Document:

April 30, 1998

Exhibit

10.4

 

AMENDED

AND RESTATED

MASTER

LEASE

 

BETWEEN

 

ARG PROPERTIES I, LLC,

 

as Landlord

 

AND

 

ARG ENTERPRISES, INC.,

 

As Tenant

 

Dated: May 11, 1998

 

 

LEASE

 

In consideration of the rents and covenants set forth

below, Landlord (as hereinafter defined) hereby leases to Tenant (as

hereinafter defined), and Tenant hereby leases from Landlord, the following

Premises (as hereinafter defined) upon the following terms and conditions:

 

ARTICLE 1

FUNDAMENTAL

LEASE PROVISIONS

 

This Amended and Restated Master Lease amends and

restates that certain Master Lease by and between Landlord (as hereinafter

defined) and Tenant (as hereinafter defined) dated

September 11, 1996, as heretofore amended, as it applies to the

Premises (as hereinafter defined), in its entirety.

 

	

  Date: 

  	

  May 11, 1998

  
	

   

  	

   

  
	

  Commencement 

  Date:

  	

  May 11, 1998

  
	

   

  	

   

  
	

  Landlord:

  	

  ARG Properties I, LLC, a California limited

  liability company

  
	

   

  	

   

  
	

  Tenant:

  	

  ARG Enterprises, Inc., a California corporation

  
	

   

  	

   

  
	

  Tenant’s 

  Trade Name:

  	

  Stuart Anderson’s Black Angus or Stuart Anderson’s

  Cattle Company restaurants 

  
	

   

  	

   

  
	

  Guarantor:

  	

  American Restaurant Group, Inc., a Delaware

  corporation

  
	

   

  	

   

  
	

  Guaranty

  	

  Guaranty of Lease dated May 11, 1998 by

  Guarantor in favor of Landlord

  
	

   

  	

   

  
	

  Lease Term:

  	

  Twenty-Five (25) years, commencing on the

  Commencement Date and ending on June 1, 2023, with three (3) renewal options

  of five (5) years each.  (Article 4)

  
	

   

  	

   

  
	

  Annual

  Rent:

  	

  One Million Eight Hundred Sixty-Six Thousand Three

  Hundred Thirty Dollars ($1,866,330), subject to adjustment as hereinafter

  provided.  (Article 6, Section 6.01)

  
	

  The Annual Rent

  shall be payable on the first day of each month, commencing on June 1, 1998,

  in twelve (12) equal installments each in the amount of One Hundred

  Fifty-Five Thousand Five Hundred Twenty Seven and 50/100 Dollars

  ($155,527.50) during each year of the term of this Lease subject to proration

  or adjustment as hereinafter provided. Annual Rent is allocated on Exhibit D

  attached hereto and made a part hereof among the eight (8) properties

  constituting the Premises for certain purposes specified in this Lease.  This initial allocation of 

  

 

1

 

	

   

  	

  Annual Rent

  shall be subject to proration or adjustment as hereinafter provided.

  

 

 

	

   

  	

  To Landlord:

  	

  ARG Properties I, LLC

  
	

   

  	

   

  	

  c/o Griffin Capital

  
	

   

  	

   

  	

  10940 Wilshire Blvd., Suite 1600 

  
	

   

  	

   

  	

  Los Angeles, CA 90024

  
	

   

  	

   

  	

  Attn:       Kevin

  A. Shields 

  
	

   

  	

   

  	

  Fax:         (310)

  443-4117

  

 

	

   

  	

  To Tenant:

  	

  ARG Enterprises, Inc.

  
	

   

  	

   

  	

  6th Floor

  
	

   

  	

   

  	

  450 Newport Center Drive 

  
	

   

  	

   

  	

  Newport Beach, CA 

  92660

  
	

   

  	

   

  	

  Attn:       Chief

  Financial Officer

  
	

   

  	

   

  	

  Fax:         (949)

  721-8941

  

Addresses for Notice:

	

   

  	

  With a copy to:

  	

  American Restaurant Group, Inc.

  
	

   

  	

   

  	

  Suite 201 

  
	

   

  	

   

  	

  4410 El Camino Real 

  
	

   

  	

   

  	

  Los Altos, CA 

  94022 

  
	

   

  	

   

  	

  Attn:       Legal

  Department

  
	

   

  	

   

  	

  Fax:         (650)

  949-6420

  

 

	

   

  	

  With a copy to:

  	

  Stuart Anderson’s Restaurants

  
	

   

  	

   

  	

  4410 El Camino Real, Suite 201

  
	

   

  	

   

  	

  Los Altos, California  94022

  
	

   

  	

   

  	

  Attn:       Director

  of Real Estate

  
	

   

  	

   

  	

  Fax:         (650)

  949-6245

  

 

	

  Premises:

  	

  That

  certain real property described in Exhibit A attached hereto, and all

  appurtenances, easements and rights of way now or subsequently pertaining

  thereto, together with all improvements now or hereafter located thereon,

  consisting of eight (8) restaurants known as either Stuart Anderson*s Black

  Angus or Stuart Anderson*s Cattle Company restaurants.  References to the “Premises” shall refer

  to one location, or to all locations, as the context shall require.

  

 

References in this Article 1 to other Articles are for

convenience and designate some of the other Articles where references to the

Fundamental Lease Provisions appear. 

Each reference in this Lease to any of the Fundamental Lease Provisions

contained in this Article 1 shall be construed to incorporate all of the terms

provided under such Fundamental Lease Provisions.  In the event of any conflict between any Fundamental Lease

Provision and the balance of this Lease, the latter shall control.

 

2

 

ARTICLE 2

EXHIBITS

 

The following are attached hereto as Exhibits and made

a part of this Lease:

 

EXHIBIT A—Description of the Premises

 

EXHIBIT B—Form of Subordination, Non-Disturbance and

Attornment Agreement

 

EXHIBIT C—Form of Notice of Non–Responsibility

 

EXHIBIT D—Allocated Rent Schedule

 

In the event of any conflict between any of the

above-referenced Exhibits and the balance of this Lease, the Exhibit shall

control.

 

ARTICLE 3

PREMISES

 

Landlord hereby leases and demises unto Tenant and

Tenant hereby leases and takes from Landlord, for the term, at the rental, and

upon the terms, covenants, and conditions hereinafter set forth, the property

referred to in Article 1 as the Premises and described on Exhibit A attached

hereto.

 

ARTICLE 4

TERM

 

4.01         Term.  The term of this Lease shall be the term

specified in Article 1 hereof (the initial term and any extensions exercised by

Tenant thereof are hereinafter referred to as the “Lease Term”) and shall

commence on the Commencement Date.

 

4.02         Option

to Extend Lease Term.  Tenant

shall have the option to extend the initial term of this Lease with respect to

any of the Premises that Tenant may elect to continue to lease from Landlord

for three (3) additional, successive periods of five (5) years each (each, an

“Extension Period”) on the same terms, covenants and conditions of this Lease.

In the event Tenant elects to exercise the option(s), Tenant shall provide

Landlord written notice of Tenant’s exercise of the option(s) not less than

ninety (90) days prior to the end of the then-current term, such notice shall

identify each of the Premises which Tenant has elected to remain subject to

this Lease during the applicable Extension Period and is to be given in the

manner provided in Section 25.04 of this Lease.  Provided that Tenant has duly exercised its option to extend the term

of this Lease as set forth herein and further provided that Tenant is not in

default under this Lease at the end of the then current term of this Lease,

this Lease shall be amended to reflect the exclusion of any of the Premises

from the Lease and the corresponding reduction in the Annual Rent in connection

with Tenant’s exercise of the applicable extension option.  Tenant’s right to exercise the foregoing

option(s) is conditioned upon Tenant’s performance of all of the duties and

obligations on its part to be performed under this Lease so that, at the time

of the exercise of such options, Tenant shall not be in default hereunder.  In the event that Tenant elects to extend

 

3

 

the initial term of this Lease, the Annual Rent shall continue to be adjusted

as provided in Section 6.02 of this Lease.

 

ARTICLE 5

LIENS

 

Tenant shall do all things necessary to prevent the

filing of any mechanics’ or other liens or encumbrances against the Premises,

or any part thereof, or upon any interest of Landlord or any mortgagee or

beneficiary under a deed of trust or any ground or underlying lessor in any

portion of the Premises, by reason of work, labor, services, or materials

supplied or claimed to have been supplied to Tenant, or anyone holding the

Premises, or any part thereof, through or under Tenant.  If any such lien or encumbrance shall at any

time be filed against the Premises, or any portion thereof, Tenant shall either

cause same to be discharged of record within thirty (30) days after the date of

filing of same or, if Tenant in good faith determines that such lien should be

contested, Tenant will give Landlord prior notice of Tenant’s intention to

contest any such lien and, upon demand by Landlord, will procure and record a

lien release bond under applicable law in the amount prescribed by applicable

law or if no amount is prescribed by applicable law in an amount equal to 150%

of the lien amount.  If a final judgment

is rendered against Tenant by a court of competent jurisdiction, or if the

Premises or any portion thereof are in danger of being foreclosed upon as a

result of any such lien, Tenant will satisfy such judgment or lien at

once.  If Tenant does not post the

release bond or fails to pay any such adverse judgment or to discharge any lien

in the event of any imminent foreclosure, then Landlord may post the bond or

pay the judgment or discharge the lien, as applicable, and Tenant will promptly

reimburse Landlord for all sums paid by it in connection therewith, together

with the applicable Administrative Fee (as hereinafter defined).  Tenant shall give Landlord notice of the

intended commencement date of any work, labor, services or material to be

performed or provided to any of the Premises or any portion thereof involving

total expenditures for any project in excess of one and twenty–five one

hundredths percent (1.25%) of the Annual Rent, as it may be adjusted from time

to time as provided herein, at least ten (10) days before said date, and in

connection with the performance or provision of any such work, labor, services

or materials, Tenant shall file and post on

the applicable Premises a notice of nonresponsibility on behalf of Landlord in

the form attached hereto as Exhibit C within any time period and in the manner

prescribed under the laws of the state(s) in which the Premises or applicable

portion thereof is located in order to protect Landlord from responsibility

for, and evidencing Tenant’s obligations with respect to, any of the matters

covered by this Article, and shall provide Landlord with a copy thereof.  Landlord shall also have the right

and opportunity, to post and maintain on the Premises such notices, including

notices of nonresponsibility and other similar notices, as are provided for

under the Laws of the state(s) in which the Premises are located, evidencing

Tenant’s obligations with respect to any of the matters covered by this Article

and Landlord shall have the right to enter the Premises and post such notices

at any reasonable time.

 

ARTICLE 6

RENT

 

6.01         Rent.  Tenant covenants and agrees to pay for the

use and occupancy of the Premises, the Annual Rent specified in Article 1

hereof, subject to increase pursuant to the provisions of Section 6.02 hereof,

in twelve (12) equal monthly installments during each year of

 

4

 

the Lease Term, in advance, on the first day of each calendar month,

without any offset or deduction.  Should

the Lease Term commence on a day other than the first day of a calendar month,

then the rental for such first fractional month shall be computed on a daily

basis for the period from the Commencement Date to the end of such calendar

month at an amount equal to one three hundred sixty-fifth (1/365) of the Annual

Rent for each day.  Should the Lease

Term end on a day other than the last day of a calendar month, then the rental

for such fractional month shall be computed on a daily basis at an amount equal

to one three hundred sixty-fifth (1/365) of the Annual Rent for each day.  Rent shall be paid in lawful money of the

United States to Landlord at the address stated in Article 1 or to such other

persons or at such other places as Landlord may designate in writing to Tenant.

 

6.02         Rental

Adjustments.  The Annual Rent payable under this Lease

shall be increased on October 1, 2001 and every five (5) years thereafter

(each, an “Increase Date”) during the Lease Term as follows:

 

(a)           The

basis for computing the increase shall be the Consumer Price Index for all

Urban Consumers - All Items U.S. Cities Average, published monthly by the

Bureau of Labor Statistics of the United States Department of Labor (Base

Period 1982-1984=100) (“Index”), published on September 20, 1996 for

August, 1996, i.e., 157.3 (the “Beginning Index”).

 

(b)           If

the Index published for the date nearest the applicable Increase Date (the

“Extension Index”) has increased over the Beginning Index, the Annual Rent will

be calculated by multiplying the then Annual Rent by a fraction, the numerator

of which is the Extension Index and the denominator of which is the Beginning

Index, not to exceed an increase equal to 10% of the Annual Rent in effect

during the five-year period immediately preceding the applicable Increase Date.

 

(c)           In

the event the Extension Index is not available on the applicable Increase Date,

Tenant will continue to pay the Annual Rent in effect immediately prior to the

Increase Date.  As soon as practicable,

Landlord will furnish Tenant with a true copy of the Extension Index figure

together with a computation of the increase in the Annual Rent for the ensuing

five-year period, if any, and an appropriate adjustment will be paid within 30

days of Tenant’s receipt of Landlord’s statement.

 

(d)           If

the Index is changed so that the base year differs from that in effect on the

Commencement Date, the Index shall be converted in accordance with the

conversion factor published by the Bureau of Labor Statistics.  If the Index is discontinued or revised

during the Lease Term, such other governmental index or computation with which

it is replaced will be used in order to obtain substantially the same result as

would be obtained if the Index had not been discontinued or revised.

 

6.03         Net

Lease; Impositions.  This Lease

is what is commonly called a “triple net lease,” it being understood that

Landlord shall receive the Annual Rent set forth in Article 1 hereof, as

increased pursuant to Section 6.02, free and clear of any and all other

impositions, taxes, liens, charges, or expenses of any nature whatsoever

incurred in connection with the ownership and operation of any of the

Premises.  In addition to the Annual

Rent reserved by

 

5

 

Article 1 hereof, as increased pursuant to Section 6.02, Tenant shall

pay to the appropriate parties all impositions, insurance premiums, Real

Property Taxes (as defined below), operating charges, maintenance charges,

construction costs, accounting and legal fees, and any other charges, costs and

expenses which arise or may be contemplated under any provision of this Lease

during the Lease Term (collectively “Impositions”).  All of such Impositions shall constitute additional rent, and

upon the failure of Tenant to pay any of such Impositions, Landlord shall have

the same rights and remedies as otherwise provided in this Lease for the failure

of Tenant to pay rent.  Tenant shall

furnish to Landlord, promptly upon the reasonable request of Landlord, official

receipts or other satisfactory proof evidencing payment of any such

Impositions.  Upon Tenant’s failure to

pay any Real Property Taxes as provided herein, Landlord shall have the right,

at Landlord’s option, to require Tenant to (a) promptly deposit with Landlord

funds sufficient for the payment of the current Real Property Taxes required to

be paid by Tenant hereunder; and (b) also deposit one-twelfth of the current

annual or annualized Real Property Taxes (or those of the preceding years if

the current amounts thereof have not been fixed), on the first day of each

month in advance.  It is the intention

of the parties hereto that this Lease shall not be terminable for any reason by

Tenant, and that Tenant shall in no event be entitled to any abatement of,

deductions of any kind, offset or reduction in rent payable under this Lease,

except as may otherwise be expressly set forth in this Lease.  Any present or future Law to the contrary

shall not alter this agreement of the parties.

 

ARTICLE 7

USE

OF THE PREMISES

 

7.01         Use.  Tenant shall occupy and use each of the

Premises solely for the operation of a Stuart Anderson’s Black Angus or Cattle

Company restaurant or any other lawful use, provided such other use does not

decrease the market value of the Premises.

 

7.02         Compliance

With Laws.

 

(a)           Tenant

accepts the Premises in its “AS IS” condition. 

Tenant accepts each of the Premises “AS IS” in reliance upon Tenant’s

own knowledge as owner and/or occupier of the Premises prior to commencement of

this Lease.  Landlord makes no

representations or warranties of any type whatsoever, including without

limitation, whether there has been or are currently any violations of any

covenants or restrictions of record, or any applicable Laws in effect regarding

any of the Premises on the Commencement Date.

 

(b)           Tenant

shall, at Tenant’s sole expense, comply in all material respects with all

applicable laws, ordinances, building codes, orders, zoning ordinances, rules,

and regulations of any governmental authorities and with any directive of any

public officer which shall impose any order or duty upon Landlord or Tenant

with respect to any of the Premises or the use or occupation thereof or

relating to the environment, health or safety with respect to any of the

Premises or the use or occupation thereof (including, without limitation, any

rule of common law and judicial decisions and The Americans With Disabilities

Act), and any covenants, conditions or restrictions of record relating to the

Premises or the use or occupation thereof, in each case as now or hereafter in

effect (collectively, “Laws”).

 

6

 

(c)           Notwithstanding

any other provision of this Lease, Tenant shall not use or permit any of the

Premises to be used in any manner which will result in waste or the creation of

a nuisance, and Tenant shall maintain each of the Premises free of any

objectionable noises, odors, or disturbances; provided that, as between

Landlord and Tenant only, odors and exhaust incidental to a restaurant,

excluding odors of deteriorating food, will not be deemed a nuisance or

objectionable provided the same do not violate applicable Laws and do not

subject Landlord to any civil liability.

 

(d)           Notwithstanding

any other provision of this Lease, in the event that any new Law which goes

into effect during any Extension Period requires an investment in any of the

Premises in excess of 30% of the replacement cost of such Premises (exclusive

of land, foundations and footings), and which has an economic life in excess of

five (5) years, Tenant, at its option, may elect to terminate this Lease as to

such Premises only at any time during such Extension Period written notice to

Landlord and payment to Landlord of all accrued rent and other obligations

hereunder with respect to such Premises through the date of such termination,

except as to obligations hereunder which expressly survive any termination of

this Lease.

 

7.03         Permits

and Licenses.  As between

Landlord and Tenant, Tenant shall be solely responsible to apply for and secure

any building permit or permission of any duly constituted authority for the

purpose of doing any of the things which Tenant is required or permitted to do

under the provisions of this Lease. 

Landlord shall cooperate as reasonably requested by Tenant to facilitate

Tenant’s compliance with this obligation but at no cost to Landlord.

 

ARTICLE 8

UTILITIES

 

8.01         Payment.  Tenant shall pay to the utility companies or

other parties entitled to payment the cost of all water, sewer, heat, air

conditioning, gas, electricity, garbage collection, telephone, and other

utilities and services provided to or for any of the Premises, including

connection fees and taxes thereon.

 

8.02         Interruption

in Service.  Landlord shall not

be liable in damages or otherwise for any failure or interruption of any

utility or other service being furnished to any of the Premises subject to the

provisions of Section 11.04(b) hereof, and no such failure or interruption

shall entitle Tenant to any abatement of, setoff of or reduction in the amounts

payable to Landlord hereunder or otherwise entitle Tenant to terminate this

Lease.

 

ARTICLE 9

TAXES

 

9.01         Payment of

Taxes.  Tenant shall pay the

Real Property Taxes (as defined in Section 9.02) applicable to each of the

Premises during the Lease Term. 

Landlord and Tenant agree to cooperate to ensure that all tax bills

applicable to each of the Premises are sent directly to Tenant by the taxing

authority.  All such payments shall be

made prior to delinquency.  Upon

Landlord’s request, Tenant shall promptly furnish Landlord with satisfactory

evidence that such Real Property Taxes have been paid.  If any such Real Property Taxes paid by

Tenant shall cover any period of time prior to or after the expiration of the

Lease Term, Landlord shall promptly

 

7

 

reimburse Tenant to the extent required.  If Tenant shall fail to pay any such Real Property Taxes,

Landlord shall have the right but not the obligation to pay the same in which

case Tenant shall repay such amount plus any penalties and interest resulting

therefrom to Landlord with Tenant’s next Annual Rental installment together

with the applicable Administrative Fee.

 

9.02         Definition

of “Real Property Taxes”.  As

used herein, the term “Real Property Taxes” shall mean any form of real estate

tax or assessment, ad valorem or value–added tax or occupancy tax or

gross receipts tax, fee, levy, penalty, interest or other charge, imposed by

any authority having the direct or indirect power to tax, including any city,

county, state, or federal government, or any school, agricultural, sanitary,

fire, street, drainage, or other improvement district thereof, on, against or

with respect to any of the Premises, this Lease, any legal or equitable

interest of Landlord or any superior landlord or any mortgagee of Landlord in

the Premises or in the real property of which any of the Premises are a part,

and Landlord’s right to rent.  The term

“Real Property Taxes” shall also include any tax, fee, levy, assessment,

penalty, interest or other charge (i) in substitution of, partially or

totally, any tax, fee, levy, assessment, or charge included within the

foregoing definition of Real Property Taxes, (ii) the nature of which was

included within the foregoing definition of Real Property Taxes, or

(iii) any tax or increase in any tax which is imposed as a result of a

transfer, either partial or total, of Landlord’s interest in the Premises or

which is added to a tax or charge hereinbefore included within the definition

of Real Property Taxes by reason of such transfer (other than documentary,

stamp or other transfer taxes resulting from any such transfer but including

any increase in any Real Property Taxes attributable to any such transfer), or

which is imposed by reason of the transfer of any of the Premises to Landlord

or this transaction, any modifications or changes hereto, or any other transfers

hereof.  Notwithstanding the foregoing,

the term “Real Property Taxes” shall not include any general income taxes,

inheritance taxes, and estate taxes imposed upon Landlord or any superior

landlord or any mortgagee or beneficiary of Landlord or any taxes attributable

to the recording of any mortgage or deed of trust on Landlord’s interest in the

Premises.

 

9.03         Personal

Property Taxes.  Tenant shall

pay, prior to delinquency, all taxes assessed against and levied upon trade

fixtures, furnishings, equipment, and all other personal property of Tenant

contained in any of the Premises or elsewhere. 

Tenant shall seek to cause said trade fixtures, furnishings, equipment,

and all other personal property to be assessed and billed separately from the

real property of Landlord.

 

9.04         Tenant’s

Right to Contest Taxes.

 

(a)           Tenant

shall have the right, at its cost and expense, to contest the amount or

validity, in whole or in part, of any Real Property Taxes of any kind by

appropriate proceedings diligently conducted in good faith, but no such contest

shall be carried on or maintained by Tenant after the time limit for the

payment of any Real Property Taxes unless Tenant, at its option: (i) shall

pay the amount involved under protest; or (ii) shall procure and maintain

a stay of all proceedings to enforce any collection of any Real Property Taxes,

together with all penalties, interest, costs and expenses, by a deposit of a

sufficient sum of money, or by such undertaking, as may be required or

permitted by law to accomplish such stay; or (iii) shall deposit with

Landlord, as security for the performance by Tenant of its obligations

hereunder with respect to such Real Property Taxes, security in the amount, if

any, prescribed by applicable law, or if no amount is prescribed by applicable

law, in amounts equal to one hundred fifty

 

8

 

percent (150%) of the contested amount or such other reasonable

security as may be demanded by Landlord to ensure payment of such contested

Real Property Taxes and all penalties, interest, costs and expenses which may

accrue during the period of the contest. 

Upon the termination of any such proceedings, it shall be the obligation

of Tenant to pay the amount of such Real Property Taxes or part thereof, as

finally determined in such proceedings, together with any costs, fees

(including attorneys’ fees), penalties or other liabilities in connection

therewith; provided, however, that if Tenant has deposited cash or cash

equivalents with Landlord as security under clause (iii) above, then, so long

as no material default exists under this Lease, Landlord shall pay such Real

Property Taxes (or part thereof) together with the applicable costs, fees and

liabilities as described above out of such cash or cash equivalents and return

any unused balance, if any, to Tenant. 

Otherwise, Landlord shall return or cause to have returned to Tenant all

amounts, if any, held by or on behalf of Landlord which were deposited by Tenant

in accordance with the provisions hereof.

 

(b)           Tenant

shall have the right, at its cost and expense, to seek a reduction in the

valuation of the Premises as assessed for tax purposes and to prosecute any

action or proceeding in connection therewith. 

Provided Tenant is not in material default hereunder, Tenant shall be

authorized to collect any tax refund of any tax paid by Tenant obtained by

reason thereof and to retain the same.

 

(c)           Landlord

agrees that whenever Landlord’s cooperation is required in any of the

proceedings brought by Tenant as aforesaid, Landlord will reasonably cooperate

therein, provided same shall not entail any cost, liability or expense to

Landlord, and Tenant will pay, indemnify and save Landlord harmless of and

from, any and all liabilities, losses, judgments, decrees, costs and expenses

(including all reasonable attorneys’ fees and expenses) in connection with any

such contest and will, promptly after the final settlement, fully pay and

discharge the amounts which shall be levied, assessed, charged or imposed or be

determined to be payable therein or in connection therewith, and Tenant shall

perform and observe all acts and obligations, the performance of which shall be

ordered or decreed as a result thereof. 

No such contest shall subject Landlord to the risk of any civil

liability or the risk of any criminal liability, and Tenant shall give such

reasonable indemnity or security to Landlord, as may reasonably be demanded by

Landlord, to ensure compliance with the foregoing provisions of this Section

9.04.

 

9.05         Survival of Tenant’s Tax Obligations.  Tenant’s obligations pursuant to this

Article 9 shall survive the termination or expiration of this Lease, in

whole or in part, such that, notwithstanding such termination or expiration of

this Lease, such that Tenant shall continue to be responsible for that portion

of the Real Property Taxes and/or personal property taxes which pertain to the

period prior to the date of such termination or expiration of this Lease, which

taxes shall be prorated and apportioned in accordance with the number of days

elapsed in the applicable tax year.

 

ARTICLE 10

MAINTENANCE

AND REPAIRS

 

10.01       Tenant’s

Obligations.

 

(a)           Tenant

shall, at Tenant’s expense, maintain in good repair, order, and serviceable

condition, reasonable wear and tear excepted, the Premises and every part

thereof,

 

9

 

including but not limited to all plumbing, ventilation, heating, air

conditioning, and electrical systems and equipment in, on, or exclusively

serving any of the Premises, and windows, doors, storefronts, plate glass,

interior walls, and ceilings which are part of any of the Premises.

 

(b)           Tenant

shall not commit or suffer to be committed any waste upon or about the

Premises, and shall promptly at Tenant’s cost and expense, make all necessary

replacements, restorations, renewals and repairs to each of the Premises and

all appurtenances thereto which are material to the operation of any of the

Premises, whether interior or exterior, structural or non-structural, ordinary

or extraordinary, and foreseen or unforeseen; provided that with respect to

appurtenances to the Premises which are material to the operation of the

Premises, if third parties are obligated to repair or maintain such

appurtenances, Tenant shall use commercially reasonable efforts to enforce such

obligations of third parties or, if such third parties fail to perform such

obligations, Tenant shall perform such obligations to the extent Tenant has the

legal right to do so.  Tenant shall pay

to the appropriate parties Tenant’s pro rata share of any maintenance, repair

or other costs to the extent required under any appurtenances to any of the

Premises.  Repairs, restorations,

renewals and replacements shall be at least equivalent in quality to the

original work or the property replaced, as the case may be.  Tenant shall not make any claim or demand

upon or bring any action against Landlord for any loss, cost, injury, damage or

other expense caused by any failure or defect, structural or non-structural, of

the Premises or any part thereof.

 

(c)           Upon

the expiration or earlier termination of this Lease, Tenant shall return each

of the Premises to Landlord in good and clean condition and repair, reasonable

wear and tear excepted.  Any damage to

any of the Premises, including any structural damage, resulting from Tenant’s

use or from the removal of Tenant’s fixtures, furnishings, and equipment

pursuant to Section 12.04 hereof, shall be repaired by Tenant at Tenant’s

expense.

 

10.02       Landlord’s

Obligations.  Except for the

obligations of Landlord under Article 14 hereof (relating to destruction of the

Premises), and under Article 15 hereof (relating to the condemnation of the

Premises), it is intended by the parties hereto that Landlord have no

obligation, in any manner whatsoever, to repair and maintain any of the

Premises nor any building located thereon nor any fixtures thereon or equipment

or personal property therein, whether interior or exterior, structural or

nonstructural, ordinary or extraordinary, all of which obligations are that of

Tenant under Section 10.01 hereof. 

Tenant expressly waives the benefit of any statute or law now or

hereafter in effect which would otherwise afford Tenant the right to terminate

this Lease because of Landlord’s failure to keep the Premises or any part

thereof or any building located thereon or fixtures thereon or equipment or

personal property therein in good order, condition, and repair, or the right to

repair and offset the cost related thereto against rent.

 

10.03       Landlord’s

Rights.  If Tenant refuses or

neglects to make repairs or maintain the Premises, or any part thereof, or any

appurtenances thereto material to the operation of the Premises or to enforce

maintenance or repair obligations of third parties with respect to any such

appurtenances, as provided above, in a manner reasonably satisfactory to

Landlord, without prejudice to any other remedy Landlord may have hereunder,

upon giving Tenant ten (10) days’ prior written notice, Landlord shall have the

right to enter such Premises and perform such maintenance or make such repairs

on behalf of and for the account of Tenant. 

In the event Landlord so elects, Tenant shall pay the cost of such

repairs, maintenance, or replacements

 

10

 

promptly following Tenant’s receipt of a bill therefor, together with

the applicable Administrative Fee. 

Tenant agrees to permit Landlord or its agent to enter the Premises,

upon reasonable notice by Landlord, during normal business hours for the purpose

of inspecting the Premises.

 

ARTICLE 11

INSURANCE

AND INDEMNIFICATION

 

11.01       Tenant’s

Insurance Obligation.  Tenant

covenants and agrees that Tenant will carry and maintain, at its sole cost and

expense, the following types of insurance with respect to each of the Premises,

in the amounts specified and in the form hereinafter provided for:

 

(a)           COMMERCIAL

GENERAL LIABILITY.  Commercial general

liability insurance (including liquor liability insurance) against any loss,

liability or damage on or relating to the Premises, with limits of not less

than Two Million Dollars ($2,000,000) in any one occurrence for death or

injuries to one or more persons and/or for damage to property.

 

(b)           WORKERS’

COMPENSATION.  Worker’s compensation

insurance or self insurance as required by the jurisdiction in which the

Premises are located.

 

(c)           PROPERTY

DAMAGE.  Insurance covering all

improvements located on the Premises and all of Tenant’s fixtures, merchandise,

and personal property from time to time in, on or upon each of the Premises, in

an amount not less than one hundred percent (100%) of their full replacement

value providing protection against perils commonly included within the

classification “All Risk”.  Any policy

proceeds shall be used for the repair or replacement of the property damaged or

destroyed to the extent necessary to maintain the standard of operation of the

Premises and the business operated thereon existing prior to the damage or

destruction except as provided in Article 14.

 

(d)           POLICY

FORM.

 

(i)            All

policies of insurance provided for herein shall be issued by reputable and

financially sound insurance companies reasonably satisfactory to Landlord, and

such insurance companies shall be qualified to do business in the jurisdiction

where the applicable Premises are situated. 

All such policies shall be issued in Tenant’s name, with Landlord named

as an additional insured and/or loss payee as applicable, and, if requested by

Landlord, name any superior landlord and any mortgagee or beneficiary of

Landlord as an additional insured or loss payee.  The policies shall be for the mutual and joint benefit and

protection of Landlord, Tenant, any superior landlord and any mortgagee or

beneficiary of Landlord.  Certificates

of insurance shall be delivered to Landlord prior to Landlord’s execution of

this Lease, and thereafter certificates or other evidence of renewal or

replacement coverage shall be delivered to Landlord within five (5) days prior

to the expiration of the term of each such policy.  As often as any such policy shall expire or terminate, renewal or

additional policies shall be procured and maintained by Tenant in like manner

and to like extent.  All certificates of

insurance delivered to Landlord must contain a provision giving Landlord, any

superior landlord, and any mortgagee or beneficiary of Landlord thirty (30)

days’ notice in writing in advance of any cancellation or lapse, except only

ten (10) days’ notice will be provided for cancellation due

 

11

 

to premium non-payment, of insurance. 

All public liability, property damage, and other casualty policies shall

be written on an occurrence basis as primary policies, not contributing with or

in excess of coverage which Landlord may carry.

 

(ii)           Tenant’s

obligations to carry the insurance provided for above may be brought within the

coverage of a so-called blanket policy or policies of insurance carried and

maintained by Tenant; provided, however, that such policy or policies must have

limits of not less than Five Million and 00/100 Dollars ($5,000,000) for any

one occurrence and that Landlord, any superior landlord and any mortgagee or

beneficiary of Landlord shall be named as an additional insured or loss payee

thereunder as their interests may appear and that the coverage afforded

Landlord will not be reduced or diminished by reason of the use of such blanket

policies and the requirements set forth herein are otherwise satisfied.

 

11.02       Subrogation

Waiver.  Landlord (for itself

and its insurer) hereby waives any rights, including rights of subrogation, and

Tenant (for itself and its insurer) hereby waives any rights, including rights

of subrogation, each may have against the other on account of any loss or

damage occasioned to Landlord or Tenant, as the case may be, to their

respective property, any of the Premises or their respective contents that are

caused by or result from risks insured against under any property insurance

policies carried by the parties hereto and in force at the time of any such

damage.  The foregoing waivers of

subrogation shall be operative only so long as available in the jurisdiction

where the Premises are located and so long as no policy of insurance is

invalidated thereby.

 

11.03       Insurance

Use Restrictions.  Tenant agrees

that it will not carry any stock or goods or do anything in, on, or about the

Premises outside of the ordinary course of Tenant’s business which will

substantially increase the insurance rates upon the building of which any of

the Premises are a part.

 

11.04       Indemnification.  (a) Tenant shall at all times indemnify

Landlord and any mortgagee or beneficiary of Landlord for, defend (with counsel

reasonably satisfactory to Landlord) Landlord against, and save Landlord and

any mortgagee or beneficiary of Landlord harmless from, any liability, loss,

cost, injury, damage or other expense or risk (including without limitation

reasonable attorneys’ fees) whatsoever that may occur or be claimed by or with

respect to any person(s) or property on or relating to any of the Premises and

resulting directly or indirectly from the use, misuse, occupancy, possession or

disuse of any of the Premises by Tenant or other persons claiming through or

under Tenant, or their respective agents, employees, licensees, invitees,

guests or other such persons, or from the condition of any of the

Premises.  Tenant shall, at its cost and

expense, defend against any and all such actions, claims and demands and shall

indemnify Landlord and any mortgage or beneficiary of Landlord for all costs,

expenses and liabilities (including, without limitation, reasonable attorneys’

fees) it may incur in connection therewith. 

Neither Landlord nor any mortgagee or beneficiary of Landlord shall in

any event whatsoever be liable for any injury or damage to any of the Premises

or to the Tenant or to any other persons claiming through or under Tenant, or

their respective agents, employees, licensees, invitees, guests or other such

persons or to any property of any such persons except as provided in

subparagraph (b) below.  Tenant shall

not make any claim or demand upon or institute any action against Landlord as a

result of such injury or damage except as provided in subparagraph (b)

below.  Tenant covenants and agrees

during the Lease Term

 

12

 

hereof to pay when due or reimburse and indemnify and hold Landlord and

any mortgagee or beneficiary of Landlord harmless from and against all

inspection fees, taxes, bonds, permits, certificates, assessments and sales,

use, property or other taxes, fees or tolls of any nature whatsoever (together

with any related interest or penalties) now or hereafter imposed against

Landlord, any superior landlord or any mortgagee or beneficiary of Landlord or

Tenant by any federal, state, county or local governmental authority upon or

with respect to any of the Premises or the use thereof or upon the possession,

leasing, use, operation or other disposition of any thereof or upon the rents,

receipts or earnings arising therefrom or upon or with respect to this Lease

(excepting only federal, state, and local net income taxes on the income of

Landlord or any superior landlord or any mortgagee or beneficiary of Landlord

or any taxes attributable to the recording of any mortgage or deed of trust on

Landlord’s interest in the Premises.

