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EXHIBIT 10.2
LEASE
BY AND BETWEEN
MALL OF AMERICA COMPANY,
A MINNESOTA GENERAL PARTNERSHIP
AND
HOTEL MEXICO, INC.,
d/b/a HOTEL DISCOVERY
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Mall of America
Lease
THIS LEASE made this 4th day of August, 1997, by and between MALL OF
AMERICA COMPANY, a Minnesota General Partnership, ("Landlord"), and HOTEL
MEXICO, INC., d/b/a HOTEL DISCOVERY ("Tenant"):
WITNESSETH THAT, in consideration of the rents, covenants and
agreements hereinafter set forth, such parties enter into the following
agreement:
ARTICLE I
EXHIBITS
The exhibits listed below and attached to this Lease are incorporated
herein by this reference:
EXHIBIT "A" Legal description of real estate to be developed by
the Landlord as a mixed use project, consisting of a
retail mail and entertainment center ("Retail Space")
and a hotel ("Hotel Space"), as well as a parking deck
("Parking Space") (hereinafter called "Total Tract").
The Total Tract with existing and future improvements
being hereinafter called the "Center".
EXHIBIT "B" Plot Plan of that area of the Retail Space upon which
is located the space herein leased to Tenant. This
Exhibit is provided for informational purposes only,
and shall not be deemed to be a warranty,
representation or agreement by Landlord that the
Center or buildings and/or any stores will be exactly
as indicated on the Exhibit, or that the other tenants
which may be drawn on said Exhibit will be occupants
in the center. Landlord reserves unto itself the
unlimited right to modify the configuration of Total
Tract at any time for the purpose of incorporating
additional department stores and other buildings
within the Center.
EXHIBIT "C" Description of Tenant's Work.
EXHIBIT "D" Rules and Regulations applicable to Tenant.
EXHIBIT "E" Sign Criteria applicable to Tenant.
EXHIBIT "F" INTENTIONALLY DELETED.
Notwithstanding Exhibits A or B or anything else in this Lease
contained, Landlord reserves the right to change or modify and add to or
subtract from the size and dimensions of the Center or any part thereof, the
number, location and dimensions of buildings and stores, the size and
configuration of the parking areas, entrances, exits and parking aisle
alignments, dimensions of hallways, malls and corridors, the number of floors in
any building, the location, size and number of tenants' spaces and kicsks which
may be erected in or fronting on any mall or otherwise, the identity, type and
location of other stores and tenants, and the size, shape, location and
arrangement of common Areas (hereinafter defined), and to design and decorate
any portion of the Center as it desires, but the general character of the
Center, the approximate location, access, visibility and identification of the
Premises (as hereinafter defined) in relation to the major department stores
shall not be substantially changed.
ARTICLE II
LEASED PREMISES AND TERM
Section 2.1 Leased Premises
Landlord hereby leases to Tenant and Tenant hereby rents from Landlord
the space (in the Center) designated as Space S-320 outlined in red on Exhibit
"B" (hereinafter called "the Premises"), measured to the center line of all
party or common walls, to the exterior faces of all other walls and to the
building line where there is no wall, containing approximately 16,215 square
feet. When the Premises are completed, Landlord shall deliver to Tenant a
certificate stating Landlord's determination of the actual number of square feet
in the Premises (hereinafter called the "Store Floor Area"). Provided,
however, within sixty (60) days of Tenant's receipt of such certificate,
Tenant's architect may remeasure the Store Floor Area in the Premises. In the
event of a dispute as to the Store Floor Area in the premises, the parties
agree to have the Store Floor Area remeasured by a mutually acceptable,
independent, third-party architect or engineer whose determination as to Store
Floor Area shall be final, binding and conclusive absent manifest error. The
fee for such third-party architect or engineer shall be shared equally by the
parties.
