contractors, customers or invitees or arising from or out of the
occupancy or use by Tenant of the Leased Premises, or the ownership of the
Leased Premises by  Landlord, or any
part thereof or any other part of the Center or arising, directly or
indirectly, wholly or in part, from any conduct, activity, act, omission or
operation involving the use, handling, storage, generation, treatment,
transportation, disposal, release or management of any Hazardous Substance
(hereinafter defined) in, from or to the Leased Premises, whether or not Tenant
or Landlord may have acted negligently with respect to such Hazardous
Substance.

 

Section 12.2. 
Tenant agrees to take out and maintain at all times during the Lease
Term a policy of all risk fire and extended coverage insurance on the leased
premises and all leasehold improvements and other personal property placed at
the Leased Premises (including, but not limited to, the rooftop HVAC unit and
plate and window glass). In the event that Tenant sustains a loss by reason of
fire or other casualty, and such fire or casualty is not caused in whole or in
part by acts or omissions of Landlord, its agents, servants or employees, then
Tenant agrees to look solely to its insurance proceeds (if any); and Tenant
shall have no claim or right of recovery against Landlord, or the agents,
servants or employees of Landlord; and no third party shall have any claim or
right of recovery by way of subrogation or assignment or otherwise.

 

Tenant hereby releases Landlord from any and all liability or
responsibility, or to any other party claiming through or under Tenant, by way
of subrogation or otherwise, for any loss or damage to property caused by a
casualty which is insurable under standard fire and extended coverage
insurance; provided however, waiver shall be applicable only with respect to a
loss or damage occurring during the time when standard fire and extended
coverage insurance policies contain a clause or endorsement to the effect that
any such release shall not adversely affect or impair the policy or right of the
insured party to receive proceeds under the policy (and the parties shall cause
their insurance companies to endorse the waivers of subrogation).

 

Such insurance policy shall contain a loss payable clause designating
Tenant, Landlord and Landlord’s Mortgage holder as loss payees as their
respective interests may appear. Tenant shall be responsible for the safety and
personal well being of Tenant’s employees, both within the Leased Premises and
in the Center. Tenant agrees that Landlord shall not be responsible or liable
to Tenant or those claiming under Tenant (including, without limitation,
Tenant’s agents, servants, employees, customers and invitees) for injury,

 

12

 

death or
damage or loss occasioned by the acts or omissions of persons occupying any
other part of the Center or occasioned by the condition of the Center or
property of any other occupant of any part of the Center or the acts or
omissions of any other person or persons present at the Center who are not
occupants of any part thereof, whether or not such persons are present with the
knowledge or consent of Landlord; and Tenant agrees to indemnify and hold
Landlord harmless from all losses, claims, suits, actions, damages, and
liabilities arising (or alleged to arise) therefrom.

 

Section 12.3. 
Tenant will take out and maintain, at its own cost and expense,
commercial, comprehensive general liability insurance  overage in a minimum amount of $2,000,000.00 combined single
limit, which comprehensive general liability policy shall include (i) coverage
for bodily injury and death, property damage and products liability coverage;
(ii) contractual liability coverage insurance the obligations of Tenant under
the terms of this Lease; (iii) fire legal liability coverage with respect to
the Leased Premises and building of which they are a part in the amount of at
least $300,000.00; and (iv) liquor liability insurance in an amount acceptable
to Landlord, if applicable; and (v) business interruption insurance. Such
policy or policies shall name Landlord (and any of its affiliates,
subsidiaries, successors and assigns designated by the Landlord) as an
additional insured and contains a waiver of subrogation.

 

Section 12.4. 
Tenant shall take out and maintain, at its own cost and expense,
worker’s compensation insurance or such other similar coverage as is required
by law and approved by Landlord and a waiver of subrogation.

 

Section 12.5. 
The policies of insurance required to be maintained by Tenant under the
terms of this Lease are referred to in this Section 12.5. in the singular as a
“Required Policy” and in the plural as “Required Policies”.  All Required Policies shall be in a form and
with a company acceptable to Landlord and shall be endorsed so as to be noncancellable
with respect to Landlord and not subject to material change, alterations as
termination except upon thirty (30) days prior written notice to Landlord given
in the manner set forth in Article XXIII, below. Tenant agrees to initially
deliver to Landlord a duplicate, updated original or certificate of each
Required Policy upon tender of possession of the Leased Premises to Tenant and
at all times during the lease term, to maintain a duplicate, updated original
or certificate of all Required Policies on deposit with Landlord. Tenant shall
obtain a written obligation on the part of each insurance company to notify
Landlord at least twenty days prior to cancellation of such insurance. If
Tenant shall fail to perform any of its obligations under this Article XII,
Landlord may perform the same and the cost thereof shall be deemed additional
rent and be payable upon Landlord’s demand with interest at the rate of 12%  per annum from the date such expense was
incurred by Landlord until paid.

 

Section 12.6. 
Tenant shall require any contractor of Tenant performing work on the
Leased Premises to carry and maintain, at no expense to Landlord, a
non-deductible:

 

1.                                       commercial
(comprehensive) liability insurance policy, including (but not limited to)
contractor’s liability coverage, contractual liability coverage, completed
operations coverage, broad form property damage endorsement and contractor’s
protective liability coverage, to afford protection, with respect to personal
injury, death or property damage of not less than One Million Dollars
($1,000,000) per occurrence combined single limit/Two Million Dollars
($2,000,000) general aggregate (but not less than $3,000,000 per location
aggregate); and

 

2.                                       comprehensive
automobile liability insurance policy with limits for each occurrence of not
less than One Million Dollars ($1,000,000) with respect to personal injury or
death and Five Hundred Thousand Dollars ($500,000) with respect to property
damage; and

 

3.                                       worker’s
compensation insurance policy in the amount of $500,000.

 

In addition to any other provision of this Lease concerning insurance
coverage, Landlord shall be named as an additional loss payee with respect to
any such policy of insurance required under this Section 12.6.

 

Section 12.7. 
Tenant will not do or suffer to be done, or keep or suffer to be kept,
anything in, upon or about the Leased Premises which will violate Landlord’s
policies of casualty or liability insurance or which will prevent Landlord from
procuring such policies with Companies acceptable to Landlord.  If anything done, omitted to be done or
suffered by Tenant to be kept in, upon or about the Leased Premises shall cause
the rate of liability, casualty or other insurance on the Leased Premises or on
the Center to be increased beyond the minimum rate from time to time applicable
to the Leased Premises or to any such other property for the use or uses made
thereof, then Tenant will pay, as additional rent, the amount of any such
increase upon Landlord’s demand.

 

13

 

ARTICLE
XIII

DIVISION OF SALES

 

Section 13.1. 
INTENTIONALLY OMITTED

 

ARTICLE
XIV

SECURITY DEPOSIT

 

Section 14.1. 
INTENTIONALLY OMITTED

 

ARTICLE XV

LANDLORD’S LIEN

 

Section 15.1. 
To secure the payment of all rent due and to become due hereunder and
the faithful performance of this Lease by Tenant and to secure all other
indebtedness and liabilities of Tenant to Landlord now existing or hereafter
incurred, Tenant hereby gives to Landlord an express first and prior contract
lien and security interest on all property (including, but not limited to,
fixtures, equipment, chattels and merchandise) which may be placed in or on the
Leased Premises, and also upon all proceeds of any insurance which may accrue
to Tenant by reason of destruction of or damage to any such property. All
exemption laws are hereby waived in favor of said lien and security interest to
and in favor of Landlord’s statutory lien. This lien and security interest may
be foreclosed with or without court proceedings by public or private sale
provided Landlord gives Tenant at least thirty (30) days notice of the time and
place of said sale, and Landlord shall have the right to become the purchaser,
upon being the highest bidder at such sale. Contemporaneously with the execution
of this Lease (or at any lime if requested by Landlord), Tenant shall execute
and deliver to Landlord Texas Uniform Commercial Code Financing Statements in
sufficient form so that when properly filed, the security interest hereby given
shall thereupon be perfected. Landlord shall, in addition to all of its rights
hereunder, also have all of the rights and remedies of a secured party under
the Texas Uniform Commercial Code (the Texas Business and Commerce Code).
However, not withstanding any provision herein to the contrary, Landlord agrees
to execute a subordination agreement in favor of Tenant’s commercial lender or
finance company for purchase money loans for equipment, furniture and fixtures.
Said subordination agreement to be in such form as may be approved by
Landlord’s mortgagor.

 

ARTICLE
XVI

DEFAULT, REMEDIES AND DETERMINATION OF DAMAGES

 

Section 16.1. 
Each of the following acts or omissions of Tenant or occurrences shall
constitute an “Event of Default”:

 

(a)                                  Failure or refusal by
Tenant, after notice, to timely pay Minimum Rent or any other sum when due
hereunder, including but not limited to any Additional Rent expenses under
Section XXII.  Notwithstanding any
provision herein to the contrary, however, Landlord, shall provide Tenant five
(5) days written notice of any default by Tenant of failure to pay Minimum Rent
and other sums due herunder. Provided, however, Landlord shall not be required
to give Tenant more than two (2) such written notices within any calendar year
during the life of this Lease; or

 

(b)                                 Failure or refusal by
Tenant to comply with the obligations of Tenant set forth in Article VI of this
Lease; or

 

(c)                                  Failure or refusal by
Tenant to timely perform or observe any other covenant, duty or obligation of
Tenant under this Lease; [provided, however, notwithstanding the occurrence of
such an Event of Default, Landlord shall not be entitled to exercise any of the
remedies provided for in this Lease or by law unless such Event of Default
continues beyond the expiration of thirty (30) days following notice to Tenant
of the occurrence of such Event of Default; provided, further, that if Tenant
shall default in the performance of any covenant, duty or obligation two (2) or
more times in any twelve (12) month period, then notwithstanding that each such
default shall

 

14

 

have been cured by Tenant, any further default shall be deemed an Event
of Default without Landlord’s being obligated to provide notice to Tenant and
grant Tenant the right to cure] or

 

(d)                                 Abandonment or
vacating of the Leased Premises or any portion thereof; or

 

(e)                                  The entry of a decree
or order for relief by a court having jurisdiction over Tenant or any guarantor
of Tenant’s obligations hereunder in an involuntary case under the federal
bankruptcy laws, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of Tenant or any guarantor of Tenant’s obligations hereunder of for
any substantial part of either of said parties’ property, or ordering the
winding-up or liquidation of either of said parties’ affairs; or

 

(f)                                    Tenant shall do or
permit to be done anything which creates a lien upon the Leased Premises; or

 

(g)                                 The commencement by
Tenant or any guarantor of Tenant’s obligations hereunder if a voluntary case
under the federal bankruptcy laws, as now constituted or hereafter amended, or
any other applicable federal or state bankruptcy, insolvency or other similar
law.

