Document:

Exhibit 10.23

 

LEASE

 

BJ’S
RESTAURANT & BREWHOUSE

TRADE NAME

 

CHICAGO
PIZZA & BREWERY, INC.

TENANT

 

R-l

STORE NUMBER

 

Westfield

SHOPPINGTOWN

 

OAKRIDGE

 

 

INDEX TO LEASE

 

	
  DATA SHEET AND GRANT

  
	
  ARTICLE I. GRANT AND TERM

  
	
  Section 1.01. Conditions of Grant

  
	
  Section 1.02. Term

  
	
  Section 1.03. Late Opening

  
	
  ARTICLE II. RENTAL

  
	
  Section 2.01. Minimum Annual Rental

  
	
  Section 2.02. Percentage Rental

  
	
  Section 2.03. Gross Sales

  
	
  Section 2.04. Tenant’s Tax Obligation

  
	
  Section 2.05. Trash Removal Charge

  
	
  Section 2.06. Additional Rent

  
	
  Section 2.07. Late Charge

  
	
  Section 2.08. Tenant’s Payment
  Obligations

  
	
  ARTICLE
  III. RECORDS AND BOOKS OF ACCOUNT

  
	
  Section 3.01. Tenant’s Records

  
	
  Section 3.02. Reports by Tenant

  
	
  ARTICLE IV. AUDIT

  
	
  Section 4.01. Right to Examine Books

  
	
  Section 4.02. Audit

  
	
  ARTICLE V. CONSTRUCTION OF PREMISES

  
	
  Section 5.01. Construction of Premises

  
	
  Section 5.02. Certificate of Occupancy

  
	
  Section 5.03. Condition of Premises

  
	
  Section 5.04. Ultimate Rental
  Commencement Date

  
	
  ARTICLE VI. ALTERATIONS, CHANGES AND
  ADDITIONS

  
	
  Section 6.01. Alterations by Tenant

  
	
  Section 6.02. Removal by Tenant

  
	
  Section 6.03. Changes and Additions

  
	
  Section 6.04. Rights of Landlord

  
	
  ARTICLE
  VII. CONDUCT OF BUSINESS BY TENANT

  
	
  Section 7.01. Permitted Use

  
	
  Section 7.02. Operation of Business

  
	
  Section 7.03. Hazardous Materials

  
	
  Section 7.04. Radius

  
	
  ARTICLE
  VIII. COMMON AREAS

  
	
  Section 8.01. Operation and
  Maintenance of Common Areas

  
	
  Section 8.02. Use of Common Areas

  
	
  Section 8.03. Common Area Operating
  Costs and Expenses

  
	
  ARTICLE IX. SIGNS

  
	
  Section 9.01. Tenant’s Signs

  
	
  ARTICLE X. MAINTENANCE OF PREMISES

  
	
  Section 10.01. Landlord’s Obligations
  for Maintenance

  
	
  Section 10.02. Tenant’s Obligations
  for Maintenance

  
	
  ARTICLE XI. INSURANCE AND INDEMNITY

  
	
  Section 11.01. Tenant’s Insurance

  
	
  Section 11.02. Landlord’s Insurance

  
	
  Section 11.03. Covenant to Hold
  Harmless

  
	
  Section 11.04. Waiver of Right of
  Recovery

  
	
  ARTICLE
  XII. UTILITIES

  
	
  Section 12.01. Utility Charges

  
	
  ARTICLE
  XIII. ESTOPPEL STATEMENT, ATTORNMENT AND SUBORDINATION

  
	
  Section 13.01. Estoppel Statement

  
	
  Section 13.02. Attornment

  
	
  Section 13.03. Subordination

  
	
  Section 13.04. Remedies

  
	
  Section 13.05. Notice to Mortgagee,
  Beneficiary or Ground Lessor

  
	
  ARTICLE
  XIV. ASSIGNMENT AND SUBLETTING

  
	
  Section 14.01. Restrictions on
  Transfer

  
	
  Section 14.02. Procedure For Transfer

  
	
  Section 14.03. Transfer Rent
  Adjustment

  
	
  Section 14.04. Required Documents and
  Fees

  
	
  Section 14.05. Transfer of Stock or
  Partnership Interest

  
	
  Section 14.06. Assignment and Sublease
  Rentals

  
	
  ARTICLE XV. WASTE OR NUISANCE

  
	
  Section 15.01. Waste or Nuisance

  
	
  ARTICLE
  XVI. TRADE NAME; PROMOTIONAL PROGRAM AND MEDIA FUND

  
	
  Section 16.01. Trade Name

  
	
  Section 16.02. Promotional Program

  
	
  ARTICLE
  XVII. DAMAGE AND DESTRUCTION

  
	
  Section 17.01. Reconstruction of
  Damaged Premises

  
	
  Section 17.02. Landlord’s Option to
  Terminate Lease

  
	
  ARTICLE
  XVIII. EMINENT DOMAIN

  
	
  Section 18.01. Total Condemnation of
  Premises

  
	
  Section 18.02. Partial Condemnation

  
	
  Section 18.03. Landlord and Tenant
  Damages

  
	
  ARTICLE
  XIX. DEFAULT

  
	
  Section 19.01. Rights Upon Default

  
	
  ARTICLE XX. BANKRUPTCY OR INSOLVENCY

  
	
  Section 20.01. Tenant’s Interest Not
  Transferable

  
	
  Section 20.02. Termination

  
	
  Section 20.03. Tenant’s Obligations to
  Avoid Creditors’ Proceedings

  
	
  Section 20.04. Election to Assume
  Lease

  
	
  Section 20.05. Subsequent Bankruptcy

  
	
  Section 20.06. Assignment

  
	
  Section 20.07. Occupancy Charges

  
	
  Section 20.08. Consent

  
	
  Section 20.09. Attorney Fees

  
	
  Section 20.10. Other Laws

  
	
  ARTICLE
  XXI. ACCESS BY LANDLORD

  
	
  Section 21.01. Right of Entry

  
	
  ARTICLE
  XXII. TENANT’S PROPERTY

  
	
  Section 22.01. Taxes on Tenant’s
  Property

  
	
  Section 22.02. Loss and Damage

  
	
  Section 22.03. Notice by Tenant

  
	
  ARTICLE
  XXIII. HOLDING OVER

  
	
  Section 23.01. Holding Over

  
	
  Section 23.02. Successors

  
	
  ARTICLE
  XXIV. RULES AND REGULATIONS

  
	
  Section 24.01. Rules and Regulations

  
	
  ARTICLE
  XXV. QUIET ENJOYMENT

  
	
  Section 25.01. Landlord’s Covenant

  
	
  ARTICLE
  XXVI. SECURITY DEPOSIT

  
	
  Section 26.01. Deposit

  
	
  ARTICLE
  XXVII. MISCELLANEOUS

  
	
  Section 27.01. Waiver; Election of
  Remedies

  
	
  Section 27.02. Entire Agreement

  
	
  Section 27.03. Interpretation; Use of
  Pronouns; Authority

  
	
  Section 27.04. Delays; Force Majeure

  
	
  Section 27.05. Notices

  
	
  Section 27.06. Captions and
  Section Numbers

  
	
  Section 27.07. Broker’s Commission

  
	
  Section 27.08. Recording

  
	
  Section 27.09. Furnishing of Financial
  Statements

  
	
  Section 27.10. Waiver of Counterclaim
  or Defenses in Action for Possession

  
	
  Section 27.11. Transfer of Landlord’s
  Interest

  
	
  Section 27.12. Floor Area

  
	
  Section 27.13. Interest on Past Due
  Obligations

  
	
  Section 27.14. Liability of Landlord

  
	
  Section 27.15. Accord and Satisfaction

  
	
  Section 27.16. Execution of Lease; No
  Option

  
	
  Section 27.17. Governing Law

  
	
  Section 27.18. Specific Performance of
  Landlord’s Rights

  
	
  Section 27.19. Survival of Tenant’s
  Obligations

  
	
  Section 27.20. Certain Rules of
  Construction

  
	
  Section 27.21. Confidentiality

  
	
  Section 27.22. Attorney Fees

  
	
  Section 27.23. Index

  
	
  Section 27.24. Waiver of Trial by Jury

  
	
  Section 27.25. Mortgagee Changes

  
	
  Section 27.26. Real Estate Investment
  Trust

  
	
   

  
	
  EXHIBITS - See Data Sheet

  

 

i

 

WESTFIELD SHOPPINGTOWN OAKRIDGE

 

City of San Jose

County
of Santa Clara

State of California

 

THIS LEASE is made as of this 4th day of February, 2003, by and between
OAKRIDGE MALL LP, a Delaware
limited partnership, whose address is 11601 Wilshire Boulevard, 12th Floor, Los
Angeles, California 90025 (“Landlord”), and CHICAGO
PIZZA & BREWERY, INC.,
a California corporation, whose address is: 
16162 Beach Boulevard, Suite 100, Huntington Beach, California 92647
(“Tenant”).

 

Landlord, in consideration of the rent to be paid and the covenants to
be performed by Tenant, does hereby, subject to the provisions of this Lease,
demise and lease unto Tenant, and Tenant hereby rents and hires from Landlord,
those certain premises identified on Exhibit A-2 attached hereto and made a
part hereof (“the Premises”) which is in and part of the development commonly
known as “WESTFIELD SHOPPINGTOWN OAKRIDGE”,  a general site plan of which development
is shown on Exhibit A-1 attached hereto and made a part hereof.  The
term “Development” as used herein shall include the real property shown on
Exhibit A-1, the Department Stores, the locations of which are shown on Exhibit
A-1, any Floor Area not included in the definition of Shopping Center, the
parking facilities and the Shopping Center.  Wherever the term “Shopping Center”
is used, it shall be deemed to include the areas shown on Exhibit A-1 and shall
be deemed to exclude the Department Stores, free standing units, all premises
having an exterior entrance, all basement space not used for retail purposes,
and the parking facilities.  In the event Landlord elects to
enlarge the Shopping Center, any additional area may be included by Landlord in
the definition of “Shopping Center” for purposes of this Lease.  The
term “Department Store” shall be deemed to include any retail store operating
or proposed to be operated in the Development the gross leasable Floor Area of
whose premises is Twenty Thousand (20,000) square feet or greater.  The
term “Floor Area” is defined in Section 27.12.  Said
site plan shows, among other things, the principal improvements which comprise
or will comprise the Development.  The Premises is described as follows:

 

Store No. R-l, being approximately 7,060 square feet.

 

DATA SHEET

 

The
following references furnish data to be incorporated in the specified sections
of this Lease and shall be construed as if set Forth in this Lease:

 

(1)                                  Section 1.02: Term:

 

Latest
Rental Commencement Date:  Grand Opening
Date which is estimated by Landlord
to be October 3, 2003

 

Expiration Date of Term:  June
30, 2018

 

Option(s) to Extend Term:  One extension of five (5) years (the “Option
Period”)

 

(2)                                  Section 2.01: Minimum
Annual Rental:

 

SEE LEASE ADDENDUM.

 

(3)                                  Section 2.02:
Percentage Rental:

 

SEE LEASE ADDENDUM.

 

(4)                                  Address for Rental Payments:
Payee: Oakridge Mall LP; Address: Oakridge, File #55714, Los
Angeles, California 90074-5714.

 

(5)                                  Section 2.05: Trash
Removal Charge:  Paid Direct

 

(6)                                  Section 6.01:
Alterations by Tenant: An
aggregate of None ($.00)
permitted in each lease year.

 

1

 

(7)                                  Section 7.01: Permitted
Use: For the first class
operation of a BJ’s Restaurant & Brewhouse casual theme, sit-down,
full service restaurant which includes the sale of liquor for on-premises
consumption with those food items offered on the menu substantially in the form
as attached hereto as Exhibit E; and as ancillary thereto, Tenant may offer
take-out service for menu items. Incidental thereto, Tenant may engage in the
display and sale at retail of directly related merchandise bearing the BJ’s
Restaurant & Brewhouse logo.  The Premises shall be used solely for
the use stated above and for no other use or purpose.

 

(8)                                  Section 16.01: Trade Name:  BJ’S RESTAURANT & BREWHOUSE

 

(9)                                  Section 16.02: Promotional Program:  Seven Thousand Sixty and No/100 Dollars ($
7,060.00) per annum.

 

(10)                            Section 26.01: Security
Deposit:  None

 

(11)                            Section 27.05: Legal Notice Address:

 

	
  Landlord

  	
   

  	
  Tenant:  [NO NOTICES TO THE PREMISES]:

  
	
   

  	
   

  	
   

  
	
  Oakridge Mall LP

  11601 Wilshire Boulevard, 12th Floor

  Los Angeles, California 90025

  Attention: Legal Department

  	
   

  	
  Chicago Pizza &
  Brewery, Inc.

  16162 Beach Boulevard, Suite 100

  Huntington Beach, California 92647

  Attention: Legal Department

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Billing
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Chicago Pizza & Brewery,
  Inc.

  16162 Beach Boulevard, Suite 100

  Huntington Beach, California 92647

  Attention: Legal Department

  

 

(12)                            Addendum to Exhibit B:
Reimbursement for Cost of Construction:  Forty Thousand and No/100 Dollars ($ 40,000.00).

 

EXHIBITS

 

The following exhibits are attached hereto, and such exhibits, as well
as all drawings and documents prepared pursuant thereto, shall be deemed to be
a part hereof:

 

	
  EXHIBIT “A-l”:

  	
   

  	
  SITE
  PLAN

  
	
  EXHIBIT “A-2”:

  	
   

  	
  FLOOR
  PLAN

  
	
  EXHIBIT “A-3”:

  	
   

  	
  PATIO

  
	
  EXHIBIT “B”:

  	
   

  	
  CONSTRUCTION OF PREMISES

  
	
  EXHIBIT “C”

  	
   

  	
  ADDITIONAL
  INSURED ENTITIES

  
	
  EXHIBIT “D”

  	
   

  	
  INTENTIONALLY DELETED

  
	
  EXHIBIT “E”

  	
   

  	
  MENU

  

 

2

 

ARTICLE I

 

GRANT AND TERM

 

Section 1.01                            CONDITIONS OF GRANT.

The
exterior walls, the floor above, the roof and the area beneath the Premises are
not demised hereunder, and the use thereof, together with the right to locate,
both vertically and horizontally, install, maintain, use, repair and replace pipes,
utility lines, ducts, conduits, flues, refrigerant lines, drains, sprinkler
mains and valves, access panels, wires and structural elements leading through
the Premises serving other parts
of the Development is hereby reserved unto Landlord.  Landlord agrees to
use reasonable efforts to locate any such items in locations that do not
materially interfere with Tenant’s use of the Premises.

 

Section 1.02                            TERM.

The
“Term” of this Lease shall commence on the date (the “Commencement Date”) of
the execution of this Lease by Landlord and Tenant.  Tenant’s obligation
for payment of Minimum Annual Rental, Percentage Rental and Additional Rent shall commence upon the date (the
“Rental Commencement Date”) which is the earliest to occur of (a) the date on
which Tenant opens its store in the Premises for business to the public, or (b)
the “Latest Rental Commencement Date” specified in the Data Sheet, if so
specified, or (c) in the event of new construction where a grand opening date
shall be set by Landlord, the date set forth in a notice sent by Landlord to
Tenant specifying the “Grand Opening Date”, provided that such date shall not
be sooner than ninety (90) days from the date the notice is mailed by Landlord.  In
the case of (c) above, Tenant shall cooperate with Landlord to effect the Grand
Opening Date as set forth in such notice, and Tenant shall delay opening of the
Premises until the Grand Opening Date, if required by such notice.  Any
occupancy of the Premises by Tenant following the Commencement Date and prior
to the Rental Commencement Date shall be subject to all terms and conditions of
this Lease other than payment of Rental.  The Term of this Lease shall end on
the expiration date set forth in the Data Sheet, unless sooner terminated in accordance
with this Lease.  Unless otherwise approved in writing
by Landlord, Tenant shall open its store in the Premises for business to the
public (with improvements pursuant to Exhibit B hereto completed and the
Premises fully fixtured, stocked with current season merchandise in place and
staffed, with Tenant prepared to engage in selling merchandise and/or services
as provided pursuant to Article VII) by the Rental Commencement Date.  For
the purposes of this Lease, the first lease year shall be the period commencing
on the Rental Commencement Date and ending on January 31 next following; after
the first lease year, the term “lease year” shall mean a fiscal year of twelve
(12) consecutive calendar months ending on January 31 of each calendar year.

 

Section 1.03                            LATE OPENING.

In
the event Tenant shall fail to open its store for business by the Rental
Commencement Date, the parties
agree that it is and will be impracticable and extremely difficult to determine
the actual damages suffered by Landlord.  Therefore, the parties have agreed
that in order to compensate Landlord for its loss, Tenant shall pay to Landlord
as Additional Rent, upon demand, the sum of Five Hundred Dollars ($500.00) per
day for each day Tenant delays its initial opening in accordance with
Section 1.02 above, after and including the Rental Commencement Date.  This
remedy shall be in addition to any and all other remedies provided in this
Lease or by law to Landlord in the event of default by Tenant.  Such
Additional Rent shall be deemed to be in lieu of Percentage Rental only (as
that term is defined in Section 2.02) that might have been earned during
the period of Tenant’s failure to open.  The amount has been determined based
upon numerous considerations
including the fact that Landlord will have expended considerable sums of money in reliance upon and based upon Tenant
opening for business on the Rental Commencement Date.

 

ARTICLE II

 

RENTAL

 

Section 2.01                            MINIMUM ANNUAL RENTAL.

(a)                                  From and after the Rental Commencement Date,
Tenant shall pay to Landlord as the “Minimum Annual Rental” the sum set forth
in the Data Sheet for each lease year during the Term in equal consecutive monthly installments in advance on or before
the first day of each month, without prior demand or notice.  Minimum Annual Rental, Percentage Rental,
Additional Rent and all other sums payable to Landlord pursuant to this Lease shall be paid to
Landlord in currency of the United States or other customary commercial manner at the address set forth in
the Data Sheet under “Address for Rental Payments,” or such other place as
Landlord may designate, without any deductions or offsets whatsoever.

 

(b)                                 Should the Rental Commencement Date occur on
a day other than the first day of a calendar month, then the Minimum Annual
Rental for such fractional month shall be one three hundred sixty-fifth
(1/365th) of the Minimum Annual Rental multiplied by the number of days
remaining in the month.  Should any lease year contain less
than twelve (12) calendar months, said Minimum Annual Rental shall be prorated.

 

3

 

Section 2.02                            PERCENTAGE RENTAL.

(a)                                  In addition to the payment of the Minimum
Annual Rental as provided in Section 2.01 and other sums set forth in this
Lease, from and after the Rental Commencement Date, Tenant shall pay to
Landlord, for each three (3) months of the Term, “Percentage Rental” equal to
the product of the Percentage Rental Rate times the amount by which Tenant’s
Gross Sales (as defined in Section 2.03) resulting from business conducted
in, on or from the Premises during such three (3) months, exceed the “Quarterly
Breakpoint” as set forth in the Data Sheet.  Each such three (3) month period of
the Term hereof may be referred to as a “Lease Quarter.”

 

Such
Percentage Rental shall be paid by Tenant to Landlord quarterly without prior
notice or demand within thirty (30) days after the expiration of each Lease
Quarter following the Rental Commencement Date.

 

(b)                                 Percentage Rental shall be computed on all
Gross Sales made during the Lease Quarter or Quarters elapsed in the lease year
in excess of the product of (i) the Quarterly Breakpoint and (ii) the number of
Lease Quarters elapsed in the lease year.  Should the Rental Commencement Date
occur on a day other than the first day of a Lease Quarter or should the Term
expire on a day other than the end of a full Lease Quarter, then the Percentage
Rental due for such partial Lease Quarter shall equal the product of the
Percentage Rental Rate times the amount by which Tenant’s Gross Sales exceed
the product obtained by multiplying the Quarterly Breakpoint by a fraction, the
numerator of which is the number of calendar days in such partial Lease Quarter
and the denominator of which is ninety (90).

 

(c)                                  If, at the end of any lease year, the total
amount of quarterly installments of Percentage Rental paid by Tenant based on
Gross Sales for such lease year exceeds the total amount of Percentage Rental
required to be paid by Tenant for such lease year based on Gross Sales in
excess of four (4) times the Quarterly Breakpoint (hereinafter referred to as
the “Annual Breakpoint”), Tenant shall receive a credit equivalent to such
excess which shall be credited by Landlord to the next monthly payments due
from Tenant to Landlord under this Lease.
 If at the end of the final lease
year the total amount of Percentage Rental paid by Tenant exceeds the total
amount of Percentage Rental required to be paid by Tenant for such lease year,
such excess shall be refunded to Tenant after Tenant has vacated the Premises
and the Premises are in the condition required by Section 10.02(b) below,
and any other sums due Landlord from Tenant under this Lease have been paid in
full or deducted therefrom.  If at the
end of any lease year, the total amount of quarterly installments of Percentage
Rental paid by Tenant for such lease year is less than the total amount of
Percentage Rental required to be paid by Tenant for such Lease year, Tenant
shall pay the amount of such deficiency on or before the thirtieth (30th) day
after the last day of such lease year.  Should any lease year contain less
than four (4) calendar quarters, then the Annual Breakpoint and Quarterly
Breakpoint shall be adjusted proportionately for such partial lease year.

 

(d)                                 It is expressly understood and agreed that
Landlord does not consider Minimum Annual Rental in itself a fair and adequate
rental for the Premises and would not have entered into this Lease unless
Tenant had obligated itself to pay Percentage Rent, which Landlord expects to
supplement the Minimum Annual Rental and the Additional Rent to provide a fair
and adequate rental return.  Therefore, if Tenant fails to
continuously operate its business in accordance with the terms of this Lease,
fails to keep the required store hours, or vacates the Premises prior to the
expiration of the Term hereof, Landlord will suffer damages in an amount which
is not readily ascertainable and thus Landlord, in any such event, shall have
the right, at its option, to collect as liquidated damages, and not as a
penalty, in addition to all other charges and Minimum Annual Rental due
hereunder, one-thirtieth (l/30th) of an amount equal to the greater of (a) the
amount of Minimum Annual Rental due for the month in which Tenant failed to
operate as required by this Lease, or (b) the average monthly amount of Minimum
Annual Rental and Percentage Rent payable for the immediately preceding lease
year, for each day or portion thereof during which Tenant fails to operate as
required by this Lease including, without limitation, Tenant’s failure to
maintain the required store hours, and, in addition, Landlord shall have the
right to treat any of such events as a material default and breach of this
Lease.

 

Section 2.03                            GROSS SALES.

(a)                                  The term “Gross Sales” as used herein shall
be construed to include the entire amount of the actual sales price (including
all finance charges by Tenant or anyone on Tenant’s behalf) whether for cash,
credit or otherwise, of all sales, rentals, leases, licenses or other transfer
of merchandise or services and other receipts whatsoever of all business
conducted in or from the Premises, by Tenant, all subtenants, assignees,
licensees, concessionaires or otherwise, including, without limitation:  mail, catalogue, closed circuit television,
computer, other electronic or telephone orders received or filled at the
Premises; all deposits not refunded to purchasers; orders taken, although said
orders may be filled elsewhere; gross receipts from vending machines,
electronic games or similar devices, whether coin-operated or otherwise; and
the entire amount of the actual sales price and all other receipts for sales
and services by Tenant, any subtenants, assignees, licensees, concessionaires
or otherwise in or from the Premises.  A “sale” shall be deemed to have been
consummated for the purposes of this Lease, and the entire amount of the sales
price shall be included

 

4

 

in Gross Sales, at such time
as (i) the transaction is initially reflected in the books or records of Tenant
or any subtenant, assignee, licensee or concessionaire (if a concessionaire
makes the sale), or (ii) Tenant or any subtenant, assignee, licensee or
concessionaire receives all or any portion of the sales price, or (iii) the
applicable goods or services are delivered to the customer, whichever first
occurs, irrespective of whether payment is made in installments, the sale is
for cash or for credit, or all or any portion of the sales price has actually
been paid at the time of inclusion in Gross Sales or at any other time.  Subject
to Section 2.03(b) below, no deduction shall be allowed for direct or
indirect discounts, rebates, credits or other reductions to employees or
others, unless such discounts, rebates, credits or other reductions are
generally offered to the public on a uniform basis.

 

(b)                                 Notwithstanding anything to the contrary
contained in Section 2.03(a) above, Gross Sales shall not include the
following:

 

(1)                                  The portion of the sales price of all
merchandise returned by customers and accepted for credit to the extent of the
credit;

 

(2)                                  Goods returned to sources, including shippers
or manufacturers, or transferred to another store or warehouse owned by or
affiliated with Tenant (where such exchange of goods or merchandise is made
solely for the convenient operation of the business of Tenant and not for
purposes of consummating a sale which has theretofore been made in or from the
Premises and/or for the purpose of depriving Landlord of the benefit of a sale
which otherwise would be made in or from the Premises);

 

(3)                                  Alteration workroom charges and delivery
charges at Tenant’s cost of sales;

 

(4)                                  Receipts from public telephones, stamp
machines, public toilet locks, or vending machines installed solely for use by
Tenant’s employees;

 

(5)                                  Sales taxes, so-called luxury taxes;
consumers’ excise taxes, gross receipts taxes and other similar taxes now or
hereafter imposed upon the sale of merchandise or services, but only if
collected separately from the selling price of goods, merchandise or services
and collected from customers; and

 

(6)                                  Sales of trade fixtures, equipment or
property which are not stock in trade.

 

(c)                                  If,
in each of at least two of the fifth (5th), sixth (6th) and seventh (7th) lease
years of the Term, Tenant has not been obligated to pay Percentage Rental,
Landlord may terminate this Lease upon notice to Tenant given at any time
within six (6) months after the earlier of the receipt by Landlord, or the due
date, of Tenant’s annual statement of Gross Sales for the seventh (7th) lease
year (or for the sixth (6th) lease year if Tenant has not been obligated to pay
such amount of Percentage Rental for both the fifth (5th) and sixth (6th) lease
years), in the event of which election by Landlord, this Lease shall be terminated
and of no further force or effect, effective ninety (90) days following the
giving of such notice; provided, however, that Tenant shall have the right to
nullify such termination and maintain this Lease in full force and effect by
entering into an agreement with Landlord (within thirty (30) days following
Landlord’s delivery of such notice of termination) increasing the Minimum
Annual Rental payable under this Lease from and after Landlord’s election to
terminate to an amount equal to one hundred twenty-five percent (125%) of the
amount of Minimum Annual Rental otherwise due under this Lease.

 

Section 2.04                            TENANT’S TAX OBLIGATION.

(a)                                  Commencing
with the Rental Commencement Date, and continuing for the balance of the Term,
Tenant shall pay to Landlord as Additional Rent that portion of “Taxes” (as
hereinafter defined) levied or assessed
during or with respect to each fiscal tax year falling in whole or in part
during the Term following the Rental Commencement Date, which the number of
square feet of Floor Area in the Premises bears to the total number of square
feet of constructed gross leased and occupied Floor Area of all buildings in
the Shopping Center, plus an amount equal to fifteen percent (15%) of the total
of such Taxes.  As used herein, the term “Taxes” shall mean any and all
taxes, surcharges, assessments, levies, fees and other governmental charges and
impositions of every kind or nature, regular or special, direct or indirect,
presently foreseen or unforeseen or known or unknown, levied or assessed by
municipal, county, state, federal or other governmental taxing or assessing
authority (i) upon, against or with respect to the real estate upon which the
Development, or any part of it, is located and to any improvements located in
the Shopping Center or the Development, and (ii) any other taxes which Landlord
becomes obligated to pay with respect to the Development, irrespective of
whether the same are assessed as real or personal property.  Taxes
shall not include Landlord’s income or franchise taxes.  To the extent that
any such Taxes are the obligation of Tenant pursuant to Section 8.03 or
Section 22.01, the same shall not be included in Tenant’s proportionate
share pursuant to this Section 2.04.  Prior to the proration of such Taxes
as provided in this Section 2.04, there shall be deducted therefrom all
amounts received from the Department Stores and/or any other tenant within the
Development not included in the definition of Shopping Center towards such
Taxes. 
The Taxes payable by Tenant pursuant to this Section 2.04(a)
which are levied or assessed for the fiscal tax year in which the

 

5

 

Rental Commencement Date occurs
and for the fiscal tax year in which the Term of this Lease ends shall be prorated
on a daily basis.

 

(b)                                 Should the state where the Development is
located or any political subdivision thereof or any governmental, taxing or
assessing authority, directly or indirectly by way of substitution for or in
lieu of or in addition to or in any other way directly or indirectly used or
intended to provide revenues to fund all or any part of revenues theretofore
provided or services theretofore funded by all or any part of the Taxes
otherwise required to be paid in whole or in part by Tenant pursuant to this
Section 2.04 or Section 8.03 or Section 22.01, whether presently
foreseen or unforeseen or known or unknown, either (i) impose a tax of any kind
or nature upon, against, in connection with or with respect to the rentals or
other charges payable by or to Landlord by the Tenant or other tenants in or
occupants of the Shopping Center and/or the Development or on the income of
Landlord derived from the Shopping Center and/or the Development or on the
revenues of the Shopping Center and/or the Development or on Landlord’s (or the
individuals or entities which constitute the partners of Landlord, if Landlord
is a partnership) ownership of the Shopping Center and/or the Development or
any portion thereof or interest therein, or any direct or indirect tax
whatsoever other than the Taxes otherwise required to be paid in whole or in
part by Tenant pursuant to this Section 2.04, Section 8.03 or
Section 22.01, and/or (ii) impose a tax of any kind or nature upon,
against or with respect to the parking facilities or the number of parking
spaces in the Development, such tax shall be deemed to constitute a part of
Taxes payable by Tenant under this Lease and Tenant shall pay to Landlord its
proportionate share thereof (or all thereof, with respect to taxes relating to
items (i) through (iii) of Section 22.01) as determined and billed by
Landlord and/or (iii) reappraise, or determine that the method utilized by
Landlord in determining property Taxes to be incorrect, or redetermine the
method upon which property taxes are imposed against the Shopping Center and/or
the Development from time to time by virtue of a change in the ownership of
Landlord’s interest or otherwise by operation of law and/or (iv) impose a
charge for assessments, taxes, fees, levies and charges imposed by governmental
agencies for services such as fire protection, sidewalk and road maintenance,
refuse removal and other public services generally provided without charge to
property owners or occupants prior to the date of this Lease, the same shall be
deemed as a part of Taxes payable by Tenant hereunder for the purposes of this
Lease. 
For the purposes of this Section 2.04, the term “Shopping
Center” shall include any land upon which temporary off-site utility systems
and parking serving the Shopping Center and/or the Development are located.

 

(c)                                  Tenant’s proportionate share of Taxes, as
reasonably determined by Landlord, shall be paid to Landlord as Additional
Rent, in monthly installments on or before the first day of each month (or such
longer period as Landlord may determine), in advance, in an amount estimated by
Landlord and billed by Landlord to Tenant; provided that Landlord shall have
the right initially to determine monthly estimates and to revise the estimates
from time to time.  Upon receipt of all tax bills
pertaining to Taxes payable by Tenant, Landlord shall furnish Tenant with a
written statement of the actual amount of Tenant’s proportionate share of the
Taxes for such year.  In the event any applicable tax bill
is not available at the time Landlord bills Tenant for Taxes, Landlord may
estimate the amount of such tax.  If the total amount paid by Tenant
under this Section 2.04 for any calendar, fiscal or lease year during the
Term following the Rental Commencement Date shall be less than the actual
amount due from Tenant for such year, as shown on such statement, Tenant shall
pay to Landlord the difference between the amount paid by Tenant and the actual
amount due within thirty (30) days after demand therefor by Landlord; and if the
total amount paid by Tenant hereunder for any such calendar, fiscal or lease
year shall exceed such actual amount due from Tenant for such year, such excess
shall be credited against the next monthly payments due from Tenant to Landlord
under this Lease.  If at the end of the final lease year
the total amount paid by Tenant hereunder for such lease year shall exceed such
actual amount due from Tenant for such year, such excess shall be refunded to
Tenant after Tenant has vacated the Premises in good condition at the
conclusion of this Lease and any other sums due Landlord from Tenant under this
Lease have been paid in full or deducted therefrom.  A copy of a tax
bill or statement or assessment notice submitted by Landlord to Tenant shall at
all times be sufficient evidence of the amount of Taxes assessed or levied
against the property to which such bill relates.  Tenant’s
obligations under this Section 2.04 shall survive the expiration of the
Term or earlier termination of this Lease.

 

(d)                                 Landlord reserves the right to contest any
Taxes levied or assessed during the Term upon, against or with respect to the
Shopping Center and/or the Development or any portion thereof or interest
therein.  Tenant shall pay to Landlord that proportion
of all costs incurred by Landlord in connection therewith based on the formula
specified in Section 2.04(a). 
Notwithstanding any such contest, or any related negotiation or appeal,
Tenant shall pay, as provided for in this Section 2.04, its proportionate
share of Taxes.  If, as a result of any
such contest, negotiation or appeal, Taxes shall be increased, Tenant’s
proportionate share of Taxes shall be computed on the basis of the amount of
Taxes finally determined to be payable by Landlord, including any of Landlord’s
reasonable costs in any such contest.  If, as a result of any such contest,
negotiation or appeal, Taxes shall be decreased, Landlord’s statement to Tenant
of Taxes following such decrease shall include an adjustment for any prior tax
years affected by such decrease reflecting the amount of such decrease in Taxes.  Tenant’s
proportionate share of any such adjustment, less all costs and expenses,
including, but not limited to, attorney fees, expenses of accountants,
consultants and appraisers, and administrative expenses incurred by Landlord in
connection with such contest, negotiation or appeal and not previously paid by
Tenant, shall be treated as a credit against Taxes payable by Tenant following
such decrease.

 

6

 

Section 2.05                            TRASH REMOVAL CHARGE.

Tenant,
at Tenant’s expense, shall at all times keep the Premises (including, without
limitation, the service areas adjacent to the Premises, display windows and
signs) orderly, neat, safe, clean and free from rubbish and dirt, and
shall store all trash and other solid waste within the Premises or in such
areas as may be designated by Landlord for such storage.  Tenant shall not
burn any trash or garbage at any time in or about the Development.  Landlord may direct the use of solid waste
disposal contractors at such intervals as Landlord may require.  Tenant
shall be solely responsible for and shall promptly pay, in a manner and at the
place provided in this Lease, all fees and charges for trash removal required
to properly service the Premises irrespective
of whether such charges are initially paid in advance by Landlord, or otherwise.  Landlord,
at its sole option, may elect to
furnish any or all services required for trash removal from the Premises, the
cost of which will be, at Landlord’s election, either (i) paid as Additional
Rent to Landlord (which payment shall include a fifteen percent (15%)
administrative fee to Landlord), each calendar month during the Term of this Lease in the manner specified in
Section 2.01 for the payment of Minimum Annual Rental, based upon
Landlord’s allocation thereof amongst Shopping Center occupants determined in
its sole and absolute discretion, or (ii) included in Operating Costs and
Expenses paid by Tenant pursuant to this Lease.

 

At
any time during the Term hereof, Landlord may, upon thirty (30) days’ prior
written notice to Tenant, discontinue furnishing trash removal services to the
Premises without thereby affecting this Lease in any manner or otherwise
incurring any liability to Tenant except that Landlord will no longer be
required to furnish trash
removal services to the Premises.  If
Landlord does not provide such services, Tenant shall arrange for the regular
pickup of all trash, garbage and other solid waste.

 

Section 2.06                            ADDITIONAL RENT.

In
addition to Minimum Annual Rental and Percentage Rental hereunder, Tenant shall
pay, as “Additional Rent” (whether or not so designated herein), in a manner
and at the place provided in this Lease, all sums of money required to be paid
by Tenant under this Lease.  If such amounts or charges are not
paid at the time and in the manner as provided in this Lease, they shall
nevertheless be collectible as Additional Rent with the next installment of
Minimum Annual Rental thereafter falling due, but nothing herein contained
shall be deemed to suspend or delay the payment of any amount of money or
charge at the time the same becomes due and payable hereunder or to limit any
other remedy of Landlord.  All amounts of Minimum Annual Rental,
Percentage Rental and Additional Rent (also collectively referred to in this
Lease; as “Rental”) payable in a given month shall be deemed to comprise a
single rental obligation of Tenant to Landlord.

 

Section 2.07                            LATE CHARGE.

Unless
specifically stated otherwise in this Lease, all Rental or other charges
required to be paid by Tenant pursuant to this Lease shall be due and
payable ten (10) days after demand, without any notice from Landlord and without any deductions or
offsets whatsoever.  The parties hereby agree that late
payment by Tenant of any Rental owing under this Lease will cause Landlord to
incur certain costs and expenses not contemplated under this Lease, the
exact amount of which costs are extremely difficult and impracticable to fix.  Such costs and expenses may include,
for example, administrative and collection costs, and processing and accounting
expenses.  Therefore, in the event Tenant fails to pay any monthly
installment of Rental on the date said payment is due, then Tenant shall pay a
late charge of ten percent (10%) of the amount in default as liquidated damages
for failure to make prompt payment.  The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs and expenses
Landlord will incur by reason of late payment by Tenant.  Acceptance of such
late charge 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 in this Lease.  In
the event Tenant pays the late charge set forth hereunder but fails to pay
contemporaneously therewith all unpaid amounts of Rental, Landlord’s acceptance
of this late charge payment shall not constitute a waiver of Tenant’s default
with respect to Tenant’s nonpayment nor prevent Landlord from exercising all
other rights and remedies available to Landlord under this Lease, at law or in
equity.

 

Section 2.08                            TENANT’S PAYMENT OBLIGATIONS.

(a)                                  Landlord may, at its option and its sole
discretion, apply any payments received from Tenant to any Rental, or other
charges which are then due and payable. 
If Landlord shall not make any specific application of a payment
received from Tenant, then any payment received from Tenant shall be applied
first to the other charge, then to Rental which has been overdue for the
longest period of time.  No designation of any payment by
Tenant for application to a specific portion of Tenant’s financial obligations
hereunder shall be binding upon Landlord.  Any sums received by Landlord after
termination of this Lease shall not constitute rent but shall be received only
as reimbursement for use and occupancy of the Premises.

 

(b)                                 Tenant covenants to pay all charges under
this Lease, including, without limitation, Minimum Annual Rental, Percentage
Rent and Additional Rent and other charges, independent of any obligation of
Landlord.  No breach of this Lease by Landlord shall relieve Tenant
of its obligation and duty to pay all such charges when due under the terms of
this Article II.

 

7

 

ARTICLE III

 

RECORDS AND BOOKS OF ACCOUNT

 

Section 3.01                            TENANT’S RECORDS.

Tenant
shall prepare and keep full, complete and proper books and source documents, in
accordance with Generally
Accepted Accounting Principles, of the Gross Sales, whether for cash, credit or
otherwise, of each separate department at any time operated within the Premises
and of the operations of each subtenant, concessionaire, licensee and/or
assignee, and shall require and cause all such parties to prepare and keep
books, source documents, records and accounts sufficient to substantiate those
kept by Tenant (“Records”).  The Records to be kept by Tenant
shall include, without limitation, true copies of all state and local sales and
use tax returns and reports,
records of inventories and receipts of merchandise, records of bank deposits of
the entire receipts from transactions at the Premises, daily receipts from all
sales (including those from mail or
telephone orders), and other pertinent original sales records and records of
any other transactions conducted
in or from the Premises by Tenant and any other persons conducting business
from the Premises.  Pertinent original sales records shall include, without limitation, a
point of sale system of record keeping and such other reasonable documentation
which would normally be examined by an independent accountant pursuant to
Generally Accepted Auditing Standards in performing an audit of Tenant’s sales
sufficient to provide determination and verification of Gross Sales and the
exclusions and deductions therefrom.  Tenant's Records shall be preserved
by Tenant at the Premises for at least three (3) years after expiration of each
lease year or partial lease year.  All
of books, source documents, records and documentation maintained pursuant
hereto shall at all reasonable times be open to the inspection of, and may be
copied or extracted from, in
whole or in part, by Landlord or Landlord’s authorized representative or agent
for a period of at least three
(3) years after the expiration of each lease year.

 

Section 3.02                            REPORTS BY TENANT.

Tenant
shall furnish to Landlord, within fifteen (15) days after the expiration of
each month of each lease
year, a complete statement, certified by Tenant, of the amount of Gross Sales,
as defined in Section 2.03 of this Lease, made from the Premises during
such period.  Tenant shall furnish to
Landlord, within thirty (30)
days after the expiration of each lease year, a complete statement, certified
by Tenant, showing in all reasonable detail the amount of such Gross Sales made
by Tenant from the Premises during the preceding lease year or partial lease
year.  Tenant shall require all
subtenants, concessionaires, licensees and/or assignees, if any, to furnish a
similar statement.  If Tenant or any subtenant,
concessionaire, licensee and/or assignee
fails to furnish to Landlord any monthly or annual statement of Gross Sales
within the time required by this
Section 3.02, then Tenant shall pay within ten (10) days of demand
therefor by Landlord as Additional Rent, a special handling fee of One Hundred
Dollars ($100.00) per statement per day until such statement is delivered to
Landlord.  This remedy shall be in addition to any and all other
remedies provided in this Lease or by law to Landlord.  In addition, if
Tenant or any subtenant, concessionaire, licensee and/or assignee, if any,
fails to furnish any two (2) consecutive monthly or annual statements of Gross
Sales within the time required
by this Section 3.02, then, without limiting any of the Landlord’s other
rights under this Lease,
Landlord shall have the right upon ten (10) days’ prior written notice to
conduct an audit as set forth in Section 4.02 below and any and all
charges occasioned by reason thereof shall be the sole obligation of Tenant and
payable on demand.

 

ARTICLE IV

 

AUDIT

 

Section 4.01                            RIGHT TO EXAMINE BOOKS.

Notwithstanding
the acceptance by Landlord of payments of Minimum Annual Rental or Percentage
Rental or installments thereof, Landlord shall have the right to audit all
rentals and other charges actually due hereunder.  Within ten (10) days following
Landlord’s request, Tenant shall make available to Landlord at the Premises or
at Tenant’s principal business office in the United States for examination,
extracting and/or copying all books, source documents, accounts, records and
sales tax reports of Tenant and any subtenants, concessionaires, licensees
and/or assignees, including Tenant’s state and federal income tax returns, in
order to verify the amount of Gross Sales made in and from the Premises.

 

Section 4.02                            AUDIT.

(a)                                  At its option, Landlord may at any time upon
ten (10) days’ prior written notice to Tenant, cause a complete audit
(including a physical inventory) to be made by an auditor selected by Landlord
of the entire records and
operations of Tenant and/or any subtenants, concessionaires, licensees and/or
assignees relating to the
Premises for the period covered by any statement issued or required to be
issued by Tenant or a concessionaire as above set forth in Article III.  In connection with the audit, Landlord or
its representative will have the right to inspect records from any other store
operated by Tenant or an affiliate of Tenant, but only if such inspection is
reasonably necessary to verify Tenant’s Gross Sales reports.  Tenant
shall make available to Landlord’s auditor at the Premises or at Tenant’s
principal business office in the United States, within ten (10) days following
Landlord’s notice requiring such audit, all of the books, source documents,

 

8

 

accounts, records and sales
tax reports of Tenant and any of its concessionaires which such auditor deems
necessary or desirable for the purpose of making such audit, including Tenant’s
state and federal income tax returns.  If such audit discloses that Tenant’s Gross
Sales as previously reported for the period audited were understated Tenant
shall immediately pay to Landlord the additional percentage rental due for the
period audited.  Further, if such understatement was
in excess of two percent (2%) of Tenant’s actual Grass Sales as disclosed by
such audit, Tenant shall immediately pay to Landlord the cost of such audit,
and if such understatement was in excess of ten percent (10%) of Tenant’s Gross
Sales as disclosed by such audit, Landlord may declare this Lease terminated
and the Term ended, in which event this Lease shall cease and terminate on the
date specified in such notice with the same force and effect as though the date
set forth in such notice were the date set forth in this Lease for expiration
of the Term, and Tenant shall vacate and surrender the Premises on or before
such date in the condition required by this Lease for surrender upon the
expiration of the Term.

 

(b)                                 If upon examination or audit Landlord’s
accountant or representative determines that sufficient documentation is not
maintained, retained, recorded or available to verify Tenant’s actual Gross
Sales, Tenant shall pay for the cost of such audit and, in addition, should
Landlord deem it necessary, Tenant shall reconstruct, at its sole cost and
expense, all Records for the determination of Gross Sales for any period being
audited.

 

If
such audit shall disclose that the Records, in Landlord’s determination, are inadequate
to disclose such Gross
Sales, Landlord shall be entitled to collect as Additional Rent an amount equal
to ten percent (10%) of the
Minimum Annual Rental payable by Tenant during the period in question.

 

(c)                                  If Tenant subleases, licenses, or in any
manner allows the Premises to be used by another party (the “Subtenant”),
Tenant is responsible for ensuring that the Subtenant’s Records conform to the
requirements of this Lease.  The failure of Subtenant to maintain
its Records as required under this Lease, or to correctly report Gross Sales,
will be deemed a failure on the part of Tenant to conform to the requirements
of this Lease and shall subject Tenant to the remedies set forth in
Section 4.02(a) or Section 4.02(b) above, including termination of
this Lease.

 

ARTICLE V

 

CONSTRUCTION OF PREMISES

 

Section 5.01                            CONSTRUCTION OF PREMISES.

(a)                                  Any improvements to be made to the Premises
shall be substantially as set forth in Exhibit B attached hereto.  Each of the parties hereto shall perform the
obligations imposed upon such party in said Exhibit at the times and in the
manner therein provided.  It is
understood and agreed by Tenant that any minor changes from any plans or
specifications covering Landlord’s Work as defined in said Exhibit shall not
affect or change this Lease or invalidate the same.

 

(b)                                 Without limiting the generality of the
incorporation by reference of all exhibits and/or addenda to this Lease,
Tenant’s failure to furnish the plans and specifications required pursuant to
Exhibit B (“Plans and Specifications”) to Landlord within the time periods and
in the form required by Exhibit B, or failure to perform any other obligation under Exhibit B, shall constitute a
default under this Lease pursuant to Article XIX below, which shall entitle Landlord to all remedies set forth in
Article XIX below.  In addition, if Landlord determines
that Landlord and Tenant are unable to agree upon the Plans and Specifications,
Landlord may at its option, terminate this Lease upon ten (10) days’ notice to
Tenant, in which event this Lease shall terminate on the date specified in such
notice and Tenant shall remain liable as provided in this Lease.  No deviation from the final Plans and
Specifications, once approved by Landlord, shall be made by Tenant without Landlord’s
prior written consent.  Approval of the final Plans and
Specifications by Landlord shall not constitute the assumption of any
responsibility by Landlord for their accuracy, efficacy or sufficiency, and
Tenant shall be solely responsible for such items.  Any occupancy of the Premises by Tenant prior to the Rental
Commencement Date shall be solely for the purpose of inspection, measurement
and obtaining information necessary to prepare Plans and Specifications and to
construct its leasehold improvements, and shall be subject to all terms and
conditions of this Lease applicable to such entry prior to the Rental
Commencement Date pursuant to Section 1.02 above.  Storefront barricades, reasonably acceptable
to Landlord, attractively screening the Premises from view during construction
shall be erected and maintained by Tenant at all times prior to Tenant’s
opening for business to the general public and shall be removed by Tenant prior
to such opening.

 

9

 

Section 5.02                            CERTIFICATE
OF OCCUPANCY.

Within the earlier of (a) ten (10) daysafter completion of construction of Tenant’s Work in accordance with the final Plans and Specifications as
approved by Landlord (as described in Section 5.01 and Exhibit B);
or (b) ten (10) days after Tenant opens the Premises for business, Tenant shall
deliver to Landlord the original of the
Certificate of Occupancy for the Premises issued by the appropriate
governmental agency, original execution copies of all mechanics’ lien releases
or other lien releases on account of Tenant’s Work, notarized and
unconditional, in such form as Landlord shall have approved, copies of all
building permits indicating inspection and approval by the issuer of said
permits, and an architect’s certification that Tenant’s Work has been
constructed in accordance with the final Plans and Specifications and is fully
complete in accordance with Exhibit B.

 

Section 5.03                            CONDITION
OF PREMISES.

Except as otherwise specifically provided in this Lease (including,
without limitation, in Exhibit B attached hereto), Tenant hereby agrees that upon delivery of possession
of the Premises to Tenant, Tenant shall accept such delivery of
possession of the Premises in its then existing “AS IS” condition, and Tenant acknowledges (i) that Tenant shall have
inspected the Premises and shall be fully aware of the condition of the
Premises as of delivery of possession; (ii) that Landlord shall have no
obligation to improve or alter the Premises for the benefit of Tenant; (iii)
that, except as may be expressly provided in this Lease, neither Landlord nor
any of Landlord’s employees, agents, representatives, contractors nor brokers
has made any representation or warranty of any kind respecting (a) the
condition of the Premises, Shopping Center and/or Development, (b) the
suitability thereof for Tenant’s use or the conduct of Tenant’s business, or
(c) occupancy or operation within the Shopping Center or Development by any
other person or entity.  Tenant irrevocably waives any claim
based upon or related to any such claimed representation by Landlord or any
claimed representation by Landlord as to traffic to be expected at the Premises
or sales to be expected at the Premises. 
Tenant’s taking possession of the Premises shall constitute Tenant’s
formal acceptance of the same and acknowledgement that the Premises are in the
condition called for under this Lease, subject to all field conditions existing
at the time of delivery of possession. 
In no event shall Landlord be liable for damages or otherwise as a
result of any failure to make the Premises available within the time and/or in
the condition provided in this Lease and no such failure shall permit Tenant to
rescind or terminate this Lease.

 

Section 5.04                            ULTIMATE RENTAL COMMENCEMENT
DATE.

Notwithstanding anything to the contrary contained herein, if for any
reason whatsoever (including, without limitation, excusable delay), the Rental Commencement Date
shall not have commenced prior to such date as shall be two (2) years from the
Commencement Date, then this Lease shall be automatically terminated without
further act of either party hereto and each of the parties hereto shall be
released from any further obligation hereunder.

 

ARTICLE
VI

 

ALTERATIONS, CHANGES AND ADDITIONS

 

Section 6.01                            ALTERATIONS
BY TENANT.

Tenant shall not make or cause to be made any alterations, additions or
improvements to the Premises without the prior written approval of Landlord
(for example, but without limiting the generality of the foregoing.  Tenant
shall not install or cause to be installed any signs, floor covering, interior
or exterior lighting, plumbing fixtures, shades, canopies, awnings, electronic
detection devices, antennas, mechanical, electrical or sprinkler systems, or
make any changes to the storefront).  However, Tenant may make such
alterations, additions and improvements to the interior of the Premises as do
not in the aggregate exceed in any lease year the amount set forth in the Data
Sheet, provided (a) the same are cosmetic and not structural in nature, do not
affect a utility system, the storefront or storefront sign and are not
inconsistent with the final Plans and Specifications approved by Landlord; (b)
that Tenant complies with the provisions concerning contractors, labor relations, compliance
with law, reporting of costs and insurance and bonds and the provisions
of Exhibit B; and (c) that Tenant shall submit to Landlord fifteen (15) days
written notice prior to undertaking any of the foregoing.  Tenant shall
present to Landlord Plans and Specifications for any other alterations,
additions or improvements at the time approval is sought, in accordance with
criteria and procedures as provided in Exhibit B.

 

Section 6.02                            REMOVAL BY TENANT.

All
alterations, decorations, additions and improvements made by Tenant shall be
deemed to have attached to the Premises and to have become the property of
Landlord upon such attachment.  Upon the expiration or earlier
termination of this Lease, Tenant shall not remove any of such alterations,
decorations, additions and improvements, except that trade fixtures, equipment
and other personal property installed by Tenant (“Property”) and not affixed to
the Premises may be removed if all Rental and other charges due hereunder are
paid in full and Tenant is not otherwise in default hereunder; provided that
Tenant immediately repairs any damage caused by such removal.  Further,
Landlord may designate by written notice to Tenant those alterations,
decorations, additions and improvements which shall be removed by Tenant at the
expiration or termination of this Lease, and Tenant shall, at its own cost and
expense, promptly

 

10

 

remove the same and immediately
repair any damage to the Premises caused by such removal.  If Tenant shall fail to remove any of its Property,
Landlord may, at Landlord’s option, retain either any or all of the property,
and title thereto shall thereupon vest in Landlord without compensation to
Tenant; or remove all or any portion of the Property from the Premises and
dispose of the Property in any manner, without compensation to Tenant.  In
the latter event, Tenant shall, upon demand, pay to Landlord the actual expense
of such removal and disposition and the repair of any damage to the Premises resulting
from or caused by such removal.  The obligations contained in this
Section 6.02 shall survive the expiration or earlier termination of this
Lease.

 

Section 6.03                            CHANGES AND ADDITIONS.

(a)                                  Landlord reserves the right at any time, and
from time to time, to make alterations to, and to build additional stories on,
the building in which the Premises is located, and to construct other buildings and improvements in the Shopping
Center and/or the Development, including any modifications of the Common Areas in connection therewith, to enlarge
or reduce the Shopping Center and/or
the Development, to add decks or elevated parking facilities, and to sell or
lease any part of the land
comprising the Development, as shown on Exhibit A-l, for the construction thereon
of a building or buildings to be occupied by a Department Store which may or
may not be part of the Development.  Landlord also reserves the right at
any time, and from time to time, to change, modify, or abolish any temporary
off-site utility serving the Shopping Center and/or Development.  The purpose of Exhibit A-l is to show the
approximate location of the Shopping Center while the purpose of Exhibit A-2 is
to show the approximate location of the Premises within the Shopping
Center.  Landlord reserves the right at
any time to relocate, reduce, enlarge, or reconfigure the various buildings,
parking areas and other common areas
shown on said exhibits; provided, however, that no such changes shall reduce
the parking areas below the number of parking spaces required by law.

 

(b)                                 Landlord shall have the exclusive right to
use all or any part of the roof of the Premises for any purpose; to erect additional stories or other structures over
all or any part of the Premises; to erect in connection with the construction
thereof temporary scaffolds and other aids to construction on the exterior of
the Premises, provided that access to the Premises shall not be denied; and to
install, maintain, use, repair and replace within the Premises pipes, ducts,
conduits, wires and all other mechanical equipment serving other parts of the
Shopping Center, the same to be in locations as will not unreasonably deny Tenant’s use thereof.  Landlord may make any use it desires of the
side or rear walls of the Premises (including, without limitation, freestanding
columns and footings for all columns), provided that such use shall not encroach on the interior of the
Premises unless (i) all work carried on by Landlord with respect to such
encroachment shall be done during hours when the Premises are not open for
business and otherwise shall be carried out in such a manner as not to
unreasonably interfere with Tenant’s operations in the Premises, and (ii)
Landlord, at its expense, shall repair all damage to the Premises resulting
from such work.

 

Section 6.04                            RIGHTS OF LANDLORD.

(a)                                  Landlord hereby reserves the right at any
time following the Commencement Date to change the location of the Premises in
the Shopping Center, as the same may be expanded from time to time; provided
such relocated premises shall contain approximately the same number of square
feet as the original Premises.  In the
event Landlord elects to exercise such right, it shall so advise Tenant by
sixty (60) days prior written
notice, and Tenant hereby agrees to be bound by such election and to execute,
upon receipt from Landlord, whatever amendments or other instruments as may be
required to correctly reflect the foregoing.  Landlord
shall pay the costs of renovating the relocated Premises so that the same are
reasonably comparable to the original Premises (including leasehold
improvements) and of moving and reinstalling Tenant’s trade fixtures and
storefront sign.  Landlord shall have no liability for
such relocation or the closing of the Premises other than as specifically set
forth in this paragraph and Tenant waives any such claims including, without
limitation, claims for lost profits.

 

(b)                                 In the event Landlord elects to expand or
renovate the Shopping Center in a manner that Landlord in its sole judgment
believes makes it desirable for Landlord to obtain possession of the Premises,
Landlord, upon one hundred eighty (180) days prior notice in writing to Tenant,
may terminate this Lease.  In the event of such termination,
within thirty (30) days following the date that Tenant shall have vacated the
Premises, paid all rents and performed all other accrued obligations under this
Lease through to the effective date of such termination, Landlord shall pay to
Tenant a sum equal to the then unamortized cost of Tenant’s leasehold
improvements paid for by Tenant exclusive of any construction allowance which
has been paid to Tenant and the value of any construction chargebacks set forth
in Exhibit B that have been waived by Landlord, such amortization to be as
determined with reference to Tenant’s federal income tax returns but in no
event more than an amount based on straight-line depreciation.  Upon written request from Landlord, Tenant
shall furnish to Landlord such information as Landlord may reasonably require
in connection with the determination of such costs.

 

11

 

ARTICLE VII

 

CONDUCT OF BUSINESS BY TENANT

 

Section 7.01                            PERMITTED USE.

Tenant
shall use the Premises only for the purpose of conducting the business
specifically set forth in the
Data Sheet and for no other use or purpose.  If any governmental license or permit
shall be required for the proper
and lawful conduct of Tenant’s business or other activity conducted in the
Premises, or if a failure to procure such a license or permit might or would in
any way adversely affect Landlord, the Shopping Center and/or the Development, then Tenant, at Tenant’s expense, shall
duly procure and thereafter maintain such license or permit and submit the same
for inspection by Landlord.  Tenant, at Tenant’s expense, shall at
all times comply with the requirements of each such license or permit.

 

Section 7.02                            OPERATION OF BUSINESS.