Section 2.2 Roof and Walls
Landlord shall have the exclusive right to use all or any part of the
roof, side and rear walls of the Premises for any purpose, including but not
limited to erecting signs or other structures on or over all or any part of the
same, erecting scaffolds and other aids to the construction and installation of
the same, and installing, maintaining, using, repairing and replacing pipes,
ducts, conduits and wires leading through, to or from the Premises and serving
other parts of the Center in locations which do
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not materially interfere with Tenant's use of the Premises. Tenant shall have
no right whatsoever in the exterior of exterior walls or the roof of the
Premises. In all non-stockroom areas of the Premises, Landlord agrees that all
pipes, ducts, conduits and wires leading through, to or from the Premises will
be located above the finished ceiling, within columns, within walls or under
the finished floor. Further, should Landlord erect any scaffolds or other aids
to construction which adversely interferes with access to the Premises,
visibility of the Premises or identification of the Premises for a period of
more than five (5) consecutive business days, then rent shall thereafter ▇▇▇▇▇
until such time as such interference is removed.
Section 2.3 Lease Term.
The term of this Lease (hereinafter called "Lease Term") shall commence
upon the earlier of (a) the day following the last day allowed herein to Tenant
for completion of Tenant's Work (hereinafter defined) hereinafter called
"Required Completion Date." or (b) the day on which Tenant opens for business,
the applicable date being hereinafter called "Commencement Date." The term of
this Lease shall end on the last day of the twelfth (12th) Lease Year
(hereinafter defined) after the Commencement Date unless sooner terminated as
herein provided.
NOTWITHSTANDING ANYTHING CONTAINED IN THIS LEASE TO THE CONTRARYS TENANT
IS REQUIRED TO OPEN FOR BUSINESS TO THE PUBLIC IN THE PREMISES ON OR BEFORE
NOVEMBER XXXXXX
Section 2.4. Lease Year Defined.
"Lease Year," as used herein, means a period of twelve (12) consecutive
calendar months during the Lease Term commencing on the Commencement Date. If
the Commencement Date is other than February 1, then the first Lease Year shall
commence on the Commencement Date and end on the last day of January which shall
be more than six (6) months but not more than eighteen (18) months after the
Commencement Date. "Partial Lease Year" means that portion of the Lease Term
prior to the first Lease Year.
Section 2.5 Relocation of Premises. INTENTIONALLY DELETED.
ARTICLE III
TENANT'S WORK
Section 3.1 Tenant's Work.
Tenant agrees to accept delivery of the Premises in its present "AS IS,
WHERE IS" condition except that Tenant is to completely remodel the Premises at
Tenant's expense not later than the Required Completion Date (hereinafter
defined) in accordance with plans and specifications submitted by Tenant and
approved by Landlord (hereinafter referred to as "Tenant's Plans") which plans
shall become a part hereof by this reference as Exhibit "C-2". Further
alterations to the Premises, if any, shall be performed by Tenant (hereinafter
called "Tenant's Work") including but not limited to all work designated as
Tenant's Work in Exhibit "C", and Tenant shall do and perform at its expense
all of Tenant's Work diligently and promptly and in accordance with the
following provisions.
Section 3.2. Tenant's Obligations Before Commencement Date.
As soon as reasonably possible hereafter, Landlord shall deliver to
Tenant a drawing of the Premises and a copy of the Tenant Handbook prepared by
Landlord's architect (hereinafter referred to as "Tenant Handbook"). Within
sixty (60) days after the date of this Lease, Tenant will submit to Landlord
one (1) reproducible set (sepia) and 4 copies of Tenant's Plans and
specifications, prepared by a registered architect or engineer, of all Tenant's
Work to be done within the Premises, prepared in conformity with Exhibit "C"
and the Tenant Handbook. Within thirty (30) days after receipt of Tenant's
Plans, Landlord shall notify Tenant of any failures of Tenant's Plans to
conform to Exhibit "C," the Tenant Handbook or otherwise to meet with
Landlord's approval. Tenant shall within thirty (30) days after receipt of any
such notice cause Tenant's Plans to be revised to the extent necessary to
obtain Landlord's approval and resubmitted for Landlord's approval. When
Landlord has approved the original or revised Tenant's Plans, Landlord shall
initial and return one (1) set of approved Tenant's Plans to Tenant and the
same shall become a part hereof by this reference as Exhibit "C-2." Approval of
plans and specifications by Landlord shall not constitute the assumption of any
responsibility by Landlord for their accuracy or sufficiency, or compliance
with applicable codes and Tenant shall be solely responsible for such plans and
specifications. Tenant shall not commence any of Tenant's Work until Landlord
has approved Exhibit "C-2," unless prior Landlord approval has been obtained in
writing. Landlord's review and approval of Tenant's Plans shall not be
unreasonably withheld or delayed.