 

(h)                                 Tenant shall fail to
execute and acknowledge in good faith and in writing within ten (10) days after
submission to Tenant of a request for confirmation of the subordination of the
Lease to a security document and an estoppel certificate.

 

(i)                                     Failure or refusal
of Tenant to make all Tenant’s improvements to the Leased Premises within 60
days of commencement of the Lease term.

 

Section 16.2. 
This Lease and the term and estate hereby granted and the demise hereby
made are subject to the limitation that if and whenever any Event of Default
shall occur, after such notice, if any, as is provided in Section 16.1,
Landlord may, at its option, in addition to all other rights and remedies given
hereunder or by law or equity, do any one or more of the following:

 

(a)                                  Terminate this Lease,
in which event, Tenant shall immediately surrender possession of the Leased
Premises to Landlord; or

 

(b)                                 Enter upon and take
possession of the Leased Premises and expel or remove Tenant and any other
occupant there from, with or without having terminated the Lease; or

 

(c)                                  Alter locks and other
security devices at the Leased Premises.

 

Exercise by Landlord of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Leased Premises by Tenant, whether by agreement or by operation of law, it
being understood that such surrender can be effected only by the written
agreement of Landlord and Tenant.

 

Upon the occurrence of an Event of Default, landlord shall not be
obligated to give any notice (written or oral) regarding alteration of lock or
other security devices at the Leased Premises, or notice (written or oral) to
vacate the Leased Premises or notice of liability for Landlord’s attorneys’
fees prior to Landlord’s alteration of such locks or security devices or
institution of proceedings in forcible detainer. In the event Landlord
exercises its rights to alter the locks at the Leased Premises, Landlord shall only
be required to provide Tenant with a new key during Landlord’s regular business
hours, provided that in no event shall Landlord be required to provide Tenant a
new key until such time as Tenant cures all defaults under the Lease and, if
required by Landlord, Tenant increases the amount of the Security Deposit being
held under the terms of Section 14.1. by an amount equal to twice the monthly
Minimum Rent and Additional Charges due hereunder. Tenant hereby waives (to the
extent legally permissible) any and all notices otherwise required under common
law or under Chapters 24 or 92 of the Texas Property Code, as same presently
exist or may be hereafter amended (or any subsequent similar statute relating
to notice prior to instituting such action or proceeding). To the extent of any
inconsistency between this Lease and provisions of Section 92.008 of the Texas
Property Code (as it may be hereafter amended), it is the agreement of the
parties that this Lease shall prevail and govern and control.

 

15

 

If Tenant
should fail to make any payment or cure any default hereunder within the time
herein permitted, if any, Landlord, without being under any obligation to do so
and without thereby waiving such default, may make such payment and/or remedy
such other default for such purpose), and thereupon Tenant shall be obligated
to, and hereby agrees to pay Landlord, upon demand, all costs, expenses and
disbursements incurred by Landlord in taking such remedial action, including
interest at the rate of 12% per annum from the date of such costs incurred by
Landlord until payment.

 

In the event of termination of this Lease or Tenant’s right to
possession of the Leased Premises or repossession of the Leased Premises for an
Event of Default, Landlord shall have the duty to relet or attempt to relet and
in the event of reletting Landlord may relet the whole or any portion of the
Leased Premises for any period, to any tenant, and for any use and purpose and
upon terms acceptable to Landlord in its sole discretion. Upon an Event of
Default, Landlord and Tenant agree that Landlord shall only be required to use
the same efforts Landlord then uses to lease other properties Landlord owns and
manages (or if the Leased Premises is then managed for Landlord, the Landlord
will instruct such manager to use the same efforts such manager then uses to
lease the space or properties which it owns or manages); provided, however,
that Landlord or its manager shall not be required to give any preference or
priority to the showing or leasing of the Leased Premises over any other space
that Landlord or its manager may be leasing or have available and may place a
prospective tenant in any such available space regardless of when such
alternative space becomes available; provided further, that Landlord shall not
be required to observe any instructions given by Tenant about such reletting or
accept any tenants offered by Tenant unless such offered tenant has a credit
worthiness acceptable to Landlord, leases the entire Leased Premises, agrees to
use the Leased Premises in a manner consistent with this Lease and  leases the Leased Premises at the same
rent, for no more than the term of this Lease and on the same other terms and
conditions as in the Lease without the expenditure by Landlord for tenant
improvements or broker’s commissions.

 

Section 16.3. 
In the event Landlord elects to terminate this Lease by reason of an
Event of Default or in the event Landlord elects to terminate Tenant’s right to
possession of the Leased Premises without terminating this Lease, Landlord may
hold Tenant liable for all rent and other indebtedness accrued to the date of
such termination, plus such rent and other indebtedness as would otherwise have
been required to be paid by Tenant to Landlord during the period following
termination of the lease term (or Tenant’s right to possession of the Leased
Premises, as the case may be) measured from the date of such termination by
Landlord until the date which would have been the date of expiration of the
term as stated in Article III (had Landlord not elected to terminate the Lease
or Tenant’s right to possession on account of such Event of Default) diminished
by any net sums thereafter received by Landlord through reletting the Leased Premises
during said period (after deducting expenses incurred by Landlord as provided
in the succeeding paragraph). Actions to collect amounts due by Tenant provided
for in this paragraph of Section 16.3. may be brought from time to time by
Landlord during the aforesaid period, on one or more occasions, without the
necessity of Landlord’s waiting until expiration of such period; and in no
event shall Tenant be entitled to any excess of rent (or rent plus other sums)
obtained by reletting over and above the rent herein reserved. At any time
after the term of this Lease shall be expired and come to an end or Landlord
shall have reentered upon the Leased Premises, as the case may be. Landlord
shall be entitled to recover from Tenant, and Tenant shall pay to Landlord on
demand, as and for liquidated and agreed final damages, a sum equal to the
amount by which the rent, including Minimum Rent and all Additional Charges due
hereunder, reserved in this Lease for the period which otherwise would have
constituted the unexpired portion of the term of this Lease, exceeds the then
fair rental value of the Leased Premises for the same period, both discounted
to present value as determined by Landlord.

 

In the case of an Event of Default, Tenant shall also be liable for and
shall pay to Landlord at Houston, Harris County, Texas, in addition to any sum
provided to be paid above; broker’s fees incurred by Landlord in connection
with reletting the whole or any part of the Leased Premises; the costs of
removing and storing Tenant’s or other occupant’s property; the costs of
repairing, altering, remodeling or otherwise putting the Leased Premises into
required by this Lease to be repaired, altered, or remodeled, and all
reasonable expenses incurred by Landlord in enforcing Landlord’s remedies.

 

Section 16.4. 
In the event of any default by Landlord, Tenant’s exclusive remedy shall
be an action for damages (Tenant hereby waiving the benefit of any laws
granting it a lien upon the property of Landlord and/or upon rent due
Landlord), but prior to any such action Tenant will give Landlord written
notice specifying such default with particularity, and Landlord shall thereupon
have a reasonable period, but in no event less than thirty (30) days, in which
to commence to cure any such default. Tenant shall not have any remedy or cause
of action, until Landlord fails to commence to cure any default after such
notice or having so commenced thereafter fails to exercise reasonable diligence
to complete such curing by reason thereof. All obligations of Landlord
hereunder will be construed as independent covenants, not conditions; and all
such obligations will be binding upon Landlord only during the period of its
ownership of the Center and not thereafter. Notwithstanding anything contained
in this Lease to the contrary, in the event of any default by Landlord in
performing its covenants or obligations hereunder, Tenant shall not exercise
any rights it may have on account of such default until (I) Tenant gives
forty-five (45) days written notice of such default (which notice shall specify
the exact nature of

 

16

 

said default
and how the same may be cured) to each holder of any mortgage or deed of trust
encumbering the Center or the Leased Premises who has heretofore notified
Tenant in writing of its interest and the address to which notices are to be
sent (herein referred to as  “Landlord’s
Mortgagees”) and (ii) each such Landlord’s Mortgagee fails to cure or cause to
be cured said default within the time period permitted Landlord pursuant to the
terms of this Lease together with such additional time as may be reasonably
necessary if Landlord’s Mortgagee is prevented by applicable laws from
commencing the cure of such default.

 

Notwithstanding anything in this Lease to the contrary, if Tenant
claims or asserts that Landlord has violated or failed to perform a covenant of
Landlord not to unreasonably withhold Landlord’s consent or approval, Tenant’s
sole and exclusive remedy shall be an action for specific performance,
declaratory judgment or injunction and in no event shall Tenant be entitled to
any money damages for a breach of such covenant and in no event shall Tenant
claim or assert any claim for any money damages in any action or by way of set
off, defense or counterclaim and Tenant hereby specifically waives the right to
any money damages or other remedies.

 

Section 16.5. 
In the event that Landlord institutes an action or proceeding to enforce
payment of a monetary sum due hereunder or to enforce any compliance by Tenant
with the provisions of this Lease and is the prevailing party in such action or
in the event it shall become necessary for  Landlord
to employ or consult with an attorney with regard to Tenant’s performance under
this Lease then, in such event, Tenant will pay to Landlord all reasonable
costs incurred by Landlord in such event, including reasonable attorneys’ fees,
which shall not be less than fifteen percent ( 15%) of all such sums owing by
Tenant to Landlord.

