Exhibit 10.30
LEASE
THIS LEASE (“Lease”),
dated the 15 th day of January, 2007, is by and
between VCG Real Estate Holdings Inc. a Colorado corporation
(“Landlord”) and Epicurean Enterprises LLC, an Arizona
limited liability company (“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 Premises are
located.
(c) “Operating
Costs” shall mean all costs incurred to insure, maintain,
repair and replace (except with respect to Paragraph 6(c)) all
elements of the Premises. Operating Costs include, but are not
limited to, costs and expenses for the following: maintenance and
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 (but not including costs
incurred by Landlord in performing its obligations under Paragraphs
6(a) and 24); 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 Real Property Taxes (as defined below); all personal
property taxes levied on or attributable to Tenant’s personal
property used in connection with the maintenance and operation of
the Premises; fees for required licenses and permits; repairing,
resurfacing 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 painting, lighting,
cleaning, refuse removal, security, if any, and other related
charges. Operating Costs shall also include any parking charges,
utilities surcharges, or other costs levied, assessed or imposed on
the Premises pursuant to any covenants, conditions or restrictions
to which the Premises are subject.
(d) “Effective
Date” shall mean January 15, 2007.
(e) “Guarantor”
shall mean all individuals or entities on Exhibit B
.
(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).
(g) “Premises”
shall mean all the land consisting of approximately two acres and
improvements located at 1902 Black Canyon Freeway Phoenix, Arizona,
and depicted on the Site Plan, attached as Exhibit A ,
including any parking, driveways, sidewalks, alleyways or other
appurtenances thereto. Said 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.
(h) “ Lease Term”
shall mean a period of 5 years beginning on the Effective
Date, plus any Extended Term granted by Landlord and timely and
properly elected by Tenant pursuant to subparagraph 3(b)
below.
(i) “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 Effective Date or any anniversary thereof.
(j) “Minimum
Rent” shall mean the base rental for the Premises set
forth in subparagraph 4 below.
(k) “Permitted
Use” shall mean the operation of a restaurant and adult
cabaret, together with all uses associated with the operation of an
adult entertainment business.
(l) “Property”
shall mean that certain real property owned by Landlord upon which
the Premises are located.
(m) “Real Property
Taxes” shall mean (i) any fee, license fee, license
tax, business license fee, levy, charge, real estate taxes, special
or metro district assessment, penalty or tax imposed by any taxing
authority against the Property and Premises, and (ii) any tax
or charge for fire protection, streets, sidewalks, road
maintenance, refuse or other services provided to the Property by
any governmental agency. 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.
(n) “Rent” shall
mean Minimum Rent and any Additional Rent.
(o) “Site Plan”
shall mean the site plan for the Property attached hereto as
Exhibit A.
2. LEASE OF PREMISES.
Landlord hereby leases the Premises
to Tenant, and Tenant hereby leases the 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.
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3. LEASE TERM/OPTION TO
RENEW.
(a) The Lease Term shall begin at
twelve o’clock noon on the Effective Date and shall end at
twelve o’clock noon on January 15th, 2012.
(b) Upon the condition that Tenant
is not in default beyond any applicable notice and cure periods at
the time of the automatic exercise of any option contained in this
subparagraph, Landlord hereby grants to Tenant three
(3) separate options (each an “Option”) to renew
the Lease Term each for an additional five (5) year period
(each an “Extended Term”) upon the same terms and
conditions as set forth in this Lease, except that the Rent payable
during each Extended Term will be as described in Paragraph 4
below. Each Option shall be deemed automatically exercised by
Tenant, unless Tenant provides written notice (“Termination
Notice”) to Landlord notifying Landlord of the termination of
said Option at least six (6) months prior to the end of either
the Lease Term or any Extended Term of this Lease. In the event
that Tenant fails to give the Termination Notice within the time
period set forth in the prior sentence, the Option shall be
exercised and the Lease shall be extended for the Extended Term. If
any Option is not exercised, for any reason, or if the Tenant is in
default beyond any applicable notice and cure periods, at the time
which is six (6) months prior to either the Lease Term or an
Extended Term of the Lease, the Lease shall terminate at the
expiration of the Lease Term and any Extended Term
thereof.
(c) Provided that Tenant is not in
default under this Lease beyond all applicable cure periods, Tenant
shall have the Option to Purchase the premise as defines in the
Option Agreement attached as Exhibit C .