(a)                                  Tenant agrees to be open for business and to
operate in all of the Premises during the entire Term following the Rental
Commencement Date, and to actively and diligently conduct its business at all
times in a first class and reputable manner, maintaining at all times a full
staff of employees and a complete stock of current season merchandise.  Tenant
shall install and maintain at all times a display of merchandise in the display
windows, if any, of the Premises and shall keep the same well lighted.  Tenant shall be obligated to be open for
business and to operate continuously during all hours established by Landlord
as Shopping Center business hours.  In the event Landlord has approved
Tenant’s remaining open for business after normal Shopping Center hours, then
such approval shall be conditioned upon Tenant paying, as Additional Rent, all
additional costs incurred by Landlord as a result thereof.  Tenant’s
obligation to be open for business shall include, but not be limited to,
opening for business not more than fifteen (15) minutes late, closing for
business not more than fifteen (15) minutes early, and closing for business for
not more than fifteen (15) minutes during Shopping Center business hours.  If Tenant fails to comply with any of the
provisions of this Section 7.02(a), then Tenant shall pay within ten (10)
days of demand therefor by Landlord Additional Rent in the amount of One
Hundred Fifty Dollars ($150.00) per day until such time as Tenant is in
compliance with this Section 7.02(a). 
This remedy shall be in addition to any and all other remedies provided
in this Lease or by law to Landlord.  Failure by Tenant to be open for
business and to operate shall entitle Landlord, in addition to other remedies
provided in this Section 7.02, this Lease or by law, to mandatory
injunctive relief.  Without limiting the
generality of the foregoing, in the event the hours during which the Shopping
Center is legally permitted to be open to the public are regulated by any
lawful authority, then Landlord shall be the sole judge of which hours and days
shall be Shopping Center business hours.

 

(b)                                 Tenant, at Tenant’s expense, shall promptly
comply with all present and future laws, ordinances, orders, rules, regulations
and requirements of all governmental authorities having jurisdiction affecting
or applicable to the Premises or the cleanliness, safety, occupancy and use of
the same, whether or not any such law, ordinance, order, rule, regulation or
requirement is substantial, or foreseen or unforeseen, or ordinary or
extraordinary, or shall necessitate changes or improvements (other than
structural changes or improvements) or interfere with the use and enjoyment of
the Premises.  Tenant shall not do or permit anything to be done in or
about the Premises, nor bring anything therein, which will in any way conflict
with any such law, ordinance, order, rule, regulation or requirement affecting
the occupancy or use of the Premises, the Shopping Center or the Development
which has been or may hereafter be enacted or promulgated by governmental
authorities, or in any way obstruct or interfere with the rights of others, nor
shall Tenant use or allow the
Premises to be used for any improper, immoral or objectionable purposes or do
any act tending to injure the reputation of the Shopping Center and/or the
Development.  Tenant shall not give samples, approach customers or
otherwise solicit business in the parking or other Common Areas or any part of
the Development other than in the Premises, nor shall Tenant distribute any
handbills or other advertising matter in the parking area or other Common Areas
or any part of the Development other than in the Premises.

 

No
auction, liquidation, going out of business, fire or bankruptcy sale may be
conducted or advertised by sign or otherwise in the Premises.  Tenant
shall not permit the operation of any coin operated or vending machines or pay
telephones in the Premises, other than in the areas reserved solely for the use
of Tenant’s employees.  Tenant shall not sell or display any
merchandise within five feet (5) of the storefront leaseline or opening unless
such sale or display shall be expressly approved on the Plans and
Specifications or otherwise approved by Landlord, in writing, except that
Tenant shall be permitted to display merchandise in the display windows, if any.  Tenant
shall not use the areas adjacent to the Premises for business purposes or any
other purpose.  Tenant shall not store anything in service or exit
corridors.  All receiving and delivery of goods and merchandise for
the Premises, and all removal of merchandise, supplies, equipment, trash and
debris and all storage of trash and debris from the Premises shall be made only
by way of or in the areas provided by Landlord.  Tenant shall be solely responsible
for prompt disposal within the Premises or in such areas as may be provided for
such disposal by Landlord of all trash and debris from the Premises.  Tenant
shall not use or permit the use of any portion of the Premises as sleeping
quarters, lodging rooms, for any unlawful purpose, or for cooking, except as
specifically permitted in Section 7.01.
 Tenant shall not install any radio,
television, communication dish or other similar device or related equipment
exterior to the

 

12

 

Premises, shall not cause or
make any penetration of the roof of the Premises or the building in which the Premises is located and shall not erect any
aerial or antenna on the roof or exterior walls of any building within the Development.

 

If
Tenant shall fail to comply with any of the provisions of this
Section 7.02(b) then Tenant shall pay, within ten (10) days of demand
therefor by Landlord, Additional Rent in the amount of One Hundred Dollars
($100.00) per day until such time as Tenant is in compliance.  This
remedy shall be in addition to any and all other remedies provided in this Lease or by law to Landlord.

 

(c)                                  If Tenant is permitted pursuant to this Lease
to engage in the sale of food and/or beverages from the Premises, whether in
the area designated as a Food Court or otherwise, the same shall be offered
only pursuant to a menu approved
in writing by the Landlord and attached as an exhibit to this Lease which shall
not be changed without
Landlord’s prior written consent. 
Further, in such event, Tenant shall provide to Landlord upon demand
proof satisfactory to Landlord that monthly cleaning and maintenance of all
grease traps, pans and hood
ventilators located in the Premises has been performed by a suitable contractor.  A
suitable contractor shall be one who is bondable and capable of performing
Tenant’s obligations hereunder.  If
Tenant is permitted to engage in the sale of food and/or beverages from the
Premises and the Premises is not located within a Food Court area, Tenant shall
be solely responsible for prompt collection of all trash and debris within a
radius of thirty feet (30’) of the Premises.  Tenant shall further be solely
responsible for prompt disposal within the Premises or in such areas as may be
provided for such disposal by Landlord of all such trash and debris.  If Tenant fails to effect such prompt
collection and disposal, Landlord may provide for such collection and disposal
and, in such event, Tenant shall pay to Landlord the cost of such collection
and disposal plus a fifteen percent (15%) administrative fee to Landlord within
ten (10) days after receipt of a written statement setting forth such cost.

 

Section 7.03                            HAZARDOUS MATERIALS.

(a)                                  For the purposes of this Section 7.03
the following terms shall have the following meanings: (i) the term “Hazardous
Material” shall mean: (aa) any material or substance that, whether by its nature
or use, is subject to regulation under any Environmental Requirement, or (bb)
any material, substance or waste which is toxic, ignitable, explosive,
corrosive or reactive, or (cc) asbestos, or (dd) petroleum and petroleum-based
products, or (ee) formaldehyde, or (ff) polychlorinated biphenyls (PCBs), (gg)
freon and other chlorofluorcarbons or (hh) such other material as is designated
in a notice from Landlord to Tenant (whether such notice is provided before or
after Tenant first commences to use such material); (ii) the term
“Environmental Requirement” shall include the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. §9601 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. §1801 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. §6901 et seq.), the Toxic Substances Control Act
(15 U.S.C. §2601 et seq.), the Clean Air Act (42 U.S.C. §7401 et seq.), the
Federal Water Pollution Control Act (33 U.S.C. §1251 et seq.), all as presently
in effect and as the same may hereafter be amended, any regulation pursuant
thereto, or any other present or future law, ordinance, rule, regulation, order
or directive addressing environmental, health or safely issues of or by any
Governmental Authority; and (iii) the term “Governmental Authority” shall mean
the Federal government, or any state or other political subdivision thereof,
any local government, or any agency, court or body of the Federal government,
any state or other political subdivision thereof, exercising executive,
legislative, judicial, regulatory or administrative functions.

 

(b)                                 Tenant hereby represents and warrants to
Landlord that it will insure that (i) no Hazardous Material will be generated, manufactured,
sold, transported or located at, on, in, under or about the Premises; (ii) no Hazardous Material will be generated,
manufactured, sold, transported or located at, in, on, under or about the
Premises in a manner which violates any Environmental Requirement, or which
requires cleanup or corrective action of any kind under any Environmental
Requirement and (iii) no Hazardous Material will be transported, released,
emitted, sold, discharged, leached, dumped or disposed of from the Premises
onto or into any other property. 
However, the above prohibition concerning Hazardous Materials shall not
prevent Tenant from selling regular consumer products which contain small, safe
amounts of such Hazardous Materials or maintaining small, safe amounts of
cleaning solutions at the Premises.

 

(c)                                  Tenant shall comply and shall cause any other
person on or about the Premises, including, without limitation, employees,
invitees, contractors, subcontractors, licensees, subtenants or agents, to
comply in all respects with all Environmental Requirements, and shall cause
itself and its employees, invitees, contractors, subcontractors, licensees,
subtenants or agents not to generate, store, handle, manufacture, process,
sell, dispose of, transport or otherwise use Hazardous Materials at, in, on,
under or about the Premises in a manner that could lead or potentially lead to
the imposition on Landlord or the Shopping Center or the Development of any
liability or lien of any nature whatsoever.

 

13

 

(d)                                 Tenant
shall (i) notify Landlord promptly in the event of any spill or other release
of any Hazardous Material at, in, on,
under or about the Premises which is required to be reported to a Governmental
Authority under any Environmental Requirement; (ii) promptly forward to Landlord
copies of any notices received by Tenant relating to the alleged violations of
any Environmental Requirement; and (iii) promptly pay when due any fine or
assessment against Tenant, Landlord or the Shopping Center or the Development
relating to any Environmental Requirement or the existence of Hazardous
Materials at the Premises.

 

(e)                                  If,
at any time, it is determined that the operation or use of the Premises
violates any applicable Environmental Requirement, or that there are Hazardous
Materials located at, in, on, under or about the Premises which require special handling in collection, storage,
treatment or disposal, or any other form of cleanup or corrective action,
Tenant shall within ten (10) days after receipt of notice thereof from any
Governmental Authority or from Landlord take, at its sole cost and expense,
such actions as may be necessary to fully comply in all respects with all
Environmental Requirements; provided, however, that if such compliance cannot
reasonably be completed within such ten (10) day period, Tenant shall commence
such necessary action within such ten (10) day period and shall thereafter
diligently and expeditiously proceed to fully comply in all respects and in a
timely fashion with all Environmental Requirements.  If Tenant fails to
timely take, or to diligently and expeditiously proceed to complete in a timely
fashion, any such action, Landlord may, in its sole and absolute discretion,
make advances or payments towards the performance or satisfaction of the same,
but shall in no event be under any obligation to do so.  All sums so advanced or paid by Landlord
(including, without limitation, counsel and consultant fees and expenses,
investigation and laboratory fees and expenses, and fines or other penalty
payments) and all sums advanced or paid in connection with any judicial or
administrative investigation or proceeding relating thereto, will immediately,
upon demand, become due and payable from Tenant.  If Tenant fails to
make such payment within ten (10) days of such demand, Tenant shall be in
default under this Lease and Landlord may, without any further notice to Tenant
terminate this Lease or resort to any other of its rights upon default set
forth in Article XIX.  Tenant will
execute and deliver, promptly upon request, such instruments as Landlord may
deem useful or necessary to permit Landlord to take such action, and such
notes, mortgages, or other security as Landlord may require to secure all sums
to be advanced or paid by Landlord.

 

(f)                                    If a lien is filed against the Premises, the
Development or the Shopping Center by any Governmental Authority resulting from
the need to expend or the actual expending of monies arising from an
Environmental Requirement, or a liability regarding Hazardous Materials related
to an action or omission, whether intentional or unintentional, of Tenant or
for which Tenant is responsible, then Tenant shall, within ten (10) days from
the date that the Tenant is first given notice that such lien has been placed
(or within such shorter period of time as may be specified by Landlord if such
Governmental Authority has commenced steps to cause the property to be sold
pursuant to such lien) either (i) immediately pay the claim and remove the
lien, or (ii) immediately furnish a cash deposit, bond, or such other security
with respect thereto as is satisfactory in all respects to Landlord and is
sufficient to effect a complete discharge of such lien.

 

(g)                                 If Landlord reasonably believes that (i)
Tenant has permitted a Hazardous Material at the Premises, or (ii) that any
other condition violates or threatens to violate any Environmental Requirement,
Landlord may, at is option, cause art environmental site assessment of the
Premises or portions thereof to be conducted to confirm Tenant’s compliance
with the provisions of this Section, and Tenant shall cooperate in all
reasonable ways with Landlord in connection with any such environmental site
assessment and shall pay all costs and expenses incurred in connection
therewith.

 

(h)                                 Tenant shall defend, indemnity, and hold
harmless Landlord its affiliates, parent corporation, subsidiaries, partners,
management company, successors and assigns, and the employees, agents,
officers, directors of any of them from and against any and all loss, claims,
demands, penalties, causes of action, lines, liabilities, settlements, damages,
costs or expenses of whatever kind or nature, known or unknown, foreseen or
unforeseen, contingent or otherwise (including, without limitation, counsel and
consultant fees and expenses, investigation and laboratory fees and expenses,
court costs, and litigation expenses) directly or indirectly arising out of, or
in any way related to (i) any breach by Tenant of any of the provisions of this
Section 7.03; (ii) the presence, use, generation, transportation,
disposal, spillage, discharge, emission, leakage, release, or threatened
release of any Hazardous Material which is at, in, on, under, about, from or
affecting the Premises, the Shopping Center or the Development including,
without limitation, any damage or injury resulting from any such Hazardous
Material to or affecting the Premises, the Shopping Center, the Development or
any soil, water, air, vegetation, buildings, personal property, persons or
animals; (iii) any personal injury (including wrongful death) or property
damage (real or personal) arising out of or related to any such Hazardous
Material; (iv) any lawsuit brought or threatened, settlement reached, or order
or directive of or by any Governmental Authority relating to such Hazardous Material;
or (v) any violation of any Environmental Requirement or any policy or
requirement of Landlord hereunder.  The
indemnities set forth in this subparagraph (h) are limited to actions or
omissions of Tenant, its contractors, subcontractors, licensees, concessionaires
or others on the Premises at the request of or with the consent of Tenant.  Tenant
shall indemnify Landlord for all losses, including, but not limited to, damages
occasioned by the inability of

 

14

 

Landlord to relet the
Premises or a reduction in the fair market and/or Rental value of the Premises,
Shopping Center or
Development.

 

This
indemnification shall, notwithstanding any exculpatory or other provision of
any nature whatsoever to the contrary set forth in the Lease, or any other
document or instrument now or hereafter executed between Landlord and Tenant,
constitute the personal recourse undertaking, obligation and liability of the
Tenant and any guarantor.  The obligations set forth in this
Section 7.03 shall survive the termination of the Lease.

 

(i)                                     If the Lease is assigned to, or assumed by
another party, or in the event of a sublease, it shall be a condition of
such assignment, assumption or sublease that the assignee, party assuming or
sublessee shall assume the obligations
of this Section 7.03 in addition to such obligations of Tenant continuing
after and surviving such sublease, assignment or assumption.  The obligations and liabilities of Tenant
under this Section 7.03 shall
survive and continue in full force and effect and shall not be terminated,
discharged or released, in whole or in part, irrespective of any assignment,
sublease or assumption and irrespective of any other fact or
circumstance of any nature whatsoever.

 

(j)                                     Tenant shall surrender the Premises to
Landlord upon the expiration or earlier termination of the Lease free of
Hazardous Materials and free of any violation of any Environmental
Requirement.  Upon surrender, Tenant
shall provide Landlord with a report by experts acceptable to Landlord showing
the Premises free of Hazardous Materials.

 

Section 7.04                            RADIUS.

Tenant
acknowledges that sales from a store owned by it or a related entity as
described herein within a ten (10) mile radius may reduce the Gross Sales that
might otherwise be made from the Premises.  If such a business is operated, the
specific effect on Gross Sales may be difficult or impossible to establish with
certainty.  Therefore, in order to
provide Landlord with a fair and adequate rental for the Premises, in the event
that during the Term hereof Tenant or any person, firm, corporation or other
entity who or which controls or is controlled by Tenant, or by any person,
firm, corporation or other entity who or which controls Tenant, shall directly,
either individually or as a partner or stockholder or otherwise, own, operate
or become financially interested in any business similar to or in competition
with the business of Tenant described in the Data Sheet, within a radius of ten
(10) miles from the Development, then the Gross Sales of any such business or
businesses within said area shall be included in the Gross Sales made from the
Premises and the Percentage Rental hereunder shall be computed upon the
aggregate of the Cross Sales made from the Premises and by any such other
business or businesses then conducted within said area.  Tenant shall be
obligated to provide Landlord with a statement of Tenant’s Gross Sales for all
such other businesses operated within such area, in accordance with the
provisions of Article III and Landlord shall have a right to examine the books
and to audit such other businesses in a manner as set forth in Article IV of
this Lease.

 

This
Section 7.04 shall not apply to any such business or businesses open and
in operation within said area as of the date of execution of this Lease.  Landlord or Landlord’s authorized
representative or agent shall have the right at all reasonable times during the
Term hereof and for a period of at least two (2) years after the expiration of
the Term, to inspect, audit, copy and make extracts of the books, source
documents, records and accounts pertaining to such other business or businesses
for the purpose of determining or verifying the Additional Rent due to
Landlord pursuant to this Section.

 

ARTICLE
VIII

 

COMMON AREAS

 

Section 8.01                            OPERATION
AND MAINTENANCE OF COMMON AREAS.

Following
the Rental Commencement Date, Landlord shall cause to be operated and
maintained during the Term all “Common Areas” (as defined below) at a level
comparable to other regional shopping malls in the region in which the
Development is located.  The manner in which such areas and
facilities shall be operated and maintained, and the expenditures therefor,
shall be at the sole discretion of Landlord and the use of such areas and
facilities shall be subject to such reasonable regulations as Landlord may make
from time to time.

 

Section 8.02                            USE
OF COMMON AREAS.

The
term “Common Area(s)”, as used in this Lease, shall mean, to the extent
provided by Landlord, all improved and unimproved areas within the Shopping
Center and the Development including, without limitation: (i) parking
structures, areas and facilities (collectively, “parking facilities”), traffic
control and traffic information signs and equipment, roadways, pedestrian
sidewalks, curbs, driveways, a monorail system, if any, public transportation
loading and unloading facilities not devoted to a single tenant, truckways,
delivery areas, landscaped areas, community rooms, office facilities,
elevators, escalators, roofs, skylights, beams, stairs and ramps not contained
within any Floor Area, public restrooms and comfort

 

15

 

stations, service areas,
service and fire exit corridors, passageways and other areas, amenities, facilities
and improvements provided by Landlord, and (ii) those areas within the
Development and areas adjacent to the Development containing parking
facilities, signs, pylons or structures advertising the Development or which
from time to time may be provided by the owners of such areas for the
convenience and use of Landlord, the tenants of the Shopping Center and the
Development, the owners and occupants of the Department Stores and their
respective concessionaires, agents, employees, customers, invitees and any
other licensees.  The use and occupancy by Tenant of the Premises shall
include the non-exclusive use of the Common Areas in common with Landlord and
with all others for whose convenience and use the Common Areas have been or may
hereafter be provided by Landlord or by the owners of Common Areas not within
the Shopping Center or the
Development as specified in the preceding sentence, subject, however, to such
rules and regulations for the use thereof us may be prescribed from time to
time by Landlord or the owner of such Common Areas, including the right of
Landlord or such owner to impose parking charges, whether by meter or
otherwise, and to determine the hours and mode of operation of the elevators
and escalators serving the Development and the Shopping Center.  In
no event, however, shall Tenant, its agents or employees, use the Common Areas
for the display or sale of merchandise.

 

Landlord
shall have the right, but not the obligation, from time to time, to modify the
Common Areas, remove portions of the Common Areas from common use, to permit
entertainment events, advertising displays, educational displays and other
displays in the Common Areas that in Landlord’s judgment tend to attract the
public, to erect buildings or other improvements on the Common Areas, to lease
kiosks and to establish, modify and enforce reasonable rules and regulations
with respect to all Common Areas. 
Tenant shall not be entitled to any credit for income earned by Landlord
with respect to the Common Area.

 

Tenant
and its employees shall not park their cars or any other vehicles in the
parking facilities except in the areas specifically designated by Landlord for
employee parking.  Automobile license
numbers of employees’ cars shall be furnished by Tenant to Landlord upon Landlord’s
request.  In the event any vehicle is parked by an employee of
Tenant in a parking area not designated for employee parking, (a) Landlord
shall have the right to cause the vehicle to be towed, at Tenant’s expense, to
a location designated by Landlord, and/or (b) Tenant shall pay to Landlord as
Additional Rent the sum of Fifty Dollars ($50.00) per day per automobile parked
by Tenant or an employee of Tenant in a parking area not designated for
employee parking.  Tenant shall
indemnify, defend and hold harmless Landlord and its employees, agents,
contractors and representatives from and against any and all claims of the
employee and/or owner of any vehicle so towed.  Prior to imposing any charge upon
Tenant hereunder, Landlord shall give Tenant written notice of the first
violation of this provision and Tenant shall have two (2) days thereafter
within which to cause the violation to be discontinued; if the violation is not
discontinued within said two day period, then the per day fine shall commence without
further action by Landlord.  After notice of such first violation,
no prior notice of any subsequent violation shall be required.  All amounts due under the provisions of this
paragraph shall be payable by Tenant within ten (10) days after demand therefor.

 

Landlord
may at any time close any Common Area to make repairs or changes, to prevent
the acquisition of public rights in such area or to discourage non-customer
parking, to use areas for attendant or valet parking, and may do such other
acts in and to the Common Areas as in its judgment may be desirable to improve
the convenience thereof.

 

Section 8.03                            COMMON AREA OPERATING COSTS
AND EXPENSES.

(a)                                  Tenant shall pay to Landlord as Additional
Rent in the manner and at the place hereinafter provided Tenant’s proportionate
share of the following (collectively “Operating Costs and Expenses”): all costs
and expenses of every kind and nature paid or incurred by Landlord in managing,
operating, equipping, policing and protecting, lighting, signing, cleaning,
painting, heating, ventilating, air conditioning, providing sanitation and
sewer and other services, insuring, defending or prosecuting lawsuits (or other
legal proceedings), repairing, replacing and maintaining (i) the Common Areas
(including the parking facilities), (ii) all buildings and roofs within the
Development and (iii) all other areas, facilities, work and storage areas,
leased or owned property, and buildings whether located within or outside of,
the Development or the Shopping Center (the “project areas”) plus an amount
equal to fifteen percent (15%) of the total of all of the costs and expenses
set forth herein.

 

By
way of example, Operating Costs and Expenses shall include, but shall not be
limited to, the full cost of: illumination and maintenance of signs, whether
located on or off the site of the Development; trash removal or recycling; snow
and ice removal, storm drainage systems and other installations; water, gas,
sewage, electricity and other utilities, including any and all usage, service,
hook-up, connection, availability and/or standby fees, deposits or charges
pertaining to same; maintenance and operation of any temporary or permanent
utility (including a sewage disposal system, within or outside the Shopping
Center and/or the Development) built, operated and/or maintained for the
specific purpose of servicing the Shopping Center and/or the Development,
together with hook-up or connection fees and service charges; compliance with
all rules, regulations and orders of governmental authorities including those
pertaining to environmental safety (e.g. the cost of monitoring air quality and
project life safety systems) and any amounts payable to municipal and/or other
governmental bodies in connection with environmental impacts; capital improvements
designed to protect the health and safety of the tenants in the Shopping Center
and/or the Development; cleaning,

 

16

 

lighting, striping and
landscaping curbs, gutters, sidewalks, drainage and irrigation ditches,
conduits, pipes and
canals located on or adjacent to the Development; premiums and other costs for
all liability, casualty and property insurance maintained by Landlord
(including rent insurance, self-insurance and the payment of deductible amounts
under insurance policies) and for any payment or reserve made by Landlord for
claims for damage to person (including loss of life) or property; personal
property taxes; audit fees and expenses; supplies; maintenance and replacement
of equipment supplying music to the Shopping Center and/or the Development;
taxes and assessments levied or assessed by any municipal, county, state,
federal or other taxing or assessing authority upon, against or with respect to
the Common Areas and/or the land thereunder and the land on which the
Development is situated; and all property and improvements (including any land
upon which may be located any temporary or permanent utility, within or outside
the Development), built, operated and/or maintained for the specific purpose of
servicing the Shopping Center and/or the Development which may at any time
comprise or serve the Shopping Center and/or the Development, whether located
on or off the site of the Development, irrespective of whether the same is
taxed or assessed as real or personal property; depreciation of maintenance
equipment used in the operation or maintenance of Common Areas or project
areas; and total compensation and benefits (including premiums for worker’s
compensation and other insurance) paid to or on behalf of employees involved in
the performance of the work specified in this Section 8.03.  The
preceding is for definitional purposes only and shall not impose any obligation
upon Landlord to incur such expenses or provide such services.  In the event any item of Operating Costs and
Expenses serves or benefits one or more properties in addition to all or part
of the Development, the expense attributable to such item included in Operating
Costs and Expenses shall be equitably prorated by Landlord.

 

(b)                                 The proportionate share so to be paid by
Tenant shall be that portion of Operating Costs and Expenses which the number
of square feet of Floor Area in the Premises bears to the total number of
square feet of gross leased and occupied Floor Area of all buildings in the
Shopping Center.  The gross leased and occupied Floor
Area in effect for the whole of any lease year shall be the average of the
gross leased and occupied Floor Area in effect on the first day of each
calendar month in such lease year. 
Prior to the proration of Operating Costs and Expenses, there shall be
deducted therefrom all amounts received from the Department Stores (and from
any other tenant within the Development not included in the definition of
Shopping Center) toward such costs and expenses.

 

(c)                                  Tenant’s proportionate share of Operating
Costs and Expenses for each lease year during the Term following the Rental
Commencement Date shall be paid as Additional Rent to Landlord in monthly
installments on the first day of each calendar month, in advance, in an amount
estimated by Landlord from time to time.  Subsequent to the end of each
calendar or fiscal or lease year (at Landlord’s option), Landlord shall furnish
Tenant with a statement of Tenant’s proportionate share of such Operating Costs
and Expenses for such period showing the method of computing such share.  If
the total amount paid by Tenant under this Section for any such lease year
shall be less than the actual amount due from Tenant for such lease year as
shown on such statement, Tenant shall pay to Landlord the difference between
the amount paid by Tenant and the actual amount due, within thirty (30) days
after the furnishing of each such statement. 
If the total amount paid by Tenant hereunder for any such lease year
shall exceed such actual amount due from Tenant for such year, such excess
shall be credited against the next payment due from Tenant to Landlord under
this Lease.  If at the end of the final
lease year the total amount paid by Tenant hereunder for such lease year shall
exceed such actual amount due from Tenant for such lease year, such excess
shall be refunded to Tenant after Tenant has vacated the Premises in good
condition at the conclusion of this Lease and any other sums due Landlord from
Tenant under this Lease have been paid in full or deducted therefrom.  Landlord may estimate the annual budget and
charge the same to Tenant on a monthly basis, subject to revision by Landlord
of the budget from time to time and final annual adjustment based upon actual
Operating Costs and Expenses.

 

ARTICLE IX

 

SIGNS

 

Section 9.01                            TENANT’S
SIGNS.

Tenant shall affix a sign to the exterior surface of the storefront of
the Premises located inside the Shopping Center.  Tenant shall pay
all costs of fabricating, constructing, operating and maintaining such sign
including, without limitation, all charges for electricity.  Tenant
shall keep said sign well lighted during such hours as Landlord shall designate
and shall maintain said sign in good condition and repair during the entire
Term of this Lease.  Said sign shall
conform to the criteria for signs contained in Exhibit B, and the size,
content, design and location thereof shall be subject to the prior written
approval of Landlord.  Except as hereinabove mentioned,
Tenant shall not place or cause to be placed, erected or maintained on any
exterior door, wall, window or the roof of the Premises, or on the interior or
exterior surface of the glass of any window or door of the Premises, or on any
sidewalk or other location outside the Premises, or on or within any display
window space in the Premises, or within five feet (5) of the front of the
storefront leaseline, whether or not there is display window space in the
Premises, or within any entrance to the Premises, any sign (flashing, moving,
hanging, handwritten, or otherwise), decal, placard, decoration,

 

17

 

flashing, moving or hanging
lights, lettering, or any other advertising matter of any kind or description;
provided, however, that subject to the prior written approval of Landlord with
respect to design and placement, Tenant may place decals for safety purposes on
glass storefronts where warranted.  No symbol, design, name, mark or
insignia adopted by Landlord for the Shopping Center or the Development shall
be used without the prior written consent of Landlord.  No illuminated sign located in the interior
of the Premises and visible from outside the Premises shall be permitted
without the prior written approval of Landlord.  All signs located in the interior of
the Premises shall be in good taste so as not to detract from the general
appearance of the Premises, the Shopping Center.  In the event Tenant shall be in default of this Section 9.01,
Tenant shall pay as Additional Rent the sum of One Hundred Dollars ($100.00)
for each day of default in order to reimburse Landlord for the additional
administrative expenses resulting therefrom.

 

ARTICLE X

 

MAINTENANCE OF PREMISES

 

Section 10.01                     LANDLORD’S
OBLIGATIONS FOR MAINTENANCE.

Landlord shall
keep and maintain the roof (excluding any skylights, Tenant rooftop HVAC units and/or roof penetrations made by Tenant, any
of which shall only be permitted with Landlord’s prior written consent),
foundation and the exterior surface of the exterior walls of the building in
which the Premises are located (exclusive of storefronts, doors, door frames,
door checks, other entrances, windows and window frames which are not part of
Common Areas) in good repair, except that Landlord shall not be called upon to
make any such repairs occasioned by the act or omission or negligence of
Tenant, its agents, employees, invitees, licensees or contractors.  Landlord
shall not be called upon to make any other improvements or repairs of any kind
upon the Premises and appurtenances, except as may be required under Articles
XVII and XVIII hereof, and nothing contained in this Section 10.01 shall
limit Landlord’s right to reimbursement from Tenant for maintenance, repair
costs and replacement costs conferred elsewhere in this Lease.  In no event shall Landlord be liable for
consequential damages or Tenant’s lost profits claimed to be caused by any
failure of maintenance or repair by Landlord.

 

Section 10.02                     TENANT’S OBLIGATIONS FOR
MAINTENANCE.

(a)                                  Except as provided in Section 10.01 of
this Lease, Tenant, at Tenant’s expense, shall keep and maintain in first-class
appearance, in a condition equal to or better than that which existed when
Tenant initially opened the Premises for business, reasonable wear and tear
excepted, and in good condition and repair (including replacement of parts and
equipment, if necessary), the Premises and every part thereof and any and all
appurtenances thereto wherever located, including, without limitation, the
interior surfaces of the exterior walls, the exterior and interior portion of
all doors, door frames, door checks, other entrances, windows, window frames,
plate glass, storefronts, all plumbing and sewage facilities within the
Premises (including free flow to the main sewer line), fixtures, ventilation,
heating and air conditioning and electrical systems exclusively serving the
Premises (whether or not located in the Premises), sprinkler systems, walls,
floors and ceilings (including floor and ceiling coverings), and all other
repairs, replacements, renewals and restorations, interior and exterior,
ordinary and extraordinary, foreseen and unforeseen, and all other work
performed by or on behalf of Tenant pursuant to Exhibit B and Article VI
hereof.

 

(b)                                 Tenant shall keep and maintain the Premises
in a clean, sanitary and safe condition in accordance with applicable law and
all directions, rules and regulations of the health officer, fire marshal,
building inspector or other proper officials of the governmental agencies
having jurisdiction and Tenant shall comply with all requirements of law,
ordinances and otherwise, affecting the Premises, all at Tenant’s sole cost and
expense.  Tenant also agrees to comply
with requirements of any insurance underwriters, inspection bureaus or a
similar agency designated by Landlord with respect to the Premises.  At
the end of the Term, Tenant shall surrender the Premises in good order,
condition and repair, reasonable wear and tear excepted.  Tenant, at its own
expense, shall install and maintain such fire extinguishers and other fire
protection devices as may be required from time to time by any agency having
jurisdiction thereof or by the insurance underwriter insuring the building in
which the Premises are located.

 

(c)                                  Tenant shall keep the Premises and all other
parts of the Development free from any and all liens arising out of any work
performed, materials furnished or obligations incurred by or on behalf of
Tenant. 
Within ten (10) days after written request therefor by Landlord,
Tenant shall (a) bond against or discharge any mechanics’ or materialmens’ lien
or (b) furnish Landlord with a copy of the recorded waiver of lien, recorded
release of lien, or of the recorded bond discharging such lien.  Tenant
shall reimburse Landlord as Additional Rent for any and all costs and expenses
including, without limitation, attorneys’ fees, which may be incurred by
Landlord by reason of the filing of any such liens and/or removal of same, such
reimbursement to be made within ten (10) days after receipt by Tenant from Landlord
of a statement setting forth the amount of such costs and expenses such
reimbursement to be paid to Landlord in the manner and at the place provided in
this Lease.  Tenant shall give Landlord at least fifteen (15) days’
written notice prior to commencing or causing to be commenced any work on the
Premises (whether prior or subsequent to the Commencement Date), so that
Landlord shall have reasonable opportunity to file and post a notice of
non-responsibility for Tenant’s work.

 

18

 

(d)                                 In the event Tenant fails, refuses or
neglects to maintain the Premises as required hereunder or to commence and
complete repairs promptly and adequately, to remove or bond against any lien,
to pay any cost or expense, to reimburse Landlord, or otherwise to perform any
act or fulfill any obligation required of  Tenant
pursuant to this Section 10.02, Landlord may, but shall not be required
to, perform such maintenance or to make or complete any such repairs, remove or
bond against such lien, pay such cost or perform such act or the like without
prior notice to, but at the sole cost and expense of Tenant.  Tenant
shall reimburse Landlord, as Additional Rent, for all cost and expense of
Landlord thereby incurred within ten (10) days after receipt by Tenant from
Landlord of a statement setting forth the amount of such cost and expense.

 

ARTICLE XI

 

INSURANCE AND INDEMNITY

 

Section 11.01                     TENANT’S INSURANCE.

(a)                                  Tenant, at its sole cost and expense, shall,
during the entire Term hereof, procure and keep in force: (i) Commercial
General Liability Insurance with respect to the Premises and the operations of
Tenant in, on or about the Premises, in which the limits shall be not less than
Three Million Dollars ($3,000,000.00) per occurrence combined single limit,
broad form/extended bodily injury, death and property damage, and business
automobile liability insurance covering all owned, non-owned and hired or
borrowed vehicles of Tenant used in connection with the operation of its
business from the Premises, in which the limits shall be not less than One
Million Dollars ($1,000,000.00) per occurrence combined single limit, insuring
for bodily injury, death and property damage; (ii) plate glass insurance, at
full replacement value; (iii) insurance against fire, extended coverage,
vandalism, malicious mischief, water damage which does not exclude backup from
sewers or drains and/or sprinkler leakage, and such other additional perils
including earthquake and flood as now are or hereafter may be included in a
standard extended coverage endorsement from time to time in general use in the
county in which the Development is located, insuring Tenant’s merchandise,
trade fixtures, furnishings, equipment and all other items of personal property
of Tenant located on or in the Premises, including steam boiler insurance, if
applicable, in an amount equal to the full replacement cost thereof; (iv)
workers’ compensation coverage as required by law and including Employer’s
Liability Insurance in the amount of Two Million Dollars ($2,000,000.00) each
accident, Two Million Dollars ($2,000,000.00) each employee, by disease, Two
Million Dollars ($2,000,000.00) policy aggregate by disease; (v) with respect
to alterations, improvements and the like required or permitted to be made by
Tenant under this Lease, contingent liability and builders’ risk insurance, in
an amount satisfactory to Landlord; (vi) the insurance required under Exhibit
B, and (vii) product liability coverage (including, without limitation, if this
Lease covers Premises in which food and/or beverages are sold and/or consumed,
liquor liability coverage for acts arising out of the serving and/or
consumption of food and/or alcoholic beverages on or obtained at the Premises,
to the extent obtainable), for not less than Three Million Dollars
($3,000,000.00) combined single limit, bodily injury, death and property damage.  In
addition, if Landlord deems it necessary to increase the amounts or limits of
insurance required to be carried by Tenant hereunder, Landlord may reasonably
increase said amounts or limits, and Tenant shall so increase the amounts or
limits of the insurance required to be carried by Tenant hereunder and shall
provide Landlord with policies or certificates indicating the increased amounts
or limits as provided in this Section 11.01.

 

(b)                                 All policies of insurance required to be
carried by Tenant pursuant to this Section 11.01 shall be written by
insurance companies of adequate financial capacity satisfactory to Landlord
with a Best’s rating and Financial Size Category of not less than A-/VII and
authorized to do business in the state in which the Development is
located.  Any such insurance required of
Tenant hereunder may be furnished by Tenant under any blanket policy carried by
it or under a separate policy therefor. 
An insurance certificate (and endorsements where same become necessary)
together with a copy of the policy declaration page from Tenant’s insurer,
certifying that such policy has been issued, provides the coverage required by
this Section 11.01 and contains all of the provisions specified in this
Section 11.01 (including, without limitation, naming of additional insured
entities as required by Section 11.0l(c) below and a statement that no
deductible or self-insured retention applies to such policy), shall be
delivered to Landlord, at the address set forth on the Data Sheet prior to the
commencement of the Term of this Lease, and such insurance information shall
also be provided in connection with all renewals, not less than thirty (30)
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. 
Landlord may, at any time, and from time to time, inspect and
copy any and all insurance policies required to be procured by Tenant
hereunder.

 

(c)                                  Each
policy evidencing insurance required to be carried by Tenant pursuant to this
Section 11.01 shall contain the following clauses and provisions: (i) a
provision that such policy and the coverage evidenced thereby shall be primary
and non-contributing with respect to any policies carried by Landlord and that
any coverage carried by Landlord be excess insurance; (ii) a provision including
Landlord and the parties set forth on Exhibit C of this Lease and any other
parties designated by Landlord from time to time as additional insured
entities; (iii) a waiver by the insurer of any right to subrogation against
Landlord and other additional insured entities (as set forth on Exhibit C), its
agents, employees and representatives which arises or might arise by reason of
any payment under such policy or by reason of any act or omission of Landlord,

 

19

 

its agents, employees or representatives;
(iv) a severability of interest clause or  endorsement;
(v) a provision that the insurer will not cancel or change the coverage
provided by such policy without giving Landlord thirty (30) days’ prior written
notice; and (vi) such policy shall be an “occurrence form” policy.  Any
policy of insurance required to
be carried by Tenant that names the parties set forth in this
Section 11.01 (c) (ii) as additional insured entities shall not be subject
to a deductible or self-insured retention, it being the intent of the parties
that such insurance shall fully and completely insure such additional insured
entities for all loss or expense.

 

(d)                                 In the event that Tenant fails to procure or
to maintain, at the times and for the duration specified in this
Section 11.01, any insurance required by this Section 11.01, or fails
to carry insurance required by law or governmental regulation, Landlord may
(but shall not be required to) at any time or from time to time, and without
notice to Tenant, procure such insurance and pay the premiums therefor, and the
cost of same, plus a fifteen percent (15%) administrative fee shall be deemed
Additional Rent and shall be payable upon Landlord’s demand.

 

(e)                                  Tenant will not do or suffer to be done, or
keep or suffer to be kept, anything in, upon or about the Premises which will
violate Landlord’s policies of hazard or liability insurance or which will
prevent Landlord from procuring such policies in companies acceptable to Landlord.  If
anything done, omitted to be done or suffered by Tenant to be kept in, upon or
about the Premises shall cause the rate of fire or other insurance on the
Premises or on other property of Landlord or of others within the Shopping
Center to be increased beyond the minimum rate from time to time applicable to
the Premises or to any property for the use or uses made thereof, Tenant will
pay, as Additional Rent, the amount of any such increase upon Landlord’s demand.

 

(f)                                    In the event Tenant retains any security
guard contractor to service the Premises, Tenant shall cause Landlord to receive a customary waiver
of subrogation under the worker’s compensation insurance policy covering such
security guard.  Tenant shall provide Landlord with
written notice if any such security guard is to carry a firearm upon the
Premises or Development, and in such event, Landlord shall have the right to
impose additional reasonable insurance requirements upon Tenant and/or such
security guard, which shall be complied with by Tenant and Tenant shall provide
Landlord with evidence of such compliance prior to the posting of such security
guard at the Premises.  Notwithstanding
the foregoing, Landlord shall have the sole and absolute right to prohibit any
person (including any security guard) from carrying a firearm upon the
Premises, Shopping Center and/or Development.

 

Section 11.02                     LANDLORD’S INSURANCE.

During
the Term following the Rental Commencement Date, Landlord shall provide (a) in
amounts and coverages determined by Landlord (but not less than the replacement
cost of the property so insured), with or without deductibles, insurance
coverage in the form of an “all-risk” type policy against loss or damage by
fire, flood, windstorm, hail, explosion, damage from aircraft and vehicles and
smoke damage, and such other risks as are from time to time included in a
standard extended coverage endorsement, insuring the Shopping Center and the
leasehold improvements to the Premises (exclusive of Tenant’s merchandise,
trade fixtures, furnishings, equipment, plate glass, signs and all other items
of personal property of Tenant); and (b) to the extent the same is available in
the market during such period, rental interruption insurance, which insurance
may be carried in amounts equal to Tenant’s total Rental obligation for
twenty-four (24) months under this Lease plus the total of the estimated costs
to Tenant of Taxes and Operating Costs and Expenses for such twenty-four (24)
months. 
Tenant shall submit to Landlord a statement setting forth the
cost of Tenant’s leasehold improvements promptly after completion thereof.  Landlord
at its option may carry a special extended coverage endorsement.  The cost of all insurance maintained by Landlord pursuant to this
Section shall be included as part of the costs set forth in Section 8.03
of this Lease.

 

Section 11.03                     COVENANT TO HOLD HARMLESS.

Tenant
covenants to defend and indemnify Landlord, its partners, shareholders,
representatives, management company, agents and employees, and save them
harmless (except to the extent of loss or damage resulting from the intentional
or willful acts or omissions or the gross negligence of Landlord not required
to be insured against by Tenant pursuant to this Article XI) from and against
any and all claims, actions, demands, judgments, awards, fines, mechanics’
liens or other liens, losses, damages, liability and expense, including
attorneys’ fees and court costs, in connection with all losses, including loss
of life, personal injury and/or damage to property, arising from or out of any
occurrence (or arising from or out of Tenant’s failure to comply with any
provision of this Lease) wholly or in part by any act or omission of Tenant,
its concessionaires, agents, contractors, suppliers, employees, servants,
customers or licensees and including any product liability claim or any labor
dispute involving Tenant or its contractors and agents.  In case Landlord or
any other party so indemnified shall be made a party to any litigation
commenced by or against Tenant, then Tenant shall defend, indemnify, protect
and save them harmless and shall pay, as the same becomes due and payable, all
costs, expenses and reasonable attorneys’ fees and court costs incurred or paid
by them in connection with such litigation.

 

20

 

Section 11.04                     WAIVER OF RIGHT OF RECOVERY.

Except
as otherwise provided in this Lease, neither Landlord nor Tenant shall be
liable to the other or to any insurance company (by way of subrogation or
otherwise) insuring the other party for any loss, or damage to any building,
structure or other tangible property, or any resulting loss of income, or
losses under worker’s compensation laws and benefits, even though such loss or
damage might have been occasioned by the negligence of such party, its agents
or employees.  The provisions of this Section 11.04 shall not limit
the indemnification for liability to third parties pursuant to
Section 11.03.

 

ARTICLE XII

 

UTILITIES

 

Section 12.01                     UTILITY CHARGES.

(a)                                  Tenant shall be solely responsible for and
shall promptly pay for all fees, deposits and charges, including use and/or
connection fees, hook-up fees, standby fees, and/or penalties for discontinued
or interrupted service, and the like, for water, gas, electricity, fire alarm,
burglar alarm, telephone, cable television, sewer and sanitation, solid waste
disposal and any other service or utility used, in or upon or furnished to the
Premises, including, without limitation, any services to be supplied by
Landlord from a central utility plant or other utility system, as more
particularly set forth in Exhibit D, irrespective of whether any of the
foregoing are initially paid in advance by Landlord, or otherwise.  Landlord, at its sole option, may elect to
furnish any or all of such services with a separate charge therefor to Tenant,
at a cost in excess of Landlord’s cost, such charge to be based upon the
services used by Tenant, as reflected by meter, submeter or otherwise.  Tenant
shall pay such charge, as Additional Rent, at such time and upon such terms as
installments of Minimum Annual Rental are due.

 

(b)                                 Except to the extent of Landlord’s gross
negligence, in no event shall Landlord be liable for damages or otherwise for
any interruption, reduction, disruption, curtailment or failure in the supply,
quality or character of electricity, services from a central utility plant or
any other utility or other service, or if either the quantity, quality or
character thereof supplied to or by Landlord is changed or is no longer available
for Tenant’s requirements, nor shall any such interruption, reduction,
disruption, curtailment, failure or change in quantity, quality or character
constitute or be deemed to constitute constructive eviction of Tenant, or
excuse or relieve Tenant from its obligations under this Lease, including but
not limited to the payment of Rental.

 

(c)                                  Prior to the commencement of Tenant’s
occupancy of the Premises and/or at any time thereafter until the expiration of
the Term, Landlord may, upon thirty (30) days’ prior written notice to Tenant,
elect to have Tenant obtain, and/or discontinue furnishing, as applicable, any
utility to the Premises (including, without limitation, heating, ventilation
and air conditioning services), without thereby affecting this Lease in any
manner or otherwise incurring any liability to Tenant, and Landlord shall no
longer be obligated to furnish such utility to the Premises.  If
Landlord shall give Tenant notice of intention to so have Tenant obtain, or for
Landlord to cease furnishing, a utility to the Premises, Tenant may contract
for and receive such utility directly from the public utility corporation then
serving the Shopping Center, and if Tenant does so, Landlord shall permit
Tenant, at Tenant’s sole cost, to use Landlord’s risers, wiring, electric and
any other installations then serving the Premises for such purpose, if any, to
the extent that the same are available, suitable and may be safely so used,
consistent with concurrent and anticipated future use by Landlord and other
tenants.  If Landlord is the initial provider of a utility service
to Tenant, Landlord agrees not to discontinue furnishing any utility to Tenant
pursuant hereto until such time as Tenant shall be able to receive said utility
service from an alternate source of supply.  Tenant agrees to act diligently in
connecting to such alternate source as soon as it becomes available.  Landlord
may from time to time during the Term elect to provide, or resume provision of,
any utility to the Premises obtained or provided by Tenant pursuant hereto, and
thereafter make an election for Tenant to provide such utility pursuant hereto,
and thereafter re-elect again pursuant hereto on an ongoing basis.

 

(d)                                 Notwithstanding any other provisions of this
Article, to the extent utilities provided by Landlord are utilities which could
be supplied to Tenant as a direct customer of a public utility, the value of
such utility used by Tenant shall be computed for the purposes of this Article
so as not to exceed the rate schedules which would be applicable if Tenant were
at the time a direct customer of such public utility corporation.

 

(e)                                  Any obligation of Landlord to furnish light,
power and services from a central utility plant shall be conditioned upon the
availability of adequate energy sources. 
Landlord shall have the right to reduce heating, cooling and lighting
within the Premises and the Common Areas as required by any mandatory or
voluntary fuel or energy saving allocation, or similar statute, regulation,
order or program.

 

(f)                                    Tenant shall operate its heating, ventilating
and air conditioning (“HVAC”) system(s) serving the Premises so as to maintain
comfortable conditions during regular Shopping Center business hours.  Temperatures
in the Premises shall be compatible with temperatures in the Shopping
Center.  Tenant’s obligation to connect
to the services supplied by Landlord, as set forth in this Section 12.01
and Exhibit B,

 

21

 

as well as Tenant’s
installation, operation and maintenance of its HVAC system(s) within the
Premises, shall be as set
forth herein, in Exhibit B and in any related exhibit(s).

 

(g)                                 If Tenant desires to install any equipment
which shall exceed the capacity of any utility facilities or which shall
require additional utility facilities, Tenant shall not have the right to do so
without Landlord’s prior written approval of Tenant’s Plans and Specifications
and specifications therefor.  If such installation is approved by
Landlord, and if Landlord provides such additional facilities to accommodate
Tenant’s installation, Tenant agrees to pay Landlord, on demand, the cost of
providing such additional utility facilities or utility facilities of greater
capacity.  Tenant shall in no event use
any of the utility facilities in anyway which shall overload or overburden the
utility systems.

 

(h)                                 Landlord reserves the right to cut off and
discontinue furnishing any heating, ventilation, air conditioning or other
utility services furnished or submetered by Landlord at any time after notice
to Tenant of an event of default under this Lease by Tenant.  Landlord
shall not be liable for any damages resulting from or arising out of such
discontinuance of utility services, and such discontinuance shall not
constitute a termination of this Lease or an eviction of Tenant.  Tenant
hereby releases Landlord from any loss, damage or liability sustained by Tenant
as a result of such discontinuance.

 

ARTICLE
XIII

 

ESTOPPEL STATEMENT, ATTORNMENT AND SUBORDINATION

 

Section 13.01                     ESTOPPEL STATEMENT.

Within
ten (10) days after request therefor by Landlord, Tenant shall execute, in
recordable form, and  deliver
to Landlord a statement, in writing, certifying (a) that this Lease is in full
force and effect, (b) the Commencement Date, the Rental Commencement Date and
the expiration date of this Lease, (c) that Rental and all other charges
hereunder are paid currently without any offset or defense thereto, (d) the
amount of Rental and all other charges hereunder, if any, paid in advance, (e)
whether this Lease has been modified and, if so, identifying the modifications,
(f) that there are no uncured defaults by Landlord or stating in reasonable
detail those claimed by Tenant (provided that, in fact, such details are
accurate and ascertainable), and
(g) such other matters as may be reasonably requested by Landlord.  Tenant’s
failure or refusal to execute
timely such statement shall constitute an acknowledgment by Tenant that the
statements contained in such statement are true and correct without exception,
and may be relied upon by Landlord or by any prospective or existing transferee
of all or any part of Landlord’s interest in the Development or this Lease or
by any of Landlord’s lenders.

 

Section 13.02                     ATTORNMENT.

If
the event any proceedings are brought for the foreclosure of, or in the event
of exercise of the power  of
sale under any mortgage and/or deed of trust made by Landlord covering the
Premises, or in the event Landlord sells, conveys or otherwise transfers its
interest in the Shopping Center and/or the Development or any portion thereof
containing the Premises, this Lease shall remain in full force and effect and
Tenant hereby automatically attorns to the new owner.  Tenant covenants
and agrees, at such new owners request, to execute an instrument evidencing
such attornment reasonably satisfactory to the new owner, recognizing the new
owner as the landlord under this Lease.  Tenant acknowledges that such new
owner shall not be bound by (i) any prepayment of more than one (1) month’s
Rent (except rental deposit but only to the extent received by said successor)
or (ii) any material amendment of the Lease made after the later of the
Commencement Date, or the date that such successor’s lien or interest first
arose, unless said successor shall have
consented to such amendment or (iii) any claims, offsets or defenses of Tenant
arising prior to such attornment, except for those specifically provided in the
Lease. 
Payment by or performance of this Lease by any person, firm or
corporation claiming an interest in this Lease or the Premises by, through or
under Tenant without Landlord’s consent in writing shall not constitute an
attornment or create any interest in this Lease or the Premises.  At
Tenant’s request, the new owner shall acknowledge in writing that, subject to
the provisions of this Section, Tenant’s interest in the Premises and rights
under this Lease shall not be disturbed so long as Tenant is not in default
under the terms of this Lease beyond the time permitted to cure such default.

 

Section 13.03                     SUBORDINATION.

Tenant
further agrees this Lease shall be subordinate to the lien of any mortgage,
deed of trust or any ground lease that may be placed upon the Premises or the
Shopping Center or the Development and to any and all advances to be made
thereunder, and to the interest thereon, and all renewals, modifications,
replacement and extensions
thereof.  The foregoing shall be
self-operative and no further instruments shall be required to effect such
subordination of this Lease.  Tenant also agrees that any
mortgagee, beneficiary or ground lessor may elect to have this Lease constitute
a prior lien to its mortgage, deed of trust or ground lease, and in the event
of such election and upon notification by such mortgagee, beneficiary or ground
lessor to Tenant to that effect, this Lease shall be deemed a prior lien to
such mortgage, deed of trust or

 

22

 

ground lease, whether this
Lease is dated prior to or subsequent to the date of said mortgage, deed of
trust or ground lease.  Tenant agrees that upon the demand of
Landlord, or any mortgagee, beneficiary or ground lessor, Tenant shall, within
ten (10) days of the receipt of said demand, execute whatever instruments may
be required to carry out the intent of this Section 13.03 in the form
requested by Landlord or such mortgagee, beneficiary or ground lessor,
including, without limitation, an appropriate recordable subordination
agreement.  In the event Tenant fails to
execute such instruments within ten (10) days after demand, Tenant does hereby
irrevocably appoint Landlord as its attorney-in-fact and in its place and stead
so to do.

 

Section 13.04                     REMEDIES.

Failure
of Tenant to execute any statements or instruments necessary or desirable to
effectuate the  foregoing
provisions of this Article within ten (10) days after written demand so to do
by Landlord shall constitute a breach of this Lease.  In the event of
such failure, Landlord, in addition to any other rights or remedies it might
have, shall have the right by not less than ten (10) days’ notice to Tenant to
declare this Lease terminated and the Term ended, in which event this Lease
shall cease and terminate on the date specified in such notice with the same
force and effect as though the date set forth in such notice were the date
originally set forth in this Lease and fixed for the expiration of the Term;
upon such termination Tenant shall vacate and surrender the Premises, but shall
remain liable as provided in this Lease by reason of said breach.

 

Section 13.05                     NOTICE TO MORTGAGEE,
BENEFICIARY OR GROUND LESSOR.

If
Tenant is given notice of the name and address of a mortgagee, beneficiary or
ground lessor, then Tenant shall give written notice of any default by Landlord
to such mortgagee, beneficiary or ground lessor specifying the default in
reasonable detail.  Tenant shall afford
mortgagee, beneficiary or ground lessor the right to cure such default and if
such mortgagee, beneficiary or ground lessor does perform on behalf of
Landlord, such default shall be deemed cured.

 

ARTICLE XIV

 

ASSIGNMENT AND SUBLETTING

 

Section 14.01                     RESTRICTIONS ON TRANSFER.

(a)                                  Notwithstanding any provision contained herein
to the contrary, Tenant agrees not to mortgage, encumber, pledge or hypothecate all or any part of this Lease, Tenant’s
interest in the Premises, or Tenant’s business.  Further, Tenant shall not transfer, assign, sublet, enter into
franchise, license or concession agreements,
change ownership or voting control of, all or any part of this Lease, Tenant’s interest
in the Premises or Tenant’s business (collectively “Transfer”) without first
procuring the written consent of Landlord, which consent shall not be
unreasonably withheld, subject to the terms, covenants and conditions contained
in this Lease and to the right of Landlord to elect to terminate this Lease as
provided in Section 14.02
below.  Any attempted or purported
Transfer without Landlord’s prior written consent shall be void and of no force
or effect and shall not confer any estate or benefit on anyone.  Further,
any such attempted or purported
Transfer shall entitle Landlord immediately to terminate this Lease and all
further obligations of Landlord hereunder. 
A consent to one Transfer by Landlord shall not be deemed to be a
consent to any subsequent Transfer to any other party.  No Transfer of this Lease or agreement
entered into with respect thereto,
whether with or without Landlord’s consent, shall relieve Tenant or any
guarantor from liability under this Lease.

 

(b)                                 Landlord and Tenant agree that it shall not
he unreasonable for Landlord to withhold its consent to any proposed Transfer
for any of the following reasons, which are not exclusive:

 

(1)                                  The contemplated use of the Premises by the
proposed transferee, assignee or sublessee (hereinafter referred to as the
“Transferee”) is not substantially identical to the “Use of Premises” permitted
under this Lease;

 

(2)                                  The
proposed use of the Premises by the proposed transferee is inconsistent with
the retail tenant mix desired by Landlord;

 

(3)                                  The net worth and/or financial stability of
the Transferee is, or may become, inadequate to operate the business permitted
to be conducted in the Premises in the manner required by this Lease and/or to meet all of Tenant’s financial and other
obligations under this Lease;

 

(4)                                  The Transferee’s reputation (or that of any of
its affiliates) would have an adverse effect upon the reputation of the Shopping Center or the other businesses
located therein;

 

(5)                                  The Percentage Rental that would be
reasonably anticipated from the sales of the Transferee would reasonably be expected to be less than that of Tenant
hereunder;

 

23

 

(6)                                  The
Transferee would breach any covenant of Landlord respecting radius, location,
use or exclusivity in any other lease, financing agreement or other agreement
relating to the Shopping Center;

 

(7)                                  Tenant is in default pursuant to this Lease;

 

(8)                                  The nature of the Transferee’s proposed or
likely use of the Premises would involve any risk, greater than that of
Tenant’s, of the use, release, disposition or mishandling of “Hazardous
Materials” (as defined in Section 7.03);

 

(9)                                  The Transferee is not likely to conduct on
the Premises a business of a quality substantially equal to that conducted by Tenant; or

 

(10)                            Any ground lessor or mortgagee whose consent
to such transfer is required fails to consent thereto.

 

Section 14.02                     PROCEDURE FOR TRANSFER.