 

Section 16.6. 
INTENTIONALLY OMITTED

 

ARTICLE
XVII

NON-WAIVER

 

Section 17.1. 
Neither acceptance of rent (or any portion thereof) or any other sums
payable by Tenant hereunder (or any portion thereof) by Landlord nor failure by
Landlord to complain of any action, non-action or default of Tenant shall
constitute a waiver as to any breach of any covenant or condition of Tenant
contained herein nor a waiver of any of Landlord’s rights hereunder.
Forbearance by Landlord in enforcing one or more of the remedies herein
provided upon an Event of Default shall not constitute a waiver of any right to
enforce such remedies for either a prior or subsequent default of the same
obligation or for any prior or subsequent default of any other obligation of
Tenant under this Lease. No right or remedy of Landlord hereunder or covenant,
duty or obligation of Tenant hereunder shall be deemed waived by Landlord
unless such waiver be in  writing,
signed by Landlord. Landlord’s acceptance of the payment of rental or other
payments hereunder after the occurrence of an Event of Default shall not be
construed as an accord and satisfaction or comprise a waiver of such default,
unless Landlord so notifies Tenant in writing.

 

ARTICLE
XVIII

LANDLORD-TENANT RELATION

 

Section 18.1. 
The relation created by this Lease is that of landlord and tenant.
Nothing herein contained shall be deemed or construed by the parties hereto,
nor by a third party, to be a creation of the relationship of principal and
agent, or of partnership, or of joint venture between the parties. Neither
computation of rent, nor any other provision contained herein, nor any acts of
the parties hereto, shall be deemed to make Landlord liable for the debts of
Tenant or create any relationship between the parties hereto other than the
relationship of landlord and tenant.

 

ARTICLE
XIX

EMINENT
DOMAIN

 

Section 19.1. 
If more than twenty percent (20%) of the floor area of the Leased
Premises should be taken by any authority having the power of eminent domain,
then and in that event, the term of this Lease shall cease and terminate, and
the date of such termination shall be, at Landlord’s election, either the date
upon which possession shall be tendered to such authority by Landlord or the
date upon which possession is taken by such authority.

 

Section 19.2. 
If less than twenty percent (20%) of the floor area of the Leased
Premises should be taken as aforesaid, this lease shall not terminate, however,
the minimum guaranteed rental (but not percentage rental) payable hereunder
during the expired portion of this lease shall be reduced in proportion to the
area taken, effective on the date physical possession is taken by the
condemning authority. Following such partial taking, Landlord shall make all
necessary repairs or alterations to the remaining premises or, if an exhibit
describing Landlord’s Work is attached to this lease, all necessary repairs
within the scope of Landlord’s Work as described in such exhibit, as the case
may be, required to make the remaining portions of the Leased Premises an
architectural

 

17

 

whole.  All work by Landlord required in this
Section 19.2 shall be commenced and completed in a reasonable time following
such partial taking.

 

Section 19.3. 
All sums awarded or agreed upon between Landlord and the condemning
authority for the taking of the fee or the leasehold interest, whether as
damages or as compensation, will be and are the property of Landlord. Tenant
hereby assigns to Landlord all proceeds, whether by way of compensation or damages,
otherwise payable to Tenant for its leasehold interest by reason of such taking
as same applies to the land, structure and/or rent proceeds. All other elements
of compensation relating to the operation of Tenant’s business operations under
the terms of this Lease affected by way of the taking shall belong to Tenant.

 

Section 19.4. 
If this Lease should be terminated under any provision of this Article,
rental and other sums due and payable by Tenant hereunder shall be payable up
to the date that possession is taken by the condemning authority and Landlord
will refund to Tenant an equitable portion of any such rental and other sums
paid in advance but not yet earned by such date.

 

Section 19,5. 
In the event that any authority having the power of eminent domain
requests that Landlord convey to such authority all or any portion of the
Center or all or any portion of the Leased Premises, Landlord shall have the
right to make a voluntary conveyance to such authority of all or any portion of
the Center or all or any portion of the Leased Premises whether or not
proceedings have been filed by such authority; and in the event of any such
voluntary conveyance, it shall nevertheless for all purposes hereunder be
deemed that there has been a taking by such authority of the property
voluntarily conveyed by Landlord. Accordingly, all of the provisions of
Sections 19.1, 19.2, 19.3 and 19.4 hereof shall be applicable notwithstanding
such voluntary conveyance.

 

ARTICLE
XX

HOLDING OVER

 

Section 20.1. 
If Tenant should remain in possession of the Leased Premises after the
expiration of the term of this Lease, without the execution of a new lease,
then Tenant shall be deemed to be occupying the Leased Premises as a tenant
from month-to- month, subject to all the covenants and obligations of this
Lease, except that as liquidated damages by reason of such holding over, the
monthly amounts payable by Tenant under this Lease shall be increased to one
hundred fifty percent (150%) of the monthly amounts payable in the last month of
the stated term.

 

Section 20.2. 
The above described tenancy from month-to-month may be terminated by
either party upon thirty (30) days written notice to the other.

 

Section 20.3. 
Any rent due after such notice of termination of possession or of this Lease
has been given is to be calculated according to section 20.1 on a pro rata
basis. If upon notice of termination by Landlord, Tenant tenders rent in excess
of the amount due and payable pursuant to the formula in Section 20.1 and
Landlord accepts such payment, the acceptance of such payment will not operate
as a waiver by Landlord of the notice of termination, unless such waiver is in
writing and signed by Landlord. Any such excess amounts tendered and accepted
shall be promptly refunded by Landlord, after deducting therefrom any amounts
owed Landlord.

 

ARTICLE
XXI

LANDLORD’S MORTGAGES

 

Section 21.1. 
Tenant agrees that its interest under this Lease shall be subordinate to
any mortgage, deed of trust or similar device now or hereafter placed upon the
Leased Premises or all or any portion of the Center by Landlord if the
mortgagee or beneficiary under said deed of trust or lender for whose benefit
any other security device is created so elects, and upon notice to Tenant of
such election. Tenant will execute any instruments required to evidence such
subordination. Likewise, such mortgagee or beneficiary under said deed of trust
or lender for whose benefit any other security device is created elects, by
notice to Tenant, to make this Lease superior to such mortgage or deed of trust
or other security device; and in the event of any such election, Tenant will
execute any instruments required to evidence such superiority. If any person or
entity shall succeed to all or part of Landlord’s interest in the Leased Premises,
whether by purchase, foreclosure, deed in lieu of foreclosure, power of sale,
termination of lease or otherwise, and if so requested or required by such
successor in interest, Tenant shall attorn to such successor in interest and
shall execute such agreement in confirmation of such attornment as such
successor in interest shall reasonably request.

 

Section 21.2. 
Landlord and Tenant shall execute and deliver to each other, at such
time and from time to time as either Landlord or Tenant may request, a
certificate stating:

 

18

 

(a)                                  Whether
or not the Lease is in full force and effect;

 

(b)                                 Whether or not the
Lease has been modified or amended in any respect, and submitting copies of
such modifications or amendments, if any;

 

(c)                                  Whether or not there
are any existing defaults under this Lease to the knowledge of the party
executing the certificate, and specifying in detail the nature of such
defaults, if any, and

 

(d)                                 Such other information
as may be reasonably requested.

 

The aforesaid certificate(s) shall be delivered to Landlord or Tenant,
as the case may be, promptly upon receipt of a written request therefore, but
in no event more than five (5) business days following receipt of such request.
Landlord and Tenant intend that any statement delivered pursuant to this
Section may be relied upon by any mortgagee, beneficiary or purchaser and
Tenant shall be liable for all loss, cost or expense resulting from the failure
of any sale or funding of any loan caused by any material misstatement
contained in such estoppel certificate. If, however, Tenant fails to deliver
the same within such five (5) business day period after request by Landlord,
such failure shall be deemed to be an event of default hereinunder.

 

Section 21.3. 
In order to protect Tenant’s leasehold interests in the event of a
default by Landlord with respect to any mortgage obligation related to the Leas
Premises, Landlord agrees and shall have Landlord’s Mortgagor issue to Tenant a
non- disturbance/attornment agreement in the form attached hereto as Exhibit
“D”.

 

ARTICLE
XXII

ADDITIONAL RENT

 

Section 22.1. 
In addition to and separate from the Minimum Rent, Tenant shall pay to
Landlord as Additional Rent any “Tax Payment” and “Insurance Payment” as set
out in Article I of this Lease paid by Landlord on Tenant’s behalf. Tenant
shall be responsible for all maintenance, and repairs to the structure and
common area including, but not limited to sweeping, cleaning, removing debris
from, maintaining, re-striping and repairing the common area. In addition
Tenant shall be totally responsible for maintaining planting and landscaping
with respect to the Common Area; utilities charges for any services to the
Common Area; repairing and maintaining utility lines located in the Common Area
which do not exclusively serve one tenant in the Center (including, without
limitation, lighting and tile); repairing and maintaining sprinklers and
sprinkler-risers serving the Leased Premises and the building of which they are
a part; repairing and maintaining sidewalks in the Common Area (including,
without limitation, periodic steam cleaning thereof); repair and maintaining
the parking lots in the Common Area; plus all other costs and expenses of every
kind or nature relative to operating, managing and equipping the Common Area,
and including, but not limited to, maintaining and repairs to the parking lot
in the common area and roof of the leased premises. The word “Taxes”, as used
herein shall mean all taxes, assessments, imposition, levies, charges, excises,
fees, state or federal tax imposed on rental income of the Center, licenses and
others sums levied, assessed, charged or imposed by any governmental authority
or other taxing authority or which accrue on the Center for each calendar year
(or portion thereof) during the term of this Lease, including, without
limitation, professional fees and expenses incurred by Landlord for ad valorem
tax consultants or tax-rendering services and all penalties, interest and other
charges (with respect to Taxes) payable by reason of any delay in or failure or
refusal of Tenant to make timely payment as required under this Lease.

 

Landlord currently estimates that taxes on the Leased premises are
approximately $58,000.00 per year. Tenant agrees to pay to Landlord the sum of
$4,833.33 per month, in addition to Minimum Rent and as additional charges in
order to satisfy these tax obligations under the terms of this triple net
lease. Landlord specifically reserves the right to adjust this estimate for
taxes at the end of each tax year based on the actual tax liability imposed by
any taxing authority pursuant to Section 22.3 hereof.

 

Alternatively, should Tenant desire to pay these taxes directly to any
such taxing authority, Tenant shall, within thirty (30) days of payment provide
proof of payment to Landlord in the form a receipt indicating that all such
taxes have been paid in full or any such other proof as may be deemed
acceptable by Landlord.

