EXHIBIT 10.42
SECOND AMENDMENT TO LEASE AGREEMENT
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This Second Amendment to Lease Agreement (this "Agreement") is made as of
May 1, 1997, by and among HOB Marina City Partners, L.P., a Delaware limited
partnership, having an address at 0000 Xxxxxx Xxxxxxxxx, Xxxxx 000, X.
Xxxxxxxxx, Xxxxxxxxxx 00000 ("Landlord"), and HOB Chicago, Inc., a Delaware
corporation having an address at c/o HOB Entertainment, Inc., 0000 Xxxxxx Xxxx.,
Xxxxx 000, X. Xxxxxxxxx, Xxxxxxxxxx 00000 ("Tenant").
WHEREAS, the parties have previously entered into that certain Lease
Agreement dated as of January 29, 1996, for a portion of the real property
commonly known as Marina City, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx.
WHEREAS, the parties amended such Lease Agreement pursuant to that certain
Amendment To Lease Agreement dated August 20, 1996 (the "Amendment") .
WHEREAS, the aforesaid Lease Agreement and the Amendment shall hereinafter
collectively be referred to as the "Lease."
WHEREAS, the parties desire to further amend the Lease in the following
respects and only in the following respects.
NOW THEREFORE, for valuable consideration, Landlord and Tenant amend the
Lease as follows:
1. The foregoing recitals are incorporated herein to the same extent as
if set out in full in this Section 1.
2. The following provision is hereby added as paragraph 2.j. to the
Lease:
j. Net Lease.
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(i) Notwithstanding anything to the contrary which may be contained
in this Lease, this Lease is an absolutely net lease to Landlord and the Minimum
Rent, Percentage Rent and all other sums payable hereunder by Tenant shall be
paid without notice or demand, and without set-off, counterclaim, abatement,
suspension, deduction or defense of any kind whatsoever, except as may otherwise
be expressly provided in paragraph 8.b. of this Lease.
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(ii) Notwithstanding anything to the contrary which may be contained
in this Lease, except as may otherwise be expressly provided in paragraph 8.b.
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of this Lease, this Lease shall not terminate, nor shall Tenant be entitled to
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the abatement of any rent hereunder or any reduction thereof, nor shall the
obligations of Tenant under this Lease be otherwise affected, by reason of: (1)
any damage to or the destruction of all or any part of the Leased Premises from
whatever cause, or the taking of the Leased Premises or any portion thereof by
condemnation, requisition or otherwise for any reason whatever, (2) prohibition,
limitation or restriction of Tenant's use of all or any part of the Leased
Premises, or the interference with or prevention of such use by any person, (3)
any title defect or encumbrance or any eviction by paramount title or
otherwise, (4) any default on the part of Landlord under this Lease or under any
other agreement to which Landlord and Tenant may be parties, or (5) any other
cause whether similar or dissimilar to the foregoing, any present or future law
to the contrary notwithstanding, it being the intention of the parties hereto
that the obligations of Tenant hereunder shall be separate and independent
covenants and agreements, that the Minimum Rent, Percentage Rent and all other
sums payable by Tenant hereunder shall continue to be payable in all events, and
the obligations of Tenant hereunder shall continue to be payable in all events,
and the obligations of Tenant hereunder shall continue unaffected, unless the
requirement to pay or perform the same shall have been terminated pursuant to
the express provisions of paragraph 8.b. of this Lease.
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(iii) Notwithstanding anything to the contrary which may be contained
in this Lease, Tenant covenants and agrees that it will remain obligated under
this Lease in accordance with its terms, and that Tenant will not take any
action to terminate, rescind, or avoid this Lease, notwithstanding the
bankruptcy, insolvency, reorganization, composition, readjustment, liquidation,
dissolution, winding-up or other proceeding affecting Landlord or any assignee
of Landlord in any such proceeding, and, notwithstanding any action with respect
to this Lease which may be taken by any trustee or receiver of Landlord or any
assignee of Landlord in any such proceeding, or by any court in any such
proceeding.
