Vermont-Burlington-93 Church Street Lease - Howard Opera House Associates and Bruegger's Corp.
TERMINATION AND MODIFICATION AGREEMENT
--------------------------------------
THIS AGREEMENT made this 23 day of OCTOBER, 1996, by and between Howard
Opera House Associates, a Vermont limited partnership ("Lessor"), whose address
is P.O. Box 1082, Burlington, Vermont 05402, and Bruegger's Corporation, a
Delaware corporation ("Lessee"), whose address is 435 Park Place Circle,
Mishawaka, Indiana 46545.
WHEREAS, Lessor and Champlain Management Company, a Vermont corporation
("Champlain"), entered into a Lease as of January 28, 1991 for the premises
referred to as a test kitchen located on the second floor of the building at 93
Church Street, Burlington, Vermont (the "Test Kitchen Lease"); and
WHEREAS, Lessor and Champlain entered into a Lease as of January 28, 1991
for the premises located on the first floor of the building at 93 Church Street,
Burlington, Vermont for a Bruegger's Bagel Bakery (the "Bakery Lease"); and
WHEREAS, Lessee is successor by merger to Champlain; and
WHEREAS, Lessor and Lessee entered into a Lease as of July 1, 1995 for the
premises consisting of approximately 11,308 square feet of space on the third
floor of the building commonly known as 159 Bank Street, Burlington, Vermont
(the "Third Floor Lease"); and
WHEREAS, Lessor and Lessee entered into a Lease as of July 1, 1995 for the
premises consisting of approximately 11,767 square feet of space on the fourth
floor of the building commonly known as 150 Bank Street, Burlington, Vermont
(the "Fourth Floor Lease") (the Test Kitchen Lease, the Bakery Lease, the Third
Floor Lease and the Fourth Floor Lease are sometimes collectively referred to
herein as the "Leases"); and
WHEREAS, Lessor and Lessee desire to amend the Leases as hereinafter set
forth.
NOW THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the parties hereto agree as follows:
1. On January 2, 1997, Lessee shall pay to Lessor, or Lessor's assigns,
by wire transfer, Nine Hundred Thousand ($900,000.00) Dollars, which shall be
applied as follows:
1.1 Sixty-four thousand one hundred sixty-seven Dollars ($64,176.00)
shall constitute prepayment of the Base Annual Rental due under the Test Kitchen
Lease; and
1.2 Eight-hundred thirty-five thousand eight hundred twenty-four
Dollars ($835,824.00) shall constitute consideration
<PAGE>
for the termination of the Fourth Floor Lease and the Third Floor Lease.
2. Effective as of midnight on December 31, 1996 (the "Effective Date"),
the Test Kitchen Lease, the Third Floor Lease, the Fourth Floor Lease, and the
Bakery Lease shall be modified as follows:
2.1 Test Kitchen Lease.
2.1.1 The parties agree that the "Premises", as defined in the
Test Kitchen Lease, shall consist of approximately 1337 square feet of the
second floor of the Bruegger's Bagel Bakery located at 93 Church Street,
Burlington, Vermont and no portion of the basement space of the building in
which the test kitchen is located.
2.1.2 The Test Kitchen Lease shall remain in effect until the
end of the stated term; provided, however, all rents payable thereunder,
including any pass through items such as taxes, insurance and common area
maintenance charges ("Additional Rent") shall abate, and no amounts shall be
payable under the Test Kitchen Lease from Lessee to Lessor from and after the
Effective Date through the expiration of the initial term of the Test Kitchen
Lease on December 30, 2000. In the event Lessee exercises any options under the
Test Kitchen Lease, the rent, including Base Annual Rent and Additional Rent,
shall be as set forth in the Test Kitchen Lease, except that the Lessee's
Maintenance Percentage (as defined in the Third Floor Lease) shall be 1.94% of
Lessor's total Maintenance Costs (as defined in the Third Floor Lease).
2.1.3 Lessee may not exercise any option to renew the Test
Kitchen Lease unless it also exercises the option for the identical period of
time under the Bakery Lease.
2.2 Third Floor Lease.
2.2.1 As of the Effective Date, the Third Floor Lease shall
terminate and be of no further force and effect.
2.2.2 In the event Lessee so elects by written notice to Lessor
delivered on or before December 1, 1996, Lessee shall be entitled to lease a
portion of the premises contained in the Third Floor Lease as shown on the
attached Exhibit A (the "Retained Premises"). The term of the lease for the
Retained Premises shall commence January 1, 1997. The lease for the Retained
Premises shall be month-to-month at a monthly rental of Two Thousand Eight
Hundred Forty-one and 41/100 ($2,841.41)
2
<PAGE>
Dollars (10.54 x 3235 + 12), plus all additional rent provided for in the Third
Floor Lease, including, but not limited to the amounts provided for in
paragraphs 6 and 7 of the said lease, allocable to 3235 square feet. In the
event Lessee elects to lease the Retained Premises, all terms of the Third Floor
Lease, except for length of term and relevant rental provisions, shall be
included in the month-to-month lease for the Retained Premises; provided,
however, that no portion of the basement space of the building in which the
demised premises are located shall be included in the demised premises.
2.2.3 Except as provided above, Lessor releases Lessee from any
obligations arising after the Effective Date under the Third Floor Lease.
2.3 Fourth Floor Lease. As of the Effective Date, the Fourth Floor
Lease shall terminate and be of no further force and effect. Lessor releases
Lessee from any obligations arising after the Effective Date under the Fourth
Floor Lease.
2.4 Bakery Lease.
2.4.1 Lessee may not exercise any option to renew the Bakery
Lease unless Lessee also exercises the option for the identical period of time
under the Test Kitchen Lease.
2.4.2 "Premises" shall mean approximately 2352 square feet of
space situated on the first floor of the building known as 93-95 Church Street,
Burlington, Vermont, together with that portion of the basement of 93-95 Church
Street that is situated directly beneath the first floor space.
2.4.3 Lessee shall pay as additional rent to Lessor 100% of the
Marketplace Fee for the building known as 93-95 Church Street, Burlington,
Vermont, as and when billed by Lessor.
2.4.4 Lessee shall pay as additional rent to Lessor 3.45% of the
Maintenance Costs (as defined in the Third Floor Lease), to the extent such
Maintenance Costs are currently charged to Lessee.
2.4.5 Lessee shall pay as additional rent to Lessor 2.95% of the
property taxes for the building known as 81-95 Church Street, Burlington,
Vermont, as and when billed by Lessor.
2.4.6 In all other respects, the Bakery Lease shall remain in
full force and effect as set forth therein.
3
<PAGE>
3. This Agreement constitutes the entire agreement between the parties
hereto and no other agreements or understandings between the parties hereto will
be effective unless in writing singed by the parties.
4. This document may be signed in counterparts each of which shall be
deemed an original, but all together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals on
the date and year first above written.
Lessor
Howard Opera House Associates,
a Vermont limited partnership
/S/ Nordah L. Brue
-------------------------------
By: Nordah L. Brue
-------------------------------
Its General Partner
-------------------------------
Lessee
Bruegger's Corporation, a
Delaware corporation,
successor by merger to
Champlain Management Company,
a Vermont corporation
/S/ Stephen A. Finn
-------------------------------
By: Stephen A. Finn
-------------------------------
Its President
-------------------------------
4
<PAGE>
EXHIBIT A
[Drawing of Floor Plan appears here]
<PAGE>
EXHIBIT 10-AN(ii)
LEASE
THIS LEASE made as of January 28th, 1991, by and between Howard Opera House
Associates (a Vermont limited partnership) ("Lessor") whose address is P.O. Box
374, Burlington, Vermont 05402 and Champlain Management Company, (a Vermont
corporation) (Lessee") whose address is 109 South Winooski Avenue, P.O. Box
374, Burlington, Vermont 05402.
Lessor and Lessee agree as follows.
1. Definitions. The fol1owing terms shall have the following meanings for all
purposes of this Lease:
"Annual Percentage Rental means four percent (4%) of Lessee's Gross Sales
in excess of 85% of the average sales of the first two Lease years.
"Base Annual Rental" means $46,600.
"Base Monthly Rental means an amount equal to 1/12 of the applicable Base
Annual Rental.
"Franchisor" means Champlain Management Company or its successor.
"Lease Term" means the period described in Section 3.
"Lease Year" means the 12 month period commencing on the first day of the
calendar year or the first day of the first month of such other 12 month period
as may be approved in writing by Lessor after the commencement of the Lease Term
and each successive 12 month period hereafter.
"Lessee" means Champlain Management Company or its successor or assiqns.
"Lessee's Gross Sales" means all retail sales arising from Lessee's
business conducted on the Premises, less sales tax and any amounts received from
sales of non-food items approved for use in connection with promotional
campaigns, if any, approved by Franchisor and as more fully defined on Exhibit A
to this Lease.
"Lessor means Howard Opera House Associates, its successors or assigns.
Monthly Percentage Rental means either that portion of the
Howard Opera House Associates- Bakery Lease - Page 1
<PAGE>
Annual Percentage Rental payable for each month or portion thereof.
"Premises" means the real property together with all building, structures,
fixtures and improvements related to the operation of the Bruegger's Bagel
Bakery located thereon, at 93 Church Street, Burlington, Vermont.
2. Demise of Premises. In consideration of the rentals and other sums to be
paid by Lessee and of the other terms, covenants and conditions on Lessee's part
to be kept and performed, Lessor hereby leases to Lessee, and Lessee hereby
takes and hires, the Premises.
3. Lease Term. The Lease Term of approximately ten (10) years, shall commence
on the earlier of a) the store opening or b) December 31, 1990 and shall expire
on either a) ten (10) years from the store opening or b) December 30, 2000,
unless terminated sooner as provided in this Lease and as may be extended for
four (4) periods of five (5) years each as set forth in Section 24.
4. Rental and Other Payments.
a. Lessee shall pay the Base Monthly Rental each month, on or before the
first day of the month for which it is due. If the Lease Term commences other
than on the first day of a calendar month, the Base Monthly Rental shall be
prorated from the date on which the Lease Term commences to and including the
last day of said month.
b. In addition to the Base Monthly Rental, Lessee shall pay the Monthly
Percentage Rental each month after which Lessee's aggregate Annual Gross Sales
for any Lease Year exceeds the Base Annual Rental as specified in Section 1.
Monthly Percentage Rental shall be paid on or before the first (1st) day of the
month following the month for which it is due, and contemporaneous with such
payment Lessee shall furnish to Lessor a written statement satisfactory to
Lessor, which Lessee shall warrant and certify to be complete and correct,
setting forth Lessee's Gross Sales for such month.
c. Within 90 days after the end of each Lease Year, Lessee shall furnish
to Lessor a written statement setting forth the Base Monthly Rental and Monthly
Percentage Rental actually paid for the applicable Base Year, the Lessee's Gross
Sales and the Annual Percentage Rental payable for that Lease Year. To the
extent that Lessee has not paid Monthly Percentage Rental in an amount equal to
the Annual Percentage Rental due for that Lease Year, it shall pay the
deficiency at the time the annual Statement is filed. To the extent that the
total actually paid in the applicable Lease Year as Base Monthly Rental and
Monthly Percentage Rental exceeds the Base Annual Rental and Annual Percentage
Renta1, such excess shall be refunded to Lessee.