Within fifteen (15) days after the later of the date of this Lease or the
date Tenant's Plans have been approved by Landlord, Landlord shall notify
Tenant that Tenant can commence Tenant's Work; and Tenant shall commence such
work not later than the date specified in such notice, complete the same in
strict accordance with Exhibits "C" and "C-2," install all store and trade
fixtures, equipment, stock in trade, merchandise and inventory, and open for
business therein not later than the 150th day after the last to occur of the
following: (i) a fully-executed copy of this Lease has been delivered to
Tenant, (ii) Tenant's Plans have been approved by Landlord provided Tenant
timely submits the same to Landlord for Landlord's review, (iii) Landlord has
notified Tenant that the Premises are ready for the commencement of Tenant's
Work, (iv) Tenant has received a building permit provided Tenant promptly
applies for such building permit and diligently pursues such application for
approval, and (v) Tenant has received an On-Sale Liquor License from the City
of Bloomington provided Tenant promptly applies for such liquor license and
diligently pursues such application for approval, which applicable day shall be
the Required Completion Date. Tenant hereby releases Landlord and its
contractors from any claim whatsoever for damages against Landlord or its
contractors for any delay in the date on which the Premises shall be ready for
delivery to Tenant or for any delay in commencing or completing any work
Landlord is to perform or is authorized by Tenant to perform under Exhibit "C",
or with respect to the Center or any other part or all of the Total
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Tract. Notwithstanding anything herein which may be to the contrary, in the
event of any conflict between Exhibit "C" and Tenant's Plans, as approved by
Landlord, Tenant's Plans, as approved by Landlord shall take precedence over
Exhibit "C" in resolving such conflict.
Section 3.3. Failure of Tenant to Perform.
Because of the difficulty or impossibility of determining Landlord's
damages resulting from Tenant's failure to open for business fully fixtured,
stocked and staffed by the Required Completion Date, including, but not limited
to, damages from loss of Percentage Rent (hereinafter defined) from Tenant and
other tenants, diminished saleability, leaseability, mortgageability or
economic value of the Center, if Tenant fails to commence Tenant's Work within
the time provided above and proceed with the same diligently, or to open for
business fully fixtured, stocked and staffed on or before the Required
Completion Date or to perform any of its obligations to be performed prior to
the Required Completion Date, Landlord may, with notice in addition to the
right to exercise any other remedies and rights herein or at law provided,
collect rent from the Required Completion Date in an amount equal to the
Minimum Annual Rent (hereinafter defined) and other additional rent and other
amounts payable by Tenant hereunder, and, in addition thereto, if Tenant shall
fail to open for business in the Premises within thirty (30) days after the
Required Completion Date, Tenant shall also pay to Landlord an amount equal to
$150.00 per day for each day thereafter that Tenant has failed to open for
business. In addition, commencing on the thirty-first (31st) day after the
Required Completion Date and provided Tenant has failed to open for business in
the Premises by such date, Landlord may thereafter (a) do and perform any of
Tenant's Work or other obligations of Tenant hereunder, at Tenant's expense,
preparing such drawings and doing such things as Landlord deems advisable,
collecting all of Landlord's expenses pursuant to this Section. All remedies
in this Lease or at law provided shall be cumulative and not exclusive and
shall survive the expiration of the Lease Term or the earlier termination of
this Lease. Notwithstanding the foregoing, Tenant shall not be liable or
responsible for any delays and applicable periods for performance shall be
extended accordingly due to strikes, lockouts, riots, acts of God, shortages of
labor or materials, national emergency, acts of a public enemy, governmental
restrictions, including but not limited to, the Tenant being able to obtain all
necessary governmental licenses (provided Tenant timely applies for the same
and diligently pursues such license applications for approval), or any other
cause or causes, whether similar or dissimilar to those enumerated, beyond
Tenant's reasonable control.