Should
Tenant desire to make a Transfer hereunder, Tenant shall, in each instance,
give written notice of its intention to do so to Landlord at least ninety (90)
days before the intended effective date of any such proposed Transfer,
specifying in such notice whether Tenant proposes to assign or sublet, or enter
into license, franchise or concession agreements, the proposed date thereof,
and specifically identifying the proposed Transferee, the net worth and
previous business experience of the proposed Transferee, including without
limitation copies of the proposed Transferee’s last two years’ income statement,
balance sheet and statement of changes in financial position (with accompanying
notes and disclosures of all material changes thereto) in audited form, if
available, and certified as accurate by the proposed Transferee.  Such
notice shall be accompanied, in the case of a proposed assignment, subletting,
license, franchise or concession agreement, by a copy of the proposed
assignment, sublease, license, franchise or concession agreement or, if same is
not available, a letter of commitment or a letter of intent.  In
the case of a proposed sale of Tenant’s business, Tenant shall provide a copy
of the proposed sale and financing agreements.

 

Landlord
shall, within sixty (60) days after its receipt of such notice of a proposed
Transfer, by giving written notice to Tenant of its intention to do so: (a)
withhold its consent to the Transfer; (b) consent to the Transfer; or (c)
terminate this Lease, such termination to be effective thirty (30) days after
receipt of such notice by Tenant. 
Failure of Landlord to give Tenant written notice of Landlord’s action
with respect to any request for Landlord’s consent to a proposed Transfer shall
not constitute or be deemed Landlord’s consent to such Transfer.  Landlord’s consent to a proposed Transfer
shall only be given if and when Landlord has notified Tenant in writing that
Landlord consents to such proposed Transfer.

 

If
Landlord shall exercise its termination right hereunder, Landlord shall have
the right to enter into a lease or other occupancy agreement directly with the
proposed Transferee, and Tenant shall have no right to any of the rents or
other consideration payable by such proposed Transferee under such other lease
or occupancy agreement, even if such rents and other consideration exceed the
rent payable under this Lease by Tenant.  Landlord shall have the right to
lease the Premises to any other tenant, or not lease the Premises, in its sole
discretion.  Tenant may, however, elect to nullify Landlord’s election
to terminate this Lease under clause (c) by furnishing Landlord with written
notice of Tenant’s election to withdraw its proposed Transfer within ten (10)
days of Tenant’s receipt of Landlord’s notice of termination, in which event
the Lease shall remain in effect with the existing Tenant.  Landlord
and Tenant specifically agree that Landlord’s election to terminate this Lease
under clause (c) may be made in Landlord’s sole and absolute discretion and
that no test of reasonableness shall be applicable thereto.  Failure
of Tenant to furnish Landlord notice of Tenant’s election to nullify shall be
deemed Tenant’s election to terminate this Lease without further liability of
either party.  If Landlord withholds its consent to any proposed Transfer
pursuant hereto and if Tenant requests in writing within ten (10) days after
Tenant’s receipt of Landlord’s written notice of such withholding of consent,
Landlord shall provide to Tenant a statement of its reason(s) for withholding
consent to the proposed Transfer within a reasonable time after Landlord’s
receipt of Tenant’s request therefor.  Tenant acknowledges and agrees that
each of the rights of Landlord set forth herein in the event of a proposed
Transfer is a reasonable restriction on Transfer for purposes of applicable
laws. 
Landlord and Tenant agree that Tenant shall have the burden of
proving that Landlord’s consent to the proposed Transfer was withheld
unreasonably.  Landlord shall have no liability to Tenant or to any
proposed Transferee in damages if it is adjudicated that Landlord’s consent
shall have been unreasonably withheld and/or that such unreasonable withholding
of consent shall have constituted a breach of this Lease or other duty to
Tenant, the proposed Transferee or any other person.  In such event,
Tenant’s sole remedy shall be to have the proposed Transfer  declared valid, as if Landlord’s consent had
been duly and timely given (although Tenant shall be entitled to reasonable
attorneys’ fees if it is the successful party in such litigation, in accordance
with the terms of this Lease).

 

Section 14.03                     TRANSFER RENT ADJUSTMENT.

If
Tenant shall make a permitted Transfer hereunder, the Minimum Annual Rental
specified in Section 2.01 shall be increased, effective as of the date of
such Transfer, to the highest of: (a) the total rent payable by the Transferee
pursuant to such Transfer; or (b) an amount equal to the total of the Minimum
Annual

 

24

 

Rental, plus Percentage
Rent, required to he paid by Tenant pursuant to this Lease during the 12-month
period immediately preceding such Transfer; or (c) a sum equal to the then
fair-market rental value of the Premises as reasonably determined by Landlord, the amount of which
Landlord shall notify Tenant before the effective date of the Transfer.  In no event shall the Minimum Annual
Rental, after Transfer, be less than the Minimum Annual Rental immediately before Transfer.

 

Section 14.04                     REQUIRED DOCUMENTS AND FEES.

Each
Transfer to which Landlord has consented shall be evidenced by a written
instrument in form satisfactory to Landlord, executed by Tenant and the
Transferee, under which the Transferee shall agree in writing for the benefit of Landlord (except
as otherwise agreed in writing by Landlord) to assume, perform and abide by all
of the terms, covenants and conditions of this Lease to be done, kept and
performed by Tenant, including
the payment of all amounts due or to become due under this Lease directly to
Landlord and the obligation to use the Premises only for the purpose specified
in this Lease.  Tenant shall reimburse Landlord for Landlord’s reasonable attorneys’
and administrative fees incurred in the processing of, and documentation for,
each such requested Transfer, whether or not the Transfer is consummated.

 

Section 14.05                     TRANSFER OF STOCK OR PARTNERSHIP
INTEREST.

If
Tenant is a corporation which, under the current laws, rules or guidelines
promulgated by the governmental body or agency having jurisdiction and
authority to promulgate the same, is not deemed a public corporation, or is an
unincorporated association or partnership, the transfer, assignment or
hypothecation, in the aggregate of more than a controlling interest of the
total outstanding stock or interest in such corporation, association or
partnership shall be deemed a Transfer within the meaning and provisions of
this Lease.

 

Section 14.06                     ASSIGNMENT AND SUBLEASE
RENTALS.

The
following terms and conditions shall apply to any subletting by Tenant of all
or any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein:

 

(a)                                  Tenant hereby assigns and transfers to
Landlord all of Tenant’s interest in all rentals and income arising from any
sublease of all or a portion of the Premises heretofore or hereafter made by
Tenant, and Landlord may collect such rent and income and apply same toward
Tenant’s obligations under this Lease; provided, however, that until a breach
shall occur in the performance of Tenant’s obligations under this Lease, Tenant
may, except as otherwise provided in this Lease, receive, collect and enjoy the
rents accruing under such sublease. 
Landlord shall not, by reason of this or any other assignment of such
sublease to Landlord, nor by reason of the collection of the rents from a
subtenant, be deemed liable to the subtenant for any failure of Tenant to
perform and comply with any of Tenant’s obligations to such subtenant under
such sublease.  Tenant hereby irrevocably authorizes and directs any such
subtenant, upon receipt of a written notice from Landlord stating that a breach
exists in the performance of Tenant’s obligations under this Lease, to pay to
Landlord the rents and other charges due and to become due under the sublease.  The
subtenant shall rely upon any such statement and request from Landlord and
shall pay such rents and other charges to Landlord without any obligation or
right to inquire as to whether such breach exists and notwithstanding any
notice from or claim from Tenant to the contrary.  Tenant shall have
no right or claim against said subtenant, or, until the breach has been cured,
against Landlord, for any such rents and other charges so paid by said subtenant to Landlord.

 

(b)                                 In the event of a breach by Tenant in the
performance of its obligations under this Lease, Landlord, at its option and
without any obligation to do so, may require any subtenant to attorn to
Landlord, in which event Landlord shall undertake the obligations of the
sublandlord under such sublease from the time of the exercise of said option to
the expiration of such sublease; provided, however, Landlord shall not be
liable for any prepaid rents or security deposit paid by such subtenant to
Tenant or for any other prior defaults or breaches of Tenant as sublandlord
under such sublease.

 

25

 

ARTICLE XV

 

WASTE OR NUISANCE

 

Section 15.01                     WASTE OR NUISANCE.

Tenant
shall not commit nor permit any of its employees, invitees, contractors,
subcontractors, licensees, subtenants or agents to commit any waste upon the
Premises and shall not place a load upon the floor of the Premises which
exceeds the floor load per square loot which such floor was designed to carry.  Tenant
shall not commit nor permit any of its employees, invitees, contractors,
subcontractors, licensees, subtenants or agents to commit any nuisance or other
act or thing which may impact Landlord’s operation of the Development or
disturb the quiet enjoyment of any other occupant or tenant of the Development.  Tenant
shall not use or permit to be used any medium that might constitute a nuisance,
such as loudspeakers, sound amplifiers, tape decks, compact disc players,
radios, televisions, or any other sound producing or other device which will
carry sound or odors outside the Premises and, upon written notice from Landlord,
Tenant shall cause any such noise or odors to cease.  Tenant agrees that
business machines and mechanical equipment used by Tenant which cause vibration
or noise that may be transmitted to the building or buildings comprising the
Development or to the Premises to such a degree as to he reasonably
objectionable to Landlord or to any occupant, shall he placed and maintained by
Tenant at its expense in a manner sufficient to eliminate such vibrations or
noise, such as by cork, rubber or spring-type vibration isolators.  Tenant
shall not allow any use of the Premises or any other portion of the Development
in a manner which is a source of annoyance, disturbance or embarrassment to
Landlord or to the other tenants of the Development or which is deemed by
Landlord, in its sole discretion, us not in keeping with the character of the
Development.  The Premises shall not be used for any unlawful, immoral
or other purpose deemed improper by Landlord.

 

ARTICLE XVI

 

TRADE NAME; PROMOTIONAL PROGRAM

 

Section 16.01                     TRADE NAME.

Tenant
shall operate its business in the Premises under the name specifically set
forth in the Data Sheet (“Trade Name”) so long as the same shall not be held to
be in violation of any applicable law, and shall not change the advertised name
or character of the business operated in the Premises without the prior written
approval of Landlord.

 

Section 16.02                     PROMOTIONAL PROGRAM.

(a)                                  Landlord shall provide or cause to be
provided a program of advertising and promotional events and services (“Promotional
Program”) which, in Landlord’s sole judgment, will serve to promote the
Shopping Center and/or the Development.  Landlord shall not be obligated to
spend more than is actually collected from tenants in providing the Promotional
Program.  Any promotional services and personnel provided shall be
under the exclusive control and supervision of Landlord, who shall have the
sole authority to employ and discharge personnel and to establish a budget for
the Promotional Program.  Tenant agrees to the mention or
nonmention of Tenant’s Trade Name in the general advertising and, in either
event, Tenant shall, upon the request of Landlord, furnish copy, pictures or an
example of its merchandise for promotion in such advertising.

 

(b)                                 Tenant shall pay to Landlord, as Tenant’s
share of the cost of the Promotional Program, an annual promotional charge
(“Promotional Charge”) which originally shall equal the amount set forth in the
Data Sheet.  All payments, charges, dues and assessments payable under
this Section shall be payable in monthly installments on the first day of each
month as Additional Rent.  Such Promotional Charge payable by
Tenant shall be adjusted annually commencing on the February 1st immediately
succeeding the Rental Commencement Date and annually thereafter by a percentage
equal to the percentage increase from the base period of the “Index” (as
defined in Section 27.23) to the respective February or the closest
subsequent month thereto that the Index is published; provided, however, in no
event shall Tenant pay less for any year than the Promotional Charge for the
preceding year.  The term “base period” shall refer to
the month during which the Rental Commencement Date occurs (or, if the Index is
not published for the month during which the Rental Commencement Date occurs,
then the closest subsequent month thereto).  In the event the Premises is located
within an expansion and/or specially constructed area within the Shopping
Center where a grand opening date shall be set by Landlord, then Tenant shall also
pay an initial assessment in the amount set forth in the Data Sheet in addition
to the Promotional Charge, such initial assessment payable in one lump sum
within thirty (30) days after the Rental Commencement Date.

 

26

 

ARTICLE
XVII

 

DAMAGE AND DESTRUCTION

 

Section 17.01                     RECONSTRUCTION OF DAMAGED
PREMISES.

(a)                                  In the event the Premises shall be partially
or totally destroyed by fire or other casualty insured under the insurance
carried by Landlord pursuant to Section 11.02 of this Lease so as to
become partially or totally untenantable, then the damage to the Premises shall
be promptly repaired (unless Landlord shall elect not to rebuild as hereinafter
provided), whereupon the Minimum Annual Rental and, to the extent reimbursed
from the proceeds of insurance carried by Landlord under Section 11.02,
Additional Rent payable by Tenant to Landlord shall be abated in proportion to
the Floor Area of the Premises rendered untenantable, and the Annual Breakpoint
and Quarterly Breakpoint shall likewise be proportionately reduced.  Payment of full Minimum Annual Rental and Additional Rent so
abated shall commence, and Tenant shall be obligated to reopen for business on
the thirtieth (30th) day following the date that Landlord advises Tenant that
the Premises are tenantable (which shall mean that Landlord shall have
repaired, restored or reconstructed the Premises, including the leasehold
improvements as defined in Exhibit B), unless Tenant opens at an earlier time or
remains open following such damage or destruction.  Tenant hereby waives the provisions of any statute or other law
that may be in effect at the time of the occurrence of any such damage or
destruction under which a lease is automatically terminated or pursuant to
which a tenant is given the right to terminate a lease by reason of such an
event of damage or destruction.

 

(b)                                 Landlord shall be obligated to cause such
repairs to be made unless Landlord, at its sole option, elects to cause Tenant
to make such repairs to the leasehold improvements, in which event Tenant shall
promptly complete the same and Landlord will make available to Tenant for the
sole purpose of reconstruction of Tenant’s leasehold improvements such portion
of any insurance proceeds received by Landlord from its insurance carrier under
a policy carried pursuant to Section 11.02 of this Lease as may be
allocated to the leasehold improvements of the Premises by Landlord.  In
the event of any such repairs, restoration and reconstruction by Tenant, an
architect duly registered in the state where the Premises is located (if such
registration is required by applicable code or governmental authorities) shall
be selected and appointed by Tenant to prepare any necessary drawings and
specifications and to supervise the work and direct the payment of such
insurance proceeds.  Such insurance
proceeds shall be payable to Tenant only upon being provided certificates by
said architect stating that the payments specified therein are properly payable
for the purpose of reimbursing Tenant for the expenditures actually made by
Tenant in connection with such work.  At
the election of Landlord or Landlord’s mortgagee, direct payments may be made
to material suppliers and laborers upon written certification by said architect
that such payments are due and payable.  In making such repairs, restoration
or reconstruction, Tenant, at its expense, shall comply with all laws,
ordinances and governmental rules and regulations and shall perform all work or
cause such work to be performed with due diligence and in a first-class
manner.  All permits required in
connection with said repairs, restoration and reconstruction shall be obtained
by Tenant at Tenant’s sole cost and expense. 
Any amount expended by Tenant in excess of such insurance proceeds
received by Landlord and made available to Tenant shall be the sole obligation
of Tenant.

 

(c)                                  In the event of repair, restoration or
reconstruction by Landlord, any amount expended by Landlord in repairing the
Premises in excess of the proceeds of insurance received by Landlord pursuant
to Section 11.02 of this Lease
which were allocated to the Premises shall be repayable by Tenant to Landlord
within ten (10) days after receipt by Tenant of a statement setting forth the
amount of such excess.  The party required hereunder to
repair, restore or reconstruct the damage to the Premises shall reconstruct
such Premises in accordance with the Plans and Specifications originally
approved by Landlord or new drawings prepared by Tenant’s architect at Tenant’s
sole cost and expense and acceptable to Landlord and Tenant, and shall
otherwise comply with the criteria and procedures of Exhibit B unless Landlord
elects otherwise.  In no event shall Landlord be
required to repair or replace Tenant’s merchandise, trade fixtures, signs,
furnishings, equipment or other items of personal property, but the same shall
be repaired or replaced promptly to a condition at least equal to that prior to
the damage or destruction thereof by Tenant.

 

Section 17.02                     LANDLORD’S OPTION TO
TERMINATE LEASE.

If
(i) more than thirty-five percent (35%) of the Floor Area of the building in
which the Premises are located or of the Shopping Center or of the parking
facilities or of the Common Areas, shall be damaged or destroyed by fire or
other casualty at any time, or (ii) during the last three (3) years of the Term
of this Lease, more than twenty-five percent (25%) of the Floor Area of the
Premises or of the building in which the Premises are located or of the
Shopping Center or of the parking facilities or of the Common Areas shall be
damaged or destroyed by fire or other casualty, or (iii) all or any part of the
Shopping Center or said building or the Premises or of the parking facilities
or of the Common Areas is damaged or destroyed at any time by the occurrence of
any risk not insured under the insurance carried by Landlord pursuant to
Section 8.03 or Section 11.02, then Landlord either may elect that
the building and/or Premises and/or Shopping Center and/or the parking facilities
and/or the Common Areas, as the case may be, shall be repaired and rebuilt or,
at its sole option, may terminate this Lease by giving written notice to Tenant
of Landlord’s

 

27

 

election so to terminate,
such notice to be given within ninety (90) days after the occurrence of such
damage or destruction.

 

ARTICLE
XVIII

 

EMINENT DOMAIN

 

Section 18.01                     TOTAL CONDEMNATION OF
PREMISES.

If
the whole of the Premises shall be taken by any public authority under the
power of eminent domain or sold to a public authority under threat or in lieu
of such taking, then the Term of this Lease shall cense as of the day upon
which possession is taken by such public authority, and Minimum Annual Rental,
Percentage Rental, Additional Rent and other charges shall be paid up to that
day with a proportionate refund by Landlord of such Rental payments as may have
been paid in advance for a period subsequent to the date of the taking.

 

Section 18.02                     PARTIAL CONDEMNATION.

(a)                                  If less than the whole but more than twenty
percent (20%) of the Floor Area of the Premises or more than fifty percent
(50%) of the square footage of the parking facilities or of the Common Areas
shall be so taken under eminent domain, or sold to public authority under
threat or in lieu of such taking, Tenant shall have the right either to
terminate this Lease as of the day possession is taken by such public
authority, or, subject to Landlord’s right of termination as set forth in
Section 18.02(c) of this Article, to continue in possession of the
remainder of the Premises, upon notifying Landlord in writing within ten (10)
days after such taking of Tenant’s intention. 
In the event Tenant elects to remain in possession, all of the terms
provided herein shall continue in effect, except that as of the day possession
of such percentage of the Premises is taken by public authority, the Minimum
Annual Rental and Additional Rent payable by Tenant to Landlord shall be
reduced in proportion to the Floor Area of the Premises taken and the Annual
Breakpoint and Quarterly Breakpoint shall likewise he proportionately reduced;
thereafter, Landlord shall, at Landlord’s cost and expense to the extent of any
available condemnation award, make all the necessary repairs or alterations to
the basic building, so as to constitute the remaining Premises a complete
architectural unit, and Tenant, at Tenant’s sole cost and expense, shall
similarly act with respect to Tenant’s leasehold improvements, trade fixtures,
furnishings and equipment.

 

(b)                                 If twenty percent (20%) or less of the Floor
Area of the Premises shall be so taken, the Term of this Lease shall cease,
only on the part so taken, as of the day possession shall be taken by such
public authority, and Tenant shall pay Rental and other charges up to that day;
thereafter, the Minimum Annual Rental and Additional Rent payable by Tenant to
Landlord shall be reduced in proportion to the Floor Area of the Premises so
taken and the Annual Breakpoint and Quarterly Breakpoint shall likewise be
proportionately reduced.  Landlord shall, at Landlord’s cost
and expense to the extent of any available condemnation award, make all
necessary repairs or alterations to the basic building, so as to constitute the
remaining Premises a complete architectural unit, and Tenant, at Tenant’s sole
cost and expense, shall similarly act with respect to Tenant’s leasehold
improvements, trade fixtures, furnishings and equipment.

 

(c)                                  If more than twenty-five percent (25%) of the
Floor Area of the building in which the Premises are located, or more than
twenty-five percent (25%) of the Premises, or more than twenty-five percent
(25%) of the square footage of the Shopping Center or of the parking facilities
or of the Common Areas shall be taken under power of eminent domain, or sold to
public authority under threat or in lieu of such taking, Landlord may, by
written notice to Tenant delivered on or before the tenth (10th) day following
the date of surrender of possession to the public authority, terminate this
Lease as of the date possession is taken by public authority.  The
Minimum Annual Rental, Percentage Rental, Additional Rent and other charges
shall be paid up to the day possession is taken by public authority, with an
appropriate refund by Landlord of such Rental payments as may have been paid in
advance for a period subsequent to that date.

 

(d)                                 A voluntary sale or transfer of interest of
all or any part of the Premises or of the Common Area in the Shopping Center by
Landlord to any public or quasi-public body, agency, person or other entity,
corporate or otherwise, having the power of eminent domain, either under threat
of condemnation or while condemnation proceedings are pending, shall be deemed
to be a taking under the power of eminent domain for the purposes of this
Article XVIII.

 

Section 18.03                     LANDLORD AND TENANT DAMAGES.

All
damages awarded for such taking under the power of eminent domain or proceeds
from any sale under threat or in lieu of such a taking, whether for the whole
or part of the Premises or leasehold improvements thereto, shall belong to and
be the property of Landlord, irrespective of whether such damages shall be
awarded or proceeds obtained as compensation for diminution in value to the
leasehold improvements thereto, or to the fee of the Premises, and Tenant shall
have no claim against either Landlord or the condemning authority with respect
thereto; provided, however, that Landlord shall not be entitled to any award
specifically designated as compensation for, depreciation to, and cost of
removal of, Tenant’s stock and trade fixtures, or (subject to the rights of any
mortgagee or beneficiary of any mortgage or deed of

 

28

 

trust made by Landlord
covering the Premises or the Development) to any award specifically designated
as compensation for the unamortized cost of Tenant’s leasehold improvements
less any Landlord contribution to Tenant’s Work, such amortization to be
calculated on a straight-line basis over the Term of this Lease.  Tenant
hereby waives the provisions of any statute or other law that may be in effect
at the time of the occurrence of any such taking under which a lease is
automatically terminated or pursuant to which a tenant is given the right to
terminate a lease by reason of such a taking.

 

ARTICLE XIX

 

DEFAULT

 

Section 19.01                     RIGHTS UPON DEFAULT.

(a)                                  Notwithstanding any provision herein to the
contrary and irrespective of whether all or any rights conferred upon Landlord
by this Article XIX are expressly or by implication conferred upon Landlord
elsewhere in this Lease, in the event of (i) any failure of Tenant to pay any
Minimum Annual Rental, Percentage Rental or Additional Rent or any other
charges or sums whatsoever due hereunder (including without limitation, amounts
due as reimbursement to Landlord for costs incurred by Landlord in performing
obligations of Tenant hereunder upon Tenant’s failure so to perform) for more
than five (5) days after written notice from Landlord to Tenant that such
rental or any other charges or sums whatsoever due hereunder were not received
on the date required for payment pursuant to this Lease, provided that such
notice from Landlord shall be in lieu of, and not in addition to, any notice of
default required by applicable laws, or (ii) any default or failure by Tenant
to perform any other of the terms, conditions, or covenants of this Lease to be
observed or performed by Tenant for more than twenty (20) days after written
notice from Landlord to Tenant of such default (unless such default cannot be
cured within said twenty (20) days in which event Tenant shall not be deemed to
be in default hereunder if Tenant shall have commenced to cure said default
promptly within twenty (20) days and shall thereafter proceed to prosecute such
cure to completion with all reasonable dispatch and diligence, provided that in
no event shall such cure period extend beyond one hundred twenty (120) days),
provided that such notice from Landlord shall be in lieu of, and not in
addition to, any notice of default required by applicable laws, or (iii) any
failure by Tenant to move into the Premises and to initially open for business
on or before the Rental Commencement Date, or (iv) any failure by Tenant to
operate continuously in the manner and during the hours established by Landlord
pursuant to Section 7.02(a) hereof or for the purpose specified in the
Data Sheet (the Permitted Use), or (v) Tenant’s abandonment of the Premises, or
permitting this Lease to be taken under any writ of execution or similar writ
or order, then Landlord, in addition to or in lieu of other rights or remedies
it may have under this Lease or by law, shall have the following rights:
Landlord may at its sole discretion: (A) immediately terminate this Lease and
Tenant’s right to possession of the Premises by giving Tenant written notice
that this Lease is terminated, in which event, upon such termination, Landlord
shall have the right to recover from Tenant the sum of (1) the worth at the
time of award of the unpaid rental which had been earned at the time of
termination; (2) the worth at the time of award of the amount by which the
unpaid rental which would have been earned after termination until the time of
award exceeds the amount of such rental loss that Tenant affirmatively proves
could have been reasonably avoided; (3) the worth at the time of award of the
amount by which the unpaid rental for the balance of the Term after the time of
award exceeds the amount of such rental loss that Tenant affirmatively proves
could be reasonably avoided; (4) any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant’s failure to
perform Tenant’s obligations under this Lease or which in the ordinary course
of things would be likely to result therefrom; and (5) all such other amounts
in addition to or in lieu of the foregoing as may be permitted from time to
time under applicable law; or (B) have this Lease continue in effect for so
long as Landlord does not terminate this Lease and Tenant’s right to possession
of the Premises, in which event Landlord shall have the right to enforce all of
Landlord’s rights and remedies under this Lease including the right to recover
the Minimum Annual Rental, Percentage Rental, Additional Rent and other charges
payable by Tenant under this Lease as they become due under this Lease; or (C)
without terminating this Lease, Landlord may pay or discharge any breach or
violation hereof which amount so expended shall be added to the next monthly
incremental payment of Minimum Annual Rent, Percentage Rental and Additional
Rent due and treated in the same manner as Rental hereunder; or (D) without
terminating this Lease, make such alterations and repairs as may be necessary
in order to relet the Premises, and relet the Premises or any part thereof for
such term or terms (which may be for a term extending beyond the Term) at such
rental or rentals and upon such other terms and conditions as Landlord in its
sole discretion may deem advisable.

 

(b)                                 If Landlord proceeds under
Section 19.0l(a)(D) above, upon such reletting all Rental and other sums
received by Landlord from such reletting shall be applied, first, to the
payment of any indebtedness other than Rental due hereunder from Tenant to
Landlord; second, to the payment of any costs and expenses of such reletting,
including reasonable brokerage fees and attorney fees and of costs of such
alterations and repairs; third, to the payment of Rental due and unpaid
hereunder; and the residue, if any, shall be held by Landlord and applied in
payment of future Minimum Annual Rental and Additional Rent payable by Tenant
hereunder, as the same may become due and payable hereunder.  If
such Minimum Annual Rental, Additional Rent and other sums received from such
reletting during any month are less than that to be paid

 

29

 

during that month by Tenant
hereunder, Tenant shall pay such deficiency to Landlord; if such rentals and
sums shall be more.  Tenant shall have no right to the
excess. 
Such deficiency shall be calculated and paid monthly.  No
re-entry or taking possession of the Premises by Landlord shall be construed as
an election on its part to terminate this Lease unless a written notice of such
intention is given to Tenant or unless the termination thereof is decreed by a
court of competent jurisdiction.  Notwithstanding any such reletting
without termination, Landlord may at any time thereafter elect to terminate
this Lease for such previous breach and shall have the remedies provided herein.  Should
Landlord at any time terminate this Lease for any breach, in addition to any
other remedies it may have, it may recover from Tenant all damages it may incur
by reason of such breach, including the cost of recovering the Premises, all of
which amount shall be immediately due and payable from Tenant to Landlord.  Landlord
shall use its reasonable efforts to mitigate its damages hereunder; however,
the failure or refusal of Landlord to relet the Premises shall not affect
Tenant’s liability.  The terms “entry” and “re-entry” are
not limited to their technical meanings.  If Tenant shall default hereunder
prior to the date fixed as the commencement of any renewal or extension of this
Lease, Landlord may cancel and terminate such renewal or extension agreement by
written notice.  In the event of re-entry by Landlord,
Landlord may remove all persons and property from the Premises and such
property may be stored in a public warehouse or elsewhere at the cost of, and
for the account of Tenant, without notice or resort to legal process and
without Landlord being deemed guilty of trespass, conversion or becoming liable
for any loss or damage which may be occasioned thereby.  In the event Tenant
shall not remove its property from the Premises within ten (10) days after
Tenant has vacated the Premises, then such property shall be deemed abandoned
by Tenant and Landlord may dispose of the same without Landlord having any
liability to Tenant.  If Landlord removes such property
from the Premises and stores it at Tenant’s risk and expense, and if Tenant
fails to pay the cost of such removal and storage after written demand therefor
and/or to pay any Rental then due, then after the property has been stored for
a period of thirty (30) days or more Landlord may sell such property at public or
private sale, in the manner and at such times and places as Landlord deems
commercially reasonable following reasonable notice to Tenant of the time and
place of such sale.  The proceeds of any such sale shall
be applied first to the payment of the expenses for removal and storage of the
property, the preparation for the conducting of such sale, and for attorneys’
fees and other legal expenses incurred by Landlord in connection therewith, and
the balance shall be applied as provided in this Section 19.01(b).

 

(c)                                  At any time that Tenant has either failed to
pay Rental or other charges within five (5) days after the same shall be due or
shall have delivered checks to Landlord for payments pursuant to this Lease
which shall have on at least three (3) occasions during the Term of this Lease
(whether consecutive or not or whether involving the same check or different
checks) been returned by Landlord’s bank for any reason, Landlord shall not be
obligated to accept any payment from Tenant unless such payment is made by
cashier’s check or in bank certified funds.

 

(d)                                 For purposes of subclauses (1) and (2) of
Section 19.01(a), “worth at the time of award” shall be computed by
allowing interest at the maximum rate permitted by law (see Section 27.13)
and for purposes of subclause (3) of Section 19.01(a), “worth at the time
of award” shall be computed by discounting such amount at the discount rate of
the Federal Reserve Bank whose jurisdiction includes the Development at the
time of award, plus one percent (1%); the Rental reserved in this Lease shall
be deemed to be a monthly rental arrived at (i) by adding to the monthly
installment of Minimum Annual Rental payable under this Lease an amount equal
to the monthly average of all the Percentage Rental based on Gross Sales
received by or payable to Landlord hereunder during the period that Tenant was
conducting Tenant’s business in the Premises in the manner and to the extent
required pursuant to this Lease, plus (ii) one twelfth (1/12th) of the annual
average of all Additional Rent payable by Tenant hereunder (such as, by way of
example, Tenant’s share of Operating Costs and Expenses).

 

(e)                                  Anything to the contrary notwithstanding,
Landlord shall not be required to give notice under this Article XIX more than
twice in any consecutive twelve month period.

 

ARTICLE XX

 

BANKRUPTCY OR INSOLVENCY

 

Section 20.01                     TENANT’S INTEREST NOT
TRANSFERABLE.

Except
as may specifically be provided pursuant to the Federal Bankruptcy Code,
neither Tenant’s interest in this Lease, nor any estate hereby created in
Tenant nor any interest herein, shall pass to any trustee or receiver or
assignee for the benefit of creditors or otherwise by operation of law.

 

30

 

Section 20.02                     TERMINATION.

In
the event the interest or estate created in Tenant hereby shall be taken in
execution or by other process of law, or if Tenant’s guarantor, if any, or its
executors, administrators, or assigns, if any, shall be adjudicated insolvent
or bankrupt pursuant to the provisions of any state act or the Federal
Bankruptcy Code or if Tenant is adjudicated insolvent by a court of competent
jurisdiction other than the United States Bankruptcy Court, or if a receiver or
trustee of the property of Tenant or Tenant’s guarantor, if any, shall be
appointed by reason of the insolvency or inability of Tenant or Tenant’s
guarantor, if any, to pay its debts as the same become due or if any assignment
shall be made of the property of Tenant or Tenant’s guarantor, if any, for the
benefit of creditors, then Landlord shall have the right to elect by written
notice to Tenant to terminate this Lease and all rights of Tenant hereunder,
and Tenant shall vacate and surrender the Premises but shall remain liable as herein provided.

 

Section 20.03                     TENANT’S OBLIGATION TO AVOID
CREDITORS’ PROCEEDINGS.

Tenant or Tenant’s
guarantor, if any, shall not cause or give cause for the appointment of a
trustee or receiver of the assets of Tenant or Tenant’s guarantor, if any, and
shall not make any assignment for the benefit of creditors, or become or be
adjudicated insolvent.  The allowance of any petition under
insolvency law except under the Federal Bankruptcy Code or the appointment of a
trustee or receiver of Tenant or Tenant’s guarantor, if any, or of the assets
of either of them, shall be conclusive evidence that Tenant caused, or gave
cause therefor, unless such allowance of the petition, or the appointment of a
trustee or receiver, is vacated within sixty (60) days after such allowance or
appointment.  Any act or occurrence described in this Section 20.03
shall be deemed a material breach of Tenant’s obligations hereunder, and
providing Landlord with the right to elect by written notice to Tenant to
terminate this Lease and all rights of Tenant hereunder, and Tenant shall
vacate and surrender the Premises but shall remain liable as herein
provided.  Landlord does, in addition,
reserve any and all other remedies provided in this Lease or by law.

 

Section 20.04                     ELECTION TO ASSUME LEASE.

(a)                                  This is a lease of real property in a
shopping Center within the meaning of Section 365(b)(3) of the United
States Bankruptcy Code, 11 U.S.C. Section 101 et seq. (the
“Bankruptcy Code”).

 

(b)                                 In the event that Tenant becomes a Debtor
under Chapter 7, 11 or 13 of the Bankruptcy Code, and the Trustee or Tenant, as
Debtor-In-Possession, elects to assume this Lease for the purpose of assignment
to a third party or otherwise, such election and assignment, if any, may only
be made if all of Landlord’s conditions are met.  If the Trustee or
Tenant, as Debtor-In-Possession, fails to elect to assume or reject this Lease
by the sixtieth (60th) day after the entry of the Order for Relief in a case
under Chapter 7, 11 and 13 of the Bankruptcy Code, this Lease shall thereafter
be deemed rejected and terminated in accordance with Section 365(d)(4) of
the Bankruptcy Code.  The Trustee or Tenant, as
Debtor-In-Possession, shall thereupon immediately surrender possession of the
Premises to Landlord and Landlord shall have no further obligation to Tenant or
Trustee under the Lease.  The acceptance of rent by Landlord
after the sixtieth (60th) day shall not be deemed a waiver of Landlord’s rights
herein and under Section 365(d)(4) of the Bankruptcy Code, and Landlord’s
right to be compensated for damages in such bankruptcy case shall survive.

 

Section 20.05                     SUBSEQUENT BANKRUPTCY.

In
the event that this Lease is assumed by a Trustee appointed for Tenant or by
Tenant as Debtor-In-Possession and thereafter Tenant is liquidated or files a
subsequent Petition for reorganization or adjustment of debts under Chapter 11
or 13 of the Bankruptcy Code, then, and in either of such events, Landlord may,
at its option, terminate this Lease and all rights of Tenant hereunder, by
giving Tenant written notice of its election to so terminate, by no later than thirty (30) days after the
occurrence of either of such events.

 

Section 20.06                     ASSIGNMENT.

If
the Trustee or Debtor-In-Possession has assumed this Lease pursuant to the
terms and conditions of Sections 20.02 or 20.03, for the purpose of
transferring Tenant’s interest under this Lease or the estate created thereby, to any other person, such
interest or estate may be so transferred only if Landlord shall acknowledge in
writing that the intended transferee has provided “adequate assurance of future
performance” of all of the terms, covenants and conditions of this Lease to be
performed by Tenant.

 

Section 20.07                     OCCUPANCY CHARGES.

When,
pursuant to the Bankruptcy Code, the Trustee or Tenant, as Debtor-In-Possession
shall be obligated to pay reasonable use and occupancy charges for the use of
the Premises or any portion thereof, such charge shall not be less than the
Minimum Annual Rental as defined in this Lease and other monetary obligations of Tenant for the payment of
Additional Rent.

 

31

 

Section 20.08                     CONSENT.

Neither
Tenant’s interest in this Lease, nor any lesser interest of Tenant herein, nor
any estate of Tenant hereby created, shall pass to any trustee, receiver,
transferee for the benefit of creditors, or any other person or entity, or
otherwise by operation of law under the laws of any state having jurisdiction
of the person or property of Tenant unless Landlord shall consent to such
transfer in writing.  No acceptance by
Landlord of Rental or any other payments from any such trustee, receiver,
transferee, person or other entity shall be deemed to have waived the need to
obtain Landlord’s consent for any transfer of Tenant’s interest under this
Lease.

 

Section 20.09                     ATTORNEY FEES.

If,
in the context of Tenant’s bankruptcy case, Landlord is compelled at any time
to incur any expense, including attorneys’ fees, in enforcing or attempting to
enforce the terms of this Lease or to enforce or attempt to enforce any actions
required under the Bankruptcy Code to be taken by the Trustee or by Tenant, as
Debtor-In-Possession, then the sum so paid by Landlord shall be awarded to
Landlord by the Bankruptcy Court and shall be immediately due and payable by
the Trustee or by Tenant’s bankruptcy estate to Landlord in accordance with the
terms of the order of the Bankruptcy Court.

 

Section 20.10                     OTHER LAWS.

The
provisions of this Article XX concerning the rights of Landlord, and the
obligations of Trustee, Tenant, Debtor, Receiver, Debtor-In-Possession and
assignee are in addition to such rights and obligations provided by law,
including those applicable provisions of the Bankruptcy Code.  Nothing
contained in this Article XX shall limit or reduce in any manner whatsoever
such rights and obligations which are otherwise provided by law.

 

ARTICLE XXI

 

ACCESS BY LANDLORD

 

Section 21.01                     RIGHT OF ENTRY.

Landlord
and Landlord’s agents shall have the right to enter the Premises for any
reasonable purpose upon
reasonable advance notice to Tenant. 
Landlord shall have the further right to enter the Premises to make such
repairs, alterations, improvements or additions as Landlord may deem necessary
or desirable, and Landlord shall be allowed to take all material into and upon
the Premises that may be required therefor without the same constituting an
eviction of Tenant in whole or in part, and Minimum Annual Rental, Percentage
Rental, Additional Rent and other charges reserved hereunder shall not abate
while said repairs, alterations, improvements or additions are being made, by
reason of loss or interruption of business of Tenant, or otherwise.  In
exercising such right of entry, Landlord shall use every reasonable effort not
to disrupt Tenant’s business in the Premises.  Landlord or Landlord’s agents shall
have the further right to enter the Premises at any time without notice in the
event of emergency.  During the six (6)
months prior to the expiration of the Term of this Lease, Landlord may exhibit
the Premises to prospective tenants and their representatives, including
brokers, for purposes including but not limited to the inspection and
measurement of the Premises.

 

ARTICLE
XXII

 

TENANT’S PROPERTY

 

Section 22.01                     TAXES ON TENANT’S PROPERTY.

Tenant
shall be responsible for, and agrees to pay prior to delinquency, any and all
Taxes or other taxes, assessments, levies, fees and other governmental charges
and impositions of every kind or nature, regular or special, direct or
indirect, presently foreseen or unforeseen or known or unknown, levied or
assessed by municipal, county, state, federal or other governmental taxing or
assessing authority, upon, against or with respect to (i) Tenant’s leasehold
interest in the Premises, (ii) all furniture, fixtures, equipment, inventory
and any other personal properly of any kind owned by, or placed, installed or
located in, within, upon or about the Premises by Tenant, any concessionaire or
any previous tenant or occupant, and (iii) all alterations, additions, or
improvements of whatsoever kind or nature, if any, made to the Premises, by
Tenant, any concessionaire or any previous tenant or occupant, irrespective of
whether any such tax is assessed, real or personal, and irrespective of whether
any such tax is assessed to or against Landlord or Tenant (collectively,
“Tenant’s Taxes”).  Tenant shall provide Landlord with
evidence of Tenant’s timely payment of such Tenant’s Taxes upon Landlord’s
request.  If at any time any of such Tenant’s Taxes are not levied
and assessed separately and directly to Tenant (for example, if the same are
levied or assessed to Landlord, or upon or against the building containing the
Premises and/or the land underlying said building), Tenant shall pay to
Landlord Tenant’s share thereof as determined and billed by Landlord.

 

32

 

Section 22.02                     LOSS AND DAMAGE.

Landlord
shall not be responsible or liable to Tenant for any loss or damage that may be
occasioned by or through the acts or omissions of persons occupying premises or
any part of the premises adjacent to or connected with the Premises or any part
of the building of which the Premises are a part, or any other area in the
Development, or for any loss or damage resulting to Tenant or its property from
bursting, stoppage or leaking
of water, gas, sewer or steam pipes, or (without limiting the foregoing) for
any damage or loss of property
within the Premises from any cause whatsoever.

 

Section 22.03                     NOTICE BY TENANT.

Tenant
shall give immediate notice to Landlord in case of any damage to or destruction
of all or any part of, or of accidents occurring within the Premises, or of
defects therein or of any damage to or destruction of any inventory, fixtures or equipment within the
Premises.

 

ARTICLE
XXIII

 

HOLDING OVER

 

Section 23.01                     HOLDING OVER.

If
bona fide negotiations have commenced between Landlord and Tenant for renewal
of this Lease within one hundred eighty (180) days prior to the expiration of
the Term of this Lease, any holding over after the expiration of the Term
hereof with the consent of Landlord shall be construed to be a tenancy from
month to month and the Minimum Annual Rental payable shall be at an amount
equal to onetwelfth (1/12th) of the Minimum Annual Rental required to be paid
by Tenant for the last full year of the Term of this Lease, together with an
amount estimated by Landlord for the monthly Additional Rent payable pursuant
to this Lease, and shall otherwise be on the same terms and conditions as
herein specified so far as applicable.  Any other holding over after expiration of
the Term hereof without the written consent of Landlord shall be construed to
be a tenancy from month to month pursuant to the terms of this Lease at
one-twelfth (l/12th) of an amount equal to twice the Minimum Annual
Rental required to be paid by Tenant for the last full lease year of the Term
of this Lease, together with an amount estimated by Landlord for the monthly
Additional Rent payable pursuant to this Lease, and shall otherwise be on the
same terms and conditions as herein specified so far as applicable.  Any such holding over without Landlord’s
consent shall entitle Landlord to reenter the Premises as provided in
Section 19.01 of this Lease.  Tenant shall indemnify, defend and
hold harmless Landlord from and against any and all loss, claims, demands,
liabilities, damages (including, without limitation, consequential damages),
costs and/or expenses (including, without limitation, attorneys’ fees and
expenses) resulting from any failure by Tenant to surrender the Premises in the
manner and condition required by this Lease upon the expiration of the Term or
earlier termination of this Lease, including, without limitation, any claims
made by any proposed new tenant founded upon such failure.

 

Section 23.02                     SUCCESSORS.

All
rights and liabilities herein given to, or imposed upon, the parties to this
Lease shall inure to and be imposed upon the respective heirs, executors,
administrators, successors and assigns of the said parties; and if there shall
be more than one Tenant, they shall all be bound jointly and severally by the
terms, covenants and agreements herein. 
No rights, however, shall inure to the benefit of any assignee of Tenant
unless the assignment to such assignee has been approved in advance by Landlord
in writing or permitted by Article XIV.

 

ARTICLE
XXIV

 

RULES AND REGULATIONS

 

Section 24.01                     RULES AND REGULATIONS.

Tenant
agrees to comply with and observe all rules and regulations established by
Landlord from time to
time, provided the same shall apply uniformly to all tenants of the Shopping
Center.  Tenant’s failure to keep and
observe said rules and regulations shall constitute a breach of the terms of
this Lease in the same manner as if the rules and regulations were contained
herein as covenants.  In the case of any
conflict between said rules and regulations and this Lease, this Lease shall be
controlling.

 

33

 

ARTICLE XXV

 

QUIET ENJOYMENT

 

Section 25.01                     LANDLORD’S COVENANT.

Upon
payment by Tenant of Rental herein provided and other charges payable by Tenant
under this Lease, and upon the observance and performance of all the covenants,
terms and conditions on Tenant’s part to be observed and performed, Tenant shall peaceably and quietly hold
and enjoy the Premises for the Term hereby demised without hindrance or interruption by Landlord or any
other person or persons lawfully or equitably claiming by, through or under Landlord, subject nevertheless
to the terms and conditions of this Lease, any mortgage and/or deed of trust to which this Lease is
subordinated and any reciprocal easement agreement made between Landlord and
tenants or others occupying the Department Stores.

 

ARTICLE
XXVI

 

SECURITY DEPOSIT

 

Section 26.01                     DEPOSIT.

At
or before Tenant’s execution of this Lease, Tenant shall deposit with Landlord
the sum set forth in the Data Sheet as a security deposit and payment and
performance guaranty.  Landlord shall retain said sum
throughout the Term of this Lease as security for the faithful performance by
Tenant of all of the terms, covenants and conditions of this Lease.  (Such
sum is occasionally referred to herein as the “deposit”.) If Tenant defaults
with respect to any provision of this Lease, including but not limited to the
provisions relating to the payment of Rental, Landlord may use, apply or retain
all or any part of the deposit for the payment of any Rental or any other sum
in default, or for the payment of any loss or damage which Landlord may suffer
by reason of Tenant’s default, or to compensate Landlord for any other amount
which Landlord may spend or become obligated to spend by reason of Tenant’s
default.  In no event, except as specifically hereinafter provided,
shall Landlord be obliged to apply the same to Rental or other charges in
arrears or to damages for Tenant’s failure to perform said covenants,
conditions and agreements; however, Landlord may so apply the deposit, at its
option. 
Landlord’s right to bring a special proceeding to recover or
otherwise to obtain possession of the Premises before or after Landlord’s
declaration of the termination of this Lease for non-payment of Rental or for
any other reason shall not in any event be affected by reason of the fact that
Landlord holds the deposit.

 

In
the event that Landlord regains possession of the Premises, whether by special
proceeding, reentry or otherwise, because of Tenant’s default or failure to
carry out the covenants, conditions and agreements of this Lease, Landlord may
apply such deposit to all damages suffered through the date of said repossession
and may retain the deposit to apply to such damages as may be suffered or shall
accrue thereafter by reason of Tenant’s default or breach.  In
the event any bankruptcy, insolvency, reorganization or other creditor-debtor
proceedings shall be instituted by or against Tenant, or its successors or
assigns, or any guarantor of Tenant hereunder, such deposit shall be deemed to
be applied first to the payment of any Rental and/or other charges due Landlord
for all periods prior to the institution of such proceedings, and the balance,
if any, of such deposit may be retained by Landlord in partial liquidation of
Landlord’s damages.

 

The
deposit shall not constitute a trust fund.  Landlord shall not be obligated to
keep such deposit as a separate fund but may commingle the deposit with its own
funds. 
Tenant shall not be entitled to interest on the deposit.  In
the event Landlord applies the deposit in whole or in part, Tenant shall,
within five (5) days after written demand by Landlord, deposit sufficient funds
to maintain the deposit in the initial amount.  Failure of Tenant to deposit such
additional funds shall entitle Landlord to avail itself of the remedies
provided in this Lease for non-payment of Rental by Tenant.  If
Tenant fully and faithfully performs every provision of this Lease to be
performed by it, the security deposit or any balance thereof, less any sums
then due Landlord from Tenant under this Lease, shall be returned to Tenant
(or, at Landlord’s option to the last assignee of Tenant’s interest thereunder)
within thirty (30) days following the later of the expiration of the Term of
this Lease or Tenant’s vacating the Premises.

 

34

 

ARTICLE
XXVII

 

MISCELLANEOUS

 

Section 27.01                     WAIVER; ELECTION OF REMEDIES.

One
or more waivers of any covenant or condition by Landlord shall not be construed
as a waiver of a subsequent breach of the same covenant or condition, and the
consent or approval by Landlord to or of any act by Tenant requiring Landlord’s
consent or approval shall not be deemed to render unnecessary Landlord’s
consent or approval to or of any subsequent similar act by Tenant.  No breach by Tenant of a covenant or
condition of this Lease shall be deemed to have been waived by Landlord unless
such waiver is in writing signed by Landlord.  The rights and remedies of Landlord
under this Lease or under any specific Section, subsection or clause hereof
shall be cumulative and in addition to any and all other rights and remedies
which Landlord has or may have elsewhere under this Lease or at law or equity,
whether or not such Section, subsection or clause expressly so states.

 

Section 27.02                     ENTIRE AGREEMENT.

The Data Sheet and all exhibits and/or addendum(s), and/or rider(s), if
any, attached to this Lease are hereby made a part of this Lease, with full force and effect as if set
forth herein.  This Lease supersedes all prior agreements between the
parties and sets forth all the covenants, promises, agreements and conditions,
and understandings between Landlord and Tenant concerning the Premises and
there are no actual or implied covenants, promises, agreements,
conditions or understandings, either oral or written, between them other than
as are set forth herein and none thereof shall be used to interpret, construe,
supplement or contradict this Lease.  Landlord has made no representations
or warranties regarding the profitability of the Premises, the Shopping Center
or the Development, and Tenant has not entered into this Lease in reliance on
any such representations, warranties or financial projections prepared or
furnished to Tenant by Landlord.  Although the printed provisions of
this Lease were drawn by Landlord, the parties hereto agree that this circumstance alone shall not create any
presumption, canon of construction or implication favoring the position of
either Landlord or Tenant.  The parties agree that any deletion
of language from this Lease prior to its mutual execution by Landlord and
Tenant shall not be construed to have any particular meaning or to raise any
presumption, canon of construction or implication, including, without
limitation, any implication that the parties intended thereby to state the
converse, obverse or opposite of the deleted language.  No alteration,
amendment, change or addition to this Lease shall be binding upon Landlord or
Tenant unless reduced to writing and signed by each party.  Tenant shall pay all of Landlord’s costs,
expenses and reasonable fees of its attorney(s) in connection with any
assignment of this Lease, subletting of the Premises or amendment, change or
addition to this Lease made at the request of or to accommodate Tenant.

 

Section 27.03                     INTERPRETATION; USE OF
PRONOUNS; AUTHORITY.

Nothing
contained herein shall be deemed or construed by the parties hereto, nor by any
third party, as creating the relationship of principal and agent or of
partnership or of joint ventures between the parties hereto, it being
understood and agreed that neither the method of computation of Rental, nor any
other provision contained herein, nor any acts of the parties herein, shall be
deemed to create any relationship between the parties hereto other than the
relationship of landlord and tenant. 
Whenever herein the singular number is used the same shall include the
plural, and the masculine gender shall include the feminine and neuter genders.  If
this Lease is signed on behalf of a corporation, partnership or other entity,
such entity is authorized to enter into and the signer is duly authorized to
execute this Lease on behalf of such corporation, partnership or entity.

 

Section 27.04                     DELAYS; FORCE MAJEURE.

In the event either party
hereto shall be delayed in the performance of its initial construction, or
maintenance and/or repair obligations, by reasons of strikes; lockouts;
labor disputes; Acts of God; inability to procure labor, materials, or
reasonable substitutes therefor; or shall at any time be so delayed by reason
of the diminution of power or power failure(s); restrictive governmental laws
or controls; judicial orders; enemy or hostile governmental action; civil
commotion; fire or other casualty, or reasons of a similar nature not the fault
of the party delayed in performing work or doing acts required under the terms
of this Lease, then performance of such act shall be excused for the period of
the delay and the period for the performance of any such act shall be extended
for a period equivalent to the period of such delay; provided, however, that
the time for performance shall in no event be extended due to financial or
economic problems of either party, their architects, contractors, agents or
employees, or delay caused by the inability of architects, contractors, suppliers or other employees and
agents to meet deadlines, delivery or contract dates (unless such
inability is caused by Acts of God, war, civil disobedience or strike).  Notwithstanding
anything to the contrary, the occurrence of any of the events of force majeure
herein described shall not excuse Tenant’s obligations to pay Minimum Annual
Rental, Percentage Rental and Additional Rent (unless the provisions of Article
XVII or Article XVIII apply) or excuse such obligations as this Lease may
otherwise impose on the party to obey, remedy or avoid such event; moreover
should the work performed by Tenant or Tenant’s contractor result in a strike,
lockout and/or labor dispute, such strike, lockout and/or labor dispute shall
not excuse Tenant’s performance. 
Further, Landlord’s reduction of heat, light, air conditioning, or any
other services whatsoever to the Shopping Center and/or the Development because
of any similar or dissimilar

 

35

 

event constituting a cause
for excusable delay hereunder shall not relieve Tenant from its obligations
pursuant to Article VII of this Lease. 
It shall be a condition of Tenant’s right to claim an extension of time
as a result hereof that Tenant notify Landlord in writing within ten (10)
calendar days after the first occurrence of any such event, and the cause,
specifying the nature thereof and the period of time contemplated or necessary
for performance.

 

Section 27.05                     NOTICES.

Notwithstanding
the fact that certain descriptions elsewhere in this Lease of notices required
to be given by one party to the other may omit to state that such notices shall
be in writing, any notice, demand, request or other instrument which may be or
is required to be given under this Lease shall be in writing and sent by (i)
United States certified mail, return receipt requested, postage prepaid, (ii)
telegram, mailgram, or other electronic medium using a third party carrier,
(iii) United States express mail, (iv) air courier (such as Federal Express),
(v) personal delivery or (vi) any other method creating a receipt, waybill or
other indication of delivery, and shall be addressed (a) if to the Landlord, at
the address set forth on the Data Sheet, or such other address or addresses as
Landlord may designate by written notice, together with copies thereof to such
other parties designated by Landlord and, (b) if to Tenant, at the Premises or
the address set forth on the Data Sheet, or such other address or addresses as
Tenant shall designate by written notice.  Landlord may, at its sole discretion,
provide such notice to Tenant solely to the Premises and such delivery of notice
shall be conclusively presumed to be notice to the Tenant for all purposes
under this Lease or applicable law.

 

Section 27.06                     CAPTIONS AND SECTION NUMBERS.

The
captions, section numbers, article numbers and index appearing in this Lease
are inserted only as a matter of convenience and in no way define, limit,
construe or describe the scope or intent of such sections or articles of this
Lease nor in any way affect this Lease.

 

Section 27.07                     BROKER’S COMMISSION.

Tenant
represents and warrants to Landlord that there are and shall be no claims for
brokerage commissions or finder’s fees in connection with this Lease, and each
party agrees to indemnify the other and hold it harmless from all liabilities
arising from any claim for brokerage commissions and finder’s fees in
connection with this Lease.  Such agreement shall survive the
termination of this Lease.

 

Section 27.08                     RECORDING.

Tenant
shall not record this Lease or any short form or memorandum of this Lease.  Tenant, upon the request of Landlord’s ground
lessor(s), mortgagee(s) or beneficiary(ies) under deed(s) of trust, shall
execute and acknowledge a short form or memorandum of this Lease for recording
purposes.

 

Section 27.09                     FURNISHING OF FINANCIAL
STATEMENTS.

Tenant
has provided Landlord at or prior to the date of this Lease with statements
reflecting its financial condition as of a date within the last twelve (12)
months as an inducement to Landlord to enter into this Lease, and Tenant hereby
represents and warrants that its financial condition has not materially changed
since the date of those statements. 
Upon Landlord’s written request in connection with a proposed sale,
transfer or financing transaction with respect to all or any portion of the
Development, Tenant shall promptly  furnish Landlord, from time to time, but not more frequently than once
in any lease year, with financial statements reflecting Tenant’s then current
financial condition and written evidence of ownership of controlling stock
interest if Tenant is a corporation or controlling partnership interest if
Tenant is a partnership.  Landlord shall
treat such financial statements and information provided to it pursuant to
Articles III and IV of this Lease confidentially, and shall not disclose them
except to Landlord’s lenders or otherwise
as reasonably necessary for the operation of the Development or administration
of Landlord’s business or unless disclosure is required by any judicial or
administrative order or ruling.

 

Section 27.10                     WAIVER OF COUNTERCLAIM OR
DEFENSES IN ACTION FOR POSSESSION.

Landlord
and Tenant agree that in any action brought by Landlord to obtain possession of
the Premises, the parties desire an expeditious resolution of such
litigation.  Accordingly, Tenant shall
not file and hereby waives the right to file any non-compulsory counterclaim in
such action.  Tenant also shall not file and hereby waives the right to
file any defense to such action for possession other than the defense that the
default alleged by Landlord did not occur.

 

Section 27.11                     TRANSFER OF LANDLORD’S
INTEREST.  In the event
of any transfer or transfers of Landlord’s interest in the Premises including a
so-called sale-leaseback, the transferor shall be automatically relieved of any
and all obligations on the part of Landlord accruing from and after the date of
such transfer, provided that (a) the interest of the transferor, as Landlord,
in any funds then in the hands of Landlord in which Tenant has an interest
shall be turned over, subject to such obligations, to the then transferee; and
(b) notice of such sale, transfer or lease shall be given to Tenant as required
by law. 
Upon the transfer of any such lease in a sale-leaseback
transaction prior to termination of this Lease, the former lessee thereunder
shall become and remain liable as Landlord hereunder until a further transfer.  No
holder of a

 

36

 

mortgage to which this Lease
is or may be subordinate, and no lessor under a so-called sale-leaseback, shall
be responsible in connection with the security deposited hereunder, unless such
mortgagee or holder of such deed of trust or lessor shall have actually
received the security deposited hereunder.

 

Section 27.12                     FLOOR AREA.

(a)                                  “Floor
Area” as used in this Lease means with respect to any leasable area in the
Shopping Center and/or the Development, the aggregate number of square feet of
floor space of all floor levels therein, including
any mezzanine space, measured from (i) the outside faces of all perimeter walls
thereof other than any party wall separating such premises from other leasable
premises, (ii) the center lines of any such party wall, (iii) the outside face
of any interior wall, and (iv) the building and/or leaseline adjacent to any
entrance to such premises.