For any partial year between the commencement of the Lease Term and
Howard Opera House Associates Bakery Lease - Page 2
<PAGE>
the beginning of the Lease Year, calculation of Base Annual Rental and Annual
Percentage Rental shall be prorated on the basis of the ration of the number of
days in such partial year to 365.
5. Rental to be Net to Lessor. The Base Annual Renta1 and Annual Percentage
Rental payable hereunder shall be net to Lessor, so that this Lease shall yield
to Lessor the rentals specified during the Lease Term, and that all costs,
expenses and obligations of every kind and nature, including management fees,
whatsoever relating to the Premises and the Equipment shall be paid by Lessee.
6. Taxes and Assessments Lessee shall pay, as the same become due and prior to
delinquency, all taxes and assessments which would affect in any manner the net
return realized by Lessor under this Lease, including without limitation the
following:
a. All taxes and assessments upon the Premises or part thereof or any
personal property, the Equipment, trade fixtures or improvements located on the
Premises, whether belonging to Lessor or Lessee, which are owing at the
commencement of this Lease or shall be assessed or come due during the Lease
Term or any tax or charge levied in lieu of such taxes arid assessments;
b. All taxes, charges, license fees or similar fees imposed by reason of
the use of the Premises and the Equipment by Lessee; and
c. All excise, transaction, privilege, license, sales, use and other
taxes upon the rental or other payments hereunder, the leasehold estate of
either party or the activities of either party pursuant to this Lease, except
for any tax upon or measured by the net income and profits of Lessor generally.
Lessee may seek a refund, rebate or abatement of any tax Levied or
assessed on the Premises or the Equipment but only if arrangements for paying
such tax prior to it becoming a lien on the Premises, together with all interest
and penalties, are made to the written satisfaction of Lessor.
7. Utilities. Lessee shall contract for, in its own name, and pay when due,
all charges for connection or use of water, gas, electricity, telephone, garbage
collection, sewer use and other utility services supplied to the Premises during
the Lease Term Under no circumstances shall Lessor be responsible for any
interruption of any utility service.
8. Insurance. Lessee shall maintain at its own expense the following types
and amounts of insurance (which may be included under a blanket insurance policy
if all the other terms hereof are satisfied), in addition to such other
insurance as Lessor may reasonably require:
a. Insurance against loss, damage or destruction by fire and
Howard Opera House Associates- Bakery Lease - Page 3
<PAGE>
other casualty including theft, vandalism and malicious mischief, flood (if the
Premises are in a location designated by the Federal Secretary of Housing and
Urban Development as a flood hazard area), earthquake (if the Premises are in an
area subject to destructive earthquakes within recorded history), boiler
explosion (if there is any boiler upon the premises), sprinkler damage (if the
premises have a sprinkler system), all matters covered by a standard extended
coverage endorsement and such other risks as Lessor may reasonably require,
insuring the Premises, the equipment and all improvements thereon for not less
than 90% of their full insurable replacement cost. Any insurance policy or
policies shall designate Lessor and Lessee as the named insureds as their
interest may appear and shall be payable as set forth in Section 17.
b. Comprehensive public liability and property damage insurance,
including a products liability clause, covering Lessor and Lessee against bodily
injury liability, property damage liability and automobile bodily injury and
property damage liability, including without limitation any liability arising
out of the ownership, maintenance repair, condition or operation of the Premises
or adjoining ways, streets or sidewalks. Such insurance policy or policies
shall contain a "severability of interest" clause or endorsement which
precludes the insurer from denying the claim of either Lessee or Lessor ,
because of the negligence or other acts of the other, shall be in amounts of not
less than $1,000,000 per injury and occurrence with respect to any insured
liability, whether for personal injury or property damage, or such higher limits
as Lessor may reasonably require from time to time, and shall be of form and
substance satisfactory to Lessor.
c. Worker's compensation, employer's liability and such other insurance
as may be necessary to comply with applicable laws. All insurance policies
shall:
i) Provide for a waiver of subrogation by the insurer as to claims
against Lessor, its general and limited partners, employees and Agents;
ii) Provide that such insurance cannot be unreasonably canceled,
invalidated or suspended on account of the conduct of Lessee, its officers,
directors, employees or agents;
iii) Provide that any "no other insurance" clause in the insurance
policy shall exclude any policies of insurance maintained by Lessor and that the
insurance policy shall not be brought into contribution with insurance
maintained by Lessor;
iv) Contain a standard, "without contribution", mortgage clause
endorsement in favor of any lender designated by Lessor;
Howard Opera House Associates- Bakery Lease - Page 4
<PAGE>
v) Provide that the policy of insurance shall not be terminated,
canceled or substantially modified without at least 30 days prior written notice
to Lessor arid to any lender covered by any standard mortgage clause
endorsement;
vi) Provide that the insurer shall not have the option to restore the
Premises if Lessor elects to terminate this Lease in accordance with the terms
hereof; and
vii) Be issued by insurance companies having a rating in Best's
Insurance Guide of Class VI or better.
Lessee shall provide to Lessor and any lender designated by Lessor
certificates of insurance or copies of insurance policies evidencing that
insurance satisfying the requirements of this Lease is in effect at all times.
9. Tax and Insurance Impound. Lessor may, at any time in its sole discretion,
require Lessee to pay to Lessor sums which will provide an impound account
(which shall not be deemed a trust fund) for paying up to the next one year of
taxes, assessments and insurance premiums. If Lessor so elects, it will
estimate the amounts needed for such purposes and will notify Lessee to pay the
same to Lessor in equal monthly installments, as nearly as practicable, in
addition to all other sums due under this Lease. Should additional funds be
required at any time, Lessee shall pay the same to Lessor on demand. Lessee
shall advise Lessor of all taxes and insurance bills which are due and shall
cooperate fully with Lessor in assuring that the same are paid. Lessor may
deposit all impounded funds in accounts insured by any Federal or State agency
and may commingle such funds with other funds and accounts of Lessor. Interest
or other gains from such funds, if any, shall be the sole property of Lessor.
In the event of any default by Lessee, Lessor may apply all impounded funds
against any sums due from Lessee to Lessor Lessor shall give to Lessee an
annual accounting showing all credits and debtors to and from such impounded
funds received from Lessee.
10. Payment of Rental and other Sums. All rental and other sums which Lessee
is required to pay hereunder shall be payable in full when due without right of
setoff against any other claim against or indebtedness of Lessor. Lessee shall,
at Lessor's request, establish arrangements whereby payments of Basic Monthly
Rental can be transferred by wire or other means directly from Lessee's bank
account to such account as Lessor may designate. Any delinquent payment (that
is, any payment not made within the period specified in Section 23) shall, in
addition to any other remedy of Lessor, bear interest at the rate of 18% per
annum, but in no event shall Lessee be obligated to pay a sum of interest higher
than the maximum legal rate then in effect. Monthly Percentage Rental shall be
made coincidental with Lessee's submission of monthly reports required in
Section 4(b).
Howard Opera House Associates- Bakery Lease - Page 5
<PAGE>
11. Use. Lessee may use the Premises for any lawful purpose. Except as set
forth below, Lessee will at all times during the Lease Term diligently operate
its business on the Premises. Lessee shall not cease diligent operation of
business during the Lease Term, except Lessee may discontinue operation by: (i)
giving written notice to Lessor 180 days prior to the day Lessee ceases
operation, (ii) providing adequate protection of the Premises during any period
of vacancy and (iii) paying all costs necessary to restore the Premises to its
condition on the day operation of the business ceased at such time as the
Premises is reopened for Lessee's business operations or other substituted use.
Notwithstanding anything herein to the contrary, Lessee shall pay monthly as
Base Annual Rental and Annual Percentage Rental during any period in which
Lessee discontinues operation an amount equal to the mean average of the sum of
the Base Annual Rental and Annual Percentage Rental for the three Lease Years
immediately preceding such period.
Lessee shall not convert the Premises to an alternative use during the
Lease Term, without Lessor's prior written consent, which consent will not be
unreasonably withheld. Lessor may consider the following in determining whether
to grant its consent, without being deemed to be unreasonable: (i) whether the
rental paid to Lessor would be equal to or greater than the anticipated rental
assuming continued existing use, ii) whether the proposed rental paid to Lessor
is reasonable considering the converted use of the Premises and the customary
rental prevailing in the community for such use, (iii) whether the converted use
will be consistent with the highest and best use of the Premises, and (iv)
whether the converted use will increase Lessor's risks or decrease the residual
value of the Premises.
12. Compliance with Laws. Lessee's use and occupation of the Premises, and the
condition thereof, shall not be in violation of any applicable governmental
requirement. Lessee shall, at Lessee's sole cost and expense, comply with all
applicable directions, rules and regulations of the fire marshall, health
officers, building inspector or other proper officer of any governmental agency
having jurisdiction. Lessee will not permit any act or condition to exist in or
about the Premises which will increase any insurance rate, except when such acts
are required in the normal course of its business and Lessee shall pay for such
increase.
13. Maintenance. Lessee hereby accepts the Premises "as is", with no
representation or warranty of Lessor as to the condition thereof. Lessee shall
at all times, at its own expense, maintain, repair and replace, as necessary,
the Premises, including all portions of the Premises whether or not the Premises
were in such condition upon the commencement of this Lease.
14. Alterations. Lessee shall not commit actual or constructive waste upon the
Premises or materially alter the exterior or structural elements of the Premises
in any manner without the prior written consent
Howard Opera House Associates- Bakery Lease - Page 6
<PAGE>
of Lessor. Any work, at any time, commenced by Lessee on the Premises shall be
prosecuted diligently to completion, shall be of good workmanship and materials
and shall comply fully with all the terms of this Lease. Any addition to or
alteration of the Premises shall be deemed a part of the Premises and belong to
Lessor at the expiration of the Lease Term.
15. Indemnification. Except for negligence of Lessor, Lessee shall indemnify
and hold harmless Lessor and Lessor's general and limited partners, officers,
agents and employees, from and against any and all claims, demands, causes of
action, suits, proceedings, liabilities, damages, losses, costs and expenses,
including attorney fees caused by, incurred or resulting from its operations of
or relating in any manner to the Premises, whether relating to their original
design or construction, latent defects, alterations, maintenance, use by Lessee
or any person thereon, supervision or otherwise, or from any breach of default
under or failure to perform any term or provision of this Agreement by Lessee,
its officers, employees, agents or other persons. It is expressly understood
that Lessee's obligations under this paragraph shall survive the expiration or
earlier termination of this Lease for any reason.
16. Quiet Enjoyment. So long as Lessee shall pay rental and other sums herein
provided and shall keep and perform all of the terms, covenants and conditions
on its part herein contained, Lessor covenants, that Lessee, subject to Lessor's
rights herein, shall have the right to the peaceful and quiet occupancy of the
Premises.