Section 3.4. Condition of Premises.
Tenant's taking possession of the Premises shall be conclusive evidence of
Tenant's acceptance thereof in good order and satisfactory condition.
Provided, however, Tenant shall have the right, to be exercised within thirty
(30) days after the date possession of the Premises has been delivered to
Tenant with Landlord's Work therein completed, to submit to Landlord a
punchlist of incomplete or defective construction within the Premises, and
Landlord will perform such punchlist to the extent the listed items were
Landlord's Work under Exhibit "C" and were not performed by Landlord in
accordance therewith. Tenant agrees that no representations respecting the
condition of the Premises or the existence or non-existence of Hazardous
Materials (hereinafter defined) in, on or about the Premises, no warranties or
guarantees, expressed or implied, with respect to workmanship or any defects in
material, and no promise to decorate, alter, repair or improve the Premises
either before or after the execution hereof, have been made by Landlord or its
agents to Tenant unless the same are contained herein.
ARTICLE IV
RENT
Section 4.1. Minimum and Percentage Rent.
Tenant covenants and agrees to pay to Landlord, without notice or demand,
at Landlord's address for notice (Landlord's and Tenant's notice addresses
being the addresses specified in Section 24.7 hereof), as rent for the Premises:
(i) A "Minimum Annual Rent" of $25.00 per square foot of Store Floor Area,
or Four Hundred Five Thousand Three Hundred Seventy Five and no/100
Dollars ($405,375.00) per annum (based upon the approximated Store
Floor Area set forth in Section 2.1 hereof), payable in equal monthly
installments, in advance upon the first day of each and every month of
the Lease Term commencing upon the Commencement Date (such monthly
installment being hereinafter called "Minimum Monthly Rent"); and
(ii) The amount by which six percent (6%) of Gross Sales (hereinafter
defined) during each Lease Year or Partial Lease Year exceeds the
Minimum Monthly Rent for such period (hereinafter call "Percentage
Rent").
When Store Floor Area is determined in accordance with Section 2.1, the
Minimum Annual Rent and Minimum Monthly Rent shall be deemed automatically
increased or decreased based upon the Store Floor Area as thus determined, and
any overpayments or underpayments of Minimum Monthly Rent to Landlord shall be
adjusted accordingly.
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Tract. Notwithstanding anything herein which may be to the contrary, in the
event of any conflict between Exhibit "C" and Tenant's Plans, as approved by
Landlord, Tenant's Plans, as approved by Landlord, shall take precedence over
Exhibit "C" in resolving such conflict.
Section 3.3. Failure of Tenant to Perform.
Because of the difficulty or impossibility of determining Landlord's
damages resulting from Tenant's failure to open for business fully fixtured,
stocked and staffed by the Required Completion Date, including, but not limited
to, damages from loss of Percentage Rent (hereinafter defined) from Tenant and
other tenants, diminished saleability, leaseability, mortgageability or
economic value of the Center, if Tenant fails to commence Tenant's Work within
the time provided above and proceed with the same diligently, or to open for
business fully fixtured, stocked and staffed on or before the Required
Completion Date or to perform any of its obligations to be performed prior to
the Required Completion Date. Landlord may, with notice, in addition to the
right to exercise any other remedies and rights herein or at law provided,
collect rent from the Required Completion Date in an amount equal to the
Minimum Annual Rent (hereinafter defined) and other additional rent and other
amounts payable by Tenant hereunder, and, in addition thereto, if Tenant shall
fail to open for business in the Premises within thirty (30) days after the
Required Completion Date, Tenant shall also pay to Landlord an amount equal to
$150.00 per day for each day thereafter that Tenant has failed to open for
business. In addition, commencing on the thirty-first (31st) day after the
Required Completion Date and provided Tenant has failed to open for business in
the Premises by such date, Landlord may thereafter (a) do and perform any of
Tenant's Work or other obligations of Tenant hereunder, at Tenant's expense,
preparing such drawings and doing such things as Landlord deems advisable,
collecting all of Landlord's expenses pursuant to this Section. All remedies
in this Lease or at law provided shall be cumulative and not exclusive and
shall survive the expiration of the Lease Term or the earlier termination of
this Lease. Notwithstanding the foregoing, Tenant shall not be liable or
responsible for any delays and applicable periods for performance shall be
extended accordingly due to strikes, lockouts, riots, acts of God, shortages of
labor or materials, national emergency, acts of a public enemy, governmental
restrictions, including but not limited to, the Tenant being able to obtain all
necessary governmental licenses (provided Tenant timely applies for the same
and diligently pursues such license applications for approval), or any other
cause or causes, whether similar or dissimilar to those enumerated, beyond
Tenant's reasonable control.