 

(b)           Notwithstanding

the waiver of subrogation under Section 11.02, Landlord shall indemnify, hold

harmless and defend (with counsel reasonably satisfactory to Tenant) Tenant

from and against any liability, loss, cost, injury, damage or other expense or

risk (including, without limitation, reasonable attorneys’ fees) whatsoever to

the extent arising out of the negligence or willful misconduct of Landlord or

its representatives in connection with any entry by Landlord or its representatives

on the Premises or in connection with any maintenance, construction, or other

activity of Landlord on any adjacent property, except to the extent arising

from the negligence or willful misconduct of Tenant, its representatives, or

their respective agents, employees, licensees, invitees or guests, or from the

condition of any of the Premises.

 

11.05       Payment

of Insurance.  In the event that

Tenant shall fail to obtain the insurance policies required hereunder, Landlord

shall have the right, but not the obligation, to purchase the same in which

case Tenant shall repay the cost thereof to Landlord with Tenant’s next Annual

Rent installment together with the applicable Administrative Fee.

 

ARTICLE 12

ALTERATIONS

 

12.01       Permitted

Improvements.  Except as

provided in Section 12.03 hereof, and subject to the provisions of this Article

12, at Tenant’s own expense and after giving Landlord notice in writing of its

intention to do so as required under Article 5, Tenant may from time to time

make alterations, replacements, additions, changes, and improvements

(collectively referred to in this Article 12 as “Alterations”) in and to any of

the Premises as it may find necessary or convenient for its purposes; provided,

however, that no such Alterations shall decrease the value of any of the

Premises.

 

12.02       Liens.  Tenant shall pay the costs of any

Alterations done on any of the Premises pursuant to Section 12.01, and shall

keep each of the Premises free and clear of liens of any kind as required under

Article 5.  Tenant shall indemnify and

defend Landlord from and against any liability, loss, damage, costs, attorneys’

fees, and any other expense incurred as a result of claims of lien by any

person performing work or furnishing materials or supplies for Tenant or any

person claiming under Tenant.

 

12.03       Structural

Alterations.  Tenant shall not

make any Alterations to any of the foundations, perimeter or load bearing

walls, or roof structure involving expenditures in excess

 

13

 

of the amounts specified in Article 5, other than minor repairs made in

the ordinary course of Tenant’s business which do not decrease the value of any

of the Premises, without obtaining the prior written consent of Landlord, which

consent shall not be unreasonably withheld. 

All work with respect to any Alteration shall be done in a good and

workmanlike manner by properly qualified and licensed personnel, and such work

shall be diligently prosecuted to completion.

 

12.04       Removal

of Alterations.  All Alterations

made on any of the Premises shall become the property of Landlord at the

expiration or termination of the Lease Term and shall be surrendered with such

Premises; provided, however, that if Tenant is not in default at the time of

such expiration or termination, (i) Tenant shall have the right to remove

any Alterations made in accordance with this Article 12 provided the removal

thereof does not decrease the value of any of the Premises as reasonably

determined by Landlord and provided Tenant repairs any damage to any of the

Premises caused by such removal, and (ii) Tenant’s equipment, machinery,

and trade fixtures shall remain the property of Tenant and may be removed by

Tenant, provided Tenant shall repair any damage caused by its removal of any

such equipment, machinery, and trade fixtures.

 

Landlord agrees from time to time during the term of

this Lease, upon written request from Tenant, to execute and deliver any

instrument, release, or other document that may be reasonably required by any

equipment supplier or vendor and in form and substance reasonably satisfactory

to Landlord whereby Landlord waives and/or releases any rights it may have or

acquire with respect to any such equipment or trade fixtures which may be

affixed to any of the Premises and which is subject to a security interest or

equipment lease in favor of such supplier or vendor and agrees that the same do

not constitute realty regardless of the manner same are attached.

 

12.05       Alterations

Required by Law.  Any Alteration,

structural or otherwise, to or on any of the Premises, or any part thereof,

which may be necessary or required by reason of any applicable Laws, shall be

made by and at the sole cost and expense of Tenant, subject to the provisions

of Section 7.02(d).

 

12.06       General Conditions Relating to

Alterations.  Any Alteration,

structural or otherwise, to or on the Premises, shall be subject to the

following conditions:

 

(a)           No

Alteration shall be undertaken until Tenant shall have procured and paid for

all required permits and authorizations of all municipal departments and

governmental subdivisions having jurisdiction.

 

(b)           Any

structural Alteration involving an estimated cost of more than One Hundred

Thousand and 00/100 Dollars ($100,000) (which amount shall be subject to

periodic increase in the same manner as Annual Rent under Section 6.02) shall,

at Landlord’s reasonable request, be conducted under the supervision of a

licensed architect or engineer selected by Tenant and satisfactory to Landlord

and shall be made in accordance with detailed plans and specifications (the

“Plans and Specifications”) and cost estimates prepared by such architect or

engineer and approved in writing in advance by Landlord.

 

14

 

(c)           Any

Alteration shall be made promptly and in a good workmanlike manner and in

compliance with all applicable Laws.

 

(d)           No

Alteration shall tie-in or connect any of the Premises or any improvements

thereon with any property outside such Premises without the prior written

consent of Landlord.

 

(e)           No

Alteration shall reduce the value of any of the Premises or impair the

structural integrity of any building comprising a part of any of the Premises.

 

ARTICLE 13

SIGNS

 

In addition to those signs already existing at the

Premises, Tenant shall have the right to erect or affix signs on the Premises

of such sizes, colors, and designs as required by Tenant.  All signs on the Premises shall fully comply

with all applicable Laws.

 

ARTICLE 14

DAMAGE, DESTRUCTION, OBLIGATION TO

REBUILD

 

14.01       Obligation

to Rebuild.  If any portion of

the Premises is damaged or destroyed by fire or other casualty, Tenant shall

forthwith give notice thereof to Landlord. 

Tenant shall, at its sole cost and expense, diligently repair, restore, rebuild

or replace the damaged or destroyed improvements, fixtures or equipment, and

diligently complete the same as soon as reasonably possible, to the condition

they were in prior to such damage or destruction, except for permitted

Alterations and such changes in design or materials as may then be required by

applicable Laws.  Landlord, in such

event, shall, to the extent and at the times the proceeds of the insurance are

made available to Landlord, reimburse Tenant for the costs of making such

repairs, restoration, rebuilding and replacements on such terms as Landlord may

reasonably require.  To the extent that

available proceeds of insurance are insufficient to pay the entire cost of

making such repairs, restoration, rebuilding and replacements, and notwithstanding

the expiration or termination of the Lease Term of this Lease, Tenant shall pay

the amount by which such costs exceed the available insurance proceeds.  Any surplus of insurance proceeds over the

cost of restoration, net of all reasonable out-of-pocket expenses incurred by

Landlord in connection with the administration thereof, shall be promptly paid

over to Tenant.

 

Notwithstanding the foregoing, if any such damage or

destruction occurs during any Extension Period, Tenant may elect to terminate

this Lease upon written notice to Landlord within sixty (60) days after the

occurrence of such damage or destruction provided Tenant pays to Landlord all

rent and other amounts accruing under this Lease through the date of

termination, and except as to obligations hereunder which expressly survive any

termination of this Lease.  In the event

of any such termination of this Lease, Landlord shall be entitled to retain all

proceeds of insurance relating to such damage and destruction, and Tenant shall

promptly pay to Landlord any such insurance proceeds received by Tenant and

hereby assigns to Landlord all rights of Tenant to receive such insurance

proceeds.

 

15

 

14.02       No

Abatement of Rent. 

Notwithstanding the partial or total destruction of any of the Premises,

there shall be no abatement of rent or of any other obligation of Tenant

hereunder by reason of such damage or destruction.

 

ARTICLE 15

EMINENT

DOMAIN

 

15.01       Total Taking.  If any of the Premises are taken in their

entirety under the power of eminent domain, this Lease shall terminate with

respect to such taken Premises as of the date of such taking, and upon Tenant’s

payment to Landlord of all rents and other amounts accruing hereunder through

such date, Landlord and Tenant shall each thereafter be released from accruing

any further liability under this Lease with respect to the Premises so taken

subject to the rights of Landlord and Tenant to receive condemnation awards to

which each is entitled as provided in Section 15.03, and except as to

obligations under this Lease which survive the termination hereof.  Upon any such taking, the Annual Rent shall

be adjusted pursuant to Section 15.05 below.

 

15.02       Partial

Taking.  In the event that

(a) more than twenty-five percent (25%) of the floor area of any of the

Premises is taken under the power of eminent domain; or (b) by reason of

any appropriation or taking, regardless of the amount so taken, the remainder

of any of the Premises is not one undivided parcel of property; or (c) as

a result of any taking, regardless of the amount so taken, the remainder of any

of the Premises is rendered unsuitable for the continued operation of Tenant’s

business as determined by Tenant in good faith and based on commercially reasonable

standards and criteria, Tenant shall have the right, in addition to its rights

under Article 24, to terminate this Lease with respect to such taken Premises,

upon giving notice in writing of such election within sixty (60) days after

receipt by Tenant from Landlord of written notice that said Premises have been

so appropriated or taken (with the understanding that such period of time may

be extended as reasonably necessary for Tenant to assess the effect of such

partial taking on Tenant’s continued operation of its business at the Premises,

subject to Landlord’s prior written consent, which consent shall not be

unreasonably withheld) provided Tenant shall continue to pay Annual Rent and

other amounts accruing hereunder through the date of termination.  In the event of such termination, upon

Tenant’s payment to Landlord of all rents and other amounts accruing hereunder

through such date and in connection with such termination as set forth herein,

both Landlord and Tenant shall thereupon be released from any liability

thereafter accruing hereunder, except as to obligations hereunder which survive

the termination hereof and the Annual Rent shall be adjusted as set forth in

Section 15.05 below.  Each Party agrees

immediately after learning of any actual or contemplated appropriation or

taking to give to the other party notice in writing thereof.  If this Lease is not terminated, Tenant

shall remain in that portion of the Premises not so taken and Tenant, at

Tenant’s sole cost and expense, shall restore the remaining portion of the

Premises as soon as possible to a complete unit of the quality and character as

existed prior to such taking.  Landlord

agrees to reimburse Tenant for the cost of restoration, but in no event shall

Landlord’s obligation to reimburse Tenant for the cost of restoring the

remaining portion of the Premises exceed the amount of award of compensation

that Landlord receives for a partial taking of that portion of the Premises

resulting in the need for restoration. 

So long as this Lease is not terminated in the manner provided above,

there shall be an adjustment of the Annual Rent payable by Tenant hereunder for

the Premises by reason of any partial taking as set forth in Section 15.05

below.  Tenant hereby waives any

 

16

 

statutory rights of termination which may arise by reason of any

partial taking of any of the Premises under the power of eminent domain.

 

15.03       Award.  In the event of any taking, the entire award

or compensation in any eminent domain proceeding affecting the Premises,

whether awarded to Tenant or Landlord for a total or partial taking and subject

to the remaining provisions of this Section 15.03, shall be distributed to

Landlord, provided, however, that in all instances Tenant will be entitled to

receive, and Landlord will have no right to pursue for itself, any award for

claims based on (a) the value of Tenant’s Alterations to the Premises

which Tenant has the right to remove pursuant to the provisions of this Lease

but elects not to remove, (b) loss of or damage to Tenant’s personal

property, (c) loss to Tenant because of interruption of business,

(d) Tenant’s loss of goodwill, and (e) Tenant’s cost of removal and

relocation and any rent differential payable by Tenant for replacement premises

as a result of any relocation necessitated by the taking (collectively, the

“Tenant Award”).  Landlord and Tenant

may separately pursue their claims against the condemning authority, provided, however,

that notwithstanding anything to the contrary contained in this Lease, Tenant

will have no right to pursue a claim based upon the residual value of the real

property comprising the Premises after expiration of the Lease Term or pursue

claims or retain any award to which Landlord is entitled so as inequitably to

diminish Landlord’s award.  Landlord and

Tenant shall cooperate to maximize the award payable by the condemning

authority.  Tenant hereby assigns to Landlord

all rights of Tenant to receive any award of compensation as a result of any

taking except the Tenant Award.  In the

event that Tenant elects to terminate this Lease with respect to any of the

Premises pursuant to Section 15.01, and after the application of the proceeds

of such condemnation action award (excluding any Tenant Award) and payment of

all fees and expenses set forth in Section 15.05, Landlord shall, to the extent

that there are any excess net condemnation award proceeds, pay to Tenant fifty

percent (50%) of any such excess net condemnation award proceeds. In the event

that Tenant elects to terminate this Lease with respect to any of the Premises

pursuant to Section 15.02, and after the application of the proceeds of such

condemnation action award (excluding any Tenant Award) and payment of all fees

and expenses set forth in Section 15.05, then (i) Landlord shall, to the extent

that there are any excess net condemnation award proceeds, pay to Tenant fifty

percent (50%) of any such excess net condemnation award proceeds and (ii)

Landlord shall sell or otherwise transfer the Premises, which sale or transfer

shall be pursued diligently by Landlord, which were the subject of such taking

and, after the payment of all costs and expenses of Landlord in connection with

holding, preparing for sale and selling such Premises from the proceeds of such

sale, Landlord shall pay to Tenant fifty percent (50%) of any remaining sale

proceeds.

 

15.04       Transfer

Under Threat of Taking.  For the

purposes of this Article only, a voluntary sale or conveyance under threat and

in lieu of condemnation shall be deemed an appropriation or taking under the

power of eminent domain.

 

15.05       Adjustment of Annual Rent in

connection with Takings.

 

(a)           In

the event that Tenant elects to terminate this Lease with respect to any of the

Premises pursuant to Section 15.01 or 15.02, upon receipt by Landlord of funds

from the condemnation action award pursuant to Section 15.03 plus funds from

Tenant in the total amount equal to the sum of (i) the loan balance allocated

to the Premises which are the subject of such 

 

17

 

termination at the time of such termination as set forth on the

applicable Financing Schedule (defined below), (ii) any prepayment penalties or

premiums and/or defeasance costs required to be paid by Landlord under any

Financing Documents (defined below) in connection with such termination and

(iii) all reasonable costs and expenses of Landlord in connection with such

termination, including, reasonable attorneys’ fees, the Annual Rent hereunder

shall be reduced by the amount of the then current Annual Rent allocated to the

Premises which are the subject of such termination.

 

(b)           In

the event that the Lease with respect to any of the Premises is not terminated

pursuant to Section 15.02, upon receipt by Landlord of funds from the

condemnation action award pursuant to Section 15.03 plus funds from Tenant in

the total amount equal to the sum of (i) the loan balance allocated to the

Premises which are the subject of such condemnation at the time of such condemnation

as set forth on the applicable Financing Schedule, (ii) any prepayment

penalties or premiums and/or defeasance costs required to be paid by Landlord

under any Financing Documents in connection with such condemnation and (iii)

all reasonable costs and expenses of Landlord in connection with such

condemnation, including, reasonable attorneys’ fees and expenses, less the

costs to restore the affected Premises, the Annual Rent hereunder shall be

reduced by an amount equal to the product of (i) the percentage of the Premises

so taken multiplied by (ii) the then current Annual Rent allocated to the

Premises which are the subject of such condemnation; provided, however, that

said Annual Rent shall not be reduced below an amount which bears the same

ratio to the annual scheduled payments of principal and interest due by

Landlord under the Financing Documents with respect to the portion of the loan

which is not prepaid or defeased with the proceeds of said condemnation

received by Landlord as the ratio between the Annual Rent before such reduction

bears to the total annual scheduled payments of principal and interest payable

under such Financing Documents prior to such prepayment or defeasance.

 

In connection with any loan, mortgage or other debt

obtained by Landlord that is to be secured by Landlord’s interest in the

Premises or this Lease, Landlord shall deliver to Tenant concurrently with the

closing of any such transaction a schedule (a “Financing Schedule”) containing

(i) an allocation of the original loan balance to each of the Premises, and

(ii) an amortization schedule of such loan with respect to each of the Premises

and the corresponding loan balance allocation. 

As used herein, the term “Financing Documents” shall mean any mortgage

or deed of trust or other document evidencing or securing a loan or loans to

Landlord secured by Landlord’s interest in the Premises or this Lease.

 

ARTICLE 16

ASSIGNMENT

AND SUBLETTING

 

16.01       Landlord’s

Consent Required.  For purposes

of this Article 16, the terms “assign” and “assignment” shall include and mean

any act attempting to, or document purporting to, assign, transfer, sublet,

change ownership of Tenant’s interest in and to any of the Premises or any part

thereof, or enter into license or concession agreements for a material portion

of any of the Premises or any part thereof. 

Tenant shall not assign this Lease or Tenant’s interest in and to the

Premises without obtaining the prior written consent of Landlord, such consent

not to be unreasonably withheld.  Any

attempted assignment without such consent shall be void, and shall constitute a

breach of this Lease.  Notwithstanding

the foregoing, Tenant may at any time

 

18

 

encumber its leasehold interest, by deed of trust, mortgage,

assignment, or other security agreement, without the consent of Landlord, but

no such encumbrance will constitute a lien on Landlord’s estate.

 

16.02       Assumption

of Obligations.  Any assignment

to which Landlord has consented shall be evidenced by an instrument in writing

and any assignee or transferee shall agree for the benefit of Landlord to be

bound by, assume, and perform all of the terms, covenants, and conditions of

this Lease.  Consent by Landlord to any

assignment shall not constitute consent to any subsequent assignment.

 

16.03       Assignment

to Affiliate.  Notwithstanding

anything to the contrary contained in this Article 16, Tenant shall have the

right to assign this Lease, or sublet the Premises or any portion thereof,

without the consent of, but with notice to, Landlord, to any corporation

(a) with which Tenant may merge or consolidate, (b) which is a parent

or subsidiary of Tenant at any tier, (c) which is the successor

corporation to Tenant in the event of a corporate reorganization, or (d) which

acquires all or substantially all of the voting stock of Tenant or all or

substantially all of the assets of Tenant, provided that said assignee assumes,

in full, the obligations of Tenant under this Lease and Tenant remains

primarily liable under this Lease.  In

addition, nothing contained herein shall prohibit the public offering of or

subsequent sale of shares of stock in Tenant in the public markets.

 

16.04       No

Release of Tenant.  Regardless

of Landlord’s consent, no assignment shall release Tenant of Tenant’s

obligation or alter the primary liability of Tenant to pay the rent and to

perform all other obligations to be performed by Tenant hereunder.  The acceptance of rent by Landlord from any

other person shall not be deemed to be a waiver by Landlord of any provision

hereof.  Consent to one assignment shall

not be deemed consent to any subsequent assignment.  In the event of default by any assignee of Tenant or any successor

to Tenant, in the performance of any of the terms hereof, Landlord may proceed

directly against Tenant without the necessity of exhausting remedies against

said assignee.  Landlord may consent to

subsequent assignments of this Lease or amendments or modifications to this

Lease with assignees of Tenant, without notifying Tenant, or any successor of

Tenant, and without obtaining its or their consent thereto and such action

shall not relieve Tenant of liability under this Lease, provided that Tenant

shall not be liable to the extent of amendments or modifications made to this

Lease, with assignees not affiliated with Tenant without Tenant’s consent,

which consent shall not be unreasonably withheld, which materially increase

Tenant’s monetary obligations under this Lease (such as an increase in the

Annual Rent payable hereunder or extension of the Lease Term beyond the

original term hereof and any renewal options hereunder).

 

ARTICLE 17

DEFAULT;

REMEDIES

 

17.01       Default.  The occurrence of any one or more of the

following events shall constitute a material default under this Lease by Tenant:

 

(a)           The

vacating or abandonment of the Premises by Tenant.

 

19

 

(b)           The

failure by Tenant to make any payment when due of Annual Rent, Impositions or

any other payment required to be made by Tenant hereunder, where such failure

shall continue for a period of ten (10) days after written notice from

Landlord.

 

(c)           Except

as otherwise provided in this Lease, the failure by Tenant to observe or

perform any of the covenants, conditions, or provisions of this Lease to be

observed or performed by Tenant, other than described in subparagraph (b)

above, where such failure shall continue for a period of thirty (30) days after

written notice thereof from Landlord to Tenant; provided, however, that if the

nature of Tenant’s noncompliance is such that more than thirty (30) days are

reasonably required for its cure, then Tenant shall not be deemed to be in

default if Tenant commences such cure within said thirty (30)-day period and

thereafter diligently and in good faith prosecutes such cure to completion.

 

(d)           (i) The

making by Tenant of any general arrangement or general assignment for the

benefit of creditors; (ii) Tenant becomes a “debtor” as defined in 11

U.S.C. Section 101 or any successor statute thereto (unless, in the case of a

petition filed against Tenant, the same is dismissed within sixty (60) days);

(iii) the appointment of a trustee or receiver to take possession of

substantially all of Tenant’s assets located at the Premises or of Tenant’s

interest in this Lease, where possession is not restored to Tenant within sixty

(60) days; or (iv) the attachment, execution, or other judicial seizure of

substantially all of Tenant’s assets or of Tenant’s interest in this Lease,

where such seizure is not discharged within sixty (60) days.  In the event that any provision of this

Section 17.01(d) is contrary to any applicable Law, such provision shall be of

no force or effect.

 

(e)           The

breach of any representation or warranty by Tenant hereunder in any material

respect.

 

(f)            The

default, breach or insolvency of any guarantor of this Lease beyond any

applicable notice and/or grace period under its guarantee.

 

(g)           At

Landlord’s option, a default by Tenant under that certain Amended and Restated

Master Lease of even date herewith by and between Tenant and ARG Properties II,

LLC, a California limited liability company; provided, however, that this

Section 17.01(g) shall terminate and be of no force and effect if (i) forty–nine

percent (49%) or more of the beneficial ownership interest in Landlord shall be

sold or otherwise transferred or (ii) a sale or transfer of less than forty–nine

percent (49%) of the beneficial ownership interest in Landlord shall occur and

such sale or transfer shall cause a reassessment or revaluation of the Premises

for purposes of any ad valorem or other property tax.

 

17.02       Remedies.  In the event of any such material default by

Tenant, Landlord may at any time thereafter, with or without notice or demand

and without limiting Landlord in the exercise of any right or remedy which

Landlord may have by reason of such default:

 

(a)           Terminate

Tenant’s right to possession of any of the Premises by any lawful means, in

which case this Lease shall terminate as to such Premises and Tenant shall

immediately surrender possession of the Premises to Landlord.  In such event, Landlord shall be entitled to

recover from Tenant all damages incurred by Landlord by reason of Tenant’s

default

 

20

 

including, but not limited to, the cost of recovering possession of the

Premises, expenses of reletting, including reasonable and necessary renovation

and alteration of the Premises, reasonable attorneys’ fees, and any real estate

commission actually paid; and the worth at the time of award by the court

having jurisdiction thereof of the amount by which the unpaid rent for the

balance of the term after the time of such award exceeds the amount of such

unpaid rent for the same period that Tenant proves could be reasonably avoided.

 

(b)           Maintain

Tenant’s right to possession of any of the Premises by any lawful means, in

which case this Lease and the term hereof shall continue in effect with respect

to such Premises whether or not Tenant shall have vacated or abandoned such

Premises.  In such event Landlord shall

be entitled to enforce all of Landlord’s rights and remedies under the Lease

with respect to such Premises, including the right to recover the rent as it

becomes due hereunder.

 

(c)           Pursue

any other remedy now or hereafter available to Landlord under the Laws of the

jurisdiction where the Premises are located.

 

(d)           To

the extent permitted by applicable Law, the rights and provided remedies under

this Lease shall be cumulative, and the exercise of any one right or remedy

shall not preclude the exercise of or act as a waiver of any other right or

remedy of Landlord hereunder, or which may be existing at law, or in equity or

by statute or otherwise.

 

(e)           In

addition to the foregoing, Tenant, and its successors and assigns, shall at all

times indemnify Landlord for, defend Landlord against and save Landlord

harmless from any liability, loss, cost, injury, damage or other expense or

risk (including, without limitation, reasonable attorney’s fees) whatsoever,

directly or indirectly, arising out of, resulting from or otherwise in

connection with (i) the failure for any reason on the part of Tenant to

perform, observe or comply with any of the covenants, conditions and

obligations under this Lease to be performed, observed or complied with by

Tenant, and/or (ii) the failure for any reason of any representation or

warranty given by Tenant in connection with the execution of this Lease by

Landlord to be materially true, complete and accurate.

 

17.03       Administrative

Fee.  Tenant hereby acknowledges

that late payment by Tenant to Landlord of rent and other sums due hereunder

may cause Landlord to incur administrative costs not contemplated by this

Lease, the exact amount of which will be extremely difficult to ascertain.  Such administrative costs may include, but

are not limited to, processing and accounting charges and late charges which

may be imposed on Landlord by the terms of any superior lease, mortgage or

trust deed covering the Premises. 

Accordingly, if any installment of rent or any other sum due from Tenant

is not received by Landlord or Landlord’s designee within ten (10) days after

written notice from Landlord, then, without any requirement for further notice

to Tenant, Tenant shall pay to Landlord an administrative fee equal to the Bank

of America, NT & SA, reference rate plus four percent (4%) per annum (but

in no event higher than the maximum rate permitted by Law) multiplied by such

overdue amount from the date such overdue amount was due until paid (the

“Administrative Fee”).  The parties

hereby agree that such Administrative Fee represents a fair and reasonable

estimate of the costs Landlord will incur by reason of late payment by

Tenant.  Acceptance of such

Administrative Fee by Landlord shall in no event constitute a waiver of Tenant’s

default with respect to such overdue amount, nor prevent Landlord from

exercising any of the other rights and remedies granted hereunder.

 

21

 

17.04       Default

by Landlord.  Landlord will

commit a default if Landlord fails to perform any provision of this Lease

required of it and the failure is not cured within 30 days after notice has

been given to Landlord.  If, however,

the failure cannot reasonably be cured within the cure period, Landlord will

not be in default of this Lease if Landlord commences to cure the failure

within the cure period and diligently and in good faith continues to cure the

failure.  Notices given under this

Section 17.04 will specify the alleged breach and the applicable Lease provisions.  Tenant may, after expiration of the cure

period unless there is an emergency, correct or remedy any failure of Landlord

not timely cured and deduct the reasonable cost paid by Tenant from future rent

as it becomes due.

 

17.05       Mitigation.  Landlord and Tenant will each exercise best

efforts to mitigate the damages caused by the other party’s breach of this

Lease.  Efforts to mitigate damages will

not be construed as a waiver of the nonbreaching party’s right to recover

damages.

 

17.06       Lender’s

Right to Cure.  The respective

lenders of each party will have the right, in the party’s behalf, to cure the

party’s alleged breach within the same time period allocated under this Lease,

Landlord shall upon written request from Tenant provide copies of any notices

of default given to Tenant hereunder to lenders of Tenant as specified in such

written request, provided, however, that Landlord shall not be deemed to be in

default hereunder if Landlord fails to provide any such notices to any of

Tenant’s lenders nor shall any such failure relieve Tenant from any liability

hereunder or affect any of Landlord’s rights or remedies hereunder.

 

ARTICLE 18

SUBORDINATION

 

At Landlord’s option, this Lease shall be subordinate

to any superior lease, mortgage, deed of trust, or any other hypothecation or

security now or hereafter placed upon any of the Premises and to any and all

advances made on the security thereof and to all renewals, modifications,

consolidations, replacements, and extensions thereof, provided that Landlord

and any mortgagee or beneficiary of Landlord shall execute the Subordination

Agreement (as defined below) with Tenant. 

In furtherance thereof, Tenant hereby agrees, upon request by Landlord,

to execute and deliver a subordination, non-disturbance and attornment

agreement substantially in the form attached hereto as Exhibit B (a

“Subordination Agreement”) with respect to any such superior lease, mortgage,

deed of trust, hypothecation, or security.

 

ARTICLE 19

QUIET

ENJOYMENT

 

Subject to the terms and conditions of this Lease and

conditional upon the performance of all of the provisions to be performed by

Tenant hereunder, Landlord agrees to secure to Tenant during the Lease Term and

any and all extensions thereof, the quiet and peaceful possession of each of

the Premises and all rights and privileges appertaining thereto and under this

Lease.

 

22

 

ARTICLE 20

REPRESENTATIONS

AND WARRANTIES

 

20.01       Representations

and Warranties.  To induce

Landlord to enter into this Lease, Tenant represents and warrants to Landlord

and any mortgagee or beneficiary of Landlord as follows:

 

(a)           It

is a corporation duly organized and validly existing, in good standing under

the laws of California, has stock outstanding which has been duly and validly

issued, and is qualified to do business and is in good standing in the

jurisdiction in which any of the Premises are located with full power and

authority to consummate the transactions contemplated hereby.

 

(b)           The

execution and delivery of this Lease has been duly authorized by all action as

may be required under the terms and provisions of its governing instruments and

the laws of the jurisdiction where each of the Premises is located; this Lease

will not violate or result in any breach of, or constitute a default under, or

result in the creation of any lien, encumbrance, attachment, charge or other

right or claim of any other party upon any assets of Tenant or upon Tenant’s

beneficiary interest under the terms of this Lease pursuant to any instrument

or applicable Laws to which Tenant is a party or by which it may be bound or

create in favor of or grant to any third party any interest whatsoever in

Tenant’s interest under the terms of this Lease; this Lease is valid and

enforceable in accordance with its terms, and the execution and delivery of

this Lease, and the consummation of the transactions contemplated hereby, do

not require the approval or consent of any governmental authority having

jurisdiction over Tenant or its property, or if such approval or consent is

required, it has been obtained.

 

(c)           Tenant’s

financial statements and, if applicable, the guarantors’ financial statements

heretofore delivered to Landlord are true and correct in all material respects,

have been prepared in accordance with generally accepted accounting principles,

and fairly present the respective financial conditions of the subjects thereof

as of the respective dates thereof.  No

materially adverse change has occurred in the financial conditions reflected therein

since the respective dates thereof.

 

(d)           There

are no actions, suits or proceedings pending, or to the best of Tenant’s

knowledge, threatened, against or affecting it or any of the Premises or any

guarantor of this Lease, or involving the validity or enforceability of this

Lease, at law or in equity, or before or by any governmental authority except

actions, suits and proceedings fully covered by insurance or which, if

adversely determined, would not materially impair the ability of Tenant or any guarantor

of this Lease to satisfy their obligations under this Lease or any guarantee of

this Lease.

 

(e)           Tenant

is not in default under any obligation for the payment of borrowed money, for

the deferred purchase price of property or for the payment of any rent under

any lease agreement, which, either individually or in the aggregate, would

adversely affect the financial condition of Tenant, or the ability of Tenant to

perform its obligations hereunder, or comply with the terms of this Lease.

 

23

 

ARTICLE 21

SURRENDER

OF PREMISES

 

Except for changes resulting from eminent domain

proceedings, at the expiration or sooner termination of the Lease Term, Tenant

shall surrender the Premises in good and clean condition, reasonable wear and

tear excepted, and shall surrender all keys for each of the Premises to

Landlord at the place then fixed for the payment of rent and shall inform

Landlord of all combinations on locks, safes and vaults, if any, in each of the

Premises.  Tenant shall at such time

remove all of Tenant’s property, as well as any alterations or improvements

other than permitted Alterations made in accordance with Article 12, if

requested to do so by Landlord, and shall repair any damage to any of the Premises

caused thereby, and any or all of such property not so removed shall, at

Landlord’s option, become the exclusive property of Landlord or be disposed of

by Landlord, at Tenant’s cost and expense, without further notice to or demand

upon Tenant.  If any of the Premises are

not so surrendered, Tenant shall indemnify Landlord against loss or liability

resulting from the delay by Tenant in so surrendering such Premises including,

without limitation, any claims made by any succeeding occupant founded on such

delay.  Tenant’s obligation to observe

or perform this covenant shall survive the expiration or other termination of

the Lease Term with respect to all or any of the Premises.

 

ARTICLE 22

BANKRUPTCY

OR INSOLVENCY

 

22.01       Bankruptcy

or Insolvency.  Subject to

applicable Law, Landlord and Tenant acknowledge and agree that (i) the

provisions of this Section 22.01 shall control notwithstanding anything to the

contrary contained in this Lease, and (ii) with respect to the rights of Tenant

and Landlord in any bankruptcy or insolvency proceeding relating to Tenant,

this Lease shall be interpreted as if each of the Premises were subject to a

separate lease on terms and conditions identical to those set forth in this

Lease and the Annual Rent allocable to the Premises covered by each separate

lease and each such separate lease providing that a default under any such

separate lease constitutes a default under all other such separate leases.

 

(a)           In

the event that Tenant shall become a debtor under Chapter 7 of the Bankruptcy

Reform Act of 1978, 11 U.S.C. 1 et seq (“Bankruptcy Code”), and Tenant’s

trustee or Tenant shall elect to assume this Lease for the purpose of assigning

the same or otherwise, such election and assignment may be made only if the

provisions of this Section 22.01 are satisfied.  If Tenant or Tenant’s trustee shall fail to assume this Lease

within sixty (60) days after the entry of an order for relief, this Lease shall

be deemed to have been rejected. 

Immediately thereupon Landlord shall be entitled to possession of each

of the Premises without further obligation to Tenant or Tenant’s trustee and

this Lease, upon the election of Landlord, shall terminate, but Landlord’s

right to be compensated for damages shall survive, whether or not this Lease

shall be terminated.

 

(b)           In

the event that a voluntary petition for reorganization is filed by Tenant, or

an involuntary petition is filed against Tenant under Chapter 11 of the

Bankruptcy Code, or in the event of the entry of an order for relief under

Chapter 7 in a case which is then transferred to Chapter 11, Tenant’s trustee

or Tenant, as debtor-in-possession, must elect to assume this Lease within

sixty (60) days from the date of the filing of the petition under Chapter 11 or

the transfer

 

24

 

thereto, or Tenant’s trustee or the debtor-in-possession shall be

deemed to have rejected this Lease. 

Immediately thereupon Landlord shall be entitled to possession of each

of the Premises without further obligation to Tenant or Tenant’s trustee and

this Lease, upon the election of Landlord, shall terminate, but Landlord’s

right to be compensated for damages, shall survive, whether or not this Lease

shall be terminated.

 

(c)           No

election by Tenant’s trustee or the debtor-in-possession to assume this Lease,

whether under Chapter 7 or Chapter 11, shall be effective unless each of the

following conditions has been satisfied:

 

(i)            Tenant’s trustee or the

debtor-in-possession has cured all defaults under this Lease, or has provided

Landlord with evidence satisfactory to Landlord that it will cure all defaults

susceptible of being cured by the payment of money within ten (10) days from

the date of such assumption and that it will cure all other defaults under this

Lease which are susceptible of being cured by the performance of any act within

thirty (30) days after the date of such assumption.

