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THOMAS F. HYDE (No. 50801)
80 E. Sir Francis Drake Blvd., Ste. 4-C
Larkspur, California 94939
Telephone: 415/646-1180
Facsimile- 415/464-0280
SEP 17 2010
MICHAEL J. BAKER (No. 56492)
mbaker@howardrice.com
HOWARD RICE NEMEROVSKI CANADY
FALK & RABKIN
A Professional Corporation
Three Embarcadero Center, 7th Floor
San Francisco, California 94111-4024
Telephone: 415/434-1600
Facsimile- 415/677-6262
KIM TURNER
Court Execum:_( )tticer MARIN COUNTY SUPERIOR COURT By: N. Johnson, Deintry
Attorneys for Plaintiff
POGGIO LP, a California limited partnership
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SUPERIOR COURT OF THE STA'1E, OF CALIFORNIA
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COUNTY OF MARIN
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POGGIO LP, a California limited partnership,
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Plaintiff,
V.
CASA MADRONA HOTEL AND SPA,
LLC, a California limited liability company,
TERRA RESORT GROUP, LLC, a
Wyoming limited liability company, and
DOES 1-20,
Defendants.
No W1004957
COMPLAINT FOR DAMAGES FOR
BREACH OF LEASE, BREACH OF
COVENANT OF QUIET ENJOYMENT,
TRESPASS, WRONGFUL EVICTION,
INTENTIONAL INTERFERENCE
WITH PROSPECTIVE ECONOMIC
ADVANTAGE, AND FOR
DECLARATORY RELIEF AND
INJUNCTIVE RELIEF
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COMPLAINT FOR DAMAGES, DECLARATORY AND INJUNCTIVE RELIEF
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Plaintiff POGGIO LP hereby alleges as follows:
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SUMMARY OF CLAIMS
1.
Poggio, a premier Sausalito three-star restaurant, opened for business in the Casa
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Madrona Hotel in November 2003. The principal force behind Poggio, then and now, is
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Larry Mindel, an experienced and highly regarded restaurateur who previously brought Ii
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Fornaio, Prego, MacArthur Park, Ciao, Guaymas and other leading restaurants to the Bay
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Area and expanded II Fornaio across the United States. Mr. Mindel, a resident of Sausalito
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for over 40 years, was encouraged by Sausalito city officials to head up the Casa Madrona
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restaurant development as a part of a larger project by the then-owner to add a spa, banquet
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rooms, guest rooms and restaurant to the historic hotel. Plaintiff Poggio LP, with
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Mr. Mindel as its principal owner together with many Mann County partners, invested $2.7
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million to design, construct and furnish the restaurant. Poggio opened to critical acclaim and
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has since been regularly ranked by the San Francisco Chronicle as one of the Bay Area-'s top
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100 restaurants.
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2.
In February 2010, Defendant Casa Madrona Hotel and Spa, LLC (CMHS"),
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purchased the Casa Madrona Hotel in a foreclosure sale after the prior owner defaulted on its
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bank debt and declared bankruptcy. CMHS is controlled by a real estate private equity firm
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in Los Angeles. Two months after purchasing the hotel, CMHS sought and obtained a
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bankruptcy court order "rejecting" the Poggio lease. Then, CMHS sent Poggio two letters
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declaring the Poggio lease "terminated" and directing Poggio to "vacate" the premises. The
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notices were sent even though Poggio was not in any way in default under its lease.
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CMHS's transparent purpose was to wrest possession and control of a multi-million
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restaurant space for free. Poggio refused to leave and has continued to operate the restaurant
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in compliance with its lease, even paying the cost of landlord obligations that CMHS has
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refused to honor.
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3.
Having failed in -its first efforts to evict Poggio, CMHS embarked on a new
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strategy in June 2010. As detailed below, CMHS, along with its Wyoming property
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manager, Terra Resort Group, LLC, have engaged in a series of escalating acts to harass
-1COMPLAINT FOR DAMAGES, DECLARATORY AND INJUNCTIVE RELIEF
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Poggio into either giving up the premises or agreeing to substantially higher rent. Those acts
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have included: (1) forcing Poggio to pay for valet parking for not only restaurant guests but
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also hotel guests, even though valet parking is the landlord's responsibility under Poggio's
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lease; (2) filling banquet and meeting rooms regularly used by Poggio for restaurant events
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with office equipment and furniture even though both the Poggio lease and the hotel's
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conditional use permit require that the rooms be used as "meeting spaces"; (3) denying
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Poggio access to the hotel's most prominent event space, the Mikayla; (4) depriving Poggio
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of hundreds of thousands of dollars of revenue by effectively shutting down the restaurant's
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meeting, banquet and large event business; (5) evicting the catering manager previously
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shared by the hotel and the restaurant from her hotel office and stuffing her files, computer
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and other belongings into a closet; (6) refusing to pay for maintenance and repair of critical
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hotel equipment even though that is the landlord's responsibility under the lease;
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(7) ordering Poggio to vacate a second floor kitchen that the lease reserves for Poggio's
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exclusive use; (8) ordering Poggio to remove stacked wood used in its trademark wood-
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burning ovens from the restaurant entrance where it has always been a part of the
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restaurant's distinctive decor; and (9) denying restaurant employees use of a hotel parking
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lot they have used since Poggio first opened for business.
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4.
Poggio brings this action to stop the harassing acts of CMHS and Terra Resort
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Group and to recover the substantial damages Poggio has suffered, and continues to suffer,
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because of their interference with Poggio's business.
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THE PARTIES
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Plaintiff Poggio LP ("Poggio") is a California limited partnership headquartered
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in Mann County, California. It operates the Poggio restaurant in the Casa Madrona Hotel in
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Sausalito, California.
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6.
Plaintiff is informed and believes, and on that basis alleges, that Defendant Casa
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Madrona Hotel and Spa, LLC ("CMHS"), is a California limited liability company with its
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principal place of business in Sausalito, California. Plaintiff is informed and believes, and
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on that basis alleges, that defendant CMHS is owned and controlled by an investment fund
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called MetWest SIMA Real Estate Fund I, an affiliate of MetWest Realty Advisors, a private
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equity firm in Los Angeles, California.
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Plaintiff is informed and believes, and on that basis alleges, that Defendant Terra
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Resort Group, LLC ("Terra"), is a Wyoming limited liability company with its principal
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place of business in Teton Village, Wyoming On information and belief, Terra serves as
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property manager for the Casa Madrona Hotel under a contract with CMHS.
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Plaintiff is ignorant of the true names and capacities of the remaining defendants
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sued herein as Does 1 through 20, and plaintiff therefore sues these defendants by their
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fictitious names. Plaintiff will amend its complaint to allege the true names and capacities of
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these Doe defendants, whether entities or persons, when they have been ascertained.
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Plaintiff is informed and believes, and on that basis alleges, that each of the defendants,
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including the Doe defendants, is related to or affiliated with CMHS and/or Terra.
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Plaintiff is informed and believes, and on that basis alleges, that each of the
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defendants sued herein is, and at all times relevant herein was, an agent and/or employee of
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each of the other defendants; in doing the acts alleged herein, each of the defendants was
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acting within the course and scope of such agency or employment and with the permission
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and consent of the other defendants. Plaintiff is further informed and believes that in doing
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the acts alleged herein, each of the defendants was acting in concert with each of the other
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defendants.
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FACTUAL ALLEGATIONS
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10. On or about September 23, 2002, Poggio entered into a Commercial Lease (the
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"Lease") as the tenant, with Oly Casa Madrona, LLC, a Delaware limited liability company
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("Oly"), as the landlord, for restaurant and appurtenant spaces (the "Restaurant") in the Casa
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Madrona Hotel (the "Hotel") in Sausalito, California. A copy of the Lease is attached as
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Exhibit A, and a copy of the First Amendment to the Lease and a related settlement
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agreement between Poggio and MHG (the "First Amendment") are ,attached as Exhibit B.
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When the Lease was signed, Poggio was known as Cantinetta.
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11. At the time the Lease was signed, Oly was engaged in a major Hotel expansion,
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adding 31 guest rooms, a spa, meeting and event spaces, and a restaurant. Oly recruited Mr.
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Mindel and persuaded him and his partners to build and operate a high-end restaurant in the
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new hotel structure. Oly expressed particular enthusiasm for the positive effect Mr.
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Mindel's expertise in managing group events and banquets would have on hotel occupancy.
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The Restaurant opened to the public in November 2003 at a cost to Poggio of over $2.7
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million. The Restaurant has operated successfully since and is regularly acclaimed in
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reviews and rankings as both a three-star and a top-100 Bay Area restaurant. Among other
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awards, Esquire magazine picked Poggio as one of the ten best new restaurants in the United
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States in 2003. At the time Poggio opened in 2003, there were no other San Francisco
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Chronicle rated three-star restaurants in Sausalito.
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12. Plaintiff alleges the following paragraph 12 on information and belief. In or
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about May 2005, Oly sold the Hotel to MGH Casa Madrona Hotel, LLC ("MHG"). MHG
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financed its purchase of the Hotel with a loan from Integrity Bank in Alpharetta, Georgia
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(the "Integrity Loan"). Before the Integrity Loan was made, Integrity Bank either had actual
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knowledge of the Lease or was on inquiry notice due to Poggio's occupancy of the
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Restaurant. In addition, before the First Amendment was made, Integrity Bank knew of and
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approved its terms. Because of the foregoing, at all times mentioned, the Integrity Loan was
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subordinate to the Lease, including the First Amendment.
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13. Plaintiff alleges the following paragraph 13 on information and belief. On or
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about August 29, 2008, Integrity Bank was closed by the Georgia Department of Banking
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and Finance and the Federal Deposit Insurance Corporation (the "FDIC") was appointed the
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-Bank's receiver. On or about April 30, 2009, the FDIC filed a complaint against MHG in
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U.S. District Court for the Northern District of California seeking appointment of a receiver
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and injunctive relief to facilitate a non-judicial foreclosure of MHG's interest in the Hotel.
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On or about August 10, 2009, prior to the foreclosure sale, MHG filed a voluntary petition
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for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code. The FDIC obtained relief
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from the automatic bankruptcy stay, and on or about February 2, 2010, sold the Hotel at a
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foreclosure sale to CMHS (then called CMSC Ventures, LLC). At all relevant times, the
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FDIC either had actual knowledge of the Lease and the First Amendment or was on inquiry
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notice due to Poggio's occupancy of the Restaurant, and the FDIC never objected to
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Poggio's occupancy under the Lease and First Amendment.
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14. On or about March 3, 2010, at the request of CMHS, the trustee in the MHG
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bankruptcy case filed a motion under Section 365 of the federal Bankruptcy Code to reject
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"that certain unexpired real property lease (the Poggio Lease') between the Debtor [MHG]
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and Cantinetta, LLP, dba Poggio .. ." On or about April 2, 2010, the Bankruptcy Court
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granted the motion and ordered that "the Poggio Lease is hereby rejected effective as of
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April 2, 2010."
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15. Section 365(h)(1) of the U.S. Bankruptcy Code provides, in relevant part, that if a
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trustee rejects an unexpired lease of real property under which the debtor is the lessor, the
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tenant may treat the lease as terminated or "retain its rights under such lease (including
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rights such as those relating to the amount and timing of payment of rent and other amounts
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payable by the lessee• and any right of use, possession, quiet enjoyment, subletting,
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assignment, or hypothecation) that are in or appurtenant to the real property for the balance
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of the term of such lease and for any renewal or extension of such rights to the extent that
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such rights are enforceable under applicable nonbankruptcy law." In addition, "the lessee
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may offset against the rent reserved under such lease for the balance of the term after the
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date of the rejection of such lease and for the term of any renewal or extension of such lease,
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the value of any damage caused by the nonperformance after the date of such rejection, of
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any obligation of the debtor under such lease .. . ." (11 U.S.C. §365(h)(1)).
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16. Despite the clear and unambiguous language in Section 365(h)(1) of the
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Bankruptcy Code entitling Poggio to continuing occupancy of the Restaurant, on or about
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April 20 and May 5, 2010, CMHS's attorneys sent Poggio successive letters informing it
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that since the Lease had been rejected by the bankruptcy court, Poggio no longer had any
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right to use or occupy the Restaurant, and that Poggio was required to vacate the Restaurant
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no later, than May 31, 2010. Copies of the letters are attached as Exhibits C and D. The
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letters did not state that Poggio was in any way in default under its Lease.
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17. Following the foregoing two letters, CMHS commenced a string of harassing acts
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obviously designed to intimidate Poggio into vacating its leased premises. Those acts have
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wrongfully and substantially disturbed Poggio's rights of quiet enjoyment of the Restaurant.
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CMHS engaged in such acts despite Section 30 of the Lease, which states, "Landlord agrees
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that so long as Tenant is not in Default hereunder Tenant shall have the quiet enjoyment of
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the Premises without hindrance on the part of Landlord," and despite Section 365(h)(1) of
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the Bankruptcy Code, which preserves a tenant's rights under a rejected lease to "use,
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possession [and] quiet enjoyment." Such wrongful harassing acts by CMHS include the
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following:
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a. The Lease designates certain meeting rooms and appurtenant restrooms,
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elevator and walkways as the "Meeting Space" for use by the Hotel and the Restaurant for
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"group meetings" and "events." The Lease obligates the landlord to book events in the
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Meeting Space that Poggio requests, so long as the landlord has not previously "booked a
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tentative or a confirmed event in the Meeting Space" (Lease §§2.3 and 8.3). The Lease
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gives Poggio the exclusive right to provide food and beverage in the Meeting Space, whether
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booked by the Restaurant or the Hotel. Since the Restaurant opened in 2003, Poggio has
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used the Meeting Space for banquets; weddings; dinner, lunch and breakfast meetings; and
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other restaurant events, generating revenue upwards • of $800,000 a year. Beginning in or
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about June 2010, CMHS moved computer equipment, hotel furniture, file cabinets, desks
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and miscellaneous debris into the largest of interconnected Meeting Space rooms on the
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Hotel's second floor. CMHS locked the room and refused to give Poggio a key or access,
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thereby rendering the Meeting Space unusable for large events. At the same time, CMHS
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converted another room in the Meeting Space into a second hotel lobby, again rendering it
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unusable for Restaurant events. In early September 2010, CMHS moved furniture and
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equipment into a third Meeting Space room and padlocked the door, refusing to provide
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Poggio a key. CMHS uses an additional room in the Meeting Space as a hotel guest room.
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Since taking over the Hotel, CMHS has also denied Poggio use of the Villa Madrona room
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and the Mikayla room, the Hotel's most prominent Bay-view event space, even though both
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rooms were added to the "Meeting Space" in the First Amendment to the Lease. As a result
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of all the foregoing, the second floor Meeting Space, the Villa Madrona room and the
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Mikayla room cannot be shown to prospective customers and are essentially unusable for
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Restaurant "group meetings" or "events," despite the Lease's promise of such availability.
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Poggio has thereby been deprived of substantial revenue and other valuable tenant benefits
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under its Lease.
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b.
Even though the Lease requires the landlord to provide free valet parking
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for restaurant guests, at no cost to Poggio, CMHS refused to continue to pay the Hotel's
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valet parking service. Therefore, Poggio was forced to pay for the valet service itself, for
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guests of both the Hotel and the Restaurant. Poggio is informed and believes, and thereon
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alleges, that CMHS charged its hotel guests $24 a night for valet parking even though the
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parking was paid for by Poggio and even though the Parking Management Plan approved for
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the Hotel by the City of Sausalito in 2003 provides that hotel guests may be charged no more
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than $20 a night for parking.
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c.
On or about June 23, 2010, CMHS transmitted to Poggio a Notice to Pay
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Rent or Quit that stated the estimated rent due was $60,006.35 for the months of February,
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March, April and May 2010. A copy of the Notice to Pay Rent or Quit is attached as
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Exhibit E. On or about July 2, 2010, Poggio's counsel wrote CMHS that the offsets to rent
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to which Poggio was entitled under Section 365(h)(1) of the Bankruptcy Code and the Lease
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exceeded CMHS's estimate of the rent due and that CMHS's Notice to Pay Rent or Quit,
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therefore, was invalid because no rent was then payable. A copy of the letter is attached as
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Exhibit F.
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d.
On or about July 13, 2010, CMHS's counsel notified Poggio by letter that it
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must promptly "repair, maintain, modify or replace" precipitator equipment (called "smog
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hogs"), despite the fact that the First Amendment to the Lease requires the landlord to
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maintain and repair such equipment.
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e.
On or about July 14, 2010, CMHS filed in this Court an unlawful detainer
action seeking to evict Poggio from the Restaurant because of its failure to pay the rent
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stated in CMHS's invalid Notice to Pay Rent or Quit, dated June 23, 2010. While said
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Notice stated that $60,006.35 of rent was due for the months of February, March, April and
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May 2010, in fact no rent was due because of offsets Poggio was permitted under Section
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365(h)(1) of the Bankruptcy Code and the Lease.
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f.
The Lease requires the landlord to market and sell the Meeting Space for
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the benefit of both the Hotel and the Restaurant with its own marketing staff of three
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employees. Before Oly sold the Hotel to MHG in 2005, Oly and Poggio agreed that Oly
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could reduce its marketing staff in exchange for paying half the compensation of a catering
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manager, to be hired by Poggio, and providing office space for the manager and a computer
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interface with the landlord's marketing staff. This agreement was memorialized in an
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exhibit to the Oly-MHG purchase and sale agreement and in the First Amendment. Despite
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this agreement and over six years of cooperative performance, CMHS refused to pay any
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part of the catering manager's compensation following its purchase of the Hotel. In
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addition, on or about July 30, 2010, CMHS's counsel notified Poggio by letter that no later
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than August 6, 2010, the catering manager would be required to vacate her office in the
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Hotel and relinquish her keys. Shortly thereafter, CMHS forcibly removed the catering
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manager's computer and all her files and personal effects from her office and stuffed them
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into a closet elsewhere in the Hotel. CMHS also locked the catering manager out of the
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Hotel's computer system, further impeding her ability to book Meeting Space rooms for
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Restaurant events.
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g.
CMHS's counsel's letter of July 30, 2010, also notified Poggio that no later
than August 6, 2010, Poggio was required to:
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(1)
vacate the kitchen on the second floor of the Hotel ("Second Floor
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Kitchen"); the Second Floor Kitchen was designed to be used with, and is
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connected to and an integral part of, the Restaurant's first floor kitchen, and
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is reserved by the Lease for Poggio's exclusive use;
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(2)
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wood-burning ovens, from the front entrance of the Restaurant where it has
remove stacks of split wood, which Poggio uses in its trademark
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been innocuously stacked for years for both convenience and to lend a
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distinctive ambience to the Restaurant entry; and
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(3 ) cease using the Hotel parking lots for parking by Poggio employees.
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18. CMHS's wrongful actions have interfered, and continue to interfere, with
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Poggio's right to use and possess and to quiet enjoyment of the Restaurant and have caused
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Poggio substantial monetary damage as described below.
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FIRST CAUSE OF ACTION
(DECLARATORY RELIEF AGAINST CMHS)
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19. Plaintiff incorporates by reference in this cause of action all of the allegations set
forth in paragraphs 1 through 18.
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20. Disputes have arisen between plaintiff and defendants. Plaintiff contends that
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Poggio has certain rights regarding the Restaurant and defendants dispute those rights. In
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particular:
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a.
Poggio contends it has the right to use and occupy the Restaurant under the
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terms of the Lease, while CMHS claims that Poggio has no such rights because the Lease
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was rejected by the Bankruptcy Court and terminated by the foreclosure sale. Poggio
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contends that all covenants in the Lease run with and burden the land owned by CMHS,
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while CMHS claims that only selected covenants that benefit CMHS run with the land.
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b.
Poggio contends that it has the right to offset against its rent due under the
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Lease, in accordance with Section 365(h)(1) of the U.S. Bankruptcy Code, the value of the
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damage it has suffered due to CMHS's failure to perform obligations under the Lease,
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including without limitation: (a) paying for valet parking; (b) maintaining and repairing the
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Hotel's "smog hog," elevator and other equipment that is the landlord's responsibility under
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the Lease; (c) paying half the cost of the catering manager who serves both the Restaurant
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and the Hotel and providing the catering manager with an office and a computerized
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interface with the Hotel's booking calendar; and (d) making the Meeting Space available for
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Poggio's use and managing the bookings for the Meeting Space to facilitate such use.
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CMHS contends that Poggio has no such right of offset.
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c.
Poggio contends that CMHS's failure to perform the landlord's obligations
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under the Lease both to maintain the availability of the Meeting Space for "group meetings"
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and "events" and to manage the booking of the Meeting Space for such uses, entitles Poggio
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to assume such responsibilities itself. On information and belief, CMHS contends that
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Poggio has no such right.
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d.
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Poggio contends that it has the right to use the wood storage area and the
Hotel's employee parking lot, while CMHS denies any such rights.
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21. An actual controversy exists between the parties regarding the matters set forth in
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the preceding paragraph 17 and a declaration is appropriate to enable the parties to determine
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their rights.
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SECOND CAUSE OF ACTION
(BREACH OF LEASE AGAINST CMHS)
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23. By the acts and failures to act described in paragraph 17 above, CMHS has
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materially breached the Lease including, without limitation, the implied covenant of quiet
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enjoyment, and has thereby caused Poggio damage that now exceeds $200,000 and is
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continuing.
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24. Poggio has performed all its obligations under the Lease except for those excused
by CMHS's breaches.
THIRD CAUSE OF ACTION
(BREACH OF COVENANT OF QUIET ENJOYMENT AGAINST CMHS)
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26. Regardless of the current legal status of the Lease, implied in every tenancy is an
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implied covenant entitling the tenant to quiet enjoyment of the occupied premises. By the
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acts and failures to act described in paragraph 17 above, CMHS has materially breached
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Poggio's right to quiet enjoyment of the Restaurant and has thereby caused Poggio damage
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that now exceeds $200,000 and is continuing.
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27. Poggio has performed all obligations required of it to maintain its tenancy and to
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be entitled to quiet enjoyment of the Restaurant except for those excused by CMHS's
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breaches.
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FOURTH CAUSE OF ACTION
(TRESPASS AGAINST ALL DEFENDANTS)
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29. By doing the acts described in paragraph 17(a) above, CMHS, Terra, and Does 1-
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10 have trespassed onto land that Poggio has the right under the Lease and under law to use,
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occupy and quietly enjoy. As a proximate result of such wrongful acts, Poggio has suffered
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monetary damages that now exceed $200,000 and are continuing.
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30.
CMHS, Terra, and Does 1-10 intended to cause injury to Poggio by their
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wrongful acts and to harass and intimidate Poggio into abandoning its rights to use, occupy
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and quietly enjoy the Restaurant. Further said defendants' conduct was despicable and
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carried on with a willful and conscious disregard of the rights of others. Therefore, CMHS,
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Terra, and Does 1-10 acted with malice, entitling Poggio to recover punitive damages
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against them in an amount to be proved at trial.
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FIFTH CAUSE OF ACTION
(WRONGFUL EVICTION AGAINST CMHS)
31. Plaintiffs incorporate by reference in this cause of action all of the allegations set
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32. By doing the acts described in paragraphs 17(a) and 17(g) above, CMHS has
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wrongfully evicted Poggio from property the Lease entitles it to possess and use. As a
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proximate result of such wrongful acts, Poggio has suffered monetary damages that now
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exceed $200,000 and are continuing.
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33. CMHS intended to cause injury to Poggio by its wrongful acts and to harass and
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intimidate Poggio into abandoning its rights to use and occupy the Meeting Space. Further
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CMHS's conduct was despicable and carried on with a willful and conscious disregard of the
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rights of others. Therefore, CMHS acted with malice, entitling Poggio to recover punitive
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damages against CMHS in an amount to be proved at trial.
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SIXTH CAUSE OF ACTION
(INTENTIONAL INTERFERENCE WITH PROSPECTIVE ECONOMIC ADVANTAGE AGAINST ALL DEFENDANTS)
34. Plaintiffs incorporate by reference in this cause of action all of the allegations set
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35. By doing the acts described in paragraph 17(a), 17(b) and 17(g) above, CMHS,
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Terra, and Does 1-10 have intentionally and actually interfered with the ongoing and
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prospective economic relationship between Poggio and its customers. As a proximate result
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of said defendants' wrongful acts, Poggio has suffered monetary damages that now exceed
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$200,000 and are continuing.
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36. CMHS, Terra, and Does 1-10 intended to damage Poggio's current and
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prospective economic relationship with its customers by their wrongful acts. CMHS, Terra,
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and Does 1-10 intended to cause injury to Poggio by their wrongful acts and to harass and
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intimidate Poggio into abandoning its rights to use, occupy and quietly enjoy the Restaurant.
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Further said defendants' conduct was despicable and carried on with a willful and conscious
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disregard of the rights of others. Therefore, CMHS, Terra, and Does 1-10 acted with malice,
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entitling Poggio to recover punitive damages against them in an amount to be proved at trial.
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SEVENTH CAUSE OF ACTION
(INJUNCTIVE RELIEF AGAINST ALL DEFENDANTS)
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38. Money damages are inadequate to remedy at least some of the breaches by
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CMHS, Terra, and Does 1-10, and the resulting harms to Poggio, set forth in paragraph 17
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above. In particular, Poggio seeks an injunction restraining CMHS, Terra, and Does 1-10
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from interfering with Poggio's rights of use, occupancy and quiet enjoyment of the
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Restaurant and appurtenant spaces, including the Meeting Space. In particular, Poggio seeks
an order restraining CMHS, Terra, and Does 1-10 from interfering with Poggio's rights
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(a) to book and use all rooms and spaces included in the Meeting Space, (b) to receive free
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valet parking service for its patrons, (c) to use the Second Floor Kitchen, (d) to stack split
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wood at the Restaurant's entrance for use in the Restaurant's wood ovens, and (e) to use the
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Hotel's parking lots for parking by Restaurant employees. Such acts, unless enjoined, will
6
cause Poggio great or irreparable injury for which it has no adequate remedy at law.