Section 3.4. Condition of Premises.
Tenant's taking possession of the Premises shall be conclusive evidence of
Tenant's acceptance thereof in good order and satisfactory condition.
Provided, however, Tenant shall have the right, to be exercised within thirty
(30) days after the date possession of the Premises has been delivered to
Tenant with Landlord's Work therein completed, to submit to Landlord a
punchlist of incomplete or defective construction within the Premises, and
Landlord will perform such punchlist to the extent the listed items were
Landlord's Work under Exhibit "C" and were not performed by Landlord in
accordance therewith. Tenant agrees that no representations respecting the
condition of the Premises or the existence or non-existence of Hazardous
Materials (hereinafter defined) in, on or about the Premises, no warranties or
guarantees, expressed or implied, with respect to workmanship or any defects in
material, and no promise to decorate, alter, repair or improve the Premises
either before or after the execution hereof, have been made by Landlord or its
agents to Tenant unless the same are contained herein.
ARTICLE IV
RENT
Section 4.1 Minimum and Percentage Rent.
Tenant covenants and agrees to pay to Landlord, without notice or demand,
at Landlord's address for notice (Landlord's and Tenant's notice addresses
being the addresses specified in Section 24.7 hereof), as rent for the
Premises:
(i) A "Minimum Annual Rent" of $25.00 per square foot of Store Floor Area,
or Four Hundred Five Thousand Three Hundred Seventy Five and no/100
Dollars ($405,375.00) per annum (based upon the approximated Store
Floor Area set forth in Section 2.1 hereof), payable in equal monthly
installments, in advance upon the first day of each and every month
of the Lease Term commencing upon the Commencement Date (such monthly
installment being hereinafter called "Minimum Monthly Rent"): and
(ii) The amount by which six percent (6%) of Gross Sales (hereinafter
defined) during each Lease Year of Partial Lease Year exceeds the
Minimum Monthly Rent for such period (hereinafter called "Percentage
Rent").
When Store Floor Area is determined in accordance with Section 2.1 the
Minimum Annual Rent and Minimum Monthly Rent shall be deemed automatically
increased or decreased based upon the Store Floor Area as thus determined, and
any overpayments or underpayments of Minimum Monthly Rent to Landlord shall be
adjusted accordingly.
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Notwithstanding anything herein in this Section 4.1 which may be to the
contrary, so long as Tenant is not in default hereunder beyond any applicable
grace period and provided no liens have attached or may attach to the Premises
or the Center or Landlord's interest therein as a result of Tenant's Work in
the Premises (with reasonable time for Tenant to satisfy or bond over), Tenant
may retain the sum of Twenty Five and no/100 Dollars ($25.00) per square foot
of Store Floor Area as Landlord's contribution to Tenant's Work in the
Premises. Such sum shall only be retained from the Minimum Monthly Rent due and
payable by Tenant to Landlord hereunder until such time as the entire sum of
Twenty Five and no/100 Dollars ($25.00) per square foot of Store Floor Area and
no more has been retained by Tenant. Thereafter, no amount otherwise due and
payable by Tenant to Landlord hereunder as rent may be retained by Tenant. For
purposes of calculating Percentage Rent, if any, during the period of time
Tenant is allowed to retain the Minimum Monthly Rent as hereinabove provided,
the Minimum Monthly Rent paid by Tenant shall be deemed to be the Minimum.