 

(ii)           Tenant’s trustee or the

debtor-in-possession has compensated, or has provided Landlord with evidence

satisfactory to Landlord that, within ten (10) days from the date of such

assumption, that it will compensate Landlord for any actual pecuniary loss

incurred by Landlord arising from the default of Tenant, Tenant’s trustee, or

the debtor-in-possession as indicated in any statement of actual pecuniary loss

sent by Landlord to Tenant’s trustee or the debtor-in-possession.

 

(iii)          Tenant’s trustee or the

debtor-in-possession (A) has provided Landlord with “Assurance”, as

hereinbelow defined, of the future performance of each of the obligations under

this Lease of Tenant, Tenant’s trustee, or the debtor-in-possession, and

(B) shall, in addition to any other security deposits held by Landlord,

deposit with Landlord, as security for the timely payment of Annual Rent and

for the performance of all other obligations of Tenant under this Lease, an

amount equal to three (3) monthly installments of Annual Rent (at the rate then

payable), and (C) pay in advance to Landlord on the date each installment

of Annual Rent is due and payable, one-twelfth of Tenant’s annual obligations

for Impositions to be made by Tenant pursuant to this Lease.  The obligations imposed upon Tenant’s

trustee or the debtor-in-possession by this Section 22.01 shall continue with

respect to Tenant or any assignee of this Lease, after the conclusion of

proceedings under the Bankruptcy Code.

 

(iv)          Such assumption will not breach or

cause a default under any provision of any other lease, mortgage, financing

agreement or other agreement by which Landlord is bound, relating to the Premises.

 

(d)           For

purposes of Section 22.01(c)(iii) hereof, Landlord and Tenant shall acknowledge

that “Assurance” shall mean no less than:

 

(i)            Tenant’s trustee or the

debtor-in-possession has and will continue to have sufficient unencumbered

assets after the payment of all secured obligations and

 

25

 

administrative expenses to assure Landlord that

sufficient funds will be available to fulfill the obligations of Tenant under

this Lease; and

 

(ii)           To secure to Landlord the obligations

of Tenant, Tenant’s trustee or the debtor-in-possession and to assure the

ability of Tenant, Tenant’s trustee or the debtor-in-possession to cure the

defaults under this Lease, monetary and/or nonmonetary, there shall have been: (A) sufficient

cash deposited with Landlord, or (B) the bankruptcy court shall have

entered an order segregating sufficient cash payable to Landlord, and/or

(C) Tenant’s trustee or the debtor-in-possession shall have granted to

Landlord a valid and perfected first lien and security interest and/or mortgage

in property of Tenant, Tenant’s trustee or the debtor-in-possession, acceptable

as to value and kind to Landlord.

 

(e)           In

the event that this Lease is assumed in accordance with Section 22.01(b) hereof

and thereafter Tenant is liquidated or files, or has filed against it, a

subsequent petition under any provision of the Bankruptcy Code or any similar

statute for relief of debtors, Landlord may, at its option, terminate this

Lease and all rights of Tenant hereunder, by giving Tenant notice of its

election to so terminate within thirty (30) days after the occurrence of either

of such events.

 

(f)            If

Tenant’s trustee or the debtor-in-possession has assumed this Lease pursuant to

the terms and provisions of this Section 22.01 for the purpose of assigning (or

elects to assign) this Lease, this Lease may be so assigned only if the

proposed assignee has provided adequate assurance of future performance of all

of the terms, covenants and conditions of this Lease to be performed by

Tenant.  Landlord shall be entitled to

receive all consideration for such assignment, whether cash or otherwise.  As used in this Section 22.01(f) “adequate

assurance of future performance” shall mean at least that clauses (B) and (C)

of Section 22.01(c)(iii)hereof and each of the following conditions, has been

satisfied:

 

(i)            The proposed assignee has furnished

Landlord with a current financial statement audited by a certified public

accountant determined in accordance with generally accepted accounting

principles consistently applied indicating a credit rating, net worth and

working capital in amounts which Landlord reasonably determines to be

sufficient to assure the future performance of such assignee of Tenant’s

obligations under this Lease, but in no event indicating a net worth less than

the net worth of the Tenant and any guarantors of this Lease, on the date of

execution hereof.

 

(ii)           Such assignment will not breach or

cause a default under any provision of any other lease, mortgage, financing

agreement or other agreement by which Landlord is bound, relating to the

Premises.

 

(iii)          The proposed assignment will not

release or impair any guarantee under this Lease.

 

(g)           When,

pursuant to the Bankruptcy Code, Tenant’s trustee or the debtor-in-possession

shall be obligated to pay reasonable use and occupancy charges for the use of

the Premises, such charges shall not be less than the Annual Rent and all

additional rent payable by 

 

26

 

Tenant under this Lease and shall be paid at the times and when due as

though such charges were Annual Rent and additional rent.

 

(h)           Anything

in this Lease to the contrary notwithstanding, neither the whole nor any

portion of Tenant’s interest in this Lease or its estate in the Premises shall

pass to any trustee, receiver, assignee for the benefit of creditors, or any

other similar person or entity, or otherwise by operation of law under the

Bankruptcy Code or any similar federal statute now or hereinafter enacted, or

under the laws of any state, district or municipality having jurisdiction of

the person or property of Tenant unless Landlord shall have consented to such

transfer in writing.  No acceptance by

Landlord of rent or any other payments from any such trustee, receiver,

assignee, person or other entity shall be deemed to constitute such consent by

Landlord nor shall it be deemed a waiver of Landlord’s right to terminate this

Lease for any transfer of Tenant’s interest under this Lease without such

consent.

 

ARTICLE 23

HAZARDOUS

MATERIALS

 

23.01       Representations

and Warranties.  Notwithstanding

anything to the contrary which may be contained in this Lease, Tenant

represents, warrants and covenants to Landlord and any mortgagee or beneficiary

of Landlord as follows:

 

(a)           To

the best of Tenant’s Knowledge (as defined below), except as set forth in the

environmental and engineering reports for the Premises previously delivered by

Tenant or its affiliates to Landlord and any environmental and engineering

reports for the Premises prepared by Landlord in connection herewith

(collectively, the “Reports”), there are no and have been no violations of the

Relevant Environmental Laws (as hereinafter defined) respecting any of the

Premises and no consent orders have been entered with respect thereto, except

where noncompliance could not reasonably be expected to have a materially

adverse effect on the value or the use or operation of the Premises for its

intended purpose or the ability of Tenant to perform its obligations under this

Lease (a “Material Adverse Effect”).

 

(b)           To

the best of Tenant’s Knowledge and except as set forth in the Reports, there

are no and have been no Hazardous Wastes (as hereinafter defined) or Asbestos

(as hereinafter defined) either at, upon, under or within, or discharged or

emitted at or from, any of the Premises, including, but not limited to, the

air, soil, surface, and ground water; no Hazardous Wastes or Asbestos have

flowed, blown or otherwise become present at any of the Premises from neighboring

land; and no Hazardous Wastes or Asbestos have been removed from any of the

Premises other than those Hazardous Wastes or Asbestos which are used and/or

incidental to the ordinary course of Tenant’s business provided that the same

are used, stored, handled and disposed of in accordance with all Relevant

Environmental Laws and all other applicable Laws, industry standards and

manufacturers specifications.

 

(c)           None

of the Premises will be used for the purpose of storing Hazardous Wastes, and

no such storage or use will otherwise be allowed on any of the Premises which

will cause or increase the likelihood of causing the release of Hazardous

Wastes onto any of the Premises other than those Hazardous Wastes which are

used and/or incidental to the ordinary course of Tenant’s business provided

that the same are used, stored, handled and disposed of in

 

27

 

accordance with all Relevant Environmental Laws and all other

applicable Laws, industry standards and manufacturers specifications.  Neither Tenant, nor to the best of Tenant’s

Knowledge and except as set forth in the Reports any third party, has

installed, used or removed any storage tanks on, from or in connection with the

Premises except in full compliance with all Relevant Environmental Laws, and to

the best of Tenant’s Knowledge, there are no storage tanks or wells (whether

existing or abandoned) located on, under or about the Premises.  To the best of Tenant’s Knowledge, except as

set forth in the Reports, the Property does not consist of any building

materials that contain Hazardous Wastes or Asbestos.

 

(d)           Tenant

is not aware of any claims or litigation, and has not received any

communication from any person (including any governmental authority), concerning

the presence or possible presence of Hazardous Wastes or Asbestos at or

adjacent to any of the Premises or concerning any violation or alleged

violation of the Relevant Environmental Laws respecting any of the Premises.  Tenant shall promptly notify Landlord of any

such claims and shall furnish Landlord with a copy of any such communications

received by Tenant.

 

(e)           Tenant

shall notify Landlord promptly and in reasonable detail in the event that

Tenant becomes aware of or suspects the presence of Hazardous Wastes or

Asbestos (other than those Hazardous Wastes or Asbestos which are used and/or

incidental to the ordinary course of Tenant’s business provided that the same

are used, stored, handled and disposed of in accordance with all Relevant

Environmental Laws and all other applicable Laws, industry standards and

manufacturers specifications) or a violation of the Relevant Environmental

Laws, at or adjacent to any of the Premises.

 

(f)            Tenant

shall ensure that the Premises complies and continues to comply in all respects

with all Relevant Environmental Laws.

 

(g)           If

the Premises or any part thereof are used or maintained so as to subject

Tenant, Landlord or any mortgagee or beneficiary of Landlord or the user of any

of the Premises to a claim of violation of the Relevant Environmental Laws

(unless contested in good faith by appropriate proceedings), Tenant shall

immediately cease or cause a cessation of such use or operations and shall

remedy and fully cure any conditions arising therefrom, at its own cost and

expense.

 

(h)           Upon

Landlord’s reasonable belief that there is a material breach of one of the

environmental representations or warranties set forth above, Tenant shall

permit Landlord, at its option, at any time upon five (5) days’ prior written

notice to Tenant, to cause or conduct a complete environmental audit to be

performed.  The audit shall be at

Tenant’s sole cost and expense.

 

23.02       Definitions.

 

(a)           The

“Relevant Environmental Laws,” as referred to herein, shall mean all applicable

federal, state and local laws, rules, regulations, orders, judicial

determinations, and decisions or determinations by any judicial, legislative or

executive body of any governmental or quasi-governmental entity, whether in the

past, the present or the future, with respect to: (A) the installation,

existence, or removal of, or exposure to, Asbestos on any of the Premises;

(B) the

 

28

 

existence on, discharge from, or removal from any of the Premises of

Hazardous Wastes; or (C) the effects on the environment of any of the

Premises or of any activity now, previously, or hereafter conducted on any of

the Premises.  The Relevant

Environmental Laws shall include, but not be limited to, the following:

(1) the Comprehensive Environmental Response, Compensation, and Liability

Act, 42 U.S.C. Sections 9601 et seq.; the Superfund Amendments and

Reauthorization Act, Public Law 99-499, 100 Stat. 1613; the Resource

Conservation and Recovery Act, 42 U.S.C. Sections 6901 et seq.; the National

Environmental Policy Act, 42 U.S.C. Section 4321; the Safe Drinking Water Act,

42 U.S.C. Sections 300F et seq.; the Toxic Substances Control Act, 15 U.S.C.

Section 2601; the Hazardous Materials Transportation Act, 49 U.S.C. Section

1801; the Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq.;

the Clean Air Act, 42 U.S.C. Sections 7401 et seq.; and the regulations

promulgated in connection therewith; (2) Environmental Protection Agency

regulations pertaining to Asbestos (including 40 C.F.R. Part 61, Subpart M);

Occupational Safety and Health Administration regulations pertaining to

Asbestos (including 29 C.F.R. Sections 1910. 1001 and 1926.58); as each may now

or hereafter be amended; and (3) any other federal, state and local laws and

regulations pertaining to Hazardous Wastes and/or Asbestos;

 

(b)            “Asbestos,” as referred to herein, shall have

the meanings provided under the Relevant Environmental Laws, and shall include,

but not be limited to, asbestos fibers and friable asbestos, as such terms are

defined under the, Relevant Environmental Laws; and

 

(c)            “Hazardous Wastes,” as referred to herein,

shall mean any of the following as defined by the Relevant Environmental Laws:

solid wastes; petroleum and petroleum derivatives; natural or synthetic gas;

radon gas; toxic or hazardous substances, wastes, pollutants or contaminants

(including, but not limited to, polychlorinated biphenyls (“PCB’s”, paint

containing lead, and urea formaldehyde); and discharges of sewage or effluent.

 

(d)            “Knowledge” shall mean the actual knowledge

of any executive officer after due inquiry of property management.

 

23.03       Tenant’s

Obligation.  At its sole cost and expense, Tenant shall:

 

(a)           Pay

immediately when due the cost of compliance with the Relevant Environmental

Laws.

 

(b)           Keep

each of the Premises free of any lien imposed pursuant to the Relevant

Environmental Laws.

 

23.04       Landlord

Options.  In the event that

Tenant fails to comply with the requirements of this Article 23, after notice

to Tenant and the earlier of the expiration of any applicable cure period

hereunder, or the expiration of the cure period permitted under the

Relevant Environmental Laws, if any, or such earlier time if Landlord

determines that life, person or property is in jeopardy, Landlord may, but

shall not be obligated to, exercise its right to do one or more of the

following: (a) declare that such failure constitutes a default; and/or

(b) take any and all actions, at Tenant’s expense, that Landlord

reasonably deems necessary or desirable to cure said failure of

compliance.  Any costs incurred pursuant

to this Section 23.04 shall become

 

29

 

immediately due and payable by Tenant together with the applicable

Administrative Fee, and shall be paid or reimbursed to Landlord promptly upon

written notice from Landlord.

 

23.05       Indemnity.  Landlord shall not be liable for and Tenant

shall immediately pay to Landlord when incurred and shall indemnify, defend and

hold Landlord and any mortgagee or beneficiary of Landlord harmless from and

against, all loss, cost, liability, damage and expense (including, but not

limited to, attorneys’ fees and costs incurred in the investigation, defense

and settlement of claims) that Landlord or any mortgagee or beneficiary of

Landlord may suffer or incur as a result of or in connection in any way with

any Asbestos or Hazardous Wastes now or hereafter present, discharged,

released, generated, disposed, transported or emitted to, from, in on or under

any of the Premises or in connection with any violation of any of the Relevant

Environmental Laws, or any environmental assessment or study from time to time

undertaken or requested by Tenant or Landlord, or any breach of any

representation, covenant or undertaking by Tenant herein.

 

23.06       Survival.  The provisions of this Article 23 shall

survive the expiration or termination of the Lease Term.

 

ARTICLE 24

SUBSTITUTE

PREMISES

 

Tenant shall have the right, from time to time, to

substitute a property for any one of the Premises (collectively, “Substitute

Premises”) on the terms and conditions set forth below provided that Tenant, at

Tenant’s sole cost and expense (except with respect to costs and expenses

relating to Clauses (xiii), (xiv) and (xv), which shall be borne by Landlord

and for which Landlord shall be required to provide satisfactory evidence to

Landlord’s Mortgagee (defined below) of Landlord’s ability to pay such costs as

a condition to such substitution, failure of which shall not constitute a

default by Landlord under this Lease, but shall give Tenant the option to pay

for such costs and expenses and if so paid by Tenant, Tenant shall have the

right to offset on the next Increase Date (and on subsequent Annual Rent

payment dates if necessary) any amount so paid plus interest at the rate set

forth in Section 17.03 only from the amount by which the Annual Rent  is increased on such Increase Date pursuant

to Section 6.02), delivers to Landlord and any mortgagee or beneficiary of

Landlord (“Landlord’s Mortgagee”) all of the following:

 

(i)            Written

notice of Tenant’s election to provide a Substitute Premises (a “Substitution

Notice”) at least sixty (60) days  prior

to the date on which the substitution transaction is to close (the

“Substitution Date”).  Such Substitution

Notice shall identify the Substitute Premises, the Premises for which the

Substitute Premises is offered as a substitute and the scheduled Substitution

Date;

 

(ii)           On

or prior to the date that is twenty (20) days prior to the Substitution Date,

an appraisal by an independent appraisal firm which is a member of the American

Institute of Real Estate Appraisers of the National Association of Realtors,

with at least ten years’ experience in the valuation of commercial real estate

in the metropolitan area in which the Substitute Premises is located and

otherwise who is reasonably acceptable to the Landlord and the Landlord’s

Mortgagee (x) indicating that the fair market value of the Substitute Premises

(taking into account utility and the remaining useful life of the land and

improvements as if encumbered by this Lease and as vacant assuming a use

comparable to Tenant’s use of the Premises) (the

 

30

 

“Substitute Premises Value”) is not less than the fair market value of

the Premises (taking into account utility and the remaining useful life of the

land and improvements constituting the Premises as encumbered by this Lease and

as vacant assuming a use comparable to Tenant’s use of the Premises) for which the

Substitute Premises is offered as a substitute (the “Premises Value”) and (y)

otherwise reasonably satisfactory in all respects to the Landlord and the

Landlord’s Mortgagee.  In the event that

the Substitute Premises Value is less than the Premises Value, provided that

such differential in value does not exceed ten percent (10%) of the Premises

Value and further provided that all other requirements of this Article 24 are

satisfied, Tenant shall deposit with Landlord’s Mortgagee, as additional

collateral for Landlord’s Mortgagee’s loan to Landlord, funds in an amount

equal to the difference between the Substitute Premises Value and the Premises

Value (an “Appraisal Shortfall Deposit”) and the requirement in (x) above shall

be deemed satisfied.  Upon the full

satisfaction of the Landlord’s Mortgagee’s loan, any Appraisal Shortfall

Deposit shall be returned by Landlord’s Mortgagee to Tenant;

 

(iii)          Special

warranty deed (or the approximate local equivalent) in form and substance

satisfactory to the Landlord and the Landlord’s Mortgagee, duly executed and

acknowledged by the Tenant, conveying to the Landlord good and marketable fee

simple title to the land and improvements constituting the Substitute Premises,

subject only to liens and matters of record which are reasonably approved by

Landlord and Landlord’s Mortgagee;

 

(iv)          An

amendment to this Lease duly executed by the Tenant providing for the lease of

the Substitute Premises by the Landlord to the Tenant upon all of the terms and

conditions set forth in this Lease, except that the term shall be equal to the

then remaining term under this Lease, and the Annual Rent for all of the

Premises (including the Substitute Premises and excluding the Premises for

which the Substitute Premises is a substitute) shall be equal to the Annual

Rent under this Lease immediately prior to the substitution;

 

(v)           A

memorandum of lease (or the approximate local equivalent) with respect to the

Substitute Premises, duly executed and acknowledged by the Tenant and in proper

form for recording;

 

(vi)          Such

amendments, supplements and/or confirmations of the Guaranty and of any other

related documents as the Landlord or the Landlord’s Mortgagee reasonably may

require in connection with such substitution, including without limiting the generality

of the foregoing, amendments, supplements and/or confirmations to any loan

agreement, promissory note, mortgage or deed of trust by and between Landlord

and Landlord’s Mortgagee or by Landlord in favor of Landlord’s Mortgagee (all

of the documents in this Clause (vi) and in Clauses (ii) through (v) above,

being referred collectively as the “Substitution Documents”);

 

(vii)         Opinion(s)

of counsel to Tenant, including local counsel in the jurisdiction in which the

Substitute Premises is located, opining, subject only to reasonable and

customary assumptions, exceptions and qualifications (A) that the execution and

delivery by the Tenant of the Substitution Documents and the performance by the

Tenant of its obligations under the Substitution Documents have been duly

authorized by all necessary corporate actions on the part of the Tenant, (B)

that the Substitution Documents have been validly executed and delivered by the

Tenant, (C) that the Substitution Documents constitute the legal, valid and

binding obligations of the Tenant enforceable against the Tenant in accordance

with their respective

 

31

 

terms, (D) that each of the Substitution Documents to be recorded or

filed in the jurisdiction in which the Substitute Premises is located is in

proper form for recording or filing in the appropriate land records or in the

appropriate filing office, as the case may be, in such jurisdiction and, when

recorded or filed, as the case may be, will be effective (x) to validly

transfer legal fee title in the Substitute Premises to the Landlord, (y) to

create a valid leasehold estate in the Substitute Premises in favor of the

Tenant and (z) to create a valid and perfected mortgage lien on the Substitute

Premises in favor of the Landlord’s Mortgagee, and (E) as to such other matters

as the Landlord or the Landlord’s Mortgagee reasonably may require in

connection with the Substitute Premises and the Substitution Documents;

 

(viii)        (A)

to the Landlord’s Mortgagee, a reissued ALTA extended coverage Lender’s Policy

of Title Insurance or an endorsement to the Landlord’s Mortgagee’s ALTA

extended coverage Lender’s Policy of Title Insurance, as applicable, in form

reasonably acceptable to the Landlord’s Mortgagee, issued by the title

insurance company, its successor and/or assigns, which issued Landlord’s

Mortgagee’s existing ALTA extended coverage Lender’s Policy of Title Insurance,

ensuring that the lien of the mortgage or deed of trust in favor of Landlord’s

Mortgagee continues to be a valid first priority mortgage lien on the Premises

and is a valid first priority lien on the Substitute Premises, subject only to

liens and other matters of record reasonably acceptable to Landlord’s Mortgagee

and (B) to the Landlord, an ALTA extended coverage Owner’s Policy of Title

Insurance, issued by a title insurance company reasonably acceptable to

Landlord’s Mortgagee in an amount equal to the fair market value of the

Substitute Premises, and ensuring that the Landlord has good and marketable fee

simple title to the Substitute Premises, subject only to liens and other

matters of record reasonably acceptable to Landlord;

 

(ix)           An

ALTA survey of the Substitute Premises, dated no more than (90) days before the

Substitution Date, certified to the Landlord, the title insurance company

issuing the title insurance or title endorsement referred to in Clause (viii)

above and the Landlord’s Mortgagee, by land surveyor duly registered and

licensed in the state where the Substitute Premises is located and in form and

substance similar to the surveys delivered in connection with the closing of

the loan from Landlord’s Mortgagee to Landlord and otherwise reasonably

acceptable to the Landlord and the Landlord’s Mortgagee;

 

(x)            A

Phase I environmental study in respect of the Substitute Premises by a

qualified, independent environmental consulting firm reasonably acceptable to

the Landlord and the Landlord’s Mortgagee showing that the Substitute Premises

is in full compliance with all applicable environmental laws or otherwise

showing such manner of environmental noncompliance or risk as shall be

acceptable in the reasonable discretion of the Landlord and the Landlord’s

Mortgagee;

 

(xi)           An

engineering study in respect of the Substitute Premises by a qualified, independent

engineering firm reasonably acceptable to the Landlord and the Landlord’s

Mortgagee, reasonably acceptable in form and substance to the Landlord and the

Landlord’s Mortgagee;

 

(xii)          (A)

evidence that Tenant has paid any and all transfer taxes, recording fees,

mortgage recording taxes, intangible taxes and similar charges in connection

with such

 

32

 

substitution and (B) a commitment by the Tenant to pay all of the

reasonable costs and expenses (including reasonable attorney’s fees) incurred

by the Landlord and the Landlord’s Mortgagee and such other persons party to

any Substitution Documents or that shall have provided services in connection

with such substitution;

 

(xiii)         In

the event that the debt of Landlord to Landlord’s Mortgagee shall have been

deposited with a trust or other entity, which trust or other entity shall have

sold certificates to investors evidencing an ownership interest in the assets

of such trust or other entity, or securities collateralized by such debt shall

have been sold to one or more investors (in either event, a “Secondary Market

Transaction”), Standard & Poor’s Ratings Service (and/or any other rating

agency then rating such certificates or securities) shall have confirmed in

writing or Landlord’s Mortgagee has determined to its reasonable satisfaction

that the substitution of the Substitute Premises for the Premises being

substituted will not result in a downgrade, withdrawal or qualification of the

rating then assigned to such certificates or securities;

 

(xiv)        If

requested by Landlord’s Mortgagee, an opinion of tax counsel selected by

Landlord and reasonably acceptable to the Tenant and Landlord’s Mortgagee

confirming that neither the Landlord nor the Landlord’s Mortgagee will suffer

or incur any adverse tax consequences in connection with the substitution;

 

(xv)         In

the event that a Secondary Market Transaction shall have occurred, and if the

debt of the Landlord to the Landlord’s Mortgagee is at such time held by a real

estate mortgage investment conduit (“REMIC”) as defined in Section 860D of the

Internal Revenue Code of 1986, as amended (the “Code”) or a financial asset

securitization investment trust (“FASIT”) as defined in Section 860L of the

Code, an opinion of tax counsel selected by Landlord’s Mortgagee or its

successor in interest confirming that such REMIC or FASIT, as the case may be,

will not fail to maintain its status as a REMIC or FASIT as the result of such

substitution; and

 

(xvi)        Such

other documents, instruments, due diligence, reports and information as the

Landlord or the Landlord’s Mortgagee may reasonably request, it being

understood that a request for documents, instruments, due diligence, reports

and information similar to that delivered at or in connection with the closing

of the loan by Landlord’s Mortgagee to Landlord are deemed reasonable.

 

Upon the satisfaction of all of the conditions

contained in Clauses (i) through (xvi) above and the payment by Tenant to

Landlord of any accrued but unpaid Annual Rent and other amounts, if any, due

under this Lease as of the closing date of such substitution, (x) the Landlord

shall convey the Premises for which the Substitute Premises is a substitute on

an “as is, where is” basis and without recourse to or warranty by the Landlord,

except as to the absence of liens caused or imposed by the Landlord without the

knowledge and consent of the Tenant and subject to the same disclaimers as set

forth above, (y) Landlord’s Mortgagee shall reconvey or release the lien of Landlord’s

Mortgagee’s mortgage or deed of trust with respect to the Premises for which

such substitution is being effectuated, and (z) Tenant shall convey the

Substitute Premises to the Landlord.

 

33

 

ARTICLE 25

GENERAL

PROVISIONS

 

25.01       Estoppel

Certificates.  Each party

(“Responding Party”) shall at any time upon not less than fifteen (15) business

days’ prior written notice from the other party (“Requesting Party”) execute,

acknowledge, and deliver to the Requesting Party a statement reasonably

satisfactory to Landlord certifying and acknowledging the following:

(i) that this Lease represents the entire agreement between Landlord and

Tenant, and is unmodified and in full force and effect (or, if modified, stating

the nature of such modification and certifying that this Lease, as so modified,

is in full force and effect) and the date to which the Annual Rent and other

charges are paid in advance, if any; and (ii) that there are not, to the

Responding Party’s knowledge, any uncured defaults on the part of the

Requesting Party, or specifying such defaults if any are claimed.  Any such statement may be conclusively

relied upon by any prospective purchaser, mortgagee or encumbrancer of the

Premises or of the business of the Requesting Party.

 

25.02       Severability.  The invalidity of any provision of this

Lease as determined by a court of competent jurisdiction shall in no way affect

the validity of any other provision hereof.

 

25.03       Entire

Agreement.  It is understood

that there are no oral or other written agreements or representations between

the parties hereto concerning the subject matter of this Lease, and that this

Lease and the Exhibits hereto supersede and cancel any and all previous

negotiations, arrangements, representations, brochures, displays, projections,

estimates, agreements, and understandings, if any, made by Landlord or Tenant

with respect to the subject matter hereof, and none thereof shall be used to

interpret, construe, supplement, or contradict this Lease.  This Lease, and the Exhibits hereto, and all

amendments hereto, constitute and shall be considered to be the only agreement

between the parties hereto and their representatives and agents.  All negotiations and oral agreements

acceptable to both parties have been merged into and are included herein and in

the Exhibits hereto.

 

25.04       Notices.  Any notice required or permitted to be given

hereunder shall be in writing and may be given by personal delivery, certified

mail, return-receipt requested or by nationally recognized overnight courier

service and, if given by mail or courier service, shall be deemed sufficiently

given if addressed to Tenant or to Landlord, as the case may be, at the

addresses noted in Article 1 hereof. 

Delivery by courier will be deemed given on the date indicated in the

courier’s records; delivery by certified mail will be deemed given on the date

indicated on the return receipt.  Either

party may by notice to the other specify a different street address for notice

purposes.  A copy of all notices

required or permitted to be given hereunder shall be concurrently transmitted

to such party or parties at such addresses as may from time to time hereafter

be designated by notice.

 

25.05       Waivers.  No waiver by a party of any provision hereof

shall be deemed a waiver of any other provision hereof or of any subsequent

breach by the other party of the same of any other provision.  Landlord’s consent to, or approval of, any

act shall not be deemed to render unnecessary the obtaining of Landlord’s

consent to or approval of any subsequent act by Tenant.  The acceptance of rent hereunder by Landlord

shall not be a waiver of any preceding breach by Tenant of any provision

hereof, other than the failure of Tenant to pay the particular rent so

 

34

 

accepted, regardless of Landlord’s knowledge of such preceding breach

at the time of acceptance of such rent.

 

25.06       Recording.  Either Landlord or Tenant shall, upon

request of the other, execute, acknowledge, and deliver to the other a “short

form” memorandum of this Lease for recording purposes in each county where any

of the Premises is located.  Such

memorandum shall be in a form reasonably acceptable to Landlord and sufficient

for Tenant to obtain a leasehold policy of title insurance based thereon.  In the event of any termination of this

Lease, Tenant agrees to execute and deliver to Landlord one or more termination

agreements satisfactory to Landlord, which termination agreement shall be

similarly recorded.

 

25.07       Holding Over.  If Tenant remains in possession of the

Premises or any part thereof after the expiration or termination of the Lease

Term, such occupancy shall be a tenancy from month-to-month upon all the

provisions of this Lease pertaining to the obligations of Tenant and Tenant

shall thereby waive its rights to any additional notice to quit, but all

options, if any, granted under the terms of this Lease shall be deemed

terminated and be of no further force or effect.  The monthly rental during such hold-over period shall be equal to

one hundred ten percent (110%) of the monthly installment of Annual Rent

payable immediately prior to expiration or termination of the Lease Term.  In addition, Tenant shall continue to be

obligated to pay all Impositions and other amounts required to be paid by the

terms of this Lease.

 

25.08       Cumulative  Remedies.  No remedy or election hereunder shall be

deemed exclusive but shall, wherever possible, be cumulative with all other

remedies at law or in equity.

 

25.09       Choice of Law.  This Lease shall be governed by the laws of

the State of California without regard to conflicts of laws, provided that the

laws of the jurisdiction in which a particular Premises is located shall, to

the extent mandated by the Laws of such jurisdiction, govern the exercise by

Landlord of its remedies under this Lease with respect to such Premises.  Except as may otherwise be required by the

Laws of the jurisdiction in which any of the Premises is located, the parties

hereto (i) submit and consent in advance to the exclusive and in personam

jurisdiction of any state or federal court located within Los Angeles County,

California, in any action or suit pertaining to this Lease or to any matter

arising out of or related to this Lease, (ii) waives any right to transfer

or change the venue of litigation brought under this Lease, and

(iii) agrees to service of process, to the extent permitted by law, by

mail.

 

25.10       Attorneys’

Fees.  Should either party

institute any action or proceeding to enforce any provision hereof or for a

declaration of such party’s rights or obligations hereunder, the prevailing

party shall be entitled to receive from the losing party such amounts as the

court may adjudge to be reasonable attorneys’ fees for services rendered to the

party prevailing in any such action or proceeding, and such fees shall be

deemed to have accrued upon the commencement of such action or proceeding.

 

25.11       Force Majeure.  Except for payment obligations imposed

pursuant to this Lease, if there is any prevention, delay, or stoppage of an

act required of a party pursuant to this Lease because of strikes, lockouts,

other labor disputes, material shortages, embargoes, civil unrest, governmental

regulations, governmental controls, enemy or hostile governmental action,

judicial order, public emergency, fire, earthquake, other Acts of God, and

other causes (other than

 

35

 

financial condition beyond the reasonable control of the party

obligated to perform, performance of the act will be excused for the period of

the delay.

 

25.12       Consent.  Whenever the consent or approval of either

party is required pursuant to this Lease, such consent or approval will not be

unreasonably withheld or delayed except as otherwise expressly provided herein.

 

25.13       Liability

of Landlord.

 

(a)           In

the event of any sale or other transfer of Landlord’s interest in any of the

Premises, Landlord shall be and hereby is entirely freed and relieved of all

liabilities and obligations of Landlord hereunder with respect to such Premises

to the extent accruing after the date of such transfer.

 

(b)           Notwithstanding

anything contained herein to the contrary, it is specifically understood and

agreed that there shall be no personal liability of Landlord or any of its

shareholders, members, officers or directors in respect of any of the terms,

covenants, conditions or provisions of this Lease, and in the event of a breach

or default by Landlord of any of its liabilities and obligations under this

Lease, Tenant and any persons claiming by, through or under Tenant shall look

solely to the equity of Landlord in the Premises for the satisfaction of

Tenant’s and/or such persons’ remedies and claims for damages.

 

25.14       No Merger.  There shall be no merger of this Lease, or

the leasehold estate created by this Lease, with any other estate or interest

in the Premises, or any part thereof, by reason of the fact that the same

person, firm, corporation or other entity may acquire or own or hold, directly

or indirectly, (a) this Lease or the leasehold estate created by this

Lease, or any interest in this Lease or in any such leasehold estate, and

(b) any such other estate or interest in the Premises or any part thereof,

and no such merger shall occur unless and until all persons, corporations,

firms, and other entities having an interest (including a security interest) in

(i) this Lease or the leasehold estate created by this Lease; and

(ii) any such other estate or interest in the Premises, or any part

thereof, shall join in a written instrument effecting such merger and shall

duly record the same.

 

25.15       Reports.  Tenant agrees to furnish to Landlord, with

reasonable promptness upon Landlord’s request: 

financial statements, reports and documents which Tenant and each

guarantor of this Lease sends to or makes available to its shareholders,

noteholders or bondholders.

 

25.16       Definition

of Rent.  All monetary

obligations of Tenant to Landlord under the terms of this Lease, including,

without limitation, all Impositions, Real Property Taxes and insurance premiums

payable hereunder, shall be deemed to be “rent”.

 

25.17       Interpretation.  The captions by which the Articles and

Sections of this Lease are identified are for convenience only and shall have

no effect upon the interpretation of this Lease.  Whenever the context so requires, singular numbers shall include

the plural, the plural shall refer to the singular, the neuter gender shall

include the masculine and feminine genders, and the words “Landlord” and “Tenant”

and “person” shall include corporations, partnerships, associations, other

legal entities, and individuals.

 

36

 

25.18       Relationship

of the Parties.  Nothing in this

Lease shall create a partnership, joint venture, employment relationship,

borrower and lender relationship, or any other relationship between Landlord

and Tenant other than the relationship of landlord and tenant.

 

25.19       Successors.  This Lease shall be binding upon and inure

to the benefit of the parties hereto and their respective personal and legal

representatives, heirs, successors, and assigns.