7
8
WHEREFORE, Plaintiff prays for judgment as follows:
9
1.
10
11
For a judicial declaration that Poggio has the right to use and occupy the
Restaurant under the terms of the Lease;
2.
For a judicial declaration that Poggio has the right to offset against its rent due
12
under the Lease, in accordance with the Lease and Section 365(h)(1) of the U.S. Bankruptcy
13
Code, the value of the damage it has suffered due to CMHS's failure to perform obligations
14
under the Lease, including without limitation: (a) paying for valet parking; (b) maintaining
15
and repairing the Hotel's "smog hogs," elevator and other equipment that is the landlord's
16
responsibility under the Lease; (c) paying half the cost of the catering manager who serves
17
both the Restaurant and the Hotel and providing the catering manager an office and a
18
computerized interface with the Hotel's booking calendar; and (d) making the Meeting
19
Space available for Poggio's use and managing the bookings for the Meeting Space to
20
facilitate such use;
21
3.
For a judicial declaration that, due to CMHS's failure to perform the landlord's
22
obligations under the Lease both to maintain the availability of the Meeting Space for "group
23
meetings" and "events" and to manage the booking of the Meeting Space for such uses,
24
Poggio is entitled to perform such responsibilities itself and is further entitled to offset the
25
costs of performing such responsibilities against its rent;
26
27
28
4.
For damages against CMHS, Terra, and Does 1-10 in an amount to be proven at
trial but currently in excess of $200,000 and continuing;
5.
For its reasonable attorneys' fees and expenses under the terms of the Lease;
1
6.
For punitive damages against CMHS, Terra and Does 1-10 according to proof;
2
7.
For a preliminary and permanent injunction restraining against CMHS, Terra, and
3
Does 1-10 from interfering with Poggio's rights of use, occupancy and quiet enjoyment of
4
the Restaurant including, without limitation, an order restraining CMHS from interfering
5
with Poggio's rights (a) to book and use all rooms and spaces included in the Meeting Space,
6
(b) to receive free valet parking service for its patrons, (c) to exclusive use of the Second
7
Floor Kitchen, (d) to stack wood for the Restaurant's wood-burning ovens at the Restaurant
8
entrance, and (e) to use the Hotel's parking lots for parking by Restaurant employees; and
9
8.
For its costs of suit; and
10
9.
Such other and further relief as the Court may deem proper.
11
12
13
14
15
16
17
18
DATED: September 17, 2010.
THOMAS F. HYDE
Attorney at Law
HOWARD RICE NEMEROVSKI CANADY
FALK & RAB KIN
A Professional Co orati
By:
Attorneys for Plaintiff POGGIO LP, a California
limited partnership
19
20
21
22
23
24
25
26
27
28
EXHIBIT A
commtaispiLumg
MIS LEASE (the '4Lease') is made as of September 23,2602, by and between
OLY CA.SA MADRONA, LLC a Delaware limited liability company ("Landlord w), and •
CANTIN5EiTTA1 a California liraited partnership Mouton
Ma Landlord hereby leases to Tenant and rennet hilts from Land:lid those
I.
Premises described below in Section. 2.2 hi accordance with the following tenna and conditions.
2.
MEL P1EN1i MIIIIThQPAC.•
2.1. Slyit44k Landlordropresentj; that it is throwner in fee of all that
- certain real property and interests in realprofroaty on BridgewayStztet in the City of Sansalitei
State of California, cOromonly 'mown the -Casa Madrona:Hotel 4te Spa and more particularly
desc.dbed in Ittbibit= attached hereto, u4 made apart hereof (all of said property is
'
• . '
• *hereinafter teferra to as the "Hotel").
2.2r .tEgVaLs- -AV PromiPS Onsistbfaiipmxinuitely 5,488 square feet
•
legated on the ground flocrirk the Rotel (the Itcatatiranr), approxin'latsly 484 square ihet on the
second floor ofthe. !Intel ithe uPrivate pining Area ail of vilsiolx is sheWn as shaded and labeled cat said fialiihjt 137 attache:A /Wine and made apart boreof (collsotively the "Premises").
Landlord rizeivcs.114tO big & however, the use of the roof (other th omion* needed foe
Tenant'a equipment, vents and mechanical Oquiptnent), exterior walls (other than the storefront
for the Premises; the area beneath and the urea above the Protaises), together With the right to .
mint*, nal, repair and replace pipes, ducts, conduits end wires servicing other-peals of
the Hotel that pass thartigh the Pretniso in locations which will net interfere with Tenants nse
thereof or atiteas t4drato, Landlord and Tenant altal net/ the square footage of the-Premises
and the eecuteeI of
after the execution of ate Louse.
2.3. Meeting§pace. A pothert of the second floor of the Hotel will be used for
meeting apace, such portion more particularly deson.bed on Etdibit C dumbed Rebate and made a
part -hereof (tbet "Meeting Space, and siudl include the civet:if:root the ground floor to the
sewed floor (the "Elevatoe) the two•adttcoms looirod-on the second &or (the 93atlwooms"),
and the arcaort the second floor outside the Mentor and Bathrooms. Tenant and its invitees
shall have the non-exclusive right to use the Ekvator and Bathrooms and, as a wet= of access to
and from the Premises, the area On the s000lid Auer odtside the:mentor and Bathrooms. Tenant
shall have the =elusive use of the kitchen, awl related areas-located on the second floor of the
rroTel as ShOitill onMcitibit C (the "Second Moor Kitchen"); provided; Tenant shall allow
LandlOrd to use the food preparation area and the itooldng area of the Second Floor Icitelterk for
the purposes ptoided in S action 3.4(0 between alp bazrof A.M, and 10 A.M., and in Section
3.4(d) edits Leiwc, if Landlontexemises reasonable raid diligent efforts to clean the seas uziral
•by Landlord in the Second Floor Zitchen and to wash any serviceware used for hot 'breakfasts by
la A. and Is unable to complete such work, Latidield may continue fo use the Second Piper
Kitchen as 'may be IlMetaary (until no later than 1030 LK) to finish oleaning the areas used by
Landlord and to complete washing any aervioeware for hot breakfasts. Landlord lila at its eels
0420/443260:1ALIA /065611-11
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coat and expense and in accordance with the Meeting Space Plana, construct the Second Floor
Kitchen, area and aupply all walk-in coolers, refrigeration, warewashing and Other equipment
taid storage an pantry areas for china, glass, itiver:, linens and other iterns that are sufficient to
sersau up to 150 people at any gitren time. Landlord's use of the Second Floor Kitchen shall not
Include the right to use the walloim coolers, refrigetation and warowashing equipment. storage
and pantry arCas and lockable draw= identified by Tenant as being eaoalusiVely-reserved for
Tenant's use. The Second Floor Kitchen will include a email refrigerator fur Landlord's use.
Tenant shall, at its expense, maintain all equipment in the Second Floor Kitchen, except
Landlord's refrigerator.
2.4. condition ofPremises. E.xcept,1br the constraction of thetandlord's
Work described in Section 9.8 hereot which vial beconstructett in a good and workmanlike
inaltrier and In accordance with all applicable laws, statutes. and Ordinances, the Premises are
being leased "AS IS". . Landlord. makes no warranty of any kind, camas or intplied, with respect
to the Premises (without limitation, Landlord makes no want* as to the habitability, &gess or
suitability of the Premises for any paniettiar purpose).
9.
OW04 74324
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3.
• USE.
3,1. Lerni
_keithe. Subject to the limitations containedin Section 1141 hereof,
Tenant shah use and occupy the Preartiles (a) for an-upscale ttstaurant, bar, and a coffee cafe and
may also use the Premises for A retail store offering on-sale and of
items to the general
public related. to the above tries and (b) as the location from whiehit will prepare and provide
food and beverage services, at described in. Section/a 82 and 83 hereg in a manner consistent
with an upscale restaurant TenantvalmoWledges that the uses of the Premises which are
Twitted hereby Zaaans only that the Landlord lies no objection to the Specified use and does not
include any representation or warranty by Landlord as to whether or. not such speeited uses
comply with apPlitablo laws andlor require special govesinnerial imitate. a thig regard, Tenant
acknowledges that this Section 3 if the Lease is subject to Sections 9.3, 10.5 =411 of this
Lease. . As used. herein, the term `gupscaleriatimant'naeant aiestartrant the has the equivalent
level of Service, de' cot,fat affirm, Extorts, equipmeM, nietm,.and qualiwof food -aa is currently •
found in the 11 Fornaio restaurant located at Corte Maderaj'Califorthap and shall riot include any
vending Maohines other thaantachhies that are accessible only to Ternmfs employees (the •
wronaid Operating Standate). In the even .t Landlordbelieyes that Tenant has Violated this
covenant; Landlord shall provide Tenant with 'mitten notice of the alleged breach and with a
description of the problem that Landlard believes needs to be addressed.. lf Tenant does not
make the changes that arerequired to bring it into ccsipliance.with the Tenant operating
Standaula within a reasonable time, but not exceeding one hOndred twenty (120) days, it shall be
&default hereendee. lf Tenant disputes the existence of a breach of the Tenant Operating
stataianis then, vdthin, thirty(30) days following receiptof Landlord's notice cyf the alleged
breach, Tenant may initiate the Diapitte13:esolution. Proems, .as described In. Section 34.10 hereof,
and the parties Ica abide by the decision. reached in those proceedings.
' • 31 : Name of&Eistanteat.. The Restanrant shall.be oydrated under the name of
Cautinett& or under such oth.er.marie as maybe approved by Landlord from time to time in ifs
solo dignietion; provided howev'er, prior to the Commealeement Date such apt3roya1 shall not be
unreasmiably withheld. Tenant hereby represents and covenants. that at the time of this Lease., to
the best of Tenant's knowledge, it has fed:Hest authority to use the trackman:1.e for the Restaurant
and that the tele does net violate any law, rule, order or regulation of the federal; state or
municipal government or other duty constituted public authority or the rights of any third party.
Tenant shall tip all actions reasonably necetsaty to protect its &Winn* to use 'the traclenaine
throughout the term of this Lea/fa.
33, Days =allows of Operation, The Restaurant shall be open for dinner
and shall prepare, continental breakfasta for self or mom Service to the Hotel 365 days per year.
Additionally, the Restaurant will be open far hatch from May 1 through October 31 of each year
and, at Tenitnt's discretion, from. thne toll= betweenNovernber 1 through April 30 of each
year. The hours of operation of theitestanrant shall be from 5pra— 10pra and during
periods when. it is open for lunch, 11:30 gun — 2ran, or such othet heeri es maybe tmatnally
agreed upon by Landlord andTenent from tbne to tinie. When the Resonant is open, Tens&
shall also prepare trays for delivery to guests of the Hotel desiring roam service as contaminated
in Section 8..2 hate: At all other reasonable hours of the day, Tenant shall also provide food
and 11m:cages fir meetings and evitits at the Hotetas toutemplated in Section 8.3 heiect
provided Tenant has received the Banquet Event Order at least seventy-two (72) hours prior to
442074114326: DALLAS:10
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the event Notwithstanding the foregoing, if Tenant is unable to male any contoroplated
Refurbishments (as definedin Secti.oh 10.1) hereof without closing the Restaurant, Tenant may
dose the Restaurant proVided that (a) the period of closure diet net exeeed thirty (10)
consecutive days, (h)--the:Restautaut Net not be cloied for Refarbishment more then once during
any sixty (60) month period,. (a) the closing shall be preceded by at least thirty (30) days, bet no
more• rhan ninety (90) days, ptibr written melee- frora Trout to Landlord- (the "ClosureNotioel,
(d) the closing shall Occur in the month of Yanuary, February lulls/lett, (e) the closing altall not
Melee, the Hotel has booked meetings or other occur iZ prior to the delivery of the
events for which food. and/or beverage eerviCe is required and the dosure vili prevent Tenure
from providing wet food and or lieverage seevibe for Such event; and (f) Tenant 312;11 in all Ways
go& to eth*ntee the length of true the Restaurant is awed and the curtailment of food and
beverage services during the alas.cire.
..
• 3.4. befeirelet Landlord hereby grants Tenant the eXelusive right to .
Drove food and boveregee at the Hotel atprides Which are reasonably competitive with the San
Irrancisco Bay arearnarket Notwithst:e ging the foregoing, Landlord reserves the right to (a) •
•provide 'beverages end MAIO to guests from in-mom rainibirs and coffee-stations, (b) provide
t from separate kitchen facilities if • complimeetaty VIP gills to gOests, (a) soma het br Tenant declines to provide au& setvice, (d) allow gads of the Hotel to cater in religiVes Or
alga food ifihe-Tenant is unable or unwilling to provide sheh guestawith such food which is
satisfactory to such gtost, and (o).Provide food and beverage service,,-by Catkin or-otherwise,.
during any period when the Restaurant is closed. for Refurbishment Outside Caterers will not.
have access to the Restamiint (including Its Wel= or the Rtetaurant Equipment and Supplies (as
_denied in Section loll), octelit caterers may use the Restaurant's kitchen (but not the
Restaurant Equipment and Stipplios) during anyperiod when the testament IS closed for
1.01thisluneut if sueb, I:136 does not disrillit the work of the cankactors performing the •
Refurixishinent
•
4. =IL
4.1. initial Term, The Initial term of this Lease shall be for one 12x/flared
'twerey (120) months (the "Initial Tearo"); counnerteing on. the eadier of (a) nine (9) months frosti
the issuance of the Tenant Permits as described in Section 9.3(a) hereof, (b) the date that Tenant
opens the Res ant 'ffoi busbiesi to the.publie, (C) the clatete Restaurant is first used for preopening.events (the "Commencement Date). Notwithstanding the foregoing, if the day that the •
term of this Lease commences as pnovided above is on a day otherthenthe fast day of a calendar
month, then the terni tif this Lease shall contimre for the period qf months specified above from the first day of the calendar month foilowinig said ComMenbement Date ' The twelve (12) month
Period beginning on the first day of the firet full calendar rdonth and each twelve month period
thereafter shall be coreAdered a "Lease Year." Thopextres hereto agree to sign ainemorandem
setting forth the Commencement Date of the term of -this .Lease within thirty (30) days after said
date. Toned and its agentskill leCVe the right to .enter the Premises during rearionablebustress
hours after the execation .of this Lease and prior to the Commencement Dete ii order to inspect
same, design-11re Work for the Premises and peril= and/or monitor the construction of the
-Work.
04207474126 IMUAS : NOMA 1
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4.2. Tennination.
.
4.24 Landlord Teauketion Righi. Landlord may elect, bits sole
discretion, to ter:unwire this Lease upon wiitten notice to Tenant (a) if the Tenant Peonits
deacnhed in Section 9.3(a) and (6) hereof have not been. obtained hy April 1, 2003, (b) if the
Working Drawings have net been approved pursuant to Section 9.2.3 hereof by February
2003, or (c) if the Tenant has net 4eaated and delivered the First Amendment attached hereto as
Exhibit a (thetirst Amenchnentli executed and delivered an amendment to the loan. Agreement
dated as ef April 20, 1999 by and between Landlord, Park Plaza International, LLC pad Jahn W.
Mays as trustee of the Iethu W. Mays 1993 Revocable Trust (the LoanAgreemerd") pursuant to
witichTeoant becomes a co-lender thereunder, and his funded an amount equal to the greater of .
$2,000,000.00 or the Construction Costs to Landlord (such sum: to be divided betWeen
mezzanine debt and contributed capital as specified in the First Amendateug.on or 'before the
fifth (P) day following the date that the Tenant Permits &scribed in Section_ 9.3(a) have been •
issued. .
eten
4.2.2 Tenant 11Ljn
Itight. Tenant may elect in its sole discretion,
to terminate this Lease upink written notice to Landlord if (a) the Landlord's Permits have not
been obtained.by April 1, 2003 or (b) the =rent members of Landlord have not executed and •
delivered the First .Ameadmerti, the atnembnenfto the Lean Agreement referred to in Section • .
4.2.1 above, a piomiesory note and the other documents as contemplated by the amended Loan
Agreement on or before the fdtb,(5m) day followirtg the date thet.the Tenani Permits descnbedin
Section 9.3(a) have been issued.
•
••
Tertant shall he three (1) successive bpi:tens
•
4.3. Renewal
•
y
Options")
to
extend
the
term,
for
(individuall a "Readval Option" and collectively the "Renewal
three anocessive periods of five (5) years each (individually a "Reitreval Tenn" and collectively
the "Renewal. Terms"); The Renewal Options shall be effective only if (1)- Tenant is not in
Default under any of the terms or conditions of this Louie auato event lias siccutredthat with
thegiving of 310tiCe; patsage of time or betkwauldbe a Default either' attbe time of exercise of
the Renewal Opticn or the time ofcommencement of the Renewal Terre provided if on the day
thel/enewal; Term was to have Graz:kneed, the Tenant is eel:kg a Default pursuant to the tettna
of this rAase, the then current Term Shell be extended te a date that is the earlier to occur of (x)
sixty (60) . days thensafter, or (y) the dais on Which. -the potential Daze* has been cured, and (ii)
Tenant's anis Sales during the twelve (12) calendar months preceding the month in which
Rewind Notice (as hereinafter -defined) Is gwen, exefeding any Gross Sales derived from off- •
site catering, is at least $3,000,000 as adjusted fbr any•changes in the Coniurneeprieo index.
Such adjustment shall be made by multiplying $3,000,000 by the Percentage change, if any
occurring over the period beginning on the first date alterthe execution of this Lease - from. which
the In.dex ia measured' to the lastmeasuring date pre,ceding :the day that the last Accounemg Year
ends before an abplicableRenewal Term; The Index is in the Consumer Price Index-Urban.
Wage Barnerteand OlerFcal:Worleers ( ganFranoisco-Galdand Metropolitan Area Base 1982-84
100), as published by the United States Deparb:neut of Leber, Bureau of Labor Statistics (the
"Consumer Rdce Index"). Should the Brireau of Labor Statistie's discontinue the publication of
the Consigner Price Index, Publish the sante Idas frequently or alter the same in some other. •
rammer, than a substiniteindex or procedure which reasonably reflects and Monitors consumer
prices acceptable te .inndlord and• Tenant,• in -their reasonable
discretion, shall be used.
•
042014a4326 : DAM/LS 1050411.11
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•
Bach Renewal Option inust be 1;xercised, if atl1 byttennoticeomTenant
ti Landlna given net more than eighteen (18) months nor loss than: six (6) mantis prior to the
expiration of the Initial Term Cr a Renewal Termn (each. a "Renewal Notice:" 'Mich shall be •
seconipanied by a oalealatioti, together with supporting material as reasonably requested by .
Landlord, which demonstrates that the threshold level for Tenant Gross . Sales described in the
foregoing paragriph has been. achieved. Bach Renewal Term ltaIl. be upon the same terms and
conditions a the InifiAl Term;
The Initial Term and the Renewal Tanis constitute the 'Term" .
.
•
.
RENTAL. Teeznt agrees to pay to Landlord =dal for the Premises as follows:
5.1. • Percentage Rent,
5.1.1
. • •
nouiitofPercentaoR$e. Tenant shall:pay to Landlord. at the
-times and in the manner hereinafter specified, rerghereinafter scimetimes called the "-Percentage
ttenf') in an amount 'equal to: (i) four percent' (4%) of the aiaount ofTenanfaCooss Sales during
an-Accounting Year in which Tenant's Gross Sales are equal to or less than $5,000,000, cu) four
and one-baltpereent (4.5%) of the amount of TenanfaVross Wes &trills an Accounting Year in
which Tenant's Gross Sales are in excess of $5,000,000 and. not more than $6,000;000, (iii) five
. percent (5%) of the amount OfTsu.O's Gross Sides during an .A.cconating Year in, which
Tenant's Gross Sales are in excess of $6,000,000 -and n tinoru than $7,000,000 (iv) five and
-one-half percent (3.5%) of the =built of Tenant's Gross Sales during an'Accouptiag Year
Nichtett Tenant'S Gress Sales are in excess of p,000,000 and not 41406 than 48,000k0e0 and (v)
aIx perperd (0%) alto amount of Tenant's Gross Sales during an Accounting Year in Which
Tedant's Gress gales at excess of $8;000,000. For theAccOunting Year iii whioh the
CommeneeMent Date coders and theAceounthig Yeatiri which the firm of this Lease expires,
the amount of Tenant Gross Sales, when Used in the foresail:1g declaim, ELM be Pretated,
• Notwithstanding the foregoing, if(i) the Hotel is sold to -a third patty end Tenant has received
distributiona pursiaint to Section 61)3 and Section 6.04 of the Amended and lestated Limited
Company Agreement of Landlord, as amended ("LLC Agreement s) With respect to its
membership interest in Landlord and reptryinent of itsMeizanitt'e Loans (as defined in.theLLC
Agreement) it an aggregate amount of at least the hrostment Amount, or (ii) Tenant has sold its
membership in Landlord pursuant to Section 9.06 of the LLC Agreement, then the r Percerditge •
Rent shall at all thnes thereafter be six percent (6%) of the amount of Tenant's Gross Salsa.
Within tea (10) days following the date upon which the Percentage Rent Is income& ao described in theforegoing sentence, Tenant agrees to congrat such fact in wilting. A "third
party sale" means the sale ofthell.Otel to a buyer thatiendan. iftiliate, an associate, or
- subsidiary
of a COOtiling =Aber of Landlord as those trant* are defined in Rule 12b-2 of the
regulations promulgated 'under the Securities litchetige Act of 1934; The WA:s4ow:4 Amount
shallbe the Tereentagelntexest (as denied inthe TeLC Agreeinent) Of Tenantmnittplied by the
total Capital Contributions Of the Ivlembera at the time of such calculation, as established by the
I.LC Agreement plus the amount of the Tenant's hilezianine T.A?ans.
• •
5i VaLoujitiere. Percentage Rent shall be
computed and paid as follows:
5-
•
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(I) Within fifteen (15) days immediately following the •
col of each month , and within sixty (60) days innuediately
following the end of each Accounting Year .cluring the
Term., Tenant shall furnish to Landlord a statement setting
forth the Gross Sales during th.e preceding month or
Acc,ounting Year, the aggregate of the amount of any
authorized deductions, and the PerceIntageg.ent due for
ski/ Month or Accounting Year, to gether with payment to
Landlord for the Percentage Rent due;
(2)
(a)
The tetra "Gross Sales," as used herein (subject to
the eitceptions and authorized deductions that are
•
lateitafter Set forth), is defined as the gross selling price,
•whethes for cash, Credit or otherwise (including the full
purchase Price of pnrchases which are paid for, in whole or
input, by gift certificates, advertising certificates or tradeouis), of all Salsa of retail tilaphatidise. or services, the •
.entire amount of therental or o gler charges for'ell items
leased or rented, and all other receipts whatsoever of all
business conducted on ót from the Premises, litotmlfrig
room service and food and beverages provided to meeting
and events at the Hotel and catering to off-site venues when
•
the preparation therefore has occurred in-the Premises,
____the following:
•
. • • .
The =aunt cf any sales tailc Ot any excise or.
-other tax on Cross Sales paid hy Tenant to
• any gavemmenbal autharity;...
(1)
•
The amount of any actual refunds or credits
made by Teak to a. purobaser ibr return
merchandise or unacceptable services, the
aiactunt ofwhich previously. were included
in Gross Sales;
(Hi) Credit card fees; and
(iv) The payments inacle by Teiinnt to third
parties for atrangenients in connection With
special events, such as tlawers, gifts, audiovisual equipment,.and rental items to the
extent auollpirymeats are included in °was
'
•
. (b).Gross Sala shall not inehide the 'following: .
6
042(7414326 : DALLAS / 065611.11
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(1)
Ivicalsprovided to employees at no cost to
envloyees or it a discount equal to or
greaterthan 25% for corisurription du the
- Premises;
•
OD- contplirnentary meats and *motional
meals (i.e., meals provided-at a discouni
equal to .or greater than 2So/o)), other than
those paid for with advertising certificates;
Tips and gratuities paid to employees of
Tenant on served in the RestaUtant
(but not tips, gratuities or sfroilfir charges
charged vlith respect to food and beverages.. .
served meetings and *eats held to. tb,e
Hotel); ,
insuraricepto—ceeds; and .
(V) . lioceeds from the sale of any used furniture,
fixtures or equipment from the Premises.
(o) Daring any period with respect to which business
interruption insurance proceeds arepayableto
Tenant, Gross Sales shall alto' include an amount
which corresponds to the ,gross revenues used by the
insurance 'company in the comp/ration of the
proceeds payable with respect to Tenant's business
inteireption htiranr.:0.
5.13 ,Statenienta.. Books aturRecords. Each statement of Gross gales-.
furnished by Tenautpursuant to the shove paragraphs shall be certified as C:Orred by Tenant or •
an employee Cr agent of Tenant authorized so to certify and shall Shriw the computations of
Tenant's GrOo Salea, Tenant shall keep and mai/dein full, complete and accurate books of
accounts and records of the Gross Sales, the amounts which ate deducted from Gross g ales and
offickbasineils relating to the Premises In accordance with standard =collating practices
consistently Eipplied, which books and records shall bereadEly aocessilsle to and open for
insixoth3g1,7 Landlord, its auditors or Otkir authorized representatives at all reasonable times
upon T6as049140 adytinollatine from Landlca Copies of all sales and other excise tax reports
that Tenant maybe reqUired teprovide to any govettomental authority Shall be provided to
Landlord uPon. requett.
