Old City Hall - Saffron Restaurant Group - Lease Termination AgreementLEASE TERMINATION AGREEMENT
This Lease Termination Agreement ( "Agreement "), dated for reference purposes only as
of November 2, 2012, is made by and between the City of Gilroy, a municipal corporation
( "Landlord ") and Saffron Restaurant Group, LLC, a California limited liability company
( "Tenant ").
RECITALS
A. Landlord and Tenant are the current landlord and tenant, respectively, under that
certain Single Tenant Lease dated as of May 6, 2003 (as the same has been amended, the
"Lease "), naming Landlord as the landlord thereunder and naming one of Tenant's predecessors
in interest (Old City Hall, LLC, a California limited liability company) as the original tenant
thereunder, for the rental of that certain real property commonly known as Old City Hall and
located at 7400 Monterey Street, Gilroy, California, and for that certain parking lot at the corner
of Sixth Street and Railroad Street in Gilroy, California, as more particularly described in the
Lease ( "Premises ").
B. Tenant has advised Landlord that it desires to sell its restaurant business which is
operated at the Premises to Fran Beaudet and Bobby Beaudet (collectively, the "Beaudets "), and
has requested that in connection with such sale that the Lease be terminated and that a new lease
for the Premises be entered into between Landlord and the Beaudets. Landlord is agreeable to
terminating the Lease with Tenant, but only on the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and
covenants contained herein, the parties agree as follows:
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1. If the Lease Termination Condition (defined in Section 2 below) is fully satisfied
by November 2012, (the "Termination Date "), then the Lease shall terminate as of 11:59 pm
on the Termination Date, and Tenant shall yield up and surrender the Premises to Landlord on or
before 11:59 pm on the Termination Date in the condition required by the Lease, provided
however that (i) all alterations, additions and improvements made by Tenant (other than Tenant's
personal property, signs and trade fixtures, and other than those that may contain Hazardous
Materials) shall remain without alteration, shall be surrendered with the Premises and shall
become Landlord's property at the termination of the Lease, at no cost to Landlord, and (ii) all
personal property and trade fixtures being sold to the Beaudets by Tenant (which shall not
include any of the Landlord's Property described on Exhibit A attached hereto) may remain in
the Premises upon termination of the Lease if consented to by the Beaudets. In no event shall the
prior sentence relieve Tenant of any obligation or liability relating to Hazardous Materials under
the Lease, all of which obligations or liabilities shall survive Lease termination. Attached hereto
as Exhibit A is a current list of the Landlord's Property described in the Lease, all of which items
shall be surrendered to Landlord with the Premises in good condition and repair, and as to which
Tenant shall have no right, title or interest.
2. The effectiveness of this Agreement is conditioned and contingent upon all of the
following having occurred on or before the Termination Date (all of such conditions and
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contingencies being collectively the "Lease Termination Condition "): (i) this Agreement has
been fully executed by Landlord and Tenant; (ii) Tenant has signed and delivered to Landlord
the Termination Memorandum (defined in Section 3 below), with signatures notarized for
recording in the Official Records of Santa Clara, California ( "Official Records "); (iii) Landlord
and the Beaudets have executed a new lease for the Premises on terms and conditions acceptable
to Landlord in Landlord's sole and absolute discretion; (iv) Tenant has paid all Rentals due under
the Lease as of the Termination Date; and (v) Tenant has surrendered the Premises and
Landlord's Property to Landlord in the condition required by this Agreement. Landlord makes
no representation or warranty that the Lease Termination Condition can or will be satisfied by
the Termination Date, and Landlord shall not have any liability to Tenant in the event it is not
satisfied by such date for any reason. If the Lease Termination Condition has not been satisfied
in full by the Termination Date, then this Agreement shall terminate and be of no further force
and effect, and the Lease shall continue in full force and effect as a lease between Landlord and
Tenant, in accordance with all of the terms and conditions of the Lease. The date that this
Agreement becomes effective and the Lease Termination Condition has been fully satisfied is
referred to in this Agreement as the "Effective Date ". Until the Lease terminates pursuant to this
Agreement, Tenant shall continue to timely perform all of its obligations under the Lease,
including without limitation paying all rent and all other charges as such amounts become due.
3. Concurrently with Tenant's execution of this Agreement and delivery of it to
Landlord, Tenant shall execute and deliver to Landlord, with signatures notarized for recording
in the Official Records, a Memorandum of Lease Termination in the form attached hereto as
Exhibit B (the "Termination Memorandum "). Landlord shall have the right to record the
Termination Memorandum in the Official Records at any time after termination of the Lease.