17. Condemnation or Destruction.
a. In case of a taking of all or any part of the Premises or the
commencement of any proceedings or negotiations which might result in a taking,
for any public or quasi public purpose by any lawful power or authority by
exercise of the right of condemnation or eminent domain by agreement between
Lessor, Lessee and those authorized to exercise such right (Taking), Lessee will
promptly give written notice thereof to Lessor, generally describing the nature
and extent of such Taking. Lessee may prosecute, if permissible under the
appropriate law of the jurisdiction, any award, compensation or damages
resulting from a Total Taking, to which it is entitled but shall not have the
right to Lessor's ward, compensation or damages.
b. In case of a Taking of the whole of the Project, other than for
temporary use ("Total Taking"), this Lease shall terminate as of the date of
such Total Taking and all rental and other sum or sums of money and other
charges provided to be paid by Lessee shall be apportioned and paid to the date
of such Total Taking. Total Taking shall include a taking of substantially all
the premises if the remainder of the Premises is not useable and cannot be made
useable for the purposes provided herein.
Howard Opera House Associates- Bakery Lease - Page 7
<PAGE>
c. In case of temporary use of the whole or any part of the Premises by a
Taking, this Lease shall remain in full force and effect without any reduction
of rent or any other sum payable hereunder. Lessee shall be entitled to the
entire award for such taking whether paid by damages, rent or otherwise, unless
the period of occupation and use by the condemning authorities shall extend
beyond the date of expiration of this Lease, in which case the award made for
such taking shall be apportioned between Lessor arid Lessee as of the date of
such expiration. At the termination of any such use or occupation of the
Premises, Lessee will, at its own cost and expense, promptly commence and
complete the restoration of the Premises. Lessee shall not be required to make
the restoration if the term of this Lease shall expire prior to, or within one
(1) year after, the date of termination of the temporary use so taken, and in
such event Lessor shall be entitled to recover all damages and awards arising
out of the failure of the condemning authority to repay and restore the building
at the expiration of such temporary taking.
d. In the event of a Taking of less than all of the Premises other than a
temporary use (Partial Taking) or of damage or destruction to all or any part of
the Premises, all awards, compensation or damages shall be paid to Lessor and
Lessor shall have the option to terminate this Lease by notifying Lessee in
writing within 60 days after Lessee gives Lessor notice of such damage or
destruction or that title as vested in the taking authority. Lessee shall
thereupon have a period of 60 days in which to elect in writing to continue this
Lease on the terms herein provided. If Lessee does not elect to continue this
Lease or shall fail during such 60 day period to elect to continue this Lease,
then this Lease shall terminate as of the last day of the month during which
such period expired. Lessee shall then immediately vacate and surrender the
premises, all obligations of either party hereunder shall cease as of the date
of termination and Lessor may retain all such awards, compensation or damages.
If Lessor does not elect to terminate this Lease, or if Lessor so elects but
Lessee elects to continue this Lease, then this Lease shall continue on the
following terms: Rental and other sums due under this Lease shall continue
unabated, and Lessee shall promptly commence and diligently prosecute
restoration of the Premises to the same condition, as nearly as practicable, as
prior to such partial condemnation, damage or destruction as approved by Lessor
in its sole discretion. Lessor shall promptly make available in installments as
restoration progresses an amount equal to any award, compensation or damages
received by Lessor, upon written request of Lessee accompanied by evidence
reasonably satisfactory to Lessor that such amount has been paid or is due and
payable and is properly a part of such costs and that there are no mechanics or
similar liens for labor and/or materials theretofore supplied in connection with
the restoration. Lessor shall be entitled to keep any portion of such award,
compensation or damages which may be in excess of the cost of restoration, and
Lessee shall bear all additional costs, fees and
Howard Opera House Associates- Bakery Lease - Page 8
<PAGE>
expenses of such restoration in excess of the amount of the amount of any such-
award, compensation or damages.
e. Notwithstanding the foregoing, if at the time of any Taking or at any
time thereafter Lessee shall be in default under this Lease and such default
shall be continuing, Lessor is hereby authorized and empowered, in the name and
on behalf of Lessee and otherwise, to file and prosecute Lessee's claim, if any
for an award on account of any Taking and to collect such award and apply the
same, after deducting all costs, fees and expenses incident to the collection
thereof, to the curing of such default and any other then existing default and
any other then existing default under this Lease.
18. Inspection. Lessor and its authorized representatives shall have the
right, upon giving reasonable notice, to enter the Premises or any part thereof
and inspect the same and make photographic or other evidence concerning Lessee's
compliance with the terms of this Lease. Lessee shall keep full, complete and
accurate books, records and accounts of all business done including any sales or
other tax reports that Lessee may be required to furnish to any governmental
agency at or from the Premises sufficient to permit Lessor to verify all
statements, certificates and accountings delivered to Lessor. Should any audit
by Lessor reveal that any statement or account rendered by Lessee was in error
by 10% or more, then in addition to any other remedy of Lessor, Lessee shall
reimburse the cost of such audit to Lessor upon demand.
Lessee hereby consents to Lessor's providing information it obtains to
Franchisor and to Lessor's obtaining from Franchisor information which
Franchisor receives relating to Lessee's operation of its business in the
Premises.
19. Franchisor Requirements. Lessee, in its use, occupancy and maintenance of
the Premises shall comply with all requirements of its license agreement with
Franchisor.
20. Default and Remedies;
a. Each of the following shall be deemed a breach of this Lease and a
default by Lessee:
i) If any material representation or warranty of Lessee herein or
as Seller in the Purchase Agreement was false when made, or in the event that
any such representation or warranty is continuing and becomes false at any time,
or if Lessee renders any false statement or account;
ii) If any rent of or other monetary sums due remain unpaid for five
(5) days after written notice thereof to Lessee;
iii) If Lessee becomes insolvent, performs any act of
Howard Opera House Associates- Bakery Lease - Page 9
<PAGE>
bankruptcy or is not generally paying its debts as the same become due;
iv) If Lessee fails to perform any of the covenants, conditions or
obligations of this Lease; or
v) If there is a breach or default under the Purchase Agreement,
under any license or franchise permitting Lessee or Guarantors to operate the
Premises in the manner authorized or if such license or franchise otherwise
terminates or expires, under any guarantee of Lessee's obligations under this
Lease or under any other agreement between Lessor and Lessee.
b. If any such breach or default does not involve the payment of any
rental or other monetary sum, is not willful or intentional, does not place any
rights or property of Lessor in immediate jeopardy, is not known to Lessee
(unless Lessor has given Lessee notice thereof) and is within the reasonable
power of Lessee to cure within 30 days after receipt of notice thereof, all as
determined by Lessor in its reasonable discretion, then such event shall not
constitute a default hereunder, unless otherwise expressly provided herein,
unless and until Lessor shall have given Lessee notice thereof and a period of
30 days shall have elapsed, during which period Lessee may correct or cure such
event, upon failure of which a default shall be deemed to have occurred
hereunder without further notice or demand of any kind. If such breach or
default cannot reasonably be cured with the 30 day period, as determined by
Lessor in its reasonable discretion, and Lessee is diligently pursuing a cure of
such breach or default, then Lessee shall, after receiving notice specified
herein, have a reasonable period to cure such breach or default.
c. In the event of any breach or default, and without any notice, except,
if applicable, the notice prior to default required under certain circumstances
by Paragraph b above or such other notice as may be required by law and cannot
be waived by Lessee (all other notices being hereby waived), Lessor shall be
entitled to exercise, at its option, concurrently, successively or in any
combination, all remedies available at law or in equity, including without
limitation any one or ore of the following:
i) To terminate this Lease;
ii) To reenter and take possession-of the Premises or any art
thereof (which reentry shall not operate to terminate this Lease unless Lessor
expressly so elects), of any or all personal property or fixtures of Lessee upon
the Premises, the Equipment and of all franchises, licenses, permits and other
rights or privileges of Lessee pertaining to the use and operation of the
Premises and to conduct business thereon in the name of Lessor or of Lessee but
for the sole profit and benefit of Lessor and without compensation to Lessee;
Howard Opera House Associates- Bakery Lease - Page 10
<PAGE>
iii) To seize all personal property, the Equipment or fixtures upon
the Premises which Lessee owns or in which it has an interest, in which Lessor
shall have a landlord's lien and is hereby granted a security interest, and to
dispose thereof in accordance with laws prevailing at the time and place of
such seizure or to remove all or any portion of such property and cause the same
to be stored in a public warehouse or elsewhere at the cost of Lessee:
iv) To relet the Premises or any part thereof for such term or terms
(including a term which extends beyond the original term of his Lease, at such
rentals and upon such other terms as Lessor, in its sole discretion, may
determine, with all proceeds received from such reletting being applied to the
rentals and other sums due from Lessee in such order as Lessor may, in its sole
discretion, determine, with Lessee remaining liable for deficiency;
v) To recover from Lessee an amount equal to the difference between
the rentals and such other sums (including all sums required to be paid by
Lessee, such as taxes and insurance) to be received from the date of such breach
to the expiration of the original term hereof and the reasonable long term
rental value of the Premises for the same period; and/or
vi) To recover from Lessee all expenses, including attorney fees,
reasonably paid or incurred by Lessor as a result of such breach.
In addition, in the event of any breach or default by Lessee, Lessor may,
but shall not be obligated to, immediately or at any time thereafter, and
without notice, except as required herein, correct such breach or default
without, however, curing the same for the account and at the expense of the
Lessee. Any sum or sums so paid by Lessor, together with interest at the then
existing maximum legal rate, but not higher than 18% per annum, and all costs
and damages, shall be deemed to be additional rent hereunder and shall be
immediately due from Lessee to Lessor.
21. Mortgage and Subordination. Lessor's interest in this Lease, the Equipment
or the Premises shall not be subordinate to any encumbrances placed upon the
Premises by or resulting from any act of Lessee, and nothing herein contained
shall be construed to require such subordination by Lessor. Lessee shall keep
the Premises free from any liens for work performed, materials furnished or
obligations incurred by Lessee. NOTICE IS HEREBY GIVEN THAT LESSEE IS NOT
AUTHORIZED TO PLACE ANY LIEN, MORTGAGE, DEED OF TRUST OR ENCUMBRANCE OF ANY KIND
UPON ALL OR ANY PART OF THE PREMISES AND THE EQUIPMENT OF LESSEE'S LEASEHOLD
INTEREST THEREIN, AND ANY SUCH PURPORTED TRANSACTION SHALL BE VOID.
This Lease at all time shall be subordinated to the lien or any ground
leases, mortgage, mortgages, trust deed or trust deeds now or hereafter placed
upon the Premises by Lessor, and Lessee covenants and
Howard Opera House Associates- Bakery Lease - Page 11
<PAGE>
agrees to execute and deliver, upon demand, such further instruments
subordinating this Lease to the lien of any such ground lease, mortgage,
mortgages, trust deed or trust deeds as shall be desired by Lessor, or any
mortgagees or proposed mortgagees or trustees under trust deeds, upon the
condition that Lessee shall have the right to remain in possession of the
Premises under the terms of this Lease, notwithstanding any default in any such
mortgage, mortgages, trust deed or trust deeds, or after foreclosure thereof so
long as Lessee is not in default under any of the covenants, conditions and
agreements contained in this Lease.