- 5,14
Lart4lor
' d Audit. ItiOlits. Not more than once each Accounting
Year, Landlord shall have the right to•tiaditthe books and records of Tenant as necetsary for
• proper determination of the =Mutt of Gross Sales, and all callbacks and records shall be made
• . available for such putposo at Tenant's Offices upon reasonable advance notice from, Landlord,
Tenant Shall retaircand
• preserve hooks and records on which any statement of Gross Sales is
64.10174f74326 ;DOT ALS:30;6041/.11
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based for a period of at last three (i) years after such statement is rendered. Such records shall
include all sales records which would normally be or,atuined by in independent accountant
pursuant to accepted auditing standards in performing an audit of Tenant's sales at the Preinises,
If any statements of Gross Sales previously made bY Tenant to Landlord for the Accounting Year
shall be found in an audit conducted by or for Landlord to be more than four percent (4%) less
Than the actoal amount of Gross *Sales for such period. Tenant shallpromptly pay to Landlord the costs of such audit as wc11 as the additional Pereentap Rent therein shown to be payable by •
Tenant otherwise the costs of such audit Ad. be paid by Landlord. If the audit proves that the
Gross Sales are inoon-ect by than. the above four percent (4%), Tenant shall only pay the additional P'excentage Rent, if any, due Landlord. Intlie event there is found to be any excess
payment by Tenant Landlord shall promptly return such moimt to Tenant: Landlord Shall
provide a copy of all working papers and audit records to. Tenant regarcileSs of whether the audit
is completed.
5.1.5 Meountinu Year. Vox the pUtps e eithis.Leise, "Accatoding .
be
defined
as a calendar Year, prOvided that the first AccountbigYearshall
shill
Yeaf'
=ammo° upon the Commencement Date and Shall end on December 31 st following-the
Coalmen cement:Date, and the last Accamxting Year shall _cravat eicpiratien.
of. the tenn hereof
.
.
,
• 5.1.6 NoWelver. The acceptanceby Landlord °frilly moneys paid to
Landlord by Tenant as tent4 Sat the Premises as shownly any statement famishixl by Tenant
Atoll not be an admission of the accuracy of said statement or of any of-the statements furnished
by Tenant during the year reported therein, or of the sufficiency of the amount of said rental
payment, and Landlord reserves all right to question. the suffici6noy of the amount thereof and/or •
the accuracy of-the statement or statements furnished by Tenant to jitstify the same. .
5.2. LATE CHARGES.
5.2.1 Late Charge for Pm/melt of Rent. If Percentage Rent is due and
payableby the Tenant pursuant-to the terms of this Lease, and such amoutit remains due and
unpaid ten (10) daya following the delivety to Tenant of a written demand,fromLandlord, then:
Tenant shall pay Landlord a. late charge of 5% of the monthly charge putty and all amounts
then due or debt' went; provided if Landlord delivers such written demand for ti ro C2)
consecutive months (or any .threo (3) months in any one (1) year) then for the remainder of this
,Lease the prerequisite of a demand from Landlord will cease and the late charge provided in. this
seotion. 52.1 shall be due if tb.e Percentage Rent Is not Prtid.within ton (10) days after the date
•such amount is a.p.o.
5.22 kiterest. AnyPercentage Rent and any additional sums due by
Tenant to Landlord hereunder shall bear interest at the lesser of (a) the-prime interestrate per
atm= as published by the Wall Street Journal (or eno longer published by the WatiBirget •
lournal, as established by IP Morgan Chase Bank or its successors), oz (b) the highest rate
allowed by appliCible Um, frora the date on which such imns were due until paid in full.
5.23
The right; ofLandloid under the immediately
•
'
preceding subsectiona of 52 are cumulative of the rights prescribed elsewhere in this Lease or at
law.
04201414326 15AXLAS 10606.11,11
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. Tenant agrees to paY therentailiereitt reserved at the
.6.
times hereinabove set forth, witheret deduction or offset, in iawful nioneY of the united Swim of • •
Anierica to LattdiOrd at auchplace is Landlord may from thne to time designate in writing, it • .
being agreed that the obligations of Lendlard under this LOCO are Wei/ended of Tenant's
.
obligations.
TAB Tenant agrees to Pay, prior to
7.
delinquency, any and all taxes and assessments levied or asseased•cluting the Terni upon or
against all furniture, trade fixtures, equipment and any other personal property installed or
located within the Premises which it agreedto have separately assessed by the taxing authorities.
Tenant agrees to pay orte-half the copt of rnaintwielee and. matting the elevator *tin ten (10)
days of its roceiPt of an invoiets from Landlord for such sums.
8.
HOTAL.
8d. Operation of Hot& Landlord hereby agrees to operete the Hotel in a •
manner and with arnaaltieS that are substantially similar to current operations', .eXcept durieg
periods Of lisnergenoy and. reConstrection aue to a 'caztraity (the "Landlord Operating Seeedardal..
In the event that Tenant believes that Landlord has violated this covenant, Theurt shell provide Landlord with written notice of the alleged breach and v iiith a desatiption of the problem that
Tenant believes needs to be addressed. if the Landlord does not ;take the changes that are required to bring it into complience with the :Opel/di/3g Standar& within a reasonable timei but
not exceeding one hundred twenty (120) days, or if Latid:tord does not agree With Tenanes
allegation, that it has breacb.ed the Landlord Operating Standards then within one hundred fifty
• (150) days following receipt of Tenant's notice of the alleged breach, either patty may initiate
the Dispute Resolution. Process and the patties vd.11 abide by the decisions reached in those
proceedings provided that anyjndgnent for damages shall.be limited to Tenant's actual..
• dameges,
•
81. Room Service. The Tented shall provide Landlord With El:complete mom
service Mister menu, which will be comprised of seleetiona from tire.ltestatiant's regular Mena
Which are tratually agroesble to Landlord and Tenant and, 11:P OA Ludlcird* reveit. such Other •
items as Landlord and TeniintruaY, from time to time, mutually determine. Tenant shall provide
tandlOrd with. it le.aat ten (10) days prior notice of anyproposed change to the room service •
menu, whielt obengovabe subject to Landlord's approval; In addition icintettu items, Tenant
agrees tOaceorianOdate other items requested by Hotel guests to the extent feasible without
inourtfing additional costs to Twant which cannot be charged to such Hotel guest. Landlord will
copy and distribute the room service menu at its cost Tenant shall take all guest orders for rem&
sortie* and prepare the orders in a mariner sonsisteat with the Tenant Operating Standards, with
i3211:13311163: attentionto pro1ntservice and shall inform Landlord's staff is /OM as the order is
toady to be delhered. Landlord's staffshell be rdspOnaible for the delivety, pick up and prompt
return of icom service trays., inahrdieg linens; ohine, glassware and.utensila (brit shallot be
responsible for the pilferage or loss of such items), and shall obtain the girests signature on the
charge slip. The Tetrad shall charge Hotel greets oraering through room service one hundred •
percent (100%) of the then-enttent to.ettuptice for:all items served in the Restaurant plus
applicable taxes. Landlord shall be entitledtO retain service charges, gratuities and any amount
(including taxes) in excess -of the price charged by Tenant for room aeriace °idea. •
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8.3. Events in the Meeting Space;
. 8.3.1 . Sale ef Meeting Spatz. Duringthe Term, the 'Landlord, or
Landlord's =eager, will market and sell the Meeting Spam for group meetings and shall bear
the marketing expenaes ineurred in connection with those efforte. .
8.32 Booking the MettiLeg SpaCe. Landlord, or its `manager, will book
all events Which will Use the Meeting Space. Tentative and cm:pined events will be recorded in
a function Vete diar y that will be readily available to Tenant dreing normal business hears fat
the Reston:dad.. The Tenant may request that the Meeting Space be reseiVed for en & yea If
Landlord, or its manager, has net booked i tentative or e conilruted event in the Meeting Space
by the Witted" day (With respect to Monday through 5 priairriday) or the fortyfifth day (with
respect to Priday after 5 pm through Sunday) preceding -the requested date then Landlord shall.
corm Tenant's reservation in writing by the later of 5 pin of the next week day. or 24 hours
from the date of the request When a function has been coned for the lvleeting.Spacec the
party that genetatedthe f t1onth1 generate a sales and catering oentract which shall specify,
areeerethat.fhb:1gs, thedescription of the food and beverages required, the number of people to
attend the event, the. dayi of the event,- .1he time of the event, and agreed upon "setup" time and
15tear down" thine (each.being a "Banquet Event Order"). With respect to Banquet Event Orders
generated hythe Landlord, or ite Manager, the Tenant will promptly Provide Landlord with the Catering Charges for Stroh event.
.
.
.
833 Meetiag Spede Ch.argee. Prier to the cornmweement of the Term
the Landlord shall provide Tenant 14th the room.reetal rates for each meeting and conference
room located in. the Meeting Space (the 'Meeting Spece Charge") which will be subject to
Tenant's approvaL The Meeting Spew Charge shall be the same for the Eertspet Event Orders
generated by the Landlord and Banquet Event Orders generated by the Tenant, and will be set by
. Landlord at an itributt, equal to the greater of (a) amounts which arevithin the accepted roma
of the industry iii the San :Francisco Bay area or (b) an =nut equal to the direct operating cost
inclined by the Land* in perftamingthe duties asaociated with the situp, breakdown and
' other Services perforinedpursuani to Seddon 8345 hereof and any incremental valet parking
services required to handle the event. No changes will be made in the Meeting Space Charge
vvitbont at least. sixty my days gig nO0ce :from Landlord to Tenant. Landlord May Waive or
crvicount.the geetin.g Space Charge with respect to Banquet Event Orders *aerated by Landlord
if sucii. event IS held in conjunction With an OW Whioh generates gueStroom rentals for .
' Landlord. If Landlord hereafter acquires any audio/v/01ml equiPmerct, dance floors or other
personal property which may be used in the Meeting Space ("Additiourd Equipment"), Itill set
the price for such items in the same'maraer as theivieeting Space Chargewa will include ithi
the meeting Space Charge in connection with banquet Event Orders generated by Terumt which
request the use of WO Addillottal Equipment.
. 83.4 Dud
the l'enatt
With raapeet to weds to take place in the Meeting Space, Tenant shall design and prepare MEM
items, subject to Landlord's approval, in accordance vvitfn the terms of the applicable catering
conkraCt, price menu items gratuities and =vices charges at rates Viladoh are cOmpetiiive rates in
the San Francisco Bay area and have.been approved biLandlord (the "Catering Charger), • ,
10
04207444= t DALLAS 106061LI /
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. prictgess all orders to and from the Meeting Space and deliver all food and beverages
to the Meeting Space. Additionally, Tenant ,sltall provide fur the preparation, service, banquet
skirting, buffet prompts, top linwi and cleanup of all foo4 and beverages for each event held hi.
the Meeting Space. Tenant will also provide all Restaurant Equipment and Supplies needed in
eentection with the event and will provide for the Cleanup and storage of all such Restaurant •
Equipment and Supplies-used:for awl), event
•
83.5 Duties of landlord_ ?or all events in the Meeting Space, Landlord
.
or its manager shall provide for the setup of all tables, buffet
chairs, areas, any Additional
F.quipment and all oth.er physical setap needs of the onetimer and Shall.tear down and store such
prinierty at the end of the e yed, except for those described in Section 83.4: .
_99gAglan4
8.4. it.
'•
•
8.4.1 ?avmit
cha.ses. Tenant will Cia7Set
all Hotel West room service °Wets to be oharged to the guestrooru folio fox' such sliest and will
permit Hotel guests to ohmic ether purchases from Tenant to their guestroom folio. In such
instances, Tenant will Immediately enter each such Charge into Tenant's point of sale system to
enable snoli charges to be added to the Hotel guestroom folio. Additionally, Tenant shall:Cause,
to be prepared and delivered to 'Landlord. # weekly invoice and accounting of all mom-service
charges by Hotel guests and all other charges made bY Hotel guests in the Premises. The amount
of Tenant's invoices to Landlord for room service , orders shall be eighty-two percent (.82%) of
the published menu Nice. The amount of Tenant's invoices to Landlord for charges other than
room. service shall be equal to such charges Landlord OM renait the in:mined prowls 'Within.
fifteen:051days from the date of invoice, except for Landlord house accounts and direct billings;
which will be paid .wit* thirty: (30) days offittroice. IfauyguetaccountwaspaidtoLandlorcl
by credit card, Landlord. Shalt deduct frektn itie.atagents due to Tenant such charges as the credit
'card . r.empanymiy assess against- or with respect to the invoked tnnourd. 14 the event that any
trefuses Inv any charges of Tenant, Tenant agrees to asaist Landlord in:the
Hotel
collection of such charges (but shall not be required. to instigate litigation or collection
procedures) and qinin provide Landlord with allrelevant information in. its possession regarding
the Hotel guest tind the 'unpaid bill, subject to any kris. which pay restrict theTenaes abilityto
share such information. Catsa Sales shall izioludb remittances to Teriant hereunder, subject
• to . the
applicable deductions and exclissioni set forth in SeCti411 511
•
8.4a
it p_m
Ckm_
When Landlord generates a
Banquet Event Order the Tenant will prepare and deliver to Landlord, within two (2)business
days following the event, an invoice and accoUntiag Of OE Catering Charges for the event. The
ammint of Tenant's invoice for Banquet Event Orders generated by Landlord Rludl be equal to
the Catering Charges. Landlord will reniit the invoiced =Pont within fifteen (15) days from the
date of the invoice, eareept for Landlord house accounts and direct billings, which will be paid
within thirty (30) -days of anvoice If the customer adtioinit was paid to Landlord by credit card,
Landlord shall deduct from the amounts due to Tenant such charges as the 'credit card company
* aim* to the account. When the Tenant generates a Banquet Event
:may assess agafrist or With m
Order, the Landlord shall charge Tenant withlbn Meeting Space Charge. Tenant will remit the
Meeting Space Charge to Landlord within /dean. (15) days from the date of the event, except for
•Tenant house accounts and direct billings, which will be paidwithin .Thirty (30) days of the event
04207414326. ; DALLAS 1060613.11
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If the customer acoount was paid to Tenant by credit =di, Tenant shall deduct from the Meeting
Space Charge, such charges as the credit card campaign:ay assets against or with respedto.
•such amount. Gross Sales shall include remittances to Tenant hereto:1de; subject to the
•apialicable deductions and exclusions set forth. in Section 5.1.2.. Landlord shall be responsible for
collecting and paying any sales tatea in respect of a Banquet Event Order generated by Landlord,
and Tenant shall be responsible for colleCting and paying any sales taxes in respect of a Banquet
Event Order generated by Tenant
8.5. Restaut
, Tenant Will useits best effikta to accommodate.
the guests of Hotel in the Restaurant on a preferred basis consistent vvith the services that a •
hotel restaurant castaway ppovides to its guests -Tenant will keep at least tenpercer g (10%) of
its dinner seats in the Rest ant reserved . for pests of the Hotel tina5:00 pm. each; clay.
8.6. Pisgmats. Tenant will provide Landlord's designated hotel p dracuonel and
associates; the identity cif which may be &anger' from time ta time bytotice to Tenant with a
discount often percent (19%) off of feod and beverage items, at retan and a/sanding graintty, up
.143 Eal. tiggregate of$6,000.00 • per •Aecouta3rig Year, 'Landlord wilEprc:Ivide Tenant's designated
personnel andissoolates, the identity of which maybe changed *Om time to Ow by notice to .
•Landlord,.41th a discount of ten percent (10%) off ofRotel lodging acepromodations on a apace
available basis 'Rita an aggregate of $6;400.00 per Accour ging Year. Any discounts not Used by
Landlord and Tenant by the end of an AP-colliding Year shall lapse,
9. MiaM_IPROILW)3131.
I
9.1 .. Qk. 'recruit shall construct the Work (as defined below) in the
Premises at Tenant's sole cOst and e-ipense, subject to if:repayment of the Construction Allowance.
•
.
-92. rimAnnsfa
ti
.
Tenant
shall arrange for the constfaction of the Work in aocordaricif, with the following procedure;
• • 9.2.1 'Hotel 1i1aga. Landlord 'shall submit plena and specifi.dationa for the
Hotel ("Hotel Plans") to the areliitiret 'Mich shrill be mutually acceptable to Landlord and Tenant
CiArchiteon, safficient to allow the Aiebiteet to complete a Spade Kan (as defined below). .
Landlord shall have submitted to Tenant the Hotel Plant aiofthe date of exeaution: of the Lease
-
9.2.2 ft)turttinn and Approval- cif Space Plat Tenant eh promptly
isuhralt to Landlord a description of the scope and woik for the iminOVeraents which it proposes •
to make to the Premises, together with a 'space; plattprepared bit ihe Architect Oh; "Space Plan").
Landlord Shall promptly review the Space Plami and shall not-unitattionablyviithhold or delay its
consent thereto provided that (i) the ilnproVelnetts contain:doled thereby coMPly with all
applicable governmental laws, codes, mica and regulations, (ii) the •Space Plan issuth.olently
detailed. for the preparation of the Working Drawings, and in case imProvements which
are visible A.oni the exterior tfthe Hotel or from -the lobby' of the Hotel, such itapravements are
consistent in quality, character and esthetics to the txiating iinproveinents aid, in Landlord's sole
but reasonable judgment, do net &brow* affect the vane or salability of the Hotel.
a
ea7474105010ILAS:100411.11
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•
9.2.3a
gagings. Following the
date of the approval the Space Plans, '1'P/rant shall promptly submit to Landlord (i) a complete
set ofproposed Working Drawings prepared by the Architeet of the improvements that Tenant
'proposes to blatall on the Premises, and (ii) a complete set of proposed. Workbag Drawings
prepared by an eogirceer =tally acceptable to Landlord and Tenant that dem:Dies the portion of
the .coaatroction work that will ("act the Hotel's 1-11 1A.C; electzical, mechanical ancVor pliambing
systems. Landlord shall review the pmposed Working Drawings and shall promptly provide
Tenant with any commenta thereon. Landlord's approval of the proposed Working Drawings
shall not be unreasonably withheld or delayed provided that (i) they complywith all applicable
laws, codes, rules and regulations, (ii) the proposed Working Drawings are sufftoiethly detailed
to allow nonstauctioh of propoae& imp:row:emits in a good and workinaulike mama,- and
(iii) the portion ethe improveanents depicted thereon which are visible from the exterior of the
Hotel and from the lobby of the Hotel are consistent in quality, character, and esthetics to the
existing improvements in the Hotel and do not in Landlord's sole hut =amiable judgthent,
adversely affect the value or salability of the Hotel. Approval by Landlord of the Working
Drawing shall not he a representation or warranty of Taaallord that each drawings are adequate
for :any use, purpose or °audition or that such drawings comply with any applicable law or code,
but shall Merely-be The consent of Landlord to the performance of the Work. All changes in the
Work must receive the prior Nitrified approval of Landlord •which aholl not be unreasonably
withheld or delayed. •
• •
9.2.4 permed TbIllOg. As used herein "Wetting Drawings" shall mean
.
the final worldig drawing, which shall kelt& the scope of work and all plans and •
specifications, for the improvements to be corisfructed on the Piendses which have been.
approved_ by Landlord, as mended from time to time by any approved changes thereto. "Work','
shall mean all improvements to be constructed in accordance with and as indicated oirthe
Working Drawings which 11 inept-fide, to themaximommckat possible, separate metering of all
:•
utilities for the Premises. • 93. Permits. Tauard shallbe responsible for Obtaining (a) all goVennftental approvals Of the :Working Drawings, necessary banding pe.itraito and zoning use permit changes
which are necessary for the construction ofthe Work, (b) .a. certificate of becupancy (or local
equivalent), liquor licenses and all other governmental approvals, and arming use permit .Obanges
which are ileGeSp# to use awl:occupy the Premises upon crsmpIetion of the Work and to operate
the business irt and from the Premises aS conteroplated by dila Agreement, and (e) all governmental approvals nrhida are required to operate the additional parking contemplated by
Section 31 hereof (collectively, the "Tenant Permits'). Landlord shall be responsible for, • •
obtaining (a) all governmental approvals, building peomita and govern:tient zoning use penult thangett which are necessat3i for the constriction of the Meethg Space (b) a certificate of
occupancy (or local equivalent), end all other governmental approvals and 2otiing permit use
dinnigeS which arenccessary to use and occupy the Meeting Space and (e) all governmental
•appreVais*hioh -aterequired to operate any additional parting reqrcired for the Meeting Space as
borteMplated by Section 31 hereof (colleetively, the "I•aindlours Permits"). Additionally,
Tenant agees to Obi:Tecate with Landlord and use Its best efforts to assist Landlord inits efforts
to *obtain the Landlord's PazroltdProvided Landlord shall reimburse Tenant for any reasonable
out-of-pockiit costs incurred in connection with such .efforts.. •
MO7414326 :DALLAS: 1063611.1r
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9.4. Contractor. The Work shall he performed only by contractors and
subcontractors approved in writing by 'Landlord, which approval shall not be unreasonably
withheld or delayed. 10 contractors and saboontractori shall (i) be required to procure and.
maintain instnance against such risks, in snob amounts and with such companies as Landlord
may reasonably requkce; (ii) have sufficient ftnancial resources to perform their. obligations under
the constractica contracts to which they are a party; and .(iii) otherwise be teasciiibly salisfacstary.
tb Landlord. Cealift.cates of such ingtkamee, with pairfitoeipts tfi,erefore must be receivectby
Landlord before the Work is commertOed. The WO* shall be performe.d in a good And
worlana-illilui mariner that is free of defect: and is in strict conforpance with the Working
Drawings, and shall be peerinned in, such a Manner and at such Saes as to Maintain hal:Mania=
labor relations and not to Imrepotably itierture with or delay Landlord's other contractors, the
operation of the Hotet or the occupaney of Rotel by &cots. The Work to be pcnionned be pursuant to axons-traction schedule which is approYed in Oriting by : Landlonl, which approval
shall not be nrunasoneblY withheld * or delayed. All C:Ontritotots and subOontractors shall contact
the Landlord and schedule time vette& dating which they maY use Hotel facilities in connection
with the Work Subjeet to sachreasonable rules and regal/dims as- Landlord ,shall impost.
- •
.9.5. Tertargraproyements.
.
.
r •
•
9.5.1 Tekl,NmA
v jeentgesg, Ihe Tenant ghvil bear the entire cost of
performing the Work for th.eirnproveruents to be located in the PretniaeS, including without
limitation, the design of the Work and prortOration of the Working Drawings, cost of arohitectaral
and engineering Sorvioes, costs of ether Professional fees, =its of construction labor and
=raid; electrical usage during oonstractien, additional janitorial services, general tenant .
.siguage, related taxes .and insurance:costs, farnitans, fixtures, Ippipttient, one half the cost Of any
precipitator or c'smog hog" (if requite by applicable law,:the notel or neighborhood concerns),
one-half the cod oftheinstallation dfthe gievator, the Itestaurant Equipmeait and Supplies, and
pre-openiug =peaks that are oustontary for an npsoae 'regal-ant, including the cost of training,
promotion, and pre-openingparties and the legal fees inotsxed by Tenant in cotan.ection. with the
negotiation of this Lease (all of Which costs are herein collectively esZed the 'Total
fraprovement Coats"); in camas of the Construction Alirrwance (such excess being the
"Exceis"). If costs contemplated by the agreements with the architects and engineers, when
added to the costs under the (femora Construction Contract (the "Construction Coats") exceed
the araeunt actually contributed by Tenant to Landlord trader:the First Amen.dmesit atul loaned to
Landlord under the amendment tri the Loan Agreement, Tenant shall deposit the amount Of such
excess (the Deposit") with Landlord. Landlord shall provide Tenant with a construction
allowance (the "Construction Allowance) equal to the fesser of (1) the Total IMprovement Costs
as adjasted for any approved changes to the Work, or (ii) the amount actually contributed by
Tenant to Landlord under the First Amencirderit and-loaned to Landlord under the amendment to
the Loral Agreement .- The Landlord Will dfstribute funds fivm. the Construction Allowance and
Deposit from time to time, to pay for anyTotai Impro,Vement Costs which Tenant has Incurred,
zilch disbursements to be made at Laterals which enable Landlonfto Meet it payinent •
obligations. Landlord will also distabUte faalS from the-Corti:ruction AlloWanoe and Deposit to
Tenant to rohnhurse it for all-Total: Improvement Costs which it has incurred, provided sufficient
funds are theta available in the Construotion. Allowance and Deposit and Ltuidlord has received
an application for payment front the Tenant. which includes an application for payment from the
042024:742.ELDALLAS:1060611.17
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general c' ontactor, aupporting invoices from subccintractora and other parties requestingpayment and lien NtraiVerEi fronnail parties supplying labor or materials.(an "A.pplication"). Landlord will
advance funds froth the Conatractiets. Allowance or the Deposit within three (3) business days
following receipt of a complete Applicatio.n, provided Landlord shall not be required to maim
advances to Tenant more than once per
Notwithstanding the foregoing, an. arnount equal
to ten percent (10%) of the ponstructionAllotance and Deposit, less $25,000.00, shall be
retained until the Einal Payrawat Date, which Shall be the dEite Upen which (a) the Work. has been
Sthstintially Cerapleted, (b) Landlord has received all invoices from contractors, subcontractors
and suppliers .evidencing the east to periforrh the-Work, together with lien waivers from such
imam to the. Prilshed Work, and (6) Tenant has received the Tenant Permits. The enAl
$25,000.00 shall be retained nntil Tenant has furnished lAndlord with an -awn* reproducible
"as built" plan (e.g. sepia) efThe intim:v=0dg as constructed. Mused herein, "substantially
Complete" and any derivations thereof mean. the Work is auhatantially completed (as reasonably
denstreined by Landlord and Landlord's lender) in substantial a.ocorkugle with the Working •
Drawings.
•
9.5.2 pccos. If Ternmt pals. to pay ail or any portion (Cho EXM5
within'. ten (10)-days of natice from Landlarcl, Lendlord'shall have the following alternative
remedies:
.
•
•
(A.,) Lan.dlord =ay treat Tenant's iaare to pay itich Excess as a •
failure to pay rental pursuant to Section. 23;
"
•
•
(E) ' Pelt Hotel Investraents, LW, a member of Lancliotd,
Mark") may advance uncharnount to Landlord on behalf of Tenant which advance. shall be .used
by Landlord to satisfy the outstanding traeunt oftlie Exceas winch, advance shall be treated as
a loan. from Pia to Tenant which loan. (i) shall be secured tithe menthership interest in
Landlord of Tenant, and any distributions to Which Tenant is entitled under the tipetating .
