LAND AND BUILDING LEASE
between
SKYLINE-FRI 12, MATTHEWS, L.P.
a Texas limited partnership, as
LANDLORD
and
HOPS OF MATTHEWS, LTD.
A Florida Limited Partnership
as TENANT
August 29, 2003
<PAGE>
INDEX TO MASTER LAND AND BUILDING LEASE
Article
RECITALS
I.
Demise of Premises
1
II.
Term
2
III.
Rent
2
IV.
Use
6
V.
Acceptance of Demised Premises
6
VI.
Alterations
6
VII.
Repairs and Maintenance
8
VIII.
Compliance with Law
9
IX.
Utilities
9
X.
Indemnity
9
XI.
Insurance
11
XII.
Damage or Destruction
14
XIII.
Eminent Domain
15
XIV.
Covenants of Landlord
17
XV.
Insolvency
18
XVI.
Default
19
XVII.
Unavoidable Delays, Force Majeure
23
XVIII.
No Waiver
24
XIX.
Notices
24
XX.
Access
25
XXI.
Signs
26
XXII.
Improvements and Fixtures
26
XXIII.
End of Term
27
XXIV.
Holding Over
28
XXV.
Assignment and Subletting
28
XXVI.
Landlord's Loan
29
XXVII.
Maintenance of Outside Areas
31
XXVIII.
Certificates
31
XXIX.
Relationship of Parties
32
XXX.
Recording
32
XXXI.
Captions and Section Numbers
33
XXXII.
Applicable Law
33
XXXIII.
Entire Agreement
33
XXXIV.
Landlord's Liability
33
XXXV.
Attorney's Fees
34
XXXVI.
Substitution
34
XXXVII.
Environmental
34
XXXVIII.
Addenda
38
XXXIX.
Counterparts
38
Exhibit A
Location/Legal Description/Address of the Real Property
Exhibit B
Tenant's Personal Property List
Exhibit C
Tenant's Estoppel Certificate
Exhibit D
Memorandum of Lease
Exhibit E
Fixed Rent Allocation
Exhibit F
Subordination, Nondisturbance and Attornment Agreement
Exhibit G
Avado Brands, Inc. Guaranty
<PAGE>
LAND AND BUILDING LEASE
THIS LAND AND
BUILDING LEASE (the
"Lease") is made and
entered into as of
August 29, 2003 (the
"Effective Date"), between SKYLINE-FRI 12, MATTHEWS, L.P.,
a Texas limited partnership("Landlord")
and Hops Of Matthews,
Ltd., a
Florida
limited partnership
("Tenant").
R E C I T A L S
A. Landlord is
the owner of the tract of real property (the "Real
Property"
or "Property"). The Property is more particularly described in Exhibit A
attached hereto and for
purposes hereof shall
include all of Landlord's right,
title and interest in and to
all easements, appurtenances and rights relating to
the Real Property.
B. Tenant
desires to lease from
Landlord the Property
so that Tenant may,
in accordance with and
subject to the terms, conditions, and restrictions of
the
Lease, operate a Hops Grill
& Bar restaurant at the Real Property location. The
buildings and all
improvements
to or on the tract of
Real Property,
including
but not limited to all site
work, landscaping,
fixtures, machinery,
equipment
and systems, utilities, and other improvements, is referred to as the
"Building". The personal property and moveable trade fixtures (other than
Landlord's Equipment, as defined in Section 22.03) located at the Demised
Premises are owned by Tenant
and/or leased from third parties including, without
limitation, those items generally described on Exhibit B attached
hereto, and
are not included in the
definition of Building or Real Property leased to Tenant
pursuant to this
Lease.
C. The Property
and the Building shall
be referred to either
individually
or collectively as the
"Demised Premises."
D. Tenant
desires to lease the Demised Premises from Landlord, and
Landlord
desires to lease the
Demised Premises to Tenant, on the terms and conditions
hereinafter set
forth.
NOW,
THEREFORE,
in consideration of
the lease of the Demised Premises and
the rents, covenants and conditions herein set forth, Landlord and Tenant do
hereby covenant, promise and
agree as follows:
ARTICLE I
DEMISE OF PREMISES
Landlord
does hereby lease unto
Tenant, and Tenant does hereby hire
from
Landlord, for the term hereinafter provided in Section 2.01, the Demised
Premises for the use thereof by Tenant,
Tenant's employees, concessionaires,
licensees, agents, customers and invitees, which use
shall be exclusive except
as otherwise provided in
Section 3.06 or elsewhere herein.
ARTICLE II
TERM
Section
2.01
(a) The "Commencement
Date" of this Lease shall be upon the Effective Date.
The Lease shall continue for a period of twenty (20) years following the
Effective Date (the "Original Lease Term") unless sooner terminated as
hereinafter provided for. The "Lease Term", as
such term is used herein, shall
mean the Original
Lease Term as extended
(or as may be
extended) pursuant to
Section 2.02 below unless
sooner terminated as hereinafter provided for.
(b) This
Lease shall be deemed to be in full
force and effect upon the
Effective Date. Tenant shall be deemed in
possession of the
Demised
Premises
upon the Effective
Date.
Section
2.02 Tenant shall have
the option to extend the term of this Lease
for up to two (2)
separate option periods upon and subject to the terms
set
forth below in this Section
2.02. The first option period (the "First Option
Period") shall commence at
the expiration of the Original Lease Term. The second
option period (the "Second
Option Period") shall commence at the
expiration of
the First Option Period. The First Option Period and the
Second Option Period,
are sometimes referred to herein collectively as the "Option Periods" and
individually as an "Option Period." Each Option Period shall continue for a
period of ten (10)
years from the commencement date of such Option Period.
