Exhibit 10.5
EXECUTION COPY -
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BUSINESS LEASE
THIS LEASE
(“Lease”), dated the 14 day of Sept. ,
2007, is by and between K & R Properties, Inc., a South
Carolina Corporation (“Landlord”) and KenKevII Inc., a
Maine corporation (“Tenant”).
1.
DEFINITIONS . Unless otherwise indicated,
capitalized terms used in this Lease shall have the meanings set
forth below:
(a)
“Additional Rent” shall mean all charges payable by Tenant under
this Lease other than Minimum Rent.
(b)
“Building” shall mean the building in which the Demised
Premises is located.
(c)
“Operating Costs” shall mean all costs incurred
to insure, maintain, repair and replace all elements of the
Premises. Operating
Costs include, but are not limited to, costs and expenses for the
following: maintenance, repair and replacement (as necessary) of
all structural and mechanical components of the Building including,
but not limited to, exterior and interior walls, the roof ,
foundation and all components of the parking lots, driveways and
sidewalks surrounding the Building and located on the Premises;
gardening and landscaping; utilities, water and storm sewer
charges; maintenance of signs; fire alarm monitoring service;
premiums for liability, property damage, fire and other types of
insurance on the Premises and worker’s compensation
insurance; all property taxes and assessments levied on or
attributable to the Premises; all real and personal property taxes
levied on or attributable to such property used in connection with
the maintenance and operation of the Premises; fees for required
licenses and permits; repairing, resurfacing, painting, lighting,
cleaning, refuse removal, security, if any, and similar
items. Operating Costs shall also include any parking
charges, utilities surcharges, or other costs levied, assessed or
imposed on the Premises by or at the direction of any governmental
authority in connection with the use or occupancy of the Premises
or the parking facilities included in the Premises, or pursuant to
any covenants, conditions or restrictions to which the Premises are
subject.
(d)
“Effective Date” shall mean September 14, 2007
beginning at 11:00 am.
(e)
“Guarantor: shall mean VCG Holding Corp. a
Colorado corporation, the sole owner of Tenant.
(f)
“ Hazardous Material” shall mean any hazardous,
radioactive or toxic substance, material or waste, including, but
not limited to, those substances, materials and wastes (whether or
not mixed, commingled or otherwise combined with other substances,
materials or wastes) listed in the United States Department
Transportation Hazardous Material Table (49 CFR 172.101) or by the
Environmental Protection Agency as hazardous substances (40 CFR
Part 302) and amendments thereto, or such substances, materials and
wastes which are or become regulated under any applicable local,
state or federal law including, without limitation, any material,
waste or substance which is (i) a petroleum product, crude oil or
any fraction thereof, (ii) asbestos, (iii) polychlorinated
biphenyls, (iv) designated as a “hazardous substance”
pursuant to Section 311 of the Clean Water Act, 33 U.S.C. Section
1251, et seq. (33 U.S.C. Section 1321) or listed pursuant to
Section 307 of the Clean Water Act (33 U.S.C Section 1317), (v)
defined as a “hazardous waste” pursuant to Section 1004
of the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901, et seq. (42 U.S.C. Section 6903) or (vi) defined as a
“hazardous substance” pursuant to Section 101 of the
Comprehensive Environmental Response, Compensation, and Liability
Act, 42 U.S.C. Section 9601, et seq. (42 U.S.C. Section 9601).
(h)
“Demised Premises” or “Premises”
shall mean all improvements located on the property depicted on the
Site Plan, attached as Exhibit A, for property located at 200
Riverside Street, Portland, Maine, including any parking,
driveways, sidewalks, alleyways or other appurtenances thereto.
Said Demised Premises shall include the roof, exterior walls and
structural members thereof, together with utility lines, ducting,
pipes, and the like to serve adjoining Premises other than those
specifically herein Demised.
(i)
“ Lease Term” shall mean a period of 25 years
and 0 months beginning on the Rent Commencement Date, plus any
extended term granted by Landlord and timely and properly elected
by Tenant pursuant to subparagraph 3(b) below.
(j)
“Lease Year” shall mean a period of twelve
consecutive months during the Lease Term which begins on the first
day of the first calendar month after the Rent Commencement Date or
any anniversary thereof.
(k)
“Minimum Rent” shall mean the base rental for
the Demised Premises set forth in subparagraph 5(a) below.