Agreement shall be applied in repaym.ent of such loan. and (A) stall bear interest at faelate
-provided in Section 5.2.2 hereof; or
•
(C) After five (5) days prior written notice to Tenant; Park may
advance such amount to Landlord on behalf of Teuantwliich advance shill be used by Landlord
to satisfy the outstanding amount of the Excess and such advance shall be treated as payment of
the purchase price to acquire a portion of the rnera.bership interetit of Tenant in Landlord and
Tenant'iMeztanine Loans whichpertiori shall be determined by multiplying Tenant's
membership interest and Mezzanine Loans by a fraction the ranneratoi of which is 200% of the
Amount of the advance and the denomisidor of which is the sum of Tenant's initial capital
contribution to Landlord and the principal amount of Tenant's Mezzahine Loans.
9,6
ervision ofaWs,
,7 .• Landlord shall appoint a representative (which •
initially will be Ron Dam* which shall SuperviSe s the Wodc, approve the disburseraents
required to be made from the Contraction Allowance and act as a Halton between the
contraotor, Landlord and Tenant, and Coordinate the relationship between the Work, the Hotel
and the Hotel's systenAs. Any disputes relating to the Work which &dee between, the
005741743W:DALLAIMONUAI -
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representative and Tenant shall be referrei to Landlord. Any disputes which. arise between the
Tenant.and the Landlord will be resolved by the Dispute 1tesoluilon. Process.
sructiooiitra4. The :Work shallbe performed under a single
9.7.
general cmsituotion contract (the "General Construction Contract"). The Ga llersi construction
Contact and the construction contracts with major subcontractors all all be. subject to Landlord's
approval, which shall not be unreasonably withheld or delayed. •
9.8. Landlord,
Landlord shall provide a sanitary Sewer line, electdcal
service and natural gas service, separatelymetered as set forth on Exhibit E and imProveruents to
the second floor of the Hotel arliacent to the PrercdSes pursnant to plans and specifications for
Meeting Space (the 1.1/e.P...ting Space Plans) That have been reviewed by Tenant and that are , •
consistent with the standatds and Vality of other imprirvements to the Hotel (the "Landlord's
Work"). Landlord gnat. coordinate Landlord's Work with Townes construction ofthe Work and
shall-complete Landlord's Workwithont causing any delaY to the approved constructiOn schedule
and, in any cvent,.on br before the opening of the Restaurant 'Landlord's Wink is not part of the
Work and shall be completed at the sole cost awl expense of Landlord,
•
9.9. _ eSflCØ of zardoas Subitances. lf duringthe consinction of the
Work, the ?remises and/or the asuman areas of the motel are determined to contain hazardow
substances, Tenant shall have the right to notify Landlord, and Landlord shallInTediaiely
remove, encapsulate, c onlaiic or otherwise dispose of or abate such hazardous sobstinces. The
oast ofperfonning the foregoing work shall be separate and apart from, and in addition to, the
Construction Alichvence and shall not be deducted aom the Construction Allowance. Any delay
incumsd by Tenant in the deSign or construction of tho Work because of the presence of
hazardous- substances shall extend the period deseribed in Section *4:1(a) b y the length of such
-delay.
•
10. • 0111IUTILaC
.
ialaI
SINES
10.1, P nitutc..1ixr
.•
•-" 10.1.1 Installation. -Tenant agrees to provide and install in the Premises,
all fumittle, fixtures*. equipment, wail, floor sad ceiling coverings and other personal property •
specified in the Working Drawing. 'Ansa. Shall also provide all other perconalty as is
reasonably required for the conduct OfTenant's business in accordance with the Tenant's .
°Pending Standard, including, the provisien of services described in Sections 82 and 8.3 hereo4
suchpersormity to include; but not be limited in, a point of sale system which will allow Hotel .
guests to Charge purchases in the Premises to their Hotel b:M, at china, glass, silverware, table
accompaniments, linens, stands, roll-inbred carts, buffet props, traylacks and stands, hot boxes
and related equipment and supplies (tOlIectively; the (Iteatviurant l3quipment. and Supplies").
10.1,2 Refurbiahments. Tenant shall Maintain. rep* and replace
fu
rniture,
f' ixtures, equipment, Restaurant Equipment and Supplies, wall, door and ceiling coverings and other personal property in the Premises to the extent necessary to cowly with
applicable law, and to wade the Rettanrot andthe'services which it is to provide under
0420747926 :DALLAS r1060611./i
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Sections 82.and 8.3, at .all times to meet the. Tenant's Operating Standard (the
c'Refrabishmenta). •
10.2.lameiQraons.
e
Tenant agrees that it WA at its own expense, (1)
.employ.a pest•ontrol agency, duly licensed by the State of Caffein*, to provide service
regalady and as necessary for the purpose ofpreventing and/or eliminating rodents and pests
from if‘Premittes; (ii) employ a regularly scheclaledpreventive maiainaeope and service
contract for all IWAC equipment or servicing the Premises; (iii) retain a dependable bonded •
degreasing service on et regular bask and as needed throughout the Team to clean and degrease •
Tenant's entire kitchen area, ranges, cooking
broilers, stcries, hoods; fail; exhausts
and Waiver systems, filters and flue Stacks, whethenor not within the Premises, (iv) maintain all
Tenant's motors and blowers, whether or riot Withirethe Premises, in. such a manner as not to
tranemit 'unreasonable noises or vibrations to other parts of the Hotel or transmit noxious
emissions directly into the Hotel; (v),at ail timesnutheain a state of oleantmess throughout the
?retakes in accordancelNitia standards established by any health departtnent haviugluilidiatiou over the Premises or Tenant's operation therein (vi) clean the grease trap for the Premises; (vii)'
provide suitable receptacles for garbage egad garbage procedures tihninating all garbage from the
. PreiaiSes witharesattable regularitx and ('via) arrange for the collection of garbage. Landlord
acknowledges that Tenant is 'operating a. restaurant, which at times may produce noise, odors,
and other miner imigences that are reasonable in the operation of a restaurant. Nothing in this •
Section 10.2 shall be eonettueSto limit Tenant from causing noise, vibrationa, and emissions that
•are reasonable and otaitornaryin the operation of an upscale regal:gnat located in an upscale
hotel.
.•
•
- lio relations firm to assist it with
10.3. Promotion. Tenant intim& to hire. a plib
.theproniotion. and Marketing of the Restaurant and shall take aucla other actions as Tenant, in its
reasonable business judgment, believes are suitable and appropriate to market and promote an .upscale testanrant. Ail. Marketing and prombtional materialii thatuse the name "OREM Me.dronan, •
eny derivatives therot any depleticits thereof or any log° related thereto are subject to
Landlord's approval in its sole &song= All marketiag and promotional materials that use the - •
name "Rockleekgrer, any deriyetiiies thereof or any logo related *mien are subjectto approved
byRocklteaorta International, 1.14, iii Its sole discretion.
•
in
104. Continued Overaiions. Tenant shall commencebusiness operation in the
Pretaises,on or before the Commencement Date and will operate its business in in efficient, • .
upscale and reputable manner SO as to produce the Maim= amount of sales from the'Precalees.
Tenant Shall pay aftexpeuses inottrred in ecemeetion with the operation of the Premises and the
performance of its. duties as .descrilsed in Sectinns 3.3, $.2 and 83 of.this Lease, spe,oilioallY
including but not lb/rifled to the gloat ofinventories. Except for perieds when the Premises are
being refoebished, as pennitted tender S 00101133. or as a reault of casualty or condemnation, or
forte majoze events, Tenant Must not at any tiinti leave the Premises vacant, but must in good •
faith continuouslyetarrogfieut the term of this lease conductand carry main the entire Premises
the type of buainess for which the Premis'ea are leased.
•
,
10,5. Pereennel. Tenant Must retain an adequate staffdtrain.ed and qualified
inattendance
on all days , and during hours when the Rastaurantis required to be open
personnel
or the Tenant is otherwise obligated to provide thed and beverage service as described in •
17
04201474326 JLASilia:SW11,T 1"
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be tesponSible for hiring, training,'
*
Sections' 13. -2 rind 8.3 of this Lease. Tenant shall
.
•
supervising and diseharging afl such employees.
. •
gm_ cA&teirot.s. As part of the Wade, Tenant agrees to install and
10:6.an
Maintain. &St class Eignage on theRremiSes, which shall he approved byLandlord, in its
reasonabli discretion; Tenant must not, without Landlord's prior written consent -not to be
'noreasonably withheld or delayed, (a) make any changes to the starefront, or (b) install anV• .
exterior lighting, decorations,- paintings, aWnings, canopies or the like, or (0) erect or iistai1 any •
signs, window oidoor lettering, placards, decorations or advertising Media of any type which
can be viewed &orate extetior of the Premises,
11.• JIS PROHIBI=.
.
.
11.1. dermal. Tenant shall tot Use, Or permit the Premises or any part thereof
to bellied; for any purpose other &allele purpose for which said Promises are hereby leased, and
nn e Oval be made or permitted to be made of said Preana• es, nor aets done therein, which will
-
inireise the then existing rate of insurance.upon the Hatel-or muse a;cancellation of any
insummee'policy covering said Hotel, or any part thereat nor shall Tenant set or permit to be
kept, -used or said, in -or about said Premises, any article that is not customarily used in upscale
restaurant operations, and which May be prohibited by the standard form of fire insurance policy.
Tenant shall, at its solo cost and expense, co4ly with any andallInuire:roents, pertaining to • said premises; of attyinsuaTci ergan1ZatiO33:orcompany, necessary for the liaainipnaaGe of
reasonable fire and public liability insuranee, coveting said Hotel and appurtenances. Tenant
qllallnot conduct or permit to be conducted ttny sale : by auction or any hqw4ation3 going out of
business, fire or bankruptcy salein the PrezniSes. Tenant shall not commir, or suffer to be •
committed, any 'waste upon thePrentises. Subjeot to notion 10 above, Tenant shall not create a
IleiBULCO or do any other act or thing in or about the Premises which may unreasonably disturb
the quiet erijoymentaf any other tenant in the Hotel or say Hotel guests.
•
•11.2. - .Toxie MaterWs. lIceept aa may otherwise be Provided in this Lease, or
for conditions orindardaus wastes thattney exist on the Premises prior to the execution of this
Lease, which stalt belle sae ripsponsibility ofthe Landlord,. Tenant slli °empty at its own cost
with all laws pertaining to the creation, generation, use, emission, disposal, Or release on the
Premises of any toxic or hazardous gaseous, liquid or &Mid xnabadal:or vrasfe ("Toxic Math:x:10.1,
including Without Ihnitation, material or substanee which is listed on any of the Environmental
Protection Agency's lists of haserdous :warltei, as tine same rnzybe amend.ed from time to time
Tenant Shall indemnify and holdLana5rd harmless fro1fl any clans, liabhties, costa, or expenses incurred or. suffered by. Landlord arising front the breach of this section of the Lease. •
This provision survives the erEpitation or termination of this Lease. 'Landlord acimowledges that
' feels ()Abe PremNes, and .
Tenant will be utilng charcoal, firewood and other cooIcing,
substances' that are onstotnatilY Used for *min and main.taining restaurants.
. .
12.
12.1. Restriction. -Tenant shall not voluntarily or by-operation of law, sell,
assign, sublet, encumber, pledge or otherwise transfer or hypothecate any interest in or rights
with respect to Tenants leasehold estate hereunder without Landlord's prior written consent,
042474174326 ;DALLAS : t040611.11
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whichin each instal= may be Withhold in its sole discretion; provided however, Landlord's
clime:ion shall be exercised ressonablyin instances where the assignee or mibtenent meets the
. Criteria (as hereinafter defined). If the Tenant, at any time dining-the tan of this Lease, is a
corporations partnership or other entity and itthe person or persons Who directly or indirectly
enni &majnrity of either the outstanding voting rights or The out:tending oWnersbip interests of
voting
the Temente/ the time ofthe execution of this Lease cease to own a majority
rights or ownership Were* or otherwise lose control (ekeept as a result of transfers by devise or
descent) that an& loss of majority of finch Voting rights or ownership interests or control shall be
deemed on assignment of this Lease by the Tanart, which may notoccur without Landlord's •
in its sole discretion; provided.
prior 'mitten consent, which in each instante maybe withheld
.
however, Landlord's discretion shall he =raised reasonably in instances where the Tenant following sn'ela transfer meets the Criteria. .NetWithstanding the foregoing, the Tenant may
assign its interest in this Lease enclitic owners of Interests in the Tenant may assigntheir
•
interests in theTeriant to an entity owned and controlled by Lawrence B. Mindel,•withoet Landlord's approvaL Any of the probffilted activities desittibed in this Seiatien are hereinafter
collectively referred. to as an "Assignment". The Criteria are that the proposed ossignee'or'
transferee (a) has a verifiable, adequate net worth determined in wander= with. generally
accepted accoinating wineiples of.* lebst $3,090,001), which amount shall be incraised -following
the date of Leese by the increase in the Consumer Price Index (as defined in Section
hereof), (13) agrees to be bond in vgnitin,g as the TenanfunderthiS Lease in a: !Soeument that is in
foini and sulistanoe resoonahlysariafactory to Landlord, (c) is not an entity or person with whom.
Landlord or ifs affiliates -have had an nufaveribie businesamlationship or experience, (d)
generally conEdderedin the rdevant business conning)* andrasteurant Industry to be of high
&meter with a favorable reputation for Integrity and honesty and has not nor have iny onts
•offiliates, been a debtor in any voluntary or imEollmtarybanlvptoy proceedings, (a) has
experience in owning and operating upscale restaurante on a. ptofitable basis in association with
hotel operatiens, and (f) does not own or menage any other restaatimt in Sausalito, California. • •
.
•
122; Procedures. If tenant desires at any time to enter into an Assignment,
'
' Tenant shall firSt givonottco to Landlord °fits desire to do so, which notice shell contain(i) the .
/icing and address of -the proposed Oisigate, (ii) the nature of the proposed assignee's badness to
be carried-en in. the PME1/653, CAD the terniaaiicl provisions of thep/onneed Assignment and (iv)
.
suols. Standsl information as I.,andlerd may reasonably reinutt concerning the proposed asaigftee. If Landloid has not consented 'to the proposed .Aesigninent in vorifirkg Within. fifteen .
(15) daysof receipt ofnotice from Teriant it will be deemed to have diSapproved of the proposed
•Assignment, Tenant may', withinninety (90) days after Landierd'rconsent, but not Inter than the
expiration of nen -ninety (90) days, enter into an Assigamentupon stbstantially the same terms
and conditions set forth in the noticefernisherl by Terunit to Landlerd pursuant to - Section 12.2.
()al
. 12.3. Release of Tenant. In the event an Assignment or other transfer-is made
•
puttied to this Section 12 as to which Landlord is required to consent; and-provided the tangible
net Worth Of the enfity whiChviril litereefter be the Tenant hereunder is at least $3,000,000, •
which wont ochplibe increased llowing this date of this Lease by any increase in the
033314112/et Pdce:Taddx.(as defraed in Section 4.2 hereof), Tenant shall be releised on all
obligati* and liabilities ;accruing /index this Late sabeennentto the ef6ect1ve date of such
Assigratient or other transfer. The consent by Landlord to any. , Assignment shall not . relieve the
• 04207474725 DALLAS:1650611a'
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successor tenant from the obligation to obtain Landlord's express consent to any other •
Assignment. Any Assignment that falls' to comply with this Section 12 shall be void.
. ,
.
.
.
. ctinn. of Obligations: Each assignee shill assrane all obligations ot
12.4. Assarn
Tenant under this Lease.
DISOLVENCY. The occurrence of any one or more of the following events shall
13.
constitute a default and breach oftbis Lease by Tenant: ' the tasking birTmant o any general
assignment or general arretngement for the benefit of creditors; or the Hung of any &den by or •
against Tenant under any insolvenoyi banlauptoy, reorganization, rnoratbritun, at other debtor
relief statute, whether now or hereafter existing (unless, in the ease of iv* action taken against
Tenant the same dismissed within sixty (60)days); Or the appointment of a trustee or a
reeettrer to take possessi.on of substantially all ofTenants asseti Iodated at the Premises or of •
Tenant's interest in this Leath, where possession is not restored to Tenant within thirty (30) days;
or the attac.bnient execution -or otherjudiciEd seizure otsubatantiallyAll of Tenants US.*
Ideated at the Promise or of Tenants interest in this Lease, where snob, seizure is not diaoharged
in thitty (SO) day.s:
•
ALTERATIONS. Teilant /hall not 'Ask% or suffer to be made, any change in'.
14.
'reliant's store front' of any.other alterationotdditinn or imProvement to the Piemises, or any pad
thereof, without -the vititten consent of-Landlord, will& consent shall not be unreasonably
•
withheld. tarullerdis consent 04 not be required to alterations, improvemen‘ or additions, the
aggregate cost of which during any Lease Year does not exceed $50,004, which am.ount shall b e
increased by any increaseIn the Consumer Price Index (as defined in Sect= 42 hereof) during •
the term of the Le:21$6,. and which do not afoot the Strooturil portions of the Hotel, any of the
systems of the Rntel or Premises or the exterior appearance ofthe Premises or thanotel. Any
such changes, alterations, additions and impravements requiring Landlord's consent shall be
done solely in. accordance witb.planeand specifications approved in rgftiting.by Landlord prior to
the commencement of any WO& .rdnal:lt agrees that allal:tattlers:I,. additions or improvements of
whatsoever kind or nature ro:ade by it to the Premises, other than trade II:dares, furnishings and .
equipment, shall belong to tmd become- the property of Landlord upon the expiration of theTetm
or sooner terminationhereof Landlord shall have the right to feqdire Tenimt t& pot and keep
posted on the Preniises anynotices of non-re:spouSibility that maybe proper for Laildkriltifi
.
protection.
• 15.. AlEtANDONlvifiNT% If Tenant shall abandon, -vacate or surten.det said.Premises,
or be. dispossessed byprooess of la*, or otherwise, anypsoWpropertybeIongingto Tenant
and left on said premises shall be deemed tobe abandoned, at the option of Landlord, or
Landlord may store the same in the name and at gig cost of and withoixt notice to Tenant.
16.
I
••02MSEal_M
1.1"8 OGA70 •
•..
• • 16.1. Mad INDE:MAXIT. Timm sruitz DramoreTAN)) •
SAVE rfARINEE,Estiruremova), rrs AMLIATED COMPANIES rrs lib TEL
MANAGER (WHICH CORRENTLY IS R.0 =RESORTS INTERNA.TIONAL LILA rrs
ASSET MA.11AGER(WitICII CURRENTLY IS GEMSTONE , rummers . )
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;
THEIR RESPECTIVE ACatNTS, SERVANT'S, DTRECT0RS, OFFICERS, AND
EMPLOYEES (COLLECTIVELY, PINDEMINHTEEsw oR INDIVIDUALLY, AN
"TNDEMNITEE”) FROM AND AGAINST ANY AND ALL LLorLtrics, DANIAGEig,
CLAMS, Mars, COSTS (INCLUDING CoUR.T 'COSTS, ATTORNEYS , TEES, AND
COSTS p)? INVESTIGATION), AND ACTIONS OF AN KIND (COLLECTIVELY,
"I/ABILATTII,SnARISDIG OR ALLEGED TO ARTSE By REASON OF (A) MAW
ARISING DDE TO frEVANrs USE OF THE NAME OF THE RESTAURANT (E)
INJURY To OR DEATH OF ANY PERSON WHICH Is ATTRIBUTABLE TO ANY
FOOD oREEVERAGF,S PREPARED BY TENANT (C) INJURY To OR DF:ATH OF
ANY PERSON OR DAMA.GE TO OR LOSS OF PROPERTY OCCUrRING ON IN, OR
ABOUT THE PREVUSEg (D) INJURY TO QR. DEATH OF AN PERSON OR
DAMAGE TO ORLOSS OF PROPERTY OCCURRING ON, IN, OR ABOUT THE rnEETiNG SPACE DT CONNECTION VIM ANY BANQUET EVENT ORDER.
GENERATED Ey TENANT {E) ANY OTT M. cLAnvi WHATS0EVIT.R, OF ANY •
PERSON OR *PARTY ocCAslowb OR ALLEGED Tb BE OcCi2T0INED IN
winsix OR IP.IPART BY•ANY ACT OR oldISSIoN ON THE PART 01? TENANT OR
ANy LICENSEE., EMPLOYEE, DIRECTOR, orrim, SERVANT, coimukerox
suBcomuCToR,,OR TENANT OF TENANT, OR (1) ANY BREACH, NaoLATXM,
•OICNONVERFORMANcE OF ANY COVENANT OF TENANT UNDER TIM LEASE,
BUT SpEcanCALI,Y IrmaLtrDING ANY ATATTP.R, CAUSED BY OR RESULTING FROM TEM GROSS NEGLIOME OR virmAL Act or ANY INDEMNITEE.
ANY ACTION OR PROCEEDING IS BRoTAtuat.BY OR A.GADIST ANY •
DaVadrair= IN CorThwicnoictcrac Azrzsuctozumniasj TENANT, ON
NOTICEFRONE LANDLORD, SHALL DEFEND MICH AcTioN ORTROCEETING,
NSE, BY on MOODIE ATTORNEYS.REASONABLY
AT TENANT'S
•SATJSTACToRY TO I;ANDLORD. TEE FROVISIONS OF THIS SECT ON APPLY •
TO ALL ACTIVITIES 01? TENANT, WHORTIOgR. OCCUR:MG-BEFORE OR AFTER
TECE etommialwarr DATE AND BEFOREAFTER ME XX:PIRATION OR
TERMINATION OF TBIS LEASE. AMAMI; OBLIGATIoNS UNDER tfaS
SECTION ARE NOT LIMITED TO THE LIMITS OR COVERAGE OF INSURANCE MAINTA OR REQUIRED TO BE MAINTAINED BY TENANT UNDER: TAB
LEASE
• 16.2. PERSONAL PROPERTY. ALL nit§ ONAL PROPERTY OWNED
BY TENANT INCLUDINGIIUT NOT TAMITED TO, MEMORY, FURNITURE,
MMES, AND EQPTPIKENT,TPON ThE PREaVirsa OR IN THE unTING
SPACE SHALL BE AT THE RISK OF TENANT ony, AND No TNDEMNITEES
WILL EMU TABLE FOR: ANY DAIVIArrE THERETO OR THEFT TEEMEOF, •
EXCEPT TO THE 107cren CAUSED Bt THE GROSS NEGLIGENCE OR. WILLFUL
ACTS OF AlsTY I1S7DEIViNaKE, ALL IMISONAL PROPERTY' OWNED By
LANDLORD, INCIMDTNG mix NOT LustrED TO, FIAINITURE, matmEs AND
IN THE .MEETTistOSPACE SHALT, BEAT TEE RISK OF LAA-DrAmn
ONLY; AND NO TENANT TDEMNTrEES WILL EVER= LTA= FOR ANY - •
DAMAGE THERETO OR THEFT THERE0F, EXCEPT TO THE EXTENT CAUSED
BY THE GROSS NEGILIGENCE ORNVILLM ACTS OF TENANT INDEMITEE.
04207V437.6 ;DALLAS 1 21306tLii
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• 163. . WAIVER OF SUBR.OGATIO . NO PARTY SHALL 11AVRANY =kr OR CLAIM A44314ST ANY INDEMNITEE FOR ANY PROPXRTY DAMAGE
(WHETHER; CAUSED BY NEGLIGENCE OR WE CONDITION OF rim mamas
OR /OW PART ITIEREOP) BY WAY -01rSUBROGATION OR ASSIGNWNT,
• • TENANT HEREBY WAIVING AND RigLINQUISDING ANY SUCH RIGA' TO TEE
ErrENT COVIKRI2D BY /NSURANCE PROCEED& TENANT WILL REQUEST ITS
INstRANCE cARRIER TO ENDORSE ALL AP'pricamix POLICIES WAIVING •
THE CARRIER'S Rilisirr 01? RECOVERY UNDER. SUBROGATION OR OTHERWISE
INFAVOR OF ANY IVEMNITEN AND pRolfroE A CERTIFICATE 'OF
DISTIRANCEV FNG TEE WATirsx mANDLonD wafts AND
11)4,INQ3ISEEES AY RIG.Eir OR CLAM AGAINST TENANT FORD,AM A• GE TO
Tff?1UMTES, nre VRoJEcT, OR ANY MIMI. PROPERTY BY WAY OF
=ROGATION OR ASSIGNMENT, To THE AiltENT =map BY DISURANCE
• PROCEEDS. LANDLORD 'SHALL REQUEST. ITS INSURANCE CARRIER TO
ENDORSE ALL APPLICABLE POLICIES WAIVING ME CARRIER:1S Rievilf OF
RECOVERY UNDER SUBROGATION OR. OTECE.RWISE Thr EOM OF TKNANT.
• INDIIMNITEE; AND A CERTIFICA,TE OIONSURANciE will, BE MADE
REQUEST Or ME TENANT..
••
AVAILAME AT
•
••• 16.4: LANDLoko ilsIDEMNITZ . LANDLORD SHALL INDEMNIFY
AND SAVE AARIVILVSS TiasTANT.AND ITP AFFILIATED COM -PAWS" AND TEEM
•
AGENTS, SERVANTS, DIRECTORS, OFFICERS .AND EIVITEOVEES
(COLLECTIVELY, THE "TKNA.NT INDFMNITKES" OR INDIVIDUALLY, A.
"TENANT INDEMNITEE") FROM AND AGAINST ANY AND AIL LIABILTITES,
DAMAGES, CLAIMS, SUITS, COSTS (INCLLIDISG COURT COSTS), ATTORNEY
FEES AND COSTS OF DIVESTIGAILON, AND ACTIONS OF ANY MD
•(COMIWITVEZY, THE "TENANT LIARmiTIES) ARMING OR ALLEGED TO . •
ARISE BY REM 1:Vi OF (A) IOIRY TO OR DEATHDF ANY PERSON OR DAMAGE
• TO OR LOSS- OF PEopERTy OCCURRING ON, IN OR ABOUT THE HOTEL .