Except as otherwise
expressly provided herein, all of the terms
and conditions
of this Lease applicable to the Original Lease Term shall continue to apply
during each Option Period. To validly extend the Lease Term beyond the
expiration of the Original
Lease Term with the
First Option Period (a), Tenant
must and shall deliver to Landlord written notice of Tenant's election to so
extend not later than one (1)
year prior to the expiration of the Original Lease
Term and (b)no event
shall have
occurred and be continuing which, with the
passage of time or the giving
of any required notice, would constitute an
Event
of Default (such event,
a "Default).
To validly
extend the Lease Term
for the
Second Option Period , Tenant (x) must and shall
deliver to Landlord
written
notice of Tenant's
election to so extend
not later than six (6) months prior to
the expiration of the First
Option Period, and (y) shall not be in default under
any material term or condition of this Lease as of the
date of such notice or
the commencement of the Second Option Period. Without limiting anything
contained in Article XXXIII
hereof, time is of the essence in the performance of
each provision of this Section 2.02.
Either party,
upon request of the
other,
shall execute and
acknowledge,
in form suitable for
recording,
an
instrument
confirming any such extension, with Tenant paying all applicable recording
costs.
1
<PAGE>
ARTICLE III
RENT
Section 3.01
Tenant shall pay to Landlord, from and after the
Commencement
Date and thereafter
throughout the Lease
Term, the sums set forth in this Lease
as "Rent" without prior demand therefore and without offset, deduction, or
abatement except as may be
otherwise expressly provided herein. Notwithstanding
the foregoing, any amounts due by Tenant to
Landlord hereunder for which no due
date is expressly
specified herein
(e.g., the first day of each month) shall be
due within ten (10) days
following the giving to Tenant by Landlord
of written
notice of such amounts due, except if some other period of time following
written notice or demand is
otherwise expressly
provided below, then such other
period shall apply.
As used herein,
"Rent" shall be deemed
to include not only
Fixed Rent but also all
additional
sums payable or owed by Tenant
under this
Lease, including without limitation as set forth in Sections 3.05 and 3.07
("Additional Rent"). Except
as otherwise expressly provided herein, in the event
of nonpayment by Tenant of any Rent,
Landlord shall have the same rights
and
remedies in respect thereof
regardless of whether
such Rent constitutes
Fixed
Rent or Additional
Rent. All payments of Rent to be paid to
Landlord shall
be
paid to Landlord at its
election, in one of
the following manners
(which shall
be disclosed in writing to
Tenant and may be changed only by a writing delivered
to Tenant): (1) by mail at the Landlord's office indicated on the first
page
hereof or (2) by mail to any
other place designated
by Landlord
upon at
least
thirty (30) days' prior
written notice to Tenant. If the Commencement Date shall
not be the first day of a
calendar month, then
the rent for such month shall be
prorated based upon a Three
Hundred Sixty-Five (365) day year.
Section 3.02
Intentionally left blank.
Section 3.03
Fixed Rent: The "Fixed Rent" for the Demised Premises for
each
month of the Lease Term prior
to the fifth
anniversary of the Commencement Date
shall be $14,687.50. On the fifth anniversary of the Commencement Date, and
thereafter, on each fifth anniversary of such date
throughout the Lease
Term,
(i.e., the fifth, tenth and
fifteenth anniversary
of the Commencement Date, and
subject to Section 2.02, the
twentieth, twenty-fifth, thirtieth and thirty-fifth
anniversary of the
Commencement
Date) the monthly
Fixed Rent shall increase by
ten percent (10%) over the
Fixed Rent charged in the immediately preceding month
of the Lease Term,
and such increase
shall apply for the
ensuing five (5) year
period. Tenant shall pay to Landlord Fixed Rent in advance,
without demand
therefore, beginning on the
Commencement Date and thereafter on the first day of
each calendar month
commencing with the Commencement Date.
Section 3.04
Intentionally left blank.
Section 3.05
Additional Rent.
(a) All "Real
Estate Taxes" (as hereinafter defined) assessed against,
or
allocable or attributable to
the Demised Premises (whether accruing prior to, or
after the Effective Date and during the Lease Term) shall be deemed to be
Additional Rent and shall be payable by Tenant as contemplated by Section
3.05(b) below. Real Estate Taxes for the last year of the
Lease Term shall be
prorated based upon the most recent tax bill and shall be paid by Tenant
to
Landlord upon termination of the Lease.
As used herein,
the term "Real
Estate
Taxes" means all taxes and
general and special assessments and other impositions
in lieu thereof, as a supplement thereto and any
other tax which is measured by
the value of real property
and assessed on a uniform basis against the owners of
real property, including excise taxes described in Section 3.05 (d) and
any
substitution in whole or in part of any of the
foregoing due to a future change
in the method of taxation. Nothing contained in this Lease, however, shall
require the Tenant to pay any
estate, inheritance, corporate, profits, transfer,
franchise or income tax of
Landlord, nor shall any of same be deemed Real Estate
Taxes, unless same shall be
specifically imposed in substitution for, or in lieu
of, Real Estate Taxes, and then only to the extent
same are limited to the
Demised Premises as if it were the only
property owned by Landlord. If by law,
any general or special
assessment
or like charge may be paid in installments
without any penalty or
interest , then such
assessment may be paid by Tenant in
such installments and Tenant shall only be liable
for the portion thereof that
is allocable or attributable
to the Lease Term or any portion thereof.
(b) Tenant
shall pay the Real
Estate Taxes directly to the applicable
taxing authority within fifteen (15) days prior to the earlier of (i) the
delinquency thereof, or (ii) the date that any
penalty or interest would accrue
on any unpaid installment. Landlord shall have the tax bill for the
Demised
Premises sent directly by the
applicable taxing authority to Tenant, and Tenant
shall pay the tax bill
directly to the collecting authority, and in such event
Tenant shall provide Landlord
a copy of the paid receipt for each installment of
Real Estate Taxes so paid. If
Tenant fails to pay the Real Estate Taxes when due
hereunder, then Tenant shall, in addition to all other
remedies available to
Landlord, reimburse Landlord for any and all
penalties or interest,
or portion
thereof, incurred by Landlord as a result
of such nonpayment or late payment by
Tenant.
