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EXHIBIT 10.6
FOURTH ADDENDUM TO OFFICE LEASE
THIS FOURTH ADDENDUM TO OFFICE LEASE ( the "FOURTH ADDENDUM"),
dated
February 3, 2004 is made by and between DOUGLAS EMMETT JOINT
VENTURE, a
California general partnership ("LANDLORD"), with offices at 808
Wilshire
Boulevard, Suite 200, Santa Monica, California 90401, and GRAND
HAVANA
ENTERPRISES, a Delaware corporation (formerly known as United
Restaurants, Inc.,
a Delaware corporation)("TENANT"), with offices at 301 North
Canon Drive, Suite
R-01, Beverly Hills, California 90210.
WHEREAS,
A. PINKWOOD PROPERTIES CORP., a New York Corporation
("PINKWOOD"),
Landlord's predecessor-in-interest, pursuant to the provisions
of that certain
written Lease, dated July 1, 1994 ("ORIGINAL LEASE"), leased to
UNITED
RESTAURANTS, INC., a Delaware corporation ("ORIGINAL TENANT")
and Original
Tenant leased from Pinkwood space in the property located at 301
North Canon
Drive, Beverly Hills, California 90210 (the "BUILDING"),
commonly known as Suite
R-01 (aka G-01/Gxx) (the "ORIGINAL PREMISES");
B. On or about September 28, 1994, Landlord acquired all of
Pinkwood's
interest, right and title in and to the real property and
Building in which the
Original Premises are located, becoming successor-in-interest to
Pinkwood and
Landlord under the Lease;
C. Landlord and Original Tenant subsequently entered into that
certain
First Addendum to Lease, dated October 10, 1994 ("FIRST
ADDENDUM"), as amended
by that certain Second Addendum to Lease, dated November 23,
1994 ("SECOND
ADDENDUM") whereby Tenant expanded the Original Premises to
include Suites Mxx
and 2xx (collectively the "PREMISES");
D. Landlord and GRAND HAVANA ENTERPRISES, a Delaware
corporation,
successor-in-interest to Original Tenant, subsequently entered
into that certain
Third Addendum to Office Lease, dated October 1, 1999 ("THIRD
ADDENDUM"), which
document together with the Original Lease, First Addendum and
Second Addendum
shall collectively be referred to herein as the "LEASE";
E. The Term of the Lease expires November 30, 2004, which Term
Landlord
and Tenant wish to hereby extend; and
F. Landlord and Tenant, for their mutual benefit, wish to revise
certain
other covenants and provisions of the Lease.
NOW, THEREFORE, IN CONSIDERATION of the covenants and provisions
contained
herein, and other good and valuable consideration, the
sufficiency of which
Landlord and Tenant hereby acknowledge, Landlord and Tenant
agree:
1. CONFIRMATION OF DEFINED TERMS. Unless modified herein, all
terms previously
defined and capitalized in the Lease shall hold the same meaning
for the
purposes of this Fourth Addendum.
2. EXTENSION OF TERM. The Term of the Lease is hereby extended
five (5) years
and six (6) months (the "SECOND EXTENDED TERM"), from and
including December 1,
2004 (the "EFFECTIVE DATE"), through and including midnight on
May 31, 2010 (the
"TERMINATION DATE").
3. REVISION IN MONTHLY BASE RENT. Commencing on the Effective
Date, and
continuing through November 30, 2006, the Monthly Base Rent
payable by Tenant
shall be $25,471.08 per month.
Commencing on December 1, 2006, and continuing through November
30, 2007,
the Monthly Base Rent payable by Tenant shall increase from
$25,471.08 per month
to $26,235.21 per month.
Commencing on December 1, 2007, and continuing through November
30, 2008,
the Monthly Base Rent payable by Tenant shall increase from
$26,235.21 per month
to $27,022.27 per month.
Commencing on December 1, 2008, and continuing through November
30, 2009,
the Monthly Base Rent payable by Tenant shall increase from
$27,022.27 per month
to $27,832.94 per month.
Commencing on December 1, 2009, and continuing throughout the
remainder of
the Second Extended Term, the Monthly Base Rent payable by
Tenant shall increase
from $27,832.94 per month to $28,677.92 per month.