• (EXcErI TEE PORTION MIMEOS` vaa gil ColvrPRISA ThE. PREMISES Alb TIiIt
. MEETING SPACE AND EXCEPT FOR INYORY TO OR. MATH OF ANY PERSON
WHICH IS ATTRIBUTABLE TO ANY FOOD ORBEVERAGES PREEARKD BY
*TENANT) (B) LNXTRY TO OR DEA.= OF ANY YERSON OR DAMAGg TO 011. LOSS
01? PROP.KRTY OCCURRING ON AND/OR ABOUT TER MEETING SPACE IN
CONNECTION WITH A BANQUET EVENT ORDER GENERATED BY LANDLORD
EXCEPT FOR IVORY TO OR DEATH
OF ANY PERSON MINIM IS
•
ALTRI:MAME TO ANY FOOD OR BM:RA.0ga PREPARED BY TENANT (C) •
ANY OTHER CLAIM WHATSOEVER OF ANYPOS ON OR PARTY OCCASIONED
OR ALLEGED TO BE OCCASIONED IN WHOLE OR LEY PART BY ANY ACT OR
OMISSION ON THE PART OFLANDLORD OR ANY LICENSEE,
DIRECTOR, OFFICER, SERVANT, CONTRACTOR,SUE;CONTRAcTOR OR OTHER
• TENANT OF LANDLORD. OR (D) ANY BREA.03;vlinaktioN on •
NONPERFORMANCE 01? ANY COVENANT OPLANDLoRD UNDER ThIS LEASE
BUT sirEpuemALLY rxcurbING ANY MATTER WIACH IS CAUSED BY OR
, RESULTING FROM 110 GROSS NE4LIG4.NCE OR WILLFUL ACT OF ANY
TENANT INDEMNITEE. IF ANY ACTION OR PROCEEDING IS BROUGHT BY OR
04207474326:WILA3 : 106061211
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AGAINST ANY TENANT IiSTDIEIVINITEE IN CONNECTION INITAANY SUCH.
TENANT mat-turns, LANDthio), ON maim mom TENANT, st(ALL, tatszND
SUCII ACTION OR PROCEED3NO AT LANDLORD'S EXPENSE, BY ORTHROTIGla
ATTORNEYS REASONABLY SATISFA.CTORY TO TENANT.. TBE PROVISIONS Or
THIS SECTION APPLY TO ALL ACTIVITIES Or LANDLORD; 'WHETHER
OCCITRIUM BEFORE OR Arligt. THE COMMEiNCEMENT DATE AND BEVORE
OR AFTER,THE =PATTON OR TERMIEsIATION Or THIS LEASE. LANDLORD'S
OBLIGA.TIONS UNDER THIS SECTION ARE NOT •la ED TO THE MIMS OR
COVERAGE Or 3NSURAN6B MAINTAINED BY LAND,LoRD UNDER TIM LEASE.
17. =MI All water, electricity; power or other publio unties used npon or •
furnished to the Premises and any sewer charge& shall be paid for by Tenant, provided the •
?remises tire separately metered. Tenant shall also pay its share of utilities used oa the premises
even if not separately metered, provided such consumption can be determined with reasonable
=coney by an, independent person.
18.,
./viAll4TBNANCli AND RIPAIRS.
•
. .
.
18.1. Mena/it's ObRgatinne. Except for reasonable wear andtear and subject to •
the prOvisions of Sections 28 and 29.10reotTenant shall beep; repair and Maintain. the Premises
(except for the portion ofthe Premises whiOi Landlord is Obligated to maintain pursuant to
. Section 18,2 hereof), inoirditii the atarefoont and precipitator (or "smog hog") in a clean, neat.
and orderly state ofrepair m accordance with applicable law and normal restaurant operating -
cuitoni,;,an/1401,1 keep, repair and maintain inrniture,. fixtures, ecialprdent,mall. Boor and
ceiling coverings in accordance With Section 10.1 hereoE Upon the expiration of the TO= or
- sooner terraination hereof, Tenant shall- sOrcender the Premises in he condition they wag; in
upon Substantial Completion, subject tp Refurbishments thereafter made and to ordinary wear •
. and tear and damage thereto by fire, earthquake, act of God Or the elements 431(Zepted unless •and.
to die extent Tenant is required to repair such condition wider the terms of this Lease. If Tenant •
fails to 3iciake:inY rcPairaor PerfOrnirliaillte na= as required booby, in a reasonable dine period •
and Manner, Landlord May bare such actions at Tenant's expenao ten (10) days 'after delivery of
notice to Tenant of Landlord's intention to undertake inch antioris. Tenant shall reimbnise
Landlord within ten (10) days after receipt by Tster‘t of a statement of Landlord's costa incurred
for such repairs ar-rnaintenanee.
. . •
18.2.'
•
18.2.1 Installation. Landlord agrees to pliVide and inatall hi the Meeting
•
Space all funitnre, fixtures, equipment, wall, floor, and ceiling covering which are described in
the Meeting Spade Plans.
•
18.12 Matnienimee. adept for reasonable .wear end tear and =Meet to
the pinvisinns of Sections 28 and 29 hereoffkom and following the date hereof, Landlord agrees •
to keep, It and repair the foundations, structural components, ceilings, floor (other than floor coverings), roof area over The Private Dining .Roore, the exterior surfaces of the exterior
•
walls (except the storefront, the electrical, plombing. and HVAC systems and givilAr Components fbr the Hotel which &way affect the Preinisw-(iiicluding the imprevements,
•
23
.
0.60A74326 DALLAS :1060.61Lii
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famitare, 'fixtures. and e.quipmentin the Meeting Space), and lanclicaping, parking, lighting, and
common areas tint are used by or for the bane& ofTeriant and other occupants of the Hotel in good condition and repair and applicable law, Landlord acknowledges that it has additional
obligations nuder.Section 8.1 hereof If the Landlord shall fail to keep or perf& m any of its
obligations 'under this paragraph 18.2.2 aral such failure on. lAndlerd's part continues for tbirty
(3o) clays after the receiptlay Landlord and any bolder (Yr any mortgagee or The beneficiary of any
deeds of trust secured by the Hotel (the "Mortgagee") Of written notice of spoil fail= from- .
Tanad(providecthewever, that in the case of an emergency such notice shall noibereivited) or,
if such failure cannotreasonably be Cured wiThinfairty (30) days etch additional Period as may
be reasonably reqUired by Landlord to cure such failure with due diligence. provided Landlord
begins to oure such default within such thirty (30) day period and thereafter diligently and
continuouslY litotes said cure to comPleann), then without waiving or releasing Landlord fican
any obligation. Tenant may (but phall not be obligatedto) petthrin any such obligations, and all
sums actually paid or incuaecl by Tenant and all uteessazy andincidental costa and expenses .'
including reasonable attorney fees ineurrectby Tenant in performing such obligations, together
with interest thereon at the rate .established by Section .5423 from the date of payment by Tenant
or thedatePayment was due to or from. Tenant,. Rhin be paid by Landlord to Tenant within thirty
(30) days afterdemand, and iftbat so paid by Landlord, Tenant shall !we the right to 'offset such
sums against Percentage Rent or other amoutiti therea#er payabIeby Tenant under this Lease, •
unless Landlord disputes the claim of a default and submits such controversy to the Dispute
Resolutiim Proms described in Section 13.10.
19. MM.. Tenant shall keep the Premises and.the Hotel free from any liens arising
out of any work perfoMted, materials. famished, or obligations Warred by or for •Tenant and •
shall remove the lien or poet a hen release bond within thirty (30) days of Tenant's ieceiPt of
written notice of the ftling of the lien, and shall reimburse Landlord for all costs and expenses, if
any, Which may be ineuctedby Landlord by reason efthelliag of any such. hens and/or the
=oval of the same, within ten (10) days after receipt by Tenant from Landlord °fa bill setting
forth the-amonnt thereof, The failure of Tenant to pay ar$ .stioh amount to Landlord Within said
ten (10) day period AO earraiwith it the same consequencei as failure to pay any installment of
rental.
•
ENTRY BY LESSOR, Landlord reserves and shall have OM right at any and all•
20.
limes daring an emergency, and during Tenant's business hours in a non-eancigency situation, to
enter the ?remises to hispeetthe same, to stow thePremisesUptospectiv'epurchaser or
(during the last six months of the Taira) to a prospective toad, to post notices of nona .•
responsibility, and to alter or repair the Hotel, provided that Landlord- Asir Ore Tenant at least
Maliours prior not(ce for a non-emeripthy catty and shall use Its best efforts to minimize any
disruptionto Tenant's business, visibility,- or acceas.
21.• COMPCE
ar r. I i. AL. •
4k
Tenant shall
III 0
procure And 3110i73.1413, at its solo expense, anypttmias and licenses reqatired for the trantaction.of
business in the Premises and the use of any additional parking is contemplated by Section 31.
At Landlord's written request, Tenant shall deliver to Landlord copies . of all such permits and
lieenses.•Tenant agrees *at it will comply Nab. and conform to all Itraai and. ordinanoes, • . ,
niunioipal, state, federal, and any. and all lawful requirements and orders of any properly
constitatedammkipal, state, federal or other governmental agency relating to its use or
0001474326 :DALLAi :1061)611./1
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.
-
occupancy of the Premises throughout the entire terra of this Lease. Receipt as otherwise
provided in thia Lease, any and all costa incurred or fines 'levied against Tenant in connection
with the foregoing sentence shali be-paid by Tenant provided, however, that Tenant's obligations •
to repair the Premises shall not exceed the duty tornAlre repaiis as dears:Lind in Section I S. J.
hereof.
ANTAtatla
22.1. Pren2iges Tenant agrees_ to carry and keep in Ike* tithing the Term, at
'Tenant's sole expense, livoiliabilityldram shop i uranoe comprehen.sive general liability
bears= including coniractaal liability, personal injury (libel, slander, false arrest, vermeil
eviction, and broad finin. property damage liability with a total "licit not less than $1,000,000 per
Occurrence and $2,000,000 aggregate .onli per looation bole, bodily injery and property datn,age
combined, insuring against riny and all liability for preperty- damage and for injuries to. or death
• g in, on or about the Premises or arising out of tbn maintenance, uSe or
of persons ocoetrin
occupancy of the Premises; providedthe limits may be adjusted by the Consumer Price Index in.
the same tarmner as dwelled in Section 4%3 hereof, All such comprehensiye general liability •
insurance JIJJ pecally inserts theperformanceby Tenant of Its indemnity obligations under
this Lease with respect to liability for injery to Or de!tth of persons and for damage to.proparty.
Tenant shall also carry all:•risk insurance in the amount of one hundred percent (100%) of the
replacement value of Tenant's furniture, fixtures, eqiipitent;merchandise,inventory and other
property of Tenant on the Prerni.scs. Tenant shall also carry workers compenSation insurance as
required by applicable law during all snoletimes. Adclitierpily, 71230/7.t shall catrybusine,ss
interruption and. contingent business interruption insurance which insures Tenant against actual
loss sustained: Said insurance shall include Landlord as an additional moned inSured, Tenant
aereca to pay the premiums therefor and to deliver certificates for the iplicies of such insurance •
4 faihte ef Tenant either to effeot. said insurance in the'
or duplicates thereof, to Landlord, and
names herein called for or to Pay the premiums therefor, or to deliver said Certificates or •
duplicates thereof to Landlord shin permit Landlord to obtain said insuranec end pay the
requisite preraiums therefor, which premiums shall be repayable *Tenant to Landlord within
thirty (3p) days after receipt by Tenant of shill setting forth the amount thereof Each insurer
mentioned in. this paragraph shall agree, by endorsenuartUponthepolicy or policies issued by it,
or by independent instrument furnished to 'Landlord, that it will give Landlord sixty (64 days'
written notice before the policy or poliriies in question shalt be altered, 'canceled or not renewed,
212. HotL Pnring the Tenn., Landlord agrees to kerki the Hotel (including the.
Premises) Matra against loss or damage due to fire in aa amount equal to one hundred percent.
(100%) of the replacement cost of said Hotel (exclusive of excavations; foundations and
footings) and agairsit loss or damage due to allperils insured against under standard •
endaraomentansually added-to fire insurance policies in California, Including, without limiting
the generality of the foregoing, extendeatoyerage, spxhArler leakage, vandalism and malicious
mischief endorsements. Landlord shall pay frail such insurance.
22.3. licensed Carrier. All insurance icqpired by this Article 22 Shall be iasned
by companies that 4011Y:used =trier with apest rating of A-X or higher.
g
0420741436 klitittA
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.•
•
22A. Landlords Insurance. Landlord agrees to carry and keep in force during
the Tam, at Landlord's sole expense, etiMprehensive gmeral liability insurance indlu-ding.
contractual liability, personal injury (Bel, slander, false arrest; wrongfni.eviotion), and broad
forta proPerty damage liabilitiwith a total limit not less than $5,000,000 per Occurrence, bodily
injury and property dinnage combined, insuring against any and all liability for property damage
and for injuries to or death ofpersone occurring*, on or about the Hotel or arising out of the
Maintenance, use ur occupancy of the Hotel.. All such comprehensive general liability hiaurance
shall specifically insure the performance by Landlord of its indemnity ebligations under this
Lease with respect to liability forir4ury to .ordettela of persons and for damage to property. Said
insurance shall include Tenant as an additional named insured. .1.4indlord agrees to pay the • •
Premiums therefor and to deliver certificates for the policiai of such *mace, or duplicates
thereof, to Terumt, and the failure of Landlord either to effect said imam= In the names herein
called for or to pay the premiums therefor or to deit'yer said certificates or duplicates thereof to
-.Tenant 0,4 permit Tenant to obtain said insurance and pay the requisite Prenainias therefor,
whiehpremiuras shall be rePaYable 'by Landlord to Tenant Within fifty (30) days niter receipt by
- Landlord of a.bill setting forth the amonntthereot. Each insurer mentioned in tbit paragraph
. shall agree, by erslorstruent upon to policy or policies issued by it, or by independent
instrument famished to Tenant, that it will give Tenant sixty (60) days' Written notice beforeihe
• 'policy or policies in question shall be altered, canceled or not renewed:
23. DEFAULT,.. Tenant agreetrthat should Tenant fail to payrental herein required to
notice theme& by Landlord to
be paid to Landlord for a period, of seven (7) days after written
Tentint, or Should Tenant default in the perfonmasce of any other covenants or conditions on
Tenant's pa# herein contained and each default IS not out•ed.within thirty (50) days after written .
notice thereof by Landlord to.Tenant, or if the nature of such default reasonably reclaims more
than thirty (30) days to cure, Tenant does not CetiM101100 within said thirty (30) day period to
mtre said default mid cure the same with. all reasonable dispatch within ninety (90) days thereof
(a "Derange), Landlord shall have The right to tenninate this Lease and Tel:Lints right to
possession of the Premises in ithich event upon such terinination, Landlor4 shall have the right
to re-cover from the Tenant the unpaidaint and late charges which had been earned at the time .of
termination, plus an amount equal to twelve (12) times the averagi oldie monthly Peceentage
Rent paid during the Lease tevin, provided Landlord shall use reasonable efgorts to Mitigate Its
losses duet° Tenantl s default, but ink& Oblig gdion shall hot retirdr8 Lam:tor& to lease the
Premises to a patty which does not meetthe Criteria.. THE PAR= AGREE THAt rr
WOULD BE IMPRACTICAL AND EXTRIDLELY DIFFICULT TO ASCSRTAM THE
ACTUAL DAMAGE SUFFERED BY.LANDLORD AS A RESULT OF TEN.A.NT'S
DEFAULT ANO THAT UNDER THI3 CIRCUfrISTANCES EX:E gli:NU AS OP THE DATE OF
THIS AGREEMENT, TEE LIQUIDATE) . DAMA.GES PROVIDED FOR TN TRIS SECTION
REPRESENTS A REASMIABLE ESTIMATE OF THE DAMAGES WHECH LANDLORD
WILL INCUR AS A RESULT OF SUCH DEFAULT, PROVIDED HOWEVER THAT MS
PROVISION SHALL NOT LiMi rr LANDWRD 'S IlIatITS TO RECEIVE
REIME'URSET FOR ATTORNEY PEES NOR WAIVE OR AFFECT L.AI NIDLORD'S •
RIGHTS .AND TENAlsrns lisibEtarry OBLIGATIONS UNDER OTHER. SECTION'S OF
THIS AGREEMENT. THE PARTIES ACKNOWLEDGE mAT THE PAYMENT OF SUCH
LiQuiDATPx DAMAGES IS NOT INTERDED'AS A. FoRtiErruRE OR PENALTY
•wrraN THE MEANING OF CALlizORNIA CPIIL CODE SECTION 3275 OR. 3369, BUT IS
•
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WV 90 : i
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INTENDED TO CONSTITUTE LIQuiDATED DAIVIAGES TO LANDLORD PURSUANT
TO C,ALIFORN/A tIVIL tom SECTION 1671, 1676 AND 1677. THE PART/ES HAVE
yam THE
•SET FORTHIIIEXR. INITIALS BELOW TO INDICATE THBIR• Áç ;q; k
PROVISION
CONTAINED 'rats SECTION.
LIQUID
DAMAGES
•
Landlord's Initials
Initials
24. NBORDINATICai. This Lease, at Landlord's option, shall bUsubordittate. to
any gronnd lease, mortgage, deed of trust, or any other hypothecation for security now or
hereafter placed upon the real property of which the Prernises are apart and to any and all
advimcei made on the security thereof and to all renewals, modifications, consolidations, •
11:p1acements and extensions thereof; provided that the ground lesser or lender thereunder agrees
in writing tirt Tema's right to quiet pOSSCSSiO•D. of 0.0 PreM1608 shall not be disturb ed if Tenant
is not in Default and so long as Tenant Shall pay the rent and Observe and perform all of the
provisions of this Lease, Wm/a This Lease IS otherwise terminated pursuant to BS terIIIS. If any .
mortgagee„ trustee or ground lessor shall elect to ha.Ve this Lease prior to the lien of its mortgage,
deed of trust or ground lease., and shall give wxitterrnotice4lierete to Tenvat, this Leak shall be
deemed prior to such mortgage, deed of trust or ground lease;whether this Lease is dated prior or
subsequent to the date of said mortgage,..deed;ofinist pr ground lease or the date of reoording •
.
thereof: , Vrit1nnAwen1r(20).brtsiness days after receipt es written request Tenant agrees to .
: XeUte any documents reasonably requited to-effectuate such sobordinaticm..erito mikethis ,*
Lease prior to the lien of anyniortgageoterd Oftrust or graund. lease, as the casemay be . . . .
• providedr however any such document shall include a non-disturbance provisionreasonaky
acceptable to Tenant Tenant shall automatically be and becomethe Tenantof the suceessorin . •
interest to the Landlord-on the Etai31p textus as are contained in this Lease and shall atiren to such
successor thereto at the option of such. successor in. interest;
25. =2P:M_=1:0042rE. Each party than, within twenty (20) briSiness days
afinr receipt ofwrittenreqliest :there&r, deliVer.a tidy ec edited. and. acknowledged ceitificate to
any person, firea'or Covoration designated by the requesting party, certifying: (i) that this Lease
is unmodified and in full force and effect, or if there has been any modification, that the same is
in.11211 force and effeet as moded, and stating any suob. Modification; (ii) whether or not there is
then existing. any claim of default hereunder and, if so, specifying the nature thereet (iii) the
dates to which the rent and ogler charges payable hereunder have been paid; and (iv) the
comMencement amid exPiraiion dates of this Lease. If a party fails to execute, acknowledge and
deliver any soh certificate within the time required, and the fat notice is followed by a • econd
notice giving such party ten (10) days additional notice, and such party still Dols to execute,
acknotvledge and deliver such. cerlificate, it shall be conclusive against such isarty that this Lease
in in full faro and effect, without modification or default If a party requests a certificate more
than once many twelve namth period, such party shall reimburse the other for all reasonable
attorney's fees and costs incurred in connection with the review of such certificate.
26.
In the event that Landlord should institute any suit against
Tenant for violation of any of the covenant§ or conditions of this Lease orforlecovery of
possession of the Pratt/SIM or should Tenant institute any suit against Landlord for violation of
• 04207414326 :DAUM :1044111.11
27
WV LO : ZI GIVOIOUVIN
any of the covenants or conditions of this Lease, or ahOuld either party institute a suit against the •
other for a declaration of rights .herermder, or should either party intervene in any suit in which -
the other is a party, to enforce or protect its interest or rights heraundei'-, the prevailing patty in
any such suit kali be entitled to the fees of its ittomeys in the reasonable amount the:mg to he
deter
.
.hied by the court and taxed as a. part of the costs therein.
21; NOLDING OVEA. Tenant-Shall not hold over beyond the Terra without the prior
written consent of Landlord, my holding over by Tenant after the expiration date with the prior
Consent of Landlord shall be construed to be a tenancy from month to 'tenth on all of the terms,
civvenants, and conditions herein speced provided the rent payable hereunder shall be 150% of
the rent that wOuld otherwise be payable hereunder. Either party
terminate the month to
•
month tenancy upon delivery ofthirty (30) days 'written notice.
May
28: pBSTRUCTION.
-
28.1. )?rernises; %the event of apartial destruption: of the Premiserrgloring the
ten:611=04 from 'any hisore,.tj mimes the ?remises shall forthwith be repefred. The obligations of
the Landlord and Tenant in connection with the repair of the Premises shall be as follow:
Landlord shall forthwith commeiee and °dry to cotyledon with an due diligence the repair of •
any damage or destmetion to that portion of the Promises originally :instructed by Landlord,
Tenant shall forthwith commence and carryto completion with all dye diligence thirepair 'of any'
• •
.••
•damage or clestru?tion to the remainder-of the Premises. .28.2. T.
..),.Samitt. in,the event either the Hotel or the Premises is
damaged to the extent of not less than thirty-Three and -one-third percent (33,1/3%) of the
rePlaeement war thereof by any flood, earthquake act a WBX =Wm teactiMI or other L'ain.gittY
or event and. gt1611 damage is not covered by Inaction% intommto as requiredheretmder, •
Lanillordnutst nolitr Tenant within thihy (30) days'followir%.therlate of such damage of
Landlord's intent to either commence mconstruotion end continue This Lease in fill force and
effect, or elect not to perform saalrreecnstrurAon. ii& which event this Lease shall terminate. In
terminate This Lease if reconstruction is •
th.e.event Landlord elects reconstmot, Tenant
reasonably expected to take wore than one hundred eigbiY(1 BO) days to-complete biro the date
restoration commences.
•
•
•
•28.3. Damage Near End of Terre. Notwithstanding the foregoing, should a
substantial or complete destruction of the Rotel or the Restaurant oecur clerks the twenty-four .
months prior to the end of the third Rai:0*d Tenn, Landlord shall not be obligated to reeonstruet
the Hotel in which went either party may termintrte this Lease upon thirty (30) days vinitreo
•.
•
notice.
F
Way
28.4. Aecomettuction of MIA or the Premises.. In the event This Lease is
terminah;dby Landlord as permitted by tukseciion 28.2 and, within one (1) year following the
date of such. tianination, Landlord ocrem - ces reconstruction of the Hotel or the Premises and
each reconstruction eonteznplates a restaurant, then Landlord shall to notify Tenant in writiog
(the "Reconstruction Notice") Tenant shall have the riiht and option to lease the =tamed space
In the Hotel, as reecustmeted. Tenantnmst exercise its rights hereunder by delivering written
0420741744
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notice to Landlord within t been (15) days following the date of the Reconstruction Notice, -time
being of the essence. If Tenant exercises the option desdithed herein, the patties ahau enter into
anew lease, which shall be upon auch terms and conditions (includin g rent) as are contained
herein, except the prbiary term of such new lease shall be equivalent to the =expired portion. of
the Tram existing as ofthe date of termination hereof by Landlord, and Tenant shall havp'the
smile option or options to extend Brecht= as remained imexercised under the original terms and
conditions hereof as of the date of termination b.ereofhy Landlord. This Section 28.4 shall not
be effective following a transfer of the Hotel to a party that is not affiliated with the initial
Landlord or fin:swing an .Assignntent. .
IINNENT DO:MAIN. ShoUld the Premises or any portion thereon:JO taken for
29.
pliblicuse by right of eminent domain with 'or tiabott woo, any aviatd for compensation . •
and/or damages, whether attainrdby agreement priOr to or during the time of tdal, or by
judgment or verdict aftefidal, applying to the leasehold estate created hereby (other than. that
portion of said. award, if any) based upon the lass of Tcnanfs buSiness . or,a, taking of Tenant's
improvements a-movable ftade fixtures).shall belong.and be paid to Landlord, and Tetuan •
hereby asSigea, transfe0 and sets over to Landlord all °Nile right .title and interest which
night otbAtviase have therein: Italie event of a tairbIg of the entire Premises this Lease shall
automatically terminate. In the &bathe portion of the Premises so taken shall be more than ten
percent (10%) of the floor area of the Premises, Tenant abafl have the option, to be exercised by
written notice given to Landlord witItia thirty (30) days after the date of inch taking, to leiniinat.e
This Lease,- In the event that Write than fen /Ardent (10%) ofto flip"; area of the Still* shall
be so taken and Tenant does not op elect to terminate this Lease, or If thanterl percent (10%)
otthefioorareaoftho niscaissotaken,theiLndlordshall a1cesuchrconstructionofthe
Premises as maybe re:Oh-ed to the extent of the aforesaid award, A sale :by LandlOrdio any
governmental authority having the power of eminent dortodn, either under threa•of . •.
conderonstion or while condemnation proceedings are pendiu& shall be deemed a ta:ki-iig under
the power eminent domain for all put.poos under this 'sect:bd.