 

(b)                                 For the purpose of this Lease, in determining
the gross leasable Floor Area or the gross leased and occupied Floor Area of
the Shopping Center and/or the Development, there shall be excluded therefrom
the Floor Area of any premises leased for the operation of a U.S. Government Post
Office facility or other governmental facility, and the total Floor Area
utilized by Landlord for the operation of a child care center, community room,
library, project offices and related rooms, parking facilities, Common Areas
and project areas which shall be deemed amenities to the Shopping Center and/or
the Development.  No deduction or
exclusion from Floor Area shall be made by reason of columns, duets, stairs,
elevators, escalators, shafts or other interior construction or equipment.  The
gross leased and occupied Floor Area in effect for the whole of any lease year
shall be the average of the gross leased and occupied Floor Area in effect on
the first day of each calendar month in such lease year.

 

Section 27.13                     INTEREST ON PAST DUE
OBLIGATIONS.

Any
amount due from Tenant to Landlord hereunder which is not paid when due
(including, without limitation,
amounts due as reimbursement to Landlord for costs incurred by Landlord in
performing obligations of Tenant
hereunder upon Tenant’s failure to so perform) shall bear interest at the
lesser of (a) the “Prime Rate” as published in Wall Street Journal plus three
percent (3%); or (b) the highest rate then allowed under the usury laws of the
state where the Development is located from the date due until paid, unless
otherwise specifically provided herein, but the payment of such interest shall
not excuse or cure any default by Tenant under this Lease.

 

Section 27.14                     LIABILITY OF LANDLORD.

If
Landlord shall fail to perform any covenant, term or condition of this Lease
upon Landlord’s part to be performed, and if as a consequence of such default
Tenant shall recover a money judgment against Landlord, such judgment shall be
satisfied only out of the proceeds of sale received upon execution of such
judgment and levied thereon against the right, title and interest of Landlord
in the Development and out of rents or other income from such property receivable by Landlord, or out
of the consideration received by Landlord from the sale or other disposition of
all or any part of Landlord’s right, title and interest in the Development
subject, nevertheless to the rights of Landlord’s mortgagee, and neither
Landlord nor any of the partners comprising the partnership which may be the
Landlord herein shall be liable for any deficiency.

 

Section 27.15                     ACCORD AND SATISFACTION.

Payment
by Tenant or receipt by Landlord of a lesser amount than the Rental or other
charges herein stipulated shall be deemed to be on account of the earliest
Rental or other charges due from Tenant to Landlord.  No endorsements or
statement on any check or any letter accompanying any check or payment as Rental or other charges shall be deemed an
accord and satisfaction, and Landlord shall accept such check or payment without prejudice to Landlord’s right
to recover the balance of any and all Rental or other charges due from Tenant
to Landlord or to pursue any other remedy provided in this Lease or by law.

 

Section 27.16                     EXECUTION OF LEASE; NO
OPTION.

The
submission of this Lease to Tenant shall be for examination purposes only, and
does not and shall not constitute a reservation of an option for Tenant to
lease, or otherwise create any interest by Tenant in the Premises or any other
premises in the Development.  Execution
of this Lease by Tenant and the return of same to Landlord shall not be binding
upon Landlord, notwithstanding any time interval, until Landlord has executed
and delivered this Lease to Tenant.

 

Section 27.17                     GOVERNING LAW.

This
Lease shall be governed by and construed in accordance with laws of the state
where the Premises is situated.  If any
provision of this Lease or the application thereof to any person or
circumstances shall, to any extent be invalid or unenforceable, such provision
shall be adjusted rather than voided, if possible, in order to achieve the
intent of the parties, to the extent possible; in any event, all other
provisions of this Lease shall be deemed valid and enforceable to the full
extent.

 

37

 

Section 27.18                     SPECIFIC PERFORMANCE OF
LANDLORD’S RIGHTS.

Landlord
shall have the right to obtain specific performance of any and all covenants or
obligations of Tenant under this Lease, and nothing contained in this Lease
shall be construed as or shall have the effect of abridging such right.

 

Section 27.19                     SURVIVAL OF TENANT’S
OBLIGATIONS.

All
obligations of Tenant under this Lease which cannot be ascertained to have been
fully performed prior to the expiration or earlier termination of this Lease
shall survive the expiration or earlier termination of this Lease.

 

Section 27.20                     CERTAIN RULES OF
CONSTRUCTION.

Time
is of the essence in Tenant’s performance of this Lease.  Notwithstanding the
fact that certain references elsewhere in this Lease to acts required to be
performed by Tenant hereunder, or to breaches or defaults of this Lease by
Tenant, omit to state that such acts shall be performed at Tenant’s sole cost
and expense, or omit to state that such breaches or defaults by Tenant are
material, unless the context clearly implies to the contrary, each and every
act to be performed or obligation to be fulfilled by Tenant pursuant to this
Lease shall be performed or fulfilled at Tenant’s sole cost and expense, and
all breaches or defaults by Tenant hereunder shall be deemed material.  Tenant
shall be fully responsible and liable for the observance and compliance by
concessionaires of and with all the terms and conditions of this Lease, which
terms and conditions shall be applicable to concessionaires as fully as if they
were the Tenant hereunder; and failure by a concessionaire fully to observe and
comply with the terms and conditions of this Lease shall constitute a default
hereunder by Tenant.  Nothing contained
in the preceding sentence shall constitute a consent by Landlord to any concession,
subletting or other arrangement proscribed by Article XIV.

 

Section 27.21                     CONFIDENTIALITY.

Any
and all information contained in this Lease or provided to or by Tenant and/or
Landlord by reason of the covenants and conditions of this Lease, economic or
otherwise, shall remain confidential between Landlord and Tenant and shall not
be divulged to third parties; provided, however Landlord shall be permitted to
divulge the contents of statements and reports derived and received in
connection with the provisions of Article III and Article IV in connection with
any contemplated sales, transfers, assignments, encumbrances or financing
arrangements of Landlord’s interest in the Shopping Center and/or the
Development or in connection with any administrative or judicial proceedings in
which Landlord is involved where Landlord may be required to divulge such
information.

 

Section 27.22                     ATTORNEY FEES.

If
at any time after the date that this Lease has been executed by Landlord and
Tenant, either Landlord or Tenant institutes any action or proceeding against
the other relating to the provisions of this Lease or any default hereunder,
the non-prevailing party in such action or proceeding shall reimburse the
prevailing party for the reasonable expenses of attorneys’ fees and all costs
and disbursements incurred therein by the prevailing party, including, without
limitation, any such fees, costs or disbursements incurred on any appeal from
such action or proceeding.  Subject to the provisions of local
law, the prevailing party shall recover all such fees, costs or disbursements
as costs taxable by the court or arbiter in the action or proceeding itself
without the necessity for a cross-action by the prevailing party.

 

Notwithstanding
anything to the contrary contained herein, if Landlord is compelled to engage
the services of attorneys (either outside counsel or in-house counsel) to
enforce the provisions of this Lease, to the extent that Landlord incurs any
cost or expense (including such reasonable attorney fees for outside counsel or
payroll and overhead expenses for in-house counsel, as the case may be) in
connection with such enforcement, including instituting, prosecuting or
defending its rights in any action, proceeding or dispute by reason of any
default by Tenant, or as otherwise set forth in this Section 27.22 or
elsewhere in this Lease, the sum or sums so paid or billed to Landlord,
together with all interest, costs and disbursements, shall be deemed Additional
Rent and shall be due from Tenant immediately upon receipt of an invoice
therefor following the occurrence of such expenses.

 

Section 27.23                     INDEX.

As
used in this Lease, the term “Index” shall mean the Consumer Price Index For
All Urban Consumers (1982-84=100), U.S. City Average, All Items, published by the
Bureau of Labor Statistics of the U.S. Department of Labor.  In the event such Index is not published by
the Bureau of Labor Statistics or another governmental agency at any time
during the Term of this Lease, the most closely comparable statistics on the
purchasing power of the consumer dollar as published by a responsible financial
authority and as selected by Landlord shall be used for making any computation
under this Lease otherwise to be made on the basis of the Index.  If
during the Term the Consumer Price Index is changed or discontinued, Landlord
shall choose a comparable index, formula or other means of measurement of the
relative purchasing power of the dollar and such substitute index, formula or
other means shall be utilized in place of the Consumer Price Index as if it had
been originally designated in this Lease.

 

38

 

Section 27.24                     WAIVER OF
TRIAL BY JURY.

Landlord and Tenant desire
and intend that any disputes arising between them with respect to or in  connection with this Lease be subject to
expeditious resolution in a court trial without a jury.  Therefore, Landlord
and Tenant each hereby waive the right to trial by jury of any cause of action,
claim, counterclaim or cross-complaint in any action, proceeding or other
hearing brought by either Landlord against Tenant or Tenant against Landlord or
any matter whatsoever arising out of, or in any way connected with, this Lease,
the relationship of Landlord and Tenant, Tenant’s use or occupancy of the
Premises or any claim of injury or damage, or the enforcement of any remedy
under any law, statute, or regulation, emergency or otherwise, now or hereafter
in effect.

 

Section 27.25                     MORTGAGEE CHANGES.

Tenant shall not
unreasonably withhold its consent to changes or amendments to this Lease
requested by any current
or future ground lessor or holder of a mortgage or deed of trust or such
similar financing instrument covering Landlord’s fee or leasehold interest in
the Premises, as the case may be, so long as such changes do not materially
alter the economic terms of this Lease or otherwise materially diminish the
rights or materially increase
the obligations of Tenant.

 

Section 27.26                     REAL ESTATE INVESTMENT TRUST.

If the ownership of the
Development is in a Real Estate Investment Trust, then Landlord and Tenant
agree that Minimum Annual Rental, Percentage Rental and all Additional Rent
paid to Landlord under this Lease (collectively referred to in this Section as
“Rent”) shall qualify as “rents from real property” within the  meaning of Section 856(d) of the
Internal Revenue Code of 1986, as amended (the “Code”) and the U.S. Department
of Treasury Regulations promulgated thereunder (the “Regulations”).  Should
the Code or the Regulations, or interpretations thereof by the Internal Revenue
Service contained in Revenue Rulings, be changed so that any Rent no longer
qualifies as “rent from real property” for the purposes of Section 856(d)of the Code and the Regulations
promulgated thereunder, other than by reason of the application of
Section 856(d)(2)(B) or
856(d)(5) of the Code or the Regulations relating thereto, such Rent shall be
adjusted so that  it will so qualify; provided, however, that
any adjustments required pursuant to this Section shall be made so as to produce the equivalent (in economic
terms) Rent as payable prior to such adjustment.

 

IN WITNESS WHEREOF, Landlord
and Tenant, personally or by their duly authorized agents, have  executed this Lease as of the day and year
first above written.

 

	
  CHICAGO PIZZA
  & BREWERY, INC.,

  	
   

  	
  OAKRIDGE
  MALL LP,

  
	
  a California corporation

  	
   

  	
  a Delaware limited
  partnership

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Jeremiah J. Hennessy

  	
   

  	
  By:

  	
  Oakridge Mall, Inc.,

  
	
   

  	
   

  	
   

  	
  a Delaware corporation,

  
	
  Print Name:

  	
  Jeremiah J. Hennessy

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its

  	
  CO-CEO/[ILLEGIBLE]

  	
   

  	
   

  	
  By:

  	
  /s/ [ILLEGIBLE]

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ [ILLEGIBLE]

  	
   

  	
   

  	
  LANDLORD

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
  [ILLEGIBLE]

  	
   

  	
   

  	
  Kyle Olson

  
	
   

  	
   

  	
   

  	
  Assistant Secretary

  
	
  Its

  	
  CO-CEO

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TENANT

  	
   

  	
   

  
								

 

39

 

WESTFIELD SHOPPINGTOWN OAKR1DGE

 

LEASE ADDENDUM

 

This document constitutes an
Addendum to the Lease made as of the 4th day of February, 2003, by and between OAKRIDGE MALL LP, a Delaware limited partnership (“Landlord”) and CHICAGO PIZZA & BREWERY, INC., a
California corporation (“Tenant”) for Store
No. R-1 in the WESTFIELD
SHOPPINGTOWN OAKRIDGE (the “Development”) and is made a part of this
Lease as if set forth in full therein.

 

1.                                       Section 1.02                            TERM.

 

a)                                      The Grand Opening Date for Landlord’s
expansion of the Shopping Center is estimated by Landlord to be October 3, 2003.  Notwithstanding
anything to the contrary contained in this Section 1.02, the Rental
Commencement Date shall be the earliest to occur of (a) the date on which
Tenant opens its store in the Premises for business to the public, or (b) one
hundred fifty (150) days after Landlord’s delivery of possession of the
Premises to Tenant with Landlord’s Work substantially complete; provided,
however, that Tenant agrees to use best efforts to open for business by no
later than the Grand Opening Date.

 

b)                                     The following language is hereby added to the
end of this Section:

 

“Option to Extend, Landlord hereby grants to
Tenant one (1) option to extend the Term of this Lease for five (5)  years (the “Option Period”) on the same
terms and conditions contained in this Lease, except that (i) Minimum Annual
Rental and Percentage Rental for the Option Period shall be as set forth below,
and (ii) at the commencement of the Option Period, Tenant, at Tenant’s sole
cost and expense, shall complete a cosmetic remodel of the Premises in
accordance with the provisions of Sections 5.01 and 9.01, and Exhibit B of this
Lease. 
Written notice of Tenant’s exercise of the option to extend the
Term must be given to Landlord at least six (6) months prior but not more than
nine (9) months prior to the date the Term of the Lease would otherwise expire.  Upon
receipt of each such notice, this Lease will be extended for the Option Period
without the necessity for the execution of any further instrument.  The
“Term” of this Lease shall mean the initial Term set forth in the Data Sheet
and if applicable, the Option Period if properly exercised.  If
Tenant fails to timely exercise its right to extend the Lease for the Option
Period, Tenant shall be deemed to have waived its right to extend the Term as
provided herein.  No additional option to extend the
Term shall apply following the expiration of the Option Period.

 

If
Tenant is in default under this Lease beyond any applicable grace and cure  periods, then Tenant shall have no right
to extend the Term of this Lease during the time commencing from the date
Landlord gives to Tenant a notice of default under this Lease and continuing
until the default alleged in said notice is cured.  The period of time
within which said option may be exercised shall not be extended or enlarged by
reason of Tenant’s inability to exercise said option because of such default.  Notwithstanding
any provision herein to the contrary, the Term of this Lease shall not be
extended as herein provided if, at any time following the exercise by Tenant of
the option herein granted, Tenant shall be in default in the performance of any
covenant, obligation or agreement to be performed by Tenant under this Lease
beyond any applicable grace and cure periods and Landlord has elected to
terminate this Lease or pursue legal action as a result of such default.

 

The
right to extend the Term of this Lease is personal to Tenant and shall
automatically terminate upon any assignment, transfer, hypothecation or encumbrance
of this Lease requiring the consent of Landlord, or upon any sublease of fifty
percent (50%) or more of the Premises; provided, however, in no event shall
Tenant enter into such a sublease for the purpose of circumventing the effect
of this provision.”

 

2.                                       Section 1.03                            LATE OPENING.

 

In the first (1st)
line change “by the Rental Commencement Date” to “within thirty (30) days after
the Rental Commencement Date”.

 

1

 

3.                                      Section 2.01                            MINIMUM
ANNUAL RENTAL

 

Minimum Annual Rental [Item
number (2) on the Data Sheet]:

 

	
  Rental
  Commencement Date through January 31, 2005: Two Hundred Fifty Two Thousand
  and No/100 Dollars

  	
  ($ 252,000.00);

  
	
   

  	
   

  
	
  February 1,
  2005 through January 31, 2006: Two Hundred Fifty Seven Thousand Forty and
  No/100 Dollars

  	
  ($ 257,040.00);

  
	
   

  	
   

  
	
  February 1,
  2006 through January 31, 2007: Two Hundred Sixty Two Thousand One Hundred
  Fifty and No/100 Dollars

  	
  ($ 262,150.00);

  
	
   

  	
   

  
	
  February 1,
  2007 through January 31, 2008: Two Hundred Sixty Seven Thousand Four Hundred
  and No/100 Dollars

  	
  ($ 267,400.00);

  
	
   

  	
   

  
	
  February 1,
  2008 through January 31, 2009: Two Hundred Seventy Two Thousand Seven Hundred
  Twenty and No/100 Dollars

  	
  ($ 272,720.00);

  
	
   

  	
   

  
	
  February 1,
  2009 through January 31, 2010: Two Hundred Seventy Eight Thousand One Hundred
  Eighty and No/100 Dollars

  	
  ($ 278,180.00);

  
	
   

  	
   

  
	
  February 1,
  2010 through January 31, 2011: Two Hundred Eighty Three Thousand Seven
  Hundred Ten and No/100 Dollars

  	
  ($ 283,710.00);

  
	
   

  	
   

  
	
  February 1,
  2011 through January 31, 2012: Two Hundred Eighty Nine Thousand Three Hundred
  Eight and No/100 Dollars

  	
  ($ 289,380.00);

  
	
   

  	
   

  
	
  February 1,
  2012 through January 31, 2013: Two Hundred Ninety Five Thousand One Hundred
  Ninety and No/100 Dollars

  	
  ($ 295,190.00);

  
	
   

  	
   

  
	
  February 1,
  2013 through January 31, 2014: Three Hundred One Thousand Seventy and No/100
  Dollars

  	
  ($ 301,070.00);

  
	
   

  	
   

  
	
  February 1,
  2014 through January 31, 2015: Three Hundred Seven Thousand Ninety and No/100
  Dollars

  	
  ($ 307,090.00);

  
	
   

  	
   

  
	
  February 1,
  2015 through January 31, 2016: Three Hundred Thirteen Thousand Two Hundred
  Fifty and No/100 Dollars

  	
  ($ 313,250.00);

  
	
   

  	
   

  
	
  February 1,
  2016 through January 31, 2017: Three Hundred Nineteen Thousand Five Hundred
  Fifty and No/100 Dollars

  	
  ($ 319,550.00);

  
	
   

  	
   

  
	
  February 1,
  2017 through January 31, 2018: Three Hundred Twenty Five Thousand Nine
  Hundred Twenty and No/Dollars

  	
  ($ 325,920.00);

  
	
  and

  	
   

  
	
   

  	
   

  
	
  February 1,
  2018 through the end of the Term: Three Hundred Thirty Two Thousand Four
  Hundred Thirty and No /100 Dollars

  	
  ($ 332,430.00);

  

 

Option Period:  The amount of Minimum Annual Rental payable at the commencement
of the Option Period shall equal the greater of (i) one hundred ten percent
(110%) of the Minimum Annual Rental payable for the last full lease year of the
initial Term, or (ii) one hundred ten percent (110%) of the Minimum Annual
Rental plus Percentage Rental payable for the last full lease year of the
initial Term.  On each February 1st
during the Option Period, Minimum Annual Rental shall be adjusted by one
hundred two percent (102%) of the amount payable by Tenant for Minimum Annual
Rental in the prior lease year.

 

2

 

4                                         Section 2.02                            PERCENTAGE
RENTAL

 

a)                                      Percentage
Rental [Item number (3) on the Data Sheet]:

 

Percentage Rental:  Six percent
(6%) of Gross Sales in excess of the Annual Breakpoint(s) as follows:

 

	
  Rental
  Commencement Date through January 31, 2005: Four Million Two Hundred Thousand
  and No/100 Dollars

  	
  ($ 4,200,000.00);

  
	
   

  	
   

  
	
  February 1,
  2005 through January 31, 2006: Four Million Two Hundred Eighty Four Thousand
  and No/100 Dollars

  	
  ($ 4,284,000.00);

  
	
   

  	
   

  
	
  February 1,
  2006 through January 31, 2007: Four Million Three Hundred Sixty Nine Thousand
  One Hundred Sixty Seven and No/100 Dollars

  	
  ($ 4,369,167.00);

  
	
   

  	
   

  
	
  February 1,
  2007 through January 31, 2008: Four Million Four Hundred Fifty Six Thousand
  Six Hundred Sixty Seven and No/100 Dollars

  	
  ($ 4,456,667.00);

  
	
   

  	
   

  
	
  February 1,
  2008 through January 31, 2009: Four Million Five Hundred Forty Five Thousand
  Three Hundred Thirty Three and No/100 Dollars

  	
  ($ 4,545,333.00);

  
	
   

  	
   

  
	
  February 1,
  2009 through January 31, 2010: Four Million Six Hundred Thirty Six Thousand
  Three Hundred Thirty Three and No/100 Dollars

  	
  ($ 4,636,333.00);

  
	
   

  	
   

  
	
  February 1,
  2010 through January 31, 2011: Four Million Seven Hundred Twenty Eight Thousand
  Five Hundred and No/100 Dollars

  	
  ($ 4,728,500.00);

  
	
   

  	
   

  
	
  February 1,
  2011 through January 31, 2012: Four Million Eight Hundred Twenty Three
  Thousand and No/100 Dollars

  	
  ($ 4,823,000.00);

  
	
   

  	
   

  
	
  February 1,
  2012 through January 31, 2013: Four Million Nine Hundred Nineteen Thousand
  Eight Hundred Thirty Three and No/100 Dollars

  	
  ($ 4,919,833.00);

  
	
   

  	
   

  
	
  February 1,
  2013 through January 31, 2014: Five Million Seventeen Thousand Eight Hundred
  Thirty Three and No/100 Dollars

  	
  ($ 5,017,833.00);

  
	
   

  	
   

  
	
  February 1,
  2014 through January 31, 2015: Five Million One Hundred Eighteen Thousand One
  Hundred Sixty Seven and No/100 Dollars

  	
  ($ 5,118,167.00);

  
	
   

  	
   

  
	
  February 1,
  2015 through January 31, 2016: Five Million Two Hundred Twenty Thousand Eight
  Hundred Thirty Three and No/100 Dollars

  	
  ($ 5,220,833.00);

  
	
   

  	
   

  
	
  February 1,
  2016 through January 31, 2017: Five Million Three Hundred Twenty Five
  Thousand Eight Hundred Thirty Three and No/100 Dollars

  	
  ($ 5,325,833.00);

  
	
   

  	
   

  
	
  February 1,
  2017 through January 31, 2018: Five Million Four Hundred Thirty Two Thousand
  and No/100 Dollars

  	
  ($ 5,432,000.00);

  
	
   

  	
   

  
	
  and

  	
   

  
	
   

  	
   

  
	
  February 1,
  2018 through the end of the Term: Five Million Five Hundred Forty Thousand
  Five Hundred and No/100 Dollars

  	
  ($ 5,540,500.00);

  

 

Option Period:  Upon the commencement of the Option Period and on each February 1st
during the Option Period, the Annual Breakpoint(s) shall be calculated by
dividing the then current Minimum Annual Rental by six percent (6%).

 

b)                                     Notwithstanding
anything to the contrary contained in this Lease, with respect to each lease
year, Percentage Rental shall first be paid for the month in which the
aggregate of Gross Sales for such lease year shall have first exceeded the
Annual Breakpoint set forth in the Data Sheet, and thereafter shall be paid
monthly on all additional Gross Sales made during the remainder of such lease
year, such payments to be made in arrears within

 

3

 

 

thirty
(30) days following the month in which such Gross Sales were made.  Furthermore, whenever in this Lease the term
“Quarterly Breakpoint” is used or referred to, it shall mean the Annual
Breakpoint as set forth herein.

 

c)                                      Subsection 2.02(d) is hereby deleted.

 

5.                                       Section 2.03                            GROSS SALES.

 

a)                                      The following is added to the end of
subsection 2.03(b):

 

“(7)                            Transfers of food, beverage or merchandise
between respective stores.

 

b)                                     Subsection 2.03(e) is hereby
deleted.

 

6.                                       Section 2.04                            TENANT’S TAX OBLIGATION.

 

a)                                      In the sixth (6th) line after
“Shopping Center”, the following is inserted: “(which leased and occupied Floor
Area for purposes of this calculation shall not be less than eighty percent
(80%) of the gross leasable Floor Area of the Shopping Center).”

 

b)                                     In the sixth (6th) line change
“fifteen percent (15%)” to “five percent (5%)”.

 

7.                                       Section 2.05                            TRASH REMOVAL CHARGE.

 

Section 2.05
is hereby deleted in its entirely and the following is substituted therefor:

 

“(a)                            Tenant, at Tenant’s expense, shall at all
times keep the Premises (including, without limitation, the service areas
adjacent to the Premises, display windows and signs) orderly, neat, safe, clean
and free from rubbish and dirt.  Tenant shall dispose of all trash
(wet or dry) on a daily basis in such receptacles as may be designated by
Landlord for such disposal, and until Tenant disposes of such trash, Tenant
shall store the trash and other solid waste within the Premises or in such
areas as may be designated by Landlord for such storage.  Tenant shall not burn any trash or garbage
at any time in or about the Development.

 

(b)                                 Solid waste disposal contractors designated
by Landlord shall remove trash from said receptacles at such intervals as
Landlord may determine, in Landlord’s sole discretion.  The Data Sheet will set forth whether the Tenant
will initially pay (i) the “Trash Removal Charge” as set forth on the Data
Sheet, or (ii) the solid waste disposal contractor designated by Landlord
directly.  Landlord shall have the right
to change the method of payment at any time during the Term by providing Tenant
thirty (30) days’ prior written notice.

 

(c)                                  In the event Landlord elects that Tenant pay
a Trash Removal Charge, Tenant shall be solely responsible for and shall
promptly pay, as Additional Rent hereunder, the sum set forth in the Data Sheet
as the “Trash Removal Charge” for each lease year during the Term in equal
consecutive monthly installments in advance on or before the first day of each
month, without prior demand or notice. 
Such Trash Removal Charge payable by Tenant shall be adjusted annually
commencing on the 1st day of January immediately following the
Rental Commencement Date and each January 1st thereafter by the
annual percentage increase in the “Index” (as defined in Section 27.23) to
the respective January or the closest subsequent month thereto that the Index
is published; provided, however, in no event shall Tenant pay less than the
Trash Removal Charge payable for the preceding year.

 

If Landlord elects that Tenant pay the solid waste disposal contractors
directly, then Landlord shall instruct such contractor to bill its charges
directly to Tenant, and Tenant shall pay such charges directly to the
contractor, and no separate Trash Removal Charge shall be payable hereunder.

 

At any time during the Term, Landlord may, upon thirty (30) days’ prior
written notice to Tenant, discontinue furnishing trash removal services to the
Premises without thereby affecting this Lease in any manner or otherwise
incurring any liability to Tenant except that Landlord will no longer be
required to furnish trash removal services to the Premises.  If
Landlord does not provide such services and if Landlord has elected not to
retain a third party to

 

4

 

provide
such services, Tenant shall arrange for the regular pickup of all trash, garbage
and other solid waste with a contractor and upon terms approved in writing by
Landlord, in its sole discretion.”

 

8.                                       Section 4.02                            AUDIT.

 

a)                                      The sentence commencing in the fifth (5th)
line of subsection 4.02(a) is deleted.

 

b)                                     In the fourteenth (14th) line of
subsection 4.02(a) change “two percent (2%)” to “three percent (3%)”.

 

c)                                      In the sixteenth (16th) line of
subsection 4.02(a) after “understatement was” insert “willful or
fraudulent and”.

 

9.                                       Section 5.01                            CONSTRUCTION OF PREMISES.

 

Commencing
in the eighth (8th) line of subsection 5.0l(b) delete “and Tenant shall
remain liable as provided in this Lease”.

 

10.                                 Section 6.02                            REMOVAL BY TENANT.

 

The
following language shall be added at the end of this Section:

 

“Notwithstanding
the fact that Tenant shall not encumber the leasehold by or through any
mortgage, deed of trust, pledge, hypothecation, lien, or other security
arrangement, Landlord acknowledges that Landlord does not hold a security
interest in items of Tenant’s personal property, trade fixtures and/or
equipment installed and/or used in the Premises.”

 

11.                                 Section 6.03                            CHANGES AND ADDITIONS.

 

Notwithstanding
anything to the contrary in this Lease, except as may be required by applicable
law, no changes or alterations by Landlord pursuant to subsection 6.03(a)
shall materially, detrimentally affect ingress or egress to and from the
Premises or the reasonable visibility of the Premises.

 

12.                                 Section 6.04                            RIGHTS OF LANDLORD.

 

Subsection 6.04(a)
is hereby deleted. 

 

13.                                 The following Section is hereby added to this
Lease:

 

“Section 5.05                     REQUIRED IMPROVEMENTS.

In
the event the total length of the Term and any extended term (if applicable) is
for a period of nine (9) lease years or more, Tenant shall, at its sole cost
and expense, be responsible for performing a cosmetic refurbishment of the
interior of the Premises to “like new” condition, if necessary, such work to
include, but not be limited to new paint, ceilings, wall and floor coverings
(hereinafter “Required Improvements”). 
The Required Improvements shall be performed during the first three (3)
months of the sixth (6th) lease year of the Term and every five (5)
lease years thereafter, if applicable.  The Required Improvements shall be
performed in accordance with the provisions contained in this Article V and
Exhibit B.”

 

14.                                 Section 7.02                            OPERATION OF BUSINESS.

 

a)                                       Landlord acknowledges that Tenant’s normal
operating hours are from 11:00 AM through 12:00 AM; subject to the terms of
Section 7.02(d).  Such hours shall
not be considered “after normal Shopping Center hours” for purposes of
allocating costs to Tenant under Section 7.02(a).

 

b)                                      In the third (3rd) line of
subsection 7.02(c) change “a menu approved in writing by the Landlord and
attached as an exhibit to this Lease” to “the Permitted Use clause set forth in
the Data Sheet”.

 

5

 

15.                                 Section 7.04                          RADIUS.

 

a)                                       In the second (2nd) and ninth (9th)
lines of the first paragraph change “ten (10)” to “three (3)” each place it
appears.

 

b)                                      Notwithstanding anything to the contrary
anything in this Section to the contrary, Tenant or any such other person
or entity may operate a similar type of business within said radius, provided
such business does not operate under a trade name the same as or similar to that
being used by Tenant at the Premises.

 

16.                                 The Lease is hereby amended by the addition
of a new Section 7.05 as follows:

 

“Section 7.05                      OUTSIDE SEATING AREA.

Landlord grants Tenant the right during the Term to use the Common Area
outside and adjacent to the Premises designated as the “Patio” on Exhibit A-3
attached to this Lease provided that the Patio shall be fully enclosed and that
Tenant complies with all applicable laws, the Conditional Use Permit for the
Development (if required by the governmental authorities having jurisdiction
thereover), and the following conditions:

 

(a)                                  Consent and Approval. 
Landlord grants to Tenant a license to use the Patio for cafe seating
(the “Cafe’ Seating Area”) provided Tenant complies with all applicable
requirements of all governmental authorities having jurisdiction thereover
including, without limitation, fire and safety code requirements and with all
requirements of Landlord’s insurers for the Shopping Center.  Tenant
agrees to provide Landlord with certified copies of all consents and approvals
acquired.  Landlord agrees to cooperate with Tenant, at Tenant’s
expense, in obtaining any such consents and approvals; however, Landlord is not
bound to execute any documentation if Tenant is in default under the Lease.

 

(b)                               Tenant’s Obligations.  It
is understood that although no payment of Minimum Annual Rental is required for
the Cafe’ Seating Area, all Gross Sales and revenues derived from services
performed and sales made in the Cafe’ Seating Area will be included in Gross
Sales for the purpose of determining Tenant’s Percentage Rental payable
pursuant to Section 2.02 of the Lease.  Further, even though the Cafe’
Seating Area does not form a part of the Premises, the Cafe’ Seating Area shall
be subject to all other non-monetary terms and conditions of the Lease
including, without limitation, Article X, Article XI and Article XIX, and any
provision obligating Tenant to comply with the requirements of all governmental
authorities having jurisdiction thereover.

 

Tenant acknowledges and agrees that the insurance
requirements set forth in the Lease shall also apply to the business operations
of Tenant in the Café Seating Area and Tenant’s insurance policy shall
specifically cover the Café Seating Area.

 

(c)                                 Rights of Landlord.  Landlord
shall have the right, if required by the city in which the Development is a
part or any other lawful governmental authority, to remove Tenant from the
Cafe’ Seating Area and to terminate Tenant’s use thereof upon twenty (20) days’
prior written notice, or such shorter notice as may be required by such
governmental authority.

 

(d)                                Facilities.  Tenant, at Tenant’s cost and expense, shall
provide the tables, seating facilities and other movable fixtures for use in
the Cafe’ Seating Area (the “Facilities”). 
The Facilities shall require the prior approval of Landlord.  Tenant acknowledges and agrees that any
destruction, damage, theft, or vandalism of, or to, the Facilities shall be the
sole responsibility of Tenant and Tenant agrees to promptly repair same
immediately following such event.

 

(e)                                 Maintenance.  Tenant shall keep the Cafe’ Seating Area and
the Facilities clean and in good repair at all times throughout Tenant’s
possession.  If Tenant does not maintain
a standard of cleanliness and repair satisfactory to Landlord, then Landlord
shall have the right, after twenty-four(24) hours’ prior notice to Tenant, to
clean or repair or cause to be cleaned or repaired the Cafe’ Seating Area
and/or the Facilities and the cost thereof shall be payable by Tenant on demand
as Additional Rent.  After two notices
in any lease year, Landlord shall have the right to revoke this license and
terminate Tenant’s use thereof on twenty (20) days’ prior written notice.

 

6

 

 

(f)                                   Miscellaneous.  Notwithstanding
anything to the contrary contained in Article XIV of the Lease, the right to
use the Café Seating Area is personal to Tenant and may
not be assigned in connection with any assignment of this Lease requiring the
consent of Landlord.”

 

17.                                 Section 8.02                             USE OF COMMON AREAS.

 

a)                                      In connection with the exercise of its rights
under this Section 8.02, except as required by governmental authority or
due to force majeure as set forth in Section 27.04, Landlord shall (i) shall
use good faith efforts to minimize interference with the operation of Tenant’s
business in the Premises; (ii) not materially interfere with the ingress,
egress, or reasonable visibility of the Premises; and (iii) furnish Tenant with
reasonable prior notice of any entry onto the Premises hereunder.

 

b)                                     Landlord shall not require payment of the
Fifty Dollars ($50.00) per day Additional Rent as set forth in the third (3rd)
paragraph of subsection 8.02(b) unless written notice of a previous
violation by such employee shall have been furnished to Tenant.

 

18.                                 Section 8.03                            COMMON AREA OPERATING COSTS
AND EXPENSES.

 

Notwithstanding
anything to the contrary contained in the Section 8.03, Tenant shall have
no separate obligation to contribute toward Common Area Operating Costs and
Expenses; and, apart from its obligations with respect to the Premises which
arc set forth in other sections of this Lease, Tenant shall have no other
obligation whatsoever for the payment of any costs for the, repair,
maintenance, operation or management of the Common Areas of the Shopping
Center.

 

19.                                 Section 10.02                     TENANT’S OBLIGATIONS FOR
MAINTENANCE.

 

a)                                      In the seventh (7th) line of
subsection 10.02(b) after “wear and tear” insert “, permitted alterations
and casualty or condemnation damage which Tenant is not required by this Lease
to repair”.

 

b)                                     In the third (3rd) line of
subsection 10.02(c) change “ten (10)” to “fifteen (15)”.

 

c)                                      In the seventh (7th) and eighth (8th)
lines of subsection 10.02(d) change “ten (10) days” to “thirty (30) days”.

 

20.                               Section 11.01                     TENANT’S INSURANCE.

 

The following shall be added to the end of subsection 11.01(a):

 

“Notwithstanding
the foregoing, Landlord shall not increase the amounts or limits of insurance
required to be carried by Tenant hereunder except to the extent such increased
limits are reasonable and customary for tenants in the same merchandising
category as Tenant in similar shopping centers in the area in which the
Shopping Center is located.”

 

21.                               Section 11.02                     LANDLORD’S INSURANCE.

 

Tenant
shall pay the sum of sixty cents (.60) per square foot of Floor Area in the
Premises per annum for Insurance. 
Tenant shall pay this sum to Landlord as Additional Rent, in monthly
installments on or before the first day of each month (or such longer period as
Landlord may determine), in advance, in an amount estimated by Landlord and
billed by Landlord to Tenant; provided that Landlord shall have the right
initially to determine monthly estimates and to revise the estimates from time
to time.

 

22.                               Section 11.03                     COVENANT TO HOLD HARMLESS.

 

Landlord
agrees to indemnify and hold Tenant harmless from and against all claims,
liabilities, losses, damages and expenses for injury to or death of any person
or loss or damage to property in or upon the Common Areas which result from
claims by third parties relating to the Common Areas, except to the extent such
claim is based upon an act or omission of Tenant, any subtenant, licensee,
concessionaire or assignee of Tenant, or any of their respective agents,
employees or contractors, or Tenant’s breach of this Lease.  In
case Tenant shall, without fault, be made a party

 

7

 

to
any such litigation, then Landlord shall protect and hold Tenant harmless and
shall pay all reasonable costs, expenses and attorneys’ fees incurred or paid
by Tenant in connection with such litigation.

 

23.                                 Section 12.01                     UTILITY CHARGES.

 

a)                                      If, as a direct result of the negligence or
breach of this Lease by Landlord, there is an interruption or discontinuance in
any utility supplied to the Premises by Landlord which results in a substantial
and material interference with Tenant’s ability to conduct its business in the
Premises, and as a result Tenant is forced to close its business in the
Premises for a period in excess of seventy two (72) hours, then the payment of
Minimum Annual Rental only shall abate until such time as such utility service
is restored or Tenant is able to reopen the Premises for business, whichever
shall first occur.

 

b)                                     Subsection 12.0l(h) is hereby deleted in
its entirety from this Lease.

 

24.                                 Section 13.03                     SUBORDINATION.

 

In the eleventh (11th) and seventeenth (17th)
lines change “ten (10) days” to “twenty (20) days”.

 

25.                                 Section 13.04                     REMEDIES.

 

a)                                      In the second (2nd) line change
“ten (10) days” to “ten (10) business days”.

 

b)                                     In the fourth (4th) line change
“ten (10) days’” to “twenty (20) days’”.

 

26                                  Section 14.01                     RESTRICTIONS ON TRANSFER.

 

Notwithstanding
anything to the contrary contained in this Article, provided the conditions set
forth in this paragraph are met, Tenant may, without the prior consent of
Landlord, assign this Lease or sublease the Premises to: (a) any parent,
subsidiary or affiliate of Tenant; or (b) any corporation resulting from the
consolidation or merger of Tenant into or with any other corporation (as the
case may be under clause (a) or (b), an “Affiliate Transfer”).  As
used herein, “parent, subsidiary or affiliate” shall mean a corporation that,
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with Tenant, and “control” shall mean
ownership of at least 51% of the voting interests together with the right and
power, directly or indirectly, to direct or cause the direction of the
management and policies of a particular corporation.  Notwithstanding the
foregoing, however, (i) such assignment or sublease shall remain fully subject
to all of the terms, covenants and conditions of this Lease including but not
limited to the permitted use as described pursuant to Section 7.01, and
the provisions of this Article XIV; (ii) such assignee or sublessee shall have
a net worth at the date of such assignment or sublease equal to or greater than
the net worth of Tenant (plus the net worth of Tenant’s Guarantor, if any) as
of the date of this Lease or as of the effective date of such assignment or
sublease, whichever is greater; (iii) such assignment or sublease shall be for
the entire unexpired Lease Term; (iv) the person or entity who or which was
Tenant prior to the Transfer (and Tenant’s Guarantor, if any) shall remain
liable for the payment of all sums due and the performance of all other terms
and conditions of this Lease; (v) the assignee or sublessee shall assume in a
written instrument satisfactory to Landlord all obligations under this Lease;
and (vi) concurrent with such assignment or subletting, Tenant shall give
notice to Landlord as provided in Section 27.05 of the Lease setting forth
the name and address of such assignee or subtenant and the terms of such
assignment or subletting.  In no event shall any public
offering, listing, redemption, hypothecation, conversion, exchange or other
similar public disposition of Tenant’s corporate stock be deemed an assignment
or require Landlord’s consent.  The provisions set forth in Sections
14.02 and 14.05 and the increased Minimum Annual Rental provisions set forth in
Section 14.03 shall not apply to any Affiliate Transfer.

 

27.                                 Section 14.02                     PROCEDURE FOR TRANSFER.

 

Landlord
shall not exercise its right to terminate under this clause (c) unless Landlord
has reasonable grounds to disapprove of the proposed Transfer under
Section 14.01.

 

8

 

28.                                 Section 14.04                     REQUIRED DOCUMENTS AND FEES.

 

The following is inserted at the end of this Section: “not to exceed
Seven Hundred Fifty Dollars ($750.00)”.

 

29.                                 Section 14.06                     ASSIGNMENT AND SUBLEASE
RENTALS.

 

Landlord
shall not exercise its rights under this Section unless Tenant is in
default after the giving of notice and expiration of any applicable cure period.  Prior thereto, Tenant may, except as otherwise provided in this
Lease, receive, collect and enjoy the rents accruing under such sublease.

 

30.                                 Section 15.01                     WASTE OR NUISANCE.

 

The
restrictions in this Section against uses which are the source of
“embarrassment” to Landlord or which are “immoral” shall not of themselves be
deemed to prohibit Tenant from the display or sale of items which are similar
to or consistent with items displayed or sold by other restaurants located in
regional shopping centers in the area in which the Shopping Center is located,
but shall prohibit Tenant from the display or sale of items which, due to their
pornographic, obscene or prurient nature, are not displayed or sold by other
restaurants located in such regional shopping centers.

 

31.                                 Section 16.01                     TRADE NAME.

 

Tenant
shall have the right to change its trade name to such trade name as is utilized
by Tenant in all or substantially all of its other full service sit-down
restaurants.  Tenant shall furnish Landlord with reasonable prior notice
of such change in trade name.  Tenant agrees that any change in
trade name will require the installation of a new storefront sign at Tenant’s
expense, the plans for which shall require Landlord’s prior written approval
and shall conform to Landlord’s criteria for signs.

 

32.                                 Section 17.01                    RECONSTRUCTION OF DAMAGED
PREMISES.

 

a)                                      In line two (2) of subsection 17.01 (a),
and line eight (8) of Section 17.02, “carried by Landlord” is changed to
“which Landlord is required to carry”.

 

b)                                     The following is inserted after the first
(1st) sentence of subsection 17.01(c): “Notwithstanding the foregoing, if
the amount to be expended by Landlord in repairing the Premises is in excess of
the proceeds of insurance, Landlord and not Tenant shall bear the amount of
such excess provided Tenant has complied with Section 11.02 of this Lease”

 

c)                                      The following is added to the end of this
Section: “If more than twenty five percent (25%) of the Floor Area of the
Premises shall be damaged or destroyed by fire or other casualty during the
last two (2) years of the Term of this Lease, Tenant shall have the right to
terminate this Lease by giving written notice to Landlord, such notice to be
given within thirty (30) days after the occurrence of such damage or
destruction.”

 

33.                                 Section 17.02                     LANDLORD’S OPTION TO
TERMINATE LEASE.

 

Landlord’s
option to terminate this Lease as described in Section 17.02 shall be
conditioned upon Landlord’s exercising its option to terminate the leases of
all other tenants of the Shopping Center impacted in the same manner by such
casualty (to the extent that Landlord possesses the right to do so under its
leases with such tenants).

 

34.                                 Section 18.02                     PARTIAL CONDEMNATION.

 

a)                                      In line two (2) of subsection 18.02(a),
“fifty percent (50%)” is changed to “thirty five percent (35%)”.

 

b)                                     At the end of subsection 18.02(c) add:
Notwithstanding anything to the contrary, Landlord may only terminate this
Lease pursuant to this subsection 18.03(c) provided Landlord

 

9

 

terminates
the leases of other similarly situated tenants unless the Premises is the only
location so taken.

 

35.                                 Section 18.03                     LANDLORD AND TENANT DAMAGES.

 

Tenant
may, if allowed by applicable law, seek a separate award from the condemning
authority for the loss of its leasehold improvements and trade fixtures
installed by Tenant at Tenant’s expense and Tenant’s lost goodwill and
relocation costs, provided that Tenant shall have no right to any portion of
any proceeds awarded to or received by Landlord or Landlord’s mortgagee as a
result of any condemnation.

 

36.                                 Section 19.01                     RIGHTS UPON DEFAULT.

 

a)                                      In the sixth (6th) line of
subsection 19.01 (a) change “five (5) days” to “ten (10) days”.

 

b)                                     In the second (2nd) line of
subsection 19.01(e) change “this Article XIX” to “19.0l(a)(iv)”; and
change “twice” to “three (3) times”.

 

37.                                 Section 22.02                     LOSS AND DAMAGE.

 

This
Section shall be prefaced with the following: “Except to the extent of
Landlord’s gross negligence or willful misconduct”.

 

38.                                 Section 23.01                     HOLDING OVER.

 

In the tenth (10th) line change “twice” to “one hundred
fifty percent (150%) of”.

 

39.                                 Section 26.01                     DEPOSIT.

 

This Section is hereby deleted in its entirety
from this Lease.

 

40.                                 Section 27.05                     NOTICES.

.

The last sentence is hereby deleted.

 

41.                                 Section 27.07                 BROKER’S COMMISSION.

 

Notwithstanding
anything in this Section 27.07 or this Lease to the contrary, the parties
acknowledge that Tenant has dealt with Terranomies Retail Services (“Broker”)
in connection with this Lease and that Tenant has the sole responsibility for
payment to Broker for services rendered in connection with this Lease.  Further,
Tenant agrees to indemnify Landlord and save it harmless from all claims,
actions, damages, costs and expenses and liability whatsoever, including
attorneys’ fees, arising out of any such representation.

 

37.                                 Section 27.18                     SPECIFIC PERFORMANCE OF
LANDLORD’S RIGHTS.

 

In
the first (1st) line after “Landlord” insert “and Tenant”; and in first (1st)
and second (2nd) lines delete “of Tenant”.

 

38.                                 Section 27.20                     CERTAIN RULES OF
CONSTRUCTION.

 

In
the first (1st) line insert “Landlord’s” after “Tenant’s”.

 

39.                                 Section 27.21                     CONFIDENTIALITY.

 

This
Section shall not prohibit Tenant from making reasonably necessary disclosures
of the provisions of this Lease to Tenant’s employees, representatives, actual
and potential sublessees, assignees or purchasers, governmental requirements
and filings, and as required in any judicial proceeding.

 

10

 

 

40.                                 Section 27.22                     ATTORNEY
FEES.

 

a)                                       The second (2nd) paragraph is hereby deleted.

 

b)                                      In the eighth (8th) line of the
second paragraph change “immediately upon” to “within thirty (30) days after”.

 

41.                              The following new Section is hereby added to
this Lease:

 

“Section 27.27 PERMIT CONTINGENCY.

Tenant’s obligations under this Lease are
conditioned on Tenant’s obtaining any permits and/or licenses (including but
not limited to conditional use permits, and building permits and variances
thereto) that are required by applicable laws to enable Tenant legally to (a)
construct Tenant’s improvements to the Premises in accordance with the Plans;
(b) install Tenant’s signage on the Premises; and (c) conduct its business from
the Premises.  Tenant shall, at Tenant’s expense, initiate and diligently
pursue each permit and/or license.  Landlord shall execute any
applications and shall provide Tenant with such further assistance and
cooperation as Tenant may require in connection with applications for such
permits and licenses.  If Tenant does
not obtain such permits and/or licenses on terms satisfactory to Tenant or if a
permit and/or license is not renewed or is revoked during the Term of this Lease
due to Landlord’s actions, then Tenant shall have the right to terminate this
Lease.  If Tenant provides Landlord with
its notice of termination hereunder, Landlord shall have the right (but not the
obligation), at its sole option and discretion, to seek to obtain such permits
and/or licenses on Tenant’s behalf and at Tenant’s expense for a period of
sixty (60) days thereafter, and Tenant shall cooperate fully with Landlord’s
efforts upon request.  If the Lease is
terminated as provided in this Section, then neither party shall have any
rights or liabilities under the Lease from and after the effective date of such
termination, and Landlord shall return any deposits and prepaid amounts to
Tenant, if any.  Tenant shall vacate the Premises
within thirty (30) days after exercising the option to terminate as herein
provided.”

 

IN WITNESS WHEREOF, Landlord and Tenant, personally
or by their duly authorized agents, have executed this Lease Addendum as of the
day and year first above written.

 

	
  CHICAGO PIZZA & BREWERY,
  INC.,

  	
  OAKRIDGE MALL LP,

  
	
  a California
  corporation

  	
  a Delaware limited
  partnership

  
	
   

  	
   

  
	
  By:

  	
  /s/ Jeremiah J.
  Hennessy

  	
   

  	
  By:

  	
  Oakridge Mall, Inc.,

  
	
   

  	
   

  	
  a Delaware
  corporation,

  
	
  Print
  Name:

  	
  Jeremiah
  J. Hennessy

  	
   

  	
   

  	
  its general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Its:
  

  	
  CO-CEO/[ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  [ILLEGIBLE]

  	
   

  
	
  By:

  	
  [ILLEGIBLE]

  	
   

  	
   

  
	
   

  	
   

  
	
  Print
  Name:

  	
  [ILLEGIBLE]

  	
   

  	
  LANDLORD

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  CO-CEO

  	
   

  	
   

  
	
   

  	
   

  
	
  TENANT

  	
  Kyle Olson

  
	
   

  	
  Assistant Secretary

  
									

 

11

 

 

EXHIBIT A1

 

Westfield Corporation, Inc.

 

SITE PLAN

 

[ILLEGIBLE]

 

Westfield

SHOPPINGTOWN

OAKRIDGE

 

 

EXHIBIT A2

 

 

The document is diagrammatic
and is intended only to show the demised premises of the project (hatched
area.)  If does not purpose to show
exact dimensions not the final location at any mechanical, electrical,
structural or architectural element. 
Further, the landlord reserves the right to add, eliminate or modify any
such element, as may be required from time to time.  Tenant space dimensions, unless otherwise noted are to the
centerlines of tenant positions and column grids, face at exterior walls and to
the outside face of service area positions adjacents to the tenant space (viz.
carridars, classic, and stars)

 

 

 

EXHIBIT A3

 

 

The document is diagrammatic
and is intended only to show the demised premises of the project (hatched
area.)  If does not purpose to show
exact dimensions not the final location at any mechanical, electrical,
structural or architectural element. 
Further, the landlord reserves the right to add, eliminate or modify any
such element, as may be required from time to time.  Tenant space dimensions, unless otherwise noted are to the
centerlines of tenant positions and column grids, face at exterior walls and to
the outside face of service area positions adjacents to the tenant space (viz.
carridars, classic, and stars)

 

 

 

EXHIBIT
B

 

WESTFIELD SHOPPINGTOWN OAKRIDGE 

 

DESIGN AND CONSTRUCTION OF THE BUILDING AND
THE PREMISES

 

This
Exhibit B is hereby made part of the lease (the “Lease”) between Landlord and
Tenant.

 

I.                                    DEFINITIONS

 

A.                                   The term “Landlord’s Work” shall mean
Landlord’s total responsibilities (or any portion thereof) for the construction
and improvement of the Shopping Center building (“Building”) and the
Premises.  The cost of Landlord’s Work
shall be borne as set forth under Article III of this Exhibit B.  Landlord’s Work shall be of a design, type,
size, location, elevation and quantity as may be selected by Landlord.  Any item of work required to complete the
Premises which is not hereinafter specifically made the responsibility of
Landlord, shall be considered to be a part of Tenant’s Work.

 

B.                                     The term “Tenant’s Work” shall mean Tenant’s
total responsibilities (or any portion thereof) for the construction and
improvement of the Premises.  Tenant’s
Work shall be performed at Tenant’s sole cost and expense.  Tenant’s Work shall include, but not be
limited to, all work necessary and/or required to complete the Premises, except
those items of work specifically set forth as Landlord’s Work.

 

C.                                     The term “leasehold improvements” shall mean
all of Tenant’s work described and performed pursuant to this Exhibit B for the
purpose of the Lease (except for removable trade fixtures, merchandise, and
items of personal property).

 

II.                                GENERAL REQUIREMENTS AND PROVISIONS

 

A.                                   Tenant’s Work shall be subject to Landlord’s
prior approval and shall be designed and constructed to comply with the
requirements set forth in the most current edition of Landlord’s criteria for
the Shopping Center (the “Tenant Criteria Manual”).  All details and information contained in the Tenant Criteria
Manual, whether appearing on Tenant’s plans or not, shall be considered a part
of Tenant’s plans and construction requirements.  By this reference,
the Tenant Criteria Manual is incorporated herein and made a part of this
Lease.  This Exhibit B and the Tenant
Criteria Manual are hereinafter collectively referred to as “Tenant’s
Construction Requirements”.

 

B.                                     The design and construction of Tenant’s Work
must comply with the following requirements:

 

1.                                       This Exhibit B;

 

2.                                       The Tenant Criteria Manual;

 

3.                                       Tenant’s Final Working Drawings, as approved
by Landlord;

 

4.                                       All applicable laws, ordinances, codes,
regulations and the requirements of all jurisdictional authorities; and

 

5.                                       All applicable standards of the American
Insurance Association, the National Electrical Code (latest edition), the
American Society of Heating, Refrigeration and Air Conditioning Engineer’s
Guide (latest edition), the Acoustical Society of America, National Council of
Acoustical Consultants or such other locally recognized organization selected
by Landlord experienced in establishing noise guidelines, Landlord’s insurance
carrier, the local building regulations and all local authorities having
jurisdiction.

 

EXHIBIT B

BJ’S RESTAURANT & BREWHOUSE

OAK 2003
EXPANSION

 

B-1

 

In
the event of a conflict between any of the above-referenced items, the most
stringent requirement shall govern each increment of Tenant’s Work.

 

C.                                     Tenant’s Work shall be performed in a
first-class and workmanlike manner, and shall be in good and usable condition
on the date of completion thereof.  All
materials used in Tenant’s construction of the Premises and installations made
by Tenant as a part of Tenant’s Work shall be of new, commercial grade and
first-class quality.

 

D.                                    After Tenant’s initial construction of the
Premises, any and all elective remodeling proposed by Tenant or any and all
remodeling required of Tenant by Landlord under the applicable provisions of
this Lease shall be performed in accordance with all requirements set forth in
this Exhibit B and the most current edition of the Tenant Criteria Manual.

 

III.                           LANDLORD’S WORK AT LANDLORD’S EXPENSE

 

A.                                   Landlord’s Work to be performed or provided
at Landlord’s sole cost and expense shall be limited to the following;

 

1.                                       A basic building structure, with finished
Common Areas, constructed of such materials as are permitted by the governing
codes.

 

2.                                       Tenant areas will be provided, unless
otherwise stipulated, with a concrete floor slab.  Upper level tenant areas will be provided with a troweled
concrete floor slab.

 

3.                                       Any mall frontage above the storefront lines,
and, where required in Landlord’s sole opinion, mall frontage vertical neutral
strips centered upon the lease lines of the Premises.

 

4.                                       For exterior facing Premises fronting the
south parking lot of the Shopping Center, Landlord shall construct the basic
facade of the Building with openings to be utilized by Tenant for their
storefront design, which storefront shall be included Tenant’s Work and in
accordance with the Tenant Criteria Manual.

 

5.                                       Common use service corridors, located as
required by code or as selected by Landlord, with such corridor walls finished
on the corridor side only.

 

6.                                       All building finishes outside of the Premises
which are not specifically made the responsibility of Tenant or another tenant
of the Shopping Center.

 

7.                                       A main electrical service distribution system
of a type and capacity set forth in the Tenant Criteria Manual and consisting
of the following facilities:

 

a.                                       A remote electrical service area outside the
Premises.

 

b.                                      Main electrical service distribution
equipment within the remote electrical service area, from which Tenant’s main
electrical service will be available.

 

c.                                       Electrical service conduit stubbed to the
Premises from the applicable remote electrical service area, from which
Tenant’s main electrical service will be available.

 

8.                                       A main telephone service terminal board
located outside the Premises, from which Tenant’s main telephone service shall
be available.

 

9.                                       A 2” domestic water service main and
cold water supply line for the Premises, stubbed to a point of connection at
or below the Premises. from which Tenant’s domestic water service shall be
available.

 

B-2

 

10.                                 A 4” sanitary sewer service main for
the Premises, stubbed to a point of connection at or below the Premises,
from which Tenant’s sanitary sewer service shall be available.

 

11.                                 A fire sprinkler service main for the
Premises, from which Tenant’s fire sprinkler service shall be available.

 

12.                                 Landlord shall provide a central fire alarm
system for Tenant’s individual interlace connection.

 

13.                                 The installation of metal studs to separate
the Premises from adjoining stores and/or Common Areas.  Such studs shall extend from the mall
finished floor elevation to the underside of the deck above.

 

14.                                 As may be required of Landlord by any
jurisdictional authority, Landlord shall provide, at all common corridor
demising walls, partition enclosure of the Premises with five-eighth inch
(5/8”) fire code gypsum board or other approved material on the corridor side
only.  Such enclosure shall extend from
the floor slab within the Premises to the underside of the deck above.

 

15.                                 Landlord shall provide ducted fresh makeup
air to the Premises in accordance with the base building drawings.

 

16.                                 Landlord shall supply ducted toilet exhaust
to the Premises in accordance with the base building drawings.

 

17.                                 For those tenants located within the Food
Court area of the Shopping Center Landlord shall install a centralized grease
trap/collection system.

 

IV.                                 LANDLORD’S WORK AT TENANT’S EXPENSE

 

Landlord
may provide for Tenant’s account, as Landlord deems necessary or practical, in
Landlord’s sole opinion, or as may be requested of Landlord by Tenant or
Tenant’s General Contractor, the following items of construction, equipment,
improvements or services at Tenant’s cost. For Tenant’s convenience, Landlord
shall charge Tenant’s General Contractor directly for these various items,
prior to the start of Tenant’s construction, or at such other time(s) as
Landlord may deem appropriate.  In the event that Tenant’s General
Contractor shall refuse to pay Landlord for such items, Landlord shall invoice
Tenant directly for reimbursement.  Such items may include, but not
necessarily be limited to, the following:

 

1.                                       Landlord
shall provide Tenant’s General Contractor with mall tile for use at Tenant’s
storefront.  Tenant’s General Contractor
shall reimburse Landlord for such mall tile at cost.