 

The phrase “Insurance Premiums” shall mean the total annual insurance
premiums which accrue on all fire and extended coverage insurance, boiler
insurance, public liability and property damage insurance, rent insurance and
other insurance which, from time to time, may at Landlord’s election be carried
by Landlord with respect to the Center during any applicable calendar year (or
portion thereof) occurring during the term of this Lease; all or any part of
such coverage is written under a “blanket policy” or otherwise in such manner
that Landlord was not charged a specific insurance premium applicable solely to
the Center, then in such

 

19

 

event, the
amount considered to be the insurance premium with respect to such coverage for
such calendar year shall be that amount which would have been the annual
insurance premium payable under the rates in effect on the first day of such
applicable calendar year for a separate Texas Standard Form insurance policy
generally providing such type and amount of coverage (without any deductible
amount) with respect to the Center (considering the type of construction and
other relevant matters) irrespective of the fact that Landlord did not actually
carry such type policy. If the insurance policies maintained by Landlord with
respect to the Center containing any nature of deductible feature, then Tenant,
in the event of a loss, shall pay to Landlord Tenant’s pro rata share thereof,
based upon the amount of such deductible feature multiplied by a fraction, the
numerator of which is the aggregate number of square feet of floor area in the
Center damaged or destroyed by such casualty. Tenant’s pro rata share of such
deductible amount shall be payable to Landlord within ten (10) days following
receipt from Landlord of a statement therefore and payment thereof by Tenant
shall be condition precedent to Landlord’s obligations to repair or restore the
Leased Premises.

 

The phrase “Tenant’s Share” as applied to Common Area Operating Costs,
Taxes and Insurance Premium shall refer to a sum calculated by multiplying the
Common Area Operating Costs, Taxes and Insurance Premium (as the case may be)
by a fraction, the numerator of which is the ground floor area (in square feet)
of the Leased Premises (as indicated in Section 1.1 of this Lease Contract) and
the denominator of which is ninety-five percent (100%) of the aggregate
leasable ground floor area (in square feet) of all buildings in the Center
(whether or not actually leased) on the first day of January for the relevant
calendar year for which any calculation referred to in this Article XXII is
being made; provided, however, for any period less than twelve (12) full
calendar months with respect to which such calculation is being made, a pro
rata portion of the resulting product shall be calculated to determine Tenant’s
Share.

 

Section 22.2. 
Unless and until Landlord exercises the rights set forth in Section 22.3
of this Lease, Tenant will pay Landlord the Common Area Payment, Tax Payment,
and Insurance Payment as specified in Article I of this Lease. Each such
payment shall be made monthly in advance for each and every month during the
term of this Lease, except, however, if the lease term does not begin on the
first day of a calendar month, Tenant shall pay a pro rata portion of such sums
for such partial month.

 

Section 22.3. 
During the relevant calendar year indicated by Landlord during the Lease
Term and Extension Term of this Lease (and subsequent to the termination of
this Lease). Landlord shall have the right, but not the obligation, to determine
any increase in the Tax Payment and/or Insurance Payment collectively referred
to in this Section 22.3 as “Such Costs”. Landlord shall submit written notice
to Tenant, including an itemization of all Such Costs, to require Tenant to pay
to Landlord a sum of money for Such Costs.

 

In the event Landlord shall have given notice to Tenant of the exercise
of any of its rights under the preceding paragraph, then (with respect to any
Such Costs as to which Landlord shall have so given notice) the following shall
apply:

 

(1)                                  Landlord shall have
the right, exercisable by Landlord’s giving notice to Tenant from time to time
during the term of this Lease to estimate Tenant’s Share of any Such Costs for
the relevant calendar year indicated by Landlord, whereupon, commencing on the
date designated by Landlord and continuing for the balance of the period during
the term of this Lease indicated by Landlord, Tenant shall pay Landlord on the
first day of each month, monthly in advance, one-twelfth (1/12th) of the amount(s)
so estimated by Landlord.

 

(2)                                  At the end of the
calendar year occurring during the term of this Lease during which Landlord
shall have given Tenant notice of the exercise of any of its rights set forth
in this Section 22.3 (and subsequent to the termination of this Lease),
Landlord will give Tenant notice of the total amount(s) paid by Tenant for Such
Costs for the relevant calendar year together with the actual amount of
Tenant’s Share of any of Such Costs for such calendar year. If the actual amount
of Tenant’s Share of any of  Such Costs
with respect to such period exceeds the aggregate amount(s) previously paid by
Tenant with respect thereto during such period, Tenant shall pay to Landlord
the deficiency within ten (10) days following notice from the Landlord,
provided, however, if the aggregate amount(s) previously paid by Tenant with
respect thereto exceeds Tenant’s Share for any such period, then, at Landlord’s
election, such surplus (net of any amounts then owing by Tenant to Landlord)
shall be credited against the next ensuing installment of any of Such Costs due
hereunder by Tenant or credited to Minimum Rent, or Landlord may refund such
net surplus to Tenant. Should Tenant question the accuracy of Landlord’s
accounting of any of Such Costs, Tenant’s right to dispute any Such Costs shall
be conditioned upon payment to Landlord of Tenant’s Share thereof prior to
contesting any Such Costs, with an adjustment thereafter, if necessary.

 

20

 

(3)                                  Tenant shall pay all
Such Costs within thirty (30) days of billing. If Tenant fails to pay Such
Costs within this thirty (30) day period, Tenant will be assessed a late fee
equal to ten percent (10%) of Such Costs and which shall be cumulative,
determined on a per diem basis. If Tenant fails to pay Such Costs and any
additional fees incurred for more than one hundred eighty (180) days, this
shall constitute an Event of Default.

 

Section 22.4. 
If there is presently in effect or hereafter adopted any nature of sales
tax or use tax or other tax on rents or other sums received by Landlord under
this Lease (herein referred to as “Rent Sale Tax”), then in addition to all
rent and other payments to be made by Tenant as provided above, Tenant will
also pay Landlord a sum equal to the amount of such Rent Sales Tax. The term
“Rent Sales Tax” shall not include any income taxes applicable to Landlord.

 

ARTICLE
XXIII

NOTICE

 

Section 23.1. 
Any notice which may or shall be given under the terms of this Lease
shall be in writing and shall be either delivered to the Notice Address of
either Landlord or Tenant, by hand or sent by United States Registered or
Certified Mail, adequate postage prepaid. Either party’s address may be changed
from time to time by such party by giving notice as provided above, except that
the Leased Premises may not be used by Tenant as the sole Notice Address. No
change of address of either party shall be binding on the other party until
notice of such change of address is given as herein provided. A post office
receipt for registration of such notice or signed return receipt shall be
conclusive that such notice was delivered in due course of mail if mailed as
provided above. For purposes of the calculation of various time periods
referred to herein, notice delivered by hand shall be deemed received when
delivered to the place for giving notice to a party referred to above and
notice mailed in the manner provided above shall be deemed completed upon the
earlier to occur of (i) actual receipt as indicated on the signed return
receipt, or (ii) three (3) days after posting as herein provided. Finally, any
written notice addressed as provided hereinabove and actually received by the
addressee, shall constitute sufficient notice for all purposes under this Lease.

 

ARTICLE
XXIV

TENANT’S SIGNS

 

Section 24. 1 
Tenant shall have the option to install such signs as may be allowed and
permitted by the City of Webster.

 

Tenant shall be responsible for the costs and installation, including
design and permitting, of any sign advertising Tenant’s business on the
storefront of the Center. Tenant shall pay a proportionate share of the costs
of installation and maintenance of the Center pylon sign, if any, only if
Tenant advertises its business on the pylon. Tenant shall pay exclusively for
design and lettering advertising Tenant’s business at the Leased Premises on
the pylon. For purposes of this Article XXIV, the term “proportionate share”
shall be defined as a fraction, the numerator of which shall be the square
footage of Tenant’s sign panel to be located upon the Center pylon pole and the
denominator of which shall be the total square footage of sign panels which are
located upon the Center pylon, whether occupied or not.

 

Section 24.2. 
Tenant shall not, without prior written consent (a) make any changes to
the store front or pylon advertising, or (b) install any exterior lighting,
decorations, paintings, awnings, canopies or the like, or (c) erect or install
any signs, window or door lettering, placards, decorations or advertising media
of any type which can be viewed from the exterior of the Leased Premises. All
signs, lettering, placards, decorations and advertising media (including,
without limitation, the sign required by Section 24,3 below) shall conform in
all respects to the sign criteria established by Landlord for the Center from
time to time in the exercise of its reasonable discretion, and shall be subject
to Landlord’s requirements as to construction, method of attachment, size,
shape, height, lighting, color and general appearance. All signs shall be kept
in good condition and in proper operating order at all times.

 

Section 24.3 
Subject to the restrictions of Section 24.2 above, Tenant agrees to
install and maintain a first-class sign on the front of the Leased Premises
during the term of this lease. The sign shall be located above the front of the
storefront of the Leased Premises. The sign shall be installed by Tenant, or
its Landlord-approved contractors, in a good and workmanlike manner so as not
to damage the building or its facilities.

 

Landlord’s Signage Criteria may be changed at any time in its
reasonable discretion, to affect new signs to be placed at the Center. It is
expressly agreed, however, that Tenant shall not be required to replace its
sign to comply with new Signage Criteria unless and until Tenant voluntarily
elects to replace its sign, or the sign must be replaced because of fire or
casualty. Any sign not

 

21

 

removed by
Tenant within ten (10) days after the expiration or earlier termination of this
lease may be disposed of by Landlord without liability of any kind to Tenant.
In addition, Landlord may at any time on thirty (30) days’ advance written
notice to Tenant of its intention to do so, replace Tenant’s fascia sign with a
sign which complies with revised signage Criteria adopted for the Center, so
long as the fascia signs of a majority of the other tenants in the Center are
in compliance with such revised Signage Criteria.