30.
13NJOYNTENT. Landlord agrees that so fang as Tenant is not in-Difault
hereunder Tenant shall have the quiet enjoyment of the Prete/ma without hindrance on thepart
of Landlord,• and Landlord will warrant and defend Tenant in the peaceful and quiet enjoyment
of the premises agabisrthe lawful olaiins Of all persons darting by, through or under Landlord,.
31. PARKING. Landlord shall provide, Ono -cost to tenant or its customers, valet
park
' era on•datiat all runes when the Reduanant is Open for business to provide prom* parichig
services to Tenant's customers as well as Hotel. guests. Landlord shall be responsible for
ineint*lo g 011 parking arfangeMntil whioh exist as of the date hereof (which will, at a
73111:631111* be sufficient to satisfy the City of Sausalitols requitement for an 85. seat restaurant)
•or replacing such arrangements with comparable arrangements and obtaining any additional
parking required for the contem.pialnd use of the Meeting space. Tenant shall provide, at its .
oast; additional parking if (a) the City of Sausalito requires the Hotel to have more parking than
currently exists as aresult of the Work and/or the retail operations which Tenant conducts in the
Premises, and (b) if more parking spades than the number required by the City are needed by
valet park= toproVide patrons of the Premises with a level of parking service commensurate
with the quality of the Efotel.
• 29
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32, gOltdEMAYEtIRE. A:nyprevention, delay, or stoppage doe to strikes, lockouts,
labor disputes, acts of God °mature, governm.ental reshictions,governmental regulations,
.govennneatal controls or delays, judicial orders, enemyor hostile governmental action, civil
commotion, fire or other casoa/ty, and other causes beyond thereasonable control otthe party obligated to 13 a- dman, shall excuse the peafannance by such party for a period equal to any each
prevention, delay or stoppage; provided this provision 001 not apply to the payment by Tenant
of any sums owed to Landlord.
•
•
33.. IVIISCHLLANROUS. .
33.1. • Waiver.. No covenant or condition. of this Lease can be waived cm* by
written consent, and farhearance or indnigence by either party many regard whatsoever shall not
constitute a waiver of the covenant or conclition.to be performed to which the same -may apply,
mut, until complete performance of said covenant or condition, the other party 0.41 be entitled to •
invoke) any remedy available unto it under this Lease or by law, despite said fOrbearance or
indulgence,
35.2. iterneclies CuMufative. All remedies herein conferred upon a party shall
be deeraed'cumulative and no one exclusive of the otheror of any cither retnedy conferred by
333. Notices. Attynotice required hereunder or by law to be served upon either
of the parties hereto shall be Sufficiently served by personal deny:1y, or tnqiijile the same.tgee
(3) bushiesa. days alter the postmark by cerfified or registered mail, return receipt requested,
postage prepaid, addossed to such address as may be frau time to time furnished In vriting by
Landlord to Tenant, or by Tenant to Landlord, 'Bach of the parties hereby waive personal or any
other service, +I:twit:it as pmVide..d for in this paragraph. • g Law. This Lease shell be governed by and. construed 'in
33A. • povarnin
accordance with the laws of the state of dalifonis.
315. Invalidly/ Caotiona. The invalidity or unenforceability of any provision
of this Lease shall not affect the validity-or enforceability, oft= retniduder of this Lease, The .
captions of this Lease arc for convenience only and are net a:pait of this 1..ease and do not in atiy.
•
waylirait or amplify the OEMS and proilsions of this Lease.. •••
••
•
provisions,
33-.6. Time TiMels of the essence uf this Lease and. eaeli road all ants
•
•
33.1 ileCEIs011f and.AsOgns. This Lease shill Inure to the benefit of and be
binding von:the heirs, executors, administratois,.moossoka and .assigns of the respective parties
hereto, provided that not134)g in this paragraph contained shall linpair any of the provisions in
this Lease prohibiting assignment *Ithcynt -the 'written consent of Landlord.
30 •
442074:374326 :DAUM: 1060611.11
ICO'd
WV 80 : Z1 GaNVOIOUVIE
33.8. )3rokerage. Tenant and Landlord represent and. warrant to each other that
. they have had no dealings with any real estate broker or agent in connection'with: OF negotiationof This Lease, and they know ofno real .eitate brolcer . or neat who is entitled to a commission in.
connection with this Lease. Tenant and Landlord each agree to indeinnify and hold each other
harmless from and againd any and all claims, Am:funds, loasete liabilities, lawsuits, judgnients, .
costs and enemas (*hiding reasonable attorneys' fees) with respectto-any leasing commission
. or equivalent compensetton alleged to be owing on account of the indemnifying party's dealings
•with any other real estate broker. or agent
33.9. No Joint Vulture Intended. It is expresslyunclerstoOd that Landlord does •
not many way or for anypurpose, intend to become a partner, joint venturer or member of a • •
• joint enterprise With Tenant in the conduct of the Restaurant and that the provisions of this Lease
relating to the payment of Percentage Rent are branded solely for the purpose of provid% g a- •
method whereby rent is to be measured and ascertained.
33.10. Dispute Resolution Process. Any dispute between Landlord and Tenant
Pit/ant:to the terms of thiS LeHge, is subject to the Dispute Resolution Process, .shall be
resolved through bindingarbitriefion
•
. as bereinafter.provided,
'
•
33.10.1 Selection ofArbitrator. The Landlord or Tenant, as the case
shall
send
the other
paityioticetbatttseeld to arbitrate the dispute (the 'Dispute
may be
Notice"). Promptly thtreai:ter, the Landlord and Tenant Shall attem.pt in good WI to select a.
xmanallyzatisfaetary arbitrator to resolve the dispute in accordance with the terms of this LOase.
If the patties hereto have failed to designate, by a joint written statement., an arbitrator within
thirty C30) days following the date of the Dispirte Notice, then either Landlord or Tenant may
notify the g an Francisco office ofthe Ameeican Arbitration Association, ("AAA.") and request
that the .AAA. select a person to act as the arbitrator for the nalohition•of the dispute,
33.102 Parks of Arbitration. The arbitrator which is selected will • .
establish the roles for proc‘eding with. Ore arbittatiOn of the dig/nate, which will be binding upon
all parties to *proceeding, The arbitrator may use rules of the AAA ttir.coMmerolal arbitration
but is encouraged to adopt the rules the arbitrator deed= appropriate to accomplish the arbitration
in the quickest and least e4ensive manner posaille. Accordingly, the arbitrator may (a)
dispense with any formal rules of evidence and allow hearsay testimony 84;as to limit the number
ofWitnesses required, (b) accept evidence of property value withoUt formal appraiaals . and
otherwise rainbnixe discovery procedures it the arbitrator deems vpropriate, (o) act upon his •
understanding or interpretation of the faw in any:issue without.the obligation, to research, tho .
ism Or accept or act upon briefs of the issue prepared by any patty, (d) limit the time for
presentation of inirparty is
as well as the amount of information or the number of Witnesses •
to be presented in connection with any hearing, and (e) impose any other rules which the . • •
arbitrator in good faith believes to'be aPpropriate to effect regautical ofthe dia./ante as quioldt
and inexpensively as possible. 'The arbitrator shall render its decision within, sixty (CO) days
•
following the filing of the arbitration.
•
,
33.103. Costs ofArbitration. The arbitrator will have the authority to
dettarnine and award coats of arbitration and the costa ineurreArby Avila* for its attorneys,
tali/ACM:I and eonsrdtants.
.•
case
EL
31007400241DALLA5:110611.11
ZEO d
Fly 60 : ZI GRVOIOZ/1Z/Iflf
, 33.10.4 Award of Arbitrator. Any award made by the arbitrator shall
• the parties hereto and all parties to the arbitration and st 1e enforceable to the
be Wrong npo
fullest extent allowed by applicable law. •
34• Reasenableness RetOred. Rseept as otherwise expressly provided herein,
whenever the consent of any party is required as a. condition to any act or conduct of the other
party, such consent shall be granted if it would be unreasonable to withhold it under the
-ciroumsta.n.ees.
35, First Aitendniont. Landlord Shall not modify or further amend. the Amended and
Restated Limited Liability Company Agreement Of Oly Casa Madrona, TLC exe..ept as provided in the First Arne/An:amt. Subject to the termination rights of Landlord set firth in Section 42.1
of this Lease, LandlOrd will cause the current members of Landlord to etecute and deliver the
as Tenant his *4y-executed and delivered to Landlord the pits-6
.'
First Amendment at such time
Agreement and has timely fended in. amatint equal to the greater of
Amendment and the
;2,000,000.00 or the Construction Coots to Landlord. Latallcrd g obligations in this Section 35.
are specifically enforceable. •
•
• IN WfINESS WHERECT, litepties hereto have executed this Lease as of the day and
'year:first above *Written.
-
"Landlord"
• "Tenant"
•
OLY C.kSA MAbRONA, LLC
a Delaware limited liability company •
dAATINETTA. ' •
a Califoralit limited partnership
By cuoilEtre, LTC, a
California limited liability company
' Its sole. geteralpartuer
32
042074;74326 ;Data 1060611.11.
EEO : c1
WY 60 :
J GIVOIDZ/Willf
0
Nxbibit "A."
Legal.Description
,
All-that certain reel property -situate In the City of Sausalito, County Of Marin,.Stata of 'Catiferrga„
as 'follows:'
'described
PARCEL ONE:
COMMENCING at. a point on the *Southeasterly line of Lot 10, Black g, Of the .antis of the Sausajito
Land.and Ferry Company, as pad lot is-dezdibed In the Deed from SaustditO Land and Ferry Company
to Donald Fraser tfifinghairr, dated 'February 21, 1884 and recorded In. Rook 2 of Deeds, at Page 33,
Mann ceunty Records, distant thereon .isiorth SS° 30' . East 137 feet and N0Fth 3.4 4 301 East 1 foot
from the Southerly corner of said Lot; Thence crosaing and sUbdiViding veld Lot 10, North 46° 10'
. West 142.5 feet to the Northwesterly fine of Said Lot . 10; Mende eking the Northwesterti . line North
399 3p' 107 feet to the Westerly line of Bildgeway iforroerlY *stet Streeti; !hence along the
West lino of BridgeWay, South SQ5 1 30' Bast 14t fait to a point et the foot of a 10 soot Walkway,
. fag front the S o utheast carnet of J. Wetmouth let; thence
Vvhich paint is North 50* 30' West 15 6
.
S6uth 39°. 30' West 1:IS feet to the point of rieginoing, .
. .
•
•
BEING A PORTION of Lot 10, Block 2, as shown upon that, certain map , entided "bifida( Map of the
Lends of The Sausailto Land end Ferry Company.", tied for record April 29, 1869 In Heck 1 of Maps.'
at Full 9, Marin County Records..
1 PA ttca TWO:
BEGINNING at the Southerly corner of Lot 10, Slack '2, as shown Won the map hereinafter referred
to: and running thence North 42* 30' West 100 feet to the Westerly career of said Lot 10; thence
along the Northwesterly line of said Lot 10. North 41° 10 1 East 127 feet; Thence t:roSsIng and
subdividing said Lot 10, South 46° fte East 142.8 feet to the Southeasterly line at Lot 10; thence
:elorto said
-Southeasterly line of Lot 10, South 39 0 30 1 ,West 1.00 feet; thence South 5.9* 30' West
137 feet to the point of beginning.
BEING.A .PORTION of Lot 10, Block 2. as shawn upon that certain map entitled ".official Map of the
Lands of the Sa usalito Lend and Ferry Company, fled for record April 29, 1869 In Rack 1 of Maps.,
-at Pull 9, Mann County Record.
PARCEL THREE:
tilEINIIING at a ;tilts an the East the of Bulkley Avenue forting the SeIn ges caner Of Lpt .10, in
131Ock 2, map hereinhelinv referred to; running thence North kg° 30' West end following said East fine
Of Buildey Avenue 34 feet to a stake; thence North 21 901.:WeSt andfollOWing said line 71 fetreto
a stake; thence North sa P 30' East 192 feet toll stake on the West Vile of Bridgeway Von-nearly Water
Streets; thence South 50° 30' East and following said line of Bridgeway, 100 fast to a stake forming
tho Norttntest corner of ' Lot 19, Which said stake Is distant froln a13 fun belt forming the Southeast
corner of East 4.5rerroOtrth's Lot 300 feet; thence South 39* 30' West and folioviing the Northwepterly
line of Lot 10, 234 feet to the point of beginning..
EXCEPTING FRONI Parcels One, two and Three hereinaboVa described, that certain real property
described in the Deed _from Walter V. Coharly Rod ' Crocker National Stu*, as Tru stedS, under and.ln
accordance With the Trust* set forth ki the Codiol to the Will of Floyd U. Allensby, Deceased, doted
December S. 1972 to Sohn W, Mays, a single man, recorded .August 16, 1978 In Saoit'3419 of Official
.
."
.Records, at Page IS4, Marin Collet? Records; , -
SZO/I00 d
Exhibit ' A - Page 1
WV 01 : ZI UHM/OIOZ/I&Inf
Exhibit "AP
LegailleScript:Ian 'THE HE'RENABOVE described property being shown. as Parcel 2 and Parcel 2.A, as shown upon that.
certain Pardcl Map entitled 'Parcel- Map Division of Lots 10-11 Mock 2, Lands of the Situsalito Land
Oa. (tteing_lands 6f Floyd O. Alleneby E-- 122-ta).443rarrting. D!s dc!«1. .62i Q.R., 329) Sausalito,
au
eat.% filed for record Airgust Z:1970 in Volume 1S of parcel Maps, at Pegs 91, Mann County -•
Records:
I
PARCEL FOUBI
•
EASEMENTS, right; and conditions as contained in that certain Grant of Easement from John W, mays
TO Croaker National Sank, Vs had:if:alai banking assOciation and Walter V. Coberiy, • as CO-Tres-tees of the
, Floyd Alteneby Trust, repordd August 16, leie in Rook 5419 of Official RecOrds, at Page 1n, Merin
•County Records.
•
A pormoN or the above described Easements, more particularly described as - Esseiriant fOr Ingress
square feer, as contained therein, was quitclaimed by Dead from
and egress for Faroe! 2, area arg
Cracker National Bank, as sole successor Trustee under the FloydP. Allensby Trust, to John W. Maya,
-recorded October 19, 1983 as Recorder's Serial No. 83052613$ Matin CoUnti Records.
nz
•
PARCEL Five
••
•EASEMENTS,. rights and conditions as contained in that certain Gtàtof Easement from John W. Maya •
to Cracker National Bank, a national banldng association, as sobs sur:,cessor Trisstett of the Hatcliz),
Allenby Trust, recorded October 19, 1993 as Recorder's Serial No, 63cisge16, SUM County Records,
•)
• •
•
• PARCEL SIX:
-
• .1
E.ASElvtENTS, rights and conditions as contained In that certain Grant of Easerneni front J' ohn W. Mays •
:to Crocker National Bank, a national banking association, as Tnrstee under tfia'Trusts set forth in the
•codicil- to the Will of Floyd'D. Alletraby, deceased, detail December d, 1972, re cOrtied October /P,
1980 as Recorder's Serial NO. 93692518, Nlarin Cotinty Records,
•
.
pp.RCEL SEVEN:
PARCEL 1, as shown upon that certain map entitled, 'tPercei Map, Division of Lots 1041, Block 2,
Lands of the Saulallto Land and Ferry Co.-, flied for record August 2, 1970 in Volume 15 of Maps,
•at Page 31, Mann County Records.
FAHca. iseii'n
EASEMENTS; rights and conditions as contained in -that:certain Grant of Easement from Crocker
'National. Bank and Walter V. Cobeity, Co-Trustees of the Floyd Allenshy Trust to John W. Maya,
,recorded August 16, 1978 In Book 3219 of 'Official Pleaerder at Page 156, Marin County Records..
•
Exhibit 'A' Pap 2
Fiv orzi aaik/010Z/Hilflf
EI.13/bit "A"
Legal Description ,
PARCEL NINE:
AN EASEMENT for' encroachment purposes for the existing structural Improvements described as
folloWat
4.
BEGINNING at a point in the southeasterly, lino of Parcel 1, as shown upon that certain map entitled,
'Parcel Map, Division of Lots 10-11, Block- 2, Lands of the Sausalito Land and Ferry Co.', filed for
record August 2, 1878 inliolume 15 of Parcel Maps. st Page El ( -Marin County ttacurds. said point
ba1 -1g distant thereon South 41 0 OS' 21* West 4.20 feet from the Mciat Eatterly earher therecit.theno
along said Southeasterly line South 41 0 09'21' West 80.338 feet, Nortit48° 50' 39" Weat 7.30 feat
and South 41 0 03 21" West 4.144 feat; thence leaving said Sotrtheesterly 'line, South E0 0 08' East
9.118 feet and North 40° 07' 30 w East 04.30 feet to a point In the Northwesterly line of Parcel 2, map'
above rgferred to; thence along said Northeasterly line North 48° 55" 40" West 0,30 feet to -the point
of beginniog.
•
PARCEL TP,Nt
. . .
. •
BEGINNING at a point which is reached as foliuwa:
•
.
.
REGINNING at an iton heft formerly the Southeasterly corn& of Lot . 8 In Block 2,as the same is laid
' down and delineated upon the map hereinafter referred to„ running thence North 50" 30' West-445
feat to a point on the Sotrtinvesterly line Of Water Street, and thence at right angles South- 33 0 30'
-. ' West 75 feet to said point of beginning, Which said point of beginning Is located on the Southwesterly
I boundary line of the /ands of Ernest Jackson at a Point thereon North 50 0 Ste West 45 feet from the
Southeasterly line of 4412 in Mai* 2, 'es-the same is laid down and delineated on the map hardinafter
referred to, and running thence from said point of beginning South 33. 0 30' West parallel to said Suiftheasterly line of said Lot 12n? the Northerly line of Ilultdey Avenneithence Southeasterly along said lastnamed line and following the ineanderings tif Old Buttcley Avenue tri the Moat Westerly corner Of Lot 11 in said Stock 2, thence- Noith W e 30' Bast along the boUndAry line between Lots 11 . and 12
• In Ultra 2. 117 feet. more or less to 'the Southerly corner of the said lands of 'Ernest W. Jackson and
thence North 500 30'1/treat akin the said Southwesterly boundary line of the lands of said Ernest.W.
•
Jackson to the point of beginning.
BEING pardon of Lot 12 in -Mock 2, as shown on that certain map entitled. "S trhdiiislons of Block 1;
2, A, B Irons sector( Map 0 of the Lands of the Satisalite Land and Ferry Co.. etc.", Vied
1854 in Rack 1 Pull 9, Mann County Records,
p!"k, rtcEL g.EVIZIA
THE Sewer right of way granted by Mary E. Madden, at eon, to Laura 1. Robertson, at eon, recorded •
August 12, 1827 In Book 124 of Pfficial lie6aicEs, at-Page 1138, Mann County Records.
•
•
Exhibi[
SZO/E00
Page 3
WY II : ZI
Gam/NH/H/11r
LC-)
i=1
Dale 9/19102
Solien
SHADED AREA CONSTITUTES
LEAdED PREMISES
M .ap
of
MI
Y.
B-2
S
Omen, Afecrxeziat 4.2.1 at
041.11.f n
• CANTINET.
Ss
Q
Pretnises•:
or 84- Et
•
Deft 0/19/02
ScolaN.T.S.
11.1 a Mad, o
CANTINE
3as1rrA134to,
Map Df P. remises: F
PT.
73 -
4
r;iftls
SxhW
I
Strait IV
Oa I es
,
1
••••••••• •
•••••n •n•••••4,1, .•
CANTMETTA
CailloraJa
ca,4 .Weirr.a.•
litist)4141
.Map of
SHADED AfiEA amanvms
toctacre walk
•••••n ••••n••• n••.1. •"••••••• • • • • n•••• ow". ...ow. Y..... ••••• •• •••n •••••••
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•
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EXHIBIT B
totinur
•
MST AMEMMKNT ip)
• AMENDED AND RESTATED
MUTED LIABILITY COMPANY A.GREEMENT
Orir. CASA. IKADRONA,
This FIRST AIMNDMENT TO A
* WN= .AND RESTATED L'IMITE.ti
LIABILITY 'COMPANY AORBEMBNT OP :OLY CASA MADRONA, LLC (this
"Amendment-7) i made and entered* for all purposes as of the day of • ;
2002, by and between PAM. HOTEL INVESTMENTS, ILC, a Delaware limited lizthility
pnapany C'Olyropue), JOHN W. MAYS as trustee of the jolark'W. Mays 1993' Revocable
Trust (-May) and CAlsTrINBTTA, a California, limited partnership ("Cantinette), for the
purposes h.ereinafter expressed.
.
EXT,NERSETA:,
.
WBBRBAS; Olympus and Mays are the members of Oly Casa Madrona, LW, (the
"Company") under the Amended and'kestated Limited Liability
Company Agreement
for
• the Company dated Apri120; 1999 (the "Agreement");
WklE1/4,AS, Olympus and Mays desire to :adroit -Cantinetta. as .a member of the
Company;
•
.
.
WHEREAS, Cantinetta desires to become a member of the Company;
•
WHEREAS, the parties hereto desire to enter into this .itnenfiruent to _admit
Cantiretta as a member and to make certain revisions to the provisions of the Agreement.
. NOW, TEIBREFORE, for and in consideration of the pietthaea and the rontani
i
•
promiseS and agree.taents set forth 'herein, and other good and valuable CedigidefittiOtl, the
• receipt and sufficiency pi-Which is hereby acla2okviedged, the parties agree
Q42074174326 :DALLAS
HO/GOO d
as
follows:
:105578a0
I:ZI
um/EH/wig
1.
Cantinetta is admitted as a Member -of the Company upon the effective date.of this
Azamlraent. Cantinette agrees to be bound by all the terms and provisions of the Agreement
as amended pursuant to this Athendment.
, 2002:
2.
The effective date of this amendment shall be 1
Additional definitions are added to Section. 1..01 is follows:
"Cantinetta" has the meaning set forth in. the • introductory
. . paragtaph of this
Amendment, "Non4211pgmrs" means Mays and
Cantinetta. •
"Investment Amount" has the meaning
• set forth in Section 5,1.1 Of the Lease between
the Company and . Cantinetta dated EIS of
. , 2062.
The definitions for the following terms: "Member", "Ailezzanine Lender",
4.
"lkilezzanine Loan" and "Mezzanine Loan / ..rote" in Seddon: . LOY ca. deleted and the
•following' substituted in lieu thereon •
"Men1bcr" means one or more of .Olynapus, Maya and/or Cantinetta, or any other
Person who is admitted as a Member of the Company in accordance with. this
Agreement and applicable law.
Mezzanine Lender" shall mean each of Park Plaza International, LLC., Mays and
Cantinetta.
•
"Mqzzanine Loans" shall mean those certain unsecured loans from the Mezzanine
Lenders to the Company, and obtained by the Company from the Mezzanine Lenders
In connection with the acquisition, development and improvement by the Company of
the Project, together With any amendments,. modifioattens, subititutions,
replacements, restatements, supplements .or refb3ancings of such' loans. As of the.
2
042004.326 ;DALLAS ; /0357144 .
O/800
'cl
WY ZI : ZI dal/NOZ/WIflf
,
. .
tifectiv.re date.of this Amendment the prinoil5a1 amounts of thelvlezzetnine'Loans areas foi.lOWS!
Olympus
$4,9951000
-55510110
Mays
. Cantinetta
•
*mount to beFilled in Upon Execotionli
shall mean those certain Promissory Notes evidencing the
Meezuubac Lowis tad czeoufc.d by tht, Compailyoug ,naker, and payable to the order
tho Mul.TaninG tonders togotheit with. ao;y' dalectdmieLgri, medittottilons,
•
abttioA tgP1e4035ictli3 tn` PAltuaoingd tharooE
5.
The following definition is substituted for the deinitioff of"ç
Section 1.01 as follows:
aLit"
,-
"Capital .Contributiont" means with respect to each of the Mombera the following
Arrtorati aS of the effective date of this Amendment (atter giving effect to the Capital.
Contributions .pursnant to Section B of this ./?Lmetimin)erif):.
Olympus $12,411,630
Is;1Ys
$ .56-42740.
cEntinett4
'4[Amount to bIlUe4 Upon lize?n1ion1,1
Tho Cap1ta CwLributwns .of each of the hilowbora ha11 be- 1=0=4 by any Additional
Capital Coutributione, made by 413.9b. Ivicsmbeg Fug= to the pi= of This Agreement, It is
•4 Greater of S2,000,fihn or Total Improvement Coots (as defined. itt Swami 9.5.1 of the Loess betweau Ceedrady dna Cantinitte Elated ss oi OM but not amass or $2,200,000 vault amount
bdibe allaseted
1>etereca Cautinktues Caziutal Col:gluttons and idea:Maine Loans in the semo ratio as Olympus Capital
cantata= and Memenden Loans.
g
-
i at4.143JS:b.M.A.M1 10337IM6
SZO/600 d
3
.WV ZI : ZI GHM/010Z/IZ/Iflf
represented by OIYMints -that all its Capital Contributions .piior to • the affective date of this
'Amendment have been made in oast
6. Section 2.06 is decided in its entirety sathe folIowing substituted in lieu thereof:
2.06 Modiflosti.on to Struoture. .(a) . rn order to qnsaify and/or 'preserve :the.
status of Olympus, the Company, or any entity in which the Merah'em and/or the
Conttsany owns an interest and which owns any portion of the Company Property
as an'operating C.C/41pany'undeithe
plat asset roles of ERNA at 29 CAR.