4. MINIMUM RENT.
During the Lease Term, 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 Premises. Said rent
shall be payable in advance on the first of each month, without
deduction or set-off, without notice or demand, as
follows:
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Per Annum
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Monthly
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1-5
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$240,000.00
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$20,000.00
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6-10 (Option Period 1)
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$240,000.00
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$20,000.00
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11-15 (Option Period 2)
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$300,000.00
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$25,000.00
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16-20 (Option Period 3)
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$300,000.00
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$25,000.00
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5. SECURITY DEPOSIT.
$ 20,000 (Twenty Thousand
Dollars)
6. OPERATING
COSTS.
(a) Tenant shall maintain the
Premises in their condition on the Effective Date 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 their condition on the Effective Date, 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. Landlord
represents and warrants to Tenant that the exterior walls,
foundation and roof of the Premises are in good working order on
the Effective Date. Landlord will, at its cost,
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replace, restore, repair or maintain (as
necessary) the roof until the first anniversary of the Commencement
Date. Landlord will, at its cost, replace, restore, repair or
maintain (as necessary) the exterior walls and foundation of the
Premises until the fifth anniversary of the Commencement Date.
Tenant shall be fully responsible for the replacement, restoration,
repair and maintenance of the roof, exterior walls and foundation
of the Premises thereafter. If Landlord fails to commence such
repairs within thirty (30) days of receipt of any notice from
Tenant, Tenant may undertake such repairs and Landlord shall be
obligated to reimburse Tenant for its costs within ten
(10) days of receipt of an invoice therefore; provided
, however, that Tenant shall have no rights to offset or set off
any such amounts against the Rent to be paid hereunder. If Landlord
does not reimburse Tenant within ten (10) days from the date
of notice, such charge shall bear interest at the rate of eighteen
percent (18%) per annum until paid.
Notwithstanding anything to the
contrary herein contained (except for the provisions of paragraph
32 below), if Tenant makes any changes, additions or alterations to
the roof of the Premises which involves penetration of the roof
(other than those for telecommunications installations so long as
the installation contractor has Landlord’s prior written
approval which will not be unreasonably conditioned, delayed or
denied), Landlord’s obligations to replace, restore, repair
or maintain the roof shall cease. If Tenant undertakes any
structural repairs in the Premises which impact, affect, or alter
the walls or foundation of the Premises, Landlord’s
obligation to replace, restore, repair or maintain that portion of
the exterior walls and foundation of the Premises shall cease as of
the date of such action by Tenant. Any Operating Costs that pertain
to a period prior to or after the Lease Term will be pro rated
between Landlord and Tenant in the proportion of the amount of the
Lease Term that falls within the period to which the Operating
Costs pertain.
(b) Tenant shall pay all Operating
Costs during the Lease Term.
7. TAXES.
(a) Tenant 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 Premises by or for the benefit of
Tenant) attributable to the Lease Term. Tenant shall pay such taxes
ten (10) days prior to their due date and shall promptly
provide Landlord with evidence of such payment.
(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.
(c) Any Real Property Taxes or other
taxes described in this Paragraph 7 that pertain to a period prior
to or after the Lease Term will be pro rated between Landlord and
Tenant in the proportion of the amount of the Lease Term that falls
within the period to which the Real Property Taxes or other taxes
pertain.
(d) Tenant may contest any Real
Property Taxes or other taxes described in this Paragraph 7 by
proceedings conducted in accordance with law. Landlord will
cooperate fully
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with Tenant in any such contest. Tenant will
hold Landlord harmless from any loss, liability, or expense arising
out of any such contest. If Landlord so requires, Tenant shall
escrow the disputed tax amount with Landlord as security for any
liability that may be incurred as a result of such
contest.
8. USE OF PREMISES/MAINTENANCE OF
LIQUOR LICENSE.
(a) Tenant shall use the Premises
only for the Permitted Use. Any other use shall be subject to the
prior written consent of Landlord, which may be withheld in
Landlord’s reasonable discretion.
(b) 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, except that 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 subparagraph 8(b),
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 in violation
of law, or if the presence on, from or under the Property of
Hazardous Materials otherwise arises out of the operation of
Tenant’s business in violation of law, Tenant shall
indemnify, defend, and hold harmless Landlord (and Landlord’s
directors, shareholders, officers, employees, partners, agents,
mortgagees or successors to Landlord’s interest in the
Premises) (collectively, herein “Indemnity”) from any
and all claims, sums paid in settlement of claims, judgments,
damages, clean-up costs, penalties, fines, fees 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 contamination of the Property violation
of law as provided in this subparagraph 8(b). 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 if it is determined that Tenant
caused or permitted such Hazardous Material to be present in the
soil or groundwater in violation of law. 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 in violation of
law, 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
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 subparagraph 8 (b) shall survive
the expiration or earlier termination of this Lease and shall
survive any transfer of Landlord’s interest in the
Property.