(iv) Notwithstanding anything to the contrary which may be contained
in this Lease, except as otherwise expressly provided in paragraph 8.b. of this
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Lease, Tenant waives all rights which may now or hereafter be conferred by law
(1) to quit, terminate or surrender this Lease or the Leased Premises or any
part thereof, or (2) to any abatement, suspension, deferment or reduction of the
Minimum Rent, Percentage Rent or any other sums payable under this Lease.
3. Paragraph 3.a. of this Lease is hereby revised to read as follows:
a. Minimum Rent. Commencing on the Rental Commencement Date as
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defined in paragraph 1.o. above and continuing throughout the Primary Term,
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Tenant shall pay to Landlord the minimum rent ("Minimum-Rent") the sum of
One Hundred Seventeen Thousand Five Hundred Two and 47/100 Dollars
($117,502.47) per month, subject to adjustment in the manner otherwise
described in Section 3 of the Lease. The Minimum Rent shall be paid in
equal monthly installments in advance on the first day of each calendar
month during the Primary Term and any Renewal Terms at the address set
forth below, or to such other parties as Landlord may from time to time
designate, without any set-off, deduction, demand or billing whatsoever.
4. The following provision is hereby added as paragraph 4.h. to the
Lease:
h. Compliance with Laws.
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(i) Tenant shall at its sole cost and expense promptly (1)
comply with and shall cause the Leased Premises to comply with all federal,
state, county, municipal and other governmental and quasi-governmental
statutes, laws, codes, rules, acts, permits, licenses, judgments, decrees,
orders, regulations, injunctions and ordinances and the provisions of
insurance policies affecting the Leased Premises or any part thereof or the
use thereof, including those which require the making of any structural
unforeseen or extraordinary changes, whether or not any such statutes,
laws, codes, rules, acts, permits, licenses, judgments, decrees, orders,
regulations, injunctions or ordinances which may be hereafter enacted
involve a change of policy on the part of the governmental body enacting
the same, and (2) procure, maintain and comply with all permits,
authorizations, licenses and other authorizations required for each use of
the Leased Premises or any part thereof then being made. Tenant shall at
its sole cost and expense comply with the requirements of all policies of
insurance which at any time may be in force with respect to the Leased
Premises. Tenant shall at its sole cost and expense comply with the
provisions of any contracts, agreements and restrictions binding on
Landlord, Tenant or the Leased Premises and affecting the Leased Premises
or any party thereof or the ownership, occupancy or use thereof to which
this Lease is subordinate, and which may exist on the date hereof or which
may hereafter exist which have not been caused or created by Landlord, or
which have come into being by reason of any act or omission of Landlord if
such act or omission was caused by Landlord with the consent of Tenant.
(ii) Tenant shall, at its sole cost and expense, comply with
all covenants, terms and conditions of all presently existing documents
which are (or notice of which is) recorded in the land records in Xxxx
County, Illinois and affect the Leased Premises or the use thereof or any
interest therein and any such documents which hereafter come into
existence, provided in the latter case that Tenant is either a party to
such document or has given its written consent to the substance thereof.
(iii) Upon failure so to comply with any of the foregoing
requirements, the Landlord may after thirty (30) days written notice to the
Tenant or in the event of emergency, immediately, comply with the same for
other account of the Tenant and the cost of such compliance, together with
interest thereon at the Default Rate, shall be paid to the Landlord upon
demand.
5. The following provision is hereby added as paragraph 7.a.iv. of the
Lease:
iv. Termination of Landlord's Indemnities. Notwithstanding
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anything to the contrary contained in this paragraph 7.a., Tenant and
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Landlord hereby acknowledge and agree that in the event of a foreclosure of
the Leased Premises by a permitted mortgagee or the conveyance of the
Leased Premises by a deed in lieu of foreclosure or otherwise, the
indemnities by Landlord set forth in paragraphs 7.a.ii. and 7.a.iii above
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shall automatically terminate and shall be of no further force or effect
upon such foreclosure or conveyance.