4. Tenant hereby represents and warrants to Landlord, with respect to Tenant's
interest in the Lease and the Premises, that the following statements are true and correct as of the
date hereof and will be true and correct on the Termination Date:
(a) Tenant owns and holds the entire interest of Tenant under the Lease;
(b) There exist no subleases entered into by Tenant or anyone claiming by or
through Tenant affecting the Premises or any part thereof,
(c) Tenant has not assigned, transferred or encumbered Tenant's interest
under the Lease or any part thereof,
(d) No contracts for the furnishing of any labor or materials with respect to
improvements or alterations in or about the Premises have been let by Tenant or are outstanding
that have not been fully performed, satisfied and paid for; and
(e) Tenant has full authority to execute and deliver this Agreement, and the
undersigned signatory has received authority from Tenant to act on its behalf and execute and
deliver this Agreement to Landlord.
5. Tenant shall indemnify, defend with counsel reasonably acceptable to Landlord,
and hold harmless Landlord and all Landlord's officers, employees, agents, council members,
and other representatives harmless from and against any and all claims, demands, causes of
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action, losses, damages, liabilities, suits, costs, fees, or expenses (including without limitation
attorneys' fees) (collectively, "Claims and Liabilities ") with respect to any inaccuracies set forth
in Section 4 above or any breach or default of Tenant's obligations under this Agreement, which
obligation shall survive the termination of the Lease. All of Tenant's indemnification, defense
and hold harmless obligations under the Lease shall survive the termination of the Lease as to
conditions existing as of, or matters occurring prior to, the date that the Lease terminates
pursuant to this Agreement. Termination of the Lease pursuant to this Agreement shall in no
way excuse Tenant from any obligation of Tenant under the Lease arising prior to the Early
Termination Date or constitute a release by Landlord for Tenant from any Claims and Liabilities
under the Lease arising in connection with a breach of the Lease by Tenant prior the termination
of the Lease, or affect any obligation of Tenant under the Lease which by its terms is to survive
the expiration or sooner termination of the Lease.
6. Effective upon the termination of the Lease pursuant to this Agreement, Tenant
fully releases and discharges Landlord and all Landlord's officers, employees, agents, counsel
members, and other representatives, its agents, employees, heirs, executors, administrators,
successors, and assigns from any and all obligations and liabilities pursuant to, under, or arising
from or in connection with the Lease, including without limitation all Claims and Liabilities with
respect thereto, whether known or unknown. Tenant acknowledges the possibility that it may
have unknown claims against Landlord and the other released parties, and that by signing this
Agreement Tenant expressly waives such claims, if any. With respect to the matters released and
discharged herein, Tenant expressly waives the provisions of California Civil Code section 1542,
which provides:
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.
7. Capitalized terms used in this Agreement shall have the meanings assigned in the
Lease, if not otherwise defined in this Agreement. In the event either party hereto brings any
action or legal proceeding for damages for an alleged breach of any provision of this Agreement,
or to enforce, interpret or establish any term or condition hereof or the rights or remedies of
either party with respect to this Agreement, the prevailing party shall be entitled to recover, as
part of such action or proceeding, reasonable attorneys' fees and court costs, including attorneys'
fees and costs for appeal, as may be fixed by the court or jury. This Agreement shall be binding
upon and shall inure to the benefit of the parties and their respective heirs, representatives,
successors and assigns. In the event of any conflict or inconsistency between the terms and
provisions of this Agreement and the terms and provisions of the Lease, the terms and provisions
of this Agreement shall prevail. Except as modified by this Agreement, the Lease shall remain
unchanged and in full force and effect. This Agreement may be executed in counterparts, all of
which taken together shall constitute one and the same instrument. Signatures to this Agreement
created by the signer by electronic means and /or transmitted by telecopy or other electronic
transmission shall be valid and effective to bind the party so signing. This Agreement shall be
governed by and construed in accordance with the laws of the State of California applicable to
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agreements made and to be wholly performed within said State; and may not be modified or
amended in any manner other than by a written agreement signed by Landlord and Tenant. This
Agreement constitutes the final and complete express of the parties' agreements with respect to
the subject matter of this Agreement, and any prior negotiations or transmittals with respect to
the subject matter of this Agreement shall be of no force or effect unless expressly set forth in the
Lease. Landlord and Tenant understand, agree and acknowledge that this Agreement has been
freely negotiated by both parties; and that in any controversy, dispute, or contest over the
meaning, interpretation, validity, or enforceability of this Agreement or any of its terms or
conditions, there shall be no inference, presumption, or conclusion drawn whatsoever against
either party by virtue of that party having drafted this Agreement or any portion thereof. Caption
and section headings in this Agreement or any exhibits attached hereto, if any, are for
convenience of reference only, and shall not be used to limit, extend or interpret the meaning of
any part of this Agreement or the exhibits attached hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates
set forth below.