 

ARTICLE
XXV

ENVIRONMENTAL

 

Section 25.1. 
Tenant shall not use in any way, or permit or suffer the use of, the
Leased Premises or any part thereof to either, directly or indirectly, prepare,
produce, generate, manufacture, refine, treat, transport, store, maintain,
handle, dispose of, transfer, or process any Hazardous Substance as defined
herein, unless it has received the prior written consent of Landlord, which may
be withheld in Landlord’s sole discretion. “Hazardous Substance” means any
pollutant, contaminant, toxic or hazardous waste, dangerous substance,
potentially dangerous substance, noxious substance, toxic substance, flammable,
explosive, radioactive material, urea formaldehyde foam insulation, asbestos,
petroleum, PCBs, petroleum and its by products or any other substances the
removal of which is required, or the manufacture, preparation, production,
generation, use, maintenance, treatment, storage, transfer, handling or
ownership of which is restricted, prohibited, regulated or penalized by any and
all federal, state, county, or municipal statutes, or laws now or at any time
hereafter in effect, including but not limited to, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C, §§ 9601 et
seq.), the Hazardous Materials Transportation Act (49 U.S.C- §§ 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C, §§ 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et
seq.), the Clean Air Act (42 U.S.C. §§ 7401 et  seq.), the
Toxic Substances Control Act, as amended (15 U.S.C. §§ 2601 et  seq.),
the Occupational Safety and Health Act (29 U.S.C. §§ 651 et  seq.),
and the laws of the State of Texas, as these laws have been amended or
supplemented.

 

Any substance which Landlord permits Tenant to treat, store, transfer,
or dispose of must be done in strict compliance with any and all federal,
state, county, or municipal statutes or laws now or at any time hereafter in
effect, including but not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. §§ 9601 et  seq.), the
Hazardous Materials Transportation Act(49 U.S.C. §§ 1801 et  seq.),
the Resource Conservation and Recovery Act (42 U.S.C. §§ 6901 et  seq.),
the Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et  seq.),
the Clean Air Act (42 U.S.C. §§ 7401 et  seq.),  the Toxic Substances Control Act, as amended
(15 U.S.C. §§ 2601 et  seq.), and the Occupational Safely and
Health Act (29 U.S.C. §§ 651 et  seq.), and the laws of the State
of Texas, as these laws have been amended or supplemented.

 

If Hazardous Substances are used, stored, generated, or disposed of on
or in the Leased Premises or the Center by Tenant, or if the Leased Premises or
the Center shall become contaminated in any manner for which Tenant is legally
liable, Tenant shall indemnify and hold harmless Landlord from any and all
claims, damages, fines, judgments, penalties, costs, liabilities, or losses
(including, without limitation, a decrease in value of the Leased Premises or
the Center, damages caused by loss or restriction of rentable or usable space,
or any damages caused by adverse impact, on marketing of the space, and any and
all sums paid for settlement of claims, attorneys’ fees, consultant, and expert
fees) arising during or after the term of this Lease and arising as a result of
the contamination by Tenant or its agents. This indemnification includes,
without limitation, any and all costs incurred because of any investigation of
the site or any cleanup, removal, or restoration mandated by a federal, state,
or local agency or political subdivision. Without limiting the foregoing, if
Tenant causes or permits the presence of any Hazardous Substance in the Leased
Premises or the Center which results in contamination of the Leased Premises or
the Center. Tenant shall promptly, at its sole expense, take any and all
necessary actions to return the Leased Premises or the Center, as the case may
be, to the conditioning existing prior to the presence of any such Hazardous
Substance. Tenant shall obtain Landlord’s prior written approval for any such
remedial action. The indemnity obligations of Tenant under this Section shall
survive the expiration or earlier termination of this Lease.

 

If Hazardous Substances are used, stored, generated, or disposed of on
or in the Leased Premises or the Center by Landlord, or if the Leased Premises
or the Center shall become contaminated as the result of any act of Landlord,
Landlord shall indemnify and hold harmless Tenant from any and all claims,
damages, fines, judgments, penalties, costs, liabilities, or losses (including,
without limitation, a decrease in value of the Leased Premises or the Center,
damages caused by loss or restriction of rentable or usable space, or any
damages caused by adverse impact on marketing of the space, and any and all
sums paid for settlement of claims, attorneys’ fees, consultant, and expert
fees) arising during or after the term of this Lease and arising as a result of
the contamination by Tenant or its agents. This indemnification includes, without
limitation, any and all costs incurred because of any investigation of the site
or any cleanup, removal, or restoration mandated by a federal, state, or local
agency or political subdivision. Without limiting the foregoing, if Landlord
causes or permits the presence of any Hazardous Substance in the Leased
Premises or the Center which results in contamination of the Leased Premises or
the Center, Landlord shall promptly, at its sole expense, take any and all
necessary actions to

 

22

 

return the
Leased Premises or the Center, as the case may be, to the conditioning existing
prior to the presence of any such Hazardous Substance. The indemnity
obligations of Tenant under this Section shall survive the expiration or
earlier termination of this Lease.

 

ARTICLE
XXVI

REGULATIONS

 

Section 26.1. 
Landlord and Tenant acknowledge that there are in effect federal, state,
county and municipal laws, orders, rules, directives and regulations
(collectively referred to hereinafter as the “Regulations”) and that additional
Regulations may hereafter be enacted or go into effect, relating to or
affecting the Leased Premises or to the Center, and concerning the impact on
the environment of construction, land use, maintenance and operation of
structures, and conduct of business. Subject to the express rights granted to
Tenant under the terms of this Lease, Tenant will not cause, or permit to be
caused, any act or practice, by negligence, omission, or otherwise, that would
adversely affect the environment, or do anything to permit anything to be done
that would violate any of said laws, regulations or guidelines. Moreover,
Tenant shall have no claim against Landlord by reason of any changes Landlord
may make in the Center or the Leased Premises pursuant to said Regulations or
any charges imposed upon Tenant, Tenant’s customers or other invitees pursuant
to same.

 

Section 26.2. 
If, by reason of any Regulations, the payment to, or collection by,
Landlord of any rental or other charge (collectively referred to hereinafter as
“Lease Payments”) payable by Tenant to Landlord pursuant to the provisions of
this Lease is in excess of the amount (the “Maximum Charge”) permitted thereof
by the Regulations, then Tenant, during the period (the “Freeze Period”) when
the Regulations shall be in force and effect shall not be required to pay, nor
shall Landlord be permitted to collect, any sum in excess of the Maximum
Charge. Upon the earlier of (i) the expiration of the Freeze Period, or (ii)
the issuance of a final order or judgment of a court of competent jurisdiction
declaring the Regulations to be invalid or not applicable to the provisions of
this Lease, Tenant, to the extent not then proscribed by law, and commencing
with the first day of the month immediately following, shall pay to Landlord as
additional rental, in equal monthly installments during the balance of the term
of this Lease, a sum equal to the cumulative difference between the Maximum
Charges and the Lease Payments during the Freeze Period. If any of the
provisions of this section, or the application thereof shall to any extent be
declared to be invalid and unenforceable, the same shall not be deemed to
affect any of the other provisions of this section or of this Lease, all of which
shall be deemed valid and enforceable to the fullest extent permitted by law.

 

ARTICLE
XXVII

TERMINOLOGY AND MISCELLANEOUS

 

Section 27.1. 
With respect to terminology in this Lease, each number (singular or
plural) shall include all numbers, and each gender (male, female or neuter)
shall include all genders. If any provision of the Lease shall ever be held to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions of the Lease, but such other provisions shall
continue in full force and effect.

 

The titles of the Articles in this Lease shall have no effect and shall
neither limit nor amplify any provisions of the Lease itself. This Lease shall
be binding upon and shall accrue to the benefit of Landlord, its successors and
assigns.

 

Section 27. 2.  In all instances where Tenant is required hereunder to pay any
sum or do any act at a particular indicated time or within any indicated
period, it is understood that time is of the essence.

 

Section. 27.3 
The obligation of Tenant to pay all rent and other sums hereunder
provided to be paid by Tenant and the obligation of Tenant to perform Tenant’s
other covenants and duties hereunder constitute independent, unconditional
obligations to be performed at all times provided for hereunder. Tenant waives
and relinquishes all rights which Tenant might have to claim any nature of lien
against or withhold, or deduct from or off-set against any rent and other sums
provided hereunder to be paid Landlord by Tenant.

 

Section 27.4. 
Under no circumstances whatsoever shall Landlord ever be liable
hereunder for consequential damages or special damages; and all liability of
Landlord for damages for breach of any covenant, duty or obligation of Landlord
hereunder may be satisfied only out of the interest of Landlord in the Center
existing at the time any such liability is adjusted in a proceeding as to which
the judgment or award adjudicating such liability is non-appealable and not
subject to further review. The term “Landlord” shall mean

 

23

 

only the
owner, for the time being of the Center, and in the event of the transfer by
such owner of its interest in the Center, such owner shall thereupon be
released and discharged from all covenants and obligations of Landlord
thereafter accruing, but such covenants and obligations shall be binding during
the Lease Term upon each new owner for the duration of such owner’s ownership.

 

Section 27.5. 
All monetary obligations of Landlord and Tenant (including, without
limitation, any monetary obligation of Landlord or Tenant for damages for any
breach of the respective covenants, duties or obligations of Landlord or Tenant
hereunder) are performable exclusively in Houston, Harris County, Texas.

 

Section 27.6. 
Tenant hereby acknowledges that late payment by Tenant to Landlord of
rent or any other sums due under this Lease will cause Landlord to incur
various expenses not contemplated by this Lease, the exact amount of which are
presently difficult to ascertain. Accordingly, if payment of Minimum Rent or
any other sum due from Tenant under this Lease shall not be received by
Landlord when due, then, in addition to such required payment, Tenant shall
also pay to Landlord a “Late Charge” of five percent (5%) of the outstanding
monthly balance then due and payable to Landlord from Tenant after five (5)
days notice from landlord. Provided, however, Landlord shall not be required to
give such written notice to Tenant more than two (2) times in any calendar year
during the life of this Lease. Landlord and Tenant agree that such Late Charge
represents a fair and reasonable estimate of the expenses that Landlord will
incur by reason of such late payment by Tenant. Acceptance of such Late Charge
by Landlord shall not constitute a waiver of Tenant’s default with respect to
any such past due amounts, nor prevent Landlord from exercising any other
rights and remedies granted to Landlord under this Lease or at law or in
equity. Such Late Charge shall constitute additional rental payable by Tenant
under the Lease and is in addition to, and separate from, the Minimum Rent and
other charges payable under the Lease by Tenant.