If any mortgagee or trustee elects to have this Lease and the interest of
Lessee hereunder be superior to any such interest or right and evidences such
election by notice given to Lessee, then this Lease and the interest of Lessee
hereunder shall be deemed superior to any such mortgage or trust deed, whether
this Lease was executed before or after such mortgage or trust deed and in that
event such mortgagee or trustee shall have the same rights with respect to this
Lease as if it had been executed and delivered prior to the execution and
delivery of the mortgage or trust deed and has been assigned to such mortgagee
or trustee.
Lessee shall execute and deliver whatever instruments may be required for
such purposes, and in the event Lessee fails so to do within 10 days after
demand in writing, Lessee does hereby make, constitute and irrevocably appoint
Lessor's agent as its attorney-in-fact and in its name, place and stead so to
do.
Lessee shall give written notice to any mortgage lender having a recorded
security instrument upon the Premises or any part thereof of any breach or
default by Lessor of any of its obligations under this Lease and to give such
mortgage lender at least 60 days beyond any notice period to which Lessor might
be entitled to cure such default before Lessee may exercise any remedy with
respect thereto. Lessee shall provide Lessee's most recent audited financial
statements upon request to Lessor or any mortgage lender and to certify the
continuing accuracy of such financial statements in such manner as Lessor or
such mortgage lender may request.
22. Estoppel Certificate At any time, and from time to time, Lessee agrees,
promptly and in no event later than ten (10) days after a request in writing
from Lessor, to execute, acknowledge and deliver to Lessor a statement in
writing certifying that this Lease is unmodified and in full force and effect
(or, if there have been modifications, that the same is in full force and effect
as modified and stating the modifications) and the dates to which the rental and
other charges have been paid.
23. Assignment. Lessor shall have the right to sell or convey the Premises
subject to this Lease or to assign its right, title and
Howard Opera House Associates- Bakery Lease - Page 12
<PAGE>
interest as Lessor under this Lease in whole or in part. In the event of any
such sale or assignment other than a security assignment, Lessor shall be
relieved, from and after the date of such transfer or conveyance, of liability
for the performance of any obligation of Lessor contained herein, except for
obligations or liabilities accrued prior to such assignment or sale.
Lessee acknowledges that Lessor has been induced to enter into this Lease
in anticipation of receiving substantial percentage rentals from Lessee's
contemplated use of the Premises and that Lessor has relied both on the business
experience and credit worthiness of Lessee and upon the particular purposes for
which Lessee intends to sue the Premises. Lessee shall not assign this Lease or
any interest therein, or sublet a11 or any part of the Premises, which were
originally intended for Bagel Bakery occupation, without the prior written
consent of Lessor which consent shall not be unreasonably withheld. Lessor may
withhold or condition such consent upon such matters as Lessor may in its sole
discretion determine, including without limitation the experience and
creditworthiness of the assignee, the assumption by the assignee of all Lessee's
obligations hereunder by undertakings enforceable by Lessor, the transfer to
such assignee of all necessary licenses and franchises to continue operating the
Premises for the purposes herein provided, receipt of such representations and
warranties from such assignee as Lessor may request, including such matters as
its organization, existence, good standing and finances and other matters,
whether or not similar in kind. No such assignment or subletting shall relieve
the original Lessee, any prior assignee or any guarantor of their obligations
respecting this Lease. Lessor hereby consent to any assignment of Lessee's
interest under this Lease to Franchisor.
24. Option to Renew. Lessee, provided it is not in default hereunder at the
time of exercise or at the expiration of the Lease Term or, if applicable, the
first extension of the Lease Term and provided that the franchise or license
agreement with Franchisor is extended for a period of not less than the
applicable renewal period, shall have the option to continue this Lease in
effect for four (4) additional periods of five (5) years each in accordance with
its original terms and provisions except for the following:
i) in the event the annual fair market rental value of the Premises
to be determined as set forth below is greater than the Base Annual Rental then
the annual fair market value of the Premises shall be substituted for the Base
Annual Rental and all other provisions shall remain the same; and
ii) in the event the annual fair market rental value of the Premises
is less than the Base Annual Rental the provisions of this Lease shall remain
the same.
Lessee shall exercise such renewal option by giving written notice
Howard Opera House Associates- Bakery Lease - Page 13
<PAGE>
to Lessor of its intention to do so not more than 270 days nor less than 2l0
days prior to the expiration of the Lease Term or the first, second, or third
extension of the Lease Term and upon receipt of such notice Lessor shall within
90 days, at Lessee's expense, cause an appraisal of the fair market rental value
of the Premises to be made by an independent appraiser. If within 20 days after
being notified of the result of such appraisal Lessee elects to reject that
appraisal then Lessor shall nominate to Lessee a list of not less than three (3)
independent appraisers who are experienced with appraising property similar to
the Premises and are familiar with the geographical region where the Premises
are located, and Lessee shall select one such appraiser. Within 60 days an
appraisal shall then be made of the Premises by that appraiser and within 20
days after the results of that appraisal shall have been delivered to Lessee,
Lessee shall notify Lessor in writing of its election to exercise this option to
renew this lease and shall pay the rental so established above which shall be
absolutely net to Lessor as provided in Section 6 hereof. If such notice of
exercise is not received by Lessor within the 20 day period then this Lease
shall terminate on the last day of the Lease Term or, if applicable, the last
day of the first renewal term.
25. Notices. All notices, demands, requests, consents, approvals or other
instruments required or permitted to be given by either party pursuant to this
Lease shall be in writing and shall be deemed to have been properly given if
sent by registered or certified mail, postage prepaid, to the parties at the
addresses set forth in the first paragraph hereof or to such other address as
either party may give notice pursuant to this Section from time to time. All
notices shall be deemed received when delivered but in no event later than five
(5) days after they are deposited with the United States Postal Service,
whichever shall first occur.
26. Holding Over. If Lessee remains in possession of the Premises after the
expiration of the term hereof, Lessee maybe deemed a tenant on a month-to-month
basis and shall continue to pay rentals and other sums in the amount herein
provided and to comply with all the terms of this Lease; provided that nothing
herein nor the acceptance of rent by Lessor shall be deemed a consent to such
holding over.
27. Landlord's Lien. Lessor shall have a landlord's lien upon all furnishings,
fixtures, equipment, decoration, supplies, accessories and other personal
property which Lessee owns or in which it has an interest located on the
Premises to secure the payment of all rental and other sums due hereunder and
the performance of all other obligations of Lessee under this Lease.
28. Removal of Lessee's Property. At the expiration of the term of this Lease,
and if Lessee is not then in breach hereof, Lessee may remove from the Premises
all personal property belonging to Lessee. Lessee shall repair any damage
caused by such removal and shall leave the
Howard Opera House Associates- Bakery Lease - Page 14
<PAGE>
Premises broom clean and in good condition and repair inside and out.
29. Financial Statements. Within the 45 days after the end of each fiscal
quarter or after any 3 four week periods, and within 120 days after the end of
each fiscal year of Lessee, Lessee shall deliver to Lessor (1) complete
financial statements of Lessee including a balance sheet, profit and loss
statement, statement of changes in cash and all other related schedules for the
fiscal period then ended; and (2) income statements for the business at the
Premises showing gross sales, profits and losses for the fiscal period then
ended. All such financial statements shall be prepared in accordance with
generally accepted accounting principles, consistently applied from period to
period, and shall be certified to be accurate and complete by Lessee (or the
Treasurer or other appropriate officer of Lessee). In the event that Lessee's
property and business at the Premises is ordinarily consolidated with other
business for financial statement purposes, such financial statements shall be
prepared on a consolidated basis showing separately the sales, profits and
losses, assets and liabilities pertaining to the Premises with the basis for
allocation of overhead of other charges being clearly set forth. The financial
statements delivered to Lessor need not be audited, but Lessee shall deliver to
Lessor copies of any audited financial statements of Lessee which may be
prepared, as soon as they are available.
30. Lessor's Liability. Notwithstanding anything to the contrary provided in
this Lease, it is specifically understood and agreed, such Agreement being a
primary consideration for the execution of this Lease by Lessor, that there
shall be absolutely no personal liability on the part of Lessor or any partner
of Lessor, its successors or assigns with respect to any of the terms, covenants
and conditions of this Lease and that Lessee shall look solely to the assets of
Lessor for the satisfaction of each and every remedy of Lessee in the event of
any breach by Lessor of any of the terms, covenants and conditions of this Lease
to be performed by Lessor, such exculpation of liability to be absolute and
without any exception whatsoever.
31. Consent of Lessor. Lessor shall have no liability for damages resulting
from Lessor's failure to give any consent, approval or instruction reserved to
Lessor, Lessee's sole remedy in any such event being an action for injunctive
relief.
32. Waiver and Amendment. No provision of this Lease shall be deemed waived or
amended except by a written instrument unambiguously setting forth the matter
waived or amended and signed by the party against which enforcement of such
waiver or amendment is sought. Waiver of any matter shall not be deemed a
waiver of the same or any other matter on any future occasion.
33. Joint Venture. Neither the provision set forth herein for the computation
of Annual Percentage Rental, nor any one or more agreements
Howard Opera House Associates- Bakery Lease - Page 15
<PAGE>
contained herein, is intended, nor shall the same be deemed or construed, to
create a partnership between Lessor and Lessee, to make them joint venturers,
nor to make Lessor in any way responsible for the debts or losses of Lessee.
34. Captions. Captions are used throughout this Lease for convenience of
reference only and shall not be considered in any manner in the construction or
interpretation hereof.
35. Severability. The provisions of this Lease shall be deemed severable. If
any part of this Lease shall be held unenforceable by any court of competent
jurisdiction, the remainder shall remain in full force and effect, and such
unenforceable provision shall be reformed by such court so as to give maximum
legal effect to the intention of the parties as expressed therein.
36. Construction Generally. This is a long-term commercial lease between
entrepreneurs which has been entered into by both parties in reliance upon the
economic and legal bargains contained herein. This Lease shall be interpreted
and construed in a fair and impartial manner without regard to such factors as
the party which prepared the instrument, the relative bargaining powers of the
parties or the domicile of any party
37. Other Documents. Each of the parties agrees to sign such other and further
documents as may be appropriate to carry out the intentions expressed in this
Lease. The parties shall execute and record a Memorandum of Lease and Option
evidencing this Lease and Lessee's purchase option contained herein.
38. Attorney Fees. In the event of any judicial or other adversarial
proceeding between the parties concerning this Lease, to the extent permitted by
law, the prevailing party shall be entitled to recover all of its reasonable
attorney fees and other costs in addition to any other relief to which it may be
entitled.