Monthly Rent amount determined in accordance with Section 4.1 (l)
notwithstanding Tenant's right to retain such Minimum Monthly Rent pursuant to
this paragraph. Additional rent shall be paid as and when due in accordance
with the other terms and conditions of this Lease. The foregoing sum of Twenty
Five and no/100 Dollars ($25.00) per square foot of Store Floor Area which
Tenant is allowed to retain from Minimum Monthly Rent is in addition to the
amount set forth as Landlord's contribution to Tenant's Work set forth in
Section 24.20 below.
Section 4.2 Miscellaneous Rent Provisions.
Any rent or other amounts to be paid by Tenant which are not paid when due
shall bear interest as of the tenth (10th) day after the date on which any sum
is due and owing at the maximum rate of interest permitted in the State of
Minnesota, or if there is no such maximum, at a rate equal to two percent (2%)
over the prime rate announced by Citibank, N.A. If the Commencement Date is
other than the first day of a month, Tenant shall pay on the Commencement
Date a prorated partial Minimum Monthly Rent for the period prior to the first
day of the next calendar month, and thereafter Minimum Monthly Rent payments
shall be made not later than the first day of each calendar month. For the
purposes of this Lease, a "Major Tenant" is herein defined as a single tenant
occupying at least 40,000 contiguous square feet of floor area.
Section 4.3. Percentage Rent.
Tenant shall (i) not later than the fifteenth (15th) day after the
close of each calendar month, deliver to Landlord a written statement certified
under oath by Tenant or an officer of Tenant, showing Gross Sales made in such
calendar month; and (ii) no later than sixty (60) days after the end of each
Lease Year or Partial Lease Year, deliver to Landlord a statement of Gross
Sales for such Lease Year or Partial Lease Year the correctness of which is
certified to by Tenant's Chief Financial Officer. If Tenant fails to prepare
and deliver any statement of Gross Sales required hereunder, within the time or
times specified above, then Landlord shall have the right, in addition to the
other right and remedies set forth in this Lease, (a) to collect from Tenant a
sum which shall be $100.00 per calender day for each day that Gross Sales
reports are not so submitted, and (b) to estimate Tenant's Gross Sales for any
non-reported period and ▇▇▇▇ Tenant's Percentage Rent accordingly. Landlord
reserves the right, at Landlord's option, to adjust Percentage Rent ▇▇▇▇▇▇▇▇
when actual Gross sales reports are received. Landlord agrees that any
information obtained by Landlord as a result of such audit or examination of
Tenant's Gross Sales shall be held in strict confidence by Landlord, except in
any litigation or arbitration proceedings, and except further, that Landlord
may disclose such financial information to its mortgagee or mortgagees and to
prospective buyers and lenders.
On or before the fifteenth (15th) day of each May, August, November and
February, Tenant shall pay Landlord the amount by which six percent (6%) of
Gross Sales of Tenant during the three (3) months (or less in a Partial Lease
Year) ending on the last day of the month preceding such payment date exceeds
the total Minimum Monthly Rent Tenant was obligated to pay for such period.
Within thirty (30) days after the later of (i) the due date for Tenant's annual
report of Gross Sales, or (ii) the date of Landlord's receipt of such annual
report, if Tenant has paid Landlord for such Lease Year or Partial Lease Year
Percentage Rent greater than Tenant is obligated to pay for such period,
Landlord shall refund such excess, and if Tenant has paid less than the
Percentage Rent required to be paid for such period, Tenant shall pay Landlord
such difference.
Tenant will preserve for at least three (3) years at Tenant's notice
address all original books and records disclosing information pertaining to
Gross Sales and such other information respecting Gross Sales as Landlord
requires, including, but not limited to, all computerized records routinely
kept by the Tenant in the ordinary course of Tenant's business (and provided
such computerized records are kept in accordance with generally accepted
accounting principles), gross income and sales tax returns, bank deposit
records, sales journals and other supporting data. Landlord and its agents
shall have the right upon prior written notice to Tenant during business hours
to examine and audit such books and records preserved by Tenant. If such
examination or audit discloses a liability for Percentage Rent 5% or more in
excess of the Percentage Rent paid by Tenant for any period or if Tenant's
Gross Sales cannot be verified due to the insufficiency or inadequacy of
Tenant's records. Tenant shall promptly