2
<PAGE>
(c) Tenant shall have the right at its own
cost and expense,
to seek an
abatement of Real Estate
Taxes or a reduction
in the valuation of the
Demised
Premises and/or contest the applicability of any Real Estate Taxes to the
Demised Premises or the improvements thereon Without limiting the foregoing,
Tenant shall have the right
to contest or cause to be contested, by appropriate
legal proceedings conducted in good faith and with
due diligence, at
Tenant's
sole cost and expense,
the amount and
validity or
application, in whole
or in
part, of any Real Estate Taxes or lien
therefore,
provided that Tenant shall
have deposited with Landlord
adequate reserves for the payment of the
taxes as
required by Landlord
(but in no event less
than the amount of Real Estate Taxes
in dispute), unless paid in full under
protest or Tenant
shall have
furnished
such security as may be
required in the
proceeding. In any
instance where
any
such action or such
proceeding is being
undertaken by Tenant,
Landlord shall
reasonably cooperate with Tenant, at no cost
or expense to Landlord, including
participating (at Tenant's sole cost and expense) in any
proceeding
in which
Landlord is a necessary
party and execute any and all documents approved by
Landlord required in connection therewith. Tenant shall be entitled to
any
refund (after the deduction
therefrom of all
reasonable
expenses incurred by
Landlord in connection therewith) of any Real Estate Taxes and penalties or
interest thereon received by
Tenant or Landlord,
whether or not such refund was
a result of proceedings
instituted by Tenant,
which have been paid by Tenant or
paid by Landlord for the
benefit of Tenant and repaid to Landlord by Tenant.
(d) Tenant shall
pay to Landlord, with
each payment of Rent due hereunder,
all taxes imposed upon
Landlord with respect to rental or other payments in the
nature of a gross
receipts tax, sales
tax, privilege tax or
the like,
whether
imposed by a federal, state
or local taxing authority, which when added to
such
rental or other payment shall
yield to Landlord after deduction of all such
tax
payable by Landlord with respect to all such payments a net amount which
Landlord would have realized from such payment had no such tax
been
imposed.
Tenant shall have the right to
contest any such taxes provided for in this
Section 3.05(d) in accordance
with provisions
relating to contest
set forth in
Section 3.05(c) above.
Notwithstanding the
foregoing, but without
limiting the
preceding obligation of Tenant to pay all
taxes which are imposed on the rental
or other payments due under this Lease,
in no event will
Tenant be required to
pay any net income taxes
(i.e. taxes which are
determined
taking into
account
deductions for depreciation,
interest, taxes and ordinary and necessary business
expenses), franchise taxes of Landlord, any
transfer taxes of Landlord or other
tax imposed with respect to
the sale, exchange or other disposition by Landlord,
in whole or in part,
of the Property or
Landlord's
interest in the Lease
(not
including, in any event, any increase in ad valorem taxes
or Real Estate Taxes
resulting from such
transfer).
Section 3.06
Matters of Record:
Tenant hereby accepts the Demised Premises
in the condition as of the date of possession hereunder, subject to all
applicable zoning, municipal, county, and state laws, ordinances, and
regulations, including private easements and restrictions, (whether or not
evidence thereof is recorded in the public
records), governing and
regulating
the use of the Demised
Premises, and accepts this Lease subject
thereto and to
all matters disclosed thereby, and by any exhibits attached hereto. Tenant
acknowledges that neither Landlord nor Landlord's agent has made any
representation or warranty as to the suitability
of any Leased Property for the
conduct of the Tenant's
business.
Section 3.07
Additional
Charges: Tenant and Landlord agree that the
rent
accruing under this Lease shall be net to Landlord and that all Real Estate
Taxes (subject to contest rights), costs, promotional fees, common area
maintenance fees, expenses and charges of every kind and
nature, including
reasonable attorneys' fees incurred by Landlord in
enforcing the provisions of
this Lease, whether or not any legal
proceedings
are commenced ("Additional
Charges") arising in connection with or relating to the Demised Premises
(excluding, however, (1) taxes other than Real Estate
Taxes for which Landlord
is responsible under Section 3.05(a),
and (2) any charges
resulting solely and
directly from Landlord's gross negligence or willful misconduct and (3) any
payments for interest or principal under any fee mortgage relating to the
Demised Premises) which may arise or become
due at any time
during the
Lease
Term) and that all Additional
Charges shall be paid
by Tenant. With
respect to
any Additional Charges other
than Real Estate Taxes, Landlord shall bill
Tenant
for such charges from time to time by
delivery to Tenant of a true and accurate
statement (including reasonable backup documentation) showing in reasonable
detail the Additional
Charges. Tenant shall pay such Additional
Charges within
ten (10) days after
receipt of such bill. Landlord will provide reasonable
cooperation to Tenant at Tenant's sole cost and expense in disputing any
Additional Charges that are assessed
against Landlord or
the Property by third
parties. Tenant hereby
indemnifies, defends, protects, and saves Landlord
wholly
harmless from and against any
and all Additional
Charges. As used
herein, the
term "Additional Rent" shall
include, without limitation, all of the following:
(1) any and all Additional
Charges for which Tenant is responsible hereunder, or
which Tenant otherwise
assumes or agrees to
pay; (2) all interest and penalties
owed to third parties that
may accrue on such Additional Charges if Tenant fails
to pay them timely; (3) all other damages, costs and expenses (including,
without limitation,
reasonable attorneys'
fees and other legal and court costs)
which Landlord may suffer or
incur in enforcing this Lease; and (4) any and all
other sums which may become due by reason of Tenant's default or failure to
comply with its obligations
under this Lease.