(l)
“Permitted Use” shall mean operation of a
restaurant/bar with Nude Activities and no other uses.
(m)
“Property” shall mean that certain real property
owned by Landlord upon which the Premises are is located.
(n)
“Real Property Taxes” shall mean (i) any fee, license fee, license tax,
business license fee, commercial rental tax, levy, charge,
assessment, penalty or tax imposed by any taxing authority against
the land and buildings comprising the Premises, (ii) any tax or
charge for fire protection, streets, sidewalks, road maintenance,
refuse or other services provided to the Property by any
governmental agency, (iii) any tax imposed upon this transaction or
based upon a re-assessment of the Property due to a transfer of all
or part of Landlord’s interest in the Property. In the
event that it shall not be lawful for Tenant and Landlord to
apportion such future taxes, if any, then in that event, the
minimum rent payable to Landlord under this Lease shall be revised
to net Landlord the same rental after imposition of any such future
tax upon Landlord as would have been payable to Landlord prior to
the impositions of any such tax. “Real Property Tax”
does not, however, include Landlord’s federal or state
income, franchise, inheritance or estate taxes.
(o)
“Rent” shall mean Minimum Rent and any
Additional Rent.
(p)
“Rent Commencement Date” shall mean that date
that Tenant’s obligation to pay rent, which shall commence
upon the date the Tenant obtains possession under this Lease. For
the period between the date Tenant obtains possession of the
premise pursuant to this Lease and September 30, 2007, the rent
will be pro-rated and payable with the first rental payment which
shall be due on October 1, 2007.
(q)
“Site Plan” shall mean the site plan for the
Property attached hereto as Exhibit A.
2.
LEASE
OF DEMISEDD
PREMISES. Landlord hereby leases the Demised
Landlord’s Initials KW
Tenant’s Initials TL
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Premises to Tenant, and
Tenant hereby leases the Demised Premises from Landlord, subject to
the terms, covenants and conditions herein set forth, and Tenant
covenants as a material part of the consideration for this Lease to
keep and perform each and all of such terms, covenants and
conditions by Tenant to be kept and performed.
3.
LEASE TERM/OPTION TO RENEW.
(a)
The Lease Term shall begin at twelve o’clock noon on the Rent
Commencement Date and shall end at twelve o’clock noon on the
last day of the Twenty Fifth Lease Year. Promptly after the
Rent Commencement Date, Landlord and Tenant shall execute a
Certificate of Commencement setting forth the Rent Commencement
Date and the expiration date of the Lease Term.
(b)
Upon the condition that Tenant (a) is not in default at the time of
the exercise of any option contained in this subparagraph, and (b)
has, during the Lease Term and Option Periods, fulfilled all of
Tenant’s obligations completely and in a timely manner,
Landlord hereby grants to Tenant two (2) separate Options to Renew
the Lease Term for two (2) separate additional five (5) year
periods upon the same and terms and conditions as set forth in this
Lease (each an “Option”), except that the Rent payable
during each Option Period will be as described in Section 4
below. Unless Tenant provides the Landlord with written
notice of its intention not to renew the Lease at least Six (6)
months prior to the end of either the Lease Term or any Extended
Term of this Lease, the lease shall automatically be extended for
the Renewal Term.
4 .
MINIMUM RENT .
During the term hereof, Tenant agrees to pay
the Landlord at the address as shown herein, or at such other place
as the Landlord may from time to time designate in writing,
“Minimum Rent” for the Demised Premises. Said rent
shall be payable in advance on the first of each month, without
deduction or set-off, except as provided in a Seller
Indemnification Agreement executed by Landlords affiliate and the
Guarantor, without notice or demand, as follows: OHE HUNDRED
SEVENTY SEVEN THOUSAND ($177,000.00) DOLLARS PER ANNUM, payable
in equal monthly installment of FOURTEEN THOUSAND SEVEN HUNDRED
AND FIFTY ($14,750.00) DOLLARS and ZERO CENTS for the first
year of the lease. In each subsequent year, the lease shall
increase Three (3%) Percent per annum , with the rent for
each subsequent lease year payable in equal monthly installments.
In the event the Rent
Commencement Date is other than the first day of a month, Tenant
will pay Rent for said partial month on a pro-rata basis; provided,
however, the end of the Term shall be on the last day of the one
hundred twentieth (120
th ) month of the Term of
this Lease.