 

25.20       Modifications.

This Lease may not be altered, amended, changed, terminated, or modified in any

manner unless the same shall be in writing and signed by or on behalf of the

party to be bound.  No waiver of any

provision of this Lease of any right of Landlord hereunder shall be effective

unless in writing signed by or on behalf of the person to be bound.

 

25.21       Brokerage

Fees.  Landlord and Tenant each

represent and warrant that they have not employed a broker in connection with

the execution of this Lease.  Landlord

and Tenant shall each indemnify and hold the other harmless from and against

any claim or claims for brokerage or other commissions arising from such party

having employed a broker contrary to its representation in this Section 25.21.

 

37

 

25.22.      Not

Binding Until Executed.  This

Lease does not constitute an “offer” and is not binding until fully executed

and delivered by Landlord.

 

	

   

  	

  LANDLORD:

  
	

   

  	

   

  
	

   

  	

  ARG

  PROPERTIES I, LLC, a California

  limited liability company

  
	

   

  	

   

  
	

   

  	

  By:

  	

  ARG Properties (DE) Corporation, a Delaware

  corporation, its Manager

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By

  	

   

  
	

   

  	

   

  	

   

  	

  Kevin A.

  Shields, President

  
	

   

  	

   

  	

  Date:

  	

   

  
					

 

	

   

  	

  TENANT:

  
	

   

  	

   

  
	

   

  	

  ARG

  Enterprises, Inc., a California

  corporation

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

  Its

  	

   

  
	

   

  	

  Date:

  	

   

  
				

 

38

 

	

  STATE OF CALIFORNIA

  	

  )

  
	

   

  	

  ) SS.

  
	

  COUNTY OF

  	

  )

  

 

The foregoing instrument was acknowledged before me

this             day of                 

, 199     , by                   ,  as                      

of                        ,  a                     , on  

behalf    of                             .

 

	

   

  	

   

  	

   

  
	

   

  	

  Notary Public Los Angeles County, California

  
	

   

  	

  My Commission Expires:

  	

   

  	

   

  
	

   

  	

  [Notary Public’s Seal]

  
	

   

  	

   

  
				

 

	

  STATE OF CALIFORNIA

  	

  )

  
	

   

  	

  ) SS.

  
	

  COUNTY OF

  	

  )

  

 

The foregoing instrument was acknowledged before me

this                 day of              , 199   ,  by                      , as                of ARG Enterprises, Inc., a

California corporation, on behalf of ARG Enterprises, Inc.

 

	

   

  	

   

  	

   

  
	

   

  	

  Notary Public Los Angeles County, California

  
	

   

  	

  My Commission Expires:

  	

   

  	

   

  
	

   

  	

  [Notary Public’s Seal]

  
				

 

39

 

EXHIBIT A

TO 

LEASE

 

[Insert legal description

of Premises] 

 

1

 

EXHIBIT B 

TO 

LEASE  

 

Recording Requested

By and When Recorded Mail To:

American Restaurant Group, Inc.

Attn:  Law Department

4410 El Camino Real, Suite 201

Los Altos, California  94022

 

 

SUBORDINATION, NON-DISTURBANCE AND

ATTORNMENT AGREEMENT[ AND NOTICE OF NON-RESPONSIBILITY]

 

THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT

AGREEMENT[ AND NOTICE OF NON-RESPONSIBILITY] (this “Agreement”) is made and

entered into as of the         day

of                      , 199      , by and among (i) ARG Enterprises,

Inc., a California corporation (“Tenant”); (ii)                                      (“Landlord”); and

(iii) [LENDER], [ENTITY] (“Lender”).

 

WITNESSETH:

 

WHEREAS, Lender is the holder of that certain

mortgage/deed of trust, dated                                            ,            (“Mortgage/Deed of Trust”)

encumbering those certain parcels of real property and the improvements

thereon, relating to (      ) restaurant

assets commonly known as either Stuart Anderson’s Black Angus or Stuart

Anderson’s Cattle Company restaurant(s) located at and more particularly

described in Exhibit 1 attached hereto and incorporated herein by this

reference (individually and collectively, “Property”);

 

WHEREAS, Lender and Landlord are parties to the

Mortgage/Deed of Trust, pursuant to which Landlord financed the Property with

Lender; and

 

WHEREAS, Landlord and Tenant are parties to that

certain Lease, dated                      

, 1996 (the “Lease”), pursuant to which Tenant leased the Property from

Landlord.

 

NOW, THEREFORE, in consideration for the mutual

covenants and agreements contained herein, the sufficiency of which is hereby

acknowledged, the parties hereto hereby agree as follows:

 

1.             Subordination.  Subject to the terms of this Agreement, the

Lease, and the rights of Tenant in, to and under the Lease and the Property,

are hereby made subject, junior, and subordinate in all respects to the

Mortgage/Deed of Trust and to all renewals, modifications, consolidations,

replacements, and extensions thereof and to the respective rights of Lender

 

1

 

thereunder as if all such instruments had been executed, delivered and

recorded prior to the execution of the Lease. 

This clause shall be self-operative, and no further instrument shall be

required.  However, Tenant covenants and

agrees that if requested by Lender it will execute, acknowledge and deliver any

instrument or document reasonably requested to confirm the foregoing

subordination of the Lease within twenty (20) days after receipt of written

request therefor.

 

2.             Non-Disturbance.  So long as Tenant is not in default beyond

any applicable grace or cure period in the payment of rent or any other sums

payable under the Lease or in the performance of any of the other terms,

covenants or conditions of the Lease on Tenant’s part to be performed, then:

(a) Tenant’s possession of the Property shall not be diminished or

interfered with by Lender or any third-party purchaser; (b) the Lease

shall not be terminated or affected by the foreclosure of the Mortgage/Deed of

Trust or the Lender’s exercise of any remedy provided for in the Mortgage/Deed

of Trust; and (c) in the event that Lender forecloses upon the Property,

Lender shall elect to preserve the Lease as a lease between Lender and Tenant

in accordance with the terms of this Agreement.

 

3.             Attornment.  In the event that the Lender forecloses upon

the Property, then:

 

(a)           Tenant

shall be bound to Lender, and Lender shall be bound to Tenant, under all of the

terms, covenants and conditions of the Lease for the balance of the term

thereof remaining, and any extensions or renewals thereof which may be effected

in accordance with any option therefor contained in the Lease, with the same

force and effect as if Lender were the original landlord under the Lease,

except that Paragraph 3(b) below and the other provisions of this Agreement

shall modify the Lease, and Tenant does hereby attorn to Lender as its

landlord, said attornment to be effective and self-operative without the

execution of any further instruments; provided, however, that within twenty

(20) days after receipt of written request therefor from Lender, Tenant will

execute and deliver to Lender any instrument or other documents reasonably

requested by Lender to confirm Tenant’s attornment to Lender.

 

	

  (b)

  	

  It is agreed that in no event shall Lender:

  
	

   

  	

   

  	

   

  
	

   

  	

  (1)

  	

  be liable for any act or omission of any prior

  landlord (including Landlord);

  
	

   

  	

   

  	

   

  
	

   

  	

  (2)

  	

  be obligated to cure any defaults of any prior

  landlord (including Landlord) which occurred prior to the date that Lender

  succeeded to the interest of such prior landlord under the Lease; provided

  that from and after the date Lender becomes owner of the Property, Lender

  shall be obligated to cure any continuing default of the landlord under the

  Lease to the extent such default is capable of being cured by Lender;

  
	

   

  	

   

  	

   

  
	

   

  	

  (3)

  	

  be subject to any offsets or defenses which Tenant

  may be entitled to assert against any prior landlord (including Landlord)

  with respect to events occurring prior to the date Lender succeeded to

  Landlord’s interest;

  

 

 

2

 

	

   

  	

  (4)

  	

  be bound by any Annual Rent or other amounts paid by

  Tenant to any prior landlord (including Landlord) more than one (1) month in

  advance of the date that Lender succeeded to the interest of such prior

  landlord under the Lease; or

  
	

   

  	

   

  	

   

  
	

   

  	

  (5)

  	

  be bound by any amendment or modification of the

  Lease or any supplemental agreement made without the written consent of

  Lender, such consent not to be unreasonably withheld.

  

 

4.             Payment

of Rent to Lender.  Tenant agrees to

pay the Annual Rent and any other payments due under the Lease to Lender upon

receipt of written notice from Lender that it has succeeded to the interest of

Landlord under the Lease, and Landlord agrees that Tenant is entitled to rely

conclusively upon such notice without any duty of inquiry.

 

5.             Limitation

on Liability of Lender.  There shall

be no personal liability on the part of Lender or any officer, director,

employee, shareholder or partner of Lender for the performance of the Lease or

any covenant or agreement contained therein or in this Agreement.  Tenant shall look solely to Lender’s estate

and interest in the Property for the satisfaction of every remedy of Tenant for

any breach by Lender under the Lease or this Agreement or otherwise arising out

of or in connection with the Lease, and Tenant will not collect or attempt to

collect any such claim out of any other assets of Lender.

 

6.             Performance

by Lender: Conflict.  Nothing in

this Agreement shall be or be deemed to be an agreement by Lender to perform

any obligation of Landlord under the Lease unless and until the Lender acquires

the Property, and then only if required to do so by the terms of the Lease, as

modified and limited by this Agreement. 

In the event of any conflict between the terms of this Agreement and the

terms of the Lease, the terms of this Agreement shall control.

 

7.             Notices.  Any notice required or permitted to be given

hereunder shall be in writing and may be given by personal delivery, certified

mail, return receipt requested or by nationally recognized overnight courier

service and, if given by mail or by courier service, shall be deemed

sufficiently given if addressed to the parties at the addresses set forth

below.  Delivery by courier will be

deemed given on the date indicated in the courier’s records; delivery by

certified mail will be deemed given on the date indicated on the return

receipt.  Any party may by notice

specify a different street address for notice purposes.

 

Addresses for Notices:

 

	

   

  	

  To Lender:

  	

  [LENDER]

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  

 

3

 

	

   

  	

  To Landlord:

  	

  ARG Properties I, LLC

  
	

   

  	

  c/o Griffin Capital

  
	

   

  	

  10940 Wilshire Blvd., Suite 1600 

  
	

   

  	

  Los Angeles, CA 90024

  
	

   

  	

  Attn:       Kevin

  A. Shields 

  
	

   

  	

  Fax:         (310)

  443-4117

  

 

	

   

  	

  To Tenant:

  	

  ARG Enterprises, Inc.

  
	

   

  	

  6th Floor

  
	

   

  	

  450 Newport Center Drive 

  
	

   

  	

  Newport Beach, CA 

  92660

  
	

   

  	

  Attn:       Director

  of Real Estate 

  
	

   

  	

  Fax:         (949)

  721-8941

  

 

	

   

  	

  With a copy to:

  	

  American Restaurant Group, Inc.

  
	

   

  	

  Suite 201 

  
	

   

  	

  4410 El Camino Real 

  
	

   

  	

  Los Altos, CA 

  94022 

  
	

   

  	

  Attn:       Legal

  Department

  
	

   

  	

  Fax:         (650)

  949-6420

  

 

	

   

  	

  With a copy to:

  	

  Stuart Anderson’s Restaurants

  
	

   

  	

  4410 El Camino Real, Suite 201

  
	

   

  	

  Los Altos, California  94022

  
	

   

  	

  Attn:       Director

  of Real Estate

  
	

   

  	

  Fax:         (650)

  949-6245

  

 

8.             Successors

and Assigns.  This Agreement and

each and every covenant and provision contained herein shall be binding upon

and shall inure to the benefit of the parties hereto and their respective

representatives, successors and assigns.

 

9.             Modifications,

Counterparts.  This Agreement shall

not be modified or amended in whole or in part except by a writing executed by

all of the parties hereto or their respective representatives, successors or

assigns.  This Agreement may be executed

in one or more counterparts, each of which shall be deemed to be an original

and all of which shall constitute one and the same instrument.

 

10.           Governing

Law: Jurisdiction.  This Agreement

shall be governed by and construed in accordance with the laws of the

jurisdiction in which the Property is located.

 

11. [         NOTICE

OF NON-RESPONSIBILITY.  NOTICE IS

HEREBY GIVEN THAT NEITHER LANDLORD NOR ANY LENDER WILL BE LIABLE OR RESPONSIBLE

FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT, OR

TO ANYONE HOLDING AN INTEREST IN THE PROPERTY OR ANY PART THEREOF THROUGH OR

UNDER TENANT, AND THAT NO MECHANIC’S OR OTHER LIENS FOR ANY SUCH LABOR,

SERVICES OR MATERIALS SHALL ATTACH

4

 

TO OR AFFECT THE INTEREST OF LANDLORD OR ANY LENDER IN AND TO THE

PROPERTY.]

 

[SIGNATURE PAGE

FOLLOWS]

 

5

 

IN WITNESS WHEREOF, the parties hereto have caused

this Agreement to be executed and delivered as of the date set forth below.

 

	

   

  	

  TENANT:

  
	

   

  	

   

  
	

   

  	

  ARG

  Enterprises, Inc.

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

  Its

  	

   

  
	

   

  	

  Dated:

  	

   

  
				

 

	

   

  	

  LANDLORD:

  
	

   

  	

   

  
	

   

  	

  ARG

  PROPERTIES I, LLC  

  
	

   

  	

   

  
	

   

  	

  By:

  	

  ARG Properties (DE) Corporation II, its Manager

  
	

   

  	

   

  
	

   

  	

   

  	

  By

  	

   

  
	

   

  	

   

  	

  Its

  	

   

  
	

   

  	

   

  	

  Dated:

  	

   

  
						

 

	

   

  	

  LENDER:

  
	

   

  	

   

  
	

   

  	

  [LENDER]

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  	 

	

   

  	

  Its

  	

   

  
	

   

  	

  Dated:

  	

   

  
					

 

6

 

CALIFORNIA

ALL-PURPOSE NOTARY ACKNOWLEDGMENT

 

	

  State of

  	

   

  	

  *** OPTIONAL SECTION ***

  CAPACITY CLAIMED BY SIGNER  Through

  statute does not require the Notary to fill in the data below, doing so may

  prove invaluable to persons relying on the document

  
	

  County of

  
	

  On this                            day of                       , 199     , before me,

  
	

  ,

  
	

  Name,

  Title of Officer

  	

   

  	

   

  
	

   

  	

   

  	

  o  INDIVIDUAL

  
	

   

  	

   

  	

  o 

  CORPORATE OFFICERS(S)

  
	

  personally appeared

  	

  ,

  	

   

  	

  o 

  PARTNER(S)

  	

  o  LIMITED

  
	

  Name(s)

  of Signer(s)

  	

   

  	

   

  	

  o  GENERAL

  
	

   

  	

   

  	

  o 

  ATTORNEY-IN-FACT

  
	

  o personally known to me - OR -  o proved to me on the basis of satisfactory

  evidence to be the person(s) whose name(s) is/are subscribed to the within

  instrument and acknowledged to me that he/she/they executed the same in

  his/her/their authorized capacity(ies), and that by his/her/their

  signature(s) on the instrument the person(s), or the entity upon behalf of

  which the person(s) acted, executed the instrument.

  	

   

  	

  o 

  TRUSTEE(S)

  
	

  o 

  GUARDIAN/CONSERVATOR

  
	

  o  OTHER

  
	

   

  
	

   

  	

   

  	

   

  
	

  WITNESS my hand and official

  seal.

  	

   

  	

  SIGNER IS REPRESENTING:

  
	

   

  	

   

  	

  NAME OF PERSON(S) OR ENTITY(IES)

  
	

  SIGNATURE

  OF NOTARY

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  ***************

  OPTIONAL SECTION ***************

   

  THIS CERTIFICATE MUST BE

  ATTACHED TO THE DOCUMENT DESCRIBED BELOW:

  TITLE OR TYPE OF DOCUMENT

  NUMBER OF PAGES                            DATE OF DOCUMENT

  SIGNER(S) OTHER THAN NAMED

  ABOVE

  Though the data requested here

  is not required by law, it could prevent fraudulent reattachment of this

  form.

  
							

 

 

CALIFORNIA

ALL-PURPOSE NOTARY ACKNOWLEDGMENT

 

	

  State of

  	

   

  	

  *** OPTIONAL SECTION ***

  CAPACITY CLAIMED BY SIGNER  Through

  statute does not require the Notary to fill in the data below, doing so may

  prove invaluable to persons relying on the document

  
	

  County of

  
	

  On this                            day of                       , 199     , before me,

  
	

  ,

  
	

  Name,

  Title of Officer

  	

   

  	

   

  
	

   

  	

   

  	

  o 

  INDIVIDUAL

  
	

   

  	

   

  	

  o 

  CORPORATE OFFICERS(S)

  
	

  personally appeared

  	

  ,

  	

   

  	

  o 

  PARTNER(S)

  	

  o  LIMITED

  
	

  Name(s)

  of Signer(s)

  	

   

  	

   

  	

  o  GENERAL

  
	

   

  	

   

  	

  o 

  ATTORNEY-IN-FACT

  
	

  o personally known to me - OR -  o proved to me on the basis of satisfactory

  evidence to be the person(s) whose name(s) is/are subscribed to the within

  instrument and acknowledged to me that he/she/they executed the same in

  his/her/their authorized capacity(ies), and that by his/her/their

  signature(s) on the instrument the person(s), or the entity upon behalf of

  which the person(s) acted, executed the instrument.

  	

   

  	

  o 

  TRUSTEE(S)

  
	

  o 

  GUARDIAN/CONSERVATOR

  
	

  o  OTHER

  
	

   

  
	

   

  	

   

  	

   

  
	

  WITNESS my hand and official

  seal.

  	

   

  	

  SIGNER IS REPRESENTING:

  
	

   

  	

   

  	

  NAME OF PERSON(S) OR ENTITY(IES)

  
	

  SIGNATURE

  OF NOTARY

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  ***************

  OPTIONAL SECTION ***************

   

  THIS CERTIFICATE MUST BE

  ATTACHED TO THE DOCUMENT DESCRIBED BELOW:

  TITLE OR TYPE OF DOCUMENT

  NUMBER OF PAGES                            DATE OF DOCUMENT

  SIGNER(S) OTHER THAN NAMED

  ABOVE

  Though the data requested here

  is not required by law, it could prevent fraudulent reattachment of this

  form.

  
							

 

 

CALIFORNIA

ALL-PURPOSE NOTARY ACKNOWLEDGMENT

 

	

  State of

  	

   

  	

  *** OPTIONAL SECTION ***

  CAPACITY CLAIMED BY SIGNER  Through

  statute does not require the Notary to fill in the data below, doing so may

  prove invaluable to persons relying on the document

  
	

  County of

  
	

  On this                            day of                       , 199     , before me,

  
	

  ,

  
	

  Name,

  Title of Officer

  	

   

  	

   

  
	

   

  	

   

  	

  o 

  INDIVIDUAL

  
	

   

  	

   

  	

  o 

  CORPORATE OFFICERS(S)

  
	

  personally appeared

  	

  ,

  	

   

  	

  o 

  PARTNER(S)

  	

  o  LIMITED

  
	

  Name(s)

  of Signer(s)

  	

   

  	

   

  	

  o  GENERAL

  
	

   

  	

   

  	

  o 

  ATTORNEY-IN-FACT

  
	

  o personally known to me - OR -  o proved to me on the basis of satisfactory

  evidence to be the person(s) whose name(s) is/are subscribed to the within

  instrument and acknowledged to me that he/she/they executed the same in

  his/her/their authorized capacity(ies), and that by his/her/their

  signature(s) on the instrument the person(s), or the entity upon behalf of

  which the person(s) acted, executed the instrument.

  	

   

  	

  o 

  TRUSTEE(S)

  
	

  o 

  GUARDIAN/CONSERVATOR

  
	

  o  OTHER

  
	

   

  
	

   

  	

   

  	

   

  
	

  WITNESS my hand and official

  seal.

  	

   

  	

  SIGNER IS REPRESENTING:

  
	

   

  	

   

  	

  NAME OF PERSON(S) OR ENTITY(IES)

  
	

  SIGNATURE

  OF NOTARY

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  ***************

  OPTIONAL SECTION ***************

   

  THIS CERTIFICATE MUST BE

  ATTACHED TO THE DOCUMENT DESCRIBED BELOW:

  TITLE OR TYPE OF DOCUMENT

  NUMBER OF PAGES                            DATE OF DOCUMENT

  SIGNER(S) OTHER THAN NAMED

  ABOVE

  Though the data requested here

  is not required by law, it could prevent fraudulent reattachment of this

  form.

  
							

 

EXHIBIT 1 to

SUBORDINATION,

NONDISTURBANCE AND ATTORNMENT AGREEMENT

[Insert legal description of

the Premises]

 

 

EXHIBIT C

(Article 5)

 

	

  RECORDING REQUESTED BY AND

  WHEN RECORDED RETURN TO:

  	

   

  
	

   

  	

   

  
	

  Orrick, Herrington & Sutcliffe LLP

  	

   

  
	

  777 South Figueroa Street

  	

   

  
	

  Suite 3200

  	

   

  
	

  Los Angeles, California  90017

  	

   

  
	

  Attn: Michael A. McAndrews, Esq.

  	

   

  

 

(Space above this line

for Recorder's use)

 

NOTICE OF

NON-RESPONSIBILITY OF OWNER

 

NOTICE IS HEREBY GIVEN that the undersigned, ARG

Properties I, LLC, a California limited liability company ("Owner"),

is the owner of the real property located in the City of                                                   

, County of                                   `  , commonly identified as                                                                             , and more particularly

described in Exhibit A attached hereto (the "Property").

 

That ARG Enterprises, Inc., a California corporation

("Tenant"), is the lessee of the Property.

 

That on                              , the undersigned first obtained

knowledge that certain remodeling, construction, repair, or other work of or to

the building or other improvements located on the Property was being performed

on the Property, and that materials, equipment, labor, services and supplies

were being supplied in connection therewith.

 

 

That neither the Owner nor any mortgagee or

beneficiary of Owner will be responsible for such work, materials, equipment,

labor, services or supplies or for any mechanics', materialmens' or other lien

that may be claimed in connection therewith.

 

	

   

  	

  Dated:

  	

  .

  	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  ARG PROPERTIES I, LLC, a California

  limited 

  liability company

  
	

   

  	

   

  
	

   

  	

  By:

  	

  ARG Properties (DE) Corporation, Manager

  
	

   

  	

   

  
	

   

  	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

   

  	

  Its:

  	

   

  	

   

  
									

 

The undersigned acknowledges that it has read the

foregoing Notice of Non-Responsibility and knows its contents, and it is true

to the undersigned's own knowledge.

 

Executed at Los Angeles, California on                                          .

 

The undersigned declares under penalty of perjury that

the foregoing is true and correct.

 

	

   

  	

  ARG ENTERPRISES, INC., a California 

  corporation

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  	 

	

   

  	

  Its:

  	

   

  	

   

  	 

 

 

CALIFORNIA

ALL-PURPOSE NOTARY ACKNOWLEDGMENT

 

	

  State of

  	

   

  	

  *** OPTIONAL SECTION ***

  CAPACITY CLAIMED BY SIGNER  Through

  statute does not require the Notary to fill in the data below, doing so may

  prove invaluable to persons relying on the document

  
	

  County of

  
	

  On this                            day of                       , 199     , before me,

  
	

  ,

  
	

  Name,

  Title of Officer

  	

   

  	

   

  
	

   

  	

   

  	

  o 

  INDIVIDUAL

  
	

   

  	

   

  	

  o 

  CORPORATE OFFICERS(S)

  
	

  personally appeared

  	

  ,

  	

   

  	

  o 

  PARTNER(S)

  	

  o  LIMITED

  
	

  Name(s)

  of Signer(s)

  	

   

  	

   

  	

  o  GENERAL

  
	

   

  	

   

  	

  o 

  ATTORNEY-IN-FACT

  
	

  o personally known to me - OR -  o proved to me on the basis of satisfactory

  evidence to be the person(s) whose name(s) is/are subscribed to the within

  instrument and acknowledged to me that he/she/they executed the same in

  his/her/their authorized capacity(ies), and that by his/her/their

  signature(s) on the instrument the person(s), or the entity upon behalf of

  which the person(s) acted, executed the instrument.

  	

   

  	

  o 

  TRUSTEE(S)

  
	

  o 

  GUARDIAN/CONSERVATOR

  
	

  o  OTHER

  
	

   

  
	

   

  	

   

  	

   

  
	

  WITNESS my hand and official

  seal.

  	

   

  	

  SIGNER IS REPRESENTING:

  
	

   

  	

   

  	

  NAME OF PERSON(S) OR ENTITY(IES)

  
	

  SIGNATURE

  OF NOTARY

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  ***************

  OPTIONAL SECTION ***************

   

  THIS CERTIFICATE MUST BE

  ATTACHED TO THE DOCUMENT DESCRIBED BELOW:

  TITLE OR TYPE OF DOCUMENT

  NUMBER OF PAGES                            DATE OF DOCUMENT

  SIGNER(S) OTHER THAN NAMED

  ABOVE

  Though the data requested here

  is not required by law, it could prevent fraudulent reattachment of this

  form.

  
							

 

 

EXHIBIT

D

 

ARG

PROPERTIES I, LLC

 

Allocated

Rent Schedule

 

	

  Prop.

  Num.

  	

   

  	

  Property

  Address

  	

   

  	

   

  	

   

  	

  Allocated 

  Rent Amount

  	

   

  
	

  1059

  	

   

  	

  5259 West Indian

  School Road, Phoenix

  	

   

  	

  AZ

  	

   

  	

  $

  	

  192,505

  	

   

  
	

  1066

  	

   

  	

  6875 South

  Broadway, Littleton

  	

   

  	

  CO

  	

   

  	

  $

  	

  174,600

  	

   

  
	

  1070

  	

   

  	

  1625 Watt

  Avenue, Sacramento

  	

   

  	

  CA

  	

   

  	

  $

  	

  230,000

  	

   

  
	

  1076

  	

   

  	

  101 East Bay

  Street, Alhambra

  	

   

  	

  CA

  	

   

  	

  $

  	

  262,775

  	

   

  
	

  1080

  	

   

  	

  1704 Shadeland

  Avenue, Indianapolis

  	

   

  	

  IN

  	

   

  	

  $

  	

  220,000

  	

   

  
	

  1083

  	

   

  	

  1011 Blossom

  Hill Road, San Jose

  	

   

  	

  CA

  	

   

  	

  $

  	

  276,450

  	

   

  
	

  1085

  	

   

  	

  7853 South U.S.

  31, Indianapolis

  	

   

  	

  IN

  	

   

  	

  $

  	

  210,000

  	

   

  
	

  1090

  	

   

  	

  139 W. Thousand

  Oaks Blvd., Thousand Oaks

  	

   

  	

  CA

  	

   

  	

  $

  	

  300,000

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Total

  	

   

  	

   

  	

   

  	

  $

  	

  1,866,330

  	

   

  

 

 

TABLE OF

CONTENTS

 

	

  ARTICLE 1

  	

    FUNDAMENTAL LEASE

  PROVISIONS

  	

   

  
	

  ARTICLE 2

  	

    EXHIBITS

  	

   

  
	

  ARTICLE 3

  	

    PREMISES

  	

   

  
	

  ARTICLE 4

  	

    TERM

  	

   

  
	

  4.01

  	

    Term

  	

   

  
	

  4.02

  	

    Option to Extend Lease

  Term

  	

   

  
	

  ARTICLE 5

  	

    LIENS

  	

   

  
	

  ARTICLE 6

  	

    RENT

  	

   

  
	

  6.01

  	

    Rent

  	

   

  
	

  6.02

  	

    Rental Adjustments

  	

   

  
	

  6.03

  	

    Net Lease; Impositions

  	

   

  
	

  ARTICLE 7

  	

    USE OF THE PREMISES

  	

   

  
	

  7.01

  	

    Use

  	

   

  
	

  7.02

  	

    Compliance With Laws

  	

   

  
	

  7.03

  	

    Permits and Licenses

  	

   

  
	

  ARTICLE 8

  	

    UTILITIES

  	

   

  
	

  8.01

  	

    Payment

  	

   

  
	

  8.02

  	

    Interruption in Service

  	

   

  
	

  ARTICLE 9

  	

    TAXES

  	

   

  
	

  9.01

  	

    Payment of Taxes

  	

   

  
	

  9.02

  	

    Definition of

  “Real Property Taxes”

  	

   

  
	

  9.03

  	

    Personal Property Taxes

  	

   

  
	

  9.04

  	

    Tenant’s Right to

  Contest Taxes

  	

   

  
	

  9.05

  	

    Survival of

  Tenant’s Tax Obligations.

  	

   

  
	

  ARTICLE 10

  	

    MAINTENANCE AND REPAIRS

  	

   

  
	

  10.01

  	

    Tenant’s Obligations

  	

   

  
	

  10.02

  	

    Landlord’s Obligations

  	

   

  
	

  10.03

  	

    Landlord’s Rights

  	

   

  
	

  ARTICLE 11

  	

    INSURANCE AND

  INDEMNIFICATION

  	

   

  
	

  11.01

  	

    Tenant’s Insurance

  Obligation

  	

   

  
	

  11.02

  	

    Subrogation Waiver

  	

   

  

 

i

 

	

  11.03

  	

    Insurance Use Restrictions

  	

   

  
	

  11.04

  	

    Indemnification

  	

   

  
	

  11.05

  	

    Payment of Insurance

  	

   

  
	

  ARTICLE 12

  	

    ALTERATIONS

  	

   

  
	

  12.01

  	

    Permitted Improvements

  	

   

  
	

  12.02

  	

    Liens

  	

   

  
	

  12.03

  	

    Structural Alterations

  	

   

  
	

  12.04

  	

    Removal of Alterations

  	

   

  
	

  12.05

  	

    Alterations Required by

  Law

  	

   

  
	

  12.06

  	

    General

  Conditions Relating to Alterations

  	

   

  
	

  ARTICLE 13

  	

    SIGNS

  	

   

  
	

  ARTICLE 14

  	

    DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD

  	

   

  
	

  14.01

  	

    Obligation to Rebuild

  	

   

  
	

  14.02

  	

    No Abatement of Rent

  	

   

  
	

  ARTICLE 15

  	

    EMINENT DOMAIN

  	

   

  
	

  15.01

  	

    Total Taking

  	

   

  
	

  15.02

  	

    Partial Taking

  	

   

  
	

  15.03

  	

    Award

  	

   

  
	

  15.04

  	

    Transfer Under Threat

  of Taking

  	

   

  
	

  15.05

  	

    Adjustment

  of Annual Rent in connection with Takings.

  	

   

  
	

  ARTICLE 16

  	

    ASSIGNMENT AND SUBLETTING

  	

   

  
	

  16.01

  	

    Landlord’s Consent

  Required

  	

   

  
	

  16.02

  	

    Assumption of Obligations

  	

   

  
	

  16.03

  	

    Assignment to Affiliate

  	

   

  
	

  16.04

  	

    No Release of Tenant

  	

   

  
	

  ARTICLE 17

  	

    DEFAULT; REMEDIES

  	

   

  
	

  17.01

  	

    Default

  	

   

  
	

  17.02

  	

    Remedies

  	

   

  
	

  17.03

  	

    Administrative Fee

  	

   

  
	

  17.04

  	

    Default by Landlord

  	

   

  
	

  17.05

  	

    Mitigation

  	

   

  

 

ii

 

	

  17.06

  	

    Lender’s Right to Cure

  	

   

  
	

  ARTICLE 18

  	

    SUBORDINATION

  	

   

  
	

  ARTICLE 19

  	

    QUIET ENJOYMENT

  	

   

  
	

  ARTICLE 20

  	

    REPRESENTATIONS AND WARRANTIES

  	

   

  
	

  20.01

  	

    Representations and

  Warranties

  	

   

  
	

  ARTICLE 21

  	

    SURRENDER OF PREMISES

  	

   

  
	

  ARTICLE 22

  	

    BANKRUPTCY OR INSOLVENCY

  	

   

  
	

  22.01

  	

    Bankruptcy or Insolvency

  	

   

  
	

  ARTICLE 23

  	

    HAZARDOUS MATERIALS

  	

   

  
	

  23.01

  	

    Representations and

  Warranties

  	

   

  
	

  23.02

  	

    Definitions

  	

   

  
	

  23.03

  	

    Tenant’s Obligation

  	

   

  
	

  23.04

  	

    Landlord Options

  	

   

  
	

  23.05

  	

    Indemnity

  	

   

  
	

  23.06

  	

    Survival

  	

   

  
	

  ARTICLE 24

  	

    SUBSTITUTE PREMISES

  	

   

  
	

  ARTICLE 25

  	

    GENERAL PROVISIONS

  	

   

  
	

  25.01

  	

    Estoppel Certificates

  	

   

  
	

  25.02

  	

    Severability

  	

   

  
	

  25.03

  	

    Entire Agreement

  	

   

  
	

  25.04

  	

    Notices

  	

   

  
	

  25.05

  	

    Waivers

  	

   

  
	

  25.06

  	

    Recording

  	

   

  
	

  25.07

  	

    Holding Over

  	

   

  
	

  25.08

  	

    Cumulative Remedies

  	

   

  
	

  25.09

  	

    Choice of Law

  	

   

  
	

  25.10

  	

    Attorneys’ Fees

  	

   

  
	

  25.11

  	

    Force Majeure

  	

   

  
	

  25.12

  	

    Consent

  	

   

  
	

  25.13

  	

    Liability of Landlord

  	

   

  
	

  25.14

  	

    No Merger

  	

   

  

 

iii

 

	

   

  	

   

  	

   

  
	

  25.15

  	

    Reports

  	

   

  
	

  25.16

  	

    Definition of Rent

  	

   

  
	

  25.17

  	

    Interpretation

  	

   

  
	

  25.18

  	

    Relationship of the

  Parties

  	

   

  
	

  25.19

  	

    Successors

  	

   

  
	

  25.20

  	

    Modifications

  	

   

  
	

  25.21

  	

    Brokerage Fees

  	

   

  
	

  25.22

  	

    Not Binding Until Executed

  	

   

  

 

iv

 

An extra section break has been inserted above this

paragraph. Do not delete this section break if you plan to add text after the

Table of Contents/Authorities.  Deleting

this break will cause Table of Contents/Authorities headers and footers to

appear on any pages following the Table of Contents/Authorities.April 30, 1998

 

EXHIBIT

10.5

 

AMENDED

AND RESTATED

MASTER LEASE

 

 

BETWEEN

 

 

ARG PROPERTIES II, LLC,

 

as Landlord

 

AND

 

ARG ENTERPRISES, INC.,

 

As Tenant

 

 

Dated: May 11, 1998

 

 

LEASE

 

In consideration of the rents and covenants set forth below, Landlord

(as hereinafter defined) hereby leases to Tenant (as hereinafter defined), and

Tenant hereby leases from Landlord, the following Premises (as hereinafter

defined) upon the following terms and conditions:

ARTICLE 1

FUNDAMENTAL LEASE PROVISIONS

 

This Amended and Restated Master Lease amends and restates that certain

Master Lease by and between ARG Properties I, LLC, a predecessor in interest to

Landlord (as hereinafter defined) and Tenant (as hereinafter defined) dated

September 11, 1996, as heretofore amended, as it applies to the

Premises (as hereinafter defined), in its entirety.