3<
<PAGE>
Section
3.08 Late Charge:
In addition to all
other remedies set
forth in
this Lease, any payment of Fixed Rent due to
Landlord not received
by Landlord
within ten (10) days after
such payment is due
hereunder,
and any payment of
Additional Rent due to Landlord not received by Landlord
when due hereunder,
shall be deemed delinquent and cause Tenant to incur a late charge of five
percent (5%) on each delinquent payment (or the applicable portion of such
payment that is delinquent), due and payable immediately with the delinquent
Fixed Rent or delinquent
Additional Rent, as the case may be.
Section 3.09
Character of Demised Premises: From the Commencement Date
and
thereafter throughout the Lease Term, Tenant shall conduct its business in
a
first class and reputable manner consistent with Tenant's prior operating
practices with respect to the
Demised Premises.
Tenant shall open and operate a
Hops Bar & Grill
restaurant
at the Demised
Premises continuously during all
hours which is customary
for similarly
situated Hops Bar
& Grill
restaurants,
subject to temporary closing
due to casualty,
condemnation,
remodeling,
Lease
assignment or subletting permitted pursuant to Article XXV, or other force
majeure condition.
The character of the
occupancy of the Demised Premises is an
additional consideration and
inducement for the granting of this Lease.
Section 3.10 Guaranty. Avado Brands, Inc, a Georgia corporation
("Guarantor") shall guaranty Tenant's
obligations under this
Lease pursuant to
the Guaranty Agreement substantially in the form of Exhibit G, executed
as of
the Effective
Date.
ARTICLE IV
USE
Tenant
may use the Demised Premises to operate a Hops Bar & Grill
restaurant, including beer, wine and liquor sales,
and such other
incidental
uses related thereto in Tenant's discretion or another nationally branded
restaurant concept. Tenant may use the Demised Premises only for the uses
expressly permitted under this Section,
and for no other use
without the prior
written consent of Landlord,
which approval shall
not be unreasonably withheld,
delayed or conditioned. Notwithstanding any other provision of this
Article,
Tenant shall not use, or suffer or permit any person or entity to use,
the
Demised Premises or any portion
thereof for any purpose in violation of any
applicable law, ordinance or
regulation applicable to the Demised Premises.
ARTICLE V
ACCEPTANCE OF DEMISED PREMISES
Tenant
acknowledges
that it has
owned the Demised Premises prior to
execution of this Lease and has had the opportunity to perform all tests,
studies and inspections that it desires, and that Tenant is accepting the
Demised Premises in its AS IS condition existing on the date Tenant
executes
this Lease.
ARTICLE VI
ALTERATIONS
Subject to the
provisions of this Article VI, Tenant shall have no right
to
make changes, alterations or additions (collectively, "Alterations") to the
Building in excess of One
Hundred Thousand Dollars ($100,000.00) without prior
written consent of Landlord, which Landlord agrees it will not withhold
unreasonably; provided, however, in no event shall any Alterations be made
which, after completion, would: (i) reduce the value of the
Building as it
existed prior to the time that said
Alterations
are made; or (ii) adversely
affect the structural
integrity of the
Building. Such amount
shall increase by
five percent (5%) on each
anniversary of the
Effective Date of this Lease. Any
and all Alterations made by Tenant shall be at
Tenant's sole cost and expense.
Prior to the commencement of construction, Tenant shall deliver promptly to
Landlord detailed cost estimates for any
proposed Alterations,
as well as
all
drawings, plans and other information regarding such Alterations (such
estimates, drawings, plans and other information are
collectively referred
to
herein as the "Alteration
Information"),
Landlord's
review and/or approval
of
any Alteration Information shall in no event constitute any
representation
or
warranty of Landlord
regarding (x) the compliance of any Alteration Information
with any governmental or
legal requirements,
(y) the presence of absence of any
defects in any Alteration Information, or (z) the safety or quality of
any of
the Alterations constructed in accordance
with any plans or
other
Alteration
Information. Landlord's review and/or approval of any of the Alteration
Information shall not preclude recovery by Landlord against Tenant based
upon
the Alterations, the Alteration Information,
or any defects
therein. In making
any and all Alterations, Tenant also shall comply with all of the following
conditions:
(a) No
Alterations shall be undertaken until Tenant shall have (i)
procured
and paid for, so far as the same may be
required, all necessary permits and
authorizations of all governmental authorities having jurisdiction over such
Alterations, and (ii) delivered to Landlord at
least fifteen (15) days prior to
commencing any such
Alterations written
evidence acceptable to
Landlord of all
such permits and
authorizations. Landlord shall, to the extent necessary (but
at
no cost, expense, or risk of
loss to Landlord), join in the application for such
permits or authorizations
whenever necessary,
promptly upon written
request of
Tenant.
4
<PAGE>
(b) Any and all
structural
Alterations of the
Building shall be performed
under the supervision of an
architect and/or structural engineer.
(c) Tenant shall notify Landlord at least fifteen (15) days prior to
commencing any Alterations so as to permit,
and Tenant shall
permit,
Landlord
access to the Demised
Premises in order to
post and keep posted
thereon such
notice(s) as may be provided or required by applicable law to disclaim
responsibility for any
construction on the Demised Premises.