5.
SECURITY DEPOSIT. Concurrently with execution of this
Lease, Tenant shall deposit with Landlord the sum of $15,000.00,
which shall be held by Landlord as security for the faithful
performance by Tenant of all terms, covenants and conditions of
this Lease to be kept and performed by Tenant during the term
hereof. If Tenant defaults with respect to any provision of
this Lease, including but not limited to the provisions relating to
the payment of Rent, Landlord may from time to time (but shall not
be required to) use, apply or retain all or any part of this
security deposit for the payment of any rent or any other sum in
default, or for the payment of any amount which Landlord may spend
or become obligated to spend by reason of Tenant’s default,
or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant’s default without any
prejudice to any other remedy provided herein, or provided by
law. If any portion of such deposit is so used or applied
Tenant shall, within five
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(5) days after written
demand therefore, deposit cash with Landlord in an amount
sufficient to restore the security deposit to its original amount
and Tenant’s failure to do so shall be a default under this
Lease. Landlord shall not be required to keep this security
deposit separate from its general funds, and Tenant shall not be
entitled to interest on such deposit. If Tenant shall fully
and faithfully perform every provision of this Lease to be
performed by it, the security deposit or any balance thereof shall
be returned to Tenant (or, at Landlord’s option, to the last
assignee of Tenant’s interest hereunder) within three (3)
months following expiration of the Lease Term. In the event
of termination of Landlord’s interest in this Lease, Landlord
shall transfer the security deposit to Landlord’s successor
in interest and Landlord will have no further liability to Tenant
with respect thereto.
6.
OPERATING COSTS.
(a)
This Lease is totally net to the Landlord. Tenant
shall maintain the Premises in
first-class condition at Tenant’s sole cost and
expense. Landlord may inspect the Premises and, if Landlord
reasonably determines that Tenant is not maintaining the Premises
in a first-class condition, Landlord may provide Tenant with
written notice of any such maintenance concern, and Tenant shall
promptly make such repairs. If Tenant fails to complete such
repairs within thirty (30) days of receipt of such notice, Landlord
may undertake such repairs and Tenant shall be obligated to
reimburse Landlord for its costs within ten (10) days of receipt of
an invoice therefore.
(b)
Tenant shall pay all Operating
Costs during the Lease Term and shall not permit the placement of
any lien upon the Premises by any materialmen, laborer or other
provider of goods and services to the Premises.
7.
TAXES. Landlord shall pay
all Real Property Taxes on the land, buildings and other
improvements constituting the Property and the Premises (including
any fees, taxes or assessments against, or as a result of, any
tenant improvements installed in the Demised Premises by or for the
benefit of Tenant) attributable to the Lease Term. Tenant
shall re-pay Landlord with 10 business days of receipt of a tax
bill from Landlord.
(b)
Tenant shall pay before
delinquency all taxes charged against trade fixtures, furnishings,
equipment or any other personal property belonging to Tenant
which become payable during the Lease Term. In the event any or all of
Tenant’s leasehold improvements, equipment, furniture,
fixtures and other personal property shall be assessed and taxed
with the Property, Tenant shall pay to Landlord its equitable share
of such taxes within ten (10) days after delivery to Tenant by
Landlord of a statement in writing setting forth the amount of such
taxes determined by Landlord to be applicable to Tenant’s
property.
8.
USE OF DEMISED PREMISES/MAINTENANCE OF LIQUOR LICENSES.
(a)
Tenant shall use the Demised Premises for the Permitted Use only,
and not for any other purpose, without the prior written consent of
Landlord, which may not be unreasonably withheld.
(b)
Tenant shall not do or permit anything to be done in or about the
Demised Premises nor bring or keep anything therein which is not
within the Permitted Use of the Demised Premises or which will in
any way increase the existing rate of or affect any fire or other
insurance upon the Building or any of its contents, or cause a
cancellation of any insurance
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policy covering the
Building or any of its contents. Tenant shall not use or
allow the Demised Premises to be used for any improper, immoral,
unlawful or objectionable purpose, however, the use of the property
in its present format shall not be deemed to be an improper,
immoral, unlawful or objectionable purpose ; nor shall Tenant
cause, maintain or permit any nuisance in, on or about the Demised
Premises inconsistent with the use of the Premises for its
Permitted Use. Tenant shall not commit any waste or permit
any nuisance upon the Demised Premises or overload the floors
thereof. All work performed at the premises shall comply with the
building code requirements and Tenant shall acquire all permits
required by any governmental agency necessary to perform the work
on the Premise. The Landlord shall reasonably cooperate with the
tenant in obtaining any required approvals/permits.