 

Section 27.7. 
So long as Tenant has not been wrongfully or constructively evicted from
the Leased Premises, the doctrine of independent covenants will apply in all
matters relating to this Lease including, without limitation, all obligations
of Landlord and Tenant to perform their respective obligations under this
Lease. The preceding sentence shall apply notwithstanding that Landlord may
have defaulted in fulfilling a covenant to maintain or repair the Leased
Premises even if such default results in the unsuitability of the Leased
Premises for Tenant’s intended commercial use.

 

Section 27.8. 
Tenant has inspected the Leased Premises and accepts them in their
existing condition, on an “As-Is” basis, subject to performance by Landlord of
its obligations under the Construction Rider, if any, attached hereto. Tenant
hereby waives and relinquishes any right to assert, as either a claim or a
defense, that Landlord is bound to perform or is liable for the non-performance
of any implied covenant or implied duty of Landlord not expressly set forth
herein. Tenant hereby expressly waives any implied warranty of Landlord that
the Leased Premises are suitable for their intended commercial purpose. Tenant
agrees to perform all of its Lease obligations (including without limitation,
the obligation to pay rent), notwithstanding an alleged breach by Landlord of
any such implied warranty to the extent such warranty is not waived herein.
Tenant agrees that Landlord shall incur no liability to Tenant by reason of any
defect in the Leased Premises, whether apparent or latent.

 

Section 27.9. 
Tenant shall provide the following financial information concerning its
operations on the leased premises to Landlord (and, if requested by Landlord,
to Landlord’s Mortgagee at such address as Landlord may provide):

 

a)                                      As
soon as available and in any event with forty-five (45) days after the end of
each calendar quarter, the balance sheet of Tenant as of the end of such
calendar quarter and the operating statement of Tenant for such calendar
quarter, each prepared in accordance with generally accepted accounting
principles, and certified to be true and correct by the principal financial
officer of Tenant; and

 

b)                                     As
soon as available and in any event within sixty (60) days after the close of
each fiscal year of Tenant, the audited balance sheet of Tenant as of the end
of such year and the audited operating statement of Tenant as of the end of
such year (showing income, expenses and surplus), all prepared in accordance
with generally accepted accounting principles and accompanied by the
unqualified opinion of an independent certified public accountant acceptable to
Landlord; and

 

c)                                      As
soon as available and on an annual basis, Tenant’s annual report and Form 10-K
as filed with the U. S. Securities and Exchange Commission.

 

Landlord
agrees that Tenant shall be in compliance with the provisions of this Section
upon furnishing to Landlord (and Landlord’s Mortgagee as aforesaid) the above
described financial information in the form prepared by Tenant for
dissemination to the general public as required by a publicly traded
corporation whose stock is listed on the New York Stock Exchange.

 

24

 

Section
27.10.  If any term or provision of this Lease or
the application thereof to any person or circumstance shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Lease shall be valid an be enforced to the fullest extent
permitted by law.

 

Section
27.11.  This Lease shall be construed and enforced
in accordance with the laws of the State of Texas.

 

Section
27.12.  Tenant and Landlord represent that they have
dealt directly with and only with the Weitzman Group and SDI Rrealty, Inc. as
Brokers, in connection with this Lease, and that insofar as they know, no other
broker negotiated this Lease or is entitled to any commission in connection
herewith. Each party hereby indemnifies and holds the other and their beneficiaries,
and their respective agents and employees, harmless from any and all claims of
any other broker or brokers in connection with this Lease. Landlord hereby
agrees to pay the commission to said Brokers.

 

Section
27.13.  If Tenant is a corporation, Tenant
represents and warrants that this Lease and the undersigned’s execution of this
Lease has been duly authorized and approved by the corporation’s board of
directors. The undersigned officers and representatives of the corporation
executing this Lease on behalf of the corporation represent and warrant that
they are officers of the corporation with authority to execute the Lease on
behalf of the corporation.

 

Section
27.14.  Any liability of Landlord to Tenant for any
default by Landlord under the terms of this Lease shall be limited to the
interest of Landlord, direct or indirect, under this Lease and Landlord and any
of the persons comprising Landlord shall not be personally liable for any
deficiency. The foregoing shall not be deemed to limit or deny any remedies
which Tenant may have in the event of a default by Landlord hereunder which do
not involve personal liability of Landlord and shall not be construed to limit
or diminish the obligations or liabilities of any insurer.

 

Section
27.15.  In all circumstances under this lease where
the prior consent of one party (the “consenting party”), whether it be Landlord
or Tenant, is required before the other party (the “requesting party”) is
authorized to take any particular type of action, such consent shall not be
withheld in a wholly unreasonable and arbitrary manner, however, the requesting
party agreed that its exclusive remedy if it believes that consent has been
withheld improperly (including, but not limited to consent required from
Landlord pursuant to Section 24.1 or Section 8.1) shall be to institute
litigation either for a declaratory judgment or for a mandatory injunction
requiring that such consent be given (with the requesting party hereby waiving
any claim for damages, attorneys fees or any other remedy unless the consenting
party refuses to comply with a court order or judgment requiring it to grant
its consent). Wherever in this Lease one party is requested or required to give
its consent before an action by the other party is permitted, it is understood
and agreed that such consent shall not be unreasonably withheld or delayed.

 

Section
27.16.  Tenant will permit Landlord to place and
maintain “For Rent” or “For Lease” signs on the Leased Premises during the last
ninety days of the lease term, it being understood that such signs shall in no
way affect Tenant’s obligations or any other provision of this lease.

 

Section
27.l7.  INTENTIONALLY OMITTED

 

Section
27.18. If any term of
this Lease is ambiguous, such ambiguity, if any, shall not be construed by or
against any party on the basis that the party did or did not write it.

 

ARTICLE
XXVIII

ENTIRE AGREEMENT

 

Section
28.1.  This instrument (including all riders,
exhibits and Guaranties, if any) constitutes the entire agreement between
Landlord and Tenant and no prior written or prior or contemporaneous oral
promise or representations, brochure, rendering shall be binding on the parties
hereto or deemed a part of this agreement unless specifically incorporated
herein. This Lease shall not be amended, changed or extended except by written
instrument signed by both parties hereto.

 

This
Lease shall be binding upon and inure to the benefit of and shall be
enforceable by the parties hereto, their successors and assigns.

 

25

 

EXECUTED in multiple counterparts, all of which shall constitute one
document, but each of which shall have the force, and effect of an original, on
the day and year first written above.

 

 

	
   

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  PARIS HOLDINGS, LTD.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  6/28/02

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  ATTEST:

  	
   

  	
  CHICAGO PIZZA & BREWERY,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  
	
   

  	
   

  	
   

  
	
  Secretary

  	
   

  	
  Name:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Co - CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  6/25/02

  
					

 

26

 

 

27

 

Exhibit “A-1”

 

METES AND BOUNDS DESCRIPTION

2.056 ACRES (89,549 SQUARE FEET)

 

Being 2.056 acres (89,549
square feet) of land situated in the Robert W. Wilson Survey, Abstract 88,
Harris County, Texas, and being all of Restricted Reserve “A” Bay Area
Boulevard Restaurant Park, a subdivision recorded under Film Code 357035 of the
Harris County Map Records, and also being all of those certain tracts of land,
called Tract One and Tract Two, conveyed to Paris Court, Inc. by instrument
recorded under File Number R615011 and Film Code 505-66-3619 of the Harris
County Official Public Records of Real Property and all of that certain tract
of land described as the east 80 feet of the south one half of Lot 11 in Block
22 of the Webster Outlots, a subdivision recorded in Volume 67, Page 197 of the
Harris County Deed Records and conveyed to Charles W. Shears by instrument
recorded under File Number P631375 and Film Code 196-58-2562 of the Harris
County Official Public Records of Real Property, said 2.056 acres (89,549
square feet) of land being more particularly described by metes and bounds as
follows (all bearings are referenced to the monumented southeast right-of-way
line of that portion of Bay Area Boulevard, based on 120 feet in width,
recorded under File Number C599567 and Film Code 079-30-0776 and under File
Number C605125 and Film Code 084-25-0440, both of the Harris County Official
Public Records of Real Property):

 

BEGINNING at a 5/8 inch iron
rod with cap set for the most northerly corner of that certain 3.0303 acre
tract of land conveyed to Bruce W. Derrick by instrument recorded under File
Number M832456 and Film Code 188-77-2470 of the Harris County Official Public
Records of Real Property, same being the most westerly corner of said Bay Area
Boulevard Restaurant Park, and being the most westerly corner of the herein
described tract of land and also being in the southeast right-of-way line of
said Bay Area Boulevard and from which an iron rod with cap bears S 37°07’  E 0.47 feet;

 

THENCE N 48°
51’30” E 215.00 feet, with the southeast right-of-way line of said Bay Area
Boulevard, to an “X” in a concrete driveway set for the most westerly corner of
that certain 0.933 acre tract of land conveyed to Dr. Charles G. Shears by
instrument recorded under File Number M124302 and Film Code 044-77-1836 of the
Harris County Official Public Records of Real Property and being the most
northerly, corner of this tract;

 

THENCE S 41°
14’00” E 325.55 feet, called S 41°08’30” E 325.00
feet, to a 1/2 inch iron rod found for the most southerly corner of said 0.933
acre tract and being the most northerly east corner of this tract and also
being in a northwest line of Unrestricted Reserve “B” of Live Oak Street
Development, a subdivision recorded in Volume 340, Page 85 of the Harris County
Map Records;

 

THENCE S 48°51’30”
W 135.00 feet to a 5/8 inch iron rod with cap set for the most westerly corner
of said Unrestricted Reserve “B” and being an interior corner of this tract and
from which a 1/2 inch iron rod bears S 80’34’ E 0.27 feet;

 

THENCE S 41°14’00”
E 244.45 feet, called S 41°08’30” E, to a 5/8
inch iron rod with cap set for the most southerly corner of said Unrestricted
Reserve “B”, and being the most southerly east corner of this tract and also
being in the northwest line of that certain 11.7152 acre tract of land conveyed
to Webland Properties , Inc. by instrument recorded under File Number P746329
and Film Code 092-70-3588 of the Harris County Official Public Records of Real
Property and from which a bent 1/2 inch iron rod bears S 04’ 48’W 0.30 feet;

 

28

 

THENCE S 48°51’30”
W 80.00 feet, with the northwest line of said 11.7152 acre tract, to a 5/8 inch
iron rod with cap set for the most easterly corner of the residue of that
certain tract of land called the south one half of Lot 11 in Block 22 of said Webster
Outlots and conveyed to Roller Enterprises of Texas, Inc. by instrument
recorded under File Number D799707 and Film Code 156-40-2470 of the Harris
County Official Public Records of Real Property, and being the most southerly
corner of this tract and from which a 1/2 inch iron rod bears S 02°20’  E. 0.47 feet;

 

THENCE N 41°14’00”
W 570.00 feet, called N 41°08’30” W 569.51
feet and passing at 330.00 feet the most northerly corner of said south one
half of Lot 11 in Block 22 of the Webster Outlots, same being the most easterly
corner of said 3.0303 acre tract and from which a 5/8 inch iron rod with cap
bears S 38°22’ E 0.56 feet, to the PLACE OF BEGINNING and
containing 2.056 acres (89,549 square feet) of land.