(d) Any and all Alterations shall be conducted and completed in a
commercially reasonable time
period (subject to the terms of Article XVII), in a
good and workmanlike manner, and in compliance with all applicable laws,
municipal ordinances, building codes and permits, and requirements of all
governmental authorities having jurisdiction
over the Demised Premises, and of
the local Board of Fire
Underwriters, if any; and, within thirty (30) days after
completion of any and all Alterations, Tenant shall obtain and deliver to
Landlord a copy of the amended certificate of occupancy for the Demised
Premises, if required under
applicable law or by governmental authority. To the
extent reasonably practicable, any and all Alterations shall be made and
conducted so as not to
disrupt Tenant's
business; provided however that
major
alterations which require closing of the business on a
temporary basis may
be
made so long as otherwise in
compliance with the provisions of this Lease.
(e) The cost of
any and all Alterations shall be promptly paid by Tenant
so
that the Demised Premises at all times shall be free of any
and all liens for
labor and/or materials supplied for any Alterations subject to the next
succeeding sentence. In the event any such lien shall
be filed, Tenant
shall,
within five (5) days after receipt of notice of such
lien, deliver written
notice to Landlord
thereof, and Tenant shall, within thirty (30) days after
receipt of notice of such lien, discharge the same by bond or payment of
the
amount due the lien
claimant. However, Tenant may in good faith
contest
such
lien provided that within
such thirty (30) day period Tenant provides Landlord
with a surety bond reasonably
acceptable to
Landlord, protecting
against
said
lien.
ARTICLE VII
REPAIRS AND MAINTENANCE
Tenant,
at its sole cost and
expense, shall
maintain each of the
Demised
Premises and each part
thereof, structural and non-structural, in good order
and
condition, ordinary wear and tear and damage
by casualty excepted, and, subject
to the terms and conditions
of Article VI, if and as applicable, shall make any
necessary Repairs thereto, interior and exterior, whether extraordinary,
foreseen or unforeseen but
subject to the casualty and condemnation provisions
of this Lease. When used in this Article VII, the
term "Repairs" shall
include
all such replacements, renewals, alterations, additions and betterments
necessary for Tenant to
properly maintain the Demised Premises in good order and
condition and in compliance
with all applicable
laws. The adequacy of,
any and
all Repairs to the Demised
Premises required or conducted pursuant to this
Article VII shall be measured
by and meet, at a
minimum, all of the
following
standards: (1) at least equal in quality of
material and workmanship to the
condition of the Demised
Premises prior to the need for such
Repairs; (2) at
least equal in quality of
material and workmanship to the condition of buildings
and related facilities of similar construction and class in the general
geographic area of the
Demised Premises are generally maintained; (3) avoidance
of any and all structural
damage or injury to
the Building or persons therein;
(4) any and all maintenance, service, operation and repair standards and
requirements set forth by Guarantor for its (or its subsidiaries' or
affiliates') restaurants; (5) any and all repairs, replacements or upgrades
necessary to ensure compliance with the rules and regulations of all
governmental agencies having jurisdiction over
the Demised Premises,
including
all Environmental Laws (as defined below); and (6) no mold which inhibits
or
impairs the intended use of any Demised
Premises shall be permitted to
remain
unabated at any Demised
Premises. Landlord shall have no duty whatsoever to
maintain, replace, upgrade,
or repair any portion of the Demised Premises except
in the event the damage
necessitating such
repair is solely and directly caused
by the gross negligence or willful misconduct of Landlord.
If Tenant fails
or
neglects to commence and diligently proceed with all necessary Repairs or
fulfill its other
obligations
as set forth above
within twenty (20) days after
receipt of notice of the need
therefore or otherwise
obtaining knowledge of the
need therefore (except in
emergency situations
involving risk of further damage
to the Demised Premises or injury to persons in
which case no such time period
shall be applicable) and/or fails to diligently make such repairs within a
reasonable time period, then Landlord or its agents may enter the Demised
Premises for the purpose of
making such Repairs or fulfilling those obligations.
All costs and expenses
incurred as a
consequence of Landlord's action shall be
paid by Tenant to Landlord as
Additional
Rent within
fifteen (15) days after
Landlord delivers to Tenant copies of invoices for such Repairs or other
obligations. These invoices shall be prima
facie evidence of the payment of the
charges to be paid by
Landlord. Except in the case of emergency, Landlord shall
give Tenant ten (10) days'
written notice before taking any such action.
5
<PAGE>
ARTICLE VIII
COMPLIANCE WITH LAW
Tenant
shall, throughout the Lease Term, at its sole cost and expense,
comply with all laws and
regulations
of federal,
state, municipal and local
governments, departments, commissions and
boards pursuant to law, or directives
or orders issued pursuant thereto, including without limitation all
Environmental Laws and the Americans
With Disabilities Act, with respect to,
regarding, or pertaining to
the Demised Premises. Notwithstanding the foregoing,
Tenant may, subject to the terms and
conditions
of this Section, contest or
appeal such requirements or orders. To the
extent any such contest or appeal by
Tenant suspends any and all
obligations on the part of Tenant, Landlord, or the
Demised Premises to comply with such
requirements or
orders, and suspends
any
and all applicability of such requirements or orders to the
Demised
Premises,
Tenant shall not be required
to comply with any such laws, regulations, orders,
requirements or rules. In no event shall any such appeals, contests or
proceedings pursued by Tenant subject Landlord to criminal liability or any
civil liability. Upon final
resolution of any such appeal, proceeding or contest
pursued by Tenant,
Tenant shall comply
with the judgment,
finding or order
of
the governmental authority so
resolving such appeal,
proceeding or contest, and
shall be liable in full for
any and all fines,
penalties,
charges or costs
of
any type whatsoever which
accrue during the pendency of any contest or appeal.
ARTICLE IX
UTILITIES
Without
limiting any of Tenant's obligations set forth in Article III,
Tenant shall be solely responsible for, and shall pay the cost of all
utility
services provided to the
Demised Premises throughout the Lease Term.