(c)
Tenant shall not cause or permit any Hazardous Material (as herein
after defined) to be brought upon, transported through, stored,
kept, used, discharged or disposed in or about the Property by
Tenant, its agents, employees or contractors. Any such
Hazardous Material brought upon, transported, used, kept or stored
in or about the Property which is necessary for Tenant to operate
its business for the Permitted Use will be brought upon
transported, used, kept and sorted in only such quantities as are
necessary for the usual and customary operation of Tenant’s
business and in a manner that complies with (i) all laws, rules,
regulations, ordinances, codes or any other governmental
restrictions or requirements of all federal, state and local
government authorities having jurisdiction thereof regulating such
Hazardous Material, (ii) any permits issued for any such Hazardous
Material (copies of which must be delivered to Landlord before any
Hazardous Material is brought in, on or about the Property), and
(iii) all products and manufacturers’ instructions and
recommendations, to the extent they are stricter than laws, rules,
regulations, ordinances, codes or permits. If Tenant, its
agents, employees or contractors, in any way breach the obligations
stated in this paragraph, or if the presence of Hazardous Materials
on the Property caused or permitted by Tenant results in release or
threatened release of such Hazardous Material, on from or under the
Property, or if the presence on, from or under the Property of
Hazardous Materials otherwise arises out of the operation of
Tenant’s business, then without limitation of any other
rights or remedies available to Landlord hereunder or at law or in
equity, Tenant shall indemnify, defend, protect and hold harmless
Landlord (and Landlord’s directors, shareholders, officers,
employees, partners, agents, mortgagees or successors to
Landlord’s interest in the Demised Premises) (collectively,
herein “Indemnity”) from any and all claims, sums paid
in settlement of claims, judgments, damages, clean-up costs,
penalties, fines, liabilities, losses or expenses (including
without limitation attorney, consultant and expert fees and any
fees incurred by Landlord to enforce the Indemnity) which arise
during or after the Term as a result of Tenant’s breach of
such obligations or such release or such contamination of the
Property, including, without limitation, diminution in value of the
Property, damages for the loss of, or the restriction on the use
of, rentable or usable space or any amenity of the Property,
damages arising from any adverse impact on the sale or lease of the
Property, and damage and diminution in value to the Property or
other properties, whether owned by Landlord or by third
parties. The Indemnity includes, without limitation, costs
incurred in connection with any investigation of site conditions or
any clean-up, remedial, removal or restoration work required by any
federal, state, or local governmental agency or political
subdivision because of Hazardous Material present in the soil or
groundwater on, under or originating from the Property.
Without limiting the foregoing, if the presence of any Hazardous
Material on the Property caused or permitted by Tenant results in
any contamination, release or threatened release of Hazardous
Material on, from or under the Property or other properties, Tenant
shall promptly take all actions at its sole cost and expense which
are necessary to return the Property and any other affected
property to the condition existing prior to the
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introduction of such
Hazardous Material; provided that Landlord’s approval of such
actions shall first be obtained (which approval shall not be
unreasonably withheld) and so long as such actions do not have or
would not potentially have any material adverse effect on Landlord,
on the Property or on other property. The Indemnity contained
in this section shall survive the expiration or earlier termination
of this Lease and shall survive any transfer of Landlord’s
interest in the Property.
(d)
In conjunction with the operation of the Premises for its Permitted
Use, Tenant has obtained and shall maintain a liquor license and
Nude Activities license from the State of Maine and the City of
Portland. (“Liquor Licenses”). At all times
during the terms of this Lease, Tenant shall maintain the Liquor
Licenses in full force and effect. Tenant shall be solely
responsible for and Tenant shall pay any and all fees, assessments,
charges, levies or other monetary obligations imposed in connection
with the Liquor Licenses to assure that it is maintained in good
standing throughout the term of this Lease. In the event
Tenant receives any notice of violation, citation, written or oral
warning, or any complaint, objection, or challenge to the Liquor
Licenses, Tenant shall notify Landlord in writing of such
information within three (3) days of receipt of such written or
oral notice and, if such notice was written, Tenant shall include
in said notice a copy of any notice, citation, correspondence or
other written information provided to Tenant. Tenant shall
utilize its best efforts to maintain the Liquor Licenses in good
standing and in full compliance with the rules, regulations,
ordinances and statutes of the City of Portland and the State of
Maine and shall take no action, which may place the Liquor Licenses
in jeopardy in any way. Tenant agrees that it shall utilize
the benefits of the Liquor Licenses only in connection with the
operation of the Demised Premises for a restaurant/Bar and Nude
Activities and shall file no application to (i) amend the status of
the Liquor Licenses, (ii) amend the composition of the Tenant,
(iii) transfer the Liquor Licenses or (iv) amend the location of
the Premises served by the Liquor Licenses without the advance
written approval of the Landlord which may not be unreasonably
withheld.