6. The following provision is hereby added as paragraph 7.a.v. of the
Lease:
v. No Offset. Tenant acknowledges and agrees that in no event
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shall any of the indemnities imposed on Landlord pursuant to this paragraph
7.a. entitle Tenant to any right of set-off, rebate or reduction of any
rent payable hereunder.
7. Paragraph 8.a. of the Lease is hereby revised to read as follows:
a. Destruction. If during the Term the Leased Premises or any part
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thereof shall be damaged or destroyed by fire or other casualty, Tenant
shall promptly notify Landlord and Mortgagee of such destruction or damage,
and Tenant with reasonable promptness and diligence shall rebuild, replace
and repair any damage or destruction to the Leased Premises, at its sole
cost and expense, in conformity with the requirements of Paragraph 4.e. of
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this Lease, so that after the completion of such repairs the affected
portion of the Leased Premises shall be, as nearly as possible, in a
condition as good as and having a value as great as the condition and value
thereof immediately prior to such damage or destruction. From time to time
after the commencement of any such replacement, repairing or rebuilding but
not more often than twice in any period of 30 calendar days, Tenant may by
notice request that Landlord pay to Tenant from the insurance proceeds an
amount sufficient to reimburse Tenant for the unreimbursed cost and expense
of such restoration, replacement or rebuilding and, upon receipt by
Landlord of a certificate, dated currently and signed by an officer of
Tenant setting forth in reasonable detail the aggregate amount of such cost
and expense actually incurred f or the account of Tenant, and containing a
statement by Tenant that no event of default has happened and is continuing
hereunder, then Landlord shall promptly pay to Tenant the amount so
certified, less the amount of all previous reimbursements to Tenant on
account of such restoration, replacement or rebuilding, but only from and
to the extent of the proceeds of any insurance received by Landlord by
reason of such casualty, less any expenses incurred in collecting such
proceeds (such net proceeds being herein called the "Net Proceeds"), and
remaining after such prior reimbursements. If the cost of such repairs
required to be made by Tenant pursuant to this subparagraph shall exceed
the amount of such Net Proceeds, the difference shall be paid by Tenant if
there is a balance of Net Proceeds remaining after the final payment for
such work or repair, such balance shall be paid over to Tenant. No payment
of any amount shall be made to Tenant pursuant to this subparagraph if any
default shall have happened and be continuing hereunder unless and until
such default shall have been cured or removed. There shall be no abatement
of Minimum Rent, Percentage rent or any other sums payable hereunder by
Tenant as a result of any such fire or other casualty.
8. Paragraph 8.b. of the Lease is hereby revised to read as follows:
b. Condemnation.
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(i) Subject to the rights of Tenant set forth in this paragraph 8.b.,
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Tenant hereby irrevocably assigns to Landlord any award or payment to which
Tenant may be or become entitled with respect to the taking of the Leased
Premises or any part thereof, by condemnation or other eminent domain
proceedings pursuant to any law, general or special, or by reason of the
temporary taking of the use or occupancy of the Leased Premises or any part
thereof, by any governmental authority, civil or military, whether the same
shall be paid or payable in respect of Tenant's leasehold interest
hereunder or otherwise. Landlord shall be entitled to participate in any
such proceeding and the expenses thereof (including counsel fees and
expenses) shall be paid by Tenant.
Notwithstanding the foregoing, Tenant shall be entitled to any separate
award allowable for business interruption and/or moving expenses.