ARTICLE X
DISCLAIMER AND INDEMNITY
Section
10.01
As used in this Lease, "Landlord Parties" means,
collectively, Landlord, Landlord's lenders, and Landlord's
members,
partners,
trustees, ancillary trustees,
officers, directors, shareholders, beneficiaries,
agents, employees and
independent contractors, succesors, assigns and lenders,
to any of the foregoing. To the extent not prohibited by law, none of the
Landlord Parties shall be (and Tenant hereby agrees that they shall not
be)
liable, under any circumstances (except only Landlord (and not any other
Landlord Parties) in the event of, and then only to the extent directly
attributable to, Landlord's gross negligence or willful misconduct) for any
loss, injury, death or damage to person or
property (including
but not limited
to the business or any loss
of income or profit
therefrom) of Tenant,
Tenant's
members, officers, directors, shareholders, agents, employees, contractors,
customers, invitees or any other person in or about the Demised Premises,
whether the same are caused by (1) fire,
explosion,
falling plaster, steam,
dampness, electricity, gas, water, or rain or (2) breakage,
leakage or
other
defects of sprinklers, wires,
appliances, plumbing fixtures, water or gas pipes,
roof, air conditioning,
lighting fixtures,
street improvements,
or
subsurface
improvements or (3) theft,
acts of God, acts of the public enemy, riot, strike,
insurrection, war, court order, requisition or order of
governmental
body or
authority, or (4) any act or omission of any other occupant of the Demised
Premises or any other party,
or (5) operations in
construction of any
private,
public or quasi-public work,
or (6) any other cause, including damage or
injury
which arises from the condition of the Demised Premises, from occupants of
adjacent property, from the public, or from any other sources or
places, and
regardless of whether the cause of such damage or injury or the means of
repairing the same are inaccessible to Tenant, or which may arise through
repair, alteration or
maintenance of any part of the Demised Premises or
failure
to make any such repair, from any condition or defect in, on or about the
Demised Premises including
any "Environmental Conditions" (as defined in Article
XXXVII) or the presence of
any mold or any
Hazardous Materials
(as defined
in
Article XXXVII), or from any
other condition or cause whatsoever.
Section
10.02 Tenant hereby fully and forever releases, discharges,
acquits, and agrees to indemnify,
protect, defend (with counsel selected by
Tenant and approved by
Landlord, such
approval not to be unreasonably withheld)
and hold the Demised
Premises, and each of
the Landlord Parties wholly free and
harmless of, from and against
any and all claims,
demands, actions,
causes of
action, settlements,
obligations,
duties, indebtedness,
debts,
controversies,
losses, remedies, chooses in action, liabilities, costs, penalties, fines,
damages, injury, judgments, forfeiture, losses (including without
limitation
diminution in the value of
the Demised Premises) or expenses (including without
limitation attorneys' fees, consultant fees, testing and investigation
fees,
expert fees and court costs),
whether known or
unknown, whether
liquidated
or
unliquidated: (a) arising out of or in any way
related to or resulting directly
or indirectly from: (i) the
use, occupancy or
activities of Tenant, its agents,
employees, contractors or invitees in or
about the Demised
Premises, (ii)
any
failure on the part of Tenant to comply with any applicable law, including
without limitation all
Environmental Laws; (iii) any default or breach by
Tenant
in the performance of any obligation of Tenant under this
Lease; and (iv)
any
other loss, injury or damage
described in Section 10.01 above caused (whether by
action or omission) by
Tenant, its agents,
employees, contractors
or invitees;
and (v) in connection with mold at any Demised Premises; and (b) whether
heretofore now existing or
hereafter arising out
of or in any way related to or
resulting directly or indirectly
from the presence or
"Release" (as defined in
Article XXXVII) at, on, under to or from
the Demised Premises
of any Hazardous
Material; provided, however, that the foregoing indemnity shall not be
applicable to the extent any
such claims are directly attributable to the
gross
negligence or willful
misconduct of such
Landlord Party. All of the personal or
any other property of Tenant
kept or stored at, on or about the Demised Premises
shall be kept or stored at
the risk of Tenant.
6
<PAGE>
Section
10.03 Tenant hereby fully and forever releases, discharges,
acquits, and agrees to indemnify,
protect, defend (with counsel selected by
Tenant and approved by
Landlord, such
approval not to be unreasonably withheld)
and hold the Demised
Premises, and all Landlord Parties wholly free and
harmless
of, from and against any and
all claims,
demands, actions, causes of action,
settlements, obligations, duties, indebtedness,
debts, controversies,
losses,
remedies, chooses in action, liabilities, costs, penalties, fines, damages,
injury, judgments,
forfeiture,
losses (including
without limitation diminution
in the value of the Demised
Premises) or expenses
(including without limitation
attorneys' fees, consultant fees, testing and investigation
fees, expert
fees
and court costs), whether known or unknown, hereafter arising, whether
liquidated or unliquidated,
arising out of or in any way related to or resulting
directly or indirectly from work or labor performed, materials or supplies
furnished to or at the request of Tenant or in connection with obligations
incurred by or performance of any work done for
the account of Tenant in, on or
about the Demised
Premises.
Section
10.04 Landlord and Tenant each (a) represent to the other
party
that such representing party has dealt with no broker or
brokers in connection
with the negotiation,
execution and delivery of this Lease and (b) hereby
agrees
to indemnify, defend, protect (with counsel selected by the other party)
and
hold such other party
wholly free and
harmless of, from and against any and all
claims or demands for any and
all brokerage commissions and/or finder's fees due
or alleged to be due as a
result of any agreement or purported agreement made by
such indemnifying
party.