 

	

  Date: 

  	

  May 11, 1998

  
	

   

  	

   

  
	

  Commencement Date:

  	

  May 11, 1998

  
	

   

  	

   

  
	

  Landlord:

  	

  ARG Properties II, LLC, a California limited liability company

  
	

   

  	

   

  
	

  Tenant:

  	

  ARG Enterprises, Inc., a California corporation

  
	

   

  	

   

  
	

  Tenant’s 

  Trade Name:

  	

  Stuart Anderson’s Black Angus or Stuart Anderson’s Cattle Company

  restaurants 

  
	

   

  	

   

  
	

  Guarantor:

  	

  American Restaurant Group, Inc., a Delaware corporation

  
	

   

  	

   

  
	

  Guaranty

  	

  Guaranty of Lease dated May 11, 1998 by Guarantor in favor

  of Landlord

  
	

   

  	

   

  
	

  Lease Term:

  	

  Twenty-Five (25) years, commencing on the Commencement Date and

  ending on June 1, 2023, with three (3) renewal options of five (5) years

  each.  (Article 4)

  
	

   

  	

   

  
	

  Annual

  Rent:

  	

  One Million Nine Hundred Thirty-Seven Thousand Three Hundred Dollars

  ($1,937,300), subject to adjustment as hereinafter provided.  (Article 6, Section 6.01)

  
	

   

  	

   

  
	

   

  	

  The Annual Rent shall be payable on the first day of each month,

  commencing on June 1, 1998, in twelve (12) equal installments each in the

  amount of One Hundred Sixty-One Thousand Four Hundred Forty-One and 67/100

  Dollars ($161,441.67) during each year of the term of this Lease subject to

  proration or adjustment as hereinafter provided. Annual Rent is allocated on

  Exhibit D attached hereto and made a part hereof among the eight (8)

  properties constituting the Premises for certain purposes specified in this

  Lease.  This initial allocation

  of

  

 

 

	

   

  	

  Annual

  Rent shall be subject to proration or adjustment as hereinafter provided.

  
	

   

  	

   

  
	

  Addresses for

  Notice:

  	

  To Landlord:

  	

  ARG Properties II, LLC

  c/o Griffin Capital

  10940 Wilshire Blvd., Suite 1600

  Los Angeles, California 90024

  Attn:       Kevin

  A. Shields

  Fax:         (310)

  443-4117

   

  
	

  To Tenant:

  	

  ARG Enterprises, Inc.

  6th Floor

  450 Newport Center Drive

  Newport Beach, CA  92660

  Attn:       Chief

  Financial Officer

  Fax:         (949)

  721-8941

   

  
	

  With a copy to:

  	

  American Restaurant Group, Inc.

  Suite 201

  4410 El Camino Real

  Los Altos, CA  94022

  Attn:       Legal

  Department

  Fax:         (650)

  949-6420

   

  
	

  With a copy to:

  	

  Stuart Anderson’s Restaurants

  4410 El Camino Real, Suite 201

  Los Altos, California 94022

  Attn:       Director

  of Real Estate

  Fax:         (650)

  949-6425

   

  
	

   

  	

   

  
	

  Premises:

  	

  That certain real property

  described in Exhibit A attached hereto, and all appurtenances, easements and

  rights of way now or subsequently pertaining thereto, together with all

  improvements now or hereafter located thereon, consisting of eight (8)

  restaurants known as either Stuart Anderson*s Black Angus or Stuart

  Anderson*s Cattle Company restaurants. 

  References to the “Premises” shall refer to one location, or to all

  locations, as the context shall require.

  

 

 

References in this Article 1 to other Articles are for convenience and

designate some of the other Articles where references to the Fundamental Lease

Provisions appear.  Each reference

in this Lease to any of the Fundamental Lease Provisions contained in this

Article 1 shall be construed to incorporate all of the terms provided under

such Fundamental Lease Provisions. 

In the event of any conflict between any Fundamental Lease Provision and

the balance of this Lease, the latter shall control.

 

2

 

ARTICLE 2

EXHIBITS

 

The

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

 

EXHIBIT A’Description of the Premises

 

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

Agreement

 

EXHIBIT C’Form of Notice of Non-Responsibility

 

EXHIBIT D’Allocated Rent Schedule

 

In the event of any conflict between any of the above-referenced

Exhibits and the balance of this Lease, the Exhibit shall control.

 

ARTICLE 3

PREMISES

 

Landlord hereby leases and demises unto Tenant and Tenant hereby leases

and takes from Landlord, for the term, at the rental, and upon the terms,

covenants, and conditions hereinafter set forth, the property referred to in

Article 1 as the Premises and described on Exhibit A attached hereto.

 

ARTICLE 4

TERM

 

4.01         Term.  The term of this Lease shall be the

term specified in Article 1 hereof (the initial term and any extensions

exercised by Tenant thereof are hereinafter referred to as the “Lease Term”)

and shall commence on the Commencement Date.

 

4.02         Option to Extend Lease Term.  Tenant shall have the option to extend

the initial term of this Lease with respect to any of the Premises that Tenant

may elect to continue to lease from Landlord for three (3) additional,

successive periods of five (5) years each (each, an “Extension Period”) on the

same terms, covenants and conditions of this Lease. In the event Tenant elects

to exercise the option(s), Tenant shall provide Landlord written notice of

Tenant’s exercise of the option(s) not less than ninety (90) days prior to the

end of the then-current term, such notice shall identify each of the Premises

which Tenant has elected to remain subject to this Lease during the applicable

Extension Period and is to be given in the manner provided in Section 25.04 of

this Lease.  Provided that Tenant

has duly execised its option to extend the term of this Lease as set forth

herein and further provided that Tenant is not in default under this Lease at

the end of the then current term of this Lease, this Lease shall be amended to

reflect the exclusion of any of the Premises from the Lease and the

corresponding reduction in the Annual Rent in connection with Tenant’s exercise

of the applicable extension option. 

Tenant’s right to exercise the foregoing option(s) is conditioned upon

Tenant’s performance of all of the duties and obligations on its part to be

performed under this Lease so that, at the time of the exercise of such

options, Tenant shall not be in default hereunder.  In the event that Tenant elects to extend

 

3

 

the initial term of this Lease, the Annual Rent shall continue to be

adjusted as provided in Section 6.02 of this Lease.

 

ARTICLE 5

LIENS

 

Tenant shall do all things necessary to prevent the filing of any

mechanics’ or other liens or encumbrances against the Premises, or any part

thereof, or upon any interest of Landlord or any mortgagee or beneficiary under

a deed of trust or any ground or underlying lessor in any portion of the

Premises, by reason of work, labor, services, or materials supplied or claimed

to have been supplied to Tenant, or anyone holding the Premises, or any part

thereof, through or under Tenant. 

If any such lien or encumbrance shall at any time be filed against the

Premises, or any portion thereof, Tenant shall either cause same to be

discharged of record within thirty (30) days after the date of filing of same

or, if Tenant in good faith determines that such lien should be contested,

Tenant will give Landlord prior notice of Tenant’s intention to contest any

such lien and, upon demand by Landlord, will procure and record a lien release

bond under applicable law in the amount prescribed by applicable law or if no

amount is prescribed by applicable law in an amount equal to 150% of the lien

amount.  If a final judgment is

rendered against Tenant by a court of competent jurisdiction, or if the

Premises or any portion thereof are in danger of being foreclosed upon as a

result of any such lien, Tenant will satisfy such judgment or lien at

once.  If Tenant does not post the

release bond or fails to pay any such adverse judgment or to discharge any lien

in the event of any imminent foreclosure, then Landlord may post the bond or

pay the judgment or discharge the lien, as applicable, and Tenant will promptly

reimburse Landlord for all sums paid by it in connection therewith, together

with the applicable Administrative Fee (as hereinafter defined).  Tenant shall give Landlord notice of

the intended commencement date of any work, labor, services or material to be

performed or provided to any of the Premises or any portion thereof involving

total expenditures for any project in excess of one and twenty-five one hundredths

percent (1.25%) of the Annual Rent, as it may be adjusted from time to time as

provided herein, at least ten (10) days before said date, and in connection

with the performance or provision of any such work, labor, services or

materials, Tenant shall file and post on

the applicable Premises a notice of nonresponsibility on behalf of Landlord in

the form attached hereto as Exhibit C within any time period and in the manner

prescribed under the laws of the state(s) in which the Premises or applicable

portion thereof is located in order to protect Landlord from responsibility

for, and evidencing Tenant’s obligations with respect to, any of the matters

covered by this Article, and shall provide Landlord with a copy thereof.  Landlord shall also have the

right and opportunity, to post and maintain on the Premises such notices,

including notices of nonresponsibility and other similar notices, as are

provided for under the Laws of the state(s) in which the Premises are located,

evidencing Tenant’s obligations with respect to any of the matters covered by

this Article and Landlord shall have the right to enter the Premises and post

such notices at any reasonable time.

 

ARTICLE 6

RENT

 

6.01         Rent. 

Tenant covenants and agrees to pay for the use and occupancy of the Premises,

the Annual Rent specified in Article 1 hereof, subject to increase pursuant to

the provisions of Section 6.02 hereof, in twelve (12) equal monthly

installments during each year of

 

4

 

the Lease Term, in advance, on the first day of each calendar month,

without any offset or deduction. 

Should the Lease Term commence on a day other than the first day of a

calendar month, then the rental for such first fractional month shall be

computed on a daily basis for the period from the Commencement Date to the end

of such calendar month at an amount equal to one three hundred sixty-fifth

(1/365) of the Annual Rent for each day. 

Should the Lease Term end on a day other than the last day of a calendar

month, then the rental for such fractional month shall be computed on a daily

basis at an amount equal to one three hundred sixty-fifth (1/365) of the Annual

Rent for each day.  Rent shall be

paid in lawful money of the United States to Landlord at the address stated in

Article 1 or to such other persons or at such other places as Landlord may

designate in writing to Tenant.

 

6.02        Rental Adjustments.  The Annual Rent payable under this Lease shall be increased

on October 1, 2001 and every five (5) years thereafter (each, an “Increase

Date”) during the Lease Term as follows:

 

(a)           The

basis for computing the increase shall be the Consumer Price Index for all

Urban Consumers - All Items U.S. Cities Average, published monthly by the

Bureau of Labor Statistics of the United States Department of Labor (Base

Period 1982-1984=100) (“Index”), published on September 20, 1996 for

August, 1996, i.e., 157.3 (the “Beginning Index”).

 

(b)           If

the Index published for the date nearest the applicable Increase Date (the

“Extension Index”) has increased over the Beginning Index, the Annual Rent will

be calculated by multiplying the then Annual Rent by a fraction, the numerator

of which is the Extension Index and the denominator of which is the Beginning

Index, not to exceed an increase equal to 10% of the Annual Rent in effect

during the five-year period immediately preceding the applicable Increase Date.

 

(c)           In

the event the Extension Index is not available on the applicable Increase Date,

Tenant will continue to pay the Annual Rent in effect immediately prior to the

Increase Date.  As soon as

practicable, Landlord will furnish Tenant with a true copy of the Extension

Index figure together with a computation of the increase in the Annual Rent for

the ensuing five-year period, if any, and an appropriate adjustment will be

paid within 30 days of Tenant’s receipt of Landlord’s statement.

 

(d)           If

the Index is changed so that the base year differs from that in effect on the

Commencement Date, the Index shall be converted in accordance with the

conversion factor published by the Bureau of Labor Statistics.  If the Index is discontinued or revised

during the Lease Term, such other governmental index or computation with which

it is replaced will be used in order to obtain substantially the same result as

would be obtained if the Index had not been discontinued or revised.

 

6.03         Net Lease; Impositions.  This Lease is what is commonly called a

“triple net lease,” it being understood that Landlord shall receive the Annual

Rent set forth in Article 1 hereof, as increased pursuant to Section 6.02, free

and clear of any and all other impositions, taxes, liens, charges, or expenses

of any nature whatsoever incurred in connection with the ownership and

operation of any of the Premises. 

In addition to the Annual Rent reserved by

 

5

 

Article 1 hereof, as increased pursuant to Section 6.02, Tenant shall

pay to the appropriate parties all impositions, insurance premiums, Real

Property Taxes (as defined below), operating charges, maintenance charges,

construction costs, accounting and legal fees, and any other charges, costs and

expenses which arise or may be contemplated under any provision of this Lease

during the Lease Term (collectively “Impositions”).  All of such Impositions shall constitute additional rent,

and upon the failure of Tenant to pay any of such Impositions, Landlord shall

have the same rights and remedies as otherwise provided in this Lease for the

failure of Tenant to pay rent. 

Tenant shall furnish to Landlord, promptly upon the reasonable request

of Landlord, official receipts or other satisfactory proof evidencing payment

of any such Impositions.  Upon

Tenant’s failure to pay any Real Property Taxes as provided herein, Landlord

shall have the right, at Landlord’s option, to require Tenant to (a) promptly

deposit with Landlord funds sufficient for the payment of the current Real

Property Taxes required to be paid by Tenant hereunder; and (b) also deposit

one-twelfth of the current annual or annualized Real Property Taxes (or those

of the preceding years if the current amounts thereof have not been fixed), on

the first day of each month in advance. 

It is the intention of the parties hereto that this Lease shall not be

terminable for any reason by Tenant, and that Tenant shall in no event be

entitled to any abatement of, deductions of any kind, offset or reduction in

rent payable under this Lease, except as may otherwise be expressly set forth

in this Lease.  Any present or

future Law to the contrary shall not alter this agreement of the parties.

 

ARTICLE 7

USE OF THE PREMISES

 

7.01         Use.  Tenant

shall occupy and use each of the Premises solely for the operation of a Stuart

Anderson’s Black Angus or Cattle Company restaurant or any other lawful use,

provided such other use does not decrease the market value of the Premises.

 

7.02         Compliance With Laws.

 

(a)           Tenant

accepts the Premises in its “AS IS” condition.  Tenant accepts each of the Premises “AS IS” in reliance upon

Tenant’s own knowledge as owner and/or occupier of the Premises prior to

commencement of this Lease. 

Landlord makes no representations or warranties of any type whatsoever,

including without limitation, whether there has been or are currently any

violations of any covenants or restrictions of record, or any applicable Laws

in effect regarding any of the Premises on the Commencement Date.

 

(b)           Tenant

shall, at Tenant’s sole expense, comply in all material respects with all

applicable laws, ordinances, building codes, orders, zoning ordinances, rules,

and regulations of any governmental authorities and with any directive of any

public officer which shall impose any order or duty upon Landlord or Tenant

with respect to any of the Premises or the use or occupation thereof or

relating to the environment, health or safety with respect to any of the

Premises or the use or occupation thereof (including, without limitation, any

rule of common law and judicial decisions and The Americans With Disabilities

Act), and any covenants, conditions or restrictions of record relating to the

Premises or the use or occupation thereof, in each case as now or hereafter in

effect (collectively, “Laws”).

 

6

 

(c)           Notwithstanding

any other provision of this Lease, Tenant shall not use or permit any of the

Premises to be used in any manner which will result in waste or the creation of

a nuisance, and Tenant shall maintain each of the Premises free of any

objectionable noises, odors, or disturbances; provided that, as between

Landlord and Tenant only, odors and exhaust incidental to a restaurant,

excluding odors of deteriorating food, will not be deemed a nuisance or

objectionable provided the same do not violate applicable Laws and do not

subject Landlord to any civil liability.

 

(d)           Notwithstanding

any other provision of this Lease, in the event that any new Law which goes

into effect during any Extension Period requires an investment in any of the

Premises in excess of 30% of the replacement cost of such Premises (exclusive

of land, foundations and footings), and which has an economic life in excess of

five (5) years, Tenant, at its option, may elect to terminate this Lease as to

such Premises only at any time during such Extension Period written notice to

Landlord and payment to Landlord of all accrued rent and other obligations

hereunder with respect to such Premises through the date of such termination,

except as to obligations hereunder which expressly survive any termination of

this Lease.

 

7.03         Permits and Licenses.  As between Landlord and Tenant, Tenant

shall be solely responsible to apply for and secure any building permit or

permission of any duly constituted authority for the purpose of doing any of

the things which Tenant is required or permitted to do under the provisions of

this Lease.  Landlord shall

cooperate as reasonably requested by Tenant to facilitate Tenant’s compliance

with this obligation but at no cost to Landlord.

 

ARTICLE 8

UTILITIES

 

8.01         Payment. 

Tenant shall pay to the utility companies or other parties entitled to

payment the cost of all water, sewer, heat, air conditioning, gas, electricity,

garbage collection, telephone, and other utilities and services provided to or

for any of the Premises, including connection fees and taxes thereon.

 

8.02         Interruption in Service.  Landlord shall not be liable in damages

or otherwise for any failure or interruption of any utility or other service

being furnished to any of the Premises subject to the provisions of Section

11.04(b) hereof, and no such failure or interruption shall entitle Tenant to

any abatement of, setoff of or reduction in the amounts payable to Landlord

hereunder or otherwise entitle Tenant to terminate this Lease.

ARTICLE 9

TAXES

 

9.01         Payment of Taxes.  Tenant shall pay the Real Property Taxes (as defined in

Section 9.02) applicable to each of the Premises during the Lease Term.  Landlord and Tenant agree to cooperate

to ensure that all tax bills applicable to each of the Premises are sent

directly to Tenant by the taxing authority.  All such payments shall be made prior to delinquency.  Upon Landlord’s request, Tenant shall

promptly furnish Landlord with satisfactory evidence that such Real Property

Taxes have been paid.  If any such

Real Property Taxes paid by Tenant shall cover any period of time prior to or

after the expiration of the Lease Term, Landlord shall promptly

 

7

 

reimburse Tenant to the extent required.  If Tenant shall fail to pay any such Real Property Taxes,

Landlord shall have the right but not the obligation to pay the same in which

case Tenant shall repay such amount plus any penalties and interest resulting

therefrom to Landlord with Tenant’s next Annual Rental installment together

with the applicable Administrative Fee.

 

9.02         Definition of “Real Property Taxes”.  As used herein, the term “Real Property

Taxes” shall mean any form of real estate tax or assessment, ad valorem or

value-added tax or occupancy tax or gross receipts tax, fee, levy, penalty,

interest or other charge, imposed by any authority having the direct or

indirect power to tax, including any city, county, state, or federal

government, or any school, agricultural, sanitary, fire, street, drainage, or

other improvement district thereof, on, against or with respect to any of the

Premises, this Lease, any legal or equitable interest of Landlord or any

superior landlord or any mortgagee of Landlord in the Premises or in the real

property of which any of the Premises are a part, and Landlord’s right to rent.  The term “Real Property Taxes” shall

also include any tax, fee, levy, assessment, penalty, interest or other charge

(i) in substitution of, partially or totally, any tax, fee, levy,

assessment, or charge included within the foregoing definition of Real Property

Taxes, (ii) the nature of which was included within the foregoing

definition of Real Property Taxes, or (iii) any tax or increase in any tax

which is imposed as a result of a transfer, either partial or total, of

Landlord’s interest in the Premises or which is added to a tax or charge

hereinbefore included within the definition of Real Property Taxes by reason of

such transfer (other than documentary, stamp or other transfer taxes resulting

from any such transfer but including any increase in any Real Property Taxes

attributable to any such transfer), or which is imposed by reason of the

transfer of any of the Premises to Landlord or this transaction, any

modifications or changes hereto, or any other transfers hereof.  Notwithstanding the foregoing, the term

“Real Property Taxes” shall not include any general income taxes, inheritance

taxes, and estate taxes imposed upon Landlord or any superior landlord or any

mortgagee or beneficiary of Landlord or any taxes attributable to the recording

of any mortgage or deed of trust on Landlord’s interest in the Premises.

 

9.03         Personal Property Taxes.  Tenant shall pay, prior to delinquency,

all taxes assessed against and levied upon trade fixtures, furnishings,

equipment, and all other personal property of Tenant contained in any of the

Premises or elsewhere.  Tenant

shall seek to cause said trade fixtures, furnishings, equipment, and all other

personal property to be assessed and billed separately from the real property

of Landlord.

 

9.04         Tenant’s Right to Contest Taxes.

 

(a)           Tenant

shall have the right, at its cost and expense, to contest the amount or

validity, in whole or in part, of any Real Property Taxes of any kind by

appropriate proceedings diligently conducted in good faith, but no such contest

shall be carried on or maintained by Tenant after the time limit for the

payment of any Real Property Taxes unless Tenant, at its option: (i) shall

pay the amount involved under protest; or (ii) shall procure and maintain

a stay of all proceedings to enforce any collection of any Real Property Taxes,

together with all penalties, interest, costs and expenses, by a deposit of a

sufficient sum of money, or by such undertaking, as may be required or

permitted by law to accomplish such stay; or (iii) shall deposit with

Landlord, as security for the performance by Tenant of its obligations

hereunder with respect to such Real Property Taxes, security in the amount, if

any, prescribed by applicable law, or if no amount is prescribed by applicable

law, in amounts equal to one hundred fifty

 

8

 

percent (150%) of the contested amount or such other reasonable

security as may be demanded by Landlord to ensure payment of such contested

Real Property Taxes and all penalties, interest, costs and expenses which may

accrue during the period of the contest. 

Upon the termination of any such proceedings, it shall be the obligation

of Tenant to pay the amount of such Real Property Taxes or part thereof, as

finally determined in such proceedings, together with any costs, fees

(including attorneys’ fees), penalties or other liabilities in connection

therewith; provided, however, that if Tenant has deposited cash or cash

equivalents with Landlord as security under clause (iii) above, then, so long

as no material default exists under this Lease, Landlord shall pay such Real

Property Taxes (or part thereof) together with the applicable costs, fees and

liabilities as described above out of such cash or cash equivalents and return

any unused balance, if any, to Tenant. 

Otherwise, Landlord shall return or cause to have returned to Tenant all

amounts, if any, held by or on behalf of Landlord which were deposited by

Tenant in accordance with the provisions hereof.

 

(b)           Tenant

shall have the right, at its cost and expense, to seek a reduction in the

valuation of the Premises as assessed for tax purposes and to prosecute any

action or proceeding in connection therewith.  Provided Tenant is not in material default hereunder, Tenant

shall be authorized to collect any tax refund of any tax paid by Tenant

obtained by reason thereof and to retain the same.

 

(c)           Landlord

agrees that whenever Landlord’s cooperation is required in any of the

proceedings brought by Tenant as aforesaid, Landlord will reasonably cooperate

therein, provided same shall not entail any cost, liability or expense to

Landlord, and Tenant will pay, indemnify and save Landlord harmless of and

from, any and all liabilities, losses, judgments, decrees, costs and expenses

(including all reasonable attorneys’ fees and expenses) in connection with any

such contest and will, promptly after the final settlement, fully pay and

discharge the amounts which shall be levied, assessed, charged or imposed or be

determined to be payable therein or in connection therewith, and Tenant shall

perform and observe all acts and obligations, the performance of which shall be

ordered or decreed as a result thereof. 

No such contest shall subject Landlord to the risk of any civil

liability or the risk of any criminal liability, and Tenant shall give such

reasonable indemnity or security to Landlord, as may reasonably be demanded by

Landlord, to ensure compliance with the foregoing provisions of this Section

9.04.

 

9.05         Survival of Tenant’s Tax Obligations.  Tenant’s obligations

pursuant to this Article 9 shall survive the termination or expiration of

this Lease, in whole or in part, such that, notwithstanding such termination or

expiration of this Lease, such that Tenant shall continue to be responsible for

that portion of the Real Property Taxes and/or personal property taxes which

pertain to the period prior to the date of such termination or expiration of

this Lease, which taxes shall be prorated and apportioned in accordance with

the number of days elapsed in the applicable tax year.

 

ARTICLE 10

MAINTENANCE

AND REPAIRS

 

10.01       Tenant’s Obligations.

 

(a)           Tenant

shall, at Tenant’s expense, maintain in good repair, order, and serviceable

condition, reasonable wear and tear excepted, the Premises and every part

thereof,

 

9

 

including but not limited to all plumbing, ventilation, heating, air

conditioning, and electrical systems and equipment in, on, or exclusively

serving any of the Premises, and windows, doors, storefronts, plate glass,

interior walls, and ceilings which are part of any of the Premises.

 

(b)           Tenant

shall not commit or suffer to be committed any waste upon or about the

Premises, and shall promptly at Tenant’s cost and expense, make all necessary replacements,

restorations, renewals and repairs to each of the Premises and all

appurtenances thereto which are material to the operation of any of the

Premises, whether interior or exterior, structural or non-structural, ordinary

or extraordinary, and foreseen or unforeseen; provided that with respect to

appurtenances to the Premises which are material to the operation of the

Premises, if third parties are obligated to repair or maintain such

appurtenances, Tenant shall use commercially reasonable efforts to enforce such

obligations of third parties or, if such third parties fail to perform such

obligations, Tenant shall perform such obligations to the extent Tenant has the

legal right to do so.  Tenant shall

pay to the appropriate parties Tenant’s pro rata share of any maintenance,

repair or other costs to the extent required under any appurtenances to any of

the Premises.  Repairs,

restorations, renewals and replacements shall be at least equivalent in quality

to the original work or the property replaced, as the case may be.  Tenant shall not make any claim or

demand upon or bring any action against Landlord for any loss, cost, injury,

damage or other expense caused by any failure or defect, structural or non-structural,

of the Premises or any part thereof.

 

(c)           Upon

the expiration or earlier termination of this Lease, Tenant shall return each

of the Premises to Landlord in good and clean condition and repair, reasonable

wear and tear excepted.  Any damage

to any of the Premises, including any structural damage, resulting from

Tenant’s use or from the removal of Tenant’s fixtures, furnishings, and

equipment pursuant to Section 12.04 hereof, shall be repaired by Tenant at

Tenant’s expense.

 

10.02       Landlord’s Obligations.  Except for the obligations of Landlord

under Article 14 hereof (relating to destruction of the Premises), and under

Article 15 hereof (relating to the condemnation of the Premises), it is

intended by the parties hereto that Landlord have no obligation, in any manner

whatsoever, to repair and maintain any of the Premises nor any building located

thereon nor any fixtures thereon or equipment or personal property therein,

whether interior or exterior, structural or nonstructural, ordinary or

extraordinary, all of which obligations are that of Tenant under Section 10.01

hereof.  Tenant expressly waives

the benefit of any statute or law now or hereafter in effect which would

otherwise afford Tenant the right to terminate this Lease because of Landlord’s

failure to keep the Premises or any part thereof or any building located

thereon or fixtures thereon or equipment or personal property therein in good

order, condition, and repair, or the right to repair and offset the cost

related thereto against rent.

 

10.03       Landlord’s Rights.  If Tenant refuses or neglects to make repairs or maintain

the Premises, or any part thereof, or any appurtenances thereto material to the

operation of the Premises or to enforce maintenance or repair obligations of

third parties with respect to any such appurtenances, as provided above, in a

manner reasonably satisfactory to Landlord, without prejudice to any other

remedy Landlord may have hereunder, upon giving Tenant ten (10) days’ prior

written notice, Landlord shall have the right to enter such Premises and

perform such maintenance or make such repairs on behalf of and for the account

of Tenant.  In the event Landlord

so elects, Tenant shall pay the cost of such repairs, maintenance, or

replacements

 

10

 

promptly following Tenant’s receipt of a bill therefor, together with

the applicable Administrative Fee. 

Tenant agrees to permit Landlord or its agent to enter the Premises,

upon reasonable notice by Landlord, during normal business hours for the

purpose of inspecting the Premises.

 

ARTICLE 11

INSURANCE

AND INDEMNIFICATION

 

11.01       Tenant’s Insurance Obligation.  Tenant covenants and agrees that Tenant

will carry and maintain, at its sole cost and expense, the following types of

insurance with respect to each of the Premises, in the amounts specified and in

the form hereinafter provided for:

 

(a)           COMMERCIAL

GENERAL LIABILITY.  Commercial

general liability insurance (including liquor liability insurance) against any

loss, liability or damage on or relating to the Premises, with limits of not

less than Two Million Dollars ($2,000,000) in any one occurrence for death or

injuries to one or more persons and/or for damage to property.

 

(b)           WORKERS’

COMPENSATION.  Worker’s

compensation insurance or self insurance as required by the jurisdiction in

which the Premises are located.

 

(c)           PROPERTY

DAMAGE.  Insurance covering all

improvements located on the Premises and all of Tenant’s fixtures, merchandise,

and personal property from time to time in, on or upon each of the Premises, in

an amount not less than one hundred percent (100%) of their full replacement

value providing protection against perils commonly included within the

classification “All Risk”.  Any

policy proceeds shall be used for the repair or replacement of the property damaged

or destroyed to the extent necessary to maintain the standard of operation of

the Premises and the business operated thereon existing prior to the damage or

destruction except as provided in Article 14.

 

(d)           POLICY

FORM.

 

(i)            All

policies of insurance provided for herein shall be issued by reputable and

financially sound insurance companies reasonably satisfactory to Landlord, and

such insurance companies shall be qualified to do business in the jurisdiction

where the applicable Premises are situated.  All such policies shall be issued in Tenant’s name, with

Landlord named as an additional insured and/or loss payee as applicable, and,

if requested by Landlord, name any superior landlord and any mortgagee or

beneficiary of Landlord as an additional insured or loss payee.  The policies shall be for the mutual

and joint benefit and protection of Landlord, Tenant, any superior landlord and

any mortgagee or beneficiary of Landlord. 

Certificates of insurance shall be delivered to Landlord prior to

Landlord’s execution of this Lease, and thereafter certificates or other

evidence of renewal or replacement coverage shall be delivered to Landlord

within five (5) days prior to the expiration of the term of each such policy.  As often as any such policy shall expire

or terminate, renewal or additional policies shall be procured and maintained

by Tenant in like manner and to like extent.  All certificates of insurance delivered to Landlord must

contain a provision giving Landlord, any superior landlord, and any mortgagee

or beneficiary of Landlord thirty (30) days’ notice in writing in advance of

any cancellation or lapse, except only ten (10) days’ notice will be provided

for cancellation due

 

11

 

to premium non-payment, of insurance.  All public liability, property damage, and other casualty

policies shall be written on an occurrence basis as primary policies, not

contributing with or in excess of coverage which Landlord may carry.

 

(ii)           Tenant’s

obligations to carry the insurance provided for above may be brought within the

coverage of a so-called blanket policy or policies of insurance carried and

maintained by Tenant; provided, however, that such policy or policies must have

limits of not less than Five Million and 00/100 Dollars ($5,000,000) for any

one occurrence and that Landlord, any superior landlord and any mortgagee or

beneficiary of Landlord shall be named as an additional insured or loss payee

thereunder as their interests may appear and that the coverage afforded

Landlord will not be reduced or diminished by reason of the use of such blanket

policies and the requirements set forth herein are otherwise satisfied.

 

11.02       Subrogation Waiver.  Landlord (for itself and its insurer) hereby waives any

rights, including rights of subrogation, and Tenant (for itself and its

insurer) hereby waives any rights, including rights of subrogation, each may

have against the other on account of any loss or damage occasioned to Landlord

or Tenant, as the case may be, to their respective property, any of the

Premises or their respective contents that are caused by or result from risks

insured against under any property insurance policies carried by the parties

hereto and in force at the time of any such damage.  The foregoing waivers of subrogation shall be operative only

so long as available in the jurisdiction where the Premises are located and so

long as no policy of insurance is invalidated thereby.

 

11.03       Insurance Use Restrictions.  Tenant agrees that it will not carry any

stock or goods or do anything in, on, or about the Premises outside of the

ordinary course of Tenant’s business which will substantially increase the

insurance rates upon the building of which any of the Premises are a part.

 

11.04       Indemnification.  (a) Tenant shall at all times indemnify Landlord and

any mortgagee or beneficiary of Landlord for, defend (with counsel reasonably

satisfactory to Landlord) Landlord against, and save Landlord and any mortgagee

or beneficiary of Landlord harmless from, any liability, loss, cost, injury,

damage or other expense or risk (including without limitation reasonable

attorneys’ fees) whatsoever that may occur or be claimed by or with respect to

any person(s) or property on or relating to any of the Premises and resulting

directly or indirectly from the use, misuse, occupancy, possession or disuse of

any of the Premises by Tenant or other persons claiming through or under

Tenant, or their respective agents, employees, licensees, invitees, guests or

other such persons, or from the condition of any of the Premises.  Tenant shall, at its cost and expense,

defend against any and all such actions, claims and demands and shall indemnify

Landlord and any mortgage or beneficiary of Landlord for all costs, expenses

and liabilities (including, without limitation, reasonable attorneys’ fees) it

may incur in connection therewith. 

Neither Landlord nor any mortgagee or beneficiary of Landlord shall in

any event whatsoever be liable for any injury or damage to any of the Premises

or to the Tenant or to any other persons claiming through or under Tenant, or

their respective agents, employees, licensees, invitees, guests or other such

persons or to any property of any such persons except as provided in

subparagraph (b) below.  Tenant

shall not make any claim or demand upon or institute any action against

Landlord as a result of such injury or damage except as provided in

subparagraph (b) below.  Tenant

covenants and agrees during the Lease Term

 

12

 

hereof to pay when due or reimburse and indemnify and hold Landlord and

any mortgagee or beneficiary of Landlord harmless from and against all

inspection fees, taxes, bonds, permits, certificates, assessments and sales,

use, property or other taxes, fees or tolls of any nature whatsoever (together

with any related interest or penalties) now or hereafter imposed against

Landlord, any superior landlord or any mortgagee or beneficiary of Landlord or

Tenant by any federal, state, county or local governmental authority upon or

with respect to any of the Premises or the use thereof or upon the possession,

leasing, use, operation or other disposition of any thereof or upon the rents,

receipts or earnings arising therefrom or upon or with respect to this Lease

(excepting only federal, state, and local net income taxes on the income of

Landlord or any superior landlord or any mortgagee or beneficiary of Landlord

or any taxes attributable to the recording of any mortgage or deed of trust on

Landlord’s interest in the Premises.

 

(b)           Notwithstanding

the waiver of subrogation under Section 11.02, Landlord shall indemnify, hold

harmless and defend (with counsel reasonably satisfactory to Tenant) Tenant

from and against any liability, loss, cost, injury, damage or other expense or

risk (including, without limitation, reasonable attorneys’ fees) whatsoever to

the extent arising out of the negligence or willful misconduct of Landlord or

its representatives in connection with any entry by Landlord or its

representatives on the Premises or in connection with any maintenance,

construction, or other activity of Landlord on any adjacent property, except to

the extent arising from the negligence or willful misconduct of Tenant, its

representatives, or their respective agents, employees, licensees, invitees or

guests, or from the condition of any of the Premises.

 

11.05       Payment of Insurance.  In the event that Tenant shall fail to

obtain the insurance policies required hereunder, Landlord shall have the

right, but not the obligation, to purchase the same in which case Tenant shall

repay the cost thereof to Landlord with Tenant’s next Annual Rent installment

together with the applicable Administrative Fee.