 

2.                                       In
the event Tenant does not construct and install its own temporary construction
barricade when required by Landlord, which barricade shall be installed in
accordance with Landlord’s criteria, including compliance with Landlord’s barricade
graphics program, Landlord may provide and install a temporary construction
barricade along Tenant’s storefront lease line.  Tenant’s General Contractor shall reimburse Landlord for such
barricade and graphics at cost.

 

3.                                       Landlord
shall provide drainage and filling services for the sprinkler system main
serving the Premises to facilitate Tenant’s construction.

 

4.                                       Landlord
may provide temporary toilet facilities for use by Tenant’s General Contractor
and construction personnel during Tenant’s construction.

 

5.                                       Based
upon the electrical service sizing criteria set forth in the Tenant Criteria
Manual, Landlord may provide a main electrical service breaker and trip unit,
located within the remote electrical service area, from which Tenant’s main
electrical service will be available.

 

B-3

 

6.                                       Landlord
may provide a branch piped skeletal fire sprinkler system within the Premises
in accordance with Landlord’s insurance carrier requirements, the requirements of the local fire
marshal, all governing building codes and applicable NFPA standards and the
Tenant Criteria Manual.

 

7.                                       Landlord
may install or may have installed sprinkler system components (including, but
not limited to, mains, valves, branches, drops, and heads) in the Premises.  Tenant’s General Contractor shall reimburse Landlord for any such
sprinkler system components installed by Landlord.

 

8.                                       Landlord may provide, as Landlord
deems practical or necessary, temporary electrical power for Tenant’s use
during all or part of the construction of the Premises.  Landlord reserves the right to limit
both the amount of power consumed and the times such power is available.

 

9.                                       For those tenants located in the Food Court
area of the Shopping Center, Landlord may provide, as Landlord deems practical
or necessary certain elements of
the Food Court cooking exhaust ducts, refrigerant lines and electrical conduits
for Tenant’s use in the Premises.

 

10.                                 Landlord may provide, as Landlord deems practical or necessary,
open trash containers for use by Tenant or Tenant’s General Contractor during
all or part of Tenant’s Work for the Premises.

 

 

V.                                   TENANT’S WORK AT TENANT’S EXPENSE

 

A.                                 Tenant’s Work shall include, but not
necessarily be limited to, the following:

 

1.                                       Tenant shall be responsible to provide,
finish and level any concrete floor slab(s) within the Premises, as may be
required to accept Tenant’s finished floor material and eliminate any tripping
hazards.  Where floor slab elevations within the Premises are above
or below Common Area floor elevations, Tenant shall provide the necessary
transitions at storefront areas and rear service door areas to make the floor
of the Premises even with any adjoining floor elevation.

 

2.                                       Installation of a finished floor in all sales
areas and all storage areas within the Premises visible to the public.  Exposed
finished concrete slab floors, vinyl tile or similar materials shall not be
deemed to be a “finished floor” in any of the areas referenced above and
therefore are not acceptable.  As may be required by Landlord,
Tenant shall match the mall finished floor material from Tenant’s storefront
lease line to the store’s closure line.

 

3.                                       Installation of a finished ceiling throughout
the Premises in accordance with the Tenant Criteria Manual.

 

4.                                       Installation of fire rated partitioning and
enclosures throughout the Premises as may be required by Landlord, all
governing codes and all jurisdictional authorities.

 

5.                                       Installation of interior partitioning
throughout the Premises, as may be required to complete the Premises.

 

6.                                       Installation of all construction and finish
materials throughout the Premises which are not specifically made the
responsibility of Landlord.  Such material installations shall
include, but not be limited to, all wall coverings, floor coverings, ceiling
materials and Tenant’s storefront construction.

 

7.                                       Supply and install Premises storefront facing
the interior mall.

 

B-4

 

8.                                       If applicable, installation of an additional
storefront located on the exterior of the Shopping Center building as set forth
in the “Exterior Design Criteria” supplied by Landlord.

 

9.                                       Where required by any applicable codes,
ordinances or jurisdictional authorities, Tenant shall provide a trash storage
room of adequate capacity and fire rating; or, if such a room is not required,
Tenant shall provide a designated area within the Premises which is adequate,
in Landlord’s judgment, to store Tenant’s trash.

 

10.                                 Unless otherwise provided by Landlord, Tenant
shall construct, where applicable, a recessed doorway to provide access from
the Premises to a service area or egress corridor.

 

11.                                 Installation of all interior and exterior
doors, and associated hardware as may be required to complete the Premises.  Such
doors and hardware shall comply with all required fire ratings, where
applicable.

 

12.                                 Installation of all furniture, fixtures,
cabinetwork, shelving, personal property and equipment as may be required to
complete the Premises.

 

13.                                 Tenant shall ensure that all slab
penetrations made as a part of Tenant’s Work are properly structurally
re-enforced, sealed and remain watertight to prevent possible damage.  Failure
to do so shall be at the sole risk and expense of Tenant in the event damage
occurs.

 

14.                                 Tenant must install a waterproof membrane to
waterproof all floor/slab and slab penetrations in all lavatories, kitchens and
similar water prone areas where water is used for food preparation or
cleaning.  Perimeter walls of such areas
must be waterproofed to a point of no less than four inches (4”) above the
slab.  In addition, Tenant must slope
floor surfaces to an area drain to prevent the passage of water, waste and
other liquids out of such areas.

 

15.                                 Installation of thermal and acoustical insulation
within the Premises as required to comply with the following provisions:

 

a.                                       Installation of thermal insulation shall meet
with the requirements of all governing codes and jurisdictional authorities, as
may be required to complete the Premises for Tenant’s occupancy.

 

b.                                      Installation of acoustical insulation or
sound dampening material shall meet with the requirements of all governing
codes and the Tenant Criteria Manual.  Those premises located below the
theater, which is located within the Shopping Center, shall be subject to and
comply with the noise limits and mitigation guidelines set forth in Exhibit B-l
attached hereto.  At a minimum, Tenant shall install
sufficient acoustical insulation to prevent the transmission of any sound or
noise in excess of 40 decibels (dB) from the Premises.  Tenant agrees that
the 40 dB sound level may be verified by Landlord through the use of a portable
sound level meter, and, in the event Landlord determines that Tenant is
transmitting sound or noise outside the Premises in excess of the 40 dB level,
Tenant will immediately resolve this condition in a manner approved by
Landlord.

 

16.                                 Mezzanines will not be permitted within the
Premises without Landlord’s prior written approval.  Where permitted, mezzanines shall be designed and installed to be
independent of the building structure and shall comply with the requirements of
all governing codes.

 

B.                                     Design, fabrication and installation of
Tenant’s sign(s) shall be performed by Tenant as a part of Tenant’s Work and
shall comply with the following provisions:

 

B-5

 

1.                                       Tenant’s sign(s) shall be subject to the
prior approval of Landlord, and where applicable, the prior approval of all
jurisdictional authorities, Department Stores, and any other party that
Landlord may deem appropriate.

 

2.                                       Tenant shall submit all required plans,
details and specifications necessary to obtain Landlord’s approval for Tenant’s
sign(s), prior to fabrication and installation of the sign(s).

 

3.                                       Tenant’s sign(s) shall be designed and
constructed to comply with the standard tenant sign criteria established by
Landlord for the Shopping Center.

 

C.                                     Installation and completion of utility
services for the Premises and connection to the utility facilities provided by
Landlord shall be performed by Tenant as a part of Tenant’s Work in accordance
with the requirements set forth in the Tenant Criteria Manual and the following
provisions:

 

1.                                       Tenant’s main electrical service shall be of
a type and capacity set forth in the Tenant Criteria Manual.  If
Tenant requires electrical service capacity in excess of that provided by
Landlord, all costs of providing such increased service shall be paid by Tenant.  Tenant
shall:

 

a.                                       Make application, where applicable, for metered
electrical service to the Premises from the serving utility authority and
comply with all utility authority requirements for such metered service,
including the procurement and installation of all required meters, meter bases
and current transformers, if applicable.

 

b.                                      Based upon the electrical service sizing
criteria set forth in the Tenant Criteria Manual, Tenant shall provide a main
electrical service disconnect switch, located within the remote electrical
service area, from which Tenant’s main electrical service will be available.

 

c.                                       As may be required, provide all required
electrical system installations within the remote electrical service area
provided by Landlord in accordance with all applicable codes, ordinances and as
specified in the Tenant Criteria Manual.

 

d.                                      As may be required, provide all required
conduit and conductor installations to complete Tenant’s main electrical
service to and within the Premises.

 

e.                                       Provide all required electrical system
installations within the Premises in accordance with all applicable codes,
ordinances and as specified in the Tenant Criteria Manual.

 

2.                                       Tenant’s telephone service will be available
from the main terminal board located outside the Premises. Tenant shall provide
either an empty main telephone service conduit or exposed telephone service
cable, from the applicable telephone service terminal board to the Premises,
from which Tenant’s main telephone service will be available.  Tenant’s telephone service shall be provided
by the telephone company providing service to the Shopping Center.  Tenant shall apply for telephone service and
system wiring to and within the Premises as required by the serving telephone
company and comply with all their requirements and regulations.

 

3.                                       Tenant shall install a fire/smoke detection
system within the Premises.  Such detection system shall include
all required wiring, conduit, devices, equipment and controls, and shall comply
with all system requirements set forth by Landlord and all jurisdictional
authorities.  Where applicable, Tenant
shall use Fire-Life Safety contractor as specified by Landlord for certain
portions of Tenant’s Work.

 

B-6

 

4.                                       If required, Tenant shall install a smoke
evacuation system within the Premises. 
Such system shall include all required wiring, conduit, devices,
equipment and controls, and shall comply with all system requirements set forth
by Landlord and all jurisdictional authorities.

 

5.                                       Tenant shall make all required plumbing
system installations to serve the Premises. 
Where provided, Tenant shall connect to, and extend from, the sanitary
sewer and domestic water service mains provided by Landlord for the
Premises.  All such installations shall
comply with the following provisions:

 

a.                                       Tenant shall make application for a dedicated
metered water service as required.

 

b.                                      Tenant shall procure and install a dedicated
water meter and pressure regulating valve as required.

 

c.                                       Tenant shall provide and install toilet
facilities within the Premises in accordance with governing codes and
Landlord’s standard criteria.  Where
required by code, Tenant shall provide and install a separate toilet room for
men and women for use by Tenant’s employees if Tenant’s number of employees
exceeds four (4) persons.

 

d.                                      Tenant shall install grease and hair traps as
required to comply with all governing codes, the requirements of Landlord and
all jurisdictional authorities. 
Wherever possible, such traps are to be located within the Premises.

 

6.                                       Tenant shall install a branch piped fire
sprinkler system within the Premises.  Tenant shall connect to Landlord’s
fire sprinkler supply main, or branch, and extend piping for branches, drops
and heads as required to complete the fire sprinkler system within the Premises
in accordance with Landlord’s insurance carrier requirements, the requirements
of the local fire marshal, all governing building codes, applicable NFPA
standards and the Tenant Criteria Manual. 
Tenant sprinkler system shop drawings and calculations must be submitted
for review and approval by Landlord’s insurance carrier and all local
authorities having jurisdiction prior to installation of the sprinkler
system.  Tenant shall provide Landlord
with three (3) sets of  approved
sprinkler shop drawings and calculations bearing the seals of the local
authorities having jurisdiction prior to installation of the sprinkler
system.  Final connection to Landlord’s
fire sprinkler supply main shall not be made until the entire system within the
Premises is completed, pressure tested and ready for service.

 

7.                                       Tenant shall provide a heating, ventilating
and air conditioning (IIVAC) system to serve the Premises.  The location of any equipment outside the
Premises shall be approved in writing by Landlord.  The design and installation of the HVAC system shall be in
accordance with the provisions of the Tenant Criteria Manual.

 

8 .                                    Tenant shall provide, as required, all
exhaust air systems to serve the Premises. 
Said systems shall comply with the provisions of the Tenant Criteria
Manual.

 

9.                                       As determined by Landlord at Landlord’s sole
discretion, tenants having odor producing operations must maintain a negative
pressure within their Premises and shall install a forced draft ventilation
system discharging to the atmosphere via the roof area.  Tenant shall be responsible for proper
diffusion of the exhaust in such a manner as to prevent these odors from
entering adjacent air intakes.  The
total exhaust from the Premises must exceed maximum make up air provided for
the Premises by an amount exceeding the minimum outside air requirements of the
heated/air conditioned area for the Premises. 
Tenant shall provide said system, at Tenant’s sole cost and expense,
including, but not limited to, all necessary components, such as exhaust hood(s),
make up and exhaust ducts, fire dampers and fire rated duct chases/shafts where
required (construction as required by code and located in areas approved by
Landlord), exhaust and

 

B-7

 

make up fans,
controls and grease drip pans which shall be installed in a manner acceptable
to Landlord.

 

10.                                 In the event Tenant desires the use of a
natural gas service, such service shall be subject to Landlord’s prior approval.  If
such service is approved by Landlord, Tenant shall provide a natural gas
service pipe from a remote multiple meter area located outside the Premises to
a location within the Premises, from which Tenant’s natural gas service will be
available.  All pipe routing, earthquake
valves and installation details shall be subject to Landlord’s prior approval
and in accordance with all applicable governing codes and requirements.

 

D.                                    Tenant’s Work shall include the procurement
of all necessary permits, licenses, variances and utility services required to facilitate
Tenant’s construction and occupancy of the Premises, and the payment of any
fees and taxes associated with such permits, licenses, variances and utility
services, as may be required by public authorities and serving utility
companies.  Tenant shall make all
necessary applications, provide all necessary information, pay all required
monies and take all necessary actions to obtain such items from the applicable
jurisdictional authorities and serving utility companies.

 

E.                                      Tenant shall not use any materials in
connection with Tenant’s Work which contain asbestos or other materials, or
substances that are hazardous or toxic. 
In the event that Tenant introduces or allows to be introduced in the
Premises any asbestos containing material or other material or substance that
is now or may hereafter be defined as hazardous or toxic or is otherwise
regulated as a material or substance posing a potential health threat to
persons, then prior to the expiration or earlier termination of this Lease or
as required by applicable federal, state or local laws, rules or regulations,
Tenant shall, at Tenant’s sole cost and expense, remove any such materials or
substances in accordance with all applicable federal, state or local laws,
rules or regulations and in the manner that Landlord may direct which may
include the use of contractors and/or consultants specified by Landlord.

 

F.                                      All roof penetrations made as a part of
Tenant’s Work must conform to Landlord’s standard criteria and shall be subject
to Landlord’s approval as to location and construction details.  Roofing
and weatherproofing of any installation or penetration by Tenant must be
performed by Landlord’s authorized roofing contractor, and Tenant shall pay all
costs therefor directly to such roofing contractor.

 

G.                                     Tenant may be required to provide additional
items of work or services as a part of Tenant’s Work.  If applicable, such
work or services shall be provided in accordance with the provisions of the
Tenant Criteria Manual.

 

VI.                                 PLANS

 

A.                                   Landlord shall furnish to Tenant or, at
Tenant’s direction, to Tenant’s agent, certain design and construction
information pertinent to the Premises, including, but not limited to, one (1)
copy of the Tenant Criteria Manual.

 

B.                                     Within fifteen (15) calendar days after the
date of this Lease, or such other date as may be required by Landlord for
Tenant to achieve its Rental Commencement Date, Tenant shall, at Tenant’s sole
cost and expense:

 

1.                                       Engage the services of a licensed architect
and licensed mechanical, electrical and sprinkler system engineers (“Tenant’s
Architect and Engineers”), for the purpose of preparing plans and
specifications for Tenant’s Work.

 

2.                                       Notify Landlord of the identity of Tenant’s
Architect and Engineers.

 

C.                                     Tenant agrees that Tenant’s Architect and
Engineers may act as Tenant’s agents for all Tenant design and plan development
purposes and obligations of this Exhibit B.  Tenant shall pay all fees of its
Architect.

 

B-8

 

D.                                    Within thirty (30) calendar days after the
date of this Lease, or such other date as may be required by Landlord for
Tenant to achieve its Rental Commencement Date, Tenant shall, at Tenant’s sole
cost and expense, cause Tenant’s Architect and Engineers to coordinate, prepare
and deliver to Landlord for Landlord’s approval, the following:

 

1.                                       One (1) sample board of Tenant’s final
storefront and interior materials and colors;

 

2.                                       One (1) colored digital rendering of Tenant’s
final storefront design; and

 

3.                                       One (1) complete set of PLOT formatted
computer files, configured to a HP-GL/2 Plot driver, or other Landlord approved
electronically formatted drawing files of preliminary drawings for Tenant’s
Work, containing all applicable architectural, structural, electrical,
mechanical (HVAC and plumbing) and sprinkler system details and specifications,
in accordance with the Tenant Criteria Manual. 
To evidence Tenant’s approval, such preliminary drawings shall be
electronically stamped by Tenant.

 

E.                                      Tenant covenants and agrees that the preliminary
drawings have been prepared in strict accordance with Tenant’s Construction
Requirements.  Landlord shall promptly
review the preliminary drawings and notify Tenant’s Architect of the matters,
if any, in which the preliminary drawings fail to meet with Landlord’s approval.  Within
ten (10) calendar days after receipt of any such notice from Landlord, Tenant
or Tenant’s Architect shall cause the preliminary drawings to be revised in
such manner as is required to obtain Landlord’s approval and shall submit the
revised preliminary drawings for Landlord’s approval.  Upon Landlord’s approval of the preliminary drawings, Landlord
shall cause one (1) set to be electronically stamped on Landlord’s behalf,
thereby evidencing Landlord’s approval.  Landlord shall return such set to
Tenant or Tenant’s Architect.  The
preliminary drawings bearing Landlord’s approval shall become and are
hereinafter referred to as the “Preliminary Plans”.

 

F.                                      Within fifteen (15) calendar days after the
date of Landlord’s approval of the Preliminary Plans, or such other date as may
be required by Landlord for Tenant to achieve its Rental Commencement Date,
Tenant shall, at Tenant’s sole cost and expense, cause Tenant’s Architect and
Engineers to coordinate, prepare and deliver to Landlord, in one package, one
(1) complete set of PLOT formatted computer files, configured to a HP-GL/2 Plot
driver, or other Landlord approved electronically formatted drawings files of
all applicable final architectural, structural, mechanical (HVAC and plumbing),
electrical and sprinkler system working drawings and specifications.  To
evidence Tenant’s approval, such final working drawings and specifications
shall be electronically stamped by Tenant.

 

G.                                     Tenant covenants and agrees that the final
working drawings described in Paragraph F above have been prepared in
conformity to the Preliminary Plans and in strict accordance with Tenant’s
Construction Requirements.  Landlord shall promptly review the
final working drawings and specifications and notify Tenant’s Architect of the
matters, if any, in which such final working drawings and specifications fail
to conform to the Preliminary Plans and Tenant’s Construction Requirements.  Within
ten (10) calendar days after receipt of any such notice from Landlord, Tenant
or Tenant’s Architect shall cause the final working drawings and specifications
to be revised in such manner as is required to obtain Landlord’s approval and
shall submit one (1) set of PLOT formatted computer files, configured to a
HP-GL/2 Plot driver, or other Landlord approved electronically formatted
drawings files of the revised final working drawings and specifications for
Landlord’s approval.  Upon Landlord’s determination that
the final working drawings and specifications conform to the Preliminary Plans
and Tenant’s Construction Requirements, Landlord shall cause one (1) set of the
final working drawings and specifications, or the revised final working
drawings and specifications, as the case may be, to be electronically stamped
on Landlord’s behalf, thereby evidencing Landlord’s approval thereof.  Landlord
shall return such set to Tenant or Tenant’s

 

B-9

 

Architect.  The
final working drawings and specifications bearing Landlord’s final approval
shall become and are hereinafter referred to as the “Final Working Drawings”.  Tenant
shall commence Tenant’s Work promptly after Landlord’s approval of the Final
Working Drawings, but not prior to the date that the Premises are in the
condition for delivery by Landlord.

 

H.                                    Tenant’s Final Working Drawings must be
designed to accommodate and provide access to any ducts, pipes, or conduits
installed within the Premises to serve the Shopping Center or any part thereof,
including, but not limited to, the premises of any tenant.  If there is a conflict and relocation of any mechanical or
electrical component is necessary, Tenant must submit to Landlord for approval,
all plans, details and specifications required by Landlord for such relocation.  If
approved, the complete relocation shall be performed as directed by Landlord,
and at Tenant’s sole cost and expense.

 

1.                                       After Landlord’s approval of the Final
Working Drawings, no changes shall be made to the Final Working Drawings except
with the prior written approval of Landlord.  However, in the course of
construction Landlord may make such changes in, on or about the Building or the
Premises as may be required as a result of “as built” conditions.  During all phases of plan development and prior
to bidding plans or commencing construction, Tenant or Tenant’s Architect and
Engineers shall make a physical on-site inspection of the Premises to verify
the “as built” location, conditions and physical dimensions of the Premises and
conformance of the Final Working Drawings.  Failure to do so shall be at the sole
risk and expense of Tenant.  Landlord’s
review and approval of Tenant’s plans, working drawings and specifications is
for compliance with Landlord’s criteria only, and this approval does not
relieve Tenant of responsibility for compliance with the Lease, field
verification of dimensions and existing conditions, discrepancies between Final
Working Drawings and “as built” conditions of the Premises, coordination with
other trades, job conditions and compliance with all governing codes and
regulations applicable to Tenant’s Work.  No responsibility for proper
engineering, safety, design of facilities or compliance with all applicable
governing codes and regulations is implied or inferred on the part of Landlord
by any such approval.

 

VII.                             GENERAL BUILDING SPECIFICATIONS

 

A.                                   Tenant shall engage the services of a
licensed general contractor (“Tenant’s General Contractor”) for the purpose of
constructing the Premises and performing related services as required to complete
Tenant’s Work.  Tenant’s General Contractor shall be bonded and insured as
required under the provisions of this Lease.  By this reference, Tenant agrees not
to act as its own general contractor and further agrees that Tenant’s General
Contractor can act as Tenant’s agent for all Tenant construction purposes and
obligations of this Exhibit B.

 

B.                                     Each contractor and subcontractor
participating in the construction of Tenant’s Work shall be duly licensed, and
each contract and subcontract shall contain the guaranty of the contractor or
subcontractor that the portion of Tenant’s Work covered thereby will be free
from any and all defects in workmanship and materials for the period of time
which customarily applies in good contracting practices, but in no event less
than one (1) year after the completion of Tenant’s Work.  The aforesaid
guaranty shall include the obligations to repair or replace in a first-class
and workmanlike manner, and without any additional charge, any and all of
Tenant’s Work done or furnished by said contractor or subcontractor, or by any
of his subcontractors, employees or agents, which shall be or become defective
because of faulty materials or workmanship within the period covered by such
guaranty (and of which notice is given to such contractor or subcontractor
within such period); and the correction, as aforesaid, of any such matter shall
include, without any additional charge therefor, all expenses and damages in
connection with the removal, replacement or repair in a first-class manner of
any other part of Tenant’s Work which may be damaged or disturbed thereby. All
warranties or guarantees as to materials or workmanship on or with respect to
Tenant’s Work shall be written so that they shall inure to the benefit of
Landlord and Tenant as their respective interests may appear and can be
directly enforced by either, and Tenant shall give to Landlord any assignments
or other assurance necessary to effectuate the same.

 

B-10

 

C.                                     Tenant shall submit to Landlord at least five
(5) days prior to the commencement of construction the following information:

 

1.                                       The name and address of the General
Contractor Tenant intends to engage for the construction of the Premises,
including names and telephone numbers of on-site and off-site representatives;

 

2.                                       The names and addresses of Tenant’s
mechanical, electrical and plumbing subcontractors, including names and
telephone numbers of on-site and off-site representatives;

 

3.                                       A schedule setting forth key dates relating
to Tenant’s construction;

 

4.                                       Copies of insurance certificates required by
Article IX below; and

 

5.                                       A copy of Tenant’s written contract with its
General Contractor(s) and an itemized statement of estimated construction
costs, including architectural, engineering and contractor’s fees.

 

D.                                    The following provisions with respect to
construction procedures and materials shall apply to Tenant’s Work at Tenant’s
expense:

 

1.                                       Tenant and
Tenant’s General Contractor participating in Tenant’s Work shall:

 

a.                                       Prior to the commencement of Tenant’s
construction, submit one (1) full set of Final Working Drawings, endorsed with
the approval stamp and permit number of the local municipality’s building
department, local fire marshal or other governmental entity having jurisdiction
over Tenant’s construction or other evidence that the Tenant has received
building department approval, to Landlord’s tenant construction coordinator.

 

b.                                      Provide a full-time supervisor or
representative, representing either Tenant’s General Contractor or Tenant, who
will be present at all times when work is being performed in the Premises.

 

c.                                       Make appropriate arrangements, as directed by
Landlord, for temporary utility connections, if available, within the Shopping
Center. 
Landlord may provide, as Landlord deems practical or necessary,
temporary electrical power for Tenant’s use during all or part of the
construction of the Premises.  Landlord reserves the right to limit
both the amount of power consumed and the times such power is available.  Landlord
does not represent that any temporary utility services will be available for
Tenant’s use.  Tenant must verify the availability of such services with
Landlord prior to the commencement of Tenant’s Work.  If temporary
services are not available, Tenant must install permanent utility services for
the Premises immediately upon the commencement of Tenant’s Work.  If
temporary services are available, Tenant shall pay the cost of all connections,
proper maintenance, use and the removal of such temporary services.  Tenant
shall pay all utility charges incurred by Tenant’s General Contractor and any
subcontractor.

 

d.                                      Store all building materials, tools and
equipment within the Premises or such other locations as may be specifically
designated by Landlord’s tenant construction coordinator.  In no event shall
any material be stored in the Common Areas or service corridors.

 

e.                                       During Tenant’s construction of the Premises,
Tenant shall store all trash, debris and rubbish as directed by Landlord and upon
completion of Tenant’s Work, shall remove all temporary structures, surplus
materials, debris and rubbish of whatever kind remaining in the Premises, the

 

B-11

 

building
or the Shopping Center.  No debris shall be deposited in the
Common Areas except as directed by Landlord.

 

f.                                         Properly protect Tenant’s Work with lights,
guard rails and barricades and secure all parts of Tenant’s Work against
accident, storm and any other hazard.  Tenant’s Work must be performed
within the Premises, behind a temporary construction barricade.  The
design and construction of any temporary construction barricade shall comply
with the Landlord’s standard criteria for such installations including
compliance with Landlord’s barricade graphics program and shall be subject to
Landlord’s approval prior to installation.

 

2.                                       Tenant’s Work shall be coordinated with all
work being performed or to be performed by Landlord and other occupants of the
Shopping Center to the extent that Tenant’s Work will not interfere with or
delay the completion of any other work.  No contractor or subcontractors
participating in Tenant’s Work shall at any time damage, injure, interfere with
or delay the completion of the Building or any other construction within the
Shopping Center, and each of them shall comply with all procedures and
regulations prescribed by Landlord for the integration of Tenant’s Work with
the work to be performed in connection with the Building and all other
construction within the Shopping Center.

 

Recognizing
that Landlord shall be employing such contractors, Tenant agrees to engage the
services of contractors whose employees employed at the job site arc members
of, or represented by, organizations for the purpose of collective bargaining,
to the end that there shall be no labor dispute which would interfere with the
operation, construction and completion of the Shopping Center or any other
work, and Tenant further agrees to enforce the same condition upon all
contractors engaged by Tenant with respect to their subcontractors which may be
engaged by any such contractors.

 

Tenant
will comply with the instructions of Landlord or Landlord’s General Contractor
for the purpose of avoiding, ending and/or minimizing labor disputes.  Upon
notice from Landlord or Landlord’s General Contractor, Tenant will take such
action, including the prosecution of legal proceedings in court or with
agencies such as the National Labor Relations Board, as Landlord or Landlord’s
General Contractor shall deem appropriate.

 

E.                                      If required by Landlord, prior to Tenant’s
commencement of construction, Tenant shall obtain or cause Tenant’s General
Contractor to obtain payment and performance bonds covering the faithful
performance of the contract for the construction of Tenant’s Work and the
payment of all obligations arising thereunder.  Such bonds shall be for the mutual
benefit of both Landlord and Tenant, and shall be issued in the names of both
Landlord and Tenant as beneficiaries and obligees.  Tenant shall submit
a copy of all such bonds, or other evidence satisfactory to Landlord that such
bonds have been issued, to:

 

OAKRIDGE MALL, LP

c/o Westfield
Corporation, Inc.

11601 Wilshire Boulevard, 12th Floor 

Los Angeles, CA 90025

Attention: Tenant Coordination

 

F.                                      During construction Tenant’s General
Contractor shall be required to comply with the following:

 

1.                                       The work of Tenant’s General Contractor and
subcontractors shall be subject to inspection by Landlord and its supervisory
personnel. Any defects and/or deviations from the Final Working Drawings shall
be rectified by Tenant’s General Contractor and/or subcontractors at no expense
to Landlord.

 

2.                                       Unless otherwise approved by Landlord, Tenant
shall cause its General Contractor and/or subcontractors to limit their access
to the Premises via the rear

 

B-12

 

entrances
and no access  will be allowed
from or to the Shopping Center Common Areas.

 

3.                                       Repair of damage caused to Landlord’s Work by
Tenant’s General Contractor or subcontractors shall be at Tenant’s expense.  Landlord
will carry out necessary repairs without notice and Tenant shall pay for the
cost of such repairs upon demand.

 

4.                                       Tenant’s General Contractor will be required
to abide by certain Construction Rules and Regulations, copies of which will be
provided prior to the commencement of Tenant’s Work, and to make certain
deposits with and/or payments to Landlord.  Notwithstanding such requirements,
Tenant shall indemnify and protect Landlord with respect to any breach of such
Construction Rules and Regulations by Tenant’s General Contractor or the
failure of Tenant’s General Contractor to make such deposits or payments.

 

G.                                     Landlord shall have the right to perform, on
behalf of and for the account of Tenant, which shall be subject to
reimbursement of the cost thereof by Tenant, any and all of Tenant’s Work which
Landlord determines in its sole discretion should be performed immediately and
on an emergency basis for the best interest of the project, or to achieve the
Rental Commencement Date, including without limitation work which pertains to
structural components, mechanical, sprinkler and general utility systems,
roofing and removal of unduly accumulated construction material and debris.  The
cost of such Tenant’s Work carried out by Landlord on behalf of Tenant shall be
the cost paid by Landlord and based on the cost of similar work and to include
any loading for overtime or any other loading as a result of carrying out
emergency work.

 

Whenever
Landlord shall have elected to perform any or all of Tenant’s Work, whether
pursuant to this Paragraph G or any other provision of the Lease, Landlord may
revoke such election by written notice to Tenant.  In such event, full
responsibility for such work shall revert to Tenant.

 

VIII.                         COMPLETION OF CONSTRUCTION

 

A.                                   Tenant shall not be permitted to, and shall
not, open for business in the Premises until the “Opening Requirements” set
forth below are met.  In order that Landlord shall have
assurance that the Premises shall be in a good and safe condition, in
compliance with all laws, that adequate insurance has been obtained, that the
Premises has been constructed in accordance with the Final Working Drawings and
that Tenant’s obligations under the Lease have been performed, the following
requirements (the “Opening Requirements”) shall be satisfied:

 

1.                                       At least five (5) days prior to the opening
of the Premises for business, Tenant shall deliver to Landlord: (a) insurance
certificates; (b) mechanics’ or construction lien waivers as the case may be,
as required by the Lease including this Exhibit B; (c) a permanent certificate
of occupancy or its equivalent; (d) certificate by Tenant’s Architect
certifying that the construction of the Premises has been completed in accordance
with all plans and specifications approved by Landlord; and (e) all evidence
typically required in the jurisdiction where the Shopping Center is located to
provide evidence of compliance with all applicable building and fire codes and
all other government requirements;

 

2.                                       Tenant shall give Landlord at least five (5)
days’ notice of the date of completion of Tenant’s Work in the Premises, and
Landlord shall have inspected the Premises to determine whether Tenant’s Work
is complete in accordance with the requirements of the Lease and Landlord shall
have approved all such work; and

 

3.                                       Tenant shall pay Landlord all Minimum Annual
Rental and Additional Rent which leas then accrued under the Lease.

 

B-13

 

No approval by
Landlord shall make Landlord responsible for the condition of the Premises or
constitute a representation by Landlord of compliance with any applicable
requirements or constitute a waiver of any rights and remedies that Landlord
may have under this Lease or at law or in equity.  If Tenant shall
open the Premises in violation of the requirements of this Article VIII, such
action by Tenant shall constitute a material default under this Lease.  On
the date Tenant opens for business in the Premises, Tenant shall be deemed to
have accepted the Premises and agrees that it is in the condition, with respect
to any of Landlord’s obligations, which is required under this Lease.  The
Opening Requirements shall apply not only to Tenant’s initial construction, but
to any subsequent opening after any temporary closure, casualty, damage or
permitted alterations.

 

B.                                     Upon
completion of Tenant’s Work, Tenant shall deliver to Landlord the following:

 

1.                                       Tenant’s
final notarized original affidavit that Tenant’s Work has been completed to
Tenant’s satisfaction and in accordance with the Final Working Drawings and
Tenant’s Construction Requirements, which affidavit may be relied on by
Landlord.  Any deliberate or negligent misstatement, or any false
statement made by Tenant therein, shall constitute a breach of this Lease.

 

2.                                       The
final notarized original affidavit of Tenant’s General Contractor performing
Tenant’s Work stating that Tenant’s Work has been completed in accordance with
the Final Working Drawings and that all subcontractors, laborers and material
suppliers engaged in furnishing materials or rendering services for Tenant’s
Work have been paid in full.

 

3.                                       A
final notarized original, unconditional waiver of lien with respect to the
Premises executed by Tenant’s General Contractor and final notarized original,
unconditional waiver of liens executed by each subcontractor, laborer and
material supplier engaged in or supplying materials or services for Tenant’s
Work. 
All waiver of lien documents must contain, in every circumstance,
a totally unconditional release.

 

IX.                                INSURANCE

 

A.                                   Tenant
shall secure, pay for and maintain, or cause Tenant’s General Contractor to
secure, pay for and maintain, for all periods of construction and fixturing
work within the Premises, all of the insurance policies required in the amounts
as set forth herein below.  Tenant shall not permit its General
Contractor to commence any work until all required insurance has been obtained
and certificates evidencing such insurance have been delivered to Landlord.

 

B.                                     Tenant’s
General Contractor’s and Subcontractor’s Required Minimum Coverages and Limits
to Liability.

 

1.                                       Worker’s
Compensation, as required by State law, and including Employer’s Liability
Insurance with a limit of not less than Two Million Dollars ($2,000,000.00)
each accident, Two Million Dollars ($2,000,000.00) each employee by disease.
Two Million Dollars ($2,000,000.00) policy aggregate by disease, and any
insurance required by any Employee Benefit Acts or other statutes applicable
where the work is to be performed as will protect Tenant’s General Contractor
and subcontractors from any and all liability under the aforementioned acts.

 

2.                                       Commercial
General Liability Insurance (including Contractor’s Protective Liability) in
which the limits shall be not less than Three Million Dollars ($3,000,000.00)
per occurrence combined single limit, bodily injury and property damage.  Such
insurance will provide for explosion, collapse and underground coverage.  Such insurance shall insure Tenant’s General
Contractor against any and all claims for bodily injury, including death
resulting therefrom and damage to or destruction of property of any kind
whatsoever and to whomever belonging

 

B-14

 

and arising
from its operations under the contract whether such operations are performed by
Tenant’s General Contractor, subcontractors, or any of their subcontractors, or
by anyone directly or indirectly employed by any of them.

 

3.                                       Comprehensive
Automobile Liability Insurance, including the ownership, maintenance and
operation of any automotive equipment, owned, hired and non-owned, in the
minimum amount of Three Million Dollars ($3,000,000.00) combined single limit,
bodily injury and property damage.  Such insurance shall insure Tenant’s
General Contractor and all subcontractors against any and all claims for bodily
injury, including death resulting therefrom and damage to the property of
others caused by accident and arising from its operations under the contract
and whether such operations are performed by the General Contractor,
subcontractors or by anyone directly or indirectly employed by any of them.

 

C.                                     Tenant’s
Protective Liability Insurance - Tenant shall provide Owner’s Protective
Liability Insurance insuring Tenant against any and all liability to third
parties for damages because of bodily injury (or death resulting therefrom) and
property damage liability of others or a combination thereof which may arise
from work, in connection with the Premises, and any other liability for damages
which Tenant’s General Contractor and/or subcontractors are required to insure
against under any provisions herein. 
Said insurance shall provide policy limits which shall provide, at a
minimum, coverage of Three Million Dollars ($3,000,000.00) combined single
limit, bodily injury and property damage.

 

D.                                    Tenant’s
Builder’s Risk Insurance - Completed
Value Builders’ Risk Material Damage Insurance policy covering the work to be
performed for Tenant in the Premises as it relates to the building within which
the Premises is located.  The policy
shall include as insureds Tenant, its General Contractor, all subcontractors
and Landlord, as their interests may appear. 
The amount of insurance to be provided shall be at one hundred percent
(100%) of the replacement cost.

 

E.                                      All
such insurance policies required under this Exhibit, except as noted above,
shall include Landlord, its architect, its consultant, its general contractor,
subcontractors, and parties set forth in the Lease and any other parties
designated by Landlord from time to time as additional insured entities, except
the Worker’s Compensation Insurance; further provided, said Worker’s
Compensation Insurance shall contain an endorsement waiving all rights of subrogation
against Landlord, its architect, its consultant, its general contractor and
subcontractors.

 

F.                                      Certificates
of insurance shall provide that no reduction in the amounts or limits of
liability or cancellation of such insurance coverage shall be undertaken
without thirty (30) days prior written notice to Landlord.

 

G.                                     The
insurance required under this Exhibit shall be in addition to the insurance
required to be procured by Tenant pursuant to the Lease.

 

B-15

 

EXHIBIT B-1

 

NOISE LEVEL LIMITS

Maximum r.m.s Octave Sound Pressure Level in dB re: 20 μ pa

Octave Bank Center Frequency – Hertz (Hz)

 

	
  63

  	
   

  	
  125

  	
   

  	
  250

  	
   

  	
  500

  	
   

  	
  1000

  	
   

  	
  2000

  	
   

  	
  4000

  	
   

  	
  8000

  
	
  87

  	
   

  	
  83

  	
   

  	
  82

  	
   

  	
  82

  	
   

  	
  84

  	
   

  	
  87

  	
   

  	
  87

  	
   

  	
  86

  

 

BACKGROUND MUSIC NOISE MITIGATION REQUIREMENTS
FOR FOOD COURT TENANTS AND TENANTS LOCATED BELOW THEATERS

 

	
  Qualitative

  Description of

  Background

  Noises

  	
   

  	
  Maximum r.m.s. Sound Level*

  	
   

  	
   

  	
   

  	
  Ceiling

  Type

  	
   

  	
  Noise
  Mitigation Guidelines **

  
	
   

  	
   

  
	
  Loudspeaker

  Location

  	
   

  	
   

  
	
  dBA

  	
   

  	
  63 - 250Hz+

  	
   

  	
  500-800
  Hz+

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Soft
  to

  Medium”

  	
   

  	
  <70
  dBA

  	
   

  	
  <80

  	
   

  	
  <75

  	
   

  	
  Not critical

  	
   

  	
  Ceiling construction is not
  critical. An exposed slab is acceptable as long as maximum r.m.s. sound
  levels are below stated values. 

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Loud”

  	
   

  	
  70
  – 85 dBA

  	
   

  	
  80
  – 85

  	
   

  	
  75
  - 80

  	
   

  	
  Floor or wall mounted.

  	
   

  	
   

  	
  Suspended loudspeakers must
  be hung from Kinetics Type ICC or ICW hangers.

   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Very
  Loud”

  	
   

  	
  >85
  dBA

  	
   

  	
  >85,
  but not 

  exceeding 95o

  	
   

  	
  >85,
  but not 

  exceeding 95o

  	
   

  	
  Floor-mounted. Suspended or
  wall-mounted loudspeakers are prohibited.

  	
   

  	
  Drywall or other form of
  ceiling required.  Minimum weight = 2.2 lbs/sq.ft.

  	
   

  	
  Acoustical analysis
  required by independent acoustical consultant.  Probable
  construction required: drywall ceiling suspended from vibration isolators with
  minimum penetrations; glass fiber batts laid on top of drywall ceiling; sound
  attenuators required for all return air openings if space above the ceiling
  utilized as a return air plenum.  Suspended loudspeakers are not
  permitted.  All loudspeakers must be floor-mounted.

  

 

*                                         During
the hours of simultaneous operation of Tenant and the theater above.

 

+                                         Octave
band sound pressure levels dB re: 20 μ PA

 

o                                         Sound
levels generated in Food Court, Common Areas or tenant areas shall not be
permitted to exceed 95 dB (octave band sound pressure level, dB re: 20 μ Pa) at
any time.

 

**                                  Provided
for guidance only.  Tenant is required to meet the above
requirements irrespective of the mitigation guidelines presented.

 

B-16

 

ADDENDUM TO EXHIBIT B

 

REIMBURSEMENT FOR COST OF CONSTRUCTION

 

This Addendum to Exhibit B
is annexed to and made a part of that certain Lease by and between OAKRIDGE MALL LP, a Delaware limited
partnership (as “Landlord”), and CHICAGO
PIZZA & BREWERY, INC., a California corporation (as “Tenant”).

 

In the event a conflict
arises between the provisions of this Addendum and any other part of this
Lease, this Addendum shall modify and supersede such other part of the Lease to
the extent necessary to eliminate any such conflict but no further.  All terms which are defined in the Lease
shall have the same meaning when used herein.

 

Section 1.                                          CONSTRUCTION REIMBURSEMENT
AND PAYMENT.

 

Subject to the
provisions of this Addendum, and provided Tenant is not in default under this
Lease beyond any applicable notice and cure period, Landlord shall reimburse to
Tenant an amount (hereinafter called the “Allowance”) equal to Forty Thousand Dollars ($40,000.00).  The Allowance shall be due only during the
original Term of this Lease.  The
Allowance shall be payable on written application therefor upon the last of the
following to occur:

 

(a)                                  Completion of the improvements in or to the
Premises required by the Lease to be made by Tenant;

 

(b)                                 Acquisition
by Tenant of a Certificate of Occupancy for the Premises properly issued by the
governmental body having jurisdiction there over (or other equivalent authority
to open);

 

(c)                                  The
opening by Tenant of Tenant’s business in the Premises; and

 

(d)                                 Receipt
by Landlord of Internal Revenue Service Form W-9, Request For Taxpayer
Identification Number and Certification.

 

1

 

EXHIBIT C

 

ADDITIONAL INSURED ENTITIES

 

WESTFIELD SHOPPINGTOWN OAKRIDGE

 

Westfield America, Inc., Westfield Corporation,
Inc., Oakridge Mall, Inc., Oakridge Mall LP, and any and all of their
respective parent organizations, partners, subsidiaries and affiliates together
with any mortgagee, as their interests may appear.

 

C-1

 

EXHIBIT
D

 

 

INTENTIONALLY DELETED

 

D-1

 

EXHIBIT
E

 

 

TO BE PROVIDED BY TENANTExhibit
10.24

LEASE

 

 

THIS LEASE is made and entered into as of                          , 2002 (“Execution Date”), by and between
KRAUSZ ENTERPRISES, a California general partnership (“Landlord”), and CHICAGO
PIZZA & BREWERY, INC., a California corporation dba “BJ’s Restaurant &
Brewhouse/Brewery” (“Tenant”).  For good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant agree as follows:

 

 

ARTICLE 1:  PREMISES.

 

1.1  Landlord hereby demises and
lets unto Tenant, and Tenant hereby hires and takes from Landlord, on the terms
hereinafter set forth, those certain premises commonly known as 11101 183rd
Street, City of Cerritos, County of Los Angeles, State of California, being the
cross-hatched area on Exhibit A (attached hereto and by this reference made a
part hereof), containing approximately 11,400 square feet of leasable area,
together with a Patio Seating Area (as defined in Section 15.10) (the
“Premises”).  The Premises is part of a
larger parcel, all as set forth in Exhibit A attached hereto and by this
reference made a part hereof, and sometimes hereinafter referred to as
“Shopping Center”.

 

1.2  Tenant shall accept the
Premises subject to all easements, rights, restrictions, agreements and encumbrances
of record (collectively called “Title Matters”).  So long as Tenant is not in default hereunder, Tenant shall have
the quiet enjoyment of the Premises without let or hindrance on the part of
Landlord, subject to (i) all of the provisions of this Lease, (ii) any mortgage
or deed of trust to which this Lease is or shall become subordinate, and (iii)
all Title Matters

 

1.3  The site plan of the
Shopping Center is tentative notwithstanding Exhibit A, and Landlord reserves
the right from time to time to make changes in the shape, size, location,
number and ex­tent of improvements, buildings, accommodations and areas,
loading area, parking layout or other improvements, and to eliminate or add any
improvements or building to any portion of the Shop­ping Center.  Landlord shall at all times have the right
to determine in Landlord’s good faith business judgment the nature and extent
of the Common Areas and shall have the right to construct buildings, or
temporary or permanent improvements, to change the character of or make changes
at any time in the size, shape, location, number and extent of the Common
Area.  Tenant, its officers, employees,
invitees and customers shall have the right, in common with Landlord, the other
tenants and occupants of the Shopping Center, and all others legally entitled
thereto, to use the Common Area as the same may be changed from time to time as
provided in this Section 1.3, subject to the provisions of this Lease.

 

Notwithstanding the foregoing, in exercising its rights under this Section,
except as may be due to force majeure, applicable legal requirements, and acts
of governmental authorities, Landlord (a) shall not materially, adversely  interfere with the ingress to or egress from
the Premises, and (b) shall otherwise use its best efforts not to materially,
adversely interfere with Tenant’s use of the Premises for the Permitted Use,
nor to otherwise materially, adversely affect Tenant’s business in the
Premises.

 

1.4  Landlord shall have the
exclusive right to use all or any part of the roof of the Premises for any
purpose; to erect additional stories or structures over all or any part of the
Premises; and to erect in connection with the construction thereof temporary
scaffolds and other aids to 

 

1

 

construction on the exterior of the Premises.  Landlord shall also have the right during the Lease Term to
install, relocate, maintain and operate columns, shafts, ducts, pipes,
conduits, facilities and structures comprising the air conditioning system
and/or permitting the conveyance of utilities and mechanical systems in and
through the space above the ceiling in the Premises. Landlord further reserves
the right to use up to one percent (1%) of the leasable area of the Premises as
Landlord may designate at any time to accommodate items serving other portions
of the Shopping Center or resulting from the remodeling or expansion of any
portion of the Shopping Center, including without limitation columns, shafts,
ducts, pipes, and conduits provided such item is located adjacent to an
interior wall other than the storefront or otherwise in a location which does
not unreasonably reduce or diminish Tenant’s rights under this Lease.

 

Notwithstanding the foregoing, in exercising its rights under this
Section, except as may be due to force majeure, applicable legal requirements,
and acts of governmental authorities, Landlord (a) shall not materially,
adversely  interfere with the ingress to
or egress from the Premises, and (b) shall otherwise use its best efforts not
to materially, adversely interfere with Tenant’s use of the Premises for the
Permitted Use, nor to otherwise materially, adversely affect Tenant’s business
in the Premises.

 

1.5  If Landlord does not deliver
possession of the Premises to Tenant for any reason, Landlord shall not be
subject to any liability therefor. Such failure of delivery shall not affect
the validity of this Lease or the obligations of Tenant hereunder, or extend
the Expiration Date.  If Landlord does
not deliver possession of the Premises to Tenant by the date which is two
hundred seventy (270) days after the Execution Date for any reason (the
“Outside Delivery Date”), except in the case of the Existing Tenancy
Termination, which shall be governed by Section 1.7 below, Landlord may at any
time terminate this Lease without liability by delivering written notice to
Tenant.  In all events, if Landlord does
not deliver possession of the Premises to Tenant for any reason within twelve
(12) months after the Execution Date, then this Lease shall terminate and
neither party shall have any further liability to the other. In the event
Landlord terminates this Lease pursuant to this Section 1.5 after it has given
the Plan Submittal Notice to Tenant under Section 2.1 below, and provided
Tenant is not then in default under this Lease, after the giving of notice and
expiration of any applicable cure period, then Landlord will reimburse Tenant,
within thirty (30) days after presentation of written demand therefor from
Tenant (which demand is accompanied by reasonable evidence, including but not
limited to paid invoices, of the sum demanded), for Tenant’s reasonable, actual
out-of-pocket costs and expenses payable to third parties in connection with
the preparation of the Site Plans and Exterior Elevations referred to in
Paragraph 2b of Exhibit C prior to the date of termination.

 

1.6  By taking possession of the
Premises Tenant will conclusively be deemed to have inspected the Premises and
found the Premises in satisfactory condition. Tenant acknowledges that neither
Landlord, nor any agent, employee or servant of Landlord, has made any
representation or warranty, expressed or implied, with respect to the Premises,
Building or Common Areas of the Shopping Center, or with respect to the suitability
of them to the conduct of Tenant’s business, nor has Landlord agreed to
undertake any modifications, alterations, or improvements of the Premises,
Building or Common Areas of the Shopping Center, except as may be specifically
provided in this Lease.

 

1.7  Tenant acknowledges that, as
of the Execution Date, the Premises is leased and occupied.  Landlord’s obligations under this Lease are
expressly conditioned upon Landlord’s ability to enter into an agreement
sufficient to cause the termination of the existing leasehold and to cause all
tenants and occupants thereunder to vacate the Premises (collectively, the
“Existing Tenancy Termination”) in order to permit the delivery of the Premises
to Tenant as set forth in this Lease. 

 

2

 

Landlord shall not be in breach or default under this Lease is it fails
or is unable to cause the Existing Tenancy Termination to occur. As an
inducement to Landlord to attempt to arrange for the Existing Tenancy
Termination, Tenant agrees to pay to Landlord the non-refundable sum of Fifty
Thousand and No/100 Dollars ($50,000.00)(the “Early Delivery Payment”) if
Landlord is able to (i) cause the Existing Tenancy Termination to occur, and
(ii) deliver the Premises to Tenant on or before midnight on the date which is
forty five (45) days after the last party has executed and delivered this Lease
(the “Target Delivery Date”).  If the
foregoing conditions are satisfied, Tenant shall pay the Early Delivery Payment
to Landlord within five (5) business days after the Premises has been delivered
to Tenant.  If Landlord fails or is
unable, for any reason whatsoever, to cause the foregoing conditions to be
satisfied by the Outside Delivery Date (which date shall be subject to
extension on a day-for-day basis for force majeure), then either party shall
have the right to cancel this Lease by written notice given to the other at any
time thereafter and prior to the occurrence of the Existing Tenancy
Termination, and in the event of such cancellation, each party shall be
relieved of all obligations and liabilities under this Lease. Landlord shall
not be liable for, and Tenant, as a material part of the consideration to
Landlord under this Lease, hereby assumes all risk of and waives all claims against
Landlord for, loss or damage of any kind or nature relating to Landlord’s
failure or inability to terminate the existing leasehold and/or cause any such
existing tenant or occupant to vacate the Premises. Notwithstanding the
foregoing, however, that Tenant shall not have the right to terminate if the
either of the foregoing conditions are not satisfied due to the failure of
Tenant to timely perform work, submit or respond to plans, or take any other
action that Tenant is required to take as and when specified in this Lease.

 

ARTICLE 2:  TENANT IMPROVEMENTS.

 

2.1 Tenant agrees to lease the Premises from Landlord in an “AS-IS,
WHERE-IS” condition with any then existing improvements in place.  By the earlier of (a) ten (10) days after
delivery of possession of the Premises to Tenant, and (b) ten (10) days after
Landlord notifies Tenant in writing (the “Plan Submittal Notice”) that it has
entered into an agreement providing for the Existing Tenancy Termination, which
notice shall state the estimated, non-binding, date that Landlord anticipates
delivering possession of the Premises to Tenant (the earlier of (a) and (b)
being referred to herein as the “Plan Submittal Date”), Tenant shall submit to
Landlord, for its approval, complete architectural plans, drawings and
specifications, finishes and materials, engineering working drawings and a
construction schedule (“Plans”) showing all work to be performed by or on
behalf of Tenant to prepare the Premises for the Permitted Use (“Tenant’s
Work”), and submit the same for Landlord’s approval. The Plans shall be
prepared by a reputable, licensed and qualified architect or engineer. If
Landlord disapproves of the proposed Plans, it shall state the reasons for such
disapproval in writing, and within ten (10) days thereafter Tenant shall cause
its architect or engineer to revise the Plans to address the concerns raised by
Landlord and resubmit the same to Landlord for its approval or disapproval in
accordance with the procedure set forth above, and revision and resubmittal of
the Plans shall continue until the same have been approved by Landlord in all
respects.

 

2.2  Tenant’s Work shall be done
in a good and workmanlike manner, and shall be in compliance with all
governmental rules, orders, licenses, zoning and build­ing requirements and
insurance applicable thereto, and all provisions of this Lease applicable to
construction of Improvements, and pursued with diligence in accordance with the
Plans as approved by Landlord. Tenant shall cause Tenant’s Work to be constructed
and installed by a qualified, reputable, licensed and insured general
contractor bonded by a corporate surety or of financial strength capable of
performing the work without a bond, as selected by Tenant and approved in
advance by Landlord, such approval not to be unreasonably withheld, and the
cost thereof shall be paid by Tenant, including the cost of design, planning,
approvals, insurance and permits.  Upon
completion of 

 

3

 

construction of the Premises, Tenant shall obtain and deliver to
Landlord an original Certificate of Occupancy or its equivalent and a
certificate of Tenant’s architect certifying to the completion of Tenant’s Work
in accordance with the Plans previously ap­proved by Landlord. The Commencement
Date as set forth in Section 3.1 hereof shall not be affected if the failure of
Tenant to complete “Tenant’s Work” shall prevent Tenant from obtaining a
temporary or permanent Certificate of Occupancy.

 

2.3  As part of Tenant’s Work,
Tenant shall, at its sole cost and expense, furnish and install all trade
fixtures, furnishings, signs, equipment, and other tangible personal property
necessary for the Permitted Use. All of the foregoing must be new when
installed in, or attached to, the Premises.

 

2.4   Tenant shall commence and
diligently proceed with Tenant’s Work so as to complete the work contemplated
thereby and open for business in the Premises on or before the Rent
Commencement Date.  Tenant’s failure to
complete such work and open for business by the Rent Commencement Date for any
reason whatsoever shall not affect the Rent Commencement Date, and Landlord
shall have all of its remedies under this Lease or at law or in equity for such
failure.

 

ARTICLE 3:  LEASE TERM.

 

3.1  The term of this Lease (the
“Lease Term”) shall be for a period of approximately twenty (20) years
commencing upon the date Landlord tenders possession of the Premises to Tenant
or Tenant’s agent (the “Commencement Date”), and ending on the twentieth (20th)
anniversary of the last day of the first full month following the Commencement
Date (“Expiration Date”).  Within thirty
(30) days following the last to occur of (a) the Execution Date, (b) the
Commencement Date, and (c) the Rent Commencement Date, Landlord and Tenant will
execute a letter agreement that will set forth and serve to ratify the actual
occurrence of each date referenced in this Section.  In the event this Lease provides for an express option to extend
the Lease Term for one or more periods, “Lease Term” shall be deemed to include
any such period(s) as to which such option has been properly exercised, and the
“Expiration Date” shall be deemed to be the last day of the last such period as
to which such option has been properly exercised.

 

3.2  Provided Tenant has not at
any time been in default under any of the terms, covenants or conditions of
this Lease through and including the commencement date of the applicable
Extended Term as hereinafter set forth, Tenant shall have the option to extend
the Lease Term for two (2) successive periods of five (5) years each, followed
by a third period of four (4) years, six (6) months (the “Extended Term [s]”),
i.e. from the first day following the Expiration Date and continuing until the
last day of the sixtieth (60th) month thereafter (the “First Extended Term”);
from the first day following the end of the First Extended Term until the last
day of the sixtieth (60th) month thereafter (the “Second Extended Term”); and
from the first day following the end of the Second Extended Term until the last
day of the fifty fourth (54th) month thereafter (the “Third Extended Term”).
The option to extend as to the any Extended Term shall be exercisable by
written notice given to Landlord no later than twelve (12) months nor earlier
than eighteen (18) months prior to the expiration of the initial Lease Term or
the end of the previous Extended Term, as the case may be.  Tenant may not exercise the option to extend
as to any Extended Term unless it has already exercised said option as to all
prior Extended Terms.  Tenant shall have
no right to extend or renew this Lease other than for the aforesaid three (3)
Extended Terms.  Time is of the essence
with respect to any exercise of such option by Tenant.  If Tenant fails to exercise the foregoing option
when required for any Extended Term, such option shall thereafter be of no
force or effect. If the option to extend described in this Section is exercised
as to any Extended Term, then all of the covenants and agreements contained in
this Lease shall apply during the 

 

4

 

Extended Term, except that Minimum Rent during the Extended Term shall
be as set forth in Section 3.3.  The
option set forth in this Section 3.2 is personal to Chicago Pizza &
Brewery, Inc., a California corporation (“Original Tenant”), and may be
exercised only so long as (i) the Original Tenant (or its affiliate) occupies
the Premises without assigning this Lease or subletting the Premises or any
part thereof, or (ii) a national or regional chain restaurant operator who
purchases all or substantially all of Tenant’s other restaurant locations in
Southern California under the same trade name as the Premises, and may not be
exercised or be assigned, voluntarily or involuntarily, by or to any person or
entity other than the foregoing.  Said
option is not assignable separate and apart from this Lease, nor may the same
be separated from this Lease in any manner, either by reservation or otherwise.