(e)
The Demised Premises may be operated under the name “
Platinum Plus” for a period of 6 months following execution
of this lease and Landlord hereby consents to Tenant’s use of
such name and warrant it has lawful authority to license the use of
the name. The Tenant thereafter shall change the name to a name of
its choosing. The Landlord will be notified of the name change, but
shall not be required to approve the name change.
9.
COMPLIANCE WITH LAW. Tenant shall not use the Demised
Premises or permit anything to be done in or about the Demised
Premises which will in any way conflict with any law, statute,
ordinance or governmental rule or regulation now in force or which
may hereafter be enacted or promulgated including, without
limitation, the Americans With Disabilities Act. Tenant
shall, at its sole cost and expense, promptly comply with all laws,
statutes, ordinances and governmental rules, regulations or
requirements now in force or which may hereafter be in force and
with the requirements of any board of fire underwriters or other
similar bodies now or hereafter constituted relating to or
affecting the condition, use or occupancy of the Demised Premises,
excluding structural changes not related to or affected by
Tenant’s improvements or acts. The judgment of any
court of competent jurisdiction or the admission of Tenant in any
action against Tenant, whether Landlord be a party thereto or not,
that Tenant has violated any law, statute, ordinance or
governmental rule, regulation or requirement, shall be conclusive
of that fact as between Landlord and Tenant.
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10.
ALTERATIONS AND ADDITIONS. Tenant shall not make or
allow to be made any alterations, additions or improvements to or
of the Demised Premises or any part thereof without first obtaining
the written consent of Landlord, whose consent shall not be
unreasonably withheld, and any alterations, additions or
improvements to or of the Demised Premises, including, but not
limited to, wall covering, paneling and built in cabinet work, but
excepting movable furniture and trade fixtures, shall at once
become a part of the realty and belong to Landlord and shall be
surrendered with the Demised Premises. In the event Landlord
consents to the making of any alterations, additions or
improvements to the Demised Premises by Tenant, the same shall be
made by Tenant at Tenant’s sole cost and expense and shall be
completed in a good and workmanlike manner, free of any liens. All
work performed at the premises shall comply with the building code
requirements and Tenant shall acquire all permits required by any
governmental agency necessary to perform the work on the Premise.
The Landlord shall reasonably cooperate with the tenant in
obtaining any required approvals/permits. Upon the expiration or
sooner termination of the Term, Tenant shall, upon written demand
by Landlord, at Tenant’s sole cost and expense, forthwith and
with all due diligence, remove any alterations, additions or
improvements made by Tenant which are designated by Landlord to be
removed, and Tenant shall, forthwith and with all due diligence, at
its sole cost and expense, repair any damage to the Demised
Premises caused by such removal.
11.
MAINTENANCE AND REPAIR.
(a)
By its entry into the Demised Premises, Tenant shall be deemed to
have accepted the Demised Premises as being in good order,
condition and repair. Tenant shall, at Tenant’s sole
cost and expense, keep the Demised Premises and every part thereof
in good condition and repair, including without limitation, the
maintenance, replacement and repair of any storefront, doors,
window casements, glazing, plumbing, pipes, electrical wiring and
conduits, and the heating and air conditioning (“HVAC”)
system. Tenant shall obtain a service contract for repairs
and maintenance of the HVAC system and shall provide to Landlord a
copy of the service contract along with written details of any and
all scheduled and other repairs and maintenance performed on the
HVAC system within ten (10) days of the date of such
performance. Tenant shall, upon the expiration or sooner
termination of this Lease, surrender the Demised Premises to
Landlord in good condition, broom clean, ordinary wear and tear
excepted. Any damage caused by Tenant’s use of the
Demised Premises shall be repaired at the sole cost and expense of
Tenant.