 

The area stated in acres is
compatible with the allowable precision of closure for his survey.  The area stated in square feet is a
calculated value only.  All 5/8 inch
iron rods with caps set by this survey are marked “Texas Land Surveying”.

 

	
  [SEAL]

  	
   

  	
  /s/ Jeffrey
  N. Heck

  
	
   

  	
   

  	
  Jeffrey N.
  Heck

  
	
   

  	
   

  	
  Registered
  Professional Land Surveyor

  
	
   

  	
   

  	
  Texas
  Registration No. 4385

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Texas Land Surveying, Inc.

  
	
  P.O. Box 5825 Pasadena, Texas 77508

  
	
  (281) 487-5880

  
	
  Job No.
  0389-001B        May 25, 2000

  

 

29

 

TRACT ONE: A 19,200 square foot
tract of land out of Lot Eleven (11), Block Twenty-Two (22) in WEBSTER OUTLOTS,
an Addition in Harris County, Texas, according to the plat as recorded in
Volume 67, Page 197 of the Deed Records of Harris County, Texas, and being more
particularly described by metes and bounds as follows, to-wit:

 

Commencing at the most
Northerly corner of said Lot 11, Block 22;

 

THENCE South 41 deg. 08 min. 30
sec. East 90.00 feet along the Northeast line of said Lot 11 to an iron red in
the Southeast right of way line of Bay Area Boulevard (120’ wide) and being the
point of beginning of this tract;

 

THENCE continuing South 41 deg.
08 min. 30 sec. East 240.00 feet along the Northeast line of Lot 11 to an iron
rod;

 

THENCE South 48 deg. 51 min. 30
sec. West 80.00 feet to an iron rod;

 

THENCE North 41 deg. 08 min. 30
sec. West 240.00 feet to an iron rod in the Southeast right of way line of Bay
Area Boulevard;

 

THENCE North 48 deg. 51 min. 30
sec. East 80.00 feet along the Southeast right of way line of Bay Area
Boulevard to the point of beginning and containing 19,200 square feet of land.

 

TRACT TWO: A 1.0072 acre tract,
more or less, out of Lot Twelve (12), in Block Twenty-Two (22) of WEBSTER
OUTLOTS, an Addition in Harris County, Texas, according to the map or plat
thereof, recorded in Volume 67, Page 197 of the Deed Records of Harris County,
Texas, and being more particularly described by metes and bounds as follows,
to-wit:

 

BEGINNING at the most Westerly
corner of said Lot 22;

 

THENCE South 41 deg. 08 min. 30
sec. East a distance of 90.0 feet to an iron rod for corner on the Southeast
right of way line of Bay Area Boulevard marking the most Westerly corner and
PLACE OF BEGINNING of the tract herein described;

 

THENCE North 48 deg. 51 min. 30
sec. East along said Southeast line of Bay Area Boulevard, a distance of 135.0
feet to a point for corner;

 

THENCE South 41 deg. 08 min. 30
sec. East a distance of 325.0 feet to a point for corner;

 

THENCE South 48 deg. 51 min. 30
sec. West a distance of 135.0 feet to a point for corner on the Southwest line
of said Lot 12;

 

THENCE North 41 deg. 08 min. 30
sec. West along and with the Southwest line of said Lot 12, a distance of 325.0
feet to the PLACE OF BEGINNING, and containing 1.0072 acres of land, more or less;

 

TOGETHER WITH a twenty foot by
fifty foot (20’ X 50’) easement for ingress and agress to Bay Area Blvd., and
being more particularly described by metes and bounds as follows, to-wit:

 

BEGINNING at the most Westerly
corner of said Lot 12;

 

THENCE South 41 deg. 08 min. 30
sec. East a distance of 90.0 feet to an iron rod for corner on the Southeast
right of way line of Bay Area Boulevard;

 

THENCE North 48 deg. 51 min. 30
sec. East along said Southeast line of Bay Area Boulevard, a distance of 135.0
feet to a point for corner, and being the PLACE OF BEGINNING OF THE BASEMENT
TRACT

 

30

 

HEREIN DESCRIBED;

 

THENCE continuing along the
Southeast line of Bay Area Boulevard 48 deg. 51 min. 30 sec. East a distance of
50 feet to a point for corner;

 

THENCE South 41 deg. 08 min. 30
sec. East a distance of 20 feet to a point for corner;

 

THENCE South 48 deg. 51 min. 30
sec. West a distance of 50 feet to a point for corner;

 

THENCE North 41 deg. 08 min. 30
sec. West a distance of 20 feet to the Southeast right of way line of Bay Area
Boulevard and the PLACE OF BEGINNING.

 

31

 

EXHIBIT
B

PERCENTAGE RENT

 

As
set forth in the Lease to which this Exhibit is attached (Section 4.2), Tenant,
as additional rent, shall pay to Landlord on an annual basis 3% of Tenant’s
Gross Sales that exceed the following natural break points for the lease year
identified.

 

	
  Lease Year

  	
   

  	
  Natural Break point

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1 through 5

  	
   

  	
  $

  	
  5,166,666.67

  	
   

  	
   

  	
   

  
	
  6 through 10

  	
   

  	
  $

  	
  5,500,000.00

  	
   

  	
   

  	
   

  
	
  11 through 15

  	
   

  	
  $

  	
  6,166,666.67

  	
   

  	
   

  	
   

  
	
  16 through 20

  	
   

  	
  $

  	
  6,666,666.67

  	
   

  	
  (Option
  Year)

  	
   

  
	
  21 through 25  

  	
   

  	
  $

  	
  7,333,333.34

  	
   

  	
  (Option
  Year)

  	
   

  
									

 

32

 

Exhibit “C”

“Exclusive
Parking Field”

 

 

33

 

EXHIBIT “D”

 

SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

 

NOTICE:                                             THIS SUBORDINATION, NON-DISTURBANCE
AND ATTORNMENT AGREEMENT RESULTS IN YOUR LEASEHOLD ESTATE IN THE PROPERTY
BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME OTHER OR LATER
SECURITY INSTRUMENT

 

This
Agreement is entered into by and among, Tenant, Landlord and Beneficiary and
affects the property located at 515 West Bay Area Boulevard, Webster, Texas,
being more; specifically described on Exhibit “A” which is attached
hereto and incorporated herein by reference.

 

The
term “Tenant” means and refers to Chicago Pizza & Brewery, Inc. d/b/a BJ’s
Restaurant & Brewery.  The term
“Landlord” means and refers to Paris Court Holdings, Ltd. The term
“Beneficiary” means and refers to Wells Fargo Bank, Landlord’s mortgage lender.

 

This
agreement is entered into with reference to the following facts:

 

1.                                       Landlord and Tenant have entered into a lease
covering approximately 10,000 square feet of the property described herein.

 

2.                                       Beneficiary has made, and may make in the
future, loans to Landlord secured by a mortgage on the subject property
(collectively the “mortgage”), provided that any lease relating to the subject
property would be subordinate to the lien of the mortgage.

 

3.                                       The parties hereto desire to expressly
subordinate the lease to the lien of the mortgage and that the lien of the
mortgage be unconditionally and at all times prior and superior to the
leasehold interests and estates created by the lease.

 

4.                                       Tenant has requested that Beneficiary agree
not to disturb Tenant’s possessory rights in the leased premises in the event
Beneficiary should foreclose the mortgage, provided that Tenant is not then in
default under the lease and provided further that Tenant attorns to Beneficiary
or the purchaser at any foreclosure or trustee’s sale of the property.

 

Now,
therefore, in consideration of the mutual covenants contained herein and of
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:

 

1.                                       Notwithstanding anything to the contrary set
forth in the lease, the lease and all leasehold estate created thereby and all
of Tenant’s rights thereunder shall be and shall at all times remain subject,
subordinate and inferior to the mortgage and the lien thereof, and all rights
of beneficiary thereunder and to any and all renewals, modifications,
consolidations, replacements and extensions thereof.

 

34

 

2.                                       In the event of foreclosure of the mortgage,
or upon a sale of the property pursuant to the trustee’s power of sale contained
therein or upon a transfer of the property by conveyance in lieu of foreclosure
then, so long as Tenant complies with this Agreement and is not in default
under any of the terms, covenants or conditions of the lease, the lease shall
continue in full force and effect as a direct lease between the succeeding
owner of the property and Tenant, upon and subject to the terms, covenants and
conditions of the lease for the balance of the term of the lease. Tenant
further agrees to adhere to and accept any successor owner as landlord under
the lease and to be bound by and perform all of the obligations imposed by the
lease.

 

3.                                       Beneficiary, or any other such successor
owner of the property, will not disturb the possession of Tenant and will be
bound by the lease, provided, however, that Beneficiary, or any other successor
owner of the property shall not be:

 

a.  liable for any act or
omission of a prior landlord (including Landlord);

 

b.  subject to any offsets or defenses which
tenant might have against any prior landlord (including Landlord);

 

c.  bound by any rent or additional rent which
Tenant might have paid in advance to any prior landlord (including Landlord)
for a period in excess of one month or by any security deposit cleaning deposit
or other prepaid charge which Tenant might have paid in advance to any prior
landlord (including Landlord); or

 

d.  bound by any agreement or modification of
the lease made without the written consent of Beneficiary

 

4.                                       Landlord and mortgagor or trustee under the
mortgage acknowledge and agree that:

 

a.  this Agreement does not constitute a waiver
by Beneficiary of any of its rights under the mortgage and/or in any way
release landlord from its obligations to comply with the terms, conditions,
covenants, agreements and clauses of the mortgage;

 

b.  the provisions of the mortgage remain in
full force and effect and must be complied with by Landlord; and

 

c.  in the event of default under the mortgage,
Tenant may pay rent and all other sums due under the lease to Beneficiary.

 

5.                                       Additional provisions:

 

A.                                   This Agreement supersedes any inconsistent
provision of the lease.

 

B.                                     Nothing contained in this Agreement shall be
construed to derogate from or an any way impair or affect the lien and charge
or provisions of the mortgage.

 

35

 

C.                                     Beneficiary shall have no obligations nor
incur any liability with respect any warranties of any nature whatsoever,
whether pursuant to the lease or otherwise, including, without limitation, any
warranties respecting the use, compliance with zoning, Landlord’s title,
Landlords authority, habitability, fitness for a particular purpose or
possession.

 

D.                                    This Agreement shall inure to the benefit of
the parties hereto, their respective successors and permitted assigns.

 

E.                                      This Agreement constitutes the full and
complete agreement of the parties and supersedes any prior oral agreement. This
agreement may only be altered, changed or modified in writing and executed by
all parties hereto.

 

F.                                      This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas. The parties agree
that jurisdiction and venue of any dispute regarding this agreement shall lie
exclusively in Harris County, Texas.

 

In
witness whereof, the parties have executed this Subordination, Non-Disturbance
and Attornment Agreement as of, June 28, 2002.

 

IT IS RECOMMENDED THAT, PRIOR TO THE
EXECUTION OF THIS AGREEMENT, THE PARTIES CONSULT WITH THEIR ATTORNEYS WITH
RESPECT THERETO.

 

	
  BENEFICIARY:

  
	
  Wells Fargo Bank

  
	
   

  	
  /s/ Charles
  Calvin

  	
   

  
	
   

  	
  BY:  Charles Calvin, (Title)  VICE PRESIDENT

  
	
   

  	
   

  
	
   

  	
   

  
	
  LANDLORD

  
	
  Paris
  Court Holdings, Ltd.

  
	
   

  	
  /s/ [ILLEGIBLE]

  	
   

  
	
   

  	
  Printed Name and
  Title  Manager

  
	
   

  	
   

  
	
  TENANT

  
	
  Chicago
  Pizza & Brewery, Inc.

  d/b/a
  BJ’s Restaurant & Brewery

  
	
   

  	
  Printed Name and Title

  

 

36

 

Exhibit
A

 

METES AND SOUNDS DESCRIPTION

2.056 ACRES (89.?49 SQUARE FEET)

 

Being 2.056 acres (89.?49
square feet) of land situated in the Robert W. Wilson Survey, Abstract ??,
Harris County, Texas, and being all of Restricted Reserve “A” Bay Area
Boulevard Restaurant Park, ? subdivision recorded under Film Code 357035 of the
Harris County Map Records, and also being all of those certain treats of land,
called Tract One and Tract Two, conveyed to Paris Court Inc.  by Instrument recorded under File Number
R425011 and File Code 505-66-361? of the Harris County Official Public Records
of Real Property and all of that certain tract of land described of the cast 80
feet of the south one hall of Let 11 in Block 22 of the Kabetar Outlots, a
subdivision recorded in Volume 67, Page 197 of the Harris County Deed Records
and conveyed to Charles W. Shears by instrument recorded under File Number
8631375 and File Code ###-##-#### of the Harris County Official Public Records
of Real Property, said 2.056 acres(89,?49 square feet) of land being more
particularly described by meter and bounds as follows (all bearings are
referenced to the monumented southeast right-of-way line of that portion of Bay
Area Boulavard, based on 120 fast in width, recorded under File Number C59?567
and Film code ###-##-#### and under File Number C605125 and File Code
###-##-####. both of the Harris County official Public Records of Real
Property):

 

BEGINNING at a 5/8 inch iron
rod with map set from the most northerly corner of that certain 3.0303 acre
treat of land conveyed to Bruce W. P?rrick by instrument recorded under File
Number H8?124?? and File Code 1??-77-2470 of the Harris County Official Public
Records of Real Property, same being the most westerly corner of said Bay Area
Boulovard Restaurant Park, and being the most westerly corner of the herein
described tract of land and also being in the southeast right-of-way line of
said Bay Area Boulovard and from which an iron rod with cap bears S37’07” E
0.47 feet:

 

THENCE N 48’51’30” E 213.00
feet with the southeast right-of-way line of said Bay Area Boulovard; to an “X”
in a concrete driveway ??t for the most westerly corner of that certain 0.?33
acre tract of land conveyed to Dr. Charles G. Sh??p? by instrument recorded
under File Number M124302 and Film Code 044-77-1?36 of the Harris County
Official Public Records of Real Property and being the most northerly corner of
this tract:

 

THENCE S 41’14’00” E 325.35
feet, called S 41’0?’30” E 325.00 feet, to a 1/2 inch iron rod found for the
most-southerly corner of said 0.933 acre tract and being the most northerly
east corner of this tract and also being in a northwest Line of Unrestricted
Reserve “B” of Live Oak Street Development, a subdivision recorded in Volume
340, Page 25 of the Harris County Map Records;

 

THENCE S 4?’51’30” E 135.00
feet to a 5/? inch iron rod with cap set for the most most westerly corner of
said Unrestricted Reserve “?” and being an interior corner of this tract and
from which a 1/2 inch iron rod bears S 80’34” E 0.27 feet;

 

THENCE S 41’14’00” ? 244.45
feet, called S 41’ 08’ 30” E to a 5/8 inch iron rod with cap set for the most
southerly corner of said Unrestricted Reserve “B” and being the most southerly
east corner of this tract and also being in the northwest line of that certain
11 7152 acre treat of land surveyed to Webland Properties Inc. by instrument
recorded under File Number F746320 and Film Code 0?2-70-3588 of the Harris
County Official Public Records of Real Property and from which a bent 1/2 inch
iron rod bears S 04’4?” W 0.30 feet:

 

37

 

TRACT ONE: A 19,200 square feet
tract of land out of Lot Eleven (11), Block Twenty-two (22) in WEBSTER OUTLOTS,
an Addition in Harris County, Texas, according to the plat as recorded in
Volume 67, Page 1?7 of the Deed Records of Harris County, Texas, and being more
particularly described by mates and bounds as follows, to-wit:

 

Commencing at the most
Northerly Corner of said Lot 11, Block 22;

 

THENCE South 41 deg. 0? min. 30
sec. East 90.00 feet along the Northeast line of said Lot 11 to an iron red in
the Southeast right of way line of Bay Area Boulevard (120’ wide) and being the
point of beginning of this tract;

 

THENCE continuing South 41 deg.
08 min. 30 sec. East 240.00 feet along the Northeast line of Lot 11 to an iron
rod;

 

THENCE South 48 deg. 51 min. 30
sec. West 80.00 feet to an iron rod;

 

THENCE North 41 deg. 08 min. 30
sec. West 240.00 feet to an iron rod in the Southeast right of way line of Bay
Area Boulevard;

 

THENCE North 48 deg. 51 min. 30
sec. East 80.00 feet along the Southeast right of way line of Bay Area
Boulevard to the point of beginning and containing 19,200 square feet of land.

 

TRACT TWO: A 1.0072 acre tract,
more or less, out of Lot Twelve (12), in Block Twenty-Two (22) of WEBSTER
OUTLOTS, an Addition in Harris County, Texas, according to the map or plat
thereof, recorded in Volume 67, Page 197 of the Deed Records of Harris County,
Texas, and being more particularly described by notes and bounds as follows,
to-wit:

 

BEGINNING at the most Westerly
corner of said Lot 12;

 

THENCE South 41 deg. 0? min. 30
sec. East a distance of 90.0 feet to an iron red for corner on the Southeast
right of way line of Bay Area Boulevard marking the most Westerly corner and
PLACE OF BEGINNING of the tract herein described;

 

THENCE North 48 deg. 51 min. 30
sec. East along said Southeast line of Bay Area Boulevard, a distance of 135.0
feet to a point for corner;

 

THENCE South 41 deg. 08 min. 30
sec. East a distance of 325.0 feet to a point for corner;

 

THENCE South 48 deg, 51 min, 30
sec. West a distance of 135.0 feet to a point for corner on the Southwest line
of said Lot 12;

 

THENCE North 41 deg. 08 min. 30
sec. West along and with the Southwest line of said Lot 12, a distance of 325.0
feet to the PLACE OF BEGINNING, and containing 1.0072 acres of land, more or
less;

 

TOGETHER WITH a twenty feet by
fifty feet (20’ X 50’) easement for ingreed and agress to Bay Area Blvd., and being
more particularly described by mates and bounds as follows, to-wit:

 

BEGINNING at the most Westerly
corner of said Lot 12;

 

THENCE South 41 deg. 0? min. 30
sec. East a distance of ?0.0 feet to an iron rod for corner on the Southeast
right of way line of Bay Area Boulevard;

 

THENCE North 48 deg. 51 min. 30
sec. East along said Southeast line of Bay Area Boulevard, a distance of 135.0
feet to a point for corner and being the PLACE OF BEGINNING OF THE EASEMENT
TRACT

 

38

 

HEREIN DESCRIBED;

 

THENCE continuing along the
Southeast line of Bay Area Boulevard 48 deg, 51 min, 30 sec. East a distance of
50 feet to a point for corner;

 

THENCE South 41 deg. 0? min. 30
sec. East a distance of 20 feet to a point for corner;

 

THENCE South 48 deg. 51 min. 30
sec. West a distance of ?0 feet to a point for corner;

 

THENCE North 41 deg. 0? min. 30
sec. West a distance of 20 feet to the Southeast right of way line of Bay Area
Boulevard and the PLACE OF BEGINNING.

 

39

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