 

ARTICLE 12

ALTERATIONS

 

12.01       Permitted Improvements.  Except as provided in Section 12.03

hereof, and subject to the provisions of this Article 12, at Tenant’s own

expense and after giving Landlord notice in writing of its intention to do so

as required under Article 5, Tenant may from time to time make alterations,

replacements, additions, changes, and improvements (collectively referred to in

this Article 12 as “Alterations”) in and to any of the Premises as it may find

necessary or convenient for its purposes; provided, however, that no such

Alterations shall decrease the value of any of the Premises.

 

12.02       Liens.  Tenant shall pay the costs of any

Alterations done on any of the Premises pursuant to Section 12.01, and shall

keep each of the Premises free and clear of liens of any kind as required under

Article 5.  Tenant shall indemnify

and defend Landlord from and against any liability, loss, damage, costs,

attorneys’ fees, and any other expense incurred as a result of claims of lien

by any person performing work or furnishing materials or supplies for Tenant or

any person claiming under Tenant.

 

12.03       Structural Alterations.  Tenant shall not make any Alterations

to any of the foundations, perimeter or load bearing walls, or roof structure

involving expenditures in excess

 

13

 

of the amounts specified in Article 5, other than minor repairs made in

the ordinary course of Tenant’s business which do not decrease the value of any

of the Premises, without obtaining the prior written consent of Landlord, which

consent shall not be unreasonably withheld.  All work with respect to any Alteration shall be done in a

good and workmanlike manner by properly qualified and licensed personnel, and

such work shall be diligently prosecuted to completion.

 

12.04       Removal of Alterations.  All Alterations made on any of the

Premises shall become the property of Landlord at the expiration or termination

of the Lease Term and shall be surrendered with such Premises; provided,

however, that if Tenant is not in default at the time of such expiration or

termination, (i) Tenant shall have the right to remove any Alterations

made in accordance with this Article 12 provided the removal thereof does not

decrease the value of any of the Premises as reasonably determined by Landlord

and provided Tenant repairs any damage to any of the Premises caused by such

removal, and (ii) Tenant’s equipment, machinery, and trade fixtures shall

remain the property of Tenant and may be removed by Tenant, provided Tenant

shall repair any damage caused by its removal of any such equipment, machinery,

and trade fixtures.

 

Landlord agrees from time to time during the term of this Lease, upon

written request from Tenant, to execute and deliver any instrument, release, or

other document that may be reasonably required by any equipment supplier or

vendor and in form and substance reasonably satisfactory to Landlord whereby

Landlord waives and/or releases any rights it may have or acquire with respect

to any such equipment or trade fixtures which may be affixed to any of the

Premises and which is subject to a security interest or equipment lease in

favor of such supplier or vendor and agrees that the same do not constitute

realty regardless of the manner same are attached.

 

12.05       Alterations Required by Law.  Any Alteration, structural or

otherwise, to or on any of the Premises, or any part thereof, which may be

necessary or required by reason of any applicable Laws, shall be made by and at

the sole cost and expense of Tenant, subject to the provisions of Section

7.02(d).

 

12.06       General Conditions Relating to

Alterations.  Any

Alteration, structural or otherwise, to or on the Premises, shall be subject to

the following conditions:

 

(a)           No

Alteration shall be undertaken until Tenant shall have procured and paid for

all required permits and authorizations of all municipal departments and

governmental subdivisions having jurisdiction.

 

(b)           Any

structural Alteration involving an estimated cost of more than One Hundred

Thousand and 00/100 Dollars ($100,000) (which amount shall be subject to

periodic increase in the same manner as Annual Rent under Section 6.02) shall,

at Landlord’s reasonable request, be conducted under the supervision of a

licensed architect or engineer selected by Tenant and satisfactory to Landlord

and shall be made in accordance with detailed plans and specifications (the

“Plans and Specifications”) and cost estimates prepared by such architect or

engineer and approved in writing in advance by Landlord.

 

14

 

(c)           Any

Alteration shall be made promptly and in a good workmanlike manner and in

compliance with all applicable Laws.

 

(d)           No

Alteration shall tie-in or connect any of the Premises or any improvements

thereon with any property outside such Premises without the prior written

consent of Landlord.

 

(e)           No

Alteration shall reduce the value of any of the Premises or impair the

structural integrity of any building comprising a part of any of the Premises.

 

ARTICLE 13

SIGNS

 

In addition to those signs already existing at the Premises, Tenant

shall have the right to erect or affix signs on the Premises of such sizes,

colors, and designs as required by Tenant.  All signs on the Premises shall fully comply with all

applicable Laws.

 

ARTICLE 14

DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD

 

14.01       Obligation

to Rebuild. 

If any portion of the Premises is damaged or destroyed by fire or other

casualty, Tenant shall forthwith give notice thereof to Landlord.  Tenant shall, at its sole cost and

expense, diligently repair, restore, rebuild or replace the damaged or

destroyed improvements, fixtures or equipment, and diligently complete the same

as soon as reasonably possible, to the condition they were in prior to such

damage or destruction, except for permitted Alterations and such changes in

design or materials as may then be required by applicable Laws.  Landlord, in such event, shall, to the

extent and at the times the proceeds of the insurance are made available to

Landlord, reimburse Tenant for the costs of making such repairs, restoration,

rebuilding and replacements on such terms as Landlord may reasonably

require.  To the extent that

available proceeds of insurance are insufficient to pay the entire cost of

making such repairs, restoration, rebuilding and replacements, and notwithstanding

the expiration or termination of the Lease Term of this Lease, Tenant shall pay

the amount by which such costs exceed the available insurance proceeds.  Any surplus of insurance proceeds over

the cost of restoration, net of all reasonable out-of-pocket expenses incurred

by Landlord in connection with the administration thereof, shall be promptly

paid over to Tenant.

 

Notwithstanding the foregoing, if any such damage or destruction occurs

during any Extension Period, Tenant may elect to terminate this Lease upon

written notice to Landlord within sixty (60) days after the occurrence of such

damage or destruction provided Tenant pays to Landlord all rent and other

amounts accruing under this Lease through the date of termination, and except

as to obligations hereunder which expressly survive any termination of this

Lease.  In the event of any such

termination of this Lease, Landlord shall be entitled to retain all proceeds of

insurance relating to such damage and destruction, and Tenant shall promptly pay

to Landlord any such insurance proceeds received by Tenant and hereby assigns

to Landlord all rights of Tenant to receive such insurance proceeds.

 

15

 

14.02       No Abatement of Rent.  Notwithstanding the partial or total

destruction of any of the Premises, there shall be no abatement of rent or of

any other obligation of Tenant hereunder by reason of such damage or

destruction.

 

ARTICLE 15

EMINENT DOMAIN

 

15.01       Total Taking. 

If any of the Premises are taken in their entirety under the power of

eminent domain, this Lease shall terminate with respect to such taken Premises

as of the date of such taking, and upon Tenant’s payment to Landlord of all

rents and other amounts accruing hereunder through such date, Landlord and

Tenant shall each thereafter be released from accruing any further liability

under this Lease with respect to the Premises so taken subject to the rights of

Landlord and Tenant to receive condemnation awards to which each is entitled as

provided in Section 15.03, and except as to obligations under this Lease which

survive the termination hereof. 

Upon any such taking, the Annual Rent shall be adjusted pursuant to

Section 15.05 below.

 

15.02       Partial Taking.  In the event that (a) more than twenty-five percent

(25%) of the floor area of any of the Premises is taken under the power of

eminent domain; or (b) by reason of any appropriation or taking,

regardless of the amount so taken, the remainder of any of the Premises is not

one undivided parcel of property; or (c) as a result of any taking,

regardless of the amount so taken, the remainder of any of the Premises is

rendered unsuitable for the continued operation of Tenant’s business as

determined by Tenant in good faith and based on commercially reasonable

standards and criteria, Tenant shall have the right, in addition to its rights

under Article 24, to terminate this Lease with respect to such taken Premises,

upon giving notice in writing of such election within sixty (60) days after

receipt by Tenant from Landlord of written notice that said Premises have been

so appropriated or taken (with the understanding that such period of time may

be extended as reasonably necessary for Tenant to assess the effect of such

partial taking on Tenant’s continued operation of its business at the Premises,

subject to Landlord’s prior written consent, which consent shall not be

unreasonably withheld) provided Tenant shall continue to pay Annual Rent and

other amounts accruing hereunder through the date of termination.  In the event of such termination, upon

Tenant’s payment to Landlord of all rents and other amounts accruing hereunder

through such date and in connection with such termination as set forth herein,

both Landlord and Tenant shall thereupon be released from any liability

thereafter accruing hereunder, except as to obligations hereunder which survive

the termination hereof and the Annual Rent shall be adjusted as set forth in

Section 15.05 below.  Each Party

agrees immediately after learning of any actual or contemplated appropriation

or taking to give to the other party notice in writing thereof.  If this Lease is not terminated, Tenant

shall remain in that portion of the Premises not so taken and Tenant, at Tenant’s

sole cost and expense, shall restore the remaining portion of the Premises as

soon as possible to a complete unit of the quality and character as existed

prior to such taking.  Landlord

agrees to reimburse Tenant for the cost of restoration, but in no event shall

Landlord’s obligation to reimburse Tenant for the cost of restoring the

remaining portion of the Premises exceed the amount of award of compensation

that Landlord receives for a partial taking of that portion of the Premises

resulting in the need for restoration. 

So long as this Lease is not terminated in the manner provided above,

there shall be an adjustment of the Annual Rent payable by Tenant hereunder for

the Premises by reason of any partial taking as set forth in Section 15.05

below.  Tenant hereby waives any

 

16

 

statutory rights of termination which may arise by reason of any

partial taking of any of the Premises under the power of eminent domain.

 

15.03       Award.  In the event of any taking, the entire

award or compensation in any eminent domain proceeding affecting the Premises,

whether awarded to Tenant or Landlord for a total or partial taking and subject

to the remaining provisions of this Section 15.03,, shall be distributed to

Landlord, provided, however, that in all instances Tenant will be entitled to

receive, and Landlord will have no right to pursue for itself, any award for

claims based on (a) the value of Tenant’s Alterations to the Premises

which Tenant has the right to remove pursuant to the provisions of this Lease

but elects not to remove, (b) loss of or damage to Tenant’s personal

property, (c) loss to Tenant because of interruption of business,

(d) Tenant’s loss of goodwill, and (e) Tenant’s cost of removal and

relocation and any rent differential payable by Tenant for replacement premises

as a result of any relocation necessitated by the taking (collectively, the

“Tenant Award”).  Landlord and

Tenant may separately pursue their claims against the condemning authority, provided,

however, that notwithstanding anything to the contrary contained in this Lease,

Tenant will have no right to pursue a claim based upon the residual value of

the real property comprising the Premises after expiration of the Lease Term or

pursue claims or retain any award to which Landlord is entitled so as

inequitably to diminish Landlord’s award. 

Landlord and Tenant shall cooperate to maximize the award payable by the

condemning authority.  Tenant

hereby assigns to Landlord all rights of Tenant to receive any award of

compensation as a result of any taking except the Tenant Award. In the event

that Tenant elects to terminate this Lease with respect to any of the Premises

pursuant to Section 15.01, and after the application of the proceeds of such

condemnation action award (excluding any Tenant Award) and payment of all fees

and expenses set forth in Section 15.05, Landlord shall, to the extent that

there are any excess net condemnation award proceeds, pay to Tenant fifty

percent (50%) of any such excess net condemnation award proceeds. In the event

that Tenant elects to terminate this Lease with respect to any of the Premises

pursuant to Section 15.02, and after the application of the proceeds of such

condemnation action award (excluding any Tenant Award) and payment of all fees

and expenses set forth in Section 15.05, then (i) Landlord shall, to the extent

that there are any excess net condemnation award proceeds, pay to Tenant fifty

percent (50%) of any such excess net condemnation award proceeds and (ii)

Landlord shall sell or otherwise transfer the Premises, which sale or transfer

shall be pursued diligently by Landlord, which were the subject of such taking

and, after the payment of all costs and expenses of Landlord in connection with

holding, preparing for sale and selling such Premises from the proceeds of such

sale, Landlord shall pay to Tenant fifty percent (50%) of any remaining sale

proceeds.

 

15.04       Transfer Under Threat of Taking.  For the purposes of this Article only,

a voluntary sale or conveyance under threat and in lieu of condemnation shall

be deemed an appropriation or taking under the power of eminent domain.

 

15.05       Adjustment of Annual Rent in

connection with Takings.

 

(a)           In

the event that Tenant elects to terminate this Lease with respect to any of the

Premises pursuant to Section 15.01 or 15.02, upon receipt by Landlord of funds

from the condemnation action award pursuant to Section 15.03 plus funds from

Tenant in the total amount equal to the sum of (i) the loan balance allocated

to the Premises which are the subject of such 

 

17

 

termination at the time of such termination as set forth on the

applicable Financing Schedule (defined below), (ii) any prepayment penalties or

premiums and/or defeasance costs required to be paid by Landlord under any

Financing Documents (defined below) in connection with such termination and

(iii) all reasonable costs and expenses of Landlord in connection with such

termination, including, reasonable attorneys’ fees, the Annual Rent hereunder

shall be reduced by the amount of the then current Annual Rent allocated to the

Premises which are the subject of such termination.

 

(b)           In

the event that the Lease with respect to any of the Premises is not terminated

pursuant to Section 15.02, upon receipt by Landlord of funds from the

condemnation action award pursuant to Section 15.03 plus funds from Tenant in

the total amount equal to the sum of (i) the loan balance allocated to the

Premises which are the subject of such condemnation at the time of such condemnation

as set forth on the applicable Financing Schedule, (ii) any prepayment

penalties or premiums and/or defeasance costs required to be paid by Landlord

under any Financing Documents in connection with such condemnation and (iii)

all reasonable costs and expenses of Landlord in connection with such

condemnation, including, reasonable attorneys’ fees and expenses, less the

costs to restore the affected Premises, the Annual Rent hereunder shall be

reduced by an amount equal to the product of (i) the percentage of the Premises

so taken multiplied by (ii) the then current Annual Rent allocated to the

Premises which are the subject of such condemnation; provided, however, that

said Annual Rent shall not be reduced below an amount which bears the same ratio

to the annual scheduled payments of principal and interest due by Landlord

under the Financing Documents with respect to the portion of the loan which is

not prepaid or defeased with the proceeds of said condemnation received by

Landlord as the ratio between the Annual Rent before such reduction bears to

the total annual scheduled payments of principal and interest payable under

such Financing Documents prior to such prepayment or defeasance.

 

In connection with any loan, mortgage or other debt obtained by

Landlord that is to be secured by Landlord’s interest in the Premises or this

Lease, Landlord shall deliver to Tenant concurrently with the closing of any

such transaction a schedule (a “Financing Schedule”) containing (i) an

allocation of the original loan balance to each of the Premises, and (ii) an

amortization schedule of such loan with respect to each of the Premises and the

corresponding loan balance allocation. 

As used herein, the term “Financing Documents” shall mean any mortgage

or deed of trust or other document evidencing or securing a loan or loans to

Landlord secured by Landlord’s interest in the Premises or this Lease.

 

ARTICLE 16

ASSIGNMENT

AND SUBLETTING

 

16.01       Landlord’s Consent Required.  For purposes of this Article 16, the

terms “assign” and “assignment” shall include and mean any act attempting to,

or document purporting to, assign, transfer, sublet, change ownership of

Tenant’s interest in and to any of the Premises or any part thereof, or enter

into license or concession agreements for a material portion of any of the

Premises or any part thereof. 

Tenant shall not assign this Lease or Tenant’s interest in and to the

Premises without obtaining the prior written consent of Landlord, such consent

not to be unreasonably withheld. 

Any attempted assignment without such consent shall be void, and shall

 

18

 

constitute a breach of this Lease.  Notwithstanding the foregoing, Tenant may at any time

encumber its leasehold interest, by deed of trust, mortgage, assignment, or

other security agreement, without the consent of Landlord, but no such

encumbrance will constitute a lien on Landlord’s estate.

 

16.02       Assumption of Obligations.  Any assignment to which Landlord has

consented shall be evidenced by an instrument in writing and any assignee or

transferee shall agree for the benefit of Landlord to be bound by, assume, and

perform all of the terms, covenants, and conditions of this Lease.  Consent by Landlord to any assignment

shall not constitute consent to any subsequent assignment.

 

16.03       Assignment to Affiliate.  Notwithstanding anything to the

contrary contained in this Article 16, Tenant shall have the right to assign

this Lease, or sublet the Premises or any portion thereof, without the consent

of, but with notice to, Landlord, to any corporation (a) with which Tenant

may merge or consolidate, (b) which is a parent or subsidiary of Tenant at

any tier, (c) which is the successor corporation to Tenant in the event of

a corporate reorganization, or (d) which acquires all or substantially all

of the voting stock of Tenant or all or substantially all of the assets of

Tenant, provided that said assignee assumes, in full, the obligations of Tenant

under this Lease and Tenant remains primarily liable under this Lease.  In addition, nothing contained herein

shall prohibit the public offering of or subsequent sale of shares of stock in

Tenant in the public markets.

 

16.04       No Release of Tenant.  Regardless of Landlord’s consent, no

assignment shall release Tenant of Tenant’s obligation or alter the primary

liability of Tenant to pay the rent and to perform all other obligations to be

performed by Tenant hereunder.  The

acceptance of rent by Landlord from any other person shall not be deemed to be

a waiver by Landlord of any provision hereof.  Consent to one assignment shall not be deemed consent to any

subsequent assignment.  In the

event of default by any assignee of Tenant or any successor to Tenant, in the

performance of any of the terms hereof, Landlord may proceed directly against

Tenant without the necessity of exhausting remedies against said assignee.  Landlord may consent to subsequent

assignments of this Lease or amendments or modifications to this Lease with

assignees of Tenant, without notifying Tenant, or any successor of Tenant, and

without obtaining its or their consent thereto and such action shall not

relieve Tenant of liability under this Lease, provided that Tenant shall not be

liable to the extent of amendments or modifications made to this Lease, with

assignees not affiliated with Tenant without Tenant’s consent, which consent

shall not be unreasonably withheld, which materially increase Tenant’s monetary

obligations under this Lease (such as an increase in the Annual Rent payable

hereunder or extension of the Lease Term beyond the original term hereof and

any renewal options hereunder).

 

ARTICLE 17

DEFAULT; REMEDIES

 

17.01       Default.  The occurrence of any one or more of

the following events shall constitute a material default under this Lease by

Tenant:

 

(a)           The

vacating or abandonment of the Premises by Tenant.

 

19

 

(b)           The

failure by Tenant to make any payment when due of Annual Rent, Impositions or

any other payment required to be made by Tenant hereunder, where such failure

shall continue for a period of ten (10) days after written notice from

Landlord.

(c)           Except

as otherwise provided in this Lease, the failure by Tenant to observe or

perform any of the covenants, conditions, or provisions of this Lease to be

observed or performed by Tenant, other than described in subparagraph (b)

above, where such failure shall continue for a period of thirty (30) days after

written notice thereof from Landlord to Tenant; provided, however, that if the

nature of Tenant’s noncompliance is such that more than thirty (30) days are

reasonably required for its cure, then Tenant shall not be deemed to be in

default if Tenant commences such cure within said thirty (30)-day period and

thereafter diligently and in good faith prosecutes such cure to completion.

 

(d)           (i) The

making by Tenant of any general arrangement or general assignment for the

benefit of creditors; (ii) Tenant becomes a “debtor” as defined in 11

U.S.C. Section 101 or any successor statute thereto (unless, in the case of a

petition filed against Tenant, the same is dismissed within sixty (60) days);

(iii) the appointment of a trustee or receiver to take possession of

substantially all of Tenant’s assets located at the Premises or of Tenant’s interest

in this Lease, where possession is not restored to Tenant within sixty (60)

days; or (iv) the attachment, execution, or other judicial seizure of

substantially all of Tenant’s assets or of Tenant’s interest in this Lease,

where such seizure is not discharged within sixty (60) days.  In the event that any provision of this

Section 17.01(d) is contrary to any applicable Law, such provision shall be of

no force or effect.

 

(e)           The

breach of any representation or warranty by Tenant hereunder in any material

respect.

 

(f)            The

default, breach or insolvency of any guarantor of this Lease beyond any

applicable notice and/or grace period under its guarantee.

 

(g)           At

Landlord’s option, a default by Tenant under that certain Amended and Restated

Master Lease of even date herewith by and between Tenant and ARG Properties I,

LLC, a California limited liability company; provided, however, that this

Section 17.01(g) shall terminate and be of no force and effect if (i)

forty-nine percent (49%) or more of the beneficial ownership interest in

Landlord shall be sold or otherwise transferred or (ii) a sale or transfer of

less than forty-nine percent (49%) of the beneficial ownership interest in

Landlord shall occur and such sale or transfer shall cause a reassessment or

revaluation of the Premises for purposes of any ad valorem or other property

tax.

 

17.02       Remedies. 

In the event of any such material default by Tenant, Landlord may at any

time thereafter, with or without notice or demand and without limiting Landlord

in the exercise of any right or remedy which Landlord may have by reason of

such default:

 

(a)           Terminate

Tenant’s right to possession of any of the Premises by any lawful means, in

which case this Lease shall terminate as to such Premises and Tenant shall

immediately surrender possession of the Premises to Landlord.  In such event, Landlord shall be

entitled to recover from Tenant all damages incurred by Landlord by reason of

Tenant’s default

 

20

 

including, but not limited to, the cost of recovering possession of the

Premises, expenses of reletting, including reasonable and necessary renovation

and alteration of the Premises, reasonable attorneys’ fees, and any real estate

commission actually paid; and the worth at the time of award by the court

having jurisdiction thereof of the amount by which the unpaid rent for the

balance of the term after the time of such award exceeds the amount of such

unpaid rent for the same period that Tenant proves could be reasonably avoided.

 

(b)           Maintain

Tenant’s right to possession of any of the Premises by any lawful means, in

which case this Lease and the term hereof shall continue in effect with respect

to such Premises whether or not Tenant shall have vacated or abandoned such

Premises.  In such event Landlord

shall be entitled to enforce all of Landlord’s rights and remedies under the

Lease with respect to such Premises, including the right to recover the rent as

it becomes due hereunder.

 

(c)           Pursue

any other remedy now or hereafter available to Landlord under the Laws of the

jurisdiction where the Premises are located.

 

(d)           To

the extent permitted by applicable Law, the rights and provided remedies under

this Lease shall be cumulative, and the exercise of any one right or remedy

shall not preclude the exercise of or act as a waiver of any other right or

remedy of Landlord hereunder, or which may be existing at law, or in equity or

by statute or otherwise.

 

(e)           In

addition to the foregoing, Tenant, and its successors and assigns, shall at all

times indemnify Landlord for, defend Landlord against and save Landlord

harmless from any liability, loss, cost, injury, damage or other expense or

risk (including, without limitation, reasonable attorney’s fees) whatsoever,

directly or indirectly, arising out of, resulting from or otherwise in

connection with (i) the failure for any reason on the part of Tenant to

perform, observe or comply with any of the covenants, conditions and

obligations under this Lease to be performed, observed or complied with by

Tenant, and/or (ii) the failure for any reason of any representation or

warranty given by Tenant in connection with the execution of this Lease by

Landlord to be materially true, complete and accurate.

 

17.03       Administrative Fee.  Tenant hereby acknowledges that late payment by Tenant to

Landlord of rent and other sums due hereunder may cause Landlord to incur

administrative costs not contemplated by this Lease, the exact amount of which

will be extremely difficult to ascertain. 

Such administrative costs may include, but are not limited to,

processing and accounting charges and late charges which may be imposed on

Landlord by the terms of any superior lease, mortgage or trust deed covering

the Premises.  Accordingly, if any

installment of rent or any other sum due from Tenant is not received by

Landlord or Landlord’s designee within ten (10) days after written notice from

Landlord, then, without any requirement for further notice to Tenant, Tenant

shall pay to Landlord an administrative fee equal to the Bank of America, NT

& SA, reference rate plus four percent (4%) per annum (but in no event

higher than the maximum rate permitted by Law) multiplied by such overdue

amount from the date such overdue amount was due until paid (the “Administrative

Fee”).  The parties hereby agree

that such Administrative Fee represents a fair and reasonable estimate of the

costs Landlord will incur by reason of late payment by Tenant.  Acceptance of such Administrative Fee

by Landlord shall in no event constitute a waiver of Tenant’s default with

respect to such overdue amount, nor prevent Landlord from exercising any of the

other rights and remedies granted hereunder.

 

21

 

17.04       Default by Landlord.  Landlord will commit a default if

Landlord fails to perform any provision of this Lease required of it and the

failure is not cured within 30 days after notice has been given to

Landlord.  If, however, the failure

cannot reasonably be cured within the cure period, Landlord will not be in

default of this Lease if Landlord commences to cure the failure within the cure

period and diligently and in good faith continues to cure the failure.  Notices given under this Section 17.04

will specify the alleged breach and the applicable Lease provisions.  Tenant may, after expiration of the

cure period unless there is an emergency, correct or remedy any failure of

Landlord not timely cured and deduct the reasonable cost paid by Tenant from

future rent as it becomes due.

 

17.05       Mitigation. 

Landlord and Tenant will each exercise best efforts to mitigate the

damages caused by the other party’s breach of this Lease.  Efforts to mitigate damages will not be

construed as a waiver of the nonbreaching party’s right to recover damages.

 

17.06       Lender’s Right to Cure.  The respective lenders of each party

will have the right, in the party’s behalf, to cure the party’s alleged breach

within the same time period allocated under this Lease, Landlord shall upon

written request from Tenant provide copies of any notices of default given to

Tenant hereunder to lenders of Tenant as specified in such written request,

provided, however, that Landlord shall not be deemed to be in default hereunder

if Landlord fails to provide any such notices to any of Tenant’s lenders nor

shall any such failure relieve Tenant from any liability hereunder or affect

any of Landlord’s rights or remedies hereunder.

 

ARTICLE 18

SUBORDINATION

 

At Landlord’s option, this Lease shall be subordinate to any superior

lease, mortgage, deed of trust, or any other hypothecation or security now or

hereafter placed upon any of the Premises and to any and all advances made on

the security thereof and to all renewals, modifications, consolidations,

replacements, and extensions thereof, provided that Landlord and any mortgagee

or beneficiary of Landlord shall execute the Subordination Agreement (as

defined below) with Tenant.  In

furtherance thereof, Tenant hereby agrees, upon request by Landlord, to execute

and deliver a subordination, non-disturbance and attornment agreement

substantially in the form attached hereto as Exhibit B (a “Subordination

Agreement”) with respect to any such superior lease, mortgage, deed of trust,

hypothecation, or security.

 

ARTICLE 19

QUIET ENJOYMENT

 

Subject to the terms and conditions of this Lease and conditional upon

the performance of all of the provisions to be performed by Tenant hereunder,

Landlord agrees to secure to Tenant during the Lease Term and any and all

extensions thereof, the quiet and peaceful possession of each of the Premises

and all rights and privileges appertaining thereto and under this Lease.

 

22

 

ARTICLE 20

REPRESENTATIONS

AND WARRANTIES

 

20.01       Representations and Warranties.  To induce Landlord to enter into this

Lease, Tenant represents and warrants to Landlord and any mortgagee or

beneficiary of Landlord as follows:

 

(a)           It

is a corporation duly organized and validly existing, in good standing under

the laws of California, has stock outstanding which has been duly and validly

issued, and is qualified to do business and is in good standing in the

jurisdiction in which any of the Premises are located with full power and

authority to consummate the transactions contemplated hereby.

 

(b)           The

execution and delivery of this Lease has been duly authorized by all action as

may be required under the terms and provisions of its governing instruments and

the laws of the jurisdiction where each of the Premises is located; this Lease

will not violate or result in any breach of, or constitute a default under, or

result in the creation of any lien, encumbrance, attachment, charge or other

right or claim of any other party upon any assets of Tenant or upon Tenant’s

beneficiary interest under the terms of this Lease pursuant to any instrument

or applicable Laws to which Tenant is a party or by which it may be bound or

create in favor of or grant to any third party any interest whatsoever in

Tenant’s interest under the terms of this Lease; this Lease is valid and

enforceable in accordance with its terms, and the execution and delivery of

this Lease, and the consummation of the transactions contemplated hereby, do

not require the approval or consent of any governmental authority having

jurisdiction over Tenant or its property, or if such approval or consent is

required, it has been obtained.

 

(c)           Tenant’s

financial statements and, if applicable, the guarantors’ financial statements

heretofore delivered to Landlord are true and correct in all material respects,

have been prepared in accordance with generally accepted accounting principles,

and fairly present the respective financial conditions of the subjects thereof

as of the respective dates thereof. 

No materially adverse change has occurred in the financial conditions

reflected therein since the respective dates thereof.

 

(d)           There

are no actions, suits or proceedings pending, or to the best of Tenant’s

knowledge, threatened, against or affecting it or any of the Premises or any

guarantor of this Lease, or involving the validity or enforceability of this

Lease, at law or in equity, or before or by any governmental authority except

actions, suits and proceedings fully covered by insurance or which, if

adversely determined, would not materially impair the ability of Tenant or any

guarantor of this Lease to satisfy their obligations under this Lease or any

guarantee of this Lease.

 

(e)           Tenant

is not in default under any obligation for the payment of borrowed money, for

the deferred purchase price of property or for the payment of any rent under

any lease agreement, which, either individually or in the aggregate, would

adversely affect the financial condition of Tenant, or the ability of Tenant to

perform its obligations hereunder, or comply with the terms of this Lease.

 

23

 

ARTICLE 21

SURRENDER OF PREMISES

 

Except for changes resulting from eminent domain proceedings, at the

expiration or sooner termination of the Lease Term, Tenant shall surrender the

Premises in good and clean condition, reasonable wear and tear excepted, and

shall surrender all keys for each of the Premises to Landlord at the place then

fixed for the payment of rent and shall inform Landlord of all combinations on

locks, safes and vaults, if any, in each of the Premises.  Tenant shall at such time remove all of

Tenant’s property, as well as any alterations or improvements other than

permitted Alterations made in accordance with Article 12, if requested to do so

by Landlord, and shall repair any damage to any of the Premises caused thereby,

and any or all of such property not so removed shall, at Landlord’s option,

become the exclusive property of Landlord or be disposed of by Landlord, at

Tenant’s cost and expense, without further notice to or demand upon

Tenant.  If any of the Premises are

not so surrendered, Tenant shall indemnify Landlord against loss or liability

resulting from the delay by Tenant in so surrendering such Premises including,

without limitation, any claims made by any succeeding occupant founded on such

delay.  Tenant’s obligation to

observe or perform this covenant shall survive the expiration or other

termination of the Lease Term with respect to all or any of the Premises.

 

ARTICLE 22

BANKRUPTCY

OR INSOLVENCY

 

22.01       Bankruptcy or Insolvency.  Subject to applicable Law, Landlord and

Tenant acknowledge and agree that (i) the provisions of this Section 22.01

shall control notwithstanding anything to the contrary contained in this Lease,

and (ii) with respect to the rights of Tenant and Landlord in any bankruptcy or

insolvency proceeding relating to Tenant, this Lease shall be interpreted as if

each of the Premises were subject to a separate lease on terms and conditions

identical to those set forth in this Lease and the Annual Rent allocable to the

Premises covered by each separate lease and each such separate lease providing

that a default under any such separate lease constitutes a default under all

other such separate leases.

 

(a)           In

the event that Tenant shall become a debtor under Chapter 7 of the Bankruptcy

Reform Act of 1978, 11 U.S.C. 1 et seq (“Bankruptcy Code”), and Tenant’s

trustee or Tenant shall elect to assume this Lease for the purpose of assigning

the same or otherwise, such election and assignment may be made only if the

provisions of this Section 22.01 are satisfied.  If Tenant or Tenant’s trustee shall fail to assume this

Lease within sixty (60) days after the entry of an order for relief, this Lease

shall be deemed to have been rejected. 

Immediately thereupon Landlord shall be entitled to possession of each

of the Premises without further obligation to Tenant or Tenant’s trustee and

this Lease, upon the election of Landlord, shall terminate, but Landlord’s

right to be compensated for damages shall survive, whether or not this Lease

shall be terminated.

 

(b)           In

the event that a voluntary petition for reorganization is filed by Tenant, or

an involuntary petition is filed against Tenant under Chapter 11 of the

Bankruptcy Code, or in the event of the entry of an order for relief under

Chapter 7 in a case which is then transferred to Chapter 11, Tenant’s trustee

or Tenant, as debtor-in-possession, must elect to assume this Lease within

sixty (60) days from the date of the filing of the petition under Chapter 11 or

the transfer

 

24

 

thereto, or Tenant’s trustee or the debtor-in-possession shall be

deemed to have rejected this Lease. 

Immediately thereupon Landlord shall be entitled to possession of each

of the Premises without further obligation to Tenant or Tenant’s trustee and

this Lease, upon the election of Landlord, shall terminate, but Landlord’s

right to be compensated for damages, shall survive, whether or not this Lease

shall be terminated.

 

(c)           No

election by Tenant’s trustee or the debtor-in-possession to assume this Lease,

whether under Chapter 7 or Chapter 11, shall be effective unless each of the

following conditions has been satisfied:

 

(i)            Tenant’s

trustee or the debtor-in-possession has cured all defaults under this Lease, or

has provided Landlord with evidence satisfactory to Landlord that it will cure

all defaults susceptible of being cured by the payment of money within ten (10)

days from the date of such assumption and that it will cure all other defaults

under this Lease which are susceptible of being cured by the performance of any

act within thirty (30) days after the date of such assumption.

 

(ii)           Tenant’s

trustee or the debtor-in-possession has compensated, or has provided Landlord

with evidence satisfactory to Landlord that, within ten (10) days from the date

of such assumption, that it will compensate Landlord for any actual pecuniary

loss incurred by Landlord arising from the default of Tenant, Tenant’s trustee,

or the debtor-in-possession as indicated in any statement of actual pecuniary

loss sent by Landlord to Tenant’s trustee or the debtor-in-possession.

 

(iii)          Tenant’s

trustee or the debtor-in-possession (A) has provided Landlord with

“Assurance”, as hereinbelow defined, of the future performance of each of the

obligations under this Lease of Tenant, Tenant’s trustee, or the

debtor-in-possession, and (B) shall, in addition to any other security

deposits held by Landlord, deposit with Landlord, as security for the timely

payment of Annual Rent and for the performance of all other obligations of

Tenant under this Lease, an amount equal to three (3) monthly installments of

Annual Rent (at the rate then payable), and (C) pay in advance to Landlord

on the date each installment of Annual Rent is due and payable, one-twelfth of

Tenant’s annual obligations for Impositions to be made by Tenant pursuant to

this Lease.  The obligations

imposed upon Tenant’s trustee or the debtor-in-possession by this Section 22.01

shall continue with respect to Tenant or any assignee of this Lease, after the

conclusion of proceedings under the Bankruptcy Code.

 

(iv)          Such

assumption will not breach or cause a default under any provision of any other

lease, mortgage, financing agreement or other agreement by which Landlord is

bound, relating to the Premises.