(b)
Tenant shall repair and maintain the structural portions of the
Building, including the exterior walls and roof. Landlord
shall not be liable for Tenant’s failure to make such repairs
or to perform any maintenance. There shall be no abatement of
Rent and no liability of Landlord by reason of any injury to or
interference with Tenant’s business arising from the making
of any repairs, alterations or improvements in or to any portion of
the Building or the Demised Premises or in or to fixtures,
appurtenances and equipment therein. Tenant waives any right
to make repairs at Landlord’s expense under any law, statute
or ordinance now or hereafter in effect.
(c)
If Tenant refuses or neglects to repair or maintain the Premises,
as required herein, to the reasonable satisfaction of Landlord,
Landlord shall provide Tenant with written notice of any such
refusal or neglect and Tenant shall repair any item mentioned in
said notice within thirty (30) days thereafter. If Tenant has
not made such repairs within the 30-day period, Landlord may make
such repairs without liability to the Tenant for any loss or damage
it may
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accrue to
Tenant’s merchandise, fixtures or other property or to
Tenant’s business by reason thereof and, upon completion
thereof, Tenant shall pay Landlord’s costs for making such
repairs upon presentation of a bill thereof. In the event
Tenant does not pay such bill within ten (10) days of its receipt,
such failure shall be an event of default hereunder, Landlord shall
be entitled to utilize all of its remedies herein and such amount
shall bear interest at the rate of eighteen percent (18%) per
annum.
12.
LIENS. Tenant shall keep the Property free from any
liens arising out of any work performed, materials furnished or
obligations incurred by or on behalf of Tenant. Landlord may
require, at Landlord’s sole option, that Tenant provide to
Landlord, at Tenant’s sole cost and expense, a lien and
completion bond in an amount equal to one and one-half (1½)
times the estimated cost of any improvements, additions or
alterations in the Demised Premises which Tenant desires to make,
to insure Landlord against any liability for mechanics and
materialmen’s liens and to insure completion of the
work. Landlord shall have the right to post notices on the
Demised Premises, that the Demised Premises are not subject to
liens of those providing labor and/or materials to the Demised
Premises at the request of the Tenant pursuant to Maine
Statutes. Tenant shall provide Landlord with ten (10) days
prior written notice prior to commencing any improvements at the
Property, to allow Landlord adequate time to post said notices.
13.
ASSIGNMENT AND SUBLETTING.
(a)
Tenant shall not (voluntarily, by operation of law or otherwise)
assign, transfer, mortgage, pledge, hypothecate or encumber this
Lease or any interest therein, and shall not sublet the Demised
Premises or any part thereof, or any right or privilege appurtenant
thereto, or allow any other person (the employees, agents, servants
and invitees of Tenant excepted) to occupy or use the Demised
Premises, or any portion thereof, without first obtaining the
written consent of Landlord, which consent may not be unreasonably
withheld, except that a transfer to a wholly owned subsidiary of
VCG shall not require advance approval. The transfer of more than
five percent (25%) of the shareholder interest of Tenant, however
accomplished, and whether in a single transaction or in a series of
related or unrelated transactions, will be deemed an assignment of
this Lease or such sublease requiring the Landlord’s consent
in each instance. Any assignment or subletting without such
consent shall be void, and shall, at the option of Landlord,
constitute a default under the terms of this Lease.
Acceptance of Rent by Landlord from anyone other than Tenant shall
not be construed as a consent or waiver by Landlord, nor as a
release of Tenant, but the same shall be taken to be a payment on
account of Tenant. A consent to one assignment, subletting,
occupation or use by any other person shall not be deemed to be a
consent to any subsequent assignment, subletting, occupation or use
by another person.