39. Entire Agreement. This Lease, and any other instruments or agreement
referred to herein, constitute the entire agreement between the parties with
respect to the subject matter hereof, and there are no other representations,
warranties or agreement except as herein provided.
40. Counterparts. This Lease may be executed in one or more counterparts, each
of which shall be deemed an original.
Howard Opera House Associates- Bakery Lease - Page 16
<PAGE>
IN WITNE5S WHEREOF, Lessor and Lessee have entered into this Lease as of
the date first above written.
LESSOR:
/s/ Rose J. Bacon HOWARD OPERA HOUSE ASSOCIATES
--------------------------------
/s/ Stephen H. Kramer By: /s/ Michael J. Dressell
-------------------------------- ------------------------------------
Michael J. Dressell, General Partner
/s/ Rose J. Bacon
--------------------------------
LESSEE:
CHAMPLAIN MANAGEMENT COMPANY
/s/ Dorothy A. Haskins
--------------------------------
By: /s/ Steven P. Schonberg
------------------------------------
Steven P. Schonberg, Chief Financial
Officer and Duly Authorized Agent
STATE OF VERMONT )
)
COUNTY OF CHITTENDEN )
The foregoing instrument was acknowledged before me on this 28th day of
January, 1991 by Michael J Dressell, general partner of Howard Opera House
Associates.
/s/ Rose J. Bacon
----------------------------------------
Notary Public
My Commission Expires: 2/10/91
STATE OF VERMONT )
)
COUNTY OF CHITTENDEN )
The foregoing instrument was acknowledged before me on this 28th day of
January, 1991 by Steven P. Schonberg, Chief Financial Officer and Duly
Authorized Agent of Champlain Management Company.
/s/ Rose J. Bacon
----------------------------------------
Notary Public
My Commission Expires: 2/10/91
Howard Opera House Associates- Bakery Lease - Page 17
<PAGE>
SHORT FORM LEASE AGREEMENT
This Short Form Lease-Agreement made as of this 11th day of March, l99l,
between Howard Opera House Associates, a Vermont limited partnership, of
Burlington, Vermont, (hereinafter referred to as "LANDLORD") and Champlain
Management Company, a Vermont corporation, of Burlington, Vermont, (hereinafter
referred to as "TENANT").
WHEREAS, the parties executed a lease as of January 28, 1991 ("Lease") that
relates to the premises described herein;
WHEREAS, the parties desire to set forth a Short Form Lease the purpose of
recording the same in the Land Records of the City of Burlington.
NOW, THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the parties agree as follows:
1. Description of Premises.
The LANDLORD hereby leases to the TENANT and the TENANT hereby leases from
the LANDLORD the following described premises:
The real property together with all building, structures, fixtures and
improvements related to the operation of the Bruegger's Bagel Bakery
located thereon, at 93 Church Street, Burlington, Vermont.
2. Commencement and Term.
Said Lease is for a term of ten (10) years commencing on the earlier of a)
the store opening or b) December 31, 1990 and expiring either a) ten (10) years
after the store opening, or b) December 30, 2000, unless terminated sooner as
provided in the Lease. TENANT may extend the term for four (4) periods of five
<PAGE>
(5) years each as set forth in Section 24 of the Lease.
3. Complete Lease.
A more complete lease is in the possession of both LANDLORD and TENANT. It
is understood that this Short Form Lease shall be recorded in the City of
Burlington Land Records.
4. No Modification.
In the event conflicts exist between the terms of this Agreement and the
terms of the Lease, the terms of the Lease shall control.
Dated at Burlington, Vermont, this 11th day of March, 1991.
LANDLORD:
/s/ Sherry L. Moser By: /s/ Nordahl L. Brue
-------------------------------- ------------------------------------
Witness Howard Opera House Associates,
General Partner
/s/ David T. Austin
--------------------------------
Witness
TENANT
/s/ Rose J. Bacon By: /s/ Stephen P. Schonberg
-------------------------------- ------------------------------------
Witness Champlain Management Company,
Duly Authorized Agent
/s/ Denise M. Longchamp
--------------------------------
Witness
STATE OF VERMONT
CHITTENDEN COUNTY, SS.
At Burlington, this 11th day of March, 1991, personally appeared Nordahl L.
Brue and he/she acknowledged this instrument, by him/her sealed and subscribed,
to be his/her free act and deed of Howard Opera House Associates.
Before me, /s/ David T. Austin
----------------------------------
Notary Public
<PAGE>
Exhibit 10-AN(iii)
LEASE
THIS LEASE made as of January 28th, 1991, by and between Howard Opera House
Associates (a Vermont limited partnership) ("Lessor") whose address is P.O. Box
374, Burlington, Vermont 05402 and Champlain Management Company, (a Vermont
corporation) ("Lessee") whose address is 109 South Winooski Avenue, P.O. Box
374, Burlington, Vermont 05402.
Lessor and Lessee agree as follows:
1. Definitions. The following terms shall have the following meanings for all
purposes of this Lease:
"Base Annual Rental" means $16,044.
"Base Monthly Rental" means an amount equal to 1/12 of the applicable Base
Annual Rental.
"Franchisor" means Champlain Management Company or its successor.
"Lease Term" means the period described in Section 3.
"Lease Year" means the 12 month period commencing on the first day of the
calendar year or the first day of the first month of such other 12 month period
as may be approved in writing by Lessor after the commencement of the Lease Term
and each successive 12 month period thereafter.
"Lessee" means Champlain Management Company or its successor or assigns.
"Lessor" means Howard Opera House Associates, its successors or assigns.
"Premises" means the real property together with all building, structures,
fixtures and improvements related to the operation of the test kitchen located
on the second floor at 93 Church Street, Burlington, Vermont.
2. Demise of Premises. In consideration of the rentals and other sums to be
paid by Lessee and of the other terms, covenants and conditions on Lessee's part
to be kept and performed, Lessor hereby leases to Lessee, and Lessee hereby
takes and hires, the Premises.
3. Lease Term. The Lease Term of approximately ten (10) years, shall
Howard Opera House Associates- Test Kitchen Lease - Page 1
<PAGE>
commence on the earlier of a) the store opening or b) December 31, 1990 and
shall expire on either a) ten (10) years from the store opening or b) December
30, 2000, unless terminated sooner as provided in this Lease and as may be
extended for four (4) periods of five (5) years each as set forth in Section 24.
4. Rental and Other Payments.
a. Lessee shall pay the Base Monthly Rental each month, on or before the
first day of the month for which it is due. If the Lease Term commences other
than on the first day of a calendar month, the Base Monthly Rental shall be
prorated from the date on which the Lease Term commences to and including the
last day of said month.
For any partial year between the commencement of the Lease Term and the
beginning of the Lease Year, calculation of Base Annual Rental shall be prorated
on the basis of the ration of the number of days in such partial year to 365.
5. Rental to be Net to Lessor. The Base Annual Rental payable hereunder shall
be net to Lessor, so that this Lease shall yield to Lessor the rentals specified
during the Lease Term, and that all costs, expenses and obligations of every
kind and nature, including management fees, whatsoever relating to the Premises
and the Equipment shall be paid by Lessee.
6. Taxes and Assessments. Lessee shall pay, as the same become due and prior
to delinquency, all taxes and assessments which would affect in any manner the
net return realized by Lessor under this Lease, including without limitation the
following:
a. All taxes and assessments upon the Premises or part thereof or any
personal property, the Equipment, trade fixtures or improvements located on the
Premises, whether belonging to Lessor or Lessee, which are owing at the
commencement of this Lease or shall be assessed or come due during the Lease
Term or any tax or charge levied in lieu of such taxes and assessments;
b. All taxes, charges, license fees or similar fees imposed by reason of
the use of the Premises and the Equipment by Lessee; and
c. All excise, transaction, privilege, license, sales, use and other
taxes upon the rental or other payments hereunder, the leasehold estate of
either party or the activities of either party pursuant to this Lease, except
for any tax upon or measured by the net income and profits of Lessor generally.
Lessee may seek a refund, rebate or abatement of any tax levied or
assessed on the Premises or the Equipment but only if arrangements for paying
such tax prior to it becoming a lien on the
Howard Opera House Associates- Test Kitchen Lease - Page 2
<PAGE>
Premises, together with all interest and penalties, are made to the written
satisfaction of Lessor.
7. Utilities. Lessee shall contract for, in its own name, and pay when due,
all charges for connection or use of water, gas, electricity, telephone, garbage
collection, sewer use and other utility services supplied to the Premises during
the Lease Term. Under no circumstances shall Lessor be responsible for any
interruption of any utility service.
8. Insurance. Lessee shall maintain at its own expense the following types
and amounts of insurance (which may be included under a blanket insurance policy
if all the other terms hereof are satisfied), in addition to such other
insurance as Lessor may reasonably require:
a. Insurance against loss, damage or destruction by fire and other
casualty, including theft, vandalism and malicious mischief, flood (if the
Premises are in a location designated by the Federal Secretary of Housing and
Urban Development as a flood hazard area), earthquake (if the Premises are in an
area subject to destructive earthquakes within recorded history), boiler
explosion (if there is any boiler upon the premises), sprinkler damage (if the
premises have a sprinkler system), all matters covered by a standard extended
coverage endorsement and such other risks as Lessor may reasonably require,
insuring the Premises, the Equipment and all improvements thereon for not less
than 90% of their full insurable replacement cost. Any insurance policy or
policies shall designate Lessor and Lessee as the named insureds as their
interest may appear and shall be payable as set forth in Section 17.
b. Comprehensive public liability and property damage insurance,
including a products liability clause, covering Lessor and Lessee against bodily
injury liability, property damage liability and automobile bodily injury and
property damage liability, including without limitation any liability arising
out of the ownership, maintenance repair, condition or operation of the Premises
or adjoining ways, streets or sidewalks. Such insurance policy or policies shall
contain a "severability of interest" clause or endorsement which precludes the
insurer from denying the claim of either Lessee or Lessor because of the
negligence or other acts of the other, shall be in amounts of not less than
$1,000,000 per injury and occurrence with respect to any insured liability,
whether for personal injury or property damage, or such higher limits as Lessor
may reasonably require from time to time, and shall be of form and substance
satisfactory to Lessor.
c. Worker's compensation, employer's liability and such other insurance
as may be necessary to comply with applicable laws. All insurance policies
shall:
i) Provide for a waiver of subrogation by the insurer as to
Howard Opera House Associates- Test Kitchen Lease - Page 3
<PAGE>
claims against Lessor, its general and limited partners, employees and agents;
ii) Provide that such insurance cannot be unreasonably cancelled,
invalidated or suspended on account of the conduct of Lessee, its officers,
directors, employees or agents;
iii) Provide that any "no other insurance" clause in the insurance
policy shall exclude any policies of insurance maintained by Lessor and that the
insurance policy shall not be brought into contribution with insurance
maintained by Lessor;
iv) Contain a standard1 "without contribution", mortgage clause
endorsement in favor of any lender designated by Lessor;
v) Provide that the policy of insurance shall not be terminated,
cancelled or substantially modified without at least 30 days prior written
notice to Lessor and to any lender covered by any standard mortgage clause
endorsement;
vi) Provide that the insurer shall not have the option to restore the
Premises if Lessor elects to terminate this Lease in accordance with the terms
hereof; and
vii) Be issued by insurance companies having a rating in Best's
Insurance Guide of Class VI or better.