 

3.3  Minimum Rent for each year
of any Extended Term(s) shall be an amount equal to: (a) the annual Minimum
Rent payable immediately prior to the Expiration Date pursuant to Section 4.3,
increased by (b) of five ­­percent (5%) per annum, cumulative and compounded,
for each year from and after the Expiration Date, inclusive of the first year
of the first Extended Term.

ARTICLE 4:  RENT.

 

4.1  From and after the earlier
to occur of (A) one hundred twenty (120) days after the later of (i) delivery
of the Premises to Tenant, or (ii) Tenant’s receipt of a building permit and
any other governmental approval necessary for the construction of Tenant’s
Work, and (B) the date Tenant first opens for business in the Premises (the
“Rent Commencement Date”), Tenant agrees to pay the following to Landlord, as
“Minimum Rent”, in lawful money of the United States of America, in ad­vance,
on the first day of each and every calendar month from and after the Rent
Commencement Date: Twenty Thousand Nine Hundred and no/100 Dollars ($20,900.00)
per month, beginning with the Rent Commencement Date and continuing  for the remainder of the Lease Term, subject
to adjustment in accordance with Section 4.3. Notwithstanding the foregoing,
prepaid Minimum Rent in the amount of Twenty Thousand Nine Hundred and no/100
Dollars ($20,900.00) shall be paid to Landlord on or before the Execution
Date.  Subparagraph (ii) hereinabove is
conditioned upon Tenant’s preparation, submittal and processing of all plans
and permit applications for Tenant’s Work in a diligent and timely manner and
in accordance with all provisions of this Lease, including but not limited to
Exhibit C, and the requirements of any governmental authority, and the Rent
Commencement Date shall be adjusted accordingly for any failure of Tenant to do
so.

 

4.2  If the Rent Commencement
Date occurs on a day other than the first day of a calendar month, the Minimum
Rent shall be paid by Tenant to Landlord for the fractional month on a per diem
basis, calculated on the basis of a thirty (30) day month.

 

4.3  Minimum Rent shall be adjusted
effective as of the sixth (6th) anniversary of the Rent Commencement Date (the
“First Adjustment Date”) and each anniversary thereafter (“Adjustment Dates”)
during the Lease Term to reflect the increases (if any) in the Consumer Price
Index (as such term is defined in subsection B below). For purposes of the
First Adjustment Date, the Rent Commencement Date shall be the Base Date; for
all subsequent Adjustment Dates, the fifth (5th) anniversary of the Rent
Commencement Date shall be the “Base Date”. 
In either case, the Consumer Price In­dex in publication two (2) months
before the Base Date shall be the “Base Index”.

 

        A.            The Consumer Price Index in publication two (2) months
before each Adjustment Date shall be the “Comparison Index”.  As of each Adjustment Date, the Mini­mum
Rent payable during the ensuing twelve month period shall be determined by in­creasing
the initial Minimum Rent by a 

 

5

 

percentage equal to the percentage in­crease, if any, in the Comparison
Index over the Base Index.  If the
Comparison Index for any Ad­justment Date is equal to or less than the
Comparison Index for the preceding Adjustment Date (or the Base Index, in the
case of First Adjustment Date), the Minimum Rent for the ensuing twelve (12)
month period shall remain the amount of Minimum Rent payable during the
preceding twelve (12) month period. 
When the Minimum Rent payable as of each Adjustment Date is determined,
Landlord shall promptly give Tenant written notice of such adjusted Minimum
Rent and the manner in which it was computed.

 

        B.            The term “Consumer Price Index” as used in this lease
shall mean the United States Department of Labor, Bureau of Labor Statistics,
Revised Consumer Price Index for All Urban Consumers, for Los
Angeles-Riverside-Orange County, CA, Subgroup “All Items” (1982-84 = 100),  In the event that the basis upon which said
Consumer Price Index is calculated should be changed from the basis upon which
it is presently calculated, then said Consumer Price Index shall be adjusted by
Landlord or a new index substituted by Landlord, to reflect the purchasing
power of the United States dollar in such manner that the result shall be
equivalent to said Consumer Price Index as presently constituted.

 

        C.            Notwithstand­ing the foregoing, the Minimum Rent
resulting from any one of the foregoing adjustments shall not exceed the
Minimum Rent which would result from an increase in the initial Minimum Rent of
­­­two ­­percent (2%) per annum, cumulative and compounded, from the Base Date
through the Adjustment Date in question.

 

4.4  All rent shall be paid
without notice, demand, offset, abatement or counterclaim except as otherwise
expressly set forth in this Lease, to Landlord: Krausz Enterprises, P.O. Box
2844, South San Francisco, CA 
94083-2844, or to such other person or place as Landlord may from time
to time designate in writing.

 

4.5  It is the intention of the
parties that the rent payable hereunder shall be net to Landlord, so that this
Lease shall yield, net to Landlord, the rent specified herein during the entire
Lease Term, and except as specifically provided herein, that all costs,
expenses and obligations of every kind and na­ture whatsoever relating to the
Premises, and Tenant’s pro rata share of the Common Area Expenses, Real Estate
Taxes and Landlord’s insurance costs, shall be paid by Tenant as hereinafter
set forth.  The term “rent” shall mean
all sums payable under this Lease by Tenant, and “additional rent” shall mean
all rent other than Minimum Rent.

 

4.7   In addition to Minimum Rent,
Tenant shall pay “Percentage Rent” for each partial or full calendar year of
the Lease Term equal to six percent (6%) of Gross Sales in excess of the
Breakpoint. “Breakpoint” for any specific period means the amount obtained by
dividing the Minimum Rent payable during such period by the percentage set
forth in this Section.

 

A.    Percentage Rent shall be
computed with respect to each calendar quarter and shall be payable on or
before the thirtieth (30th) day of the calendar month immediately following the
close of each quarter.  The payments of
Percentage Rent for a calendar quarter shall be calculated based on Gross Sales
for such period.  If the Rent
Commencement Date does not fall on the first day of a calendar quarter, and if
the first partial calendar quarter is within the same calendar year as the
first full calendar quarter, Gross Sales made during such first partial quarter
shall be added to the Gross Sales made during the first full quarter.

 

B. The total Percentage Rent due and payable for a calendar year shall
be computed based on Tenant’s annual statement of Gross Sales for that calendar
year and if Tenant paid an amount greater than the actual Percentage Rent
payable (provided Tenant is not then in default of its 

 

6

 

obligations under this Lease) the amount of such overpayment shall be
credited against Tenant’s next required payment of Percentage Rent; if Tenant
paid an amount less than the required Percentage Rent, then Tenant shall pay
such difference to Landlord together with Tenant’s annual statement of Gross
Sales for said calendar year.

 

C.  Tenant agrees to furnish to
Landlord a statement of Gross Sales within thirty (30) days after the close of
each calendar month, and an annual statement, including a monthly breakdown of
Gross Sales, within thirty (30) days after the close of each calendar year
during the Lease Term and any partial calendar year at the end of the Lease
Term.  Such statements shall itemize all
elements of Gross Sales and Gross Sales Adjustments, and shall be certified as
true and correct by a responsible officer of Tenant.  The receipt by Landlord of any statement or any payment of
Percentage Rent for any period shall not bind Landlord as to the correctness of
such statement or payment.  Upon
request, Tenant agrees to furnish to Landlord a copy of Tenant’s and its
subtenant’s, licensee’s and concessionaire’s state and local sales and use tax
returns, if required in the State of California.  If Tenant’s sales are reported on any State or local sales tax
return or any other similar form of return, and sales as so reported on any of
said returns shall exceed the Gross Sales as reported to Landlord, then the
Gross Sales shall be taken at the highest figure so reported, less all
permitted exclusions hereunder.  Tenant
shall record at the time of sale, in the presence of the customer, all receipts
from sales or other transactions using a cash register or computer system that
cumulatively numbers and records all receipts. 
Tenant and its subtenants, licensees and concessionaires, shall keep (i)
full and accurate books of account and records in accordance with generally
accepted accounting principles consistently applied, including, without
limitation, a sales journal, general ledger and all bank account statements
showing deposits of Gross Sales revenue, (ii) all cash register detail tapes
with regard to all transactions of Gross Sales, and (iii) detailed original
records of all Gross Sales Adjustments. 
Such books, receipts and records pertaining to a calendar year shall be
kept by Tenant, and its subtenants, licensees and concessionaires, for a period
of three (3) years after the close of such calendar year and shall be available
for inspection, audit, and photocopying by Landlord and Landlord’s
representatives at the Premises or Tenant’s principal place of business at all
times during regular business hours. 
Any corrections or adjustments to Gross Sales previously reported by
Tenant which will result in a refund to Tenant must be reported to Landlord
within the ninety (90) day period following the end of the calendar year in
which such Gross Sales were made.  If
any governmental authority shall increase the sales reported by Tenant on any
such tax return, after audit for any calendar year for which such sales have
been reported, then Tenant shall notify Landlord promptly of such increase and
pay any additional Percentage Rent due at that time.  If it shall be determined as a result of an audit that there has
been a deficiency in the payment of Percentage Rent, then such deficiency shall
become immediately due and payable with interest at the Interest Rate from the
date when said payment was due.  In
addition, if Tenant understates Gross Sales by more than three percent (3%), or
if any audit shows that Tenant has failed to maintain the books of account and
records as required or if Tenant fails to appear for and/or cooperate with
Landlord’s audit representative and, as a result, Landlord is unable to verify
the accuracy of Tenant’s statement, then Tenant shall pay to Landlord all
reasonable costs and expenses (including, without limitation, attorneys fees)
incurred by Landlord in conducting such audit and collecting any underpayment.  If such audit shall disclose any fraud or
intentional misrepresentation by Tenant, then, in addition to all other rights
and remedies hereunder, Landlord may elect to terminate this Lease with no
further obligations thereafter accruing from Landlord to Tenant.

 

D.  If during the Lease Term,
within a radius of five (5) miles from the perimeter of the Shopping Center,
Tenant or any entity controlled by, controlling or under common control with
Tenant, directly or indirectly, operates or owns a business under Tenant’s
Trade Name or otherwise directly or indirectly operates or owns any similar
type of business not so operated or owned on 

 

7

 

the date Landlord executed this Lease, then while Tenant or such entity
is directly or indirectly owning or operating said other business, Tenant shall
include the Gross Sales of such other business in the Gross Sales made from the
Premises for the purpose of computing the Percentage Rent due hereunder.  Tenant will provide Landlord with a statement
of Tenant’s Gross Sales, in accordance with the provisions of this Section, for
each such business location directly or indirectly owned or operated by Tenant
or such entity within the radius.

 

E.  Intentionally deleted.

 

F.  If at any time subsequent to
the Rent Commencement Date, Tenant does not operate its business in the
Premises pursuant to Sections 15.1 and 15.2, then, in addition to any and all
other remedies afforded to Landlord by reason of default, the Breakpoint shall
be reduced by 1/360th for each day or portion thereof that Tenant does not so
operate its business in the Premises. If any reporting period shall be less
than twelve (12) months, the Breakpoint for such reporting period shall be
proportionately adjusted.  Whenever
Minimum Rent is reduced or increased, the applicable Breakpoint shall be
proportionately reduced or increased, as the case may be.

 

G.  “Gross Sales” means the gross
selling price of all merchandise and/or services sold in, at or from any part
of the Premises or through the use of the Premises by Tenant, its subtenants,
licensees and concessionaires, whether for cash or on credit and whether made
by store personnel or by approved vending or gaming machines, or through
telephone, electronic mail, Internet, or other electronic means, or catalogue
orders taken at or filled from the Premises, adjusted to exclude Gross Sales
Adjustments.  Gross Sales shall not
include any government imposed taxes upon the sale of merchandise or services
which are collected separately from the selling price and paid directly to the
taxing authority.  All sales originating
at the Premises shall be considered Gross Sales, even though bookkeeping and
payment of the account may be transferred to another place for collection and
even though actual filling and/or delivery of the merchandise may be made from
a place other than the Premises.  Each
sale upon installments or credit shall be treated as a sale for the full sale
price at the time of sale. “Gross Sales Adjustments” means the following items
but only to the extent previously reported as Gross Sales: the selling price of
all merchandise returned by customers and accepted for full credit or the
amount of discounts made thereon; sums and credits received in the settlement
of claims for loss or damage to merchandise; the price allowed on merchandise
traded in by customers for credit or the amount of credit for discounts and
allowances made in lieu of acceptance thereof; alteration workroom charges and
delivery charges at Tenant’s cost and collected separately from the selling
price; receipts from vending machines installed solely for Tenant’s employees;
and sales of fixtures, equipment or property which are not stock in trade.
“Gross Sales” shall not include  transfers
of food, drinks or merchandise by Tenant from the Premises to another place of
business operated by Tenant (where such transfers are made solely for the
convenient operation of Tenant’s business and not for the purpose of
consummating a sale which has theretofore been made in, on or from the Premises
or for the purpose of depriving Landlord of the benefit of a sale which
otherwise would be made in, on or from the Premises);

 

ARTICLE 5:  REAL ESTATE  TAXES

 

5.1  Tenant shall pay to
Landlord, as additional rental, “Tenant’s Share” of the “Real Estate Taxes”
upon the Premises, the Shopping Center land, and the Common Area improve­ments
for each tax period included within the Lease Term commencing with the Rent
Commencement Date. For purposes of this Article, “Tenant’s Share” of the Real
Estate Taxes for any tax year shall be the sum of the following:

 

8

 

        (a) five and 67/100 percent
(5.67%) of the total assessments on the Shopping Center land; plus

 

        (b) five and 67/100 percent
(5.67%) of the total assessments on the Common Area improvements; plus

 

        (c) one hundred percent
(100%) of the total assessments on the building of which the Premises is a part
(the “Building”), if the Building is separately assessed; if the Building is
not separately assessed, then the percentage shall be calculated on the basis
that Tenant’s 11,400  square feet of
leasable area relates to the leasable area in square feet of all premises in
the Shopping Center jointly assessed with the Premises.  The assessments on the building(s) jointly
assessed shall be deemed to be uniformly assessed on a square foot floor area
basis and, at Landlord’s election, an appropriate adjustment shall be made with
respect to any jointly assessed buildings which do not have a construction
reasonably similar to that of the Premises. The assessment on the land and on
the Common Area improvements shall be deemed to be uniformly assessed.  If the number of square feet of any building
shall change during any tax year, the condition existing upon the day as of
which Real Estate Taxes are assessed for said tax year shall control.  If, upon the assessment day for real estate
taxes for any tax year fully or partly included within the Lease Term, at
Landlord’s election a portion of such assessment shall be attributable to
buildings in the process of construction, a fair and reasonable adjustment
shall be made to carry out the intent of the parties. Real Estate Taxes for the
tax years during which the Lease Term commences and terminates shall be
prorated.  The term “Real Estate Taxes”
used herein shall mean all taxes, assessments (special or otherwise), water,
trash, sewer or other utility fees, fees related to environmental laws and
regulations, and any other governmental levies, fees or charges of any kind, nature
or sort whatsoever, ordinary and extraordinary, foreseen or unforeseen, and
substitutes therefor related in any manner to the Shopping Center or any part
thereof, fixtures, equipment and other property used in connection therewith,
whether real or personal, rents or other amounts receivable therefrom, sales
therefrom, any use thereof, any facility located therein or used in conjunction
therewith, or to the business or activity of owning, leasing, managing or
operating a shopping center, however same shall be labeled and whether the same
be measured by way of rents, sales, use, usage, square footage, traffic counts,
car counts, parking usage, value or cost of land or improvements, sale or
transfer price or measured in any other way and all expenses incurred in
seeking reduction by the taxing authorities of the taxes and assessments
described above.  Real Estate Taxes
shall not include Landlord’s net income or franchise taxes or any inheritance,
estate, succession, gift, corporation or profit tax or capital levy. Real
Estate Taxes shall also not include any Internal Revenue Service lien or
obligation on account of any prior tenant or occupant of the Premises, nor any
interest, penalties, fees, charges or assessments incurred solely as a result
of Landlord’s failing to comply with any Environmental Regulations.

 

5.2  Landlord shall bill Tenant
for any amount that may be payable by Tenant pursuant to the provisions of this
Article.  Said bill shall be accompanied
by a computation of the amount payable. 
The amount payable by Tenant hereunder for any tax period shall be
payable at least thirty (30) days before such Real Estate Taxes become
delinquent, but if Tenant shall not have received such a bill from Landlord at
least fifteen (15) business days prior to said time for payment, Tenant shall
not be required to make pay­ment until fifteen (15) business days after the
receipt of said bill.  If Real Estate
Taxes are payable to dif­ferent taxing authorities for any tax year at
different times, an appropriate apportionment shall be made of the amount
payable by Tenant for said tax year, and the apportioned amount shall be pay­able
at such times.  Landlord at its option
may require Tenant to pay monthly an amount of such taxes into an impound
account; in such event, Tenant’s payments shall be due on a monthly basis
together with the Minimum Rent.

 

9

 

5.3  Should Tenant assign this
Lease or sublease in accordance with Article 16 hereof, and if such assignment
or sublease results in an increased assessment of the Premises, Tenant and its
assignee shall be responsible for any increase in Real Estate Taxes resulting
therefrom.

 

5.4  In addition to Real Estate
Taxes, Tenant shall pay before delinquency all taxes (including sales and use
taxes), assessments, license fees and public charges levied, assessed or
imposed upon Tenant’s business operation as well as upon Tenant’s merchandise,
signs, trade fixtures and other personal property.  In the event such items of Tenant’s property are assessed with
property of Landlord, Landlord shall allocate such assessment between Landlord
and Tenant so that Tenant shall pay only Tenant’s equitable portion.

 

ARTICLE 6.  INSURANCE

 

6.1  During the Lease Term,
Landlord shall, subject to reimbursement by Tenant as set forth below, maintain
or cause to be maintained the following:

 

        a.  Insurance providing protection against any
peril generally included in the classification “Special Form” in the geographic
area in which the Shopping Center is located (including, coverage against
sprinkler damage, vandalism, malicious mischief, and, at Landlord’s election,
earthquake and/or flood), covering the Building, exclusive of any item that
Tenant or another occupant is required to insure, in an amount that is eighty
percent (80%) of the Building’s full replacement cost (exclusive of the cost of
excavations, foundations and footings) or such greater amount as Landlord in
its discretion may elect to carry. Such insurance shall be issued in the names
of Landlord and its mortgagee, as their interests appear, and shall be for the
sole benefit of such parties and under their sole control.  If Landlord elects not to obtain flood
and/or earthquake insurance, Landlord shall have no liability to Tenant and the
provisions of this Lease shall be unchanged. Re­placement cost shall be
determined from time to time by Landlord after consulting an appraiser,
engineer, architect or contractor selected by Landlord. Tenant shall prior to
making any Improvement which may require increasing the amounts of any coverage
provide reasonable prior written notice of same to Landlord, with such
particularity as will enable Landlord to obtain any necessary additional
coverage.

 

        b.   A comprehensive coverage policy of public
liability insurance against claims and liability for personal injury, death or
property damage occurring on, in or about the Shopping Center with aggregate
limits of liability not less than One Million and no/100 Dollars
($1,000,000.00) in respect to any one occurrence in respect of bodily injury or
death of any one person and destruction or damage to property.

 

        c.  At the election of Landlord, a rental
interruption insurance policy in an amount equal to not more than the annual
rent payable by Tenant hereunder, including Minimum Rent and any additional
rent.

 

        d.  Such other insurance, in such amounts and
against such other risks, as Landlord may reasonably require from time to time
to provide the protection customarily provided premises of the character of the
Premises.

 

6.2  During the Lease Term,
Tenant will keep in force the following:

 

        a.             Commercial general liability and property damage
insurance with broad form contractual liability coverage and with coverage
limits of not less than Two Million and no/100 Dollars ($2,000,000) combined
single limit, per occurrence, insuring against personal or bodily 

 

10

 

injury to or death of persons occurring in, on or about the Premises and
any and all liability of the insureds with respect to the Premises or arising
out of the Tenant’s maintenance, use or occupancy of the Premises and all areas
appurtenant thereto, specifically including liquor liability insurance covering
consumption of alcoholic beverages by customers of Tenant, if the sale of
alcoholic beverages is permitted in the Premises, and specifically including
product liability insurance.  Such
policy shall insure Tenant’s performance of the indemnity provisions of this
Lease, but the amount of such insurance shall not limit Tenant’s liability nor
relieve Tenant of any obligation hereunder.

 

        b.             Property insurance covering any peril generally included
in the classification “Special Form” covering all Tenant’s Work, Improvements,
and all of Tenant’s personal property, trade fixtures, equipment, merchandise,
furnishings and signs in, on, or about the Premises (whether installed by
Tenant or a prior tenant), in an amount not less than their full replacement
cost.  Any policy proceeds shall be used
for the repair or replacement of the property damaged or destroyed, unless this
Lease is terminated under the provisions of Article 12.

 

        c.             Business interruption insurance covering Tenant’s
business operated in the Premises with limits of liability representing at
least approximately six (6) months of income.

 

        d.             Business auto liability covering owned non-owned and
hired vehicles with a limit of not less than One Million and no/100 Dollars
($1,000,000.00) per accident.

 

        e.             Employer’s liability with limits of $1,000,000 each
accident, $1,000,000 disease policy limited, One Million and no/100 Dollars
($1,000,000.00)  - each employee.

 

        f.              Insurance covering the full replacement cost of all
plate glass on the Premises; Tenant may self-insure such risk upon prior
approval of Landlord.

 

        g.             Boiler and machinery insurance on equipment (or any part
thereof) exclusively serving the Premises.

 

        h.             During any period of construction or alterations by
Tenant (including Tenant’s Work and any Improvements), the insurance coverage
set forth in Exhibit C.

 

6.3   All policies of insurance
provided for in Section 6.2 shall be issued by responsible insurance companies
licensed to do business in California that have a general policyholder’s rating
of not less than “A-XI” as rated in the most current available “Best’s”
Insurance Reports or equivalent. All policies of insurance provided for herein
(with the exception of workers’ compensation insurance) shall name Landlord,
Landlord’s property manager, all mortgagees and such other individuals or
entities as Landlord may from time to time designate, as “additional insureds”
using ISO Bureau Form CG2011196 (or a successor form) or such other endorsement
form reasonably acceptable to Landlord; shall contain a severability of
interest clause and a cross-liability endorsement; and shall be endorsed to
provide that the limits and aggregates apply per location using ISO Bureau Form
CG2504397 (or a successor form) or such other endorsement form reasonably
acceptable to Landlord. Certificates of all insurance required of Tenant
hereunder shall be delivered to Landlord at least ten (10) days prior to the
Commencement Date.

 

6.4  All certificates of
insurance delivered to Landlord shall be endorsed to give Landlord and its
mortgagee thirty (30) days’ advance written notice of any cancellation, lapse,
reduction or other adverse change respecting such insurance.  All of Tenant’s insurance policies shall be
written as primary policies, not contributory with or secondary to coverage
that Landlord may carry. The 

 

11

 

deductibles for all insurance required to be maintained by Tenant
hereunder shall be reasonably satisfactory to Landlord.  If Landlord or any of the other additional
insureds carries insurance which is applicable to the covered loss on a
contributing, excess or contingent basis, the amount of Tenant’s insurance
company’s liability under the policy of insurance maintained by Tenant shall
not be reduced by the existence of such other insurance. Tenant shall, prior to
the Commencement Date and from time to time during the Lease Term at Landlord’s
request, provide Landlord with a completed Certificate of Insurance, using a
form acceptable in Landlord’s reasonable judgment, attaching thereto copies of
all endorsements required to be provided by Tenant under this Lease. If Tenant
fails to maintain any policy or policies of insurance set forth herein, then
Landlord, in addition to its other rights and remedies, may (but shall not be
obligated to) obtain the applicable insurance for Tenant’s account and at
Tenant’s expense. Landlord, at any time, and from time to time, may require the
insurance limits set forth herein to be increased to reflect the
then-prevailing standards in the industry as to businesses of the type being
operated at the time in the Premises.

 

6.5  Tenant shall pay Landlord,
as additional rent, within ten (10) days of Tenant’s receipt of a written
statement from Landlord from time to time, Tenant’s Share of the cost of all
such insurance as Landlord is required to or elects to maintain under the
provisions of this Lease, including any charges for deferred payment of
premiums and the amount of any deductible incurred upon any covered loss within
the Shopping Center,  together with any
self-insurance retention for the risks to be insured or which may be insured
pursuant to Section 6.1.  For purposes
of this Article, “Tenant’s Share” shall be established by the ratio be­tween
the leasable area of the Premises and the total leasable area of the
building(s) covered by the insurance bill. Tenant acknowledges that it will pay
for its share of the cost of the insurance covering the Common Area as part of
the Common Area Expenses as provided in Article 10 hereof.

 

6.6  All insurance provided by
Landlord as required by this Article 6 shall be carried in responsible
companies licensed in California.  In
lieu of obtaining such insurance, Landlord reserves the right to self-insure
for any such risk.

 

6.7  Tenant shall timely pay all
premiums and charges for all insurance policies which it is required to provide
pursuant to this Lease and if Tenant shall fail to make any such payment when
due or carry any such policy, Landlord, at its option, may, but shall not be
obligated to, make payment or carry such policy, and the amounts paid by
Landlord, together with a fifteen percent (15%) administrative fee, shall be
due upon demand as additional rent, but payment by Landlord of any such
premiums or the car­rying by Landlord of any such policy shall not be, nor be
deemed to be, a waiver or release of the default of Tenant with respect
thereto, or the right of Landlord to institute summary proceedings and/or to
take such other action as may be permissible hereunder.

 

6.8  Tenant shall not do or
permit to be done anything which shall invalidate or materially increase the
premiums for the insurance policies referred to in this Article 6 or any other
insurance policy relating to any portion of the Shopping Center and Tenant
shall so perform and satisfy the requirements of the companies writing such
policies that at all times companies of good standing satisfactory to Landlord
shall be willing to write and/or continue such insurance.

 

6.9  Tenant shall cooperate with
Landlord in connection with the collection of any insurance monies that may be
due in the event of loss, and Tenant shall execute and deliver such proofs of
loss and other instruments which may be required by Landlord for the pur­pose
of obtaining the recovery of any such insurance monies.

 

12

 

6.10  Landlord may bring its
obligations to insure under this Article 6 within the coverage of any so-called
blanket policy or policies of insurance which it may now or hereafter carry by
appropriate amendment, rider, endorsement, or otherwise.

 

6.11  At all times during the
Lease Term, Tenant shall, at its expense, carry liquor liability coverage, writ­ten
on an occurrence basis, in an amount no less than Two Million and no/100
Dollars ($2,000,000.00), or such greater limit as Landlord or its mortgagee may
hereafter reasonably require. Sections 6.3 and 6.4 shall apply to such
insurance.

 

ARTICLE 7.  WAIVER OF SUBROGATION; RISK OF LOSS

 

7.1  Landlord and Tenant each
hereby waives any and all rights of recovery against the other, and Tenant
hereby waives any and all rights of recovery against any other tenant or
occupant of the Shopping Center and against the investment managers, trustees,
directors, partners, members, managers, beneficiaries, officers, employees,
agents, management agents, representatives, customers and business visitors of
Landlord, for any loss insured by All Risks or Special Form coverage or other
property insurance now or hereafter existing for the benefit of the waiving
party, but only to the extent of the net insurance proceeds payable under such
policies (or which would have been payable if such insurance were maintained as
required by this Lease).  Each party
shall obtain any special endorsements required by its insurer to evidence compliance
with the foregoing waiver.  The foregoing
waiver shall be effective whether or not a waiving party actually obtains and
maintains the insurance required pursuant to this Lease.  Tenant shall, upon obtaining the policies of
insurance required hereunder, give notice to their respective insurance
carriers of the foregoing waivers of subrogation.

 

7.2  Tenant shall use and occupy
the Premises and use all other portions of the Shopping Center which it is
permitted to use by the terms of this Lease at its own risk, and hereby (for
itself and all persons claiming by, through, or under Tenant) releases
Landlord, its managers, trustees, directors, partners, members, managers,
beneficiaries, officers, employees, agents and contractors from all claims and
demands of every kind resulting from any fire, steam, electricity, gas, water
or rain, which may leak or flow from or into any part of the Premises, or from
the breakage, leakage, obstruction or other defects of the components of the
Premises or Shopping Center, or any accident, damage, injury or breaking and
entering occurring therein, and Landlord shall have no responsibility for any
loss of, or damage or injury to, fixtures, improvements or other property of
Tenant from any source whatsoever, except to the extent that such damage or
loss is directly caused by Landlord’s negligence or willful misconduct and not
covered by insurance which Tenant maintains or is required to maintain under
this Lease. Landlord shall not be liable for any damages or otherwise arising
from any use, act or failure to act of any other tenant or occupant or their
employees, invitees, customers, agents or contractors or any other person in or
about the Shopping Center.

 

ARTICLE 8.  COMPLIANCE WITH LAWS AND REGULATIONS

 

8.1  Tenant shall, at its sole
cost and expense, comply with all of the requirements of all municipal, state
and federal laws, rules, regulations and ordinances, now in force, or which may
hereafter be in force, pertaining to the Premises, and shall faithfully observe
in the use or occupancy of the Premises all municipal ordinances and state and
federal statutes, laws and regulations now or hereafter in force, including,
without limitation, the “Environmental Regulations” (as hereinafter defined),
and the Americans with Disabilities Act, 42 U.S.C. §§ 12101 et. seq. and any
rules, regulations, restrictions, guidelines, requirements or publications
promulgated or published pursuant thereto (“ADA”), whether or not any of the
foregoing were foreseeable or unforeseeable 

 

13

 

at the time of the execution of this Lease.  Tenant’s obligation to comply with and observe such requirements,
ordinances, statutes and regulations shall apply regardless of whether such
requirements, ordinances, statutes and regulations regulate or relate to
Tenant’s particular use of the Premises or regulate or relate to the use of
premises in general, and regardless of the cost thereof.  The judgment of any court of competent
jurisdiction, or the admission of Tenant in any action or proceeding against Tenant,
whether Landlord be a party thereto or not, that any such requirement,
ordinance, statute or regulation pertaining to the Premises has been violated,
shall be conclusive of that fact as between Landlord and Tenant.  At its sole cost and expense, Tenant shall
also comply promptly with all requirements of all insurance carriers or
underwriters providing coverage on the Shopping Center, the Premises or the
contents thereof.  At Tenant’s sole
expense, Tenant shall procure, maintain and make available for Landlord’s
inspection any governmental license or permit required for the proper and
lawful conduct of Tenant’s business.

 

8.2  Landlord shall be
responsible for compliance with all laws, including, without limitation, the
ADA, which require changes, improvements and work in the Common Area, except
for changes, improvements or work in the Common Area required as a result of
Tenant’s particular use of the Premises or the operation of its business
therein or the construction of Tenant’s Work or any Improvements, all which
shall be the sole responsibility of Tenant. 
Landlord may perform, or require that Tenant perform, at Tenant’s cost
in either case, work required by ADA “path of travel” provisions due to
Improvements in the Premises or Tenant’s particular use of the Premises or the
operation of its business therein. 
Tenant shall be responsible for compliance with all laws, including,
without limitation, the ADA, which require changes, improvements and work to
the Premises, including changes, improvements or work affecting any leasehold
improvements.

 

8.3   Tenant shall comply with
the conservation, use and recycling policies and practices from time to time
established by Landlord for the use of utilities and services supplied by
Landlord, and the utility charges payable by Tenant hereunder may include such
excess usage penalties or surcharges as may from time to time be established by
Landlord for the Shopping Center. 
Landlord may reduce the utilities supplied to the Premises and the
Common Areas as required or permitted by any mandatory or voluntary water,
energy or other conservation statute, regulation, order or allocation or other
program; except to the extent due to force majeure, legal requirements or acts
of governmental authorities, Landlord shall furnish Tenant with at least thirty
(30) days’ prior written notice of any such reduction, including an explanation
of the reason for reduction in utility service.

 

ARTICLE 9.  REPAIRS AND MAINTENANCE; ALTERATIONS

 

9.1  Tenant agrees, at its sole
cost and expense, to keep the Premises and all parts thereof in good and
sanitary order, condition and repair at all times during the Lease Term,
whether such repairs are interior or exterior, structural or non-structural,
ordinary or extraordinary, foreseen or unforeseen, including, without
limitation, exterior and interior glass; Tenant’s interior demising partitions;
mechanical, plumbing, communications, heating, air ventilation and conditioning
and utility systems exclusively serving the Premises and free flow up to the
main sewer line (all whether or not such systems are located in the Premises);
fixtures; sprinkler systems; signs; locks and closing devices; windows; window
frames and window sashes; casements and frames; the exterior and interior
portion of all doors, door frames and door checks, other entrances; floor
coverings; drop ceilings; any grease traps and piping; the storefront; and all
items of repair, replacement, alteration, or improvement as may be required by
any legal requirement or the insurance underwriter(s) for the Shopping Center.
At Landlord’s election, either Tenant shall contract with a qualified air
conditioning service company approved by Landlord (which approval shall not be
unreasonably withheld) for the monthly maintenance and the repair and
replacement, 

 

14

 

as necessary, of the air conditioning system serving the Premises, or
Landlord shall arrange for the same, in which event Tenant shall reimburse
Landlord for the cost of same (or a reasonable share of such cost, if the
contract covers other premises) as additional rent.  All replacements made by Tenant shall be of like size, kind and
quality to the items replaced as such item or items existed when originally
installed and shall be subject to Landlord’s prior approval.  Tenant, at its expense, shall install and
maintain fire extinguishers and other fire protection devices as may be
required from time to time by any agency having jurisdiction thereof or by
Landlord’s insurance carrier. Tenant does hereby expressly waive all rights it
may have to make repairs at the expense of Landlord as provided for in Section
1941 and 1942 of the California Civil Code; it being understood that Landlord
is not to be called upon and shall not be required to make any expenditure
whatsoever on account of any improvements, alterations, repairs, modifications,
additions or changes to the Premises; provided, however, Landlord agrees to
maintain the exterior walls, roof and structure of the Building in good order
and repair throughout the Lease Term. 
Tenant shall reimburse Landlord for the cost (or, if appropriate, its
pro rata share of the cost) of Landlord’s maintenance and repair under this
Section 9.1 within thirty (30) days after Landlord shall have provided Tenant
with a written bill for same.  Tenant’s
pro rata share, if applicable, shall be determined as set forth in subsection
5.1(c). In no event shall Landlord be required to make repairs necessitated by
the negligence or willful misconduct of Tenant or anyone claiming under Tenant,
because of the failure of Tenant to perform or observe any term or condition of
this Lease, or because of Improvements made by Tenant.  Landlord shall be under no obligation to
repair, replace or maintain the Premises or the mechanical equipment
exclusively serving the Premises at any time. 
Notwithstanding anything to the contrary contained in this Lease,
Landlord shall not in any way be liable to Tenant for failure to make repairs
as herein specifically required of Landlord unless Tenant has previously
notified Landlord of the need for such repairs and Landlord has failed to
commence and complete said repairs within a reasonable period following receipt
of Tenant’s notification.  As used in
this Article 9, “exterior walls” shall exclude storefronts, plate glass, window
cases or window frames, doors or door frames, security grilles or similar
enclosures.

 

9.2  Upon Landlord’s prior
written consent, which shall be given or withheld pursuant to the provisions of
Section 9.3 below, Tenant shall have the right, at its sole cost and expense,
to make interior, non-structural alterations, changes or improvements
(collectively called “Improvements”) which are not visible from the exterior of
the Premises, provided they do not weaken the structure or lessen the value of
the Premises or reduce the leasable area or height thereof, do not impair the
use of the Premises for general retail use, do not involve puncturing,
relocating or removing the roof or any bearing walls, and do not create new
demands on or otherwise affect any shared 
mechanical, electrical, life safety, utilities or telecommunications
systems or those of any other tenant. “Improvements” include, without
limitation, the installation or removal of Tenant’s Work and all trade fixtures,
equipment and interior demising partitions required or used from time to time
in or in connection with the Permitted Use. Tenant shall reimburse Landlord for
all of its costs and expenses (not to exceed $1,000 unless, in connection with
such review, Landlord must retain a third-party engineer or other professional,
in which case Tenant shall in addition reimburse Landlord for all reasonable,
out-of-pocket costs and expenses payable to such third party) incurred by
Landlord in approving or disapproving Tenant’s plans for any proposed
Improvements. Tenant shall not store construction materials outside of the
Premises while making Improvements. 
Tenant agrees that during the course of such work, Tenant shall remove
all debris created by such work in a manner reasonably satisfactory to
Landlord.  Any Improve­ments, insofar as
they do not involve the installation of trade fixtures, equipment, fur­niture
and furnishings, shall become  the
property of Landlord upon expiration or earlier termination of this Lease.  Landlord’s reversionary interest in the
Improvements shall at all times be prior and superior to any interest of any
lender of Tenant, or of any other entity claiming any purchase 

 

15

 

money lien or other interest in the Improvements.  All Improvements paid for by or on behalf of
Landlord, including without limitation by provision of any tenant improvement
allowance, shall at all times be and remain the property of Landlord free and
clear of any liens or claims of  any
person or entity claiming any interest by, through or under Tenant.

 

9.3   Tenant agrees not to commence construction
of any Improvements, regardless of whether the same are in accordance with the
terms hereof, without first obtaining Landlord’s written approval of such work
and the plans and specifications, a construction schedule, the general
contractor and the construction contract 
therefor, and provided Tenant obtains, at its sole cost and expense, all
the necessary approvals and permits therefor from the governmental authorities
having jurisdiction.  Landlord shall not
unreasonably withhold approval of any proposed Improvements so long as prior to
the commencement of any construction Tenant shall provide Landlord with the
following: (a) complete drawings and specifications of the work, which drawings
and specifications shall be prepared by a reputable, licensed and qualified
architect or engineer and shall otherwise be reasonably satisfactory to
Landlord, (b)  documentary proof of the
cost of the work, and reasonable proof of Tenant’s ability to pay for such
work, (c) proof to the reasonable satisfaction of Landlord that the work will
not materially affect the structural integrity of the improvements, and that as
a result of said alterations, the economic value of the improvements after
completion of the alterations shall be not less than the value of the
improvements immediately prior to the commencement of the work, (d) evidence
that the work is to be performed by a qualified, reputable, licensed and
insured general contractor bonded by a corporate surety or of financial
strength capable of performing the work without a bond, and (e) evidence of the
insurance coverage set forth in Exhibit C.

9.4  Tenant covenants to pay
promptly when due the entire cost of Tenant’s Work, any Improvements and any
other work to the Premises performed by Tenant pursuant to the provisions of
this Lease so that the Premises shall at all times be free of liens for labor
and materials supplied in the prosecution of any work done in the Premises, and
Tenant shall keep the Premises and the Shopping Center free and clear of all
mechanics’ liens and other liens arising out of any work done for Tenant or
persons claiming under Tenant.  Tenant
shall promptly notify Landlord of any claim or lien filed against the Premises
or the commencement of any action affecting the title thereto.  If Tenant fails to provide discharge of any
mechanics’ lien within five (5) days of receipt of written notice of the same,
then Landlord, in addition to any other rights or remedies Landlord may have,
may (but shall not be obligated to) discharge said lien by (i) paying the
claimant an amount sufficient to settle and discharge the claim, (ii) posting a
release bond, or (iii) taking such action as Landlord shall deem appropriate in
Landlord’s sole and absolute discretion, and Tenant shall pay to Landlord on
demand, as additional rent, all costs incurred by Landlord in settling and
discharging such lien (including reasonable attorneys’ fees and bond premiums),
plus a fifteen percent (15%) administration fee. Tenant agrees to give Landlord
not less than ten (10) days’ notice in writing in advance of the commencement
of Tenant’s Work or any other construction, alterations, addition or repair of the
Premises in order that Landlord may post appropriate notices of Landlord’s
non-responsibility and similar notices. Tenant shall indemnify, hold harmless,
defend and protect Landlord from and against all injury, liens, loss, claims,
costs, expenses, liability or damage occasioned by or growing out of Tenant’s
Work or any Improvements, including, but not limited to, mechanics’ and
materialmens’ liens arising therefrom.

 

9.5  All Improvements which are
installed in the Premises and attached to the floor, walls or ceiling of the
Premises, including without limitation any floor covering which is cemented or
otherwise affixed to the Premises shall be the property of Landlord and shall
remain upon and be surrendered with the Premises at the expiration of the Lease
Term or sooner termination of this Lease, unless Landlord shall direct Tenant
to remove such items (or some of them), by written 

 

16

 

notice given not less than thirty (30) days prior to the expiration of
the Lease Term, or within ten (10) days after the earlier termination hereof,
in which event Tenant shall remove any such items and repair any damage caused
by such removal at Tenant’s sole cost, prior to the expiration of the Lease
Term, or in the event of an early termination, within ten (10) days after
Landlord’s notice.

 

9.6  Landlord may, at any time at
or after the expiration of the fourth (4th) full year of the Lease Term and
prior to the commencement of the next to last year of the Lease Term, require
Tenant, at Tenant’s cost, to renovate and refurbish the Premises as necessary
to maintain the Premises as a first-class store.  Such refurbishment or renovation shall be as specified by
Landlord by not less than thirty (30) days’ written notice to Tenant, and may
include new carpeting, painting, new wall covering, new tenant fixtures,
storefront and signage.  Nothing in this
Section shall prevent Tenant from performing other refurbishments or
renovations prior to the expiration of the fourth (4th) full year of the Lease
Term.

 

9.7  If Tenant refuses or
neglects to repair, replace, or maintain the Premises, or any part thereof, in
a manner reasonably satisfactory to Landlord, Landlord shall have the right but
not the obligation, upon giving Tenant at least twenty (20) days’ prior notice
of Landlord’s election to do so (except for an emergency in which event no such
notice shall be required), to enter the Premises and make such repairs or
perform such maintenance or replacements on behalf of and for the account of
Tenant. Nothing herein contained shall imply any duty of Landlord to do any
work that, under any provision of this Lease, Tenant is required to do, nor
shall Landlord’s performance of any repairs on behalf of Tenant constitute a
waiver of Tenant’s default in failing to do the same.  No exercise by Landlord of any rights herein reserved shall
entitle Tenant to any compensation, damages or abatement of rent from Landlord
for any injury or inconvenience occasioned thereby.  If Landlord performs any maintenance or other obligations that
Tenant is required to perform under the terms of this Lease, Tenant shall upon
demand pay to Landlord, as additional rent, the costs and expenses incurred by
Landlord’s performance on behalf of Tenant (or shall deposit with Landlord the
anticipated amounts thereof),  plus an
administrative fee of fifteen percent (15%).

 

ARTICLE 10.  COMMON AREA

 

10.1  The term “Common Area”
means all of those facilities within the Shopping Center intended for the
non-exclusive use of Tenant in common with other authorized users, including,
but not limited to, vehicle parking areas, driveways, sidewalks and malls,
landscaped areas and service and other areas not occupied by buildings or
improvements, other than buildings and improvements which are incidental to the
use, maintenance or operation of the Common Area.

 

10.2  Landlord grants to Tenant,
its subtenants, concessionaires, licensees, invitees, cus­tomers, and
employees, during the Lease Term the non-exclusive right to use the Common Area
in common with Landlord and other tenants of the Shopping Center and their
respective subtenants, concessionaires, licensees, invitees, customers,
employees, successors and assigns, and all other persons legally entitled
thereto, subject to the provisions of this Lease.  Tenant shall abide by the Rules and Regulations governing the
Shopping Center attached to this Lease as Exhibit B and made a part hereof.
Landlord shall have the right to amend said rules and regulations and/or adopt
new rules and regulations pertaining to the Shopping Center, including without
limitation, days and hours of business operation for the Shopping Center, the
use of the Common Area and/or validation of customer parking tickets, provided
that all such amendments and new rules and regulations shall be commercially
reasonable and non-discriminatory; and further provided that, except for
payment of Tenant’s Share of Common Area Expenses, any charges and fees as may
be imposed by applicable law or act of governmental authority and/or charges
for valet 

 

17

 

parking, Tenant’s use of the Common Area shall be free of charge. Any
amendments or new rules and regulations shall be in writing given at least two
(2) business days in advance of their effectiveness to Tenant.

 

10.3  Landlord shall keep the
Common Area in a neat, clean and orderly condition, and shall repair, maintain
or replace all equipment and facilities thereof as Landlord shall deem
necessary in its sole and absolute discretion. 
Landlord may cause any or all of the services concerning the Common Area
to be provided by an independent contractor(s) or by affiliates of
Landlord.  If Landlord does not maintain
all of the Common Area because one or more of the other tenants or occupants
maintains a portion thereof, then, for so long as such condition exists,
Landlord’s responsibility hereunder shall extend to only those portions of the
Common Area not maintained by such other tenants or occupants and the Common
Area Expenses described in this Article shall refer only to the portions
maintained by Landlord. All of Landlord’s costs and expenses in connection with
the Common Area, as determined by Landlord (“Common Area Expenses”), are sub­ject
to reimbursement by Tenant as hereinafter provided for, and shall include, but
not be limited to, the cost of: (1) 
supervising, managing, policing, inspecting, fire protection and traffic
direction; (2)  lighting, painting,
cleaning, landscape maintenance and supplies incidental thereto, and removing
rubbish (excluding therefrom Tenant’s garbage and rubbish), dirt and debris;
(3)  labor, payroll taxes, materials and
supplies in connection with such maintenance and operation;  (4) utilities utilized in connection
therewith, including but without limitation, all costs and expenses of
maintaining lighting facilities and drainage systems appurtenant thereto; (5)
repairing, replacing and remarking paved and unpaved surfaces, curbs,
directional and other signs (excepting therefrom Tenant’s or other tenants’
signs), landscaping, lighting facilities, drainage and equipment used in
connection with the above; (6)  all
premiums on compensation, casualty, public liability, property damage and other
in­surance on the Common Area; (7) all Real Estate Taxes levied or assessed
against the Common Area including any surcharge or tax imposed specifically on
parking facilities; and (8) an administrative fee equal to fifteen percent
(15%) of the Common Area Expenses. The preceding sentence shall not impose any
obligations upon Landlord to provide the services contained within such
sentence.

 

10.4  The manner in which the
Common Area shall be maintained and the expenditures therefor shall be in the
sole discretion of Landlord.  Landlord
shall at all times during the Lease Term have the sole and exclusive control of
the Common Areas, and may at any time and from time to time restrain any use or
occupancy thereof except as authorized by the rules and regulations for the use
of such areas established by Landlord from time to time.  If in the sole opinion of Landlord
unauthorized persons are using any of said areas by reason of the presence of
Tenant in the Shopping Center, Tenant, upon demand of Landlord, shall restrain
such unauthorized use by appropriate proceedings. Nothing herein shall affect
the right of Landlord at any time to remove any such unauthorized persons.
Landlord shall also have the right to close the Common Areas as Landlord
determines shall be necessary to prevent the accrual of prescriptive rights to
temporarily close any portion of the Common Area for repairs or alterations or
for any other reason deemed sufficient by Landlord.  Tenant shall keep all of the Common Area free and clear of any
obstructions created or permitted by Tenant or resulting from Tenant’s
operation. In connec­tion with the operation of the Common Area the Landlord
shall have the right to post at each entrance to the Shopping Center or at
intervals of not more than 200 feet along the boundary thereof a sign reading
substantially as follows:  “Right to
pass by permission, and subject to control of owner:  Section 1008 Civil Code”.

 

10.5  From and after the Rent
Commencement Date and thereafter throughout the Lease Term, Tenant shall pay to
Landlord as additional rent, within ten (10) days of receipt of a statement
from Landlord from time to time, but not more often than monthly, Tenant’s pro
rata share of all 

 

18

 

Common Area Expenses.  Tenant’s
pro rata share shall be equal to five and 67/100 percent (5.67%) of the total
amount of Common Area Expenses for the period covered by the Landlord’s
statement  Notwithstanding anything to
the contrary contained hereinabove, upon Landlord’s election, as such may be
made from time to time, Tenant shall pay to Landlord on the first day of each
month Tenant’s pro rata share of the estimated average monthly Common Area
Expenses, provided, however, that such estimate shall be subject to adjustment
by Landlord from time to time, and not less often than annually the aggregate
of such estimated billings shall be reconciled with the actual Common Area
Expenses, at which time any overpayment by Tenant of such costs will be
credited to Tenant and any underpayment will be due to Landlord.  If Tenant does not raise objections to any
such statement within one hundred eighty (180) days after the date Tenant
receives the same, such statement shall be conclusive and binding upon
Tenant.  Landlord’s failure to provide
such statement in a time period considered to be reasonable by Tenant shall in
no way excuse Tenant from its obligations to pay Landlord the costs due
hereunder, nor shall it constitute a waiver of Landlord’s right to bill and
collect such costs from Tenant at a future date.  Upon written request of Tenant from time to time, Landlord shall
provide Tenant with copies of invoices or other back-up documentation, to the
extent available, for any specific items of Common Area Expenses which Tenant
is questioning reasonably and in good faith.

 

10.6  Notwithstanding anything to
the contrary contained in this Lease, in the event that Landlord reasonably
determines, at any time during the Lease Term that it is more appropriate
and/or equitable that all or any portion of the Common Area Expenses be
chargeable exclusively to the occupants of a particular building or to a
particular occupant or group of occupants, then such charges shall be excluded
in determining the aggregate amount of the Common Area Expenses and shall be
referred to herein as “Direct Expenses”. 
In the event any Direct Expenses are chargeable to Tenant, then,
commencing with the first (1st) calendar month following the calendar month in
which Landlord gives Tenant written notice of the amount of such Direct
Expenses and Tenant’s share thereof, Tenant shall be obligated to pay a share
of such Direct Expenses, plus an administrative fee of fifteen percent (15%),
either in estimated monthly installments or within ten (10) days of receipt of
a statement  for same from Landlord.  If the Direct Expenses relate to a group of
occupants which includes Tenant, Tenant shall pay a proportionate share of such
Direct Expenses in accordance with the leasable area of the Premises, as it
relates to the total leasable area (including the Premises) of all occupants
comprising the group to which the Direct Expenses relate.  If the Direct Expenses relate solely to
Tenant, Tenant shall pay the entire amount of the Direct Expenses.  Landlord agrees not to assess Direct
Expenses under this Lease unless either (i) such assessment is made by Landlord
in order to equitably allocate the expenses among the occupants in question in
good faith and a reasonable manner, or (ii) the specific nature of Tenant’s
business in the Premises has resulted in a material and disproportionate demand
on Common Areas and/or the services provided by Landlord to the Shopping
Center.

 

10.7  If Tenant desires to
operate its business in the Premises beyond the normal Shopping Center hours of
operation, Tenant shall request Landlord’s permission to do so, which request
shall be subject to Landlord’s approval in its sole discretion and thereafter
shall notify Landlord of any changes in the times or dates of the extended
hours of operation.  Landlord will
provide those extended hours services that it deems necessary in its reasonable
business judgment and Tenant shall reimburse Landlord for the increased costs
incurred by Landlord for such extended hours services as a Direct Expense,
including without limitation, lighting and utilities.

 

ARTICLE 11:  INDEMNIFICATION.

 

11.1  Tenant shall indemnify,
protect, defend and hold Landlord (and Landlord’s partners, joint venturers,
shareholders, members, managers, affiliates and property managers, and their 

 

19

 

respective officers, directors, employees and agents) and its
mortgagee(s) and ground lessor(s), if any, and the Premises, harmless from and
against any and all losses, damages, liabilities, judgments, costs, claims,
liens, penalties and expenses (including, but not limited to, reasonable
attorneys’ fees and costs) arising out of or in connection with loss of life,
personal injury, property damage, economic loss or other damages arising from
(a) the use, occupation, improvement or maintenance of the Premises or the Shopping
Center or any work or activity in or about the Premises or Shopping Center by
Tenant or Tenant’s assignees or subtenants or their respective agents,
employees, contractors, licensees or invitees, (b) any activity, condition or
occurrence in or about the Premises, (c) the filing or potential filing of any
mechanic’s or materialmen’s lien against the Premises or the Shopping Center in
connection with any work done or caused to be done by Tenant, (d) any breach or
failure to perform any obligation imposed on Tenant under this Lease, and (e)
the negligence or willful misconduct of, or any violation of law by, Tenant or
Tenant’s assignees or subtenants or their respective agents, contractors,
employees, customers, invitees or licensees, except to the extent arising from
the gross negligence or willful misconduct of Landlord which is not covered by
insurance carried or required to be carried by Tenant under this Lease.  Upon notice and request from Landlord,
Tenant shall, at Tenant’s sole expense and by counsel satisfactory to Landlord,
defend any action or proceeding brought against Landlord by reason of any such
claim.  If any of the foregoing
indemnified persons, without fault on Landlord’s part, is made a party to any
litigation commenced by or against Tenant, then Tenant shall indemnify,
protect, defend and hold each of such persons harmless from and against any and
all claims arising out of incurred or paid by any such person in connection
with such litigation.

 

11.2  Each party shall have the
right to engage its own attorneys in connection with the provisions of this
Article 11 or any other indemnification provision of this Lease, including,
without limitation, any defense of such party or intervention by such party,
notwithstanding any contrary provisions of the laws or court decisions of the
State of California and the other party shall reimburse such party for the
reasonable costs thereof. The obligations of this Article 11 shall survive the
expiration or earlier termination of this Lease.

 

11.3   Subject to the other terms
and conditions of this Lease, including but not limited to Section 20.3,
Landlord shall indemnify, protect, defend and hold Tenant harmless from and
against any and all losses, damages, liabilities, judgments, costs, claims,
liens, penalties and expenses (including, but not limited to, reasonable
attorneys’ fees and costs) arising out of or in connection with loss of life,
personal injury, property damage, economic loss or other damages arising
from   the negligence or willful
misconduct of Landlord or Landlord’s agents, contractors, or employees, except
to the extent the same are Tenant’s responsibility under Section 11.1.

 

ARTICLE 12:  DAMAGE OR DESTRUCTION.

 

12.1  Except as otherwise
provided for herein, if at any time during the Lease Term the Premises or the
Building is damaged or destroyed, and this Lease is not terminated by Landlord
pursuant to Section 12.2 or 12.3, then this Lease shall remain in full force
and effect, and Landlord shall with due diligence, subject to any delaying
cause, reconstruct (to the extent of available net insurance proceeds)
Landlord’s Work as described in Exhibit C, if any, and the Building shell to
approximately the same condition as same existed on the Commencement Date, with
such modifications thereto as may be reasonably required in connection with the
reconstruction of the balance of the Shopping Center; promptly upon completion
of such work by Landlord, Tenant, at Tenant’s sole cost and expense, shall
reconstruct Tenant’s Work and shall replace Tenant’s Tenant’s Work and Tenant’s
merchandise, Improvements, trade fixtures, furnishings, signs and other
personal property to a condition at least equal to that prior to the occurrence
of the casualty.  Reconstruction by
Tenant shall conform to the provisions of Exhibit C and Articles 2 and 9.  

 

20

 

Tenant shall continue to occupy the Premises to the extent, if any, that
such occupancy is reasonably practicable to the conduct of Tenant’s business
during reconstruction, such determination to be made in the reasonable business
judgment of Tenant, and  the Minimum
Rent payable by Tenant shall be abated by Landlord proportionately with the
degree to which Tenant’s use of the Premises is impaired, commencing from the
date of the casualty and continuing until Landlord has substantially completed
its reconstruction obligations under this Section 12.1. Tenant shall not be
entitled to any compensation or damages from Landlord for loss of use of the
whole or any part of the Premises, the Building, or Tenant’s personal property,
or any inconvenience or annoyance occasioned by such damage, reconstruction or
replacement of the Premises or any other part of the Shopping Center.  In the event the insurance proceeds
available to Tenant are insufficient to restore the Premises or Tenant’s
current prototype restaurant design  has
changed, Landlord shall not unreasonably withhold its consent to changes to the
appearance of the Premises to permit restoration of the Premises.

 

12.2  Notwithstanding any of the
foregoing provisions of this Article 12, should there be a Major Destruction or
Uninsured Casualty at any time during the Term, Landlord shall have the right,
in its sole discretion, to terminate this Lease on written notice to Tenant
within ninety (90) days after such casualty, with no further obligations
thereafter accruing from Landlord to Tenant. “Major Destruction” means any
casualty or destruction (whether or not an Uninsured Casualty) or Hazardous
Materials condition, to an extent of more than one-third (33-1/3%) of the full
replacement cost of the Premises as of the date immediately prior to the
casualty, or that results in the termination of the leases of tenants
representing more than one-third (33-1/3%) of the leasable area of the
Building. “Uninsured Casualty” means damage or destruction to any portion of
the Shopping Center resulting from any flood, earthquake, act of war, nuclear
reaction, nuclear radiation or radioactive contamination, the existence or
migration of Hazardous Materials, or any or any other casualty of any kind or
nature whatsoever not covered by the insurance Landlord is required to maintain
under this Lease.  In the event Landlord
fails to so terminate this Lease, this Lease shall not terminate, Landlord
shall proceed with the reconstruction of the Premises and shall be responsible
for the costs of same to the extent insurance proceeds are unavailable.