(b)
Tenant shall provide Landlord with a copy of any proposed sublease
or assignment that contains the name and address of the proposed
subtenant or assignee, a copy of any purchase and sale agreement
for the assets of Tenant, the anticipated effective date of the
proposed sublease or assignment, the duration of the term of any
proposed sublease, and the amount of space any proposed subtenant
will occupy. In addition, Tenant shall provide detailed
information regarding the proposed subtenant’s or
assignee’s financial condition and credit history, relevant
business history and experience, together with any other pertinent
information which Landlord reasonably requires. Landlord may
require an opportunity to meet and interview the proposed subtenant
or assignee as well. For purposes of Landlord’s consent
to a proposed sublease or assignment, it shall be considered
reasonable for Landlord to consider (i) the relative financial
strength, business reputation and operational/management experience
of Tenant and the
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proposed subtenant or
assignee, (ii) any history that the proposed subtenant or anyone
has with the liquor licensing agencies of the City and County of
Denver and the State of Maine, and (iii) whether the use of the
Demised Premises after such sublease or assignment would create any
nuisance or violate any federal, state or local laws or any lease
or agreement affecting the Shopping Center or involve Hazardous
Materials.
Tenant shall deliver
all documents pertaining to any such assignment or subletting to
Landlord upon Landlord’s demand. Such profit shall not
include any lump-sum payment made to Tenant from its assignee or
subtenant in consideration of the transfer of Tenant’s
business, trade name, inventory, or goodwill: but any amount
attributed to lease assignment or sale on any document concerning
the transaction (including the assignee’s tax return) by
assignee shall be conclusively established as not
attributable to Tenant’s business, trade name, inventory or
goodwill, and therefore, shall be included in Tenant’s
profits as described herein.
(c)
If Landlord consents to a proposed assignment or sublease, the form
of such assignment or sublease shall be satisfactory to Landlord
and shall (i) incorporate this Lease in its entirety and be subject
to its terms, (ii) provide that Tenant shall remain liable under
this Lease, (iii) provide that subtenant will comply with all terms
and conditions of this Lease, (iv) provide for assumption by an
assignee of all the terms, covenants and conditions which this
Lease requires Tenant to perform, and (v) include a requirement
that any subtenant attorn to the Landlord. Landlord’s
consent will not be effective unless and until Tenant delivers to
Landlord an original, duly executed assignment or sublease, as the
case may be, in a form satisfactory to Landlord, as set forth
herein. Tenant shall pay Landlord’s reasonable fees,
not to exceed five thousand dollars ($5,000.00), incurred for
review of such assignment or sublease and all other materials
submitted by Tenant in connection with the request for
Landlord’s consent, whether or not such assignment or
sublease is approved.
(d)
Any transfer for which consent is required of any party having a
mortgage, deed, or trust or other encumbrance or of any lessor
under any ground or underlying lease of all or any part of the
Property shall not be effective until such consent is given.
(e)
Notwithstanding anything else in this article contained, as a
condition to Landlord’s written approval of any assignment or
sublease by Tenant, Landlord may require that it shall be entitled
to the receipt of fifty percent (50%) of any profit derived by
Tenant as a result of such assignment or sublease. Such profit is
defined as any amounts received by Tenant from its assignee or
subtenant in excess of the Rent required to be paid by Tenant
hereunder. Tenant shall deliver all documents pertaining to any
such assignment or subletting to Landlord upon Landlord’s
demand. Such profit shall not include any lump-sum payment made to
Tenant from its assignee or subtenant in consideration of the
transfer of Tenant’s business, trade name, inventory, or
goodwill: but any amount attributed to lease assignment or sale on
any document concerning the transaction (including the
assignee’s tax return) by assignee shall be conclusively
established as not attributable to Tenant’s business,
trade name, inventory or goodwill, and therefore, shall be included
in Tenant’s profits as described herein. In no event
shall the payment received by Landlord pursuant to this
subparagraph (b) be less than $100,000.00.
9
14.
HOLD HARMLESS.
(a)
Tenant shall indemnify and hold Landlord harmless against and from
any and all claims arising from Tenant’s use of the Demised
Premises or from the conduct of its business or from any activity,
work or other things done, permitted or suffered by Tenant in or
about the Demised Premises, and shall further indemnify and hold
Landlord harmless against and from any and all claims arising from
any breach or default in the performance of any obligation on
Tenant’s part to be performed under the terms of this Lease,
or arising from any act or negligence of Tenant, or any officer,
agent, employee, guest or invitee of Tenant, and from all costs,
attorney’s fees and liabilities incurred in or about the
defense of any such claim or any action or proceeding brought
thereon, and in case any action or proceeding be brought against
Landlord by reason of such claim, for events which arise subsequent
to the date of this Agreement, pursuant to the terms of an
indemnification agreement contained in a Purchase Agreement,
previously execute