Dated: i 2-
ATTEST:
Dated:
Dated: //- / 3 - �?-o / Z
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LANDLORD:
THE CITY OF GILROY,
ali is municipal corporation
By:
Thomas J. Ha Lund,
City Admin' t ator
awna eels, ity Clerk
APPROVED AS TO FORM:
Linda A. Callon, City Attorney
TENANT:
SAFFRON RESTAURANT GROUP, LLC,
a California limited liability company
By: '
ary W It n,
Managi Member
EXHIBIT A
Landlord's Property
(See list attached hereto)
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CITY OF GILROY
OLD CITY HALL - 7400 MONTEREY STREET
LANDLORD'S PROPERTY INVENTORY
11/2/2012
QUANTITY DESCRIPTION
KITCHEN
2
Large gas restaurant ranges
2
Fryers (Pitco)
1
Ansul fire protection system and hood
1
Walk -in refrigerator and freezer box
8
Wire shelving units for refrigerator and freezer
1
6' stainless steel counter at range with 4 drawers
1
Winco soup kettle
1
8' stainless steel sink unit
3
5 -shelf wire shelving units (blue)
1
5' Formica serving station
1
6' stainless steel wheeled sandwich table w/ refrigerator base
1
3' Formica wheeled prep table w/ two warming drawers
1
12' stainless steel prep table w/ sink
1
5'x 3'8" stainless steel prep table w/ overhead pipe rack
1
10' 3 -tier food warming shelf unit
1
15' (3 section) prep table w/ sink, drawers and cabinets
1
Stainless steel wall lining.
DISHWASHING AREA
2
10' L- shaped stainless steel dishwashing tables, one w/ sink
1
Stainless steel 3 -sink unit
STOREROOM
5
lWire racks
DOWNSTAIRS BAR
1
Stainless steel ice bin & wall -mount sink.
1
7 -door back bar refrigerator unit
1
8' Quad stainless steel sink unit
UPSTAIRS BAR
2
2 -door back bar refrigerator units
1
5' stainless steel bar sink & ice bin
1
Ice bin
MISCELLANEOUS
1
large chandelier in upstairs room
5
Large historic photos of Gilroy area
8
Fire extinguishers
52
Track lights upstairs
60
Salvaged bricks w/ brass plates
1
Built -in pizza oven
EXHIBIT B
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Gilroy
7351 Rosanna Street
Gilroy, CA 95020
Attention: City Clerk
RECORDING REQUESTED PURSUANT
TO GOVERNMENT CODE SECTIONS
6103 AND 27383
(Space Above This Line for Recorder's Use)
MEMORANDUM OF TERMINATION OF LEASE
THIS MEMORANDUM OF TERMINATION OF LEASE (the "Termination
Memorandum ") is dated for reference purposes as of the date it is recorded in the Official
Records of Santa Clara County, California ( "Official Records "), and is entered into by
and between the City of Gilroy, a municipal corporation ( "Landlord ") and Saffron
Restaurant Group, LLC, a California limited liability company ( "Tenant ").
RECITALS
A. Landlord and Tenant are the current landlord and tenant, respectively, under that
certain Single Tenant Lease dated as of May 6, 2003 (as the same has been amended,
being the "Lease "), naming Landlord as the landlord thereunder and naming one of
Tenant's predecessors in interest (Old City Hall, LLC, a California limited liability
company) as the original tenant thereunder (the "Original Tenant "), for the rental of that
certain real property commonly known as Old City Hall and located at 7400 Monterey
Street, Gilroy, California and certain other real property described therein, as more
particularly described in the Lease ( "Premises ").
B. In connection with the Lease, a Memorandum, executed by Landlord and the
Original Tenant, was recorded in the Official Records on June 30, 2003 as Document No.
17147093 (the "Original Memorandum ").
C. In connection with the assignment of the Original Tenant's interest to Chips N
Salsa, Inc., a California corporation ( "Chips N Salsa "), a Memorandum of Assignment of
Lease, executed by Landlord, Original Tenant and Chips N Salsa, was recorded in the
Official Records on May 31, 2005 as Document No. 18394473 (the "First Assignment
Memorandum ").
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D. In connection with the assignment of the Chips N Salsa's interest to Tenant, a
Memorandum of Assignment of Lease, executed by Landlord, Chips N Salsa and Tenant
was recorded in the Official Records on November 5, 2008 as Document No. 20038810
(the "Second Assignment Memorandum ").
E. Landlord and Tenant have terminated the Lease pursuant to an unrecorded Lease
Termination Agreement between Landlord and Tenant.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1. Termination. Landlord and Tenant hereby acknowledge and agree that the
Lease has terminated pursuant to the Lease Termination Agreement referred to in Recital
E above, and that neither the Lease, the Original Memorandum, the First Assignment
Memorandum, the Second Assignment Memorandum nor any other document that may
have been recorded in the Official Records in connection with the Lease, shall encumber
the Premises.
2. Counte arts. This Termination Memorandum may be executed in any
number of counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed one and the same instrument.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Termination
Memorandum to be executed on the dates set forth below.
Dated:
ATTEST:
Dated:
Dated:
LANDLORD:
THE CITY OF GILROY,
a California municipal corporation
ma
Thomas J. Haglund,
City Administrator
Shawna Freels, City Clerk
APPROVED AS TO FORM:
Linda A. Callon, City Attorney
[Signatures continued on next page]
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TENANT:
SAFFRON RESTAURANT
GROUP, LLC, a California limited
liability company
Dated: By:
Gary Walton,
Managing Member
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