• 2510.3-101, to avoid the imposition of a corporate tax on any income of the
Company; or to tujahuize the effects of any I.TBTI on Olympus and its respectivo .
partp.ers, members and shareholders (collectively, the "ImpOsitions"), each of the
NottOlytapus -Members agrees to consent to modifications proposed from, time to
-dine by Olympic in good faith to the structure 'of the Company and/or the
CompaWs investments in. and ownership of the Company Preperty and/or to the.
tenns of this A.gtoenient including,.withoutiimitation„ the capital contribution and
aileoation and distribitionprovisions set fOrtian Article.-IV and VI, if In any such
ease the modifications will -not (I) render Olytaput and/or its successor. it interest .
niRble to fulfill its financial obligations hereunder, su.biect . any NonOlympus
Member' and/or its Affiliates to grcatar liabilky or exposure for Capital
•
Contributions or the claims of or 'any indebtedness owing to Third parties, (iii)
adversely affect the liqtddity of the Interest of a NonOlympus Member (compared
to its liquidity dn. the date b.ereo6, or (iv) adversely affect the aggregate atnount or
timing of or exposure for capital contributions, payrnent of fees, attributions of
Cash Plow and liquidation rgobecds or the aggregate allocations of Profits and
04207414326,11ALIAS:1,05571144
SZO/OIO'cl.
4
WY EI : ZI
Gam/NH/1/1ff
•Losses to a /Tot:Olympus Member; provided,. however, that if any modification
that is necessitated by an Imposition adversely affects the aggregate =Omit or..
timing of capital contributions, fees paya
• ble or distributions of Cash Plow and
• liquida.tion proceeds or the aggregate .alloc.ations of Profits and Losses, or other
rights and/or interests (for which ai eConomic value can be quantified) to
• Nonolympus Member (an "Adverse Change), the pro-visions of Section 2.0(b)
hall apply.. Subjeet to and specifically limited by the f* oregoing, my such
modification.may include, without limitation, the formation by the Members of
other limited liability companies, partnerships., corporations or ether entities
(including, 'without limitation, corporations and trusts. that qualify as real estate
itivesitaetat trusts under Section 856 of the Code) to be owned by ttie Members or
their Affiliatcs-and which.will own a portion of the Company Property. In any
such event, the Company and Such other entities shell be treated as a. single
partnership; but for federal income tax purposes only, and the fees payable, the
aratamts distributable, the Profits and Losses allocable, the capital contributions
• required to be contributed, andite maintenance of Capital Accounts pursuant to
this'Agremiont and the orgatioloountents governing such other entities shall be
calculated, determined and applied an an aggregate basis as if the entire Company
Property were owned by the C
. orpany pursuant to this Agreement as in effect on
the date hereo -unless Olympus determines that such provisions Must be
calculated, determtned. and applied on an. enfrty by entity basis and hot on an
aggregate basis tO qualify Or preseive the•status of Olympus, the Company or any
entity in which Ilse Members 'and/or the Company on an interest and vihich.
0407474326 :DALLAS : 1016716,6
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owns any portion of the Company Property as an operating company under the
;
Plan Asset Rules. if Olympus reasonably determines that .ancb.in-ovisiens must be
• calculated, . determined and applied on an entity by entity basis and not an
aggregate basis, the Members itztee to negotiate in good faith modifications to the
tea=
of this Agreement and to the organic documents governing such other
entities so as to preserve as nearly as possible without any material adverse affect
to the NonOlympus it/ler:abets the £103,6 overs..11 economic beneilts and burdens
relating to flit entire Company Property as exist under this Agreement as in effect
on the date hereot provided, however, that if the modifications do canse an
Adv.erse Change, the provisions of Section -2.06(h) shall apply. Bach of the
lion.OlymPuS -Members agrees to reasonably cooperate with"plyMpus and to
•
execute, tolowwledge, &R ya,' fie, record and pobli gh. Ull such d6ottnisl
agreements and instruments and to do all stui) other acts and things" as OlnS
detemiines are reasonably necessazy to *lent
. ea the foregoingsubject to the
lito4tations set forth in the first Sentence of this section. OlyMpus shall bear all
costs andexpensea incurred it •conikotion with the )segotiation and review of the
documentation of such dune, (including.the 1
ga1 and .accounting
costs of the
Members), any *tars of the Company. Property and the
NonOlympui
• formation of any .additional entities to OW11 any Portion of the Conipany Property
In
col:meet:ion with any of the foregoing. 'Notwithstanding anything to the
• contrary in the foregoing, the modifications made pursuant to Ibis Section 2.06(a)
shall not .require any NonOlyrapus Metz/her:to take inereaSed tidos, or to incur
.0420741. 4326 aiALLA8 id5756.6-
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'eri4lyiacroased obligations, in 'accordance with performing its :obligations
mat
hereunder.
(b) In the event of an Adverse mange to 'a N'unolympils umber, such
NonOlympas Member sbAll notify Olyrapts thereof in ' a' iritiag iorluding an
esdinate of the econothic value of the Adveto Change inottn-ecl 'by such
XenOlyrngtia Member. If Olympus and such NonOlympus Member axe unable to
•=away'agree *upon 'the amtamt thereof within 0 days, the vane of such
Adverse- Change shall . be determined by the following lnation ircieedure.
Olymp-us and such 14oridyni1ita Member. shall, within 10 days after the
ation
ofthefbregoing 30-day period, mutually agree en ;in *clepericloixt third
party (the "Valuation. Agent") to determine the econoMic 'value to . such
go/Olympus Member arising from the Adverse Change re:suiting tom , .a
niediftcation described in Seotion 2:06(a): lf the patties ale unable to agree on a
Vf.fluaiion
Agent within such 10-day petiod, : the Valuation A.gent shall be
appointed by a retired judge seleeted by Olympus and such IslonOlympus Member
fro
. m a pan
. el presented by the San Promisee Office of the Ameri
' can Arbitration
Association C‘AAA.1. if Olympus anel. such Nondirml:mq Member itTe Unable to
agree, AAA will provide a list of three a.vailable raked judges, and each of
Olympus and such No,uPlympus Member i.nay strike ane -of the available retired'
judges. The roineb4ing reth:ed judge dual seitiet the Valuation Agent. ItOlympus
aria m
' ph NonOlyrnpue Member strike the Same retired judge end two remain,
Olymina shill flip a coin to . deterinine whieh of the Ave remag retired kidges
•shall select the Valuation Agent In making it determination of the coo/amnia
,00074143161LIEW:105176.6
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•
value of the Adverse Change; the Valuation Agent Ann Consider the impact of the
nuidificatioqs to the amounts and liming of Capital Contributions,. fees due and
payable and. distributions of Cash Flow and liquidation proceeds and the
allocations of Profits and Losses to such Non.Olympus Member MI such other.
matters 'as" the Valuation Agent shall reasonably determine to be material to the
economic value of the .Adverse Change. Any Valuation. Agent selected shall be
independent and shall not have performed or been engaged to perform any
appraisal. or Valuation services for
the
Company, any Member,. or of their
Aftliates; at any lime during the two-year period prior to its sole:diem Within 60
days of the selection cif the Valuation Agent, the Valuation. Agent shall clelivetto
Olympus and awl NoirOlympira Man gler a written: tepozt Of the econrnnic value
.Of the Adverse Change, and the determination of the Valuation Agent thereon
.shall be conclusive and binding upon dympui ard
auth NonOlyropus Member.
Within 30 days of the reoeipt of such. 'report, Olynrgns • shall pay to such
Non..0.1yrtmus Member the atiollet of the economic valae . onhe Adverse Change
•determined by the Valuation. Agent, lithe Valuation Agent is employed pursuant
to the terms of This Section 2.06(b), Olympus ..bear
bear tire costs thereof as well
as the Costs of the 'retired judge who ' appoints the Valuation Agent and any
- prefessional
fees incurred by the liorplympus Members.
(6) In the e'vent of any ccinffict Or incoietstency between the terms of this
Section 2.06 and any other provision of.this Agreement, the terms of fhi$ Section
..2.06 conkol. •
0420704326 :17.ALLA5:
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7.
•
J
The :arst sentence of Section. 5,01 is deleted in its entiretYand the following substituted in
lieu thereof .
.``Effective as of the date of this Amendment, the Members of the Company shall be
Olympus, Mar and Cantinetta."
•
8.
The cads'ling Section 4.01 is deleted in its entirety and the following 'substituted in lieu
thereof:
4.01. Coital Contributions at Effective Date. As at effective date of this Amendment
•
Olympus and Mays have made the Capital Contributions as set fath in the definition
thereof: Upon. the effertive date of this Amendment, Cantinetta Shall contribine
[Amount to be r111e-ci in Upon Execution'] and loan. $ •to be Filled in Upon Executionl as iMe=atitue
LOOM to the
[Amount
Company by wire transfer
. of funds to an account of the Company as designated by the Managing Memter,
9.
- ords "and. Cantinette are added to Section OW) after the wad "Wye:
The w
10 The phrase "after the Completion of the Development," m Section 4.02(e) is deleted and
•
the phatai$ "after the effective date of this Anima:tete' is substituted in lieu thereof
1
The references to Section. 4.020- fn..tbe definition of "Adinsted Capital Contribution -
Aron-w'
•
12.
and Seetion 4.02(e) ate changed to 4-020). •
An additional sentence'is . added at the end of 'Section. 4.03 as follows: - "As off the
effective date of 'this A
: mendment, the Capital Accounts o
. f the Members shall be adfusted
reflect the total amount of their Capital dontelutions- set forth in gbation 5 of this Amendthentti.
13, It is represented by each of Olympus and May that ndther Olympus nor Mays ilas
received any dirAdhutions pursuant to Section 643 or Section 6.04 prior to the effective date of
this Amendment.
042874743Z6: DALLAS: 10557366
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•
14. An adclitionel Section 6.09 is added to the Areement- as follow
inst stdbutions: In the event. Cantinetia has any ouistiirdirig
6.09. Oft
_aq_Agal_ni
-tinier the Lease between the Conmany, as Landlord and Cantinette, as Tenant dated
20021he
Excel:dye Committee may elect by Written notice to Cantinetta to
cause the distributions to Cantbietta to be Sneed in the amount of such liability and •
• such.distiilmtions shall be retained by the Company to be applied against such liability,
For the purposes of allocation and disttibution provisions of this Agreement, lay
-
-.withheld distributions shall be treated as if they Were paid to Cattinetta and then paid by
Cantinetta in satisfaction of any liability described above. To secure the payment of aay.
such liability and in accordance with Section 9.52 of the abevc Lease, Cantinctta hereby
. grants, transfeas, and conveys a security interest in dantnetta's Interest to the aoutany
and Olympus. • Cantinetta: agrees to execute any fine:Reins statenieats . required to perfect
the security interest gearcted herein.
•
• 15. Paragraphs (a) and (b) of Section 7.02 are deleted in their eutiret n and the
following Substituted in lieu thereof:.
7.02. lvlembers. of the Executive Committee: (a) Commenting with the e' ffective date.
of-the AmAndment, the 13xecuttve Committee shall consist et 5 members The initial.
members of the Executive Committee shall be Claric .W. Maratha, Bob Riggs, ClaYton .
Scheetz, John Mays and Larry MndeL Notwithstanding any otb.er provision of this
Agreement to the contrary, Olympus will atall times 1/".ve the right to appoint a majority
in umber Of the members of the Executive Committee, and at majority in number of the
- m.embers of the Executive Committee shall represent and Shall have been, appointed by
- Olympus. Mays and Cat:dinette shall each have tie right to appoint one member to the
0420747432.DALLA5:10557B6.6
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Executive Committee. Bath Member -may, by written notice to the othersi 'reznove any
person appointed Sy such Member arid appoint a substitate therefore; provided, however,
•that any new person appointed to the Executive Committee by any Member must either
. er, .1310nagiug ?rteMber, officer, director or employee of such Member or of
(i) he aparta
anAtrrlikte of such Moller, or (ii) be approved by tb.e *centive Committee members
appointed by the other Members, _sucb approval not to be unreasonably withheld. Any . .
Member may, byWritten notice delivered to the -OtherMembeta, delegate any or all of the
duties of such Member's representatives on .the}kept:ILI.ve Committee to another of Its
represematives att. the Exec/Ave Committee or in the case of Olympus to any employee
of Olympus or any efts respective ,A.fEdiates, or ill. the case of Mays to Mays or any of
his Aliateg, or in the ease of Co:dinette to:Can/Oct-La or any Of its employees or
Affilitat'es, as the case.rnaybe (and such delegate iftall alio be an agent-of and operate at
. the sole direction. of the appointing .lvfecoher), anq any deeisions or actions taken by such
delegate shall be'fally-binding upon the Company and the ivSembers as if
taken by such
Pie:rubor of the Bum/five Cemmittee..
•.
(b) TM =Aber of members of the Threetitive Committee mity be increased of
decreased from tithe to tithe by the ExecutiVo CoteMittee, so long as a majority in •
tniinber
of the members of the Exedutive Committee Shall represent and shAtt hmre
been appointed by Olympus and at lead one
member of the ttecative Committee
shall represent and Shalt have been appointed by each of Mays and Cantinetta. In no
event sball there be more than a total of _five (5) methbers on tr.. Executive.
.Coztunittee.
16.. The reference to Section 7.02(m) in Section 1.02(1) Ia changedto 7.02(1).
04207444,126:D.Arzm :1055164 -
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I. ••n -•-•-••••nn •
•
1
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17. The. 'first two sentences of Section 9.01 are deleted in. their entirety and the following
s* ubstituted in lieu theceof;
. ."Olympus may sell, assign, give, hypothecate, pledge, encumber or otherwise transfer
("TranSfer) all or any portion Of its Interest, whether-directly or indirectly, without •
the written consent of either Mays or Caatinetta: Except as expressly tiebnitted or :
contemplated by this Agreement, each of Mays and Cantinctta agrees not to permit
any Transfer of his Or its e- quity interest in the Company without
the
consent of •
Olympus." 18, Sections 9.65(4 (b) and (0) are deleted in their entirety and'tb,e following substituted fa
lien theieot .
(a) • if at any time after the date liereg, Olympus determines to sell, assign or
otherwise transfer all or a portion of its Interest in one transaction or .a series of related
transactions (an "Article IX Sale% then, in such event, (1) Olympus
oikoll have the right (the
"Drag-Along Right") in -its sole and absolute discretion, AO require both of Mays and
Cantinetta to sell all Of the Interest(s) of Mays and Cantinetta •as part of such transaction or
'transactions at the same price and on the same terms and conditions as are applicable to
Olympus and (II) each of Mays arid Cantinetta shall have the right (the 'Tag-Along Right"),
in. his* or its sole and absolute discretion, to sell all of his or its Interest* as part of such . •
transaction. or transadions at the same price and on the saine tems and conditions as are
app1ical310 to Olympus.
(b)
Ip. the event that Olympus
-detemciaes to enter into an. Article IX Sale and to •
exercise its Drag-Along Right, then, in such event* Olympus shall provide Mays and
notice (the "see.Noticer) of the Article IX Sale not more than sixty
cathinetta with written
042074:14326 01A.T.IAS ; 10537864
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(60) and not less than thirty (30) days prior to the closing date ofthe Article IX Sale. Upon.
receipt of the Sale Notice, Mays and Cantinetta shall take all steps necessary to facilitate the
prompt closing of the Article EK Sala and at the closing of the Article IX Sale, .each of Mays
and Cantinetta 1i MT
sell his or its Interest subject to the
.Dtag-Along night and-shall do;
ciecute, acknowledge and deliver all such further acts, documents and instruments ai may be
reasonably required to 001:011:1111111t0 the Article DC Sale,
In the event. that Olympus detennines. to enter into an Article TIC . sale and not
to exercise its Drig-Aloni Pdght, :then, in such event Olympus - shall. provide Mays and
Cantinetta.witb. the Sale Notice not less. than forty-five .(45) days prior to the doing date of
• -the Artide IX Sale and each of Maya and Cantinetta shaft provide, OlyMpus notice of its
intention to exercise his Tag-Along night within Bib= (1-5)-days prier to the closing date
(the "'rag-Along Notice"). Upon receipt of the Tag-AlOng Notice, Olympus„,Shalt take all
steps necessary to facilitate the Sale of the Interests of.Mays and/or Cantinetta in the Article
IX Sale and shall do, execute,.acknovdedge and deliVer all such Anther acts, documents and
in.struraents as may be reasonably required to consummate the Ar ticle ix sale.
•
18. A new Section 9.06 is addedfc the Agreement as taws;
•
If, upon_ a sale of the Hotel to a Person which is not anlaliateof any of the
Members., (a "Third Party Sale"), the total distributions Canthietta has
received purslient to Sections 6.03 and 61)4 With respect to its Interest and is
projected to receive -with fespect to his Interest punspant to such Sections as a
result of the Third Party Sale <and . assuming that the Company is ,liquidated)
from the effective date of this Amendment throne'. the *sing of the
Party Saleis less
04207414326 :DALLAS :1055716.0
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Third
than the Investment Amount, the COmpany shall have the
13'
WV.SI:ZI GHAVOIOUWIllf
option (but not the obligation) to purehase the Interest of Cantinetta
immediately before or simultateouily with closing of the Third Party Sale for
an amount equal to the Investment Amount lesi the amount of all previous
distributions to Cantinetta pursuant to the above Sections. Any purchase of
Cantiaetta's Interest putseant to this Section 9.06 shall be effective.only if the
Third Party Sale is coMpleted,
Article ma is deleted in itS entirety.
19,
20. • Section 13.03 is. deleted kits entirety and the following substithied in lieu thereof -
13,01 Notices:
All notices, 'demands, consents, qiprovals; . requests or other
calimi l nications .which any- of the parties to this . Agreement may desire or he requited
. to give here'nnder (collectively, 'Notices") shall be in :writing and shall 'be given by
(a) personal delivery., (b) facsimile transmission or (0) a reputable overnight courier
service, fees prepaid,- addressed as .follows: •
•
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21, All
611211
tams
and provisions of the Agreement not amended by .tbis Amendment
continue in full force and effect.
22. Any capitalized term not defined in this Araondinent shall have. the merping
set forth in . the A,greement.
23.
This Amendment shall he govrtied by and construed in accordance with the
. .
laws of the State of Delaware, applicable to agreements made and to be perfotraed wholly
within that State.
24.
This Amendment shall not be binding. tinleis and uo.fil it is executed and
delivered by all the parties hereto. This Amendment may be executed in counterparts, all of • •
which taken together shall be deemed 0110 original do c• ument. For purposes of executing this
Amendment, a document signed and transmitted by facsimile machine or telecopier shall be
treated aa an original document, the aignatore of my party thereoh silo be considered
original
signature, and the document transmitted shall be considered to hic.. ee the, same
- • bindioglegal effect as an original signature on an original dciatinatmt, At the request of any.
. party hereto, any facsimile or telecopy document ShgI1 be re-execated: . by all Of the parties
hereto in miginal foiLu.
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• Ehibi' Narratiy
• October 1, 2(102
Landlord shall provide utility infrastructure/is. thliows:
•
I. Sanitary Sewer: one (1) ilx:-Inch (6) line stubbed td the location designated on
the Exbibit"E" plan. It Is understood that the size & location oftbis line shell be
in riccordance with the engineered drawings Provided by the tenant
tii
2. Ele
_e_o
Serelae: inovide one (I) 120208 volt, 3 Phase, 1000 aniP electrical •
service to irtMital t) 41stu1t gt1on paxtel at the location designated on the Exhibit "B"
plan. It-is understrx,c1 that the size &location of this service shall be in accordance
with the engineered drawings provided by,the tenant:
.
(See scliarataly metered note)
•
• i Natural gas:. provide one (1) natural gas service, sized for Tenant requirements,
stubbed to the location designated on the Exhibit'll" plan.. It is understood that .
•
• the die & location of this tine shall be in accordance with. Ike engineered
drinvings provided by the Tenant
(See separately metered nete)
•
4: Fire qpthtkler provide one (1) fire aprialdeiniain sufficient for Ordinary Hazard Group 111 rating stubbed to the leeatien designated on Exhibit "En plan. It is .
uuderstood that the size & location ofthia line shall be in accordance with the
• =Cheered drawings previded by the Troaat. It is further understood litatthe •
Tenant shall provide the nameof its Invrance Underwriter ISO, 1E11, and
Factory
Mutual) to its engineer prior to system design taking place.
. .
5. Water provide one (1) water line sufficient for Tenant requireMents, gibbed to
the location designated on the Exhibit "B" plan. It is understood that the size &
location, of this line shall be in accordance with the engineered drawings provided
'by Tenant.
Wee separately metered note)
•
PredpitaiorM: if re quired bY laws, the hotel, or neighborhood, the Landlord &
Tenant shall each bear one-half (1/2) ofthe•osts for "smog ,hog(s)" =paired, kis
understoo d that these "smog hog(s)" must be concealed Width). the existing Met
tap screen wall.
•
•
•
• SEI
"ERATELY MICTEREDNOTE: It is understood that the Separate metering
• requirement for the utilities is-to arrive at the quantity consumed by the Tenant for
•
: paymenlby
the Tenant. The Landlord shall provide what is itgallyfgovernmentally
• allowed for metering. At a ntinimtmi, the Landlord shall provide 111 line digital metering.
•
•
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SETTLEMENT AGREEMENT [MHG Casa Madrona Hotel, LLC/Poggio, LP]
This Settlement Agreement ("Agreement") is entered into by and between MEG
Casa Madrona Hotel; LLC ("Landlord") and Poggio, LP ("Tenant"), subject to the terms and
conditions provided below, and is effective as of October 1, 2007 ("Effective Date").
RECITALS
A.
Oly Casa Madrona, LLC, the original landlord and Tenant previously
entered into a Lease dated September 23, 2002 (the "Lease"), for certain premises described in
the Lease and located in the Casa Madrona Hotel & Spa on Bridgeway Street in the City of
Sausalito, State of California.
Landlord and Tenant have been involved in a dispute about the payment of
B.
certain charges under the Lease and the performance of certain obligations under the Lease,
consisting generally of the following: (i) Tenant's objections to paying for restaurant exhaust
system maintenance charges; (ii) Tenant's objections to paying a fee for events it generates at the
Villa Madrona, the Mikayla Space, and the second floor except for Tenant's Private Dining Area
(the "Meeting Space"); (iii) Landlord's objections to paying a portion of the salary and benefits
of Tenant's Banquet Sales Manager; (iv) Tenant's objection to the condition and finish of the
Meeting Space and Tenant's allegation it has suffered damages as a result; (v) Landlord's
charges for Tenant's share of water and gas consumption; (vi) the ariangement under which
Landlord pays Tenant for Room Service; (vii) whether Tenant adequately complies with its
obligations to hold table reservations for Hotel guests and keep the Restaurant open as required
in the Lease; (viii) which of Tenant's customers are entitled to valet parking at no charge under
the Lease; (ix) whether Tenant's prices for its menu items for events in the Meeting Space are
competitive in the Bay Area pursuant to the Lease; and (x) the status and adequacy of Tenant's
liquor license, as further embodied in the parties' respective Demand for Arbitration Before
JAMS and Counter-Demand in Arbitration, filed in JAMS arbitration number 1100050694
(collectively, the "Disputed Claims").
Landlord and Tenant have resolved their Disputed Claims and this
C.
Agreement is intended to confirm the resolution and settlement of such Disputed Claims.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained the parties agree as follows:
Recitals and Definitions. Unless otherwise defined herein, capitalized
1.
terms used in this Agreement shall have the same meaning given to them under the Lease. The
Recitals are incorporated into the terms of this Agreement and form a part of this Agreement.
Arbitration. The arbitration hearing currently scheduled to commence on
2.
November 19, 2007 in Poggio, LP vs. MHG Casa Madrona Hotel, LLC, JAMS arbitration
1
SETTLEMENT AGREEMENT
[MHG Casa Madrona Hotel/Poggio]
1361571.1
reference number 1100050694, shall be taken off calendar forthwith, subject to being
rescheduled at a later date at the request of either party if the parties are unable to resolve their
dispute with regard to the improvement and future use of the Meeting Space as set forth in
Paragraph 3 below.
3.
Meeting Space Improvement and Use. The parties agree that their
respective principals shall meet in person, with counsel present if either party elects, within thirty
days of the Effective Date to make their best efforts to negotiate and reach an agreement
regarding the improvement and future use of the Meeting Space in a manner that is mutually
acceptable to the parties.
4.
Credit. Commencing October, 2007, and continuing for a period of 43
months, until and including April, 2011, Landlord shall credit Tenant $1,000 a month against
Percentage Rent, and Tenant shall accordingly pay Landlord, at the times and in the manner
specified in the Lease, $1,000 a month less than the Percentage Rent computed in the manner
provided in the Lease for that month.
5.
Settlement of Existing Charges and Accounts. Subject to this credit,
Landlord and Tenant hereby resolve and settle all of their respective claims for reimbursement
on account of all past due charges under the Lease through the Effective Date, and the same are
hereby fully and finally waived. This shall not alter or limit the parties' respective ongoing
obligations to pay rent and other charges as they come due under the Lease as amended,
including rent and charges payable to Tenant for events billed and collected by Landlord before
the Effective Date.
Liquor License. Tenant shall promptly use its best efforts to obtain a
6.
liquor license that permits it to serve alcoholic beverages throughout the Hotel. Landlord agrees
to cooperate with and use its best efforts to assist Tenant to secure such license.
Lease Amendment. Simultaneous with the execution of this Agreement,
7.
the parties will execute the First Amendment to Lease in the form attached as Exhibit "A" ("First
Amendment").
8.
No Default
(a)Except for Tenant's claim concerning the condition, improvements,
and finishes of the Meeting Space under Sections 9.8 and 18.2.2 of the Lease, Tenant
acknowledges that as of the Effective Date, it is not aware of any default on the part of Landlord
in the performance of any obligations under the Lease, nor has there been any act, omission or
incident known to Tenant that, with the passage of time, would give rise to any claim by Tenant
against Landlord for default under the Lease.