Section 10.05
The provisions of this Article X shall survive the
expiration
or sooner termination of this
Lease. Tenant hereby
waives the provisions of any
applicable laws restricting
the release of claims which the releasing parties do
not know or suspect to exist
at the time of release, which, if known, would have
materially affected Tenant's decision to
agree to this release. In this regard,
Tenant hereby agrees,
represents, and
warrants to Landlord that Tenant realizes
and acknowledges that factual matters now unknown
to Tenant may hereafter give
rise to causes of action,
claims, demands, debts, controversies, damages, costs,
losses and expenses which are
presently unknown,
unanticipated and unsuspected,
and Tenant further
agrees, represents and warrants that the release
provided
hereunder has been
negotiated and agreed
upon in light of that
realization and
that Tenant nevertheless hereby intends to release, discharge and acquit
the
parties set forth herein
above from any such unknown causes of action, claims,
demands, debts,
controversies,
damages, costs, losses and expenses which are in
any manner set forth in or
related to this Lease,
the Demised Premises
and all
dealings in connection
therewith.
ARTICLE XI
INSURANCE
Section 11.01
Tenant will maintain,
with financially
sound and
reputable
insurers, public liability,
fire and extended coverage and property damage, rent
loss or business interruption and other types of insurance with
respect to its
business and the Property
(including
all Buildings now existing or
hereafter
erected thereon) against all losses, hazards, casualties, liabilities and
contingencies as customarily carried or maintained by persons
of
established
reputation engaged in similar businesses and as Landlord shall require and
in
such amounts and for such
periods as Landlord shall require. Without limitation
of the foregoing,
Tenant shall
maintain or cause to
be maintained policies
of
insurance with respect to the Real Property in the following amounts and
covering the following
risks:
(a)
Comprehensive "all
risk" insurance covering loss or damage to the Real
Property caused by fire, lightning, hail, windstorm, explosion, vandalism,
malicious mischief, and such
other losses, hazards, casualties, liabilities and
contingencies as are normally and usually covered by "All Risk" or
special
property policies in effect where such Real Property is located endorsed to
include all of the extended coverage perils and other broad form perils,
including the standard "all
risks" or Special clauses, with such endorsements as
Landlord may from time to
time reasonably require including, without limitation,
building ordinance or law coverage
sufficient to provide
coverage for costs to
comply with building and
zoning codes and ordinances including demolition
costs
and increased cost of
construction.
(b) The
policy(ies)
referred to in Subsection (a) above shall be in
an
amount equal to one hundred
percent (100%) of the full replacement cost of the
Building and the furniture,
fixtures and equipment at the Real Property (without
any deduction for depreciation), and shall contain a replacement cost
endorsement and an agreed amount or waiver of co-insurance provisions
endorsement.
(c) Broad form
boiler and machinery
or breakdown insurance in an amount
equal to the full replacement
cost of the Building at the Real Property (without
any deduction for depreciation) in which the boiler or similar vessel is
located, and including coverage against loss or damage from (1) leakage of
sprinkler systems and (2) damage,
breakdown or explosion of steam boilers,
electrical machinery and
equipment, air
conditioning,
refrigeration,
pressure
vessels or similar apparatus
and mechanical objects
now or hereafter
installed
at the Real
Property.
7
<PAGE>
(d) If the Real
Property is located in area prone to geological phenomena,
including, but not limited to, sinkholes, mine subsidence or earthquakes,
insurance covering such risks in amounts, and in form and substance,
satisfactory to Landlord in
its sole discretion.
(e) Business
interruption or rent
loss insurance in an amount equal to the
gross income or rentals from
the Real Property for an indemnity period of twelve
(12) months, such amount
being adjusted annually.
(f) During any period of construction, reconstruction, renovation or
alteration at the Real
Property, a complete
value, "All Risks" Builders Risk
form or "Course of
Construction"
insurance policy in non-reporting form and in
an amount reasonably
satisfactory to Landlord.
(g) Commercial
General Liability insurance covering claims for
personal
injury, bodily injury, death or property
damage occurring upon, in or about the
Real Property on an occurence
form and in an amount not less than $1,000,000 per
occurrence and $2,000,000 in the aggregate and shall provide coverage for
premises and operations,
liquor liability, products and completed operations and
contractual liability, with an umbrella liability policy in the amount of
$25,000,000.
(h) If required
by applicable state laws, worker's compensation,
employer's
liability insurance in an
amount of $1,000,000 per accident, per employee and in
the aggregate, and in
accordance with such laws, subject to the statutory
limits
of the states in which the
Property is located.
(i) Such other
insurance and endorsements, if any, with respect to the
Real
Property and the operation
thereof as Landlord may reasonably require from time
to time, provided same are customarily
required by
institutional
lenders for
similar properties in the
general vicinity of the Real Property.
Section 11.02
Each carrier providing
any insurance,
or portion
thereof,
required by this Section
shall be licensed to do business in the jurisdiction in
which the Real Property is located, and shall have a claims
paying ability
rating by S&P of not less
than "A" and an A.M. Best Company, Inc. rating of not
less than A and financial size category of not less than XIII. Except as
otherwise expressly set forth in this Lease,
Tenant shall cause all
insurance
(except general public
liability and workers' compensation insurance) to
contain
a mortgagee clause and loss payee clause in favor of Landlord's lender in
accordance with this Section to be payable to
Landlord's lender as a
mortgagee
and not as a co-insured, as
its interest may appear.
Section 11.03
All insurance policies and renewals thereof (i) shall be in
a
form reasonably acceptable to Landlord, (ii) shall provide for a term of
not
less than one year, (iii) if the same are insurance policies covering any
property (a) shall include a
standard non-contributory mortgagee endorsement
or
its equivalent in favor of and in form
acceptable to
Landlord's
lender, (b)
shall contain an agreed value
clause updated annually (if the amount of coverage
under such policy is based
upon the replacement
cost of the
Property) and
(c)
shall designate Landlord's lender as "mortgagee and loss
payee." In addition,
all property insurance policies (except for flood and
earthquake limits)
must
automatically reinstate after each loss, and the
commercial general
liability
and umbrella policies shall
contain an additional
insured endorsement in
favor
of Landlord's
lender.