Lessee shall provide to Lessor and any lender designated by Lessor
certificates of insurance or copies of insurance policies evidencing that
insurance satisfying the requirements of this Lease is in effect at all times.
9. Tax and Insurance Impound. Lessor may, at any time in its sole discretion,
require Lessee to pay to Lessor sums which will provide an impound account
(which shall not be deemed a trust fund) for paying up to the next one year of
taxes, assessments and insurance premiums. If Lessor so elects, it will estimate
the amounts needed for such purposes and will notify Lessee to pay the same to
Lessor in equal monthly installments, as nearly as practicable, in addition to
all other sums due under this Lease. Should additional funds be required at any
time, Lessee shall pay the same to Lessor on demand. Lessee shall advise Lessor
of all taxes and insurance bills which are due and shall cooperate fully with
Lessor in assuring that the same are paid. Lessor may deposit all impounded
funds in accounts insured by any Federal or State agency and may commingle such
funds with other funds and accounts of Lessor. Interest or other gains from such
funds, if any, shall be the sole property of Lessor. In the event of any default
by Lessee, Lessor may apply all impounded funds against any sums due from Lessee
to Lessor. Lessor shall give to Lessee an annual accounting showing all credits
and debtors to and from such impounded funds received from
Howard Opera House Associates- Test Kitchen Lease - Page 4
<PAGE>
Lessee.
10. Payment of Rental and Other Sums. All rental and other sums which Lessee
is required to pay hereunder shall be payable in fu1l when due without right of
setoff against any other claim against or indebtedness of Lessor. Lessee shall,
at Lessor's request, establish arrangements whereby payments of Basic Monthly
Rental can be transferred by wire or other means directly from Lessee's bank
account to such account as Lessor may designate. Any delinquent payment (that
is, any payment not made within the period specified in Section 23) shall, in
addition to any other remedy of Lessor, bear interest at the rate of 18% per
annum, but in no event shall Lessee be obligated to pay a sum of interest higher
than the maximum legal rate then in effect. Monthly Percentage Rental shall be
made coincidental with Lessee's submission of monthly reports required in
Section 4(b).
11. Use. Lessee may use the Premises for any lawful purpose. Except as set
forth below, Lessee will at all times during the Lease Term diligently operate
its business on the Premises. Lessee shall not cease diligent operation of
business during the Lease Term, except Lessee may discontinue operation by: (i)
giving written notice to Lessor 180 days prior to the day Lessee ceases
operation, (ii) providing adequate protection of the Premises during any period
of vacancy and (iii) paying all costs necessary to restore the Premises to its
condition on the day operation of the business ceased at such time as the
Premises is reopened for Lessee's business operations or other substituted use.
Notwithstanding anything herein to the contrary, Lessee shall pay monthly as
Base Annual Rental during any period in which Lessee discontinues operation an
amount equal to the mean average of the sum of the Base Annual Rental for the
three Lease Years immediately preceding such period.
Lessee shall not convert the Premises to an alternative use during the
Lease Term, without Lessor's prior written consent, which consent will not be
unreasonably withheld. Lessor may consider the following determining whether to
grant its consent, without being deemed to be unreasonable: (i) whether the
rental paid to Lessor would be equal to greater than the anticipated rental
assuming continued existing use, (ii) whether the proposed rental paid to Lessor
is reasonable considering the converted use of the Premises and the customary
rental prevailing in the community for such use, (iii) whether the converted use
will be consistent with the highest and best use of the Premises, and (iv)
whether the converted use will increase Lessor's risks or decrease the residual
value of the Premises.
12. Compliance with Laws. Lessee's use and occupation of the Premises, and the
condition thereof, shall not be in violation of any applicable governmental
requirement. Lessee shall, at Lessee's sole cost and expense, comply with all
applicable directions, rules and regulations of the fire marshall, health
officers, building inspector or other proper
Howard Opera House Associates- Test Kitchen Lease - Page 5
<PAGE>
officer of any governmental agency having jurisdiction. Lessee will not permit
any act or condition to exist in or about the Premises which will increase any
insurance rate, except when such acts are required in the normal course of its
business and Lessee shall pay for such increase.
13. Maintenance. Lessee hereby accepts the Premises "as is", with no
representation or warranty of Lessor as to the condition thereof. Lessee shall
at all times, at its own expense, maintain, repair and replace, as necessary,
the Premises, including all portions of the Premises whether or not the Premises
were in such condition upon the commencement of this Lease.
14. Alterations. Lessee shall not commit actual or constructive waste upon the
Premises or materially alter the exterior or structural elements of the Premises
in any manner without the prior written consent of Lessor. Any work, at any
time, commenced by Lessee on the Premises shall be prosecuted diligently to
completion, shall be of good workmanship and materials and shall comply fully
with all the terms of this Lease. Any addition to or alteration of the Premises
shall be deemed a part of the Premises and belong to Lessor at the expiration of
the Lease Term.
15. Indemnification. Except for negligence of Lessor, Lessee shall indemnify
and hold harmless Lessor and Lessor's general and limited partners, officers,
agents and employees, from and against any and all claims, demands, causes of
action, suits, proceedings, liabilities, damages, losses, costs and expenses,
including attorney fees, caused by, incurred or resulting from its operations of
or relating in any manner to the Premises, whether relating to their original
design or construction, latent defects, alterations, maintenance, use by Lessee
or any person thereon, supervision or otherwise, or from any breach of, default
under or failure to perform any term or provision of this Agreement by Lessee,
its officers, employees, agents or other persons. It is expressly understood
that Lessee's obligations under this paragraph shall survive the expiration or
earlier termination of this Lease for any reason.
16. Quiet Enjoyment. So long as Lessee shall pay rental and other sums herein
provided and shall keep and perform all of the terms, covenants and conditions
on its part herein contained, Lessor covenants that Lessee, subject to Lessor's
rights herein, shall have the right to the peaceful and quiet occupancy of the
Premises.
17. Condemnation or Destruction.
a. In case of a taking of all or any part of the Premises or the
commencement of any proceedings or negotiations which might result in a taking,
for any public or quasi public purpose by any lawful power or authority by
exercise of the right of condemnation or eminent domain by agreement between
Lessor, Lessee and those authorized to exercise such
Howard Opera House Associates- Test Kitchen Lease - Page 6
<PAGE>
right ("Taking"), Lessee will promptly give written notice thereof to Lessor,
generally describing the nature and extent of such Taking. Lessee may prosecute,
if permissible under the appropriate law of the jurisdiction, any award,
compensation or damages resulting from a Total Taking, to which it is entitled
but shall not have the right to Lessor's award, compensation or damages.
b. In case of a Taking of the whole of the Project, other than for
temporary use ("Total Taking"), this Lease shall terminate as of the date of
such Total Taking and all rental and other sum or sums of money and other
charges provided to be paid by Lessee shall be apportioned and paid to the date
of such Total Taking. Total Taking shall include a taking of substantially all
the Premises if the remainder of the Premises is not useable and cannot be made
useable for the purposes provided herein.
c. In case of temporary use of the whole or any part of the Premises by a
Taking, this Lease shall remain in full force and effect without any reduction
of rent or any other sum payable hereunder. Lessee shall be entitled to the
entire award for such taking, whether paid by damages, rent or otherwise, unless
the period of occupation and use by the condemning authorities shall extend
beyond the date of expiration of this Lease, in which case the award made for
such taking shall be apportioned between Lessor and Lessee as of the date of
such expiration. At the termination of any such use or occupation of the
Premises, Lessee will, at its own cost and expense, promptly commence and
complete the restoration of the Premises. Lessee shall not be required to make
the restoration if the term of this Lease shall expire prior to, or within one
(1) year after, the date of termination of the temporary use so taken, and in
such event Lessor shall be entitled to recover all damages and awards arising
out of the failure of the condemning authority to repay and restore the building
at the expiration of such temporary taking.
d. In the event of a Taking of less than all of the Premises other than a
temporary use ("Partial Taking") or of damage or destruction to all or any part
of the Premises, all awards, compensation or damages shall be paid to Lessor and
Lessor shall have the option to terminate this Lease by notifying Lessee in
writing within 60 days after Lessee gives Lessor notice of such damage or
destruction or that title has vested in the taking authority. Lessee shall
thereupon have a period of 60 days in which to elect in writing to continue this
Lease on the terms herein provided. If Lessee does not elect to continue this
Lease or shall fail during such 60 day period to elect to continue this Lease,
then this Lease shall terminate as of the last day of the month during which
such period expired. Lessee shall then immediately vacate and surrender the
Premises, all obligations of either party hereunder shall cease as of the date
of termination and Lessor may retain all such awards, compensation or damages.
If Lessor does not elect to terminate this Lease, or if Lessor so elects but
Lessee elects to continue this
Howard Opera House Associates- Test Kitchen Lease - Page 7
<PAGE>
Lease, then this Lease shall continue on the following terms: Rental and other
sums due under this Lease shall continue unabated, and Lessee shall promptly
commence and diligently prosecute restoration of the Premises to the same
condition, as nearly as practicable; as prior to such partial condemnation,
damage or destruction as approved by Lessor in its sole discretion. Lessor
shall promptly make available in installments as restoration progresses an
amount equal to any award, compensation or damages received by Lessor, upon
written request of Lessee accompanied by evidence reasonably satisfactory to
Lessor that such amount has been paid or is due and payable and is properly a
part of such costs and that there are no mechanics or similar liens for labor
and/or materials theretofore supplied in connection with the restoration.
Lessor shall be entitled to keep any portion of such award, compensation or
damages which may be in excess of the cost of restoration, and Lessee shall bear
all additional costs, fees and expenses of such restoration in excess of the
amount of the amount of any such award, compensation or damages.
e. Notwithstanding the foregoing, if at the time of any Taking or at any
time thereafter Lessee shall be in default under this Lease and such default
shall be continuing, Lessor is hereby authorized and empowered, in the name and
on behalf of Lessee and otherwise, to file and prosecute Lessee's claim, if any,
for an award on account of any Taking and to collect such award and apply the
same, after deducting all costs, fees and expenses incident to the collection
thereof, to the curing of such default and any other then existing default and
any other then existing default under this Lease.
18. Inspection. Lessor and its authorized representatives shall have the
right, upon giving reasonable notice, to enter the Premises or any part thereof
and inspect the same and make photographic or other evidence concerning Lessee's
compliance with the terms of this Lease. Lessee shall keep full, complete and
accurate books, records and accounts, of all business done including any sales
or other tax reports that Lessee may be required to furnish to any governmental
agency at or from the Premises sufficient to permit Lessor to verify all
statements, certificates and accountings delivered to Lessor. Should any audit
by Lessor reveal that any statement or account rendered by Lessee was in error
by 10% or more, then in addition to any other remedy of Lessor, Lessee shall
reimburse the cost of such audit to Lessor upon demand.