 

12.3  Notwithstanding anything
herein contained to the contrary, if during the last twelve (12) months of the
Lease Term fifteen percent (15%) or more of the leasable area of the Premises
is damaged or destroyed, whether covered by insurance or not, Tenant may elect
to cancel and terminate this lease by giving written notice of its said
election to Landlord within thirty (30) days after the date of such damage.

 

12.4  Upon any termination of
this Lease under any of the provisions of this Article, the parties shall be
released thereby without further obligation to the other party, coincident with
the surrender of possession of the Premises to Landlord, except the
indemnification provisions contained in this Lease which shall survive the
termination, and except for items which have theretofore accrued and are then
unpaid.  In the event of any termination
by Tenant under the provisions of this Article, all proceeds from Tenant’s
insurance (including self-insurance and deductibles), covering Tenant’s
Improvements, but excluding proceeds from Tenant’s merchandise, the unamortized
net cost to Tenant of Tenant’s Improvements with a straight-line amortization
schedule and an amortization period equal to the Lease Term, and personal
property, shall be disbursed and paid to Landlord. Tenant hereby waives any
statutory rights of termination which may arise by reason of any partial or
total destruction of the Premises which Landlord is obligated to restore or may
restore under any of the provisions of this Lease.

 

21

 

ARTICLE 13:  EMINENT DOMAIN.

 

13.1  If the entire Premises
shall be appropriated or taken under the power of eminent domain by any public
or quasi-public authority or under threat of and in lieu of condemnation
(hereinafter, “taken” or “taking”), this Lease shall terminate as of the date
of such taking, and Landlord and Tenant shall have no further liability or
obligation, except as otherwise provided for in this Lease, arising under this
Lease after such date.

 

13.2  If more than fifteen
percent (15%) of the leasable area of the Premises is taken, or if by reason of
any taking, regardless of the amount so taken, the remainder of the Premises is
not one undivided space or is rendered unusable for the Permitted Use, either
Landlord or Tenant shall have the right to terminate this Lease as of the date
Tenant is required to vacate the portion of the Premises taken, upon giving
notice of such election within thirty (30) days after receipt by Tenant from
Landlord of written notice that said Premises have been or will be so
taken.  In addition, (a) if such a
significant portion of the Shopping Center or Common Area is taken that, in
Landlord’s reasonable opinion, substantial reconstruction is required on the
remaining portion, or such that it is no longer feasible to operate the portion
of the Shopping Center in which the Building is located as a retail shopping
center, then Landlord shall have the right to terminate this Lease within said
thirty (30) day period by giving written notice to Tenant, and (b) if such a
significant portion of the parking area serving the Premises shall be taken
that, in Tenant’s reasonable opinion, the Premises is no longer feasible for
the operation of Tenant’s business, then Tenant shall have the right to
terminate this Lease within said thirty (30) day period by giving written
notice to Landlord.  In the event of
termination described in this Section 13.2, both Landlord and Tenant shall
thereupon be released from any liability or obligation hereunder, except as
otherwise provided for in this Lease, arising after the date of
termination.  Landlord and Tenant shall,
immediately after learning of any taking, give notice thereof to each other.

 

13.3  If this Lease does not
terminate pursuant to Section 13.2 above, then Tenant shall continue to occupy
that portion of the Premises not taken and the parties shall proceed as
follows:  (a) at Landlord’s cost and
expense and as soon as reasonably possible after receipt of sufficient
condemnation proceeds, Landlord shall restore the Premises remaining to a
complete unit of like quality and character as existed prior to such
appropriation or taking, and (b) the Minimum Rent provided for in Article 1
shall be reduced by Landlord on an equitable basis, taking into account the
relative values of the portion taken as compared to the portion remaining.  Tenant waives any statutory rights of
termination that may arise because of any partial taking of the Premises.

 

13.4   Landlord shall be entitled
to the entire condemnation award for any taking of the Premises, the Shopping
Center or any part thereof. Tenant’s right to receive any amounts separately
awarded to Tenant directly from the condemning authority for the taking of
Tenant’s merchandise, personal property, relocation expenses, goodwill and/or
interests in other than the real property taken shall not be affected in any
manner by the provisions of this Section, provided Tenant’s award does not
reduce or affect Landlord’s or Landlord’s mortgagee’s award.

 

ARTICLE 14:  UTILITIES.

 

14.1  Tenant shall pay, before
delinquency, all charges for water, gas, heat, sewer, electricity, power,
telephone service and all other services and public utilities furnished to or
used, in, upon or about the Premises by Tenant.  Any utilities shall either be separately metered by Tenant at
Tenant’s sole cost and expense, or, if provided in common with others, then
Landlord shall reasonably determine Tenant’s share of the utilities so
provided, and Tenant shall pay the same to Landlord from time to time upon
demand as additional rent. If Landlord does not provide a 

 

22

 

particular utility, Tenant agrees, at Tenant’s own expense, to pay to
the appropriate utility company the cost of same, as and when due.  If Tenant fails to pay any such charge when
due, Landlord may, but shall not be required to, pay the same, and any amount
so paid by Landlord, plus a fifteen percent (15%) administrative charge, shall
immediately become due to Landlord from Tenant as additional rent. Tenant shall
also pay its share of utility services fur­nished to the Common Area as
provided in Section 10.5 hereof.

 

14.2  Landlord makes no
representations or warranties with respect to any utility installations  air conditioning system and/or other systems
and equipment, if any, existing in or serving the Premises as of the date
hereof or in the future.  Landlord shall
not be liable in damages or otherwise for any discontinuance, failure or
interruption of service to the Premises of utilities or other services. Tenant
acknowledges that any one or more services may be suspended or reduced by
reason of repairs, alterations or improvements necessary to be made, by strikes
or accidents, by any cause beyond the reasonable control of Landlord, or by
orders or regulations of any federal, state, county or municipal authority. Any
such interruption or suspension of services shall not be deemed an eviction or
disturbance of Tenant’s use and possession of the Premises or any part thereof,
nor render Landlord liable to Tenant for damages by abatement of rent or
otherwise, nor relieve Tenant of performance of Tenant’s obligations under this
Lease or permit Tenant to terminate this Lease.  Notwithstanding the foregoing, if, as a direct result of the
negligence, willful misconduct or breach of this Lease by Landlord or any of
its agents, contractors or employees, there is an interruption, disruption or
discontinuance in any utilities supplied to the Premises by Landlord, and such
violation or condition results in a substantial and material interference with
Tenant’s ability to conduct its business in the Premises, and as a result
Tenant is forced to close its business in the Premises for a period in excess
of forty eight (48) hours, then the payment of Minimum Rent shall abate until
such time as such utility service is restored or Tenant is able to reopen the
Premises for business, whichever shall first occur.

 

ARTICLE 15:  PERMITTED USE AND USE RESTRICTIONS.

 

15.1  Tenant shall continuously
use and occupy the entire Premises 
(including, as set forth in Section 15.10 below, the Patio Seating Area)
solely for the operation of a full-service, sit-down restaurant and brewery,
offering the items set forth on the menu attached to this Lease as Exhibit “E”
and made a part hereof, including, at Tenant’s option (if and to the extent
permitted under the provisions hereinafter set forth), “take-out” service and
the sale for on-Premises consumption of beer and wine (the “Permitted Use”),
and under the trade name of “BJ’s Restaurant & Brewhouse/Brewery” (the
“Trade Name”), and for no other use or purpose whatsoever.  The sale of beer and wine in the Premises
(which may, if desired by Tenant and approved in advance by Landlord, include
the sale of beer and wine as part of Tenant’s “take-out” service) is
conditioned upon Tenant’s obtaining and maintaining in effect appropriate
liquor licenses and related governmental approvals, permits and authorizations
and liquor liability insurance as set forth in Section 6.11 and Tenant’s
complying with all applicable laws, rules, regulations, orders, ordinances and
insurance requirements, including but not limited to Alcoholic Beverage Control
(ABC) requirements and guidelines.

 

15.2  Tenant shall, continuously
and uninterruptedly from and after Tenant’s initial opening for business, (a)
operate and conduct within the entire Premises the Permitted Use under the
Trade Name and for no other purpose and under no other trade name, except while
the Premises are wholly untenantable by reason of fire or other casualty (and
Tenant shall be open for business at least during all operating days and hours,
if any, as are established by Landlord for the Shopping Center pursuant to
Section 10.2), (b) maintain within the entire Premises an adequate stock of
merchandise together with sufficient personnel and personal property to service
and supply the 

 

23

 

usual and ordinary requirements of Tenant’s customers, and (c) keep the
Premises in a neat, clean and orderly condition, free from any objectionable
(due to intermittence, beat, frequency, shrillness, loudness or otherwise)
noises or sounds, obnoxious odors or nuisances. Tenant shall not conduct or
permit to be conducted any sale by auction on the Premises.  Tenant shall not commit, or suffer to be committed,
any waste upon the Premises. If the Permitted Use includes the sale of and/or
preparation of food, Tenant shall at all times maintain a health department
rating of “A” (or such other highest health department or similar rating as is
available).

 

15.3  Tenant shall not use or
occupy, nor permit or suffer, the Premises or any part thereof, to be used or
occupied for any unlawful or illegal business use or purpose, nor for any busi­ness,
use or purpose deemed disreputable or extra hazardous, nor in such manner as to
constitute a nuisance of any kind, nor for any purpose or in any way in
violation of a certificate of occupancy, or of any present or future
governmental laws, ordinances, requirements, orders, rules or regulations.  Tenant shall immediately upon the discovery
of any such unlawful, illegal, disreputable or extra haz­ardous use take all
necessary steps, legal and equitable, to compel the discontinuance of such use
and to oust and remove any subtenants, occupants, or other persons guilty of
such unlawful, illegal, disreputable or extra hazardous use.  Tenant agrees not to use or permit any use
to be made of the Premises, or any acts to be done therein which will cause a
cancellation of any insurance policy covering said premises, or any part thereof,
or sell or permit to be kept, used or sold in or about said premises any
article which may be prohibited by the standard form of fire insurance
policy.  Tenant shall, at its sole cost
and expense, comply with any and all requirements pertaining to the Premises of
any insurance organization or company necessary for the maintenance of the fire
and public liability insurance covering said premises. Tenant shall indemnify
and save harmless Landlord against and from all costs, expenses, liabilities,
losses, damages, injunctions, suits, fines, penalties, claims and demands,
including reasonable counsel fees, arising out of, by reason of, or on account
of, any violation of or default in the covenants of this Article 15.

 

15.4   During the Lease Term
Tenant shall conduct its business in the Premises in good faith and with
adequate facilities, fixtures, merchandise and employees, and endeavor, in the
utmost good faith, to exploit and develop its business in the Premises in such
manner as to produce the maximum amount of sales consistent with sound business
practice.  Tenant shall continuously,
during the Lease Term, operate it business on the Premises with due diligence
and efficiency as to reasonably produce the maximum return to Tenant and shall
keep the Premises open for business and cause such business to be conducted
thereon during normal Shopping Center days and hours, as established by
Landlord from time to time pursuant to Section 10.2.  Tenant shall not operate primarily as a liquidation or clearance
center, nor fail to maintain inventory quality and quantity comparable to that
of Tenant’s other first-class stores in the region.

 

15.5  Tenant agrees that it will
not do any of the following: (a) use or operate any machinery or equipment
that, in Landlord’s opinion, is harmful to the Building or disturbing to other
tenants in the Building or the Shopping Center; nor shall Tenant use any
loudspeakers, televisions, phonographs, radios or other like or differing
devices in a manner so as to be heard or seen outside of the Premises, nor
display merchandise on the exterior of the Premises either for sale, promotion,
or other purposes;  (b)  attach any awnings, antenna, or other
projections to the roof or outside walls of the Premises or the Building; (c)
conduct any auction, fire, bankruptcy, liquidation, selling-out or like sale
in, on or about the Premises; (d) 
solicit business or distribute any handbills or other advertising matter
in the Common Area including, without limitation, sidewalks, pedestrian
walkways, and parking area and lots; (e) operate vending machines, pay
telephones, pinball machines, or electronic games or similar services within
the Premises; or (f) use the Premises for the sale or display of pornography,
nudity, graphic violence, drug paraphernalia, or as a massage 

 

24

 

parlor, adult bookstore or second-hand store, or for the sale of any
goods and/or services that, in the reasonable business judgment of Landlord,
might tend to injure the reputation of the Shopping Center or are otherwise
inconsistent with the image of a community or family-oriented shopping center.

 

15.6  Tenant agrees that all
loading and unloading of goods shall be done only at such time and in the areas
and through such entrances as may be designated for such purposes by Landlord
and that trailers or trucks shall not be permitted to remain parked overnight
in any area of the Shopping Center, whether loaded or unloaded.

 

15.7  Tenant shall not place a
load upon any floor of the Premises which exceeds the load per square foot
which such floor was designed to carry, nor shall Tenant overload any
mechanical, electrical, plumbing or utility systems serving the Premises, all
as determined by Landlord or Landlord’s structural engineer.  The cost of any such determination made by
Landlord’s structural engineer shall be paid for by Tenant upon demand.

 

15.8  Tenant, at Tenant’s
expense, shall at all times keep the Premises, including without limitation the
storefront, display windows and signs, orderly, neat, safe, clean and free from
rubbish, dirt and vermin, and shall store all trash, garbage and other solid
waste where designated by Landlord and shall arrange for and pay for the cost
of trash removal.  Tenant shall also
retain pest extermination contractors for the Premises at the sole cost of
Tenant, using an extermination contractor designated by Landlord.

 

15.9  For each day or portion
thereof during which Tenant fails to operate as required by this Article 15,
Landlord shall have the right, at its option, to collect as liquidated damages,
and not as a penalty, in addition to all other charges and Minimum Rent due
hereunder, a sum equal to twice the daily prorated Minimum Rent then payable.

 

15.10   Tenant shall construct
and operate during the Lease Term an outdoor patio seating area (the “Patio
Seating Area”) in the location designated on Exhibit A, subject to the terms
and conditions hereinafter set forth. 
Tenant’s operation in the Patio Seating Area shall be subject to
Tenant’s obtaining and maintaining in effect appropriate licenses, approvals,
variances, permits and authorizations from all applicable governmental
authorities, and obtaining Landlord’s prior written approval (which shall not
be unreasonably withheld) of plans, specifications and working drawings for the
Patio Seating Area including without limitation the nature and location of all
Improvements, signage, equipment, flooring, furniture, awnings, tables, chairs,
and other personal property to be located in or otherwise relating to the Patio
Seating Area. Tenant shall design and construct the Patio Seating Area in such
a manner that no additional parking, and no modifications whatsoever to the
parking facilities of the Shopping Center, shall be required. Tenant, at its
sole cost and expense, shall comply with all laws, rules, regulations, orders,
ordinances and insurance requirements in connection with the construction, use
and operation of the Patio Seating Area, shall maintain the same in a safe,
clean and neat fashion, shall be responsible at its sole cost (and not as part
of Common Area Expenses) for collection of trash and debris within a radius of
fifteen (15’) feet of the Patio Seating Area, and shall be solely responsible
for installing, constructing, maintaining, repairing, restoring, replacing and
operating all Improvements (including, but not limited to, the patio slab),
signage, equipment, flooring, furniture, awnings, tables, chairs, and other
personal property located in or otherwise relating to the Patio Seating Area as
if the same were part of the leasable area of the Premises. Tenant’s
obligations to obtain insurance and to indemnify Landlord under Article 11
shall apply to the Patio Seating Area as if it were part of the leasable area
of the Premises. Tenant shall regularly inspect, clean, bus and sweep the Patio
Seating Area, keeping its tables, chairs and flooring clean, safe and free 

 

25

 

of all trash and debris on a continual basis during Tenant’s hours of
operation and shall provide adequate customer-accessible trash receptacles
therein. If Tenant fails to comply with any of the requirements set forth in
this Section within two (2) business days after receipt of written notice from
Landlord, Landlord may cure such failure, including without limitation
performing maintenance and/or other services and, in such event, Tenant shall
pay to Landlord as additional rent the cost thereof plus a fifteen percent
(15%) administrative fee promptly upon receipt of a written statement from
Landlord setting forth such cost. Tenant shall pay no rent on account of the
Patio Seating Area (except that Gross Sales relating to the Patio Seating Area
shall be included in the computation of Percentage Rent), and, solely for
purposes of computing any charges under this Lease which are based upon the
leasable area of the Premises, the Patio Seating Area shall not be considered
leasable area.

 

ARTICLE 16:  ASSIGNMENT AND SUBLETTING.

 

16.1  Tenant shall not make,
consent to, or suffer any Encumbrance except as permitted under Section
16.12.  Tenant shall not enter into or
consent to an Occupancy Transaction other than an Encumbrance without first
obtaining Landlord’s written consent, which Landlord shall not unreasonably
withhold.  Landlord may withhold its
consent on any reasonable ground, including, without limitation, any of the
following:  (a) the Transferee’s
contemplated use of the Premises following the proposed Occupancy Transaction
is not identical to the Permitted Use, (b) in Landlord’s reasonable business
judgment, the Transferee lacks sufficient business reputation or experience to
operate a successful business of the type and quality permitted under this
Lease, (c) in Landlord’s reasonable business judgment, the present net worth
and working capital of the Transferee are inadequate for the operation of the
Transferee’s proposed business in the Premises and the performance of the
Tenant’s obligations under this Lease, (d) the proposed Occupancy Transaction
would breach any covenant of Landlord in any other lease, financing agreement,
or other agreement relating to the Shopping Center, including, without
limitation, radius restriction, location, use or exclusivity, (e) the proposed
Occupancy Transaction provides for rentals thereunder based on the net income
or profits derived by the Transferee from the Premises, (f) the proposed
Transferee’s anticipated use of the Premises involves the generation, storage,
use, treatment or disposal of Hazardous Materials, (g) the proposed Transferee
has been required by any prior landlord, lender, or governmental authority to
take remedial action in connection with Hazardous Materials, (h) the proposed
Transferee is subject to an enforcement order of any governmental authority in
connection with the use, disposal or storage of Hazardous Materials, (i) the
proposed Transferee’s occupation of the Premises would cause a diminution in
the reputation of the Shopping Center or the other businesses located therein,
(j) the impact or effect of the proposed Transferee on the Common Area or the utility,
efficiency or effectiveness of any utility or telecommunication system serving
the Building or the Shopping Center or the other occupants of the Shopping
Center would be adverse, disadvantageous or require improvements or changes in
any utility or telecommunication capacity currently serving the Building or the
Shopping Center, (k)  Tenant is in
default under any provision of this Lease, or (l) the proposed Transferee is or
is likely to be, subject to compliance with additional laws or other governmental
requirements beyond those to which Tenant or Tenant’s business is subject,
including, without limitation the ADA.

16.2  Tenant shall not have the
right or power to enter into an Occupancy Transaction if Tenant shall be in
default under any provision of this Lease or in default of Tenant’s obligations
under the provisions of any other lease of any real property owned or managed
(in whole or in part) by Landlord or any affiliate of Landlord.

 

26

 

16.3  Should Tenant desire to
enter into an Occupancy Transaction, Tenant shall request Landlord’s consent to
such transaction in writing at least sixty (60) days before the effective date
of any such transaction.  Such request
shall include the following: (a) a detailed description of the proposed
transaction, including its nature, effective date, the purchase price, payment
terms, allocation among leasehold interest, Personal Property, Improvements,
goodwill, inventory and other items; (b) copies of any offers, draft
agreements, subleases, assignments, letters of commitment or intent, and other
documents or correspondence pertaining to the proposed transaction; (c) a
description of the identity, financial condition and previous business
experience of Tenant and the Transferee, including, without limitation, copies
of latest income statement, balance sheet and statement of cash flows (with
accompanying notes and disclosures of all material changes thereto) in audited
form, if available, and certified as accurate by a responsible officer of
Tenant or Transferee respectively, together with a statement authorizing
Landlord or Landlord’s designated representative(s) to investigate Tenant’s and
the Transferee’s business experience, credit and financial responsibility; (d) a statement certifying Tenant’s initial and any
subsequent costs to construct or improve the Premises, which shall include an
itemized breakdown of those costs and copies of invoices; (e) a statement by
Tenant and the Transferee agreeing that it is their intention to complete the
transaction if Landlord consents thereto; (f) the sum of One Thousand and
no/100 Dollars ($1,000.00) to reimburse Landlord for any review and processing
expenses as well as any legal fees incurred by Landlord; and (g) at least five (5)
business and three (3) personal references from the proposed Transferee.

16.4  Within thirty (30) days
after receipt of Tenant’s request for consent and all items required under
Section 16.3, Landlord may (a) consent to the proposed Occupancy Transaction,
(b) exercise Landlord’s rights under Section 16.6, or (c) refuse to consent to
the Occupancy Transaction.  Any consent
by Landlord to any Occupancy Transaction shall be evidenced by an instrument
prepared by Landlord and executed by Tenant and Transferee.  As a condition to the completion of such
transaction, Transferee shall agree in writing to assume and perform all of the
terms, covenants and conditions of this Lease that are obligations of Tenant.  Tenant shall remain fully liable to perform
its duties under this Lease following the Occupancy Transaction. Tenant shall,
on demand of Landlord, and as a condition to the effectiveness of the Occupancy
Transaction, reimburse Landlord for all Landlord’s reasonable costs, including
attorneys’ fees, incurred in obtaining advice, any consents and preparing
documentation for each requested Occupancy Transaction in excess of the amount
set forth in Section 16.3(f). Landlord’s failure to respond within such thirty
(30) day period shall be deemed disapproval of such Occupancy Transaction.  The acceptance of rent by Landlord from any
person other than Tenant shall not be deemed to be a waiver by Landlord of any
provision of this Lease or to be a consent to any Occupancy Transaction.  The consent by Landlord to an Occupancy
Transaction shall not be deemed consent to future Occupancy Transactions.

16.5  If Tenant enters into an
Occupancy Transaction, the Minimum Rent then payable and any scheduled
increases thereto shall be increased on the effective date of such transaction
to the highest of: (a) the Minimum Rent then payable plus fifty percent (50%)
of all economic consideration, whether described as rental or otherwise,
received from the Transferee in excess of the amounts otherwise payable by
Tenant to Landlord with respect to the space involved; (b) an amount equal to
the total amount of the Minimum Rent (plus percentage rent, if any) required to
be paid by Tenant pursuant to this Lease during the twelve (12) month
immediately preceding such transaction; or (c) the Minimum Rent then payable
and any scheduled increases thereto, increased in accordance with Section 4.3
using the effective date of such transaction as the Adjustment Date.  In no event shall the Minimum Rent, as adjusted,
be less than the Minimum Rent which would have been payable but for the
Occupancy Transaction.

 

27

 

16.6  If Tenant requests consent
to an Occupancy Transaction in accordance with this Article, within sixty (60)
days after receipt of such request, Landlord shall have the right to (a)
terminate this Lease in the event of any assignment of this Lease or (b)
terminate this Lease as to a portion of the Premises to be sublet, if the
sublease is to be of less than the entire Premises, such termination to be
effective thirty (30) days after receipt of Landlord’s termination notice by
Tenant.  If Landlord elects to terminate
under the provisions hereof, and the area to be terminated is less than the
entire Premises, an amendment to this Lease shall be executed in which Tenant’s
obligations for rent and other charges shall be reduced in proportion to the
reduction in the size of the Premises caused thereby by restating the
description of the Premises, and its monetary obligations hereunder shall be reduced
by multiplying such obligations by a fraction, the numerator of which is the
floor area of the Premises offered for sublease and the denominator of which is
the floor area of the Premises immediately prior to such termination, as
determined by Landlord in its sole and absolute discretion.  Failure of Landlord to give Tenant written
notice of termination shall not constitute or be deemed Landlord’s consent to
such Occupancy Transaction.  If Landlord
shall exercise its termination right hereunder, Landlord shall have the right
to enter into a lease or other occupancy agreement directly with the
proposed  Transferee under such lease or
occupancy agreement, even if such rents and other consideration exceed the rent
payable under this Lease by Tenant. Notwithstanding the foregoing, provided
Tenant is not in default under any provision of this Lease (after receipt of
notice and expiration of any applicable cure period), Tenant shall have the
right to nullify Landlord’s election to terminate under this Section by
withdrawing its request for Landlord’s consent to the Occupancy Transaction, in
writing, within five (5) days after receipt of Landlord’s notice of
termination.

16.7  Any Occupancy Transaction
purportedly consummated in violation of the provisions of this Article shall be
null and void and of no force or effect.

16.8  Landlord has entered into
this Lease with Tenant in order to obtain for the benefit of the entire
Shopping Center the unique attraction of Tenant’s Trade Name and the unique
merchandising mix and product line associated with Tenant’s business. Tenant
hereby acknowledges that the provisions of this Article 16 have been freely
negotiated and are expressly agreed to by Tenant as an inducement to Landlord
to enter into this Lease.

16.9  Notwithstanding any
Occupancy Transaction, Tenant (and any Guarantor) shall at all times remain
directly and primarily responsible and liable for the payment of the rent
herein specified and for compliance with all other obligations under this
Lease.  Upon the occurrence of a default
by Tenant, if the Premises or any part thereof are then sublet, Landlord, in
addition to any other remedies provided herein or by law, may collect directly
from the Transferee all rents due and becoming due to Tenant under such sublease
and apply such rent against any sums due to Landlord from Tenant
hereunder.  No such collection directly
from the Transferee shall be construed to constitute a novation or a release of
Tenant from the further performance of Tenant’s obligations hereunder.  The acceptance by Landlord of any payment
due hereunder from any other person shall not be deemed to be a waiver by
Landlord of any provision of this Lease or a consent to any Transfer.  Any violation of this Lease by any assignee
or subtenant shall be deemed to be a violation of this Lease by Tenant.

16.10  The restrictions on
transfer described in this Lease are acknowledged by Tenant to be reasonable
for all purposes, including, without limitation, the provisions of California
Civil Code Section 1951.4(b)(2). Tenant expressly waives any rights which it
might otherwise be deemed to possess pursuant to applicable law, including,
without limitation, Section 1997.040 of the California Civil Code, to limit any
remedy of Landlord pursuant to Section 1951.2 or 1951.4 of the 

 

28

 

California Civil Code by means of proof that enforcement of a
restriction on use of the Premises would be unreasonable.

16.11 As used in this Article 16: “Occupancy Transaction” means any
Transfer, Encumbrance, Change of Control, or other arrangement whereby the
identity of the person or persons using, occupying or possessing the Premises
changes or may change, whether such change be of an immediate, deferred,
conditional, exclusive, nonexclusive, permanent or temporary nature. “Transfer”
means any voluntary, unconditional and present (i) assignment of some or all of
Tenant’s interest, rights and duties in this Lease and the Premises, including
Tenant’s right to use, occupy and possess the Premises, or (ii) sublease of
Tenant’s right to use, occupy and possess the Premises, in whole or in part.
“Encumbrance” means any conditional, contingent or deferred assignment,
sublease or conveyance voluntarily made by Tenant of some or all of Tenant’s
interest, rights or duties in this Lease or the Premises, including Tenant’s
right to use, occupy or possess the Premises, in whole or in part, including,
without limitation, any mortgage, deed of trust, pledge, hypothecation, lien,
franchise, license, concession or other security arrangement.  “Encumbrance” shall not include financing
secured by Tenant’s furniture, trade fixtures and equipment. “Transferee” means
the proposed assignee, sublessee, mortgagee, beneficiary, pledgee or other
recipient of Tenant’s interest, rights or duties in this Lease or the Premises
in an Occupancy Transaction.  “Change of
Control” means the transfer by sale, merger, assignment, death, incompetency,
mortgage, deed of trust, trust, operation of law, or otherwise of any shares,
voting rights or ownership interests which will result in a change in the
identity of the person or persons exercising, or who may exercise, effective
control of Tenant, unless such change results from the trading of shares listed
on a recognized public stock exchange and such trading is not for the purpose
of acquiring effective control of Tenant. 
If Tenant is a private corporation whose stock becomes publicly held,
the transfers of such stock from private to public ownership shall not be
deemed a Change of Control.  If Tenant
is a sole proprietorship, the death or incapacity of Tenant shall be deemed a
Transfer.

16.12  At any time and from time
to time without Landlord’s consent (provided at least thirty (30) days’ prior
written notice is provided to Landlord, which notice shall be accompanied by a
copy of the applicable Leasehold Mortgage and a non-refundable review fee of
One Thousand Five Hundred and No/100 Dollars ($1,500.00)), Tenant may grant a
mortgage, deed of trust, pledge or other security interest (as the case may be,
a “Leasehold Mortgage”) in this Lease and Tenant’s leasehold interest in the
Premises (but not Landlord’s reversionary, including fee, interest in the
Premises, the Building or any other portion of the Shopping Center), to any bank,
savings and loan association, insurance company, pension or retirement fund or
investment banking firm subject to service of process in the State of
California (“Leasehold Mortgagee”) and may assign its interest in this Lease
under such Leasehold Mortgage, provided that: (a) Landlord’s reversionary
(including fee) interest in the Premises, Building and all other portions of
the Shopping Center shall not be affected or encumbered in any way by such
Leasehold Mortgage, and (b) until completion of Tenant’s Work and the opening
of the Premises for business, such Leasehold Mortgage shall require that all
funds obtained by Tenant in connection therewith be applied to the payment of
costs and expenses related to the construction and opening of the Premises and Tenant’s
business therein.  Any Landlord’s lien
covering the Improvements (but not Landlord’s reversionary, including fee,  interest therein) or Tenant’s personal
property shall be and is hereby deemed subordinate to any such Leasehold
Mortgage.  Landlord shall execute such
commercially reasonable documentation as may reasonably be required by the
Leasehold Mortgagee in connection with the making of the Leasehold Mortgage,
provided the same is reasonably satisfactory to Landlord as to form and content
and Landlord is reimbursed for its reasonable attorneys’ fees in connection
with its review of the same.

 

29

 

ARTICLE 17:  HOLDING OVER.

 

17.1  Tenant acknowledges and
agrees that any failure of Tenant to surrender possession of the Premises on
the Expiration Date or earlier termination of this Lease shall result in
substantial damages to Landlord. 
Accordingly, if Tenant does not surrender possession of the Premises to
Landlord as set forth herein, Tenant shall be deemed a hold over tenant at
sufferance and shall pay to Landlord for each day that Tenant holds over in the
Premises, an amount equal to one hundred fifty percent (150%) of the prorated
daily Minimum Rent applicable to the last month of the Lease Term, plus
additional rent payable in accordance with the terms of this Lease. No
provision of this Lease shall be deemed to permit Tenant to retain possession
of the Premises after the Expiration Date or earlier termination of this Lease
without Landlord’s prior written consent. 
Except as otherwise specifically stated in this Lease, all of the terms
and conditions of this Lease shall remain in effect following any extension,
renewal or hold over of the original Lease Term.  Tenant shall indemnify, defend and hold harmless Landlord from
and against any and all losses, costs, claims, liability, damages, judgments,
and expenses (including, but not limited to, reasonable attorneys’ fees and
costs) resulting from any failure by Tenant to surrender the Premises in the
manner and condition required by this Lease upon the expiration of the Lease
Term or the earlier termination of this Lease, including, without limitation,
any claims made by any proposed new tenant founded upon such failure.

 

ARTICLE 18:  INTENTIONALLY DELETED

 

ARTICLE 19:  DEFAULT.

 

19.1 The occurrence of any of the following shall constitute a default
by Tenant and a breach of this Lease.

 

(a)   Failing or refusing to pay
any amount of Minimum Rent or additional rent when due in accordance with the
provisions of this Lease, should Tenant fail to cure same within ten (10) days
after receipt of written notice of such default.

 

(b)   Failing or refusing to open,
occupy and operate the Premises in accordance with Article 15 or conducting a
going-out-of-business or similar sale or committing a default under this Lease
which is incapable of being cured.

 

(c)   Maintaining, committing, or
permitting on the Premises waste, a nuisance, or use of the Premises for an
unlawful purpose or entering into an Occupancy Transaction contrary to the
provisions of Article 16, either of which condition remains uncured for more
than forty eight (48) hours after Tenant’s receipt of written notice from
Landlord of the same.  In the event the
Permitted Use involves the sale and/or preparation of food, Tenant’s failure to
maintain a health department rating of “A” (or such other highest health
department or similar rating as is available) for the third (3rd) time in any
twelve (12) month period, provided Landlord has furnished Tenant with written
notice after the second such occasion that the third (3rd) such failure shall
result in an noncurable default hereunder. 
In each of the foregoing events, the same shall immediately constitute a
default without notice from Landlord, and Tenant shall quit the Premises within
five (5) days after written notice from Landlord.

 

(d)   Tenant’s failure to provide
any instrument or estoppel certificate as required by this Lease if the failure
continues for ten (10) days after written notice of the failure from Landlord
to Tenant.

 

30

 

(e)   If any proceeding shall be
commenced to declare Tenant or Guarantor bankrupt or insolvent or to obtain
relief from any debts or obligations or to delay or extend the payment thereof,
or if either Tenant or Guarantor generally fails to pay, or admits its
inability to pay, debts as they become due, or otherwise becomes insolvent, or
if any assignment of Tenant’s or Guarantor’s property be made for benefit of
creditors, or if a receiver or trustee be appointed for Tenant or Guarantor or
for Tenant’s or Guarantor’s property or business (unless in the case of a
petition filed against Tenant or Guarantor, the same is dismissed within ninety
(90) days).

 

(f)    The failure by Tenant to observe
or perform any of the express or implied covenants or provisions of this Lease
to be observed or performed by Tenant, other than as specified in (a), (b) or
(c) above, where such failure shall continue for a period of ten (10) days
after written notice thereof from Landlord to Tenant.  If the nature of Tenant’s default is such that more than ten (10)
days are reasonably required for its cure, then Tenant shall not be deemed to
be in default if Tenant shall commence such cure within said ten (10) day period
and thereafter diligently prosecute such cure to completion within a reasonable
time, not to exceed sixty (60) days after the notice of default.

 

(g)   Any two (2) failures by
Tenant to observe and perform any provision of this Lease during any twelve (12)
month period of the Lease Term shall constitute, at the option of Landlord, a
separate and noncurable default, provided Landlord has furnished Tenant with
written notice after the second such occasion that the third (3rd) such failure
shall result in an noncurable default hereunder.

 

To the extent permitted by applicable state law, the time periods
provided in this Section for cure of Tenant’s defaults under this Lease or for
surrender of the Premises shall be in lieu of, and not in addition to, any similar
time periods prescribed by applicable state law as a condition precedent to the
commencement of legal action against Tenant for possession of the
Premises.  Tenant waives (to the fullest
extent permitted under law) any written notice (other than such notice as this
Article specifically requires) which any statute or law now or hereafter in
force prescribes be given Tenant. 
Notwithstanding anything to the contrary contained in the preceding
sentence, any notice given pursuant to this Section 19.1 shall be in lieu of
any written notice required by statute or law, including any notice required
under California Code of Civil Procedure Section 1161 et. seq., and Tenant
waives (to the fullest extent permitted by law) the giving of any notice other
than that provided for in this Section 19.1.

 

19.2  The waiver by Landlord of
any breach of any term, covenant or condition contained in this Lease shall not
be deemed to be a waiver of such term, covenant or condition for any prior or
subsequent breach thereof, or of any other term, covenant or condition
contained in this Lease.  Landlord’s
consent to or approval of any act by Tenant requiring Landlord’s consent or
approval shall not be deemed to waive or render unnecessary Landlord’s consent
to or approval of any prior or subsequent similar act by Tenant.  Landlord’s acceptance of partial rent or
performance by Tenant shall not be deemed to be an accord and satisfaction or a
waiver of any preceding breach by Tenant of any term, covenant or condition of
this Lease or of any right of Landlord to a forfeiture of this Lease by reason
of such breach, regardless of Landlord’s knowledge of such preceding breach at
the time of Landlord’s acceptance.  No
term, covenant or condition of this Lease shall be deemed to have been waived
by Landlord unless such waiver is in writing and executed by Landlord.

 

19.3  Should Tenant fail to cure
within the time periods specified in Section 19.1 any default specified in
subparagraphs (a), (b), (d) or (f) of Section 19.1, or fail to quit the
Premises in accordance with subparagraph (c) of Section 19.1 or is in default
under subparagraph (e) of 

 

31

 

Section 19.1 or is in default under subparagraph (e) of Section 19.1
with respect to any default specified in subparagraph (c) of Section 19.1,
Landlord may exercise any of the following rights without further notice or
demand of any kind to Tenant or any other person, except as required by
applicable state law:

(a)   The right of Landlord to
terminate this Lease and Tenant’s right to possession of the Premises and to
reenter the Premises, take possession thereof and remove all persons therefrom,
following which Tenant shall have no further claim thereon or hereunder;

(b)   The right of Landlord,
without terminating this Lease and Tenant’s right to possession of the
Premises, to reenter the Premises and occupy the whole or any part thereof for
and on account of Tenant and to collect any unpaid rent which may be or become
payable, or which may thereafter become payable, and to relet the Premises or
any part thereof for such term or terms (which may be for a term extending
beyond the Term) at such rental or rentals and upon such other terms and
conditions as Landlord in its sole discretion may deem advisable (Landlord
being under no obligation to do so);

(c)   The right of Landlord, even
though it may have reentered the Premises, in accordance with subparagraph (b)
of this Section, to elect thereafter to terminate this Lease and Tenant’s right
to possession of the Premises; and/or

(d)   The right of Landlord (but
not the obligation) at any time after five (5) days’ notice to Tenant, to cure
such default for the account and at the expense of Tenant and to recover the
cost of such cure, together with an administrative fee of fifteen percent
(15%), from Tenant as additional rent.

Should Landlord reenter the Premises under the provisions of
subparagraph (b) of this Section 19.3, Landlord shall not be deemed to have
terminated this Lease or have accepted a surrender thereof by any such reentry,
unless Landlord notifies Tenant in writing that it has so elected to terminate
this Lease and Tenant’s right to possession. 
Tenant further covenants that the service by Landlord of any notice
pursuant to the unlawful detainer or eviction statutes of the State of
California (including, without limitation, California Code of Civil Procedure
Section 1161 et. seq.) and the surrender of possession pursuant to such notice
shall not be deemed to be a termination of this Lease (unless Landlord elects
to the contrary at the time of, or at any time subsequent to, the serving of
such notice and such election is evidenced by a written notice to Tenant).  In the event of any reentry or taking
possession of the Premises as aforesaid, Landlord shall have the right, but not
the obligation, to remove therefrom all or any part of the merchandise,
Improvements or personal property located therein and to place the same in
storage at a public warehouse at the expense and risk of Tenant.  The rights and remedies given to Landlord in
this Section shall be additional and supplemental to all other rights or
remedies which Landlord may have under laws in force when the default occurs.

19.4  Should Landlord terminate
this Lease and Tenant’s right to possession of the Premises, pursuant to the
provisions of subparagraphs (a) or (c) of Section 19.3, Landlord may recover
from Tenant as damages, all of the following:

(a)   The worth at the time of
award of any unpaid rent that had been earned at the time of such termination;

(b)   The worth of any unpaid rent
that would have been earned after termination until the time of award;

 

32

 

(c)   The worth at the time of
award of the amount by which the unpaid rent for the balance of the Lease Term
after the time of award exceeds the amount of such rental loss for the same
period that Tenant proves could be reasonably avoided;

(d)   Any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant’s
failure to perform Tenant’s obligations under this Lease or which would be
likely to result therefrom, including, without limitation, any costs or expense
incurred by Landlord in (i) retaking possession of the Premises, including
reasonable attorney fees therefor, (ii) maintaining or preserving the Premises
after such default, (iii) preparing the Premises for reletting to a new tenant,
including repairs or alterations to the Premises for such reletting, (iv)
leasing commissions, (v) any reductions in financing or refinancing available
to Landlord caused by the loss of its ability to show a future income stream
including Tenant’s rent, and (vi) any other costs necessary or appropriate to
relet the Premises;

(e)   The unamortized portion of
(i) all costs and expenses incurred by Landlord in connection with its
negotiation of and entry into this Lease, including, but not limited to,
brokerage commissions, attorneys’ fees, space planning costs and consultant
fees, (ii) all costs and expenses, including, but not limited to, design,
architectural, permitting and construction costs, incurred by Landlord in
connection with Landlord’s Work, if any, under Exhibit C, and (iii) the tenant
improvement allowance, if any, paid by Landlord to Tenant in accordance with
this Lease, all of the foregoing to be amortized over the Lease Term at the
“Interest Rate” set forth below;

(f)    The entire amount of any
free rent or rent deferrals or other rent concessions granted Tenant; and

(g)   At Landlord’s election, such
other amounts in addition to or in lieu of the foregoing as may be permitted
from time to time by the laws of the State of California.

As used in subparagraphs (a) and (b) of this Section, the “worth at the
time of award” is computed by allowing interest at the Interest Rate.  “Interest Rate” means the lesser of (i) the
maximum lawful rate permitted by usury or similar law in the State of
California to be charged by Landlord to Tenant, or (ii) four percent (4%) above
the annualized rate of interest publicly announced from time to time by Bank of
America NT&SA (or its successors-in-interest), as its “prime rate” or
“reference rate,” and such interest shall be computed on the basis of monthly
compounding with actual days elapsed compared to a 360-day year. As used in
subparagraph (c) of this Section, the “worth at the time of award” is computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%). All additional rent
shall, for the purposes of calculating any amount due under the provisions of
subparagraph (c) of this Section, be computed on the basis of the average
monthly amount thereof accruing during the immediately preceding sixty (60)
month period, except that, if it becomes necessary to compute such additional
rent before such a sixty (60) month period has occurred, then such additional
rent shall be computed on the basis of the average monthly amount hereof
accruing during such shorter period.

19.5  In the event of any reentry
or taking possession of the Premises as provided in this Article, Landlord
shall have the right, but not the obligation, to remove therefrom all or any
part of the merchandise or personal property located therein and to place the
same in storage at a public warehouse at the expense and risk of Tenant.

19.6  Tenant waives any and all
rights of redemption granted by or under any present or future laws (including,
without limitation, California Code of Civil Procedure Section 1179) if Tenant
is 

 

33

 

evicted or dispossessed for any cause, or if Landlord obtains possession
of the Premises by reason of the violation by Tenant of any of the terms,
covenants and conditions of this Lease or otherwise.  Tenant expressly waives its right to plead any noncompulsory
counterclaims or offset, in any action or proceeding brought by Landlord
against Tenant for a default under Section 19.1(a) above; although Tenant shall
be entitled to assert any such claims in a separate action brought by Tenant.  Tenant hereby waives its right to jury trial
in the event of any legal action relating to or affecting the rights of
Landlord or Tenant under this Lease.

19.7  If Tenant fails to pay any
amount of Minimum Rent or additional rent when due, such unpaid amount shall
bear interest from the date due until paid, at the Interest Rate. In addition
to such interest, Tenant acknowledges that the late payment by Tenant of any
installment of Minimum Rent or additional rent when due will cause Landlord to
incur certain costs and expenses not contemplated under this Lease, the exact
amount of which costs are extremely difficult or impracticable to
determine.  Such costs and expenses will
include, without limitation, attorneys’ fees, administrative and collection costs,
and processing and accounting expenses and other costs and expenses necessary
and incidental thereto.  Therefore, if
any such installment is not received by Landlord from Tenant within ten (10)
days after Tenant receives written notice from Landlord that such sum is owed
(provided that no such notice shall be required if Tenant has received one (1)
or more written notices of nonpayment or past-due payment from Landlord under
this Section within the preceding twelve (12) months), Tenant shall immediately
pay to Landlord, in addition to the interest provided above, ten percent (10%)
of such payment as a late charge. 
Landlord and Tenant agree that such late charge represents a reasonable
estimate of such costs and expenses and is fair compensation to Landlord for
Landlord’s loss caused by Tenant’s late payment.  The interest and late charges set forth herein are in addition to
the unpaid amount, and acceptance of such late charge shall not constitute a
waiver of Tenant’s default with respect to such overdue amount, nor prevent
Landlord from exercising any other rights and remedies granted hereunder or by
law to Landlord.

ARTICLE 20:  DEFAULTS BY LANDLORD.

 

20.1  If Landlord fails to
perform or observe any of the terms, covenants or conditions contained in this
Lease on Landlord’s part to be performed or observed within thirty (30) days
after written notice of default from Tenant or, when more than thirty (30) days
shall be required because of the nature of the default, if Landlord shall fail
to proceed diligently to commence to cure such default within thirty (30) days
after written notice thereof from Tenant, said failure shall constitute a
default by Landlord under this Lease.

20.2  If Tenant is given notice
of the name and address of any mortgagee, then prior to exercising its remedies
under this Lease, Tenant shall give written notice of any Landlord’s default to
such mortgagee, specifying the default in reasonable detail, and affording such
mortgagee the right to perform on behalf of Landlord within thirty (30) days
after written notice of Landlord’s default from Tenant or, when more than
thirty (30) days shall be required because of the nature of the default, within
such longer period as shall be reasonable under the circumstances after written
notice of Landlord’s default from Tenant. 
If such mortgagee does perform on behalf of Landlord, such default shall
be deemed cured and Tenant shall have no further remedies with respect thereto.
For all purposes under this Lease, “mortgagee” means the holder, beneficiary or
ground lessor under any mortgage, deed of trust, security agreement or ground
lease or similar instrument affecting the Shopping Center.

20.3  Tenant hereby waives the
right to terminate this Lease for Landlord’s defaults, Tenant’s remedies being
limited to the right to seek damages or specific performance.  In the event Tenant 

 

34

 

makes any claim or asserts any cause of action against Landlord:  (a) Tenant’s sole and exclusive remedy shall
be against the current rents, issues, profits and other income Landlord
receives from Landlord’s operation of the Shopping Center, net of all current
operating expenses, liabilities, reserves and debt service associated with said
operation (“Net Income” for purposes of this Section only), and subject to the
rights of Landlord’s mortgagees; (b) no other real, personal or mixed property
of Landlord, wherever located, shall be subject to levy on any judgment
obtained against Landlord, (c) if such Net Income is insufficient to satisfy
any judgment, Tenant will not institute any further action, suit, claim or
demand, in law or in equity, against Landlord for or on the account of such
deficiency, and (d) Tenant shall have no right to withhold rent or perform or
cure any such alleged defaults of Landlord at Landlord’s expense. The
limitations set forth in this Section shall be enforceable by Landlord and/or
by any direct or indirect owner, member, shareholder, manager, partner,
trustee, officer, director, employee, agent, contractor or property manager of
Landlord.

20.4  EXCEPT AS PROVIDED BY THE
OTHER PROVISIONS OF THIS LEASE WHICH MAY PRESCRIBE A SHORTER PERIOD, ANY CLAIM,
DEMAND, RIGHT OR DEFENSE OF ANY KIND BY TENANT WHICH IS BASED UPON OR ARISES IN
CONNECTION WITH THIS LEASE OR NEGOTIATIONS PRIOR TO EXECUTION, SHALL BE BARRED
UNLESS TENANT COMMENCES AN ACTION THEREON WITHIN TWELVE (12) MONTHS AFTER THE
DATE OF OCCURRENCE OF THE ACT OR OMISSION TO WHICH THE CLAIM, DEMAND, RIGHT OR
DEFENSE RELATES; TENANT HEREBY WAIVES ANY STATUTORY LIMITATIONS PERIODS UNDER
APPLICABLE CALIFORNIA STATE LAW WHICH MAY PRESCRIBE A LONGER PERIOD.

20.5  Under no circumstances
shall either party be liable to the other for any consequential damages under
or in connection with this Lease.

20.6  If any sums are payable by
Landlord to Tenant pursuant to any provision of this Lease, Landlord shall have
the right to first offset from such sum any amounts that are currently payable
by Tenant to Landlord pursuant to any provision contained in this Lease.

ARTICLE 21:  ATTORNEY FEES.

 

21.1 In the event that any party herein employs legal counsel for
purposes of collecting sums due under this Lease, or to commence any legal or
equitable action or proceedings, including, without limitation, an action for
declaratory relief or any other form of relief in order to enforce, interpret,
reform, rescind or in any manner affect the provisions of this Lease, or for
the breach of this Lease, then the prevailing party, in addition to all
provable damages, shall be entitled to reasonable attorneys fees, expert
witness fees and costs which may be set by the court in the same action,
including any appellate action which may be brought in connection with the
underlying action, any motion or adversary proceeding commenced in a bankruptcy
proceeding, or any separate action brought for any of these purposes, in
addition to any other relief to which the party may be entitled.  In the event no judicial or arbitration
proceeding is commenced, or if commenced is not concluded, then the “prevailing
party” for purposes of this paragraph shall be the party that obtains a payment
or other relief from the other party once an attorney has been engaged by the
prevailing party.  All remedies, rights,
undertakings, obligations and agreements contained in this Lease shall be
cumulative and none of them shall be in limitation of any other remedy, right,
undertaking, obligation or agreement of any party.  All references in this Lease to Landlord’s attorneys fees and
costs shall include, without limitation, the reasonable value of services
performed by Landlord’s in-house legal staff.

 

35

 

ARTICLE 22:  PERFORMANCE UNDER PROTEST.

 

22.1  If at any time a dispute
shall arise as to any amount or sum of money to be paid by one party to the
other party under the provisions hereof, the party against whom the obligation
to pay the money is asserted shall have the right to make payment “under
protest” and such payment shall not be regarded as a voluntary payment, and,
subject to the other terms and conditions of this Lease, there shall survive
the right on the part of said party to in­stitute suit for the recovery of such
sum.

 

ARTICLE 23:  PARTIAL INVALIDITY.

 

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

 

ARTICLE 24:  PROTECTION OF MORTGAGEES.

 

24.1  Tenant agrees to forthwith
execute and deliver to Landlord from time to time and at any time upon receipt
by it of written request therefor from Landlord, without charge, in such form
as may be reasonably required by any mortgagee, an instrument or instruments
whereby Tenant will agree to subordinate the lease to the lien of its mortgage,
deed of trust, or other en­cumbrance, provided that such mortgagee agrees, in
case of foreclosure, to recognize this Lease as continuing in full force and
effect in accordance with the terms thereof, if Tenant is not then in default
hereunder. If a mortgagee, or any person claiming under it, shall succeed to
the interest of Landlord under this Lease, Tenant agrees to recognize and
attorn to said mortgagee or person as Landlord hereunder.  Without limiting in any way Landlord’s or
Landlord’s mortgagee’s rights under this Article 24, Tenant agrees that it will
execute any subordination agreement which has as its material provisions those
set forth in Exhibit D attached hereto and incorporated herein by this
reference or, at Landlord’s request, such other form as then may be customarily
required by Landlord’s mortgagee. 
Tenant acknowledges that any mortgagee has the right to subordinate at
any time its interest in this Lease and the leasehold estate to that of Tenant,
without Tenant’s consent.  Tenant shall,
within ten (10) days after written request therefor, execute and deliver such
documents as are requested by the mortgagee to confirm such subordination.   In the event Landlord’s current or future
mortgagee requires modifications or revisions to this Lease, Tenant shall not
unreasonably withhold its consent to such modifications or revisions, provided
the modifications or revisions do not materially diminish Tenant’s rights, or
materially increase Tenant’s obligations, under this Lease.

 

ARTICLE 25:  ESTOPPEL CERTIFICATES; TENANT FINANCIAL
STATEMENTS.

 

25.1  Tenant shall, without
charge, at any time and from time to time, within ten (10) business days after
written request from Landlord, deliver a written instrument to Landlord, any
mortgagee, and/or any other person, firm or corporation specified by Landlord,
duly executed and acknowledged, in such 
form as may be customarily required by Landlord’s mortgagee or as may
otherwise be reasonably required by Landlord. 
Tenant’s failure to execute and deliver any such instrument within said
ten (10) day period shall be deemed to make conclusive and binding upon Tenant
in favor of Landlord and any such mortgagee or other person the statements
contained in such instrument without exception.  If Tenant is required to deliver more than four (4) estoppel 

 

36

 

certificates in a single calendar year, Landlord shall reimburse Tenant
upon demand for its reasonable, out-of-pocket costs to prepare any additional
estoppel certificate(s) required to be delivered by Tenant during the remainder
of such calendar year

 

25.2  Within ten (10) business
days after request therefor by Landlord, Tenant shall supply to Landlord and/or
any mortgagee or proposed mortgagee, purchaser or transferee of Landlord’s
interest in the Shopping Center, financial statements of Tenant and of any
Guarantor of this Lease prepared in accordance with generally accepted accounting
principles, consistently applied, and accurately reflecting the financial
condition of Tenant, and any Guarantor, together with such additional financial
information as may be required by any such party.

 

25.3  In connection with any
Occupancy Transaction, Encumbrance or personal property financing permitted
under this Lease, Landlord agrees to furnish Tenant with a similar estoppel
certificate, provided Tenant is not then in default (after the receipt of
notice and expiration of any applicable cure period) and has opened for
business in the Premises, and provided further that such instrument is
reasonably satisfactory to Landlord as to form and content and Landlord is
reimbursed for its reasonable attorneys’ fees and other costs in connection
with its preparation or review of the same.

 

ARTICLE 26:  ACCESS TO PREMISES.

 

26.1  Landlord and/or Landlord’s
authorized representatives shall have the right to enter the Premises at all
reasonable times for the purpose of showing the Premises to actual or
prospective insurers, governmental authorities, purchasers or mortgagees, and,
during the last year of the Lease Term or during any period in which Tenant is
in default of its obligations under this Lease, to potential occupants. Tenant
additionally shall permit Landlord, or Landlord’s authorized representatives,
to enter the Premises at all times during usual business hours to inspect the
Premises, to perform Landlord’s duties under this Lease, and to perform any
work therein (a) that may be necessary to comply with legal requirements, (b)
that Landlord may deem necessary to prevent waste or deterioration of the
Premises or Shopping Center, and (c) that Landlord may deem necessary in
connection with the expansion, reduction, remodeling, maintenance, repair or
renovation of any portion of the Shopping Center. Landlord may also enter to
post notices of non-responsibility and the like in connection with Improvements
made by Tenant (which notices shall not be removed by Tenant until after the
expiration of the statutory lien period).

 

ARTICLE 27:  WAIVER.

 

27.1  No covenant or condition of
this lease can be waived except by written consent of Landlord, and forbearance
or indulgence by Landlord in any regard whatsoever shall not constitute a
waiver of the covenant or condition to be performed by Tenant to which the same
may apply, and, until complete performance by Tenant of said covenant or
condition, Landlord shall be entitled to invoke any remedy available unto it
under this lease or by law, despite said forbearance or indulgence.  The subsequent acceptance of rental
hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach by Tenant of any term, covenant or condition of this Lease, other than
the failure of Tenant to pay the particular rental so accepted, regardless of
Landlord’s knowledge of such preceding breach at the time of acceptance of such
rental.

 

27.2  The waiver by one party of
the performance of any covenant, condition or promise shall not be considered
to be a waiver by it of any other covenant, condition, or promise.  The waiver by either or both parties of the
time for performing any act shall not constitute a waiver of the time for
performing any other act or identical act required to be per­formed at a later
time.

 

37

 

ARTICLE 28:  SALE OR CONVEYANCE BY LANDLORD.

 

28.1 If Landlord, at any time, sells, conveys, transfers or otherwise
divests itself or is divested of Landlord’s interest (“transfer”) in the
Premises, other than a transfer for security purposes only, Landlord shall be
relieved of all obligations and liabilities hereunder, provided the transferee
assumes, in a written instrument for the benefit of Tenant, all obligations and
liabilities hereunder.  Any Security
Deposit or other funds of Tenant then being held by Landlord shall be delivered
to Landlord’s successor.  The
obligations to be performed by Landlord hereunder shall be binding on
Landlord’s successors and assigns only during their respective periods of
ownership.

 

ARTICLE 29:  END OF TERM.

 

29.1  Upon the Expiration Date or
earlier termination of this Lease, subject to Section 19.5, Tenant shall remove
all of Tenant’s trade fixtures, furniture, furnishings, and other personal
property from the Premises, repair any damage caused by such removal, and
surrender possession of the Premises to Landlord in broom clean condition and
good state of repair, except ordinary wear and tear.  All Improvements made by Tenant shall be deemed to have attached
to the Premises and to have become the property of Landlord upon such
attachment.  At the Expiration Date or
earlier termination of this Lease, Tenant shall remove Tenant’s storefront sign
and any other illuminated signage in the Premises, as well as those other
Improvements as directed by Landlord, at Tenant’s cost, and shall repair any
damage caused by such removal. No termination or expiration of this Lease shall
relieve Tenant from any indemnities, liabilities, monetary obligations or other
obligations which shall have accrued or relate to a period prior to the
termination or expiration of this Lease. Tenant hereby waives any notice now or
hereafter required by law with respect to vacating the Premises on any such
date.

 

ARTICLE 30:  SIGNS.

 

30.1  Subject to Tenant obtaining
all necessary governmental approvals, Tenant shall, at its sole cost and
expense, install signage identifying Tenant’s business in the Premises. All
exterior signage or interior signage which is visible from the exterior of the
Premises which Tenant desires to install or construct at or on the Premises
shall comply with all legal requirements and Landlord’s sign criteria for the
Shopping Center, as the same may exist from time to time, and shall be subject
to Landlord’s prior written approval, which shall not be unreasonably withheld.
Tenant shall pay the cost of providing utility service to such signs and the
cost of all utilities used by same.  Any
taxes upon the signs shall be paid directly by Tenant to the taxing authority.  Tenant shall remove such signs at the end of
the Lease Term.  Tenant, at its sole
cost and expense, shall make all repairs required by reason of the
installation, maintenance and removal of its signs. No sign, picture, placard,
advertisement, notice, lettering, direction or handbill shall be exhibited,
distributed, painted, installed, displayed, inscribed, placed or affixed by
Tenant on any part of the exterior of Premises or the interior of the Premises
which is visible from the exterior of the Premises, the Building or the Common
Area, except with the prior consent of Landlord.  Landlord reserves the exclusive right in its sole discretion to
develop, modify and control all internal and external signage, advertising and
display devices at the Shopping Center. 
Upon notice from Landlord, Tenant shall immediately remove any signs,
advertising or display devices erected or maintained in violation of this Lease
or such sign criteria, and if Tenant fails to do so, Landlord may enter the
Premises and cause such item to be removed; the cost of such removal and of the
restoration of any damaged property, together with a fifteen percent (15%)
administrative fee, shall be paid by Tenant upon demand as additional rent.