 

(d)           For

purposes of Section 22.01(c)(iii) hereof, Landlord and Tenant shall acknowledge

that “Assurance” shall mean no less than:

 

(i)            Tenant’s

trustee or the debtor-in-possession has and will continue to have sufficient

unencumbered assets after the payment of all secured obligations and

 

25

 

administrative expenses

to assure Landlord that sufficient funds will be available to fulfill the

obligations of Tenant under this Lease; and

 

(ii)           To

secure to Landlord the obligations of Tenant, Tenant’s trustee or the

debtor-in-possession and to assure the ability of Tenant, Tenant’s trustee or

the debtor-in-possession to cure the defaults under this Lease, monetary and/or

nonmonetary, there shall have been: (A) sufficient cash deposited with

Landlord, or (B) the bankruptcy court shall have entered an order

segregating sufficient cash payable to Landlord, and/or (C) Tenant’s

trustee or the debtor-in-possession shall have granted to Landlord a valid and

perfected first lien and security interest and/or mortgage in property of

Tenant, Tenant’s trustee or the debtor-in-possession, acceptable as to value

and kind to Landlord.

 

(e)           In

the event that this Lease is assumed in accordance with Section 22.01(b) hereof

and thereafter Tenant is liquidated or files, or has filed against it, a

subsequent petition under any provision of the Bankruptcy Code or any similar

statute for relief of debtors, Landlord may, at its option, terminate this

Lease and all rights of Tenant hereunder, by giving Tenant notice of its

election to so terminate within thirty (30) days after the occurrence of either

of such events.

 

(f)            If

Tenant’s trustee or the debtor-in-possession has assumed this Lease pursuant to

the terms and provisions of this Section 22.01 for the purpose of assigning (or

elects to assign) this Lease, this Lease may be so assigned only if the

proposed assignee has provided adequate assurance of future performance of all

of the terms, covenants and conditions of this Lease to be performed by

Tenant.  Landlord shall be entitled

to receive all consideration for such assignment, whether cash or

otherwise.  As used in this Section

22.01(f) “adequate assurance of future performance” shall mean at least that

clauses (B) and (C) of Section 22.01(c)(iii)hereof and each of the following

conditions, has been satisfied:

 

(i)            The

proposed assignee has furnished Landlord with a current financial statement

audited by a certified public accountant determined in accordance with

generally accepted accounting principles consistently applied indicating a

credit rating, net worth and working capital in amounts which Landlord

reasonably determines to be sufficient to assure the future performance of such

assignee of Tenant’s obligations under this Lease, but in no event indicating a

net worth less than the net worth of the Tenant and any guarantors of this

Lease, on the date of execution hereof.

 

(ii)           Such

assignment will not breach or cause a default under any provision of any other

lease, mortgage, financing agreement or other agreement by which Landlord is

bound, relating to the Premises.

 

(iii)          The

proposed assignment will not release or impair any guarantee under this Lease.

 

(g)           When,

pursuant to the Bankruptcy Code, Tenant’s trustee or the debtor-in-possession

shall be obligated to pay reasonable use and occupancy charges for the use of

the Premises, such charges shall not be less than the Annual Rent and all

additional rent payable by

 

26

 

Tenant under this Lease and shall be paid at the times and when due as

though such charges were Annual Rent and additional rent.

 

(h)           Anything

in this Lease to the contrary notwithstanding, neither the whole nor any portion

of Tenant’s interest in this Lease or its estate in the Premises shall pass to

any trustee, receiver, assignee for the benefit of creditors, or any other

similar person or entity, or otherwise by operation of law under the Bankruptcy

Code or any similar federal statute now or hereinafter enacted, or under the

laws of any state, district or municipality having jurisdiction of the person

or property of Tenant unless Landlord shall have consented to such transfer in

writing.  No acceptance by Landlord

of rent or any other payments from any such trustee, receiver, assignee, person

or other entity shall be deemed to constitute such consent by Landlord nor

shall it be deemed a waiver of Landlord’s right to terminate this Lease for any

transfer of Tenant’s interest under this Lease without such consent.

 

ARTICLE 23

HAZARDOUS

MATERIALS

 

23.01       Representations and Warranties.  Notwithstanding anything to the

contrary which may be contained in this Lease, Tenant represents, warrants and

covenants to Landlord and any mortgagee or beneficiary of Landlord as follows:

 

(a)           To

the best of Tenant’s Knowledge (as defined below), except as set forth in the

environmental and engineering reports for the Premises previously delivered by

Tenant or its affiliates to Landlord and any environmental and engineering

reports for the Premises prepared by Landlord in connection herewith

(collectively, the “Reports”), there are no and have been no violations of the

Relevant Environmental Laws (as hereinafter defined) respecting any of the

Premises and no consent orders have been entered with respect thereto, except

where noncompliance could not reasonably be expected to have a materially

adverse effect on the value or the use or operation of the Premises for its

intended purpose or the ability of Tenant to perform its obligations under this

Lease (a “Material Adverse Effect”).

 

(b)           To

the best of Tenant’s Knowledge and except as set forth in the Reports, there

are no and have been no Hazardous Wastes (as hereinafter defined) or Asbestos

(as hereinafter defined) either at, upon, under or within, or discharged or

emitted at or from, any of the Premises, including, but not limited to, the

air, soil, surface, and ground water; no Hazardous Wastes or Asbestos have

flowed, blown or otherwise become present at any of the Premises from

neighboring land; and no Hazardous Wastes or Asbestos have been removed from

any of the Premises other than those Hazardous Wastes or Asbestos which are

used and/or incidental to the ordinary course of Tenant’s business provided

that the same are used, stored, handled and disposed of in accordance with all

Relevant Environmental Laws and all other applicable Laws, industry standards

and manufacturers specifications.

 

(c)           None

of the Premises will be used for the purpose of storing Hazardous Wastes, and

no such storage or use will otherwise be allowed on any of the Premises which

will cause or increase the likelihood of causing the release of Hazardous

Wastes onto any of the Premises other than those Hazardous Wastes which are

used and/or incidental to the ordinary course of Tenant’s business provided

that the same are used, stored, handled and disposed of in

 

27

 

accordance with all Relevant Environmental Laws and all other

applicable Laws, industry standards and manufacturers specifications.  Neither Tenant, nor to the best of

Tenant’s Knowledge and except as set forth in the Reports any third party, has

installed, used or removed any storage tanks on, from or in connection with the

Premises except in full compliance with all Relevant Environmental Laws, and to

the best of Tenant’s Knowledge, there are no storage tanks or wells (whether

existing or abandoned) located on, under or about the Premises.  To the best of Tenant’s Knowledge,

except as set forth in the Reports, the Property does not consist of any

building materials that contain Hazardous Wastes or Asbestos.

 

(d)           Tenant

is not aware of any claims or litigation, and has not received any

communication from any person (including any governmental authority),

concerning the presence or possible presence of Hazardous Wastes or Asbestos at

or adjacent to any of the Premises or concerning any violation or alleged

violation of the Relevant Environmental Laws respecting any of the

Premises.  Tenant shall promptly

notify Landlord of any such claims and shall furnish Landlord with a copy of

any such communications received by Tenant.

 

(e)           Tenant

shall notify Landlord promptly and in reasonable detail in the event that Tenant

becomes aware of or suspects the presence of Hazardous Wastes or Asbestos

(other than those Hazardous Wastes or Asbestos which are used and/or incidental

to the ordinary course of Tenant’s business provided that the same are used,

stored, handled and disposed of in accordance with all Relevant Environmental

Laws and all other applicable Laws, industry standards and manufacturers

specifications) or a violation of the Relevant Environmental Laws, at or

adjacent to any of the Premises.

 

(f)            Tenant

shall ensure that the Premises complies and continues to comply in all respects

with all Relevant Environmental Laws.

 

(g)           If

the Premises or any part thereof are used or maintained so as to subject

Tenant, Landlord or any mortgagee or beneficiary of Landlord or the user of any

of the Premises to a claim of violation of the Relevant Environmental Laws

(unless contested in good faith by appropriate proceedings), Tenant shall

immediately cease or cause a cessation of such use or operations and shall

remedy and fully cure any conditions arising therefrom, at its own cost and

expense.

 

(h)           Upon

Landlord’s reasonable belief that there is a material breach of one of the

environmental representations or warranties set forth above, Tenant shall

permit Landlord, at its option, at any time upon five (5) days’ prior written

notice to Tenant, to cause or conduct a complete environmental audit to be

performed.  The audit shall be at

Tenant’s sole cost and expense.

 

23.02       Definitions.

 

(a)           The

“Relevant Environmental Laws,” as referred to herein, shall mean all applicable

federal, state and local laws, rules, regulations, orders, judicial

determinations, and decisions or determinations by any judicial, legislative or

executive body of any governmental or quasi-governmental entity, whether in the

past, the present or the future, with respect to: (A) the installation,

existence, or removal of, or exposure to, Asbestos on any of the Premises;

(B) the

 

28

 

existence on, discharge from, or removal from any of the Premises of

Hazardous Wastes; or (C) the effects on the environment of any of the

Premises or of any activity now, previously, or hereafter conducted on any of

the Premises.  The Relevant

Environmental Laws shall include, but not be limited to, the following:

(1) the Comprehensive Environmental Response, Compensation, and Liability

Act, 42 U.S.C. Sections 9601 et seq.; the Superfund Amendments and

Reauthorization Act, Public Law 99-499, 100 Stat. 1613; the Resource Conservation

and Recovery Act, 42 U.S.C. Sections 6901 et seq.; the National Environmental

Policy Act, 42 U.S.C. Section 4321; the Safe Drinking Water Act, 42 U.S.C.

Sections 300F et seq.; the Toxic Substances Control Act, 15 U.S.C. Section

2601; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801; the

Federal Water Pollution Control Act, 33 U.S.C. Sections 1251 et seq.; the Clean

Air Act, 42 U.S.C. Sections 7401 et seq.; and the regulations promulgated in

connection therewith; (2) Environmental Protection Agency regulations

pertaining to Asbestos (including 40 C.F.R. Part 61, Subpart M); Occupational

Safety and Health Administration regulations pertaining to Asbestos (including

29 C.F.R. Sections 1910. 1001 and 1926.58); as each may now or hereafter be amended;

and (3) any other federal, state and local laws and regulations pertaining

to Hazardous Wastes and/or Asbestos;

 

(b)            “Asbestos,” as referred to herein, shall

have the meanings provided under the Relevant Environmental Laws, and shall

include, but not be limited to, asbestos fibers and friable asbestos, as such

terms are defined under the, Relevant Environmental Laws; and

 

(c)            “Hazardous Wastes,” as referred to

herein, shall mean any of the following as defined by the Relevant

Environmental Laws: solid wastes; petroleum and petroleum derivatives; natural

or synthetic gas; radon gas; toxic or hazardous substances, wastes, pollutants

or contaminants (including, but not limited to, polychlorinated biphenyls

(“PCB’s”, paint containing lead, and urea formaldehyde); and discharges of

sewage or effluent.

 

(d)            “Knowledge” shall mean the actual

knowledge of any executive officer after due inquiry of property management.

 

23.03       Tenant’s Obligation. At its sole cost and

expense, Tenant shall:

 

(a)           Pay

immediately when due the cost of compliance with the Relevant Environmental

Laws.

 

(b)           Keep

each of the Premises free of any lien imposed pursuant to the Relevant

Environmental Laws.

 

23.04       Landlord Options.  In the event that Tenant fails to comply with the requirements

of this Article 23, after notice to Tenant and the earlier of the expiration of

any applicable cure period hereunder, or the expiration of the cure period

permitted under the Relevant Environmental Laws, if any, or such earlier time

if Landlord determines that life, person or property is in jeopardy, Landlord

may, but shall not be obligated to, exercise its right to do one or more of the

following: (a) declare that such failure constitutes a default; and/or

(b) take any and all actions, at Tenant’s expense, that Landlord

reasonably deems necessary or desirable to cure said failure of

compliance.  Any costs incurred

pursuant to this Section 23.04 shall become

 

29

 

immediately due and payable by Tenant together with the applicable

Administrative Fee, and shall be paid or reimbursed to Landlord promptly upon

written notice from Landlord.

 

23.05       Indemnity. 

Landlord shall not be liable for and Tenant shall immediately pay to

Landlord when incurred and shall indemnify, defend and hold Landlord and any

mortgagee or beneficiary of Landlord harmless from and against, all loss, cost,

liability, damage and expense (including, but not limited to, attorneys’ fees

and costs incurred in the investigation, defense and settlement of claims) that

Landlord or any mortgagee or beneficiary of Landlord may suffer or incur as a

result of or in connection in any way with any Asbestos or Hazardous Wastes now

or hereafter present, discharged, released, generated, disposed, transported or

emitted to, from, in on or under any of the Premises or in connection with any

violation of any of the Relevant Environmental Laws, or any environmental

assessment or study from time to time undertaken or requested by Tenant or

Landlord, or any breach of any representation, covenant or undertaking by

Tenant herein.

 

23.06       Survival. 

The provisions of this Article 23 shall survive the expiration or

termination of the Lease Term.

 

ARTICLE 24

SUBSTITUTE

PREMISES

 

Tenant shall have the right, from time to time, to substitute a

property for any one of the Premises (collectively, “Substitute Premises”) on

the terms and conditions set forth below provided that Tenant, at Tenant’s sole

cost and expense (except with respect to costs and expenses relating to Clauses

(xiii), (xiv) and (xv), which shall be borne by Landlord and for which Landlord

shall be required to provide satisfactory evidence to Landlord’s Mortgagee

(defined below) of Landlord’s ability to pay such costs as a condition to such

substitution, failure of which shall not constitute a default by Landlord under

this Lease, but shall give Tenant the option to pay for such costs and expenses

and if so paid by Tenant, Tenant shall have the right to offset on the next

Increase Date (and on subsequent Annual Rent payment dates if necessary) any

amount so paid plus interest at the rate set forth in Section 17.03 only from

the amount by which the Annual Rent 

is increased on such Increase Date pursuant to Section 6.02), delivers

to Landlord and any mortgagee or beneficiary of Landlord (“Landlord’s

Mortgagee”) all of the following:

 

(i)            Written

notice of Tenant’s election to provide a Substitute Premises (a “Substitution

Notice”) at least sixty (60) days 

prior to the date on which the substitution transaction is to close (the

“Substitution Date”).  Such

Substitution Notice shall identify the Substitute Premises, the Premises for

which the Substitute Premises is offered as a substitute and the scheduled Substitution

Date;

 

(ii)           On

or prior to the date that is twenty (20) days prior to the Substitution Date,

an appraisal by an independent appraisal firm which is a member of the American

Institute of Real Estate Appraisers of the National Association of Realtors,

with at least ten years’ experience in the valuation of commercial real estate

in the metropolitan area in which the Substitute Premises is located and

otherwise who is reasonably acceptable to the Landlord and the Landlord’s

Mortgagee (x) indicating that the fair market value of the Substitute Premises

(taking into account utility and the remaining useful life of the land and

improvements as if encumbered by this Lease and as vacant assuming a use

comparable to Tenant’s use of the Premises) (the

 

30

 

“Substitute Premises Value”) is not less than the fair market value of

the Premises (taking into account utility and the remaining useful life of the

land and improvements constituting the Premises as encumbered by this Lease and

as vacant assuming a use comparable to Tenant’s use of the Premises) for which

the Substitute Premises is offered as a substitute (the “Premises Value”) and

(y) otherwise reasonably satisfactory in all respects to the Landlord and the

Landlord’s Mortgagee.  In the event

that the Substitute Premises Value is less than the Premises Value, provided

that such differential in value does not exceed ten percent (10%) of the

Premises Value and further provided that all other requirements of this Article

24 are satisfied, Tenant shall deposit with Landlord’s Mortgagee, as additional

collateral for Landlord’s Mortgagee’s loan to Landlord, funds in an amount

equal to the difference between the Substitute Premises Value and the Premises

Value (an “Appraisal Shortfall Deposit”) and the requirement in (x) above shall

be deemed satisfied.  Upon the full

satisfaction of the Landlord’s Mortgagee’s loan, any Appraisal Shortfall

Deposit shall be returned by Landlord’s Mortgagee to Tenant;

 

(iii)          Special

warranty deed (or the approximate local equivalent) in form and substance

satisfactory to the Landlord and the Landlord’s Mortgagee, duly executed and

acknowledged by the Tenant, conveying to the Landlord good and marketable fee

simple title to the land and improvements constituting the Substitute Premises,

subject only to liens and matters of record which are reasonably approved by

Landlord and Landlord’s Mortgagee;

 

(iv)          An

amendment to this Lease duly executed by the Tenant providing for the lease of

the Substitute Premises by the Landlord to the Tenant upon all of the terms and

conditions set forth in this Lease, except that the term shall be equal to the

then remaining term under this Lease, and the Annual Rent for all of the

Premises (including the Substitute Premises and excluding the Premises for

which the Substitute Premises is a substitute) shall be equal to the Annual

Rent under this Lease immediately prior to the substitution;

 

(v)           A

memorandum of lease (or the approximate local equivalent) with respect to the

Substitute Premises, duly executed and acknowledged by the Tenant and in proper

form for recording;

 

(vi)          Such

amendments, supplements and/or confirmations of the Guaranty and of any other

related documents as the Landlord or the Landlord’s Mortgagee reasonably may

require in connection with such substitution, including without limiting the

generality of the foregoing, amendments, supplements and/or confirmations to

any loan agreement, promissory note, mortgage or deed of trust by and between

Landlord and Landlord’s Mortgagee or by Landlord in favor of Landlord’s

Mortgagee (all of the documents in this Clause (vi) and in Clauses (ii) through

(v) above, being referred collectively as the “Substitution Documents”);

 

(vii)         Opinion(s)

of counsel to Tenant, including local counsel in the jurisdiction in which the

Substitute Premises is located, opining, subject only to reasonable and

customary assumptions, exceptions and qualifications (A) that the execution and

delivery by the Tenant of the Substitution Documents and the performance by the

Tenant of its obligations under the Substitution Documents have been duly

authorized by all necessary corporate actions on the part of the Tenant, (B)

that the Substitution Documents have been validly executed and delivered by the

Tenant, (C) that the Substitution Documents constitute the legal, valid and

binding obligations of the Tenant enforceable against the Tenant in accordance

with their respective

 

31

 

terms, (D) that each of the Substitution Documents to be recorded or

filed in the jurisdiction in which the Substitute Premises is located is in

proper form for recording or filing in the appropriate land records or in the

appropriate filing office, as the case may be, in such jurisdiction and, when

recorded or filed, as the case may be, will be effective (x) to validly

transfer legal fee title in the Substitute Premises to the Landlord, (y) to

create a valid leasehold estate in the Substitute Premises in favor of the

Tenant and (z) to create a valid and perfected mortgage lien on the Substitute

Premises in favor of the Landlord’s Mortgagee, and (E) as to such other matters

as the Landlord or the Landlord’s Mortgagee reasonably may require in

connection with the Substitute Premises and the Substitution Documents;

 

(viii)        (A)

to the Landlord’s Mortgagee, a reissued ALTA extended coverage Lender’s Policy

of Title Insurance or an endorsement to the Landlord’s Mortgagee’s ALTA

extended coverage Lender’s Policy of Title Insurance, as applicable, in form

reasonably acceptable to the Landlord’s Mortgagee, issued by the title

insurance company, its successor and/or assigns, which issued Landlord’s

Mortgagee’s existing ALTA extended coverage Lender’s Policy of Title Insurance,

ensuring that the lien of the mortgage or deed of trust in favor of Landlord’s

Mortgagee continues to be a valid first priority mortgage lien on the Premises

and is a valid first priority lien on the Substitute Premises, subject only to

liens and other matters of record reasonably acceptable to Landlord’s Mortgagee

and (B) to the Landlord, an ALTA extended coverage Owner’s Policy of Title

Insurance, issued by a title insurance company reasonably acceptable to

Landlord’s Mortgagee in an amount equal to the fair market value of the

Substitute Premises, and ensuring that the Landlord has good and marketable fee

simple title to the Substitute Premises, subject only to liens and other

matters of record reasonably acceptable to Landlord;

 

(ix)           An

ALTA survey of the Substitute Premises, dated no more than (90) days before the

Substitution Date, certified to the Landlord, the title insurance company

issuing the title insurance or title endorsement referred to in Clause (viii)

above and the Landlord’s Mortgagee, by land surveyor duly registered and licensed

in the state where the Substitute Premises is located and in form and substance

similar to the surveys delivered in connection with the closing of the loan

from Landlord’s Mortgagee to Landlord and otherwise reasonably acceptable to

the Landlord and the Landlord’s Mortgagee;

 

(x)            A

Phase I environmental study in respect of the Substitute Premises by a

qualified, independent environmental consulting firm reasonably acceptable to

the Landlord and the Landlord’s Mortgagee showing that the Substitute Premises

is in full compliance with all applicable environmental laws or otherwise

showing such manner of environmental noncompliance or risk as shall be

acceptable in the reasonable discretion of the Landlord and the Landlord’s

Mortgagee;

 

(xi)           An

engineering study in respect of the Substitute Premises by a qualified,

independent engineering firm reasonably acceptable to the Landlord and the

Landlord’s Mortgagee, reasonably acceptable in form and substance to the

Landlord and the Landlord’s Mortgagee;

 

(xii)          (A)

evidence that Tenant has paid any and all transfer taxes, recording fees,

mortgage recording taxes, intangible taxes and similar charges in connection

with such

 

32

 

substitution and (B) a commitment by the Tenant to pay all of the

reasonable costs and expenses (including reasonable attorney’s fees) incurred

by the Landlord and the Landlord’s Mortgagee and such other persons party to

any Substitution Documents or that shall have provided services in connection

with such substitution;

 

(xiii)         In

the event that the debt of Landlord to Landlord’s Mortgagee shall have been

deposited with a trust or other entity, which trust or other entity shall have

sold certificates to investors evidencing an ownership interest in the assets

of such trust or other entity, or securities collateralized by such debt shall

have been sold to one or more investors (in either event, a “Secondary Market

Transaction”), Standard & Poor’s Ratings Service (and/or any other rating agency

then rating such certificates or securities) shall have confirmed in writing or

Landlord’s Mortgagee has determined to its reasonable satisfaction that the

substitution of the Substitute Premises for the Premises being substituted will

not result in a downgrade, withdrawal or qualification of the rating then

assigned to such certificates or securities;

 

(xiv)        If

requested by Landlord’s Mortgagee, an opinion of tax counsel selected by

Landlord and reasonably acceptable to the Tenant and Landlord’s Mortgagee

confirming that neither the Landlord nor the Landlord’s Mortgagee will suffer

or incur any adverse tax consequences in connection with the substitution;

 

(xv)         In

the event that a Secondary Market Transaction shall have occurred, and if the

debt of the Landlord to the Landlord’s Mortgagee is at such time held by a real

estate mortgage investment conduit (“REMIC”) as defined in Section 860D of the

Internal Revenue Code of 1986, as amended (the “Code”) or a financial asset

securitization investment trust (“FASIT”) as defined in Section 860L of the

Code, an opinion of tax counsel selected by Landlord’s Mortgagee or its

successor in interest confirming that such REMIC or FASIT, as the case may be,

will not fail to maintain its status as a REMIC or FASIT as the result of such

substitution; and

 

(xvi)        Such

other documents, instruments, due diligence, reports and information as the

Landlord or the Landlord’s Mortgagee may reasonably request, it being

understood that a request for documents, instruments, due diligence, reports

and information similar to that delivered at or in connection with the closing

of the loan by Landlord’s Mortgagee to Landlord are deemed reasonable.

 

Upon the satisfaction of all of the conditions contained in Clauses (i)

through (xvi) above and the payment by Tenant to Landlord of any accrued but

unpaid Annual Rent and other amounts, if any, due under this Lease as of the

closing date of such substitution, (x) the Landlord shall convey the Premises

for which the Substitute Premises is a substitute on an “as is, where is” basis

and without recourse to or warranty by the Landlord, except as to the absence

of liens caused or imposed by the Landlord without the knowledge and consent of

the Tenant and subject to the same disclaimers as set forth above, (y)

Landlord’s Mortgagee shall reconvey or release the lien of Landlord’s

Mortgagee’s mortgage or deed of trust with respect to the Premises for which

such substitution is being effectuated, and (z) Tenant shall convey the

Substitute Premises to the Landlord.

 

33

 

ARTICLE 25

GENERAL

PROVISIONS

 

25.01       Estoppel Certificates.  Each party (“Responding Party”) shall

at any time upon not less than fifteen (15) business days’ prior written notice

from the other party (“Requesting Party”) execute, acknowledge, and deliver to

the Requesting Party a statement reasonably satisfactory to Landlord certifying

and acknowledging the following: (i) that this Lease represents the entire

agreement between Landlord and Tenant, and is unmodified and in full force and

effect (or, if modified, stating the nature of such modification and certifying

that this Lease, as so modified, is in full force and effect) and the date to

which the Annual Rent and other charges are paid in advance, if any; and

(ii) that there are not, to the Responding Party’s knowledge, any uncured

defaults on the part of the Requesting Party, or specifying such defaults if

any are claimed.  Any such statement

may be conclusively relied upon by any prospective purchaser, mortgagee or

encumbrancer of the Premises or of the business of the Requesting Party.

 

25.02       Severability.  The invalidity of any provision of this Lease as determined

by a court of competent jurisdiction shall in no way affect the validity of any

other provision hereof.

 

25.03       Entire Agreement.  It is understood that there are no oral or other written

agreements or representations between the parties hereto concerning the subject

matter of this Lease, and that this Lease and the Exhibits hereto supersede and

cancel any and all previous negotiations, arrangements, representations,

brochures, displays, projections, estimates, agreements, and understandings, if

any, made by Landlord or Tenant with respect to the subject matter hereof, and

none thereof shall be used to interpret, construe, supplement, or contradict

this Lease.  This Lease, and the

Exhibits hereto, and all amendments hereto, constitute and shall be considered

to be the only agreement between the parties hereto and their representatives

and agents.  All negotiations and

oral agreements acceptable to both parties have been merged into and are

included herein and in the Exhibits hereto.

 

25.04       Notices.  Any notice required or permitted to be

given hereunder shall be in writing and may be given by personal delivery,

certified mail, return-receipt requested or by nationally recognized overnight

courier service and, if given by mail or courier service, shall be deemed

sufficiently given if addressed to Tenant or to Landlord, as the case may be,

at the addresses noted in Article 1 hereof.  Delivery by courier will be deemed given on the date

indicated in the courier’s records; delivery by certified mail will be deemed

given on the date indicated on the return receipt.  Either party may by notice to the other specify a different

street address for notice purposes. 

A copy of all notices required or permitted to be given hereunder shall

be concurrently transmitted to such party or parties at such addresses as may

from time to time hereafter be designated by notice.

 

25.05       Waivers.  No waiver by a party of any provision

hereof shall be deemed a waiver of any other provision hereof or of any

subsequent breach by the other party of the same of any other provision.  Landlord’s consent to, or approval of,

any act shall not be deemed to render unnecessary the obtaining of Landlord’s

consent to or approval of any subsequent act by Tenant.  The acceptance of rent hereunder by

Landlord shall not be a waiver of any preceding breach by Tenant of any provision

hereof, other than the failure of Tenant to pay the particular rent so

 

34

 

accepted, regardless of Landlord’s knowledge of such preceding breach

at the time of acceptance of such rent.

 

25.06       Recording. 

Either Landlord or Tenant shall, upon request of the other, execute,

acknowledge, and deliver to the other a “short form” memorandum of this Lease

for recording purposes in each county where any of the Premises is

located.  Such memorandum shall be

in a form reasonably acceptable to Landlord and sufficient for Tenant to obtain

a leasehold policy of title insurance based thereon.  In the event of any termination of this Lease, Tenant agrees

to execute and deliver to Landlord one or more termination agreements

satisfactory to Landlord, which termination agreement shall be similarly

recorded.

 

25.07       Holding Over.  If Tenant remains in possession of the Premises or any part

thereof after the expiration or termination of the Lease Term, such occupancy

shall be a tenancy from month-to-month upon all the provisions of this Lease

pertaining to the obligations of Tenant and Tenant shall thereby waive its

rights to any additional notice to quit, but all options, if any, granted under

the terms of this Lease shall be deemed terminated and be of no further force

or effect.  The monthly rental

during such hold-over period shall be equal to one hundred ten percent (110%)

of the monthly installment of Annual Rent payable immediately prior to

expiration or termination of the Lease Term.  In addition, Tenant shall continue to be obligated to pay

all Impositions and other amounts required to be paid by the terms of this

Lease.

 

25.08       Cumulative Remedies.  No remedy or election hereunder shall

be deemed exclusive but shall, wherever possible, be cumulative with all other

remedies at law or in equity.

 

25.09       Choice of Law 

This Lease shall be governed by the laws of the State of California

without regard to conflicts of laws, provided that the laws of the jurisdiction

in which a particular Premises is located shall, to the extent mandated by the

Laws of such jurisdiction, govern the exercise by Landlord of its remedies

under this Lease with respect to such Premises.  Except as may otherwise be required by the Laws of the jurisdiction

in which any of the Premises is located, the parties hereto (i) submit and

consent in advance to the exclusive and in personam jurisdiction of any state

or federal court located within Los Angeles County, California, in any action

or suit pertaining to this Lease or to any matter arising out of or related to

this Lease, (ii) waives any right to transfer or change the venue of

litigation brought under this Lease, and (iii) agrees to service of

process, to the extent permitted by law, by mail.

 

25.10       Attorneys’ Fees.  Should either party institute any action or proceeding to

enforce any provision hereof or for a declaration of such party’s rights or

obligations hereunder, the prevailing party shall be entitled to receive from

the losing party such amounts as the court may adjudge to be reasonable

attorneys’ fees for services rendered to the party prevailing in any such

action or proceeding, and such fees shall be deemed to have accrued upon the

commencement of such action or proceeding.

 

25.11       Force Majeure.  Except for payment obligations imposed pursuant to this

Lease, if there is any prevention, delay, or stoppage of an act required of a

party pursuant to this Lease because of strikes, lockouts, other labor disputes,

material shortages, embargoes, civil unrest, governmental regulations,

governmental controls, enemy or hostile governmental action, judicial order,

public emergency, fire, earthquake, other Acts of God, and other causes (other

than

 

35

 

financial condition beyond the reasonable control of the party

obligated to perform, performance of the act will be excused for the period of

the delay.

 

25.12       Consent.  Whenever the consent or approval of

either party is required pursuant to this Lease, such consent or approval will

not be unreasonably withheld or delayed except as otherwise expressly provided

herein.

 

25.13       Liability of Landlord.

 

(a)           In

the event of any sale or other transfer of Landlord’s interest in any of the

Premises, Landlord shall be and hereby is entirely freed and relieved of all

liabilities and obligations of Landlord hereunder with respect to such Premises

to the extent accruing after the date of such transfer.

 

(b)           Notwithstanding

anything contained herein to the contrary, it is specifically understood and

agreed that there shall be no personal liability of Landlord or any of its

shareholders, members, officers or directors in respect of any of the terms,

covenants, conditions or provisions of this Lease, and in the event of a breach

or default by Landlord of any of its liabilities and obligations under this

Lease, Tenant and any persons claiming by, through or under Tenant shall look

solely to the equity of Landlord in the Premises for the satisfaction of

Tenant’s and/or such persons’ remedies and claims for damages.

 

25.14       No

Merger.  There shall be no

merger of this Lease, or the leasehold estate created by this Lease, with any

other estate or interest in the Premises, or any part thereof, by reason of the

fact that the same person, firm, corporation or other entity may acquire or own

or hold, directly or indirectly, (a) this Lease or the leasehold estate

created by this Lease, or any interest in this Lease or in any such leasehold

estate, and (b) any such other estate or interest in the Premises or any

part thereof, and no such merger shall occur unless and until all persons,

corporations, firms, and other entities having an interest (including a

security interest) in (i) this Lease or the leasehold estate created by this

Lease; and (ii) any such other estate or interest in the Premises, or any

part thereof, shall join in a written instrument effecting such merger and

shall duly record the same.

 

25.15       Reports.  Tenant agrees to furnish to Landlord,

with reasonable promptness upon Landlord’s request:  financial statements, reports and documents which Tenant and

each guarantor of this Lease sends to or makes available to its shareholders,

noteholders or bondholders.

 

25.16       Definition of Rent.  All monetary obligations of Tenant to Landlord under the

terms of this Lease, including, without limitation, all Impositions, Real

Property Taxes and insurance premiums payable hereunder, shall be deemed to be

“rent”.

 

25.17       Interpretation.  The captions by which the Articles and

Sections of this Lease are identified are for convenience only and shall have

no effect upon the interpretation of this Lease.  Whenever the context so requires, singular numbers shall

include the plural, the plural shall refer to the singular, the neuter gender

shall include the masculine and feminine genders, and the words “Landlord” and

“Tenant” and “person” shall include corporations, partnerships, associations,

other legal entities, and individuals.

 

36

 

25.18       Relationship of the Parties.  Nothing in this Lease shall create a

partnership, joint venture, employment relationship, borrower and lender

relationship, or any other relationship between Landlord and Tenant other than

the relationship of landlord and tenant.

 

25.19       Successors. 

This Lease shall be binding upon and inure to the benefit of the parties

hereto and their respective personal and legal representatives, heirs,

successors, and assigns.

 

25.20       Modifications. This Lease may not be altered,

amended, changed, terminated, or modified in any manner unless the same shall

be in writing and signed by or on behalf of the party to be bound.  No waiver of any provision of this

Lease of any right of Landlord hereunder shall be effective unless in writing

signed by or on behalf of the person to be bound.

 

25.21       Brokerage Fees.  Landlord and Tenant each represent and warrant that they

have not employed a broker in connection with the execution of this Lease.  Landlord and Tenant shall each

indemnify and hold the other harmless from and against any claim or claims for

brokerage or other commissions arising from such party having employed a broker

contrary to its representation in this Section 25.21.

 

37

 

25.22       Not Binding Until Executed.  This Lease does not constitute an

“offer” and is not binding until fully executed and delivered by Landlord.

 

	

   

  	

  LANDLORD:

  
	

   

  	

   

  
	

   

  	

  ARG

  PROPERTIES II, LLC, a California

  limited liability company

  
	

   

  	

   

  
	

   

  	

  By:

  	

  ARG Properties (DE) Corporation II,

  a Delaware corporation, its Manager

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  By

  	

   

  	

   

  
	

   

  	

   

  	

  Kevin A. Shields, President

  	

   

  
	

   

  	

   

  	

  Date:

  	

   

  	

   

  
								

 

	

   

  	

  TENANT:

  
	

   

  	

   

  
	

   

  	

  ARG

  Enterprises, Inc., a California

  corporation

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  	

   

  
	

   

  	

  Its

  	

   

  	

   

  
	

   

  	

  Date:

  	

   

  	

   

  
						

 

38

 

	

  STATE OF CALIFORNIA

  	

  )

  	

   

  
	

   

  	

  ) ss.

  	

   

  
	

  COUNTY OF

  	

   

  	

  )

  	

   

  
				

 

The foregoing instrument was acknowledged before me this                      

day of                     

, 199    , by                          

, as                      

of                                   

, a                              ,

on behalf of                                     

..