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(c) In conjunction with the
operation of the Premises for its Permitted Use, Tenant has
obtained a liquor license from the State of Phoenix and the City of
Phoenix (“Liquor License”). 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 License as required by applicable law. In the event
Tenant receives any notice of violation, citation, written or oral
warning, or any complaint, objection, or challenge to the Liquor
License, 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
License in good standing and in full compliance with the rules,
regulations, ordinances and statutes of the City of Phoenix and the
State of Arizona.
9. COMPLIANCE WITH
LAW. Tenant shall not use
the Premises or permit anything to be done in or about the 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. Landlord represents to Tenant that
Landlord has received no notice that the Premises do not comply
with all such laws, statutes, ordinances and rules and regulations
on the Effective Date. 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 Premises, excluding those limited structural
changes which are the responsibility of Landlord pursuant to
subparagraph 6(a) above, which shall be the sole cost and expense
of Landlord; however, Tenant will not be obligated to comply with
any such laws, statutes, ordinances, rules, regulations and
requirements if (a) Landlord had received notice that the
Premises did not comply on the Effective Date, or (b) unless
required by competent governmental authorities. Tenant may at its
expense contest its compliance obligations so long as Landlord is
not subjected to any expense that Tenant does not pay or subject to
criminal liability. 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.
10. ALTERATIONS AND
ADDITIONS. Tenant shall
not make or allow to be made any structural alterations, additions
or improvements to or of the Premises or any part thereof without
first obtaining the written consent of Landlord. However,
Landlord’s consent will not be required to make any
non-structural alterations, additions or improvements to the
Premises that conform to applicable building codes. In the event
Landlord consents to the making of any alterations, additions or
improvements to the 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. Any
alterations, additions or improvements to or of the Premises,
including, but not limited to, wall covering, paneling and built in
cabinet work, but excepting movable furniture, decorations, trade
fixtures and any personal property, shall at once become a part of
the realty and belong to Landlord and shall be surrendered with the
Premises. 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
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alterations, additions or improvements made by
Tenant which are designated by Landlord to be removed at the time
of installation, and Tenant shall, forthwith and with all due
diligence, at its sole cost and expense, repair any damage to the
Premises caused by such removal.
11. MAINTENANCE AND
REPAIR.
(a) Subject to Landlord’s
limited obligations under subparagraph 6(a), by taking possession
of the Premises, Tenant shall be deemed to have accepted the
Premises as being in good order, condition and repair. Tenant
shall, at Tenant’s sole cost and expense, keep the Premises
and every part thereof in good condition and repair, including
without limitation, the maintenance, repair and replacement 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 Premises to
Landlord in good condition, broom clean, ordinary wear and tear and
damage subject to Paragraph 24 excepted. Except for damage subject
to Paragraph 24, any damage caused by Tenant’s use of the
Premises shall be repaired at the sole cost and expense of
Tenant.
(b) Except as specifically provided
in subparagraph 6(a) above, 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 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 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 from the date of the notice. Notwithstanding the foregoing,
in the event that Tenant in good faith disputes Landlord’s
claim that Tenant has failed to repair or maintain any aspect of
the Premises, then if Landlord makes any repairs, Tenant shall not
be obligated to pay for the repairs or any interest thereon until
the dispute is finally determined; provided , that Tenant
shall deposit the disputed amount with the Landlord until the
dispute is resolved.
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 or
shall facilitate the release or protest of any such lien within
thirty (30) days after the lien is filed.
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Landlord shall have the right to post notices on
the Premises that the Premises are not subject to liens of those
providing labor and/or materials to the Premises at the request of
the Tenant pursuant to Colorado 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. If Tenant determines to protest
any lien, or if such lien affects Landlord’s interest in the
Premises, for any reason, Landlord may require Tenant to post a
bond pursuant to the provisions of C.R.S. §
38-22-131.
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 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 Premises, or any portion thereof, without first
obtaining the written consent of Landlord, which consent will not
be unreasonably withheld, conditioned or delayed and will not be
withheld if the assignee, subtenant or transferee is reputable, has
equal or better credit than Tenant and any guarantor of this Lease
at the time of the subject transaction, and has substantial
experience in the operation of the Permitted Use. Any assignment or
subletting without such consent (whether actual or deemed) 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. Notwithstanding
anything to the contrary in this Paragraph 13, Tenant may assign or
sublet the Premises without the prior written consent of Landlord,
to an entity which currently owns more than fifty percent
(50%) of the voting stock of Tenant or which Tenant owns
greater than fifty percent (50%) of all classes of stock (or
all classes of partnership or membership interest).
(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, 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 co