(ii) If during the Term (1) the entire Leased Premises shall be
taken by or on account of any actual or threatened condemnation or other
eminent domain proceeding pursuant to any law, general or special or (2) if
a portion of the Leased Premises is taken and said taking renders the
remaining premises unsuitable and uneconomic for the continued use or
occupancy in the business of the Tenant, in the good faith judgment of the
Tenant, then Tenant shall promptly deliver a Purchase Offer (the "Purchaser
Offer") to Landlord specifying a termination date (the "Termination Date")
occurring not less than ninety (90) nor more than one hundred eighty (180)
days after the delivery of such Purchase Offer and this Lease shall
continue in full force and effect without any abatement of Minimum Rent,
Percentage Rent or other sums payable by Tenant hereunder, notwithstanding
any taking, until the Termination Date. The Purchase offer shall be
accompanied by a certificate from Tenant stating that the conditions set
forth either in clause (1) or (2) of this paragraph 8.b. have been
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fulfilled. If the conditions set forth in clause (1) or (2) of this
paragraph 8.b. are fulfilled and if Tenant shall have failed to deliver a
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Purchase Offer as required above, Tenant conclusively shall be presumed to
have made a Purchase Offer on a date which is one hundred twenty (120) days
after any such taking (or such later date as is agreed to in writing by
Landlord), and in the event Tenant is so presumed to have made a Purchase
Offer, the termination date shall be deemed to be one hundred fifty (150)
days after such Purchase Offer is presumed to have been made; but nothing
in this sentence shall relieve Tenant of its obligation actually to deliver
such Purchase Offer. Any purchase of the Leased Premises pursuant to this
paragraph 8.b. shall be accomplished in accordance with the provisions of
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paragraph 8.c. of this Lease.
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(iii) If during the Term, (1) a portion of the Leased Premises shall
be taken by condemnation or other eminent domain proceedings, which taking
is not sufficient to require that Tenant give a Purchase Offer or (2) the
use or occupancy of the Leased Premises or any part thereof shall be
temporarily taken by any governmental authority; then this Lease shall
continue in full effect without abatement or reduction of Basic Rent,
Percentage Rent or other sums payable by Tenant hereunder notwithstanding
such partial or temporary taking. Tenant shall, promptly after any such
temporary taking ceases, at its expense, repair any damage caused thereby
in conformity with the requirements of paragraph 4.e. of this Lease so
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that, thereafter, the Leased Premises shall be, as nearly as possible, in a
condition as good as the condition thereof immediately prior to such
taking. In the event of any such partial taking, Landlord shall make the
Net Award available to Tenant to make such repair but, if such Net Award
shall be in excess of $50,000, only against certificates of Tenant
delivered to Landlord from time to time as such work or repair progresses,
each such certificate describing the work or repair for which Tenant is
requesting payment and the cost incurred by Tenant in connection therewith
and stating that Tenant has not theretofore received payment for such work.
Any Net award remaining after such repairs have been made shall be retained
by Landlord and applied in reduction of the principal amount of the
indebtedness secured by any Mortgage then outstanding at Landlord's sole
option. If Landlord retains any such amount the Minimum
Rent payable after such retention shall be reduced equitably, but in no
event shall the Minimum Rent be reduced lower than the monthly debt
payments due under any Mortgage. In the event of any such temporary taking,
Tenant shall be entitled to receive the entire Net Award payable by reason
of such temporary taking or portion of such temporary taking occurring
during the term hereof, less any costs incurred by the Landlord in
connection therewith. If the cost of any repairs required to be made by
Tenant pursuant to this paragraph 8.b. shall exceed the amount of the Net
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Award, the deficiency shall be paid by Tenant. Notwithstanding anything
therein to the contrary, no payments shall be made to Tenant pursuant to
this paragraph 8.b. if any default or event of default shall have happened
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and shall be continuing under this Lease.
(v) For the purpose of this Lease the term "Net Award" shall mean:
(1) all amounts payable as a result of any condemnation or other eminent
domain proceeding, less all expenses for such proceeding not otherwise paid
by Tenant in the collection of such amounts plus (2) all amounts payable
pursuant to any agreement with any condemning authority (which agreement
shall be deemed to be a taking) which has been made in settlement of or
under threat of any condemnation or other eminent domain proceeding
affecting the Leased Premises, less all expenses incurred as a result
thereof not otherwise paid by Tenant and the collection of such amounts.