Section 11.04
Any insurance provided for in this Article may be effected
by
a blanket policy or policies of insurance, or under so-called "all-risk" or
"multi-peril" insurance policies, provided that the amount of the total
insurance available with respect to the
Demised Premises shall provide coverage
and indemnity at least equivalent to separate
policies in the
amounts
herein
required, and provided further that in other respects, any such policy or
policies shall comply with the provisions of this Article. Any increased
coverage provided by individual or blanket policies shall be satisfactory,
provided the aggregate
liability limits covering the Demised Premises under
such
policies shall otherwise
comply with the provisions of this Article.
Section 11.05
Every insurance
policy carried by
either party with respect
to the Demised Premises shall (if it can be so
written) include provisions
waiving the insurer's
subrogation
rights against the
other party to the extent
such rights can be waived by
the insured prior to
the occurrence
of damage
or
loss. Subject to the above, each party hereby waives any rights of recovery
against the other party for
any direct damage or
consequential loss
covered by
said policies against which
such party is protected by insurance whether or not
such damage or loss shall
have been caused by any acts or omissions of the other
party, but such waiver shall
operate only to the extent such waiving party is so
protected by such insurance
coverage.
8
<PAGE>
Section
11.06 Each insurance policy required to be carried by Tenant
hereunder shall include a provision
requiring the
insurance carrier
insuring
such policy to provide Landlord with not less than thirty (30) days' prior
written notice of any
threatened or actual lapse, cancellation, reduction, or
other material change in such policy's
coverage or its terms.
If any insurance
policy required to be and in fact
carried by Tenant and
covering the Demised
Premises or any part thereof
is cancelled or is
threatened by the insurer to be
cancelled, or if the coverage thereunder is reduced in any way by the
insurer
for any reason, and if Tenant fails to remedy the condition giving rise to
cancellation, threatened cancellation, or
reduction of coverage within 48 hours
after notice thereof by
Landlord, Landlord
may, in addition to all other rights
and remedies available to Landlord,
enter the Demised
Premises and remedy
the
condition giving rise to such cancellation, threatened cancellation or
reduction, and Tenant shall forthwith pay the cost thereof to
Landlord
(which
cost may be collected by
Landlord as Additional
Rent) and Landlord shall not be
liable for any damage or
injury caused to any
property of Tenant or of others
located on the Demised Premises as a result of any such
entry. In the event
Tenant fails to procure or maintain any policy of insurance required under
Article XI, Landlord may, at its option, purchase such insurance and charge
Tenant all costs and expenses incurred in procuring and maintaining such
insurance as Additional
Rent.
ARTICLE XII
DAMAGE OR DESTRUCTION
Section 12.01
Subject to the
provisions of Section 12.04 and Section 12.05
below, if at any time during the Lease
Term, the Demised
Premises or any
part
thereof shall be damaged or destroyed by
fire or other casualty
of any kind or
nature, Tenant shall commence within
Forty-Five (45) days
after the first date
of such damage or destruction and thereafter diligently proceed to repair,
replace or rebuild such
Demised Premises as
nearly as possible to its condition
and character immediately prior to such damage with such variations and
Alterations requested by Tenant as may be
permitted under (and subject to
the
provisions of) Article VI
(the "Restoration Work").
Section
12.02 All property and casualty insurance proceeds payable to
Landlord or Tenant (except
(i) insurance proceeds
payable to Tenant on
account
of Tenant's trade fixtures or inventory and business interruption insurance
carried by Tenant and (ii)
insurance proceeds payable from comprehensive general
public liability,
or any other liability
insurance) at any time
as a result of
casualty to the Demised
Premises shall be paid jointly to Landlord and
Tenant
for purposes of payment for
the cost of the Restoration Work, except as may be
otherwise expressly set forth herein, and advanced from time to time for
such
purposes as the work
progresses upon
certified request of
Tenant's
architect.
Landlord and Tenant shall cooperate in order to obtain the largest
possible
insurance award lawfully obtainable and shall execute any
and all consents and
other instruments and take all other
actions necessary or desirable in order to
effectuate same and to cause
such proceeds to be paid as hereinbefore provided.
The proceeds of any such insurance in the case of loss shall, to the extent
necessary, be used first for the Restoration Work with the balance, if any,
payable to Tenant. If insurance proceeds as a result of a casualty to the
Demised Premises are insufficient to
complete the Restoration Work necessary by
reason of such casualty, then Tenant shall promptly pay to
Landlord the amount
which, in Landlord's sole
discretion will be required to complete such work, and
Landlord will deposit such
amount in an escrow account (or as otherwise required
by Landlord's lender) to be used for required
Restoration
Work. The escrowed
funds deposited by Tenant shall first be used in their entirety for the
Restoration Work, and only after all such funds have
been fully expended shall
the insurance proceeds collected by reason of such casualty be used and
expended.
Section 12.03
Except as provided for in Section 12.04, this Lease shall
not
be affected in any manner by
reason of the total or partial destruction to any
Demised Premises or any part thereof, or any reason whatsoever, and Tenant,
notwithstanding any law or
statute, present or future, waives all rights to quit
or surrender any Demised
Premises or any part thereof. Fixed Rent and Additional
Rent required to be paid by
Tenant hereunder shall
not abate as a result of any
casualty.
Section
12.04
(a) Notwithstanding Section 12.01 above, if the Building is destroyed
or
damaged in excess of
Twenty-Five percent
(25%) of the replacement cost thereof
(the Demised Premises at
which the Building is located is hereafter referred to
as the "Casualty Property"), exclusive of foundation and
footings, by fire
or
other insured casualty at any time during the