Lessee hereby consents to Lessor's providing information it obtains to
Franchisor and to Lessor's obtaining from Franchisor information which
Franchisor receives relating to Lessee's operation of its business on the
Premises.
19. Franchisor Requirements. Lessee, in its use, occupancy and maintenance of
the Premises shall comply with all requirements of its license agreement with
Franchisor.
Howard Opera House Associates- Test Kitchen Lease - Page 8
<PAGE>
20. Default and Remedies.
a. Each of the following shall be deemed a breach of this Lease and a
default by Lessee:
i) If any material representation or warranty of Lessee herein or as
Seller in the Purchase Agreement was false when made, or in the event that any
such representation or warranty is continuing and becomes false at any time, or
if Lessee renders any false statement or account;
ii) If any rent of or other monetary sums due remain unpaid for five
(5) days after written notice thereof to Lessee;
iii) If Lessee becomes insolvent, performs any act of bankruptcy or
is not generally paying its debts as the same become due;
iv) If Lessee fails to perform any of the covenants, conditions or
obligations of this Lease; or
v) If there is a breach or default under the Purchase Agreement,
under any license or franchise permitting Lessee or Guarantors to operate the
Premises in the manner authorized or if such license or franchise otherwise
terminates or expires, under any Guarantee of Lessee's obligations under this
Lease or under any other agreement between Lessor and Lessee.
b. If any such breach or default does not involve the payment of any
rental or other monetary sum, is not willful or intentional, does not place any
rights or property of Lessor in immediate jeopardy, is not known to Lessee
(unless Lessor has given Lessee notice thereof) and is within the reasonable
power of Lessee to cure within 30 days after receipt of notice thereof, all as
determined by Lessor in its reasonable discretion, then such event shall not
constitute a default hereunder, unless otherwise expressly provided herein,
unless and until Lessor shall have given Lessee notice thereof and a period of
30 days shall have elapsed, during which period Lessee may correct or cure such
event, upon failure of which a default shall be deemed to have occurred
hereunder without further notice or demand of any kind. If such breach or
default cannot reasonably be cured with the 30 day period, as determined by
Lessor, in its reasonable discretion, and Lessee is diligently pursuing a cure
of such breach or default, then Lessee shall, after receiving notice specified
herein, have a reasonable period to cure such breach or default.
c. In the event of any breach or default, and without any notice, except,
if applicable, the notice prior to default required under certain circumstances
by Paragraph b above or such other notice as may be required by law and cannot
be waived by Lessee (all other notices being hereby waived), Lessor shall be
entitled to exercise, at its
Howard Opera House Associates- Test Kitchen Lease - Page 9
<PAGE>
option, concurrently, successively or in any combination, all remedies available
at law or in equity, including without limitation any one or more of the
following:
i) To terminate this Lease;
ii) To reenter and take possession of the Premises or any part thereof
(which reentry shall not operate to terminate this Lease unless Lessor expressly
so elects), of any or all personal property or fixtures of Lessee upon the
Premises, the Equipment and of all franchises, licenses, permits and other
rights or privileges of Lessee pertaining to the use and operation of the
Premises and to conduct business thereon in the name of Lessor or of Lessee but
for the sole profit and benefit of Lessor and without compensation to Lessee;
iii) To seize all personal property, the Equipment or fixtures upon
the Premises which Lessee owns or in which it has an interest, in which Lessor
shall have a landlord's lien and is hereby granted a security interest, and to
dispose thereof in accordance with laws prevailing at the time and place of such
seizure or to remove all or any portion of such property and cause the same to
be stored in a public warehouse or elsewhere at the cost of Lessee;
iv) To relet the Premises or any part thereof for such term or terms
(including a term which extends beyond the original term of this Lease, at such
rentals and upon such other terms as Lessor, in its sole discretion, may
determine, with all proceeds received from such reletting being applied to the
rentals and other sums due from Lessee in such order as Lessor may, in its sole
discretion, determine, with Lessee remaining liable for deficiency;
v) To recover from Lessee an amount equal to the difference between
the rentals and such other sums (including all sums required to be paid by
Lessee, such as taxes and insurance) to be received from the date of such breach
to the expiration of the original term hereof and the reasonable long term
rental value of the Premises for the same period; and/or
vi) To recover from Lessee all expenses, including attorney fees,
reasonably paid or incurred by Lessor as a result of such breach.
In addition, in the event of any breach or default by Lessee, Lessor may,
but shall not be obligated to, immediately or at any time thereafter, and
without notice, except as required herein, correct such breach or default
without, however, curing the same for the account and at the expense of the
Lessee. Any sum or sums so paid by Lessor, together with interest at the then
existing maximum legal rate, but not higher than 18% per annum, and all costs
and damages, shall be deemed to be additional rent hereunder and shall be
immediately due from Lessee to Lessor.
Howard Opera House Associates- Test Kitchen Lease - Page 10
<PAGE>
21. Mortgage and Subordination. Lessor's interest in this Lease, the Equipment
or the Premises shall not be subordinate to any encumbrances placed upon the
Premises by or resulting from any act of Lessee, and nothing herein contained
shall be construed to require such subordination by Lessor. Lessee shall keep
the Premises free from any liens for work performed materials furnished or
obligations incurred by Lessee. NOTICE IS HEREBY GIVEN THAT LESSEE IS NOT
AUTHORIZED TO PLACE ANY LIEN, MORTGAGE, DEED OF TRUST OR ENCUMBRANCE OF ANY KIND
UPON ALL OR ANY PART OF THE PREMISES AND THE EQUIPMENT OF LESSEE'S LEASEHOLD
INTEREST THEREIN, AND ANY SUCH PURPORTED TRANSACTION SHALL BE VOID.
This Lease at all time shall be subordinated to the lien or any ground
leases, mortgage, mortgages, trust deed or trust deeds now or hereafter placed
upon the Premises by Lessor, and Lessee covenants and agrees to execute and
deliver, upon demand, such further instruments subordinating this Lease to the
lien of any such ground lease, mortgage, mortgages, trust deed or trust deeds as
shall be desired by Lessor, or any mortgagees or proposed mortgagees or trustees
under trust deeds, upon the condition that Lessee shall have the right to remain
in possession of the Premises under the terms of this Lease, notwithstanding any
default in any such mortgage, mortgages, trust deed or trust deeds, or after
foreclosure thereof, so long as Lessee is not in default under any of the
covenants, conditions and agreements contained in this Lease.
If any mortgagee or trustee elects to have this Lease and the interest of
Lessee hereunder be superior to any such interest or right and evidences such
election by notice given to Lessee, then this Lease and the interest of Lessee
hereunder shall be deemed superior to any such mortgage or trust deed, whether
this Lease was executed before or after such mortgage or trust deed and in that
event such mortgagee or trustee shall have the same rights with respect to this
Lease as if it had been executed and delivered prior to the execution and
delivery of the mortgage or trust deed and has been assigned to such mortgagee
or trustee.
Lessee shall execute and deliver whatever instruments may be required for
such purposes, and in the event Lessee fails so to do within 10 days after
demand in writing, Lessee does hereby make, constitute and irrevocably appoint
Lessor's agent as its attorney-in-fact and in its name, place and stead so to
do.
Lessee shall give written notice to any mortgage lender having a recorded
security instrument upon the Premises or any part thereof of any breach or
default by Lessor of any of its obligations under this Lease and to give such
mortgage lender at least 60 days beyond any notice period to which Lessor might
be entitled to cure such default before Lessee may exercise any remedy with
respect thereto. Lessee shall provide Lessee's most recent audited financial
statements upon
Howard Opera House Associates- Test Kitchen Lease - Page 11
<PAGE>
request to Lessor or any mortgage lender and to certify the continuing accuracy
of such financial statements in such manner as Lessor or such mortgage lender
may request.
22. Estoppel Certificate. At any time, and from time to time, Lessee agrees,
promptly and in no event later than ten (10) days after a request in writing
from Lessor, to execute, acknowledge and deliver to Lessor a statement in
writing certifying that this Lease is unmodified and in full force and effect
(or, if there have been modifications, that the same is in full force and effect
as modified and stating the modifications) and the dates to which the rental and
other charges have been paid.
23. Assignment. Lessor shall have the right to sell or convey the Premises
subject to this Lease or to assign its right, title and interest as Lessor under
this Lease in whole or in part. In the event of any such sale or assignment
other than a security assignment, Lessor shall be relieved, from and after the
date of such transfer or conveyance, of liability for the performance of any
obligation of Lessor contained herein, except for obligations or liabilities
accrued prior to such assignment or sale.
Lessee acknowledges that Lessor has been induced to enter into this Lease
in anticipation of receiving substantial percentage rentals from Lessee's
contemplated use of the Premises and that Lessor has relied both on the business
experience and credit worthiness of Lessee and upon the particular purposes for
which Lessee intends to sue the Premises. Lessee shall not assign this Lease or
any interest therein, or sublet all or any part of the Premises, which were
originally intended for Bagel Bakery occupation, without the prior written
consent of Lessor which consent shall not be unreasonably withheld. Lessor may
withhold or condition such consent upon such matters as Lessor may in its sole
discretion determine, including without limitation the experience and
creditworthiness of the assignee, the assumption by the assignee of all Lessee's
obligations hereunder by undertakings enforceable by Lessor, the transfer to
such assignee of all necessary licenses and franchises to continue operating the
Premises for the purposes herein provided, receipt of such representations and
warranties from such assignee as Lessor may request, including such matters as
its organization, existence, good standing and finances and other matters,
whether or not similar in kind. No such assignment or subletting shall relieve
the original Lessee, any prior assignee or any guarantor of their obligations
respecting this Lease. Lessor hereby consent to any assignment of Lessee's
interest under this Lease to Franchisor.
24. Option to Renew. Lessee, provided it is not in default hereunder at the
time of exercise or at the expiration of the Lease Term or, if applicable, the
first extension of the Lease Term and provided that the franchise or license
agreement with Franchisor is extended for a period of not less than the
applicable renewal period, shall have the option to
Howard Opera House Associates- Test Kitchen Lease - Page 12
<PAGE>
continue this Lease in effect for four (4) additional periods of five (5) years
each in accordance with its original terms and provisions except for the
following:
i) in the event the annual fair market rental value of the Premises
to be determined as set forth below is greater than the Base Annual Rental then
the annual fair market value of the Premises shall be substituted for the Base
Annual Rental and all other provisions shall remain the same; and
ii) in the event the annual fair market rental value of the Premises
is less than the Base Annual Rental the provisions of this Lease shall remain
the same.