9. The following provision is hereby added as paragraph 8. to the Lease.
c. Procedure Upon Purchase.
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(i) If Landlord shall reject any Purchase offer not later than
the tenth (10th) day prior to the Termination Date or purchase date
specified in such Purchase Offer, this Lease shall terminate on such date
(except with respect to obligations and liabilities of Tenant under this
Lease, actual or contingent, which have arisen on or prior to such
termination), upon payment by Tenant of the Minimum Rent, Percentage Rent
and all other sums then due and payable hereunder to and including the date
of termination without offset or deduction for any reason. No rejection of
an offer shall be effective for any purpose unless consented to in writing
by each Mortgagee. Upon a purchase of the Leased Premises pursuant to
paragraph 8.b. and the payment to the Landlord of the Purchase Price in an
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amount equal to the greater of (x) the purchase price originally paid by
Landlord for Landlord's acquisition of the Leased Premises or (y) the
outstanding amount due under each Mortgage, Landlord shall convey the
Leased Premises and all its right, title and interest in and to the Net
Award (whether or not such Award shall have been received by Landlord) to
Tenant or its designee.
(ii) If the Leased Premises or any part thereof shall be
purchased by Tenant pursuant to any provision of this Lease, Landlord need
not transfer and convey to Tenant or its designee any better title thereto
than existed on the Commencement Date of this Lease. Tenant shall accept
such title, subject to such liens, encumbrances, charges, exceptions and
restrictions on, against or relating to the Leased Premises (including
those arising pursuant to the terms of this Lease) and to all applicable
laws, regulations and ordinances, but free of the Mortgage and all other
mortgages, liens, encumbrances,
charges, exceptions and restrictions which shall have been created by or
resulted from acts of Landlord.
(iii) on the date fixed for any such purchase, Tenant shall pay
to Landlord, at any place designed by Landlord, the Purchase Price in an
amount equal to the greater of (x) the purchase price originally paid by
Landlord for Landlord's acquisition of the Leased Premises or (y) the
outstanding amount due under each Mortgage, together with all installments
of Minimum Rent, Percentage Rent and all other sums then due under this
Lease and unpaid to and including the date of purchase without offset or
deduction for any reason, and Landlord shall deliver to Tenant a warranty
deed conveying title to the Leased Premises and describing the Leased
Premises or portion thereof being sold and conveying the title thereto,
together with such instruments as shall be necessary to transfer to Tenant
or its designee any other property then required to be transferred by
Landlord pursuant to this Lease. Tenant shall pay all charges incident to
such conveyance and transfer, including counsel fees, escrow fees,
recording fees, title insurance premiums and all applicable federal, state
and local taxes (other than any income or franchise taxes levied upon or
assessed against Landlord) which may be incurred or imposed by reason of
such conveyance and transfer.
(iv) Upon the completion of such purchase, but not prior
thereto (whether or not any delay in the completion of, or the failure to
complete, such purchase shall be the fault of Landlord) , this Lease and
all obligations hereunder (including the obligations to pay Minimum Rent
and Percentage Rent) shall terminate, except with respect to (1)
obligations and liabilities of Tenant, actual or contingent, under this
Lease which arose on or prior to such date of purchase, (2) those
obligations of Tenant contained in paragraph 7.c. hereof or (3) any other
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obligations of Tenant which are intended to survive a termination of this
Lease.
10. Paragraph 10.b. of the Lease is hereby deleted in its entirety.
IN WITNESS WHEREOF, this Second Amendment is entered into by the parties
hereto as of the day and year first above stated.
TENANT:
HOB CHICAGO, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxxx
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Title: Chief Financial Officer
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LANDLORD:
HOB MARINA CITY PARTNERS, L.P.,
a Delaware limited partnership
By: HOB Marina City, Inc., its
General Partner
By: /s/ Xxxxxx X. Xxxxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxxxx
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Title: Chief Financial Officer
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