 

38

 

ARTICLE 31:   INTENTIONALLY DELETED.

 

ARTICLE 32:  NOTICE.

 

32.1  Wherever in this Lease it
shall be required or permitted that any notice, request, report, communication
or demand be given, served or transmitted by either party to this Lease to or
on the other, such notice or demand shall be in writing and shall be personally
delivered or forwarded by certified mail, return receipt requested, or by
nationally recognized courier service providing written confirmation of
delivery, to the addresses of the parties as follows:

 

if to Landlord:

Krausz Enterprises

Post Office Box 2844

South San Francisco, CA 94083-2844

 

if to Tenant:

 

Chicago Pizza and Brewery, Inc.

16162 Beach Boulevard, Suite 100

Huntington Beach, CA 92647

Attn:  Paul Motenko, CEO

 

Notice shall be deemed to have been given or served on the delivery date
indicated by the United States Postal Service or courier service on the return
receipt or on the date such delivery is refused, unless Tenant is served
personally, in which event the date of personal delivery shall be deemed the effective
date of notice.  Either party may change
its address by providing written notice as specified herein; provided, however,
that all addresses provided must be the actual street address of a residence or
business establishment. If either party fails to notify the other of a change
in address, notice shall be deemed given on the date the other party receives
the returned notice marked “undeliverable.” 
The foregoing method of service shall be exclusive, and each party
waives, to the fullest extent permitted under law, the right to any other
method of service required by any statute or law now or hereafter in force.
Whenever multiple notices are sent or multiple methods of transmitting any
notice are utilized, any time period that commences upon the giving or deemed
giving of such notice shall commence upon the earliest date such delivery is
effectuated, and such time shall not be extended by operation of law or
otherwise because of any later delivery of the same notice.

 

ARTICLE 33:  BROKERS.

 

Landlord and Tenant represent to each other that no broker or finder is
entitled to any commission by reason of the negotiation and execution of this
Lease.  Each party shall indemnify,
defend and protect and hold the other harmless from any costs, losses, claims,
damages, judgments or expenses (including costs of suit and reasonable
attorneys’ fees) for any compensation, commission or fees claimed by any other
real estate broker or agent in connection with this Lease or its negotiation by
reason of any act of such party. Each party’s obligations under this Article 33
shall survive the expiration of the Lease Term or earlier termination of this
Lease.

 

39

 

ARTICLE 34:  FORCE MAJEURE.

 

The occurrence of any of the following events shall excuse such
obligations of Landlord or Tenant as are thereby rendered impossible or
reasonably impracticable for so long as such event continues:  strikes, lockouts, labor disputes, acts of
God, inability to obtain labor, materials or reasonable substitutes therefor,
governmental restrictions, regulations or controls, judicial orders, enemy or
hostile governmental action, civil commotion, fire or other casualty, and other
causes beyond the reasonable control of the party obligated to perform.  Notwithstanding the foregoing (a) the
occurrence of such events shall not excuse Tenant’s obligations to pay Minimum
Rent or additional rent or excuse such obligations as this Lease may otherwise
impose on the party to obey, remedy or avoid such event, and (b) should the
work performed by Tenant or Tenant’s contractor result in a strike, lockout
and/or labor dispute, such strike, lockout and/or labor dispute shall not
excuse Tenant’s performance.

 

ARTICLE 35:  MISCELLANEOUS.

 

35.1  The language in all parts
of this Lease shall be construed as a whole and simply according to its fair
meaning and not strictly for or against either the Landlord or the Tenant, and
the construction of this Lease and any of its various provisions shall be
unaffected by any claim, whether or not justified, that it has been prepared,
wholly or in substantial part, by or on behalf of the Landlord.

 

35.2  This Lease shall be
governed by and construed in accordance with the laws of the State of
California. Each party consents to personal jurisdiction and venue in the State
of California and judicial district in which the Shopping Center is located.

 

35.3  The Article and Section
headings in this Lease are for convenience only and are not a part of this
lease and do not in any way limit or simplify the terms and provisions of this
Lease, nor shall they be used to determine the intent of the parties.

 

35.4  Time is of the essence of
this Lease and each and all of its provisions.

 

35.5  This Lease shall inure to
the benefit of the heirs, executors, ad­ministrators, successors and assigns of
Landlord, and each of them, and shall be binding on the permitted heirs,
executors, ad­ministrators, successors and assigns of Tenant, and each one of
them always providing that nothing in this Section contained shall impair any
of the provisions set forth in Article 16.

 

35.6  No act or conduct of
Landlord, whether consisting of the acceptance of the keys to the Premises or
otherwise, shall be deemed to be or constitute an acceptance of the surrender of
the Premises by Tenant prior to the expiration of the Lease Term hereof, and
such acceptance of sur­render by Tenant must be evidenced by a written
acknowledgment of acceptance of surrender signed by Landlord.

 

35.7 Each party acknowledges that:

 

        A.            This Lease, and the exhibits and schedules attached
hereto, if any (this “Lease”) contain the entire and only agreement between the
parties, and set forth all the covenants, promises, as­surances, agreements,
representations, conditions, warranties, statements, and understandings
(“Representations”) between Landlord and Tenant concerning the Premises and the
Shop­ping Center, and there exist no Representations, either oral or written,
between them other than those in this Lease. 
No oral agreement or representations or prior written matter not 

 

40

 

contained in this instrument shall have any force or effect.  This Lease shall not be modified in any way
or ter­minated, except by a writing executed by both parties.

 

        B.            This Lease supersedes and revokes all previous
negotiations, arrangements, letters of intent, offers to lease, lease
proposals, brochures, Representations, and information conveyed, whether oral
or in writing, between the parties hereto or their respective representatives
or any other per­son purporting to represent Landlord or Tenant.  Tenant acknowledges that it has not been
induced to enter into this Lease by any Representations not set forth in this
Lease, it has not relied on any such Representations, no such Representations
shall be used in the interpretation or construction of this Lease, and Landlord
shall have no liability for any consequences arising as a result of any such
Repre­sentations.

 

        C.            This Lease shall be effective only when it is signed by
both the Landlord and Tenant.  Tenant’s
submission of a signed lease for review by Landlord does not give Tenant any
interest, right, or option in the Premises.

 

35.8  Either Landlord or Tenant
shall, upon request of the other, execute, acknowledge and deliver to the other
a short form memorandum of this Lease, which shall be in form reasonably
satisfactory to the other party, for recording purposes.  The party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto. Within five
(5) business days following the expiration of the Lease Term or the sooner
termination of this Lease, Tenant shall furnish Landlord with a recordable
instrument, reasonably satisfactory to both parties, quitclaiming or releasing
any such short-form memorandum of this Lease. 
Tenant’s obligation under this Section shall survive the Expiration Date
or sooner termination of this Lease.

 

35.9  Tenant covenants for
itself, its heirs, executors, administrators, successors and assigns and all
persons claiming under or through Tenant, that there shall be no discrimination
against or segregation of any person or group of persons on account of race,
color, religion, creed, sex, marital status, sexual orientation, national
origin, ancestry, age, physical handicap or medical condition, in the leasing,
subleasing, transferring, use, occupancy, tenure or enjoyment of the Premises
herein leased, and Tenant and any person claiming under or through Tenant shall
not establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, subtenants, licensees, vendees or customers in the Premises.

 

35.10  Tenant represents,
warrants and covenants to and with Landlord that Tenant shall at no time use or
permit the Premises to be used in violation of any Federal, state and local
laws, including all zoning laws and ordinances, and all regulations, codes,
require­ments, public and private land use restrictions, rules and orders
(collectively, “Regulations”) that apply to the Building or Tenant’s use or
occupancy thereof, including any Regulations which relate to or govern
Hazardous Materials (defined below) and/or the environmental conditions in, on,
un­der or about the Premises, including, but not limited to, air quality, soil
and surface and subsurface water conditions (collectively, “Environmental
Regulations”).  Tenant shall assume sole
and full responsibility for, and shall remedy at its sole cost and expense, all
such violations.  Tenant shall at no
time use, generate, release, store, treat, dispose of, or otherwise deposit,
in, on, under or about the Premises any hazardous or toxic substances, wastes
or related materials (“Hazardous Materials”) or permit or allow any third party
to do so, without Landlord’s express prior written con­sent and Tenant’s
compliance, at Tenant’s sole cost and expense, with all Environmental Regula­tions.  Tenant shall pay or reimburse Landlord for
any costs or expenses incurred by Landlord, including reasonable attorneys’,
engineers’, consultants’ and other experts’ fees and disbursements, incurred or
payable to determine, review, approve, consent to or monitor 

 

41

 

compliance with Environmental Regulations. Landlord may enter the
Premises without any liability whatsoever for the purposes of inspecting the
Premises and inspecting the performance by Tenant of the terms and conditions
hereof.  Except in the case of an
emergency, Landlord shall give Tenant reasonable prior notice of any and all
intended entries or inspections. 
Landlord’s election to conduct such inspections shall not be construed
as ap­proval of Tenant’s use of the Premises or any activities conducted
thereon, and shall in no way con­stitute an assumption by Landlord of any
responsibility whatsoever of Tenant’s use of the Premises or Hazardous
Materials.  Further, Tenant shall give
to Landlord immediate notice of the presence of any Hazardous Materials and/or
the applicability or violation of any Environmental Regulations. For the
purposes hereof, Hazardous Materials shall include, but not be limited to,
asbestos, asbestos-containing matter, and the group of organic compounds known
as polychlorinated biphenyls, as well as substances defined as “hazardous
substances” or “toxic substances” in the Com­prehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et
seq; (“CERCLA”); the Hazardous Materials Transportation Act, 49 U.S.C. Section
1802;  the Resource Conservation
Recovery Act of 1976, 42 U.S.C. Section 6901, et  seq. (“RCRA”);
those substances identified in regulations, orders, and publications adopted
pursuant to California Health and Safety Code and in the regulations adopted
and publications promulgated pursuant thereto and any Environmental Regulation
which now exists or which may be enacted or become effective after the date of
this Lease; all as the foregoing may be amended or recorded from time to time.
In addition, Tenant shall indemnify and hold Landlord harmless from and
against, and shall reimburse the Landlord for any loss, claim, liability,
damages, injuries (to person, property or natural resources), cost, expense,
action or cause of action, including all foreseeable and unforeseeable
consequential damages, directly or indirectly arising out of the release,
presence, use, generation, storage or dis­posal of Hazardous Materials at the
Premises, including, without limitation, the cost of any re­quired or necessary
repair, clean-up, detoxification, or other compliance with any law, regulation
or order with respect to the discharge or removal of such substances and the
preparation of any closure or other required plans, whether such action is
required or necessary prior to or following termination of the Lease or
transfer of title to the Premises, all costs associated  claims for damages to persons or property,
and Landlord’s reasonable attorneys’ and consultants’ fees and court costs, to
the full extent that the same are attributable, directly or indirectly, to the
use, release, generation, storage or disposal of Hazardous Materials on the
Premises.  Tenant’s duty to indemnify
Landlord shall survive the expiration, termination, release and/or cancellation
of the Lease.

 

35.11  As used in this Lease,
“leasable area” means (i) with respect to the Premises, the square footage of
the Premises set forth in Section 1.1; and (ii) with respect to any other area,
the aggregate number of square feet of floor space of all floor levels therein,
excluding any mezzanine space not used for sales, measured from the exterior
surface of building walls and  from the
center line of side demising walls, without deduction for the width of or space
occupied by air conditioning equipment, columns, sprinkler risers, roof drains,
structural braces, expansion joints and/or shear walls. Common Area shall not
be considered “leasable area”.

 

35.12  Wherever in this Lease
consent, approval or permission (collectively referred to in this Section as
“consent”) is required, such consent shall be given in writing and shall not be
unreasonably withheld or delayed, unless otherwise expressly provided.  Landlord shall not be deemed to have
withheld Landlord’s consent unreasonably where Landlord’s right to give Landlord’s
consent is conditioned on Landlord obtaining the consent of any other person,
entity, agency or government authority and such other person, entity, agency or
government authority does withhold its consent.  If Landlord fails to give any consent that a court later holds
Landlord was required to give under the terms of this Lease, Tenant shall be
entitled solely to specific performance and such other remedies as may be
specifically reserved to Tenant under this 

 

42

 

Lease, but in no event shall Landlord be responsible for monetary
damages (including incidental and consequential damages) for such failure to
give consent.

 

35.13  Landlord shall have the
absolute right to lease or permit the use or occupancy of space in the Shopping
Center as Landlord shall determine in Landlord’s sole and absolute
judgment.  Tenant does not rely on the
fact, nor does Landlord represent, that there shall be any specific occupants
or minimum occupancy level of space in the Shopping Center at any time.

 

35.14   If two (2) or more
persons or corporations execute this Lease as Tenant, the word “Tenant” as used
in this Lease shall refer to all such persons or corporations, and the
liability of such persons or corporations for compliance with and performance
of all the terms, covenants and conditions of this Lease shall be joint and
several.  The masculine pronoun used
herein shall include the feminine or the neuter, as the case may be, and the
use of the singular shall include the plural. Nothing contained in this Lease
shall be deemed or construed as creating a partnership, joint venture,
principal-agent, or employer-employee relationship between Landlord and any
other person or entity (including, without limitation, Tenant) or as causing
Landlord to be responsible in any way for the debts or obligations of such
other person or entity.

 

35.15  Should Landlord be or
become a real estate investment trust during the Lease Term, Landlord may
request reasonable amendments to the Lease to preserve its status as such under
applicable law, and Tenant will not unreasonably withhold, delay or defer
Tenant’s consent thereto, provided that such amendments do not (a) increase the
monetary obligations of Tenant pursuant to this Lease or (b) in any other
manner adversely affect Tenant’s interest in the Premises.

 

35.16  To secure the payment of
rent and the performance of Tenant’s other obligations hereunder, Tenant hereby
grants to Landlord an express contractual lien on and security interest in all
equipment, inventory, fixtures, consumer goods, goods and any and all personal
property of any kind or character of Tenant which may be placed in or on the
Premises and also upon all proceeds thereof (including the proceeds of any
insurance which may accrue to Tenant by reason of damage to or destruction of
any such property).  This lien and
security interest are given in addition to, and not in lieu of, Landlord’s
statutory lien and shall be cumulative thereto.  To the extent permitted by law, this lien and security interest
may be foreclosed with or without court proceedings, by public or private sale,
with or without notice, and Landlord shall have the right to become purchaser
at any such sale upon being the highest bidder.  Upon request of Landlord, Tenant shall execute Uniform Commercial
Code financing statements relating to the aforesaid security interest.  Prior to the installation of fixtures,
equipment or improvements permanently affixed to the Premises or which would
otherwise become the property of Landlord under the terms of this Lease, Tenant
shall notify the holder of any security interest in the same of Landlord’s
rights to such property under the terms of this Lease, and at the request of
Landlord, Tenant shall furnish Landlord with evidence of such notification.

 

Notwithstanding anything to the contrary set forth in this Lease,
Landlord hereby subordinates any liens which Landlord may have against Tenant’s
personal property, trade fixtures, equipment or  merchandise therein, whether such lien is statutory,
constitutional, or contractual, or arises out of operation of law or otherwise
(collectively, “Landlord’s Lien”) to any lien(s) on such property in favor of
any lender or personal property lessor holding an interest therein, including but
not limited to any personal property lessor, any vendor or supplier, and/or the
lender under any revolving line of credit or letter of credit facility
financing obtained by Tenant. The foregoing subordination is intended to be
automatic and self-executing, but Landlord shall execute such instruments and
agreements in connection therewith as Tenant (or its lender(s) or lessor(s))
may reasonably 

 

43

 

request from time to time, provided Tenant is not then in default (after
the receipt of notice and expiration of any applicable cure period) and has
opened for business in the Premises, and provided further that such instrument
is reasonably satisfactory to Landlord as to form and content and Landlord is
reimbursed for its reasonable attorneys’ fees and other costs in connection
with its preparation or review of the same..

 

35.17   If Tenant is a
corporation, the person or persons executing this Lease on behalf of Tenant
covenant and warrant as of the date Tenant executes and delivers this Lease
that:  (a) Tenant is a duly constituted
corporation, qualified to do business in the State of California, (b) Tenant
has paid all applicable franchise and corporate taxes, (c) Tenant will file
when due all future forms, reports, fees and other documents necessary to
comply with applicable laws, and (d) the signatories signing on behalf of
Tenant have the requisite authority to bind Tenant pursuant to Tenant’s bylaws
or a certified copy of a resolution authorizing the same by Tenant’s board of
directors.  Landlord hereby represents
and warrants to Tenant that this Lease has been duly executed and delivered by
Landlord.

 

35.18   Landlord and Tenant agree
that the terms of this Lease are confidential and constitute proprietary information
of the parties hereto.  Disclosure of
the terms hereof could adversely affect the ability of Landlord to negotiate
with other tenants of the Shopping Center. 
Each of the parties hereto agrees that such party, and its respective
partners, officers, directors, employees, agents and attorneys, shall not
disclose the terms and conditions of this Lease to any other person without the
prior written consent of the other party hereto except pursuant to an order of
a court of competent jurisdiction; provided, however, that each party may
disclose the terms hereof to its lenders or prospective lenders or its
accountants who audit its financial statements or prepare its tax returns, to
any prospective transferee of all or any portions of its interests hereunder,
to any governmental entity agency or person to whom disclosure is required by
applicable law or regulation and in connection with any action brought to
enforce the terms of this Lease, on account of the breach or alleged breach
hereof or to seek a judicial determination of the rights or obligations of the
parties hereunder, and provided further that Tenant may make such disclosures
as may otherwise be required in connection with Tenant’s status as a
publicly-held company.

 

35.19  This Lease may be executed
in counterparts, each of which is an original but all of which shall constitute
one and the same instrument.

 

This Lease is
continued directly on the Signature Page.

 

44

 

IN WITNESS
WHEREOF, Landlord and Tenant have duly executed this Lease as of the Execution
Date.

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  LANDLORD:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  KRAUSZ
  ENTERPRISES,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  a
  California general partnership

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  F.
  Ron Krausz,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  a
  general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  CHICAGO
  PIZZA & BREWERY, INC.,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  a
  California corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
   

  
														

 

Note: If Tenant is corporation, its authorized officers must sign on
behalf of the corporation and indicate the capacity in which they are signing.
This Lease must be executed by the president, vice president, or chairman of
the board, and the corporate secretary, assistant secretary, chief financial
officer or assistant treasurer, unless the bylaws or a resolution of the board
of directors shall otherwise provide in which event, the bylaws or a certified
copy of the resolution, as the case may be, must be provided to Landlord.

 

45

 

EXHIBIT A

SITE PLAN

 

46

 

EXHIBIT B

RULES AND
REGULATIONS

 

1.               Tenant will deposit
its trash only in the Shopping Center trash receptacles and shall participate
in and comply with any procedures established for the collection, sorting,
separation and recycling of waste products, garbage, refuse and trash.

2.               Tenant shall use its
best efforts to complete, or cause to be completed, all deliveries, loading,
unloading and services to the Premises prior to 10:00 a.m. of each day.  Tenant shall attempt to prevent any delivery
trucks or other vehicles servicing the Premises from parking or standing in
front of the Premises while the Shopping Center is open for business.

3.               Tenant shall not
solicit business in the parking areas or display, paint or place, or cause to
be displayed, painted or placed, any handbills, bumper stickers or other
advertising devices on any vehicle parked in the parking area of the Shopping
Center, whether belonging to Tenant, or to Tenant’s agent, or to any other
person, nor shall Tenant distribute, or cause to be distributed, in the
Shopping Center, any handbills or other advertising devices.

4.               Employees of Tenant
shall not park their automobiles in those automobile parking areas of the
Common Area which Landlord may from time to time designate for use by patrons
of the Shopping Center.  Tenant shall
not leave vehicles in the parking area overnight or long-term nor park any
vehicles in the parking areas other than automobiles, motorcycles, motor driven
or non-motor driven bicycles or four-wheeled trucks. All vehicles must be
parked entirely within the painted stall lines of a single parking stall, and
Tenant may not park or permit its employees to park (i) in areas not striped
for parking; (ii) in driveways; (iii) where “no parking” signs are posted; (iv)
in cross-hatched areas; and (v) in such other areas as may be designated by
Landlord or its parking operator. 
Unless otherwise marked by Landlord, the speed limit within all parking
areas shall be 10 miles per hour.  All
directional signs and arrows must be observed by Tenant.  Washing, waxing, cleaning or servicing of
any vehicle by Tenant is prohibited.

5.               At Landlord’s
election, Tenant and its employees shall park their cars only in those parking
areas, if any, as are from time to time designated for that purpose by Landlord
for employee parking and Landlord may change such designated areas at any time
upon written notice to Tenant. Landlord may, if such violation continues
following Tenant’s receipt of written notice thereof from Landlord (provided
that no such notice shall be required if Tenant has received one (1) or more
written notices of violation from Landlord under this Paragraph within the
preceding twelve (12) months), charge the vehicle owner a commercially
reasonable fine, immobilize and/or tow from the Shopping Center any vehicle
parked in violation hereof, and/or attach violation stickers for notice to such
vehicle.  Tenant further agrees to hold
Landlord harmless and defend Landlord against any and all claims of owner(s) of
the vehicles which are fined or towed or to which violation stickers have been
stuck.

6.               If Landlord elects
or is required to limit or control parking by customers or invitees of the
Shopping Center, whether by validation or parking tickets or any method of
assessment, or any program for free or reduced cost transportation, Tenant
agrees to participate in such validation, assessment or transportation program
under such reasonable rules and regulations as are from time to time
established by Landlord with respect thereto.

 

Exhibit B, Page 1

 

7.               Tenant shall not
display or sell merchandise, or place carts, portable signs, devices or any
other objects in any part of the Shopping Center other than inside the Premises
and Tenant shall not solicit or distribute materials in any manner in any part
of the Shopping Center other than the Premises.

8.               No animals or pets
are permitted in the Premises other than as required by law (e.g., seeing eye
or guide dogs).

9.               Tenant shall not
place, affix or maintain any signs, advertising placards, names, insignia,
trademarks, descriptive material or any other similar item or items outside the
Premises, or on the sidewalk, the storefront, the glass panes and supports of
the show windows, or any window, door, roof or demising wall of the Premises,
except such signs as Landlord shall approve in writing in accordance with this
Lease, nor shall any of said items be placed within the Premises in such a
manner as to materially obstruct a view of Tenant’s store from the Shopping
Center or from any part of the outside, nor shall Tenant place any vents,
structures, improvements, or obstructions of any type or kind on the exterior
of the Premises.  Landlord shall have
the right, without prior notice to Tenant and without any liability, to remove
any of the foregoing from the Premises, except for items as to which Tenant
shall have first received express written approval of Landlord as to size,
type, color, location, copy, nature and display qualities.  Anything to the contrary in this Lease
notwithstanding, Tenant shall not affix any sign to the roof of the Premises.

10.         Tenant shall utilize
no medium which can be heard or experienced outside of the Premises.

11.         Tenant shall not
cause or permit to be used any advertising materials or methods which are
objectionable to Landlord, including without limitation, loudspeakers,
mechanical or moving display devices, unusually bright or flashing lights and
similar devices the effect of which may be seen or heard outside the Premises.

12.         Tenant shall not use
any sign or advertising material that is not of professional quality.

13.         Tenant shall not
erect an aerial or antenna, loudspeaker or other device on the roof or exterior
walls of the Premises. Tenant shall not interfere with broadcasting or
reception from or in the Building or elsewhere. Nor shall Tenant make any
penetration through the roof without prior written consent from the Landlord.

14.         Tenant shall not
install or affix to the exterior of the Premises any lighting or plumbing
fixtures, shades, awnings, or exterior decorations (including exterior
painting).

15.         Tenant shall keep
its display windows well lighted during all operating hours of Tenant, but in
no event less than the hours, if any, established by Landlord as the operating
hours of the Shopping Center plus one hour before opening and one hour after
the closing of the Shopping Center.

16.         Landlord reserves
the exclusive right in its sole discretion to develop, modify and control for
signage, advertising and display devices at the Shopping Center.  Except for such signage as has been
previously approved by Landlord in writing, Tenant shall immediately remove any
signs or advertising or display devices erected or maintained in violation of
this Lease or such criteria, and if Tenant fails to do so after notice from
Landlord, Landlord may enter the Premises and cause such item to be removed,
and the cost of such removal and restoring any damaged property shall be paid
by Tenant upon demand.

 

Exhibit B, Page 2

 

17.         Tenant shall at all
times keep its store well stocked with new items for retail sale, consistent
with good retail merchandising practices and with the use clause and other
provisions of this Lease.

Tenant shall be responsible for the observance of the forgoing rules and
regulations by Tenant’s employees, agents, customers, invitees and guests  Landlord may waive any one or more the rules
and regulations as to any tenant without being construed as having waived same
as to any other tenant. Landlord reserves the right upon two (2) business days’
prior written notice to Tenant, to rescind, alter or waive any rule or
regulation at any time prescribed for the Shopping Center, or to establish
additional rules and regulations when, in Landlord’s sole judgment, it is
necessary, desirable or proper for the best interest of the Shopping Center and
its tenants.

 

Exhibit B, Page 3

 

EXHIBIT C

CONSTRUCTION PROVISIONS

 

I.                                         DESCRIPTION OF LANDLORD’S WORK

None.  Tenant shall accept the
Premises in “as is” condition.  Tenant
has inspected the existing building and acknowledges that the Premises are in
satisfactory condition.  Landlord shall
have no responsibility to pay for any improvements to the Premises or perform
any work with respect to the improvements to the Premises.

 

II.            DESCRIPTION
OF TENANT’S WORK

1.              “Tenant’s Work”
shall have the same meaning as set forth in Section 2.1 of this Lease and shall
include, without limitation, demolition, grading and compaction of the Premises
as a building pad (if applicable), payment for all utilities, utility
connection fees, plan fees, and permits including conditional use permit, the
purchase and/or installation of all of the Improvements necessary to construct
and complete construction of Tenant’s store. 
All costs of Tenant’s Work shall be paid for by the Tenant regardless of
whether or not Tenant actually performed the work.  Tenant’s Work shall be designed, constructed and installed
pursuant to the requirements and criteria as set forth in the Tenant Package.

Tenant shall
retain a designer (“Architect, Engineers and/or Designer”) to prepare
Improvement Plans as defined below. The Architect/Engineer/Designer shall be
licensed to practice in the State of California and be familiar with the
building, the base building plans, and with all applicable laws, statutes,
codes, rules and regulations (collectively, “Laws”) applicable to Tenant’s
Work.

Tenant
shall be required to use a contractor that is licensed, bonded, insured in the
State of California, and pre-approved by Landlord prior to Tenant commencing
work in the Premises.

 

2.             Improvement
Plans

 

a.             Base Building Plans.   Landlord has previously permitted access
and provided site and other additional information sufficient to allow the
Tenant’s Architect/Engineer/Designer to prepare Site Plans and Exterior
Elevations, Civil Site and Utility Plans, Preliminary Plans (all disciplines),
Final Plans (all disciplines) as defined below. Tenant also acknowledges the
Improvement Plan document timeline and milestone dates as defined below.

 

                                                b.             Site
Plans and Exterior Elevations:    By
the “Plan Submittal Date” set forth in Section 2.1 of this Lease, Tenant shall
provide to Landlord Site Plans and Exterior Elevations for Tenant’s building.
The Site Plans shall indicate the location and orientation of the building on
the site, proposed entries, driveways, handicap parking stalls and building
utility locations (transformers, grease interceptors, water supply, etc.) and
landscaping. Exterior Elevations shall depict the building exterior appearance
and finishes from each compass direction. Landlord shall review and approve the
Site Plans and Exterior elevations and/or 

 

Exhibit C, Page 1

 

provide Tenant with its
comments within ten (10) days after Landlord’s receipt of said plans. If
disapproved the Tenant shall make all necessary revisions within ten (10) days
after Tenant’s receipt thereof. This procedure will be repeated until Landlord
ultimately approves the Site Plans and Exterior Elevations. On receipt of
Landlord’s approval, Tenant shall immediately submit approved Site Plans and
Exterior Elevations to the City of Cerritos Department for Conditional Use
Permit and City Council approval.

 

c.             Preliminary Plans:                 Within thirty (30) days after receipt of Landlord’s
approval of the Site Plan and Exterior Elevations, Tenant shall provide
complete Preliminary Plans for Landlord’s review and approval. The Preliminary
Plans shall be based upon and shall incorporate the approved Site, Utility and
Exterior Elevation Plans. These Plans shall include Tenant’s interior space
plan with sufficient information and details of interior finish, exterior
signage, roof plan, etc. Preliminary Plans will also include civil,
architectural, structural, mechanical, plumbing and electrical plans with
sufficient information for Landlord’s review. Landlord shall review and approve
these Plans and/or provide Tenant with its comments within ten (10) days after
Landlord’s receipt of same. If disapproved the Tenant shall make all necessary
revisions within ten (10) days after Tenant’s receipt thereof. This procedure
will be repeated until Landlord ultimately approves the Preliminary Plans.

 

d.             Final Plans:            Within
fifteen (15) days following receipt of Landlord’s approval and comments on the
Preliminary Plans, the Final Plans shall be prepared by the Tenant’s
Architect/Engineer/Designer and submitted to the Landlord for approval. The
Final Plans shall be a fully coordinated and engineered set of civil,
architectural, structural, mechanical, plumbing and electrical plans and
specifications to allow for the full and complete construction of the Tenant
Improvements. Landlord shall review and approve these Plans and/or provide
Tenant with its comments within ten (10) days after Landlord receipt of same.
If disapproved the Tenant shall make all necessary revisions within five (5)
days  after
Tenant’s receipt thereof. This procedure will be repeated until Landlord
ultimately approves the Final Plans. On receipt of Landlord’s approval of Final
Plans, Tenant shall promptly submit approved Preliminary Plans to the City of
Cerritos Building and Safety Department for plan check review and building
permits.

 

 

 

Contractor
Insurance and Indemnity Requirements:

 

 

Tenant’s contractor agrees to indemnify, defend
and hold harmless Landlord’s beneficiaries and their respective agents and
employees from and against all claims, liabilities, losses, damages, and
expenses of whatever nature including those to the person and property of
Tenant’s contractor, its employees, agents, invitees, licensees and others
arising out of or in conjunction with the performance of Tenant’s Work except
to the extent same may arise out of Landlord’s, Landlord’s beneficiaries’ or
their agents’ or employees’ negligence, it being understood that the foregoing
indemnity shall be in addition to the insurance requirements set forth below
and shall not be in discharge of or in substitution for same.

 

Exhibit C, Page 2

 

Before commencement of construction, Tenant’s contractor shall provide
to Landlord evidence of the following insurance:

 

Comprehensive General Liability must include Premises/Operations,
Products/Completed Operations, Blanket Contractual, Personal Injury, Broad Form
PD, Explosion, Collapse and Underground Damage.  This General Liability must be a minimum of $2,000,000.  It must cover a minimum of all operations
other than Auto and Worker’s Compensation, or must carry a minimum rating of “A
plus VII” or better.

 

General Liability must be the “Occurrence” type.  The occurrence coverage provided must apply
to covered losses that occur during the policy period regardless of when the
claim is reported.  Certificates showing
“Claims Made” and “Modified Occurrence” coverage shall not be
acceptable.

 

The Auto insurance policy shall be for “any auto”, thus providing
coverage for owned, rented or hired vehicles of the insured and the insured’s
liability arising from the use of his employees vehicles for a required minimum
of $2,000,000.  If the entity (contractor)
issuing the certificate claims to not own any vehicles, the minimum general
liability insurance acceptable policy shall cover “Non-Owned” and “Hired”
vehicles.

 

The Owner (Landlord) prefers the Umbrella Form of Excess Liability
coverage for a minimum of $2,000,000.

 

Workers’ Compensation policies in the State of California also cover
Employers’ Liability.  The Employers’
Liability policy shall show a minimum statutory limit of $1,000,000 per
accident or disease.

 

NOTICE

 

If the contractor’s Workmen’s
Compensation policy is not furnished

by the same insurance provider as the
General Liability policy and

certificate, an additional
certificate and endorsement must be

submitted from your Workers’
Compensation provider for this

portion of the insurance.  It must name the Landlord as certificate

holder.

 

The insurance as is afforded by this policy, for the benefit of the
additional insured (Landlord as is noted below) shall be primary insurance and
any insurance maintained by the additional insured shall be excess and
non-contributory.

 

Landlord requires that Tenant’s contractor’s certificate of Workers
Compensation insurance include an endorsement indicating that coverage is
primary.

 

In the case of Aircraft Liability or Crane Lifting Liability, etc., specialized
coverage must be provided to the Landlord. 
Contact the Landlord for the limits and the coverage required for any
unusual activities.

 

In all instances other than Worker’s Compensation, the Landlord must be
named as “Additionally Insured” and “Certificate Holder”.  Based on the jobsite, the Landlord should
read as follows:

 

Exhibit C, Page 3

 

                The Krausz Companies, Inc., a California Corporation

                Krausz Enterprises, a California Corporation

                Bank of America (Lender)

 

Each contractor must read and sign the attached Tenant Contractor
Indemnification Release Form.

 

Exhibit
C, Page 4

 

LESSEE CONTRACTOR INDEMNIFICATION RELEASE FORM

 

To
the fullest extent permitted by law, Tenant’s Contractor shall indemnify,
defend, protect, and hold harmless The Krausz Companies, Inc., Krausz
Enterprises, Bank of America, their officers, agents and employees and any
other person designated by Landlord, and officers, directors, members,
managers, shareholders, partners, representatives, agents and employees of each
of them (collectively the “Indemnitiees”) from and against all claims, demands,
liabilities, damages, losses, costs and expenses, including but not limited to
attorney’s and Contractor’s fees and expenses, arising out of or resulting from
the performance of the work, provided that any such claim, damage, loss, cost
or expense is caused in whole or in part by any willful or negligent act or
omission of Tenant’s Contractor, any Subcontractor, anyone directly employed by
any of them or anyone for whose acts any of them may be liable, regardless of
whether or not it is caused in part by a party indemnified hereunder.  Such obligation shall not be construed to
negate, abridge, or otherwise reduce any other right or obligation of
indemnity, which would otherwise exist as to any party or person, described in
this paragraph.

 

In
any and all claims against of the Indemnitiees, the indemnification obligation
under this paragraph shall not be limited in any way by any limitation on the
amount or type of damages, compensation or benefits payable to Tenant’s
Contractor under workmen’s compensation acts, disability benefit acts or other
employee benefit acts.

 

	
   

  	
   

  	
   

  
	
  Tenant Store Name

  	
   

  	
  Contractor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
  Best Plaza Tenant’s
  Address

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Contractor License
  Number

  	
   

  	
   

  

 

 

Exhibit C, Page 5

 

	
  RECORDING REQUESTED BY

  	
   

  
	
  AND WHEN RECORDED MAIL TO:

  	
   

  
	
   

  	
   

  
	
  Attn:

  	
   

  	
   

  
	
  Loan
  No.:

  	
   

  	
   

  
	
   

  	
   

  
				

 

                                                                                         SPACE
ABOVE THIS LINE RESERVED FOR RECORDER’S USE

 

SUBORDINATION,
NONDISTURBANCE AND ATTORNMENT AGREEMENT

 AND TENANT ESTOPPEL

 

 

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

 

                This Subordination, Nondisturbance and Attornment
Agreement (“Agreement”) is entered into as of the           day of                  
, 199     by and among                                                  (“Tenant”),                                                               
(“Borrower”) and                                                                           
(“Lender”).

 

Factual Background

 

                A.            Borrower
owns certain real property in the County of                   , State of California, more particularly
described in the attached Exhibit A. 
The term “Property” herein means that real property together with all
improvements (the “Improvements”) located on it.

 

                B.            Lender
has made or agreed to make a loan to Borrower in the principal amount of $                       (the “Loan”) as
provided in a loan agreement (the “Loan Agreement”).  The Loan is or will be evidenced by a promissory note (the
“Note”) which is or will be secured by a deed of trust encumbering the Property
(the “Deed of Trust”) with an assignment of rents.  The Loan Agreement, the Note, the Deed of Trust, this Agreement
and all other documents and instruments identified in the Loan Agreement as
“Loan Documents” shall be collectively referred to herein as the “Loan
Documents.”

 

                C.            Tenant
and Borrower (as landlord) entered into a lease dated            , 199    (the
“Lease”) under which Borrower leased to Tenant a portion of the Improvements
located within the Property and more particularly described in the Lease (the
“Premises”).

 

                D.            It
is a requirement of the Loan to Borrower that Tenant agree, among other things,
to subordinate Tenant’s rights under the Lease to the lien of the Loan
Documents and to attorn to Lender on the terms and conditions of this
Agreement.  Tenant is willing to agree
to 

 

 

such subordination and
attornment and other conditions, provided that Lender agrees to nondisturbance
provisions, all as set forth more fully below.

 

Agreement

 

Therefore, the parties
agree as follows:

 

                1.             Subordination.  The Loan Documents and all supplements,
amendments, modifications, renewals, replacements and extensions of and to them
shall unconditionally be and remain at all times a lien on the Property prior
and superior to the Lease, to the leasehold estate created by it, and to all
rights and privileges of Tenant under it. 
The Lease and leasehold estate, together with all rights and privileges
of Tenant under that Lease, are hereby unconditionally made subordinate to the
lien of the Loan Documents in favor of Lender. 
Tenant consents to Borrower and Lender entering into the Deed of Trust
and the other Loan Documents.  Tenant
intentionally and unconditionally waives, relinquishes and subordinates all of
Tenant’s right, title and interest in and to the Premises to the lien of the
Deed of Trust and understands that in reliance upon, and in consideration of,
this waiver, relinquishment and subordination, specific loans and advances are
being and will be made by Lender and, as part and parcel thereof, specific
monetary and other obligations are being and will be entered into which would
not be made or entered into but for said reliance upon this waiver,
relinquishment and subordination.

 

                                 Tenant further declares, agrees and acknowledges that in making
disbursements under the Loan Documents Lender has no obligation or duty to, nor
has Lender represented that it will, see to the application of such proceeds by
the person or persons to whom they are disbursed by Lender, and any application
or use of such proceeds for purposes other than those provided for in the Loan
Documents shall not defeat the subordination made in this Agreement, in whole
or in part.

 

                2.             Definitions
of “Transfer of the Property” and “Purchaser.”  As used herein, the term “Transfer of the Property” means any
transfer of Borrower’s interest in the Property by foreclosure, trustee’s sale
or other action or proceeding for the enforcement of the Deed of Trust or by
deed in lieu thereof.  The term
“Purchaser,” as used herein, means any transferee, including Lender, of the
interest of Borrower as a result of any such Transfer of the Property and also
includes any and all successors and assigns, including Lender, of such
transferee.

 

                3.             Nondisturbance.  The enforcement of the Deed of Trust shall
not terminate the Lease or disturb Tenant in the possession and use of the
Premises unless (i) there shall then exist a breach, default, or event of
default on the part of Tenant under the Lease or this Agreement, and (ii)
Lender so notifies Tenant in writing at or prior to the time of the foreclosure
sale that the Lease will be terminated by foreclosure because of such breach,
default or event of default.  The
nondisturbance herein granted is subject to section 5  below.  This
nondisturbance applies to any option to extend or renew the Lease term which is
set forth in the Lease as of the date of this Agreement.

 

Exhibit D, page 2

 

                4.             Attornment.  Subject to Section 3 above, if any Transfer
of the Property should occur, Tenant shall and hereby does attorn to Purchaser,
including Lender if it should be the Purchaser, as the landlord under the
Lease.  Tenant shall be bound to Purchaser
under all of the terms, covenants and conditions of the Lease for the balance
of the Lease term and any extensions or renewals of it which may then or later
be in effect under any validly exercised extension or renewal option contained
in the Lease, all with the same force and effect as if Purchaser had been the
original landlord under the Lease, including the payment of all rent required
to be made by Tenant pursuant to the terms of the Lease.  This attornment shall be effective and
self-operative without the execution of any further instruments upon
Purchaser’s succeeding to the interest of the landlord under the Lease.

 

                Upon receipt by Tenant of written notice from Lender
that Lender has elected to terminate the license granted to Borrower to collect
rents, as provided in the Deed of Trust, and directing the payments of rents by
Tenant to Lender, Tenant shall comply with such direction to pay and shall not
be required to determine whether Borrower is in default under the Loan and/or
the deed of Trust. To the extent that the Lease shall entitle Tenant to notice
of any deed of trust, this agreement shall constitute such notice to Tenant
with respect to the Deed of Trust and Tenant hereby waives notice of any and
all renewals, modifications, extensions, substitutions, replacements, and/or
consolidations of the Deed of Trust.

 

                5.             Subordination
of Options and Rights of First Refusal. 
The Loan Documents and all supplements, amendments, modifications,
renewals, replacements and extensions of and to them shall unconditionally be
and remain at all times a lien on the Property prior and superior to any
existing or future rights of Tenant, whether arising out of the Lease or
otherwise, regarding the use of insurance proceeds or condemnation proceeds
with respect to the Premises or the Property which is inconsistent with the
terms of the Deed of Trust, or to any existing or future rights of Tenant to
exercise any option or right of first refusal:

 

                                (a)           to
purchase the Premises or the Property or any interest or portion in or of
either of them; or

 

                                (b)           to
expand into other space in the Improvements.

 

                                Tenant specifically agrees and
acknowledges that upon any Transfer of the Property, any such purchase or
expansion option or right of first refusal, whether now existing or in the
future arising, shall terminate and be inapplicable to the Property
notwithstanding the nondisturbance granted to Tenant in Section 3 above.  If any option or right of first refusal to
purchase is exercised prior to a Transfer of the Property, any title so
acquired to all or any part of the Property shall be subject to the lien of the
Loan Documents, which lien shall in no way be impaired by the exercise of such
option or right of first refusal. 
Lender specifically reserves all of its rights to enforce any
accelerating transfer, due on sale, due on encumbrance or similar provision in
the Deed of Trust or any other Loan Document.

 

                6.             Notices
of Default; Material Notices; Lender’s Rights to Cure Default.  Tenant shall send a copy of any notice of
breach or default or similar statement with respect to the Lease to Lender at
the same time such notice or statement is sent to Borrower.  In the event of 

 

Exhibit D, page 3

 

any act or omission by
Borrower which would give Tenant the right to terminate the Lease or to claim a
partial or total eviction, or otherwise invoke any of its remedies under the
Lease or any other remedies available to Tenant at law or in equity.  Tenant shall not exercise any such right or
make any such claim until it has given Lender written notice of such act or
omission and Lender shall have either thirty (30) days from and after the
expiration of the time period provided for Borrower in the Lease to cure the
default if the default is monetary or Lender shall have a reasonable time to
cure the default if the default is nonmonetary, so long as Lender pursues such
cure with diligence.  Nothing in this
Agreement, however, shall be construed as a promise or undertaking by Lender to
cure any default of Borrower; Lender shall have the right but not the
obligation to cure any breach or default specified in such notice.

 

                7.             Limitation
on Lender’s Performance.  Nothing in
this Agreement shall be deemed or construed to be an agreement by Lender to
perform any covenant of Borrower as landlord under the Lease.  Tenant agrees that if Lender becomes
Purchaser then, upon subsequent transfer of the Property by Lender to a new
owner, Lender shall have no further obligations under the Lease after said
transfer.

 

                8.             Limitation
on Liability.  No Purchaser who
acquires title to the Property shall have any obligation or liability beyond
its interest in the Property.

 

                9.             Tenant’s
Covenants.  Tenant agrees that
during the term of the Lease, without Lender’s prior written consent, Tenant
shall not:

 

                                (a)           pay
any rent or additional rent more than one month in advance of the time when the
same becomes due under the Lease to any landlord including Borrower; or

 

                                (b)           cancel,
terminate or surrender the Lease, except at the normal expiration of the Lease
term or as provided in Section 6 above; or

 

                                (c)           accept
Borrower’s waiver of or release from the performance of any obligations under
the Lease regarding the length of the term or reduction of rent or otherwise
enter into any amendment, modification, termination or cancellation of the
Lease (in whole or in part) or other agreement relating to the Lease without
Lender’s prior written consent and will not make any payment to Landlord in
consideration of any amendment, modification, termination or cancellation of
the Lease (in whole or in part); or

 

                                (d)           assign
or sublet any portion of the Lease or the Premises, except as expressly
permitted in the Lease; or

 

                                (e)           make
any structural changes to the Premises.

 

                10.           Lender
Not Obligated.  Lender, if it becomes
the Purchaser or if it takes possession under the Deed of Trust, and any other
Purchaser shall not (a) be liable for any damages or other relief attributable
to any act or omission of any prior Landlord under the Lease including
Borrower; or (b) be subject to any offset or defense which Tenant may have
against any prior landlord under the Lease; or (c) be bound by any prepayment
by Tenant of more than 

 

Exhibit D, page 4

 

one month’s installment
of rent; or (d) be obligated for any security deposit not actually delivered to
Purchaser; or (e) be bound by any modification or amendment of or to the Lease
unless the amendment or modification shall have been approved in writing by the
Lender.

 

                11.           Tenant’s
Estoppel Certificate.

 

                                (a)           True
and Complete Lease.  Tenant
represents and warrants to Lender that Exhibit B accurately identifies
the Lease and all amendments, supplements, side letters and other agreements
and memoranda pertaining to the Lease, the leasehold and/or the Premises.

 

                                (b)           Entire
Agreement.  Tenant represents and
warrants that the Lease constitutes the entire agreement between Tenant and
Borrower with respect to the Premises and the Property and Tenant claims no
rights with respect to the Premises or the Property other than as set forth in
the Lease.

 

                                (c)           Tenant’s
Option Rights.  Tenant has no right
or option of any nature whatsoever, whether arising out of the Lease or
otherwise, to purchase the Premises or the Property, or any interest or portion
in or of either of them, to expand into other space in the Improvements or to
extend or renew the term of the Lease, nor any existing claims, defenses or
offsets against rental due or to become due under the Lease, except as
described in the attached Exhibit C.

 

                                (d)           No
Default.  As of the date of this
Agreement, Tenant represents and warrants that to the best of Tenant’s
knowledge there exist no breach or event of default or events that with notice
or the passage of time or both would constitute a breach or event of default
under the Lease on either the Tenant’s part or the Borrower’s, nor are there
any claims, defenses or rights of offset against rental due or to become due
under the Lease or against any of Tenant’s obligations under the Lease, except
as described in the attached Exhibit D. 
Tenant represents and warrants that the Lease is in full force and
effect as of the date of this Agreement.

 

                                (e)           Hazardous
Substances.  Tenant represents and
warrants that it has not used, generated, released, discharged, stored or
disposed of any Hazardous Substances on, under, in or about the Property other
than Hazardous Substances used in the ordinary and commercially reasonable
course of Tenant’s business in compliance with all applicable laws.  Except for such legal and commercially
reasonable use by Tenant, Tenant has no actual knowledge that any Hazardous
Substance is present or has been used, generated, released, discharged, stored
or disposed of by any party on, under, in or about the Property.  As used herein “Hazardous Substance” means
any substance, material or waste (including petroleum and petroleum products),
which is designated, classified or regulated as being “toxic” or “hazardous” or
a “pollutant” or which is similarly designated, classified or regulated under
any federal, state or local law, regulation or ordinance.

 

                12.           Assignment.         Tenant acknowledges and consents to the
assignment of the Lease by Borrower in favor of Lender.

 

Exhibit D page 5

 

                13.           Integrated;
Etc.  This Agreement integrates all
of the terms and conditions of the parties’ agreement regarding the
subordination of the Lease to the Loan Documents, attornment, nondisturbance
and the other matters contained herein. 
This Agreement supersedes and cancels all oral negotiations and prior
and other writings with respect to (a) such subordination (only to such extent,
however, as would affect the priority between the Lease and the Loan
Documents), including any provisions of the Lease which provide for the
subordination of the Lease to a deed of trust or to a mortgage and (b) such
attornment, non-disturbance and other matters contained herein.  If there is any conflict between the terms,
conditions and provisions of this Agreement and those of any other agreement or
instrument, including the Lease, the terms, conditions and provisions of this
Agreement shall prevail.  This Agreement
may not be modified or amended except by a written agreement signed by the
parties or their respective successors in interest.  This Agreement may be executed in counterparts, each of which is
an original but all of which shall constitute one and the same instrument.

 

                14.           Notices.  All notices or other communications given
under this Agreement shall be in writing and shall be given by personal
delivery, overnight receipted courier or by registered or certified United
States mail, postage prepaid, sent to the party at its address appearing
below.  Notices shall be effective upon
delivery or, if mailed, upon the first to occur of receipt of the expiration of
three (3) days after deposit in the United States mail or with the overnight
courier (or on the date when proper delivery is refused.)  Addresses for notices may be changed by any
party by notice to all other parties in accordance with this Section.  Service of any notice on any one Borrower
shall be effective service on the Borrower for all purposes.

 

To Lender:

 

To Borrower:

 

To Tenant:

 

                15.           Attorneys’
Fees.  If any lawsuit, judicial
reference or arbitration is commenced which arises out of or relates to this
Agreement, the prevailing party shall be entitled to recover from each other
party such sums as the court, referee or arbitrator may adjudge to be
reasonable attorneys’ fees, including the costs for any legal services by
in-house counsel, in addition to costs and expenses otherwise allowed by law.

 

                16.           Miscellaneous
Provisions.   This Agreement shall inure to the benefit of and be binding upon
the parties and their respective heirs, successors and assigns.  This 

 

Exhibit D, page 6

 

Agreement is governed by
the laws of the State of California without regard to the choice of law rules
of that State.  This Agreement satisfies
any condition or requirement in the Lease relating to the granting of a
nondisturbance agreement by the Lender. 
As used herein, the word “include(s)” means “include(s) without
limitation,” and the word “including” means “including but not limited
to.”  Lender, at its sole discretion, may
but shall not be obligated to record this Agreement.

 

                17.           Arbitration;
Judicial Reference.  Lender and
Borrower have agreed in the Loan Agreement that any dispute shall be resolved
by arbitration or judicial reference. 
Therefore any controversy or claim between or among the parties hereto
(including Tenant) which arises out of or relates to this Agreement, including
any claim based on or arising from an alleged tort, shall also be determined by
arbitration or judicial reference as set forth below.

 

                                (a)           Judicial
Reference.  In any judicial action
between or among the parties, including any action or cause of action arising
out of or relating to this Agreement or based on or arising from an alleged
tort, all decisions of fact and law shall at the request of any party be
referred to a referee in accordance with California Code of Civil Procedure
Sections 638 et seq.  The parties
shall designate to the court a referee or referees selected under the auspices
of the American Arbitration Association (“AAA”) in the same manner as
arbitrators are selected in AAA-sponsored proceedings.  The presiding referee of the panel, or the
referee if there is a single referee, shall be an active attorney or retired
judge.  Judgment upon the award rendered
by such referee or referees shall be entered in the court in which such
proceeding was commenced in accordance with California Code of Civil Procedure
Sections 644 and 645.

 

                                (b)           Mandatory
Arbitration.  After the Lender’s
Deed of Trust has been released, fully reconveyed or extinguished, any
controversy or claim between or among the parties, including those arising out
of or relating to this Agreement or any claim based on or arising from an
alleged tort, shall at the request of any party be determined by arbitration.  The arbitration shall be conducted in
accordance with the United States Arbitration Act (Title 9, U.S. Code),
notwithstanding any choice of law provision in this Agreement, and under the
Commercial Rules of the AAA.  The
arbitrator(s) shall give effect to statutes of limitation in determining any
claim.  Any controversy concerning
whether an issue is arbitrable shall be determined by the arbitrator(s).  Judgment upon the arbitration award may be
entered in any court having jurisdiction. 
The institution and maintenance of an action for judicial relief or
pursuit of a provisional or ancillary remedy shall not constitute a waiver of
the right of any party, including the plaintiff, to submit the controversy or
claim to arbitration if any other party contests such action for judicial
relief.

 

                                (c)           Real
Property Collateral. 
Notwithstanding the provisions of Subsection (b), no controversy or
claim shall be submitted to arbitration without the consent of all parties if,
at the time of the proposed submission, any obligation of Borrower to Lender is
secured by real property collateral.  If
all parties do not consent to submission of such a controversy or claim to
arbitration, the controversy or claim shall be determined by judicial reference
as provided in Subsection (a).

 

Exhibit D, page 7

 

                                (d)           Provisional
Remedies, Self-Help and Foreclosure. 
No provision of this Section shall limit the right of any party to this
Agreement to exercise self-help remedies such as setoff, foreclosure against or
sale of any real or personal property collateral or security, or to obtain
provisional or ancillary remedies from a court of competent jurisdiction
before, after, or during the pendency of any arbitration or other proceeding.  The exercise of a remedy does not waive the
right of a party to resort to arbitration or reference.  At Lender’s option, foreclosure under a deed
of trust or mortgage may be accomplished either by exercise of power of sale
under the deed of trust or mortgage or by judicial foreclosure.

 

                                (e)           The
parties agree that this arbitration and judicial reference provision shall not
prohibit or limit summary proceedings to obtain possession of real property
pursuant to Chapter 4 of the California Code of Civil Procedure (Section 1159
et seq.) as amended from time to time, or any similar law, statute or ordinance
now or hereafter in effect.

 

                18.           Remedies
Cumulative.         All rights of
Lender herein to collect rents on behalf of Borrower under the Lease are
cumulative and shall be in addition to any and all other rights and remedies
provided by law and by other agreements between Lender and Borrower or others.

 

                19.           Paragraph
Headings.           Paragraph headings
in this Agreement are for convenience only and are not to be construed as part
of this Agreement or in any way limiting or applying the provisions hereof.

 

Exhibit D, page 8

NOTICE: 
THIS AGREEMENT CONTAINS A PROVISION WHICH ALLOWS THE PERSON OBLIGATED ON
YOUR LEASE TO OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR PURPOSES
OTHER THAN IMPROVEMENT OF THE PROPERTY.

 

	
  TENANT:

  	
   

  	
  ,

  
	
   

  	
   

  	
   

  
	
   

  	
  a

  	
   

  	
  ,

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BORROWER:

  	
   

  	
  ,

  
	
   

  	
   

  	
   

  
	
   

  	
  a

  	
   

  	
  ,

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LENDER:

  	
   

  	
  ,

  
	
   

  	
   

  	
   

  
	
   

  	
  a

  	
   

  	
  ,

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
											

 

Exhibit D, page 9

 

 

EXHIBIT
A

PROPERTY DESCRIPTION

 

 

Exhibit A to the
Subordination, Non-Disturbance and Attornment Agreement and Tenant Estoppel

 

1

 

 

EXHIBIT
B

 

IDENTIFY LEASE AND LIST
ALL AMENDMENTS, SUPPLEMENTS, SIDE LETTERS AND OTHER AGREEMENTS AND MEMORANDA
PERTAINING TO LEASE, PREMISES OR PROPERTY

 

 

Exhibit B to the
Subordination, Non-Disturbance and Attornment Agreement and Tenant Estoppel

 

 

1

                                                                                              EXHIBIT
C

 

LIST OF PURCHASE,
EXPANSION, FIRST REFUSAL,EXTENSION AND RENEWAL OPTIONS

 

 

Exhibit C to the
Subordination, Non-Disturbance and Attornment Agreement and Tenant Estoppel

 

1

 

                                                                                              EXHIBIT
D

LIST ANY EXISTING
DEFAULTS OR OFFSETS UNDER LEASE

 

 

 

Exhibit D to the
Subordination, Non-Disturbance and Attornment Agreement and Tenant Estoppel

 

1

 

EXHIBIT
E

 

MODIFIED LEASE TERMS

 

 

 

Exhibit E to the
Subordination, Non-Disturbance and Attornment Agreement and Tenant Estoppel

 

1

 

ACKNOWLEDGMENT

 

STATE OF CALIFORNIA  )

COUNTY OF                                  )

 

                On                           before me, (***INSERT NAME OF NOTARY PUBLIC OR NAME
AND TITLE OF OTHER NOTARIZING OFFICER***)                                          [, a Notary Public in and
for the State of California,] personally appeared (***INSERT NAME(S) OF PERSON(S) SIGNING
THE DOCUMENT***)                                                                  
[and                                       ],  personally known to me (or 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.

 

WITNESS my hand and
official seal.

 

 

	
   

  	
   

  	
   

  
	
  (***Signature***)

  	
   

  	
  

  

  (Space above for official notarial seal)

  

 

 

ACKNOWLEDGMENT

 

STATE OF CALIFORNIA  )

COUNTY OF                                  )

 

                On                                       before me, (***INSERT
NAME OF NOTARY PUBLIC OR NAME AND TITLE OF OTHER NOTARIZING OFFICER***)                                               [, a Notary Public in
and for the State of California,] personally appeared (***INSERT NAME(S) OF PERSON(S) SIGNING
THE DOCUMENT***)                                            [and                                       
],  personally known to me (or
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.

 

WITNESS my hand and
official seal.

 

	
   

  	
   

  	
   

  
	
  (***Signature***)

  	
   

  	
  (Space above for
  official notarial seal)

  

 

 

 

2

EXHIBIT E

MENU (WITH PRICES DELETED)

 

 

Exhibit
E

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00049-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00049-of-00352.parquet"}]]