3.1 RENT DEFERRAL. Notwithstanding anything to the contrary in
the Lease,
provided that Tenant is not in default (after the expiration of
time and
the opportunity to cure), one hundred percent (100%) of the
Monthly Base
Rent due for the second (2nd), sixth (6th), thirteenth
(13th),
twenty-fifth (25th), thirty-seventh (37th) and forty-ninth
(49th) calendar
months of the Second Extended Term (the "RENT DEFERRAL AMOUNT")
shall be
deferred until the end of the Second Extended Term.
Further provided that if, at the end of the Second Extended
Term,
there exists no uncured material default on the part of the
Tenant (after
expiration of time and opportunity to cure), Landlord shall, on
the last
calendar day of the Second Extended Term, fully abate and
forgive the Rent
Deferral Amount.
Except as otherwise stated, the entire Monthly Base Rent shall
be
due and payable, in advance, on or before the first day of each
and every
calendar month until the end of the Second Extended Term,
pursuant to the
Lease, as amended.
4. CORRECTION TO RENTABLE AREA OF THE PREMISES. Tenant
acknowledges and agrees
that shortly after Landlord's acquisition of the Building,
Landlord engaged an
independent third party space plan audit firm to measure the
Usable Area of the
Premises in accordance with the June, 1996 standards
published
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Initial Initial Initial Initial
<PAGE>
FOURTH ADDENDUM TO OFFICE LEASE (CONTINUED)
by the Building Owners' and Managers' Association ("BOMA").
Based upon such
re-measurement Landlord has been advised that (i) the accurate
Usable Area of
Suite R-01 is approximately 3,940 square feet; (ii) the Usable
Area of Suite Mxx
is approximately 2,033 square feet; and (iii) the Usable Area of
Suite 2xx is
approximately 4,377 square feet, for a combined total of 10,310
usable square
feet for the Premises. Based on Landlord's deemed load factor as
indicated
herein below, the corrected Rentable Area of Suite R-01 is
approximately 4,488
square feet. Inasmuch as the load factor for Suites Mxx and 2xx
is 0.00%, the
Rentable Area of Suite Mxx is approximately 2,033 square feet
and the Rentable
Area of Suite 2xx is approximately 4,377 square feet. The
combined total of the
Rentable Area of the Premises is hereby agreed to be
approximately 10,858 square
feet.
Landlord and Tenant agree that Landlord is utilizing an add-on
factor of
13.92% to compute the Rentable Area of Suite R-01. Rentable Area
of Suite R-01
herein is calculated as 1.1392 times the estimated Usable Area,
regardless of
what the actual square footage of the common areas of the
Building may be, and
whether or not they are more or less than 13.92% of the total
estimated Usable
Area of the Building. The purpose of this calculation is solely
to provide a
general basis for comparison and pricing of this space in
relation to other
spaces in the market area.
5. SECURITY DEPOSIT. Landlord acknowledges that it currently
holds the sum of
$6,344.50 as a Security Deposit under the Lease, which amount
Landlord shall
continue to hold throughout the Second Extended Term, unless
otherwise applied
pursuant to the provisions of the Lease.
6. LETTER OF CREDIT. Concurrent with Tenant's execution and
tendering to
Landlord of this Fourth Addendum, and as a condition precedent
to the
effectiveness of this Fourth Addendum, Tenant shall maintain
that certain Letter
of Credit (as defined in Paragraph 6 of the Third Addendum) in
the amount of
$60,000.00 in effect, whether through replacement, renewal or
extension, for the
entire period from the date of this Fourth Addendum through the
scheduled
expiration of the Second Extended Term (the "LEASE EXPIRATION
DATE"). Landlord
and Tenant agree that for the purposes of this Fourth Addendum,
the reference to
Lease Expiration Date in Paragraph 6 of the Third Addendum shall
be as defined
in Paragraph 6 of this Fourth Addendum.
7. REVISION TO BASE YEAR. Retroactive to January 1, 2004, the
Base Year for
Tenant's payment of increases in (i) Operating Costs (as defined
in Section
3.A(ii) of the Lease) for the retail space Operating Cost pool,
and (ii) Taxes
(as defined in Section 3.A(i) of the Lease) for the Project,
shall be changed to
calendar year 2004.
8. REVISION TO TENANT'S SHARE. As of the Effective Date,
Tenant's Share, as
specified in the Fundamental
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