(b)Landlord acknowledges that as of the Effective Date, it is not aware of
any default on the part of Tenant in the performance of any obligations under the Lease, nor has
there been any act, omission or incident known to Landlord that, with the passage of time, would
give rise to any claim by Landlord against Tenant for default under the Lease, including (without
2
[MHG Casa Madrona Hotel/Poggio]
1361571.1
limitation) the following obligations under the Lease: (i) Poggio's pricing of its menu items and
services for events in the Meeting Space at rates which are competitive in the Bay Area under
Section 8.3.4 of the Lease; (ii) Poggio's obligation to accommodate Hotel guests on a preferred
basis, or keep at least 10% of its dinner seats reserved for Hotel guests until 5:00 pm each day
under Section 8.5 of the Lease. Landlord further acknowledges that no distinction shall be made,
for purposes of no cost valet parking under Section 31 of the Lease, between Tenant's customers
who are dining at the restaurant and those who are attending an event generated by Tenant in the
Meeting Space.
9.
Mutual General Releases re: Disputed Claims. Except for (a) any claim
to determine the parties' respective rights and obligations relating to the condition,
improvements and finishes of the Meeting Space under Sections 9.8 and 18.2.2 of the Lease (but
not including any claim for damages relating thereto), and (b) the rights and obligations created
or reserved in this Agreement, and the Lease as amended by the First Amendment, Landlord and
Tenant (each a "Releasor"), each on its own behalf and on behalf of such Releasor's principals,
officers, directors, agents, owners, affiliates, successors and assigns, does hereby release and
forever discharge the other party hereto, and its principals, officers, directors, agents, owners,
affiliates, attorneys, successors, assigns and insurers ("Released Parties"), from any claim,
liability, cause of action, proceeding, or any other remedy arising from or related to the Disputed
Claims, all of which are hereby intended to be fully and finally resolved.
Waiver of Civil Code § 1542. The undersigned parties acknowledge that
10.
they have been represented by their own legal counsel and have been informed of the effect of
California Civil Code § 1542, and each of the undersigned expressly waives all rights and
benefits that it has, had, or may have had, under Section 1542, which reads as follows:
A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which if known
by him or her must have materially affected his or her settlement with the debtor.
Each of the Releasors acknowledges that it may later discover facts or law different from or in
addition to those it now knows or believes to be true with respect to the claims released, and each
Releasor agrees that these releases nevertheless shall be and remain in effect as complete,
general, and mutual releases as to the Disputed Claims.
11.
Each Party to Bear Own Fees and Costs. Tenant and Landlord further
agree that they will pay for and absorb any and all costs and charges they have incurred through
the Effective Date relating to the administration or prosecution of their claims and defenses
associated with the Disputed Claims, in whatever manner or form such expenses may have taken,
and regardless of any contrary provisions in the Lease.
12.
Mutual Advice by Counsel and No Inference Against Drafting Parties.
Each of the parties to this agreement represents and warrants that it is and has been represented
by counsel in connection with this Agreement and all matters covered by it, and that it has been
fully advised by its attorneys with respect to its rights and obligations hereunder. The parties
3
[MEG Casa Madrona Hote]/Poggio]
1361571.1
Oct 24 07 05:07p
L.MINDEL
(415)924-3880
P.1%2
To:Hanson Bridsett
0CT-22-2007 1:E5 From:
p.2
IWGZ110.14.11
agree that they have participated in the preparation of this Agreement and that any rule to the
effect that ambiguities are construed against the drafter shall not be employed ie the
interpretation of this Agreement.
13. Governing Law. The intetpretation and enforcement of this Agreement
shall be governed by the laws of the State of California as applied to contracts made and
performed entirely in California.
14. Counterparts. This Agreement can be executed in separate counterparts,
which when taken together shall constitute the entire agreement A copy or telefax of the
si gnature shall he effective the same as 111 original ink signature, but the party submitting any
copy or telefax of the signature agrees to replace each signature with an original ink signature
within ten (10) days thereof. The failure to do so is a default but does not affect the effectiveness
of the countersignature and delivery of the fully executed Agreement.
15. Authority. Each party represents and warrants that it is the owner of the
claims released, and has not previously assifpcd or transferred or purported to transfer or assign
any claim released in this Agreement Each natural person signing this Agreement on behalf of
any party that is not a natural person (each an "entity') represents and warrants that he or she has
authority to bind such entity to the terms of this Agreement.
16. Integration. This Agreement and the First Amendraent set forth the
entire understanding of the parties in connection with their subject matter. No party has made
any statement, representation or warranty in connection with this Agreement which has been
relied upon by any other party or which has been an inducement for any party to enter into this
Agreement, except as set forth herein. It is understood and agreed that this Agreement shalt not
be altered, amended, modified or otherwise changed in any respect whatsoever except by a
writing duly executed by the partiesor their duly authorized representatives. The parties agree
that they will make no claim at any time that this Agreement has been altered, modified or
otherwise changed by oral communication of any kind or character..
•
IN WITNESS WHEREOF, Landlord and Tenant have executed this Agreement
effective as of the day and year above written.
120QG10, 12
MHO CASA MADRONA HOTEL, LLC
BY '?>/ 11111"-Name;
bs.eetz?4-
Its:_4st_2,27
e
4
(Mail Casa Madrona Hotaroggio]
umsna
EXHIBIT "A"
FIRST AMENDMENT TO LEASE [WIG Casa Madrona Hotel, LLC/Poggio, LP]
This First Amendment to Lease ("First Amendment") is entered into by and
between MHG Casa Madrona Hotel, LLC ("Landlord") and Poggio, LP ("Tenant"), subject to
the terms and conditions provided below, and is effective as of October 1, 2007("Effective
Date").
RECITALS
Oly Casa Madrona, LLC, the original landlord and Tenant previously
entered into a Lease dated September 23, 2002 (the "Lease"), for certain premises described in
the Lease and located in the Casa Madrona Hotel & Spa on Bridgeway Street in the City of
Sausalito, State of California.
. A.
B.
Landlord and Tenant desire to amend the Lease on the terms set forth
hereinafter.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained the parties agree as follows:
1.
Recitals and Definitions. Unless otherwise defined herein, capitalized
terms used in this Second Amendment shall have the same meaning given to them under the
Lease. The Recitals are incorporated into the terms of this First Amendment and form a part of
this agreement.
2.
Days and Hours of Operation. The following shall replace the first
sentence of Section 3.3:
The Restaurant shall be open for dinner and shall prepare continental breakfasts for self
or room service to the Hotel every day of the year but Christmas day.
3.
Meeting Space Charges. The following shall replace the next to last
sentence of Section 8.3.3:
The party generating a Banquet Order Event may, at its own discretion, may
waive or discount the Meeting Space Charge for such Banquet Order Event.
The following shall replace the fourth and fifth sentences of Section 8.4.2:
If Tenant collects a Meeting Space Charge in connection with a Banquet Event
Order that it generates, it will remit the Meeting Space Charge collected to Landlord within
1
FIRST AMENDMENT TO LEASE
[MHG Casa Madrona HoteI/Poggio]
1361745.1
fifteen (15) days from the date of the event, except for Tenant house accounts and direct billings,
which will be paid within thirty (30) days of the event.
4.
Utilities. The following shall be added at the end of Section 17:
With regard to water usage, effective September 1, 2007, and so long as Landlord
and Tenant's water usage are not separately metered, Landlord and Tenant agree and
acknowledge that Tenant's share of water consumption is 30% of total water consumption
reflected on the Hotel meter that includes Tenant's water consumption and Tenant shall pay 30%
and Landlord shall pay 70% of the cost of water consumption reflected on that meter. Tenant
•retains the right to install, at its cost, separate meter(s) and/or sub-meter(s) to separately meter its
water consumption.
5.
Smog Hog Maintenance. The following shall be added after the first
sentence of Section 18.2.2:
Notwithstanding anything else in the Lease, effective September 1, 2007,
Landlord agrees to maintain and repair at its sole cost all parts and components of the Restaurant
precipitator system (or "smog hog"), including its fans, blowers, vents, exhausts, and precipitator
units, and may employ any duly licensed and bonded service of its choosing to perform this
work, provided that Tenant shall have the right to contact the service in the event of event of the
precipitator system requires maintenance on an urgent basis to avoid causing a nuisance to the
Hotel, the Restaurant or the surrounding neighborhood.
6.
Catering Manager. The following shall be added as Section 8.3.1.1:
8.3.1.1 Catering Manager. Tenant has and continues to employ a catering
manager (the "Catering Manager") who markets and manages Tenant's catering business,
including events in the Villa Madrona, the Mikayla Space, and the second floor except for
Tenant's Private Dining Area (the "Meeting Space"), and who shall use commercially reasonable
efforts to introduce to Landlord persons or parties who may rent rooms or other facilities at the
Hotel. Effective September 1, 2007, and long as Tenant employs the Catering Manager, and
until Landlord and Tenant enter into a new or amended agreement with respect the improvement
and use of the Meeting Space, Landlord agrees to make the following payments to Tenant, which
shall be due on the 15 th of each month with respect to the expenses incurred by Tenant in the
prior month: (i) 50% of the Catering Manager's cash compensation; and (ii) 50% of the Catering
Manager's fringe benefits, including medical benefits, which are defined as the cost of medical
insurance provided by Tenant for the Catering Manager, net of any amounts paid by the Catering
Manager for such insurance, which be consistent with the medical coverage Tenant offers its
other management employees working at the Restaurant.
7.
Effectiveness of Lease. The parties hereby ratify and confirm the
provisions of the Lease, as amended by this First Amendment.
2
[MHG Casa Madrona Hote]/Poggio]
1361745.1
Oct 24 07 05:06p
L.MINDEL
OCT-22-20B7 13:25 From:
10/22/%007 10:*U:13 AM
(415)924-3880
To:Hanson Brideett
Ranson Briugott
p.1
P.2/2
va.g0
8.
Governing Law. The interpretation and enforcement of this Second
Amendment shall be governed by the laws of the State of California as applied to contract made
and perforated entirely in California.
Counterparts, This First Amendment can be executed in separate
9.
counterparts, which when taken together shall constitute the entire agreement A copy or telefax
of the signature shall be effective the same as an original ink signature, but the party submitting
any copy or telefax of the signature agrees to replace each signature with an original ink
signature within ten (10) days thereof. The failure to do so is a default but does not affect the
effectiveness of the countersignature and delivery of the fully executed First Amendment.
10. Conflict. If dime is any conflict between the Lows° or any prior
amendments to the Lease on the one hand and this First Amendment on the other hand, this First
Amendment shall supersede and control over any anurary provision in the Lease as previously
amended,
IN WITNESS WHEREOF, Landlord and Tenant have executed this First
Amendment effective as of the day and year above written.
Iville CASA MA.DRONA HOTEL, LLC
POGGIO, 12
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136$745.1
EXHIBIT C
Katten
Katten Muchin Rosenman LIP
2029 Century Park East
Suite 2600
Los Angeles, CA 90067-3012
310.788.4400 tel
310.788.4471 fax
DUSTIN P. BRANCH
dustin.branch©Icattenlaw.com
310.788.4420 direct 310.712.8271 fax
31518203v1
April 20, 20.10
Via Overnight and U.S. Mail
Poggio Restaurant
do Mr. Larry Mindel
777 Bridgeway
Sausalito, CA 94965
Re: Casa Madrona Hotel
Dear Mr. Mins:lel:
This firm represents CMSC Ventures, LLC (the "Owner") in connection with the Casa Madrona
Hotel (the "Hotel"). The purpose of this letter is to provide Poggio, LP ("Poggio") notice that it
must cease operation of its restaurant business and vacate the Hotel not later than May 31, 2010.
As you know, the Hotel was formerly owned by MHG Casa Madrona, LLC ("Casa Madrona").
Casa Madrona and the Hotel were placed into a receivership in 2009, and eventually filed for
protection under the Bankruptcy Code. Subsequently, a chapter 11 trustee (the "Trustee") was
appointed to oversee the liquidation of Casa Madrona and its assets. Finally, Casa Madrona's
secured lender foreclosed on its lien on Casa Madrona's assets, including the Hotel, outside of
the bankruptcy proceeding. Through the foreclosure sale, the Owner purchased the Hotel on
February 2, 2010_
Subsequent to the foreclosure sale, the Trustee filed various motions in the Bankruptcy Court to
conclude the administration of the bankruptcy estate, including a motion to reject various leases
and contracts to which Casa Madrona was a party. At a hearing before the Bankruptcy Court on
April 2, 2010; the Court approved the rejection of certain leases and contracts, inlcuding that
certain unrecorded commercial lease dated September 23, 2003, originally between Oly Casa
Madrona, LLC, as landlord, and Cantinetta, as tenant, under which Poggio has been operating
the Poggio restaurant in the Hotel.
As the above facts make clear, Poggio has no contractual or legal relationship with the Owner,
and as a result, Poggio has no legal right to occupy space at the Hotel or to operate its restaurant
EXHIBIT C
LOS ANGELES CHARLOTTE CHICAGO IRVING LONDON NEW YORK PALO ALTO WASHINGTON, DC WVVW.KATTENLAW.COM LONDON AFFILIATE: KATTEN MUCH1N ROSENMAN CORNISH LIP A limited liability partnership including professional corporations
Katten
ICattenMuchinRosenman
LLP
April 20, 2010
Page 2
at the Hotel. Poggio is a holdover tenant, and the Owner does not consent to its continued
operations at the Hotel.
The Owner is amenable to discussing an alternative relationship with Poggio. However, absent
the execution of a new agreement between the Owner and Poggio for Poggio's continued
operation at the Hotel, Poggio must vacate not later than May 31, 2010. To the extent Poggio
fails to do so, the Owner shall take all steps available to it under applicable law to secure the
removal of Poggio from the Hotel, as well as seeking any and all damages to Which the Owner
may be entitled as a result of Poggio's failure to vacate. Should you have any questions with
respect to the above, please do not hesitate to contact me.
Very truly yours,
juilit
`lq
6R-i9)
Dustin P. Branch, Esq.
DPB:as
cc:
Thomas J. Leanse, Esq. (via interoffice transmittal)
EXHIBIT C
EXHIBIT D
Katten
ICattenMuchin Rosenman
LLP
.2029 Century Park East
Suite 2600
Los Angeles, CA 90067-3012
310388.4400 tel
310.788.4471 fax
THOMAS J. LEANSE
thornas.leanse@kattenlaw.corn
310.788.4475 cfirect
310.712.8426 fax
May 5, 2010
VIA FACSIMILE, EMAIL AND U.S. MAL
Thomas F. Hyde, Esq.
80 E. Sir Francis Drake Blvd., Suite 4C
Larkspur, California 94939
Re:
SIIVIA Corporation MFIG Case Madrona Hotel, LLC
Poggio, LP vs. CMSC Ventures, LLC
Dear Mr. Hyde:
I am responding to your email to Dustin Branch dated May 3, 2010.
With respect to the most immediate matter, my client acquired the property through the
foreclosure sale and as part of its taking control and securing the premises, commencing last
week all of the locks in the hotel and related facilities were re-keyed. I understand that contrary
to the assertions in your email, at least one of your client's employees has a key to the second
floor kitchen and to all other relevant locks (either Ms. Cullen or Antonio (your client's night
manager)). I also understand to that extent, your client has requested access to various meeting
rooms and that your client has been provided access.
Therefore, I would request that you immediately confirm that you are NOT going to court on
Thursday, May 6, 2010 at 8:30 a.m. to pursue an ex parte application to obtain a key for the
kitchen.
Please further be advised that my client, as part of its strategy to improve the entire property, is
conducting an inspection and evaluation of the entire property including those premises leased to
your client. My client will, therefore, require access to the premises for purposes of conducting a
variety of inspections and if deemed required to modify and/or repair the premises.
•
Your' email and the attached complaint appear to misconstrue the legal basis for the statements
made in Mr. Branch's letter to your client. The legal significance of the debtor's rejection of the
lease is that the landlord has no obligation to perfonn any services and therefore it is not
responsible to the extent your client chooses to perform those services for itself. As a result of
the rejection, your client's only rights are to offset the expenses it incurs against its rental
obligations. However, as a rejected lease, my client—the successor/owner does not have a legal
obligation to pay for those services.
As far as I can tell, based upon a review of title, your client's leasehold interest was not recorded
at the time Integrity Bank placed a lien on the property to protect its loan. I therefore have no
basis to believe Mar the loan was in fact subordinate to the lease as you allege in your complaint.
If in fact the loan was not subordinate to the lease, then as a result of the sale at foreclosure, your
EXHIBIT D
LOS ANGELES
CHARLOTTE
CHICAGO
IRVING
LONDON
NEW YORK
WASHINGTON. DC
LONDON AFFLIATE KATTEN TAUCHIN ROSF_NIAAN CORNISH LLP
A limited Debility partnership including professional corporations
VWWILICATTF-NLAW.COM
Katten
ICattenMuchinRosertman
Thomas F. Hyde, Esq.
May 5, 2010
Page 2
client's lease effectively is terminated and your client does not enjoy a right of continued
possession. Nevertheless, rather than simply providing your client with a 3-day notice to quit as
required under California law, my client authorized us to give your client at least 30-days notice.
(In fact I believe Mr. Branch sent the same letter twice (on April 20 and April 28) as he found an
additional address for your client and he was not sure which address was the appropriate
address.)
Unless the parties can agree on a future arrangement that is satisfactory to both parties, I suspect
that our clients will require the assistance of a third party (i.e., a judge) to determine what the
parties respective rights are as a result of the foreclosure. Additionally, I would note that even if
your client does have a right to remain in possession based upon a determination that the
Integrity Bank loan was subordinate to the lease, any amendments to the lease that occurred after
the recording of the lien do not enjoy the same priority and therefore my client would not be
bound by any amendments even if was required to honor the lease itself.
It seems that the most appropriate strategy would be for us to schedule a meeting with our clients
at the earliest opportunity to see if we can resolve these disputes and work out a mutually
agreeable relationship so the parties can proceed with moving-forward. My client and I can meet
with you in Mann County at an mutually agreeable location next week on Wednesday, Thursday,
or Friday. Please let me know what would be convenient for your client.
I look forward to hearing from you at your earliest convenience.
Until the dispute between our clients is resolved, please direct all future communications with
respect to this matter to the undersigned.
Vey yours,
Thomas J. Leanse
TJL:cth
cc: CMSC Ventures, LLP
EXHIBIT D
EXHIBIT E
NOTICE TO PAY RENT OR OUIT
June 23, 2010
To: POGGIO LP (formerly known as CANT1NETTA), a California limited partnership (the
"Tenant"), tenant in possession of the premises located at 777 Bridgeway, Sausalito,
California, within the Casa Madrona Hotel & Spa (those premises, the "Premises"):
Reference is made to that certain Commercial Lease dated as of September 23, 2002, made
by OLY CASA MADRONA, LLC, a Delaware limited liability company; and the Tenant, with
respect to the Premises (that lease, the "Lease"). All capitalized terms used but not defined in
this letter have the meanings given those terms in the Lease (and the Premises are further
described in the Lease) As you know, CASA MADRONA HOTEL AND SPA, LLC, a California
limited liability company (formerly known as CMSC VENTURES, LLC) ("CMHS"), is the owner
of the Hotel—the Casa Madrona 1-lotel & Spa—in which the Premises are located.
This Notice to Pay Rent or Quit (this "Notice") is given pursuant to California Code of
Civil Procedure Sections 1161(2) and 1161.1.
Within seven (7) days after service of this Notice, the Tenant is required (i) to pay the
estimated rent now due and unpaid on the Premises, a total of $60,006.35, representing
Percentage Rent (as calculated by the Tenant) due for the months of February, March, April, and
May 2010; or, in the alternative, (ii) to deliver possession of the Premises to CMHS, through its
authorized agent, Darrell Oliver, who is the General Manager of the Hotel.
If the Tenant elects to pay the rent demanded, payment should be made in care of
Mr. Oliver, General Manager, Casa Madrona Hotel & Spa, 801 Bridgevvay, Sausalito, California
94965, (415) 332-0502. Payment may be made personally to Mr. Oliver, and the usual days and
hours that he is available to receive payment are Monday through Friday from 9:00 a.m. to Noon
and from 1:30 p.m. through 6:00 p in Payment by cheek, cashier's check, or money order should
be made to the order of CASA MADRONA HOTEL AND SPA, LLC.
Again, the amount of rent demanded by this Notice is an estimate based on information the
Tenant, through its counsel, has provided to CMHS, through its counsel. Rent under the Lease is
entirely based on a percentage of the Gross Sales (after authorized deductions) and the Tenant is
to provide monthly certified statements thereof to the Landlord and permit the Landlord to
inspect the Tenant's books and records on reasonable request. The Tenant has failed to provide
the required certified statements and has refused to permit the required inspection of its books
and records. Accordingly, the necessary information is not only primarily, but is exclusively,
within the knowledge of the Tenant and has not been furnished to CMHS.
Page 1 .
CMHS/Poggio
Notice to Pay Rent or Quit
SF11012793v1 62.124-0017
EXHIBIT E
The Tenant's failure to pay the amount demanded or to deliver possession of the Premises
within seven (7) days will cause CIVIHS to initiate legal proceedings against the Tenant to
declare a forfeiture of the Lease, to recover possession of the Premises, and to seek judgment for
the rent owed through the expiration date of this Notice, with damages for each day of
occupancy after that date, and any statutory damages and costs.
The Tenant is further notified that CMHS elects to declare the forfeiture of the Lease,
under which the Tenant holds possession of the Premises, if the Tenant fails to pay the amount of
rent demanded above.
Nothing in this Notice waives any defaults under the Lease or any rights or remedies of
CARS thereunder.
CAS MADR N TEL AND
SPA, LLC
Richard Schweitzer
Chief Financial Officer
cc:
(by e-mail)
Thomas F. Hyde, Esq. (Tom@hydelaw.com)
Greg Ward (GWard@mwfin.com )
Raymond F. Henze ill (RayHenze@mac.com )
Michael Mohr (MMohr@mwlin.com )
Robert E. !viands, Esq. (rem@jmbm.com )
Nicolas De Lancie, Esq. (ndeCuimbm.com )
Page 2
CMHS/Poggio
Notice to Pay Rent or Quit
SF\1012793v1 62124-0017
EXHIBIT E
EXHIBIT F
THOMAS F. HYDE
ATTORNEY AT LAW
July 2, 2010
Mr. Richard Schweitzer
Chief Financial Officer
Casa Madrona Hotel and Spa, LLC
11111 Santa Monica Blvd.
Suite 1760
Los Angeles, CA 90025
Re: Poggio Lease at the Casa Madrona Hotel
Dear Mr. Schweitzer:
This is in response to the Notice to Pay Rent or Quit and the Notice to Perform Lease
Covenants or Quit dated June 23, 2010 recently served on Poggio LP by the Casa Madrona Hotel
and Spa, LLC ("CMHS") as the Landlord under and pursuant to the commercial lease dated
September 23, 2002, for the restaurant space in the Casa Madrona Hotel (the "Lease").
Poggio pays rent under the Lease for the occupancy of the Premises and for (i) the hotel
being operated by the Landlord in accordance with certain standards, (ii) the hotel and various
support systems being maintained by the Landlord, (iii) the Banquet Space being marketed by the
Landlord, (iv) free valet parking for Poggio's customers, (v) half of the catering manager's
compensation being paid by the Landlord, and (vi) various other matters being performed by the
Landlord. Despite repeated requests to CMHS to perform those covenants, CMHS has refused.
Left with no alternative, Poggio has undertaken many of those obligations at Poggio's expense.
Through May 31, 2010, the cost of satisfying the covenants the Landlord has ignored
exceed the rent payable under the Lease by $43,129.65, plus interest on such amounts at the
80 E. SIR FRANCIS DRAKE BLVD., FOURTH FLOOR • LARKSPUR, CALIFORNIA • 94939 PHONE: 415-464-1180 • FAX: 415-464-0280 E-MAIL: TOM@HYDELAW.COM
EXHIBIT F
Mr. Richard Schweitzer
— 2 —
July 2, 2010
prime rate as published by the Wall Street Journal. Between February 2, 2010 and May 31, 2010,
Poggio has paid expenses of $71,034.11. The majority of those expenses ($43,944.49) were for
the valet parking service. Since CMHS collected valet charges from hotel guests for valet
services that were provided and paid for by Poggio, either those guests were fraudulently charged
for a service that was never performed by CMHS or those charges should be remitted to Poggio.
Because no rent is due, the Notice to Pay Rent or Quit is invalid. The Notice to Pay Rent
or Quit also overstates the amount of rent payable by Poggio before the deductions for the
expenses paid to satisfy the Landlord's obligations under the Lease. CMHS did not acquire the
property until February 2, 2010, and is not entitled to. any rent on the gross sales before that date.
With respect to the Notice to Perform Lease Covenants or Quit, on or before July 27, 2010,
Poggio will deliver certified statements of its gross sales for each month, the aggregate amount of
authorized deductions, and copies of sales or other excise tax reports that Poggio has been
required to file for sales since February 2, 2010. As provided in Section 5.1.3 and 5.1.4 of the
Lease, Poggio will permit the Landlord to conduct this once-per-year audit and to inspect and
audit Poggio's books and records relating to gross sales and deductions from gross sales at a time
and date that does not disrupt Poggio's business operations. The audit may be conducted during
the week of July 19, 2010. Please indicate what books and records would you like to audit as
some may be in electronic form and can be emailed to you. Please acknowledge, as required by
Section 5.1.4 of the Lease, that CMHS will provide Poggio with a copy of all working papers and
audit records regardless of whether the audit is completed.
Separately, Poggio hereby requests copies of, or an opportunity to inspect, books and
records of CMHS that evidence the valet parking charges collected from hotel guests since
CMHS has owned the Casa Ivladrona Hotel.
Very truly yours,
Thomas F. Hyde
cc: Thomas A. Larsen, Esq.
Michael J. Baker, Esq.
80 E. SIR FRANCIS DRAKE BLVD., FOURTH FLOOR • LARKSPUR, CALIFORNIA • 94939
PHONE: 415-464-1180 • FAX: 415-464-0280
E-MAIL: TOM@HYDELAW.COM
EXHIBIT F

full complaint right here - Inside Scoop SF

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