Lessee shall exercise such renewal option by giving written notice to
Lessor of its intention to do so not more than 270 days nor less than 210 days
prior to the expiration of the Lease Term or the first, second, or third
extension of the Lease Term and upon receipt of such notice Lessor shall within
90 days, at Lessee's expense, cause an appraisal of the fair market rental value
of the Premises to be made by an independent appraiser. If within 20 days after
being notified of the result of such appraisal Lessee elects to reject that
appraisal then Lessor shall nominate to Lessee a list of not less than three (3)
independent appraisers who are experienced with appraising property similar to
the Premises and are familiar with the geographical region where the Premises
are located, and Lessee shall select one such appraiser. Within 60 days an
appraisal shall then be made of the Premises by that appraiser and within 20
days after the results of that appraisal shall have been delivered to Lessee,
Lessee shall notify Lessor in writing of its election to exercise this option to
renew this Lease and shall pay the rental so established above which shall be
absolutely net to Lessor as provided in Section 6 hereof. If such notice of
exercise is not received by Lessor within the 20 day period then this Lease
shall terminate on the last day of the Lease Term or, if applicable, the last
day of the first renewal term.
25. Notices. All notices, demands, requests, consents, approvals or other
instruments required or permitted to be given by either party pursuant to this
Lease shall be in writing and shall be deemed to have been properly given if
sent by registered or certified mail, postage prepaid, to the parties at the
addresses set forth in the first paragraph hereof or to such other address as
either party may give notice pursuant to this Section from time to time. All
notices shall be deemed received when delivered but in no event later than five
(5) days after they are deposited with the United States Postal Service,
whichever shall first occur.
26. Holding Over. If Lessee remains in possession of the Premises after the
expiration of the term hereof, Lessee maybe deemed a tenant on a month-to-month
basis and shall continue to pay rentals and other sums
Howard Opera House Associates- Test Kitchen Lease - Page 13
<PAGE>
in the amount herein provided and to comply with all the terms of this Lease;
provided that nothing herein nor the acceptance of rent by Lessor shall be
deemed a consent to such holding over.
27. Landlord's Lien. Lessor shall have a landlord's lien upon all furnishings,
fixtures, equipment, decoration, supplies, accessories and other personal
property which Lessee owns or in which it has an interest located on the
Premises to secure the payment of all rental and other sums due hereunder and
the performance of all other obligations of Lessee under this Lease.
28. Removal of Lessee's Property. At the expiration of the term of this Lease,
and if Lessee is not then in breach hereof, Lessee may remove from the Premises
all personal property belonging to Lessee. Lessee shall repair any damage caused
by such removal and shall leave the Premises broom clean and in good condition
and repair inside and out.
29. Financial Statements. Within the 45 days after the end of each fiscal
quarter or after any 3 four week periods, and within 120 days after the end of
each fiscal year of Lessee, Lessee shall deliver to Lessor (1) complete
financial statements of Lessee including a balance sheet, profit and loss
statement, statement of changes in cash and all other related schedules for the
fiscal period then ended; and (2) income statements for the business at the
Premises showing gross sales, profits and losses for the fiscal period then
ended. All such financial statements shall be prepared in accordance with
generally accepted accounting principles, consistently applied from period to
period, and shall be certified to be accurate and complete by Lessee (or the
Treasurer or other appropriate officer of Lessee). In the event that Lessee's
property and business at the Premises is ordinarily consolidated with other
business for financial statement purposes, such financial statements shall be
prepared on a consolidated basis showing separately the sales, profits and
losses, assets and liabilities pertaining to the Premises with the basis for
allocation of overhead of other charges being clearly set forth. The financial
statements delivered to Lessor need not be audited, but Lessee shall deliver to
Lessor copies of any audited financial statements of Lessee which may be
prepared, as soon as they are available.
30. Lessor's Liability. Notwithstanding anything to the contrary provided in
this Lease, it is specifically understood and agreed, such agreement being a
primary consideration for the execution of this Lease by Lessor, that there
shall be absolutely no personal liability on the part of Lessor or any partner
of Lessor, its successors or assigns with respect to any of the terms, covenants
and conditions of this Lease and that Lessee shall look solely to the assets of
Lessor for the satisfaction of each and every remedy of Lessee in the event of
any breach by Lessor of any of the terms, covenants and conditions of this Lease
to be performed by Lessor, such exculpation of liability to be absolute and
without any exception whatsoever.
Howard Opera House Associates- Test Kitchen Lease - Page 14
<PAGE>
31. Consent of Lessor. Lessor shall have no liability for damages resulting
from Lessor's failure to give any consent, approval or instruction reserved to
Lessor, Lessee's sole remedy in any such event being an action for injunctive
relief.
32. Waiver and Amendment. No provision of this Lease shall be deemed waived or
amended except by a written instrument unambiguously setting forth the matter
waived or amended and signed by the party against which enforcement of such
waiver or amendment is sought. Waiver of any matter shall not be deemed a waiver
of the same or any other matter on any future occasion.
33. Joint Venture. Neither the provision set forth herein for the computation
of Annual Percentage Rental, nor any one or more agreements contained herein, is
intended, nor shall the same be deemed or construed, to create a partnership
between Lessor and Lessee, to make them joint venturers, nor to make Lessor in
any way responsible for the debts or losses of Lessee.
34. Captions. Captions are used throughout this Lease for convenience of
reference only and shall not be considered in any manner in the construction or
interpretation hereof.
35. Severability. The provisions of this Lease shall be deemed severable. If
any part of this Lease shall be held unenforceable by any court of competent
jurisdiction, the remainder shall remain in full force and effect, and such
unenforceable provision shall be reformed by such court so as to give maximum
legal effect to the intention of the parties as expressed therein.
36. Construction Generally. This is a long-term commercial lease between
entrepreneurs which has been entered into by both parties in reliance upon the
economic and legal bargains contained herein. This lease shall be interpreted
and construed in a fair and impartial manner without regard to such factors as
the party which prepared the instrument, the relative bargaining powers of the
parties or the domicile of any party.
37. Other Documents. Each of the parties agrees to sign such other and further
documents as may be appropriate to carry out the intentions expressed in this
Lease. The parties shall execute and record a Memorandum of Lease and Option
evidencing this Lease and Lessee's purchase option contained herein.
38. Attorney Fees. In the event of any judicial or other adversarial proceeding
between the parties concerning this Lease; to the extent permitted by law, the
prevailing party shall be entitled to recover all of its reasonable attorney
fees and other costs in addition to any other relief to which it may be
entitled.
Howard Opera House Associates- Test Kitchen Lease - Page 15
<PAGE>
39. Entire Agreement. This Lease, and any other instruments or agreement
referred to herein, constitute the entire agreement between the parties with
respect to the subject matter hereof, and there are no other representations,
warranties or agreement except as herein provided.
40. Counterparts. This Lease may be executed in one or more counterparts, each
of which shall be deemed an original.
Howard Opera House Associates- Test Kitchen Lease - Page 16
<PAGE>
IN WITNESS WHEREOF, Lessor and Lessee have entered into this Lease as of
the date first above written.
LESSOR:
HOWARD OPERA HOUSE ASSOCIATES
/s/ Rose J. Baacon
----------------------------
By:/s/ Michael J. Dressell
----------------------------
/s/ Stephen H. Kramer Michael J. Dressell, General
---------------------------- Partner
/s/ Rose J. Bacon
---------------------------- LESSEE:
CHAMPLAIN MANAGEMENT COMPANY
Dorthy A. Haskine
----------------------------
BY: /s/ Stephen P. Schonberg
---------------------------
Steven P. Schonberg, Chief
Financial Officer and Duly
Authorized Agent
STATE OF VERMONT )
)
COUNTY OF CHITTENDEN )
The foregoing instrument was acknowledged before me on this 28th day of
January, 1991 by Michael J. Dressell, general partner of Howard Opera House
Associates.
/s/ Rose J. Bacon
-----------------------------------
Notary Public
My Commission Expires: 2/10/91
STATE OF VERMONT )
)
COUNTY OF CHITTENDEN )
The foregoing instrument was acknowledged before me on this 28th day of
January, 1991 by Steven P. Schonberg, Chief Financial Officer and Duly
Authorized Agent of Champlain Management Company.
/s/ Rose J. Bacon
-----------------------------------
Notary Public
My Commission Expires: 2/10/91
Howard Opera House Associates- Test Kitchen Lease - Page 17
<PAGE>
SHORT FORM LEASE AGREEMENT
This Short Form Leas Agreement made as of this 11th day of March, 1991,
between Howard Opera House Associates, a Vermont limited partnership, of
Burlington, Vermont, (hereinafter referred to as "LANDLORD") and Champlain
Management Company, a Vermont corporation, of Burlington, Vermont, (hereinafter
referred to as "TENANT").
WHEREAS, the parties executed a Lease as of January 28, 1991 ("Lease") that
relates to the premises described herein;
WHEREAS, the parties desire to set forth a Short Form Lease for the
purposes of recording the same in the Land Records of the City of Burlington.
NOW, THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the parties agree as follows:
1. Description of Premises.
The LANDLORD hereby leases to the TENANT and the Tenant hereby leases from
the LANDLORD the following described premises:
The real property together with all building, structures, fixtures and
improvements related to the operation of the test kitchen located on
the second floor at 93 Church Street, Burlington, Vermont.
2. Commencement and Term.
Said Lease is for a term of ten (10) years commencing on the earlier of a)
the store opening or b) December 31, 1990 and expiring either a) ten (10) years
after the store opening, or b) on December 30, 2000, unless terminated sooner as
provided in the Lease. TENANT may extend the term for four (4) periods of five
(5) years each as set forth in Section 24 of the Lease.
<PAGE>
3. Complete Lease.
A more complete lease is in the possession of both LANDLORD and TENANT. It
is understood that this Short Form Lease shall be recorded in the City of
Burlington Land Records.
4. No Modification.
In the event any conflicts exist between the terms of this Agreement and
the terms of the Lease, the terms of the Lease shall control.
Dated at Burlington, Vermont, this 11th day of March, 1991.
LANDLORD:
/s/ Sherry L. Moser By: /s/ Nordahl L. Brue
-------------------------- ------------------------------
Witness Howard Opera House Associates,
General Partner
/s/ David T. Austin
--------------------------
Witness
TENANT:
/s/ Rose J. Bacon
--------------------------
Witness By: /s/ Steven P. Schonberg
-------------------------------
Champlain Management Company,
/s/ Denise M. Longchamp Duly Authorized Agent
--------------------------
Witness
STATE OF VERMONT
CHITTENDEN COUNTY, SS.
At Burlington, this 11th day of March, 1991, personally appeared
Nordahl L. Brue and he acknowledged this instrument, by him sealed and
subscribed to be his free act and deed of Howard Opera House Associates.
Before me, /s/ David T. Austin
---------------------------------
Notary Public
<PAGE>
STATE OF VERMONT
CHITTENDEN COUNTY, SS.
At Burlington, this 11th day of March, 1991, personally appeared
Steven P. Schonberg and he/she acknowledged this instrument, by him/her sealed
and subscribed, to be his/her free act and deed and the free act and deed of
Champlain Management Company.
Before me, /s/ Denise M. Longchamp
----------------------------------
Notary Public