 

	

   

  	

   

  
	

   

  	

  Notary Public

  
	

   

  	

  Los Angeles County, California

  
	

   

  	

  My Commission Expires:

  	

   

  
	

   

  	

  [Notary Public’s Seal]

  

 

	

  STATE OF CALIFORNIA

  	

  )

  	

   

  
	

   

  	

  ) ss.

  	

   

  
	

  COUNTY OF

  	

   

  	

  )

  	

   

  
				

 

The foregoing instrument was acknowledged before me this                      

day of                      

, 199     

, by                      

, as                       

of ARG Enterprises, Inc., a California corporation, on behalf of ARG

Enterprises, Inc.

 

	

   

  	

   

  
	

   

  	

  Notary Public

  
	

   

  	

  Los Angeles County, California

  
	

   

  	

  My Commission Expires:

  	

   

  
	

   

  	

  [Notary Public’s Seal]

  

 

 

EXHIBIT

A

TO

LEASE

 

[Insert

legal description of Premises]

 

1

 

EXHIBIT

B

TO

LEASE

 

Recording

Requested By

and When Recorded Mail To:

 

American

Restaurant Group, Inc.

Attn:  Law Department

4410 El Camino Real, Suite 201

Los Altos, California  94022

 

 

SUBORDINATION,

NON-DISTURBANCE AND

ATTORNMENT AGREEMENT[ AND NOTICE OF NON-RESPONSIBILITY]

 

THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT[ AND

NOTICE OF NON-RESPONSIBILITY] (this “Agreement”) is made and entered into as of

the               

day of                                 

, 199     ,

by and among (i) ARG Enterprises, Inc., a California corporation (“Tenant”);

(ii) ARG Properties II, LLC, a California limited liability company

(“Landlord”); and (iii) [LENDER], [ENTITY] (“Lender”).

 

WITNESSETH:

 

WHEREAS, Lender is the holder of that certain mortgage/deed of trust,

dated                                

          ,             

(“Mortgage/Deed of Trust”) encumbering those certain parcels of real

property and the improvements thereon, relating to                     

(      

) restaurant assets commonly known as either Stuart Anderson’s Black

Angus or Stuart Anderson’s Cattle Company restaurant(s) located at and more

particularly described in Exhibit 1 attached hereto and incorporated herein by

this reference (individually and collectively, “Property”);

 

WHEREAS, Lender and Landlord are parties to the Mortgage/Deed of Trust,

pursuant to which Landlord financed the Property with Lender; and

 

WHEREAS, Landlord and Tenant are parties to that certain Lease,

dated                    

, 1996 (the “Lease”), pursuant to which Tenant leased the Property from

Landlord.

 

NOW, THEREFORE, in consideration for the mutual covenants and

agreements contained herein, the sufficiency of which is hereby acknowledged,

the parties hereto hereby agree as follows:

 

1.             Subordination.  Subject to the terms of this Agreement,

the Lease, and the rights of Tenant in, to and under the Lease and the

Property, are hereby made subject, junior, and subordinate in all respects to

the Mortgage/Deed of Trust and to all renewals, modifications, consolidations,

replacements, and extensions thereof and to the respective rights of Lender

thereunder as if all such instruments had been executed, delivered and recorded

prior to the

 

1

 

execution of the Lease. 

This clause shall be self-operative, and no further instrument shall be

required.  However, Tenant

covenants and agrees that if requested by Lender it will execute, acknowledge

and deliver any instrument or document reasonably requested to confirm the foregoing

subordination of the Lease within twenty (20) days after receipt of written

request therefor.

 

2.             Non-Disturbance.  So long as Tenant is not in default

beyond any applicable grace or cure period in the payment of rent or any other

sums payable under the Lease or in the performance of any of the other terms,

covenants or conditions of the Lease on Tenant’s part to be performed, then:

(a) Tenant’s possession of the Property shall not be diminished or

interfered with by Lender or any third-party purchaser; (b) the Lease

shall not be terminated or affected by the foreclosure of the Mortgage/Deed of

Trust or the Lender’s exercise of any remedy provided for in the Mortgage/Deed

of Trust; and (c) in the event that Lender forecloses upon the Property,

Lender shall elect to preserve the Lease as a lease between Lender and Tenant

in accordance with the terms of this Agreement.

 

3.             Attornment.  In the event that the Lender forecloses

upon the Property, then:

 

(a)           Tenant

shall be bound to Lender, and Lender shall be bound to Tenant, under all of the

terms, covenants and conditions of the Lease for the balance of the term

thereof remaining, and any extensions or renewals thereof which may be effected

in accordance with any option therefor contained in the Lease, with the same

force and effect as if Lender were the original landlord under the Lease,

except that Paragraph 3(b) below and the other provisions of this Agreement

shall modify the Lease, and Tenant does hereby attorn to Lender as its

landlord, said attornment to be effective and self-operative without the

execution of any further instruments; provided, however, that within twenty

(20) days after receipt of written request therefor from Lender, Tenant will

execute and deliver to Lender any instrument or other documents reasonably

requested by Lender to confirm Tenant’s attornment to Lender.

 

(b)           It

is agreed that in no event shall Lender:

 

(1)                                be

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

 

(2)                                be

obligated to cure any defaults of any prior landlord (including Landlord) which

occurred prior to the date that Lender succeeded to the interest of such prior

landlord under the Lease; provided that from and after the date Lender becomes

owner of the Property, Lender shall be obligated to cure any continuing default

of the landlord under the Lease to the extent such default is capable of being

cured by Lender;

 

(3)                                be

subject to any offsets or defenses which Tenant may be entitled to assert

against any prior landlord (including Landlord) with respect to events

occurring prior to the date Lender succeeded to Landlord’s interest;

 

2

 

(4)                                be

bound by any Annual Rent or other amounts paid by Tenant to any prior landlord

(including Landlord) more than one (1) month in advance of the date that Lender

succeeded to the interest of such prior landlord under the Lease; or

 

(5)                                be

bound by any amendment or modification of the Lease or any supplemental

agreement made without the written consent of Lender, such consent not to be

unreasonably withheld.

 

4.             Payment

of Rent to Lender.  Tenant

agrees to pay the Annual Rent and any other payments due under the Lease to

Lender upon receipt of written notice from Lender that it has succeeded to the

interest of Landlord under the Lease, and Landlord agrees that Tenant is

entitled to rely conclusively upon such notice without any duty of inquiry.

 

5.             Limitation

on Liability of Lender.  There

shall be no personal liability on the part of Lender or any officer, director,

employee, shareholder or partner of Lender for the performance of the Lease or

any covenant or agreement contained therein or in this Agreement.  Tenant shall look solely to Lender’s

estate and interest in the Property for the satisfaction of every remedy of

Tenant for any breach by Lender under the Lease or this Agreement or otherwise

arising out of or in connection with the Lease, and Tenant will not collect or

attempt to collect any such claim out of any other assets of Lender.

 

6.             Performance

by Lender: Conflict.  Nothing

in this Agreement shall be or be deemed to be an agreement by Lender to perform

any obligation of Landlord under the Lease unless and until the Lender acquires

the Property, and then only if required to do so by the terms of the Lease, as

modified and limited by this Agreement. 

In the event of any conflict between the terms of this Agreement and the

terms of the Lease, the terms of this Agreement shall control.

 

7.             Notices.  Any notice required or permitted to be

given hereunder shall be in writing and may be given by personal delivery,

certified mail, return receipt requested or by nationally recognized overnight

courier service and, if given by mail or by courier service, shall be deemed

sufficiently given if addressed to the parties at the addresses set forth below.  Delivery by courier will be deemed

given on the date indicated in the courier’s records; delivery by certified

mail will be deemed given on the date indicated on the return receipt.  Any party may by notice specify a

different street address for notice purposes.

 

Addresses for Notices:

 

To Lender:                                                                                                                                      [LENDER]

___________________________

___________________________

___________________________

 

3

 

To Landlord:                                                                                                                           ARG

Properties II, LLC

c/o Griffin Capital

10940 Wilshire Blvd., Suite 1600

Los Angeles, CA 90024

Attn:       Kevin

A. Shields

Fax:         (310)

443-4117

 

To Tenant:                                                                                                                                     ARG

Enterprises, Inc.

6th Floor

450 Newport Center Drive

Newport Beach, CA  92660

Attn:       Director

of Real Estate

Fax:         (949)

721-8941

 

With a copy to:                                                                                                             American

Restaurant Group, Inc.

Suite 201

4410 El Camino Real

Los Altos, CA  94022

Attn:       Legal

Department

Fax:         (650)

949-6420

 

With a copy to:                                                                                                             Stuart

Anderson’s Restaurants

4410 El Camino Real, Suite 201

Los Altos, California  94022

Attn:       Director

of Real Estate

Fax:         (650)

949-6245

 

8.             Successors

and Assigns.  This Agreement

and each and every covenant and provision contained herein shall be binding

upon and shall inure to the benefit of the parties hereto and their respective

representatives, successors and assigns.

 

9.             Modifications,

Counterparts.  This Agreement

shall not be modified or amended in whole or in part except by a writing

executed by all of the parties hereto or their respective representatives,

successors or assigns.  This

Agreement may be executed in one or more counterparts, each of which shall be

deemed to be an original and all of which shall constitute one and the same

instrument.

 

10.           Governing

Law; Jurisdiction.  This

Agreement shall be governed by and construed in accordance with the laws of the

jurisdiction in which the Property is located.

 

11. [         NOTICE

OF NON-RESPONSIBILITY.  NOTICE

IS HEREBY GIVEN THAT NEITHER LANDLORD NOR ANY LENDER WILL BE LIABLE OR

RESPONSIBLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO

TENANT, OR TO ANYONE HOLDING AN INTEREST IN THE PROPERTY OR ANY PART THEREOF

THROUGH OR UNDER TENANT, AND THAT NO MECHANIC’S OR OTHER LIENS FOR ANY SUCH

LABOR, SERVICES OR MATERIALS SHALL ATTACH

 

4

 

TO OR AFFECT THE INTEREST OF LANDLORD OR ANY LENDER IN AND TO THE

PROPERTY.]

 

[SIGNATURE

PAGE FOLLOWS]

 

5

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be

executed and delivered as of the date set forth below.

 

	

   

  	

  TENANT:

  
	

   

  	

   

  
	

   

  	

  ARG

  Enterprises, Inc.

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

  Its

  	

   

  
	

   

  	

  Dated:

  	

   

  
				

 

 

	

   

  	

  LANDLORD:

  
	

   

  	

   

  
	

   

  	

  ARG

  PROPERTIES II, LLC 

  

  
	

   

  	

   

  
	

   

  	

   

  
	

   

  	

  By:

  	

  ARG Properties (DE) Corporation II,

  its Manager

  
	

   

  	

   

  
	

   

  	

   

  	

  By

  	

   

  
	

   

  	

   

  	

  Its

  	

   

  
	

   

  	

   

  	

  Dated:

  	

   

  
					

 

 

	

   

  	

  LENDER:

  
	

   

  	

   

  
	

   

  	

  [LENDER]

  
	

   

  	

   

  
	

   

  	

  By

  	

   

  
	

   

  	

  Its

  	

   

  
	

   

  	

  Dated:

  	

   

  
				

 

6

 

CALIFORNIA ALL-PURPOSE NOTARY

ACKNOWLEDGMENT

 

	

  State of                           

  

  County of                             

  

  On this            

  day of,                           

  199     

  , before me,

  	

  *** OPTIONAL

  SECTION ***

  CAPACITY

  CLAIMED BY SIGNER

  
	

   

  	

  Through statute does not

  require the Notary to fill in the

  
	

   

  	

  data below, doing so may prove

  invaluable to persons 

  
	

  ,

  	

  relying on the document 

  
	

  Name,

  Title of Officer

  	

   

  
	

   

  	

   o     INDIVIDUAL

  
	

  personally appeared

  	

  ,

  	

   o     CORPORATE OFFICERS(S)

  
	

   

  	

  Name(s)

  of Signer(s)

  	

   o     PARTNER(S)     o      LIMITED

  
	

  o personally known to me - OR - o proved to me on the basis of  satisfactory evidence to be the

  person(s) whose name(s) is/are subscribed to the within instrument and

  acknowledged to me that he/she/they executed the same in his/her/their

  authorized capacity(ies), and that by his/her/their signature(s) on the

  instrument the person(s), or the entity upon behalf of which the person(s)

  acted, executed the instrument. 

  	

                                      

  o      GENERAL

  
	

   o     ATTORNEY-IN-FACT

  
	

   o     TRUSTEE(S)

  
	

   o     GUARDIAN/CONSERVATOR

  
	

   o     OTHER:

  	

   

  
	

   

  	

   

  	

   

  
	

  WITNESS my hand and official

  seal.

  	

  SIGNER IS REPRESENTING:

  
	

   

  	

  NAME OF PERSON(S) OR ENTITY(IES)

  
	

   

  	

   

  
	

  SIGNATURE

  OF NOTARY

  	

   

  

 

 

	

   

  
	

  *******************************

  OPTIONAL SECTION *****************************

  
	

   

  
	

  THIS CERTIFICATE MUST BE

  ATTACHED TO THE DOCUMENT DESCRIBED BELOW:

  
	

  TITLE OR TYPE OF DOCUMENT

  
	

  NUMBER OF PAGES                     

  DATE OF DOCUMENT                                                                            

  

  
	

  SIGNER(S) OTHER THAN NAMED

  ABOVE                                                                                                   

  

  
	

  Though the data requested here

  is not required by law, it could prevent fraudulent reattachment of this

  form.

  
	

   

  

 

 

CALIFORNIA ALL-PURPOSE NOTARY

ACKNOWLEDGMENT

 

	

  State of                           

  

  County of                             

  

  On this            

  day of,                      

       199      , before me,

  	

  *** OPTIONAL

  SECTION ***

  CAPACITY

  CLAIMED BY SIGNER

  
	

   

  	

  Through statute does not

  require the Notary to fill in the data below, doing so may prove invaluable

  to persons  relying on the

  document 

  
	

   

  
	

  ,

  
	

  Name,

  Title of Officer

  	

   

  
	

   

  	

   o     INDIVIDUAL

  
	

  personally appeared

  	

  ,

  	

   o     CORPORATE OFFICERS(S)

  
	

   

  	

  Name(s)

  of Signer(s)

  	

   o     PARTNER(S)     o      LIMITED

  
	

  o personally known to me - OR - o proved to me on the basis of satisfactory

  evidence to be the person(s) whose name(s) is/are subscribed to the within

  instrument and acknowledged to me that he/she/they executed the same in

  his/her/their authorized capacity(ies), and that by his/her/their

  signature(s) on the instrument the person(s), or the entity upon behalf of

  which the person(s) acted, executed the instrument. 

  	

                                      

  o      GENERAL

  
	

   o     ATTORNEY-IN-FACT

  
	

   o     TRUSTEE(S)

  
	

   o     GUARDIAN/CONSERVATOR

  
	

   o     OTHER:

  	

   

  
	

   

  	

   

  	

   

  
	

  WITNESS my hand and official

  seal.

  	

  SIGNER IS REPRESENTING:

  
	

   

  	

  NAME OF PERSON(S) OR

  ENTITY(IES)

  
	

   

  	

   

  
	

  SIGNATURE

  OF NOTARY

  	

   

  

 

 

	

   

  
	

  *******************************

  OPTIONAL SECTION *****************************

  
	

   

  
	

  THIS CERTIFICATE MUST BE

  ATTACHED TO THE DOCUMENT DESCRIBED BELOW:

  
	

  TITLE OR TYPE OF DOCUMENT

  
	

  NUMBER OF PAGES            

           DATE OF

  DOCUMENT                                                   

  

  
	

  SIGNER(S) OTHER THAN NAMED

  ABOVE                                                                             

  

  
	

  Though the data requested here

  is not required by law, it could prevent fraudulent reattachment of this

  form.

  

 

 

CALIFORNIA ALL-PURPOSE NOTARY

ACKNOWLEDGMENT

 

	

  State of                           

  

  County of                             

  

  On this            

  day of,                           

  199     

  , before me,

  	

  *** OPTIONAL

  SECTION ***

  CAPACITY

  CLAIMED BY SIGNER

  
	

   

  	

  Through statute does not

  require the Notary to fill in the data below, doing so may prove invaluable

  to persons relying on the document 

  
	

   

  
	

  ,

  
	

  Name,

  Title of Officer

  	

   

  
	

   

  	

   o     INDIVIDUAL

  
	

  personally appeared

  	

  ,

  	

   o     CORPORATE OFFICERS(S)

  
	

   

  	

  Name(s)

  of Signer(s)

  	

   o     PARTNER(S)     o      LIMITED

  
	

  o personally known to me - OR - o proved to me on the basis of satisfactory

  evidence to be the person(s) whose name(s) is/are subscribed to the within

  instrument and acknowledged to me that he/she/they executed the same in

  his/her/their authorized capacity(ies), and that by his/her/their

  signature(s) on the instrument the person(s), or the entity upon behalf of

  which the person(s) acted, executed the instrument. 

  	

                                      

  o      GENERAL

  
	

   o     ATTORNEY-IN-FACT

  
	

   o     TRUSTEE(S)

  
	

   o     GUARDIAN/CONSERVATOR

  
	

   o     OTHER:

  	

   

  
	

   

  	

   

  	

   

  
	

  WITNESS my hand and official

  seal.

  	

  SIGNER IS REPRESENTING:

  
	

   

  	

   

  
	

   

  	

  NAME OF PERSON(S) OR

  ENTITY(IES)

  
	

   

  	

   

  
	

  SIGNATURE

  OF NOTARY 

  	

   

  

 

	

   

  
	

  *******************************

  OPTIONAL SECTION *****************************

  
	

   

  
	

  THIS CERTIFICATE MUST BE

  ATTACHED TO THE DOCUMENT DESCRIBED BELOW:

  
	

  TITLE OR TYPE OF DOCUMENT

  
	

  NUMBER OF PAGES                     

  DATE OF DOCUMENT                                                               

  
	

  SIGNER(S) OTHER THAN NAMED

  ABOVE                                                                                     

  

  
	

  Though the data requested here

  is not required by law, it could prevent fraudulent reattachment of this

  form.

  

 

 

EXHIBIT

1 to

SUBORDINATION,

NONDISTURBANCE AND ATTORNMENT AGREEMENT

[Insert legal description of the Premises.]

 

 

EXHIBIT C

(Article 5)

 

	

  RECORDING

  REQUESTED BY AND

  WHEN RECORDED RETURN TO:

   

   

  Orrick,

  Herrington & Sutcliffe LLP

  777 South Figueroa Street

  Suite 3200

  Los Angeles, California  90017

  Attn:  Michael A. McAndrews, Esq.

   

  

(Space

above this line for Recorder’s use)

 

 

NOTICE

OF NON-RESPONSIBILITY OF OWNER

 

NOTICE IS HEREBY GIVEN that the undersigned, ARG Properties II, LLC, a

California limited liability company (“Owner”), is the owner of the real

property located in the City of                           

, County of                           

, commonly identified as                                          

                                                                     ,

and more particularly described in Exhibit A attached hereto (the

“Property”).

 

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

lessee of the Property.

 

That on                                   ,

the undersigned first obtained knowledge that certain remodeling, construction,

repair, or other work of or to the building or other improvements located on

the Property was being performed on the Property, and that materials,

equipment, labor, services and supplies were being supplied in connection

therewith.

 

 

That neither the Owner nor any mortgagee or beneficiary of Owner will

be responsible for such work, materials, equipment, labor, services or supplies

or for any mechanics’, materialmens’ or other lien that may be claimed in

connection therewith.

 

	

   

  	

  Dated:

  	

   

  	

  .

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  ARG PROPERTIES II, LLC,

  a California limited

  liability company

  
	

   

  	

   

  	

   

  	 

	

   

  	

  By:

  	

  ARG Properties (DE)

  Corporation II, Manager

  	 

	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

  By:

  	

   

  	

   

  	 

	

   

  	

   

  	

  Its:

  	

   

  	

   

  	 

									

 

 

The undersigned acknowledges that it has read the foregoing Notice of

Non-Responsibility and knows its contents, and it is true to the undersigned’s

own knowledge.

 

Executed at Los Angeles, California on                                   

..

 

The undersigned declares under penalty of perjury that the foregoing is

true and correct.

 

	

   

  	

  ARG ENTERPRISES, INC.,

  a California

  corporation

  
	

   

  	

   

  
	

   

  	

  By:

  	

   

  	

   

  
	

   

  	

  Its:

  	

   

  	

   

  

 

 

CALIFORNIA ALL-PURPOSE NOTARY

ACKNOWLEDGMENT

 

	

  State of                           

  

  County of                  

             

  On this            

  day of,                           

  199     

  , before me,

  	

  *** OPTIONAL

  SECTION ***

  CAPACITY

  CLAIMED BY SIGNER

  
	

   

  	

  Through statute does not

  require the Notary to fill in the data below, doing so may prove invaluable

  to persons relying on the document 

  
	

   

  
	

  ,

  
	

  Name,

  Title of Officer

  	

   

  
	

   

  	

   o     INDIVIDUAL

  
	

  personally appeared

  	

  ,

  	

   o     CORPORATE OFFICERS(S)

  
	

   

  	

  Name(s)

  of Signer(s)

  	

   o     PARTNER(S)     o      LIMITED

  
	

  o personally known to me - OR - o proved to me on the basis of satisfactory

  evidence to be the person(s) whose name(s) is/are subscribed to the within

  instrument and acknowledged to me that he/she/they executed the same in

  his/her/their authorized capacity(ies), and that by his/her/their

  signature(s) on the instrument the person(s), or the entity upon behalf of

  which the person(s) acted, executed the instrument. 

  	

                                      

  o      GENERAL

  
	

   o     ATTORNEY-IN-FACT

  
	

   o     TRUSTEE(S)

  
	

   o     GUARDIAN/CONSERVATOR

  
	

   o     OTHER:

  	

   

  
	

   

  	

   

  
	

  WITNESS my hand and official

  seal.

  	

  SIGNER IS REPRESENTING:

  
	

   

  	

  NAME OF PERSON(S) OR

  ENTITY(IES)

  
	

   

  	

   

  
	

  SIGNATURE

  OF NOTARY 

  	

   

  

 

	

   

  
	

  *******************************

  OPTIONAL SECTION *****************************

  
	

   

  
	

  THIS CERTIFICATE MUST BE

  ATTACHED TO THE DOCUMENT DESCRIBED BELOW:

  
	

  TITLE OR TYPE OF DOCUMENT

  
	

  NUMBER OF PAGES                     

  DATE OF DOCUMENT                                                                               

  

  
	

  SIGNER(S) OTHER THAN NAMED

  ABOVE                                                        

                                                

  
	

  Though the data requested here

  is not required by law, it could prevent fraudulent reattachment of this

  form.

  

 

 

EXHIBIT D

 

ARG PROPERTIES II, LLC

 

Allocated Rent Schedule

 

	

  Prop.

  Num.

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Allocated

  Rent Amount

  	

   

  
	

   

  	

  Property

  Address

  	

   

  	

   

  
	

  1014

  	

   

  	

  6601 Florin Road, Sacramento

  	

   

  	

  CA

  	

   

  	

  $

  	

  175,325

  	

   

  
	

  1015

  	

   

  	

  1000 Graves Avenue, El Cajon

  	

   

  	

  CA

  	

   

  	

  $

  	

  255,925

  	

   

  
	

  1025

  	

   

  	

  707 E Street, Chula Vista

  	

   

  	

  CA

  	

   

  	

  $

  	

  260,000

  	

   

  
	

  1065

  	

   

  	

  1616 Sisk Road, Modesto

  	

   

  	

  CA

  	

   

  	

  $

  	

  250,000

  	

   

  
	

  1067

  	

   

  	

  3610 Park Sierra Boulevard, Riverside

  	

   

  	

  CA

  	

   

  	

  $

  	

  255,000

  	

   

  
	

  1069

  	

   

  	

  7111 Beach Boulevard, Buena Park

  	

   

  	

  CA

  	

   

  	

  $

  	

  225,000

  	

   

  
	

  1075

  	

   

  	

  23221 Lake Center Drive, Lake Forest

  	

   

  	

  CA

  	

   

  	

  $

  	

  240,000

  	

   

  
	

  1087

  	

   

  	

  3601 Rosedale Highway, Bakersfield

  	

   

  	

  CA

  	

   

  	

  $

  	

  276,050

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Total

  	

   

  	

   

  	

   

  	

  $

  	

  1,937,300

  	

   

  
										

 

 

 

TABLE OF

CONTENTS

 

	

  ARTICLE 1  

  	

  FUNDAMENTAL LEASE

  PROVISIONS   

  	

    

  
	

   

  	

    

  
	

  ARTICLE

  2  

  	

  EXHIBITS

  
	

   

  	

   

  
	

  ARTICLE

  3  

  	

  PREMISES

  
	

   

  	

   

  
	

  ARTICLE

  4  

  	

  TERM

  

  
	

   

  	

   

  
	

   

  	

  4.01

  	

  Term

  
	

   

  	

   

  	

   

  
	

   

  	

  4.02  

  	

  Option to Extend Lease Term

  

  
	

   

  	

    

  	

    

  
	

  ARTICLE

  5  

  	

  LIENS

  
	

   

  	

   

  
	

  ARTICLE

  6

  	

  RENT

  
	

   

  	

   

  
	

   

  	

  6.01

  	

  Rent

  
	

   

  	

   

  	

   

  
	

   

  	

  6.02

  	

  Rental Adjustments

  
	

   

  	

   

  	

   

  
	

   

  	

  6.03

  	

  Net Lease; Impositions  

  
	

   

  	

   

  	

   

  
	

  ARTICLE

  7

  	

  USE

  OF THE PREMISES

  
	

   

  	

   

  
	

   

  	

  7.01

  	

  Use

  
	

   

  	

   

  	

   

  
	

   

  	

  7.02

  	

  Compliance With Laws

  
	

   

  	

   

  	

   

  
	

   

  	

  7.03

  	

  Permits and Licenses

  
	

   

  	

   

  	

   

  
	

  ARTICLE

  8

  	

  UTILITIES

  
	

   

  	

   

  
	

   

  	

  8.01

  	

  Payment

  
	

   

  	

   

  	

   

  
	

   

  	

  8.02

  	

  Interruption in Service

  
	

   

  	

   

  	

   

  
	

  ARTICLE

  9

  	

  TAXES

  
	

   

  	

   

  
	

   

  	

  9.01

  	

  Payment of Taxes

  
	

   

  	

   

  	

   

  
	

   

  	

  9.02

  	

  Definition of

  “Real Property Taxes”

  
	

   

  	

   

  	

   

  
	

   

  	

  9.03

  	

  Personal Property Taxes

  
	

   

  	

   

  	

   

  
	

   

  	

  9.04

  	

  Tenant’s Right to

  Contest Taxes

  
	

   

  	

   

  	

   

  
	

   

  	

  9.05

  	

  Survival of

  Tenant’s Tax Obligations.

  
	

   

  	

   

  	

   

  
	

  ARTICLE 10

  	

  MAINTENANCE AND

  REPAIRS

  
	

   

  	

   

  
	

   

  	

  10.01

  	

  Tenant’s Obligations

  
	

   

  	

   

  	

   

  
	

   

  	

  10.02

  	

  Landlord’s Obligations

  
	

   

  	

   

  	

   

  
	

   

  	

  10.03

  	

  Landlord’s Rights

  
	

   

  	

   

  	

   

  
	

  ARTICLE 11

  	

  INSURANCE AND

  INDEMNIFICATION

  
	

   

  	

   

  
	

   

  	

  11.01

  	

  Tenant’s Insurance

  Obligation

  
	

   

  	

   

  	

   

  
	

   

  	

  11.02

  	

  Subrogation Waiver

  
				

 

i

 

	

   

  	

  11.03

  	

  Insurance Use Restrictions

  
	

   

  	

   

  	

   

  
	

   

  	

  11.04

  	

  Indemnification

  
	

   

  	

   

  	

   

  
	

   

  	

  11.05

  	

  Payment of Insurance

  
	

   

  	

   

  	

   

  
	

  ARTICLE 12

  	

  ALTERATIONS

  
	

   

  	

   

  
	

   

  	

  12.01

  	

  Permitted Improvements

  
	

   

  	

   

  	

   

  
	

   

  	

  12.02

  	

  Liens

  
	

   

  	

   

  	

   

  
	

   

  	

  12.03

  	

  Structural Alterations

  
	

   

  	

   

  	

   

  
	

   

  	

  12.04

  	

  Removal of Alterations

  
	

   

  	

   

  	

   

  
	

   

  	

  12.05

  	

  Alterations Required by Law

  
	

   

  	

   

  	

   

  
	

   

  	

  12.06

  	

  General

  Conditions Relating to Alterations

  
	

   

  	

   

  	

   

  
	

  ARTICLE

  13

  	

  SIGNS

  
	

   

  	

   

  
	

  ARTICLE 14

  	

  DAMAGE,

  DESTRUCTION, OBLIGATION TO REBUILD

  
	

   

  	

   

  
	

   

  	

  14.01

  	

  Obligation to Rebuild

  
	

   

  	

   

  	

   

  
	

   

  	

  14.02

  	

  No Abatement of Rent

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

  ARTICLE 15

  	

  EMINENT DOMAIN

  
	

   

  	

   

  
	

   

  	

  15.01

  	

  Total

  Taking

  
	

   

  	

   

  	

   

  
	

   

  	

  15.02

  	

  Partial

  Taking

  
	

   

  	

   

  	

   

  
	

   

  	

  15.03

  	

  Award

  
	

   

  	

   

  	

   

  
	

   

  	

  15.04

  	

  Transfer Under Threat

  of Taking

  
	

   

  	

   

  	

   

  
	

   

  	

  15.05

  	

  Adjustment

  of Annual Rent in connection with Takings.

  
	

   

  	

   

  	

   

  
	

  ARTICLE 16

  	

  ASSIGNMENT AND

  SUBLETTING

  
	

   

  	

   

  
	

   

  	

  16.01

  	

  Landlord’s Consent

  Required

  
	

   

  	

   

  	

   

  
	

   

  	

  16.02

  	

  Assumption of Obligations

  
	

   

  	

   

  	

   

  
	

   

  	

  16.03

  	

  Assignment to Affiliate

  
	

   

  	

   

  	

   

  
	

   

  	

  16.04

  	

  No Release of Tenant

  
	

   

  	

   

  	

   

  
	

  ARTICLE 17

  	

  DEFAULT; REMEDIES

  
	

   

  	

   

  
	

   

  	

  17.01

  	

  Default

  
	

   

  	

   

  	

   

  
	

   

  	

  17.02

  	

  Remedies

  
	

   

  	

   

  	

   

  
	

   

  	

  17.03

  	

  Administrative

  Fee

  
	

   

  	

   

  	

   

  
	

   

  	

  17.04

  	

  Default by Landlord

  
	

   

  	

   

  	

   

  
	

   

  	

  17.05

  	

  Mitigation

  
				

 

ii

 

	

   

  	

  17.06

  	

  Lender’s Right to Cure

  
	

   

  	

   

  	

   

  
	

  ARTICLE 18

  	

  SUBORDINATION

  
	

   

  	

   

  
	

  ARTICLE 19

  	

  QUIET ENJOYMENT

  
	

   

  	

   

  
	

  ARTICLE 20

  	

  REPRESENTATIONS

  AND WARRANTIES

  
	

   

  	

   

  
	

   

  	

  20.01 

  	

  Representation and Warranties

  
	

   

  	

   

  
	

  ARTICLE 21

  	

  SURRENDER OF PREMISES

  
	

   

  	

   

  
	

  ARTICLE 22

  	

  BANKRUPTCY OR

  INSOLVENCY

  
	

   

  	

   

  
	

   

  	

  22.01

  	

  Bankruptcy or Insolvency

  
	

   

  	

   

  	

   

  
	

  ARTICLE 23

  	

  HAZARDOUS MATERIALS

  
	

   

  	

   

  
	

   

  	

  23.01

  	

  Representations and

  Warranties

  
	

   

  	

   

  	

   

  
	

   

  	

  23.02

  	

  Definitions

  
	

   

  	

   

  	

   

  
	

   

  	

  23.03

  	

  Tenant’s

  Obligation

  
	

   

  	

   

  	

   

  
	

   

  	

  23.04

  	

  Landlord

  Options

  
	

   

  	

   

  	

   

  
	

   

  	

  23.05

  	

  Indemnity

  
	

   

  	

   

  	

   

  
	

   

  	

  23.06

  	

  Survival

  
	

   

  	

   

  	

   

  
	

  ARTICLE 24

  	

  SUBSTITUTE PREMISES

  
	

   

  	

   

  
	

  ARTICLE 25

  	

  GENERAL PROVISIONS

  
	

   

  	

   

  
	

   

  	

  25.01

  	

  Estoppel Certificates

  
	

   

  	

   

  	

   

  
	

   

  	

  25.02

  	

  Severability

  
	

   

  	

   

  	

   

  
	

   

  	

  25.03

  	

  Entire

  Agreement

  
	

   

  	

   

  	

   

  
	

   

  	

  25.04

  	

  Notices

  
	

   

  	

   

  	

   

  
	

   

  	

  25.05

  	

  Waivers

  
	

   

  	

   

  	

   

  
	

   

  	

  25.06

  	

  Recording

  
	

   

  	

   

  	

   

  
	

   

  	

  25.07

  	

  Holding

  Over

  
	

   

  	

   

  	

   

  
	

   

  	

  25.08

  	

  Cumulative Remedies

  
	

   

  	

   

  	

   

  
	

   

  	

  25.09

  	

  Choice of

  Law

  
	

   

  	

   

  	

   

  
	

   

  	

  25.10

  	

  Attorneys’

  Fees

  
	

   

  	

   

  	

   

  
	

   

  	

  25.11

  	

  Force

  Majeure

  
	

   

  	

   

  	

   

  
	

   

  	

  25.12

  	

  Consent

  
	

   

  	

   

  	

   

  
	

   

  	

  25.13

  	

  Liability of Landlord

  
	

   

  	

   

  	

   

  
	

   

  	

  25.14

  	

  No Merger

  
					

 

iii

 

 

	

   

  	

  25.15

  	

  Reports

  
	

   

  	

   

  	

   

  
	

   

  	

  25.16

  	

  Definition

  of Rent

  
	

   

  	

   

  	

   

  
	

   

  	

  25.17

  	

  Interpretation

  
	

   

  	

   

  	

   

  
	

   

  	

  25.18

  	

  Relationship of the Parties

  
	

   

  	

   

  	

   

  
	

   

  	

  25.19

  	

  Successors

  
	

   

  	

   

  	

   

  
	

   

  	

  25.20

  	

  Modifications

  
	

   

  	

   

  	

   

  
	

   

  	

  25.21

  	

  Brokerage

  Fees

  
	

   

  	

   

  	

   

  
	

   

  	

  25.22

  	

  Not Binding Until Executed

  

 

iv

 

An extra section break has been inserted above this paragraph. Do not

delete this section break if you plan to add text after the Table of

Contents/Authorities.  Deleting

this break will cause Table of Contents/Authorities headers and footers to

appear on any pages following the Table of Contents/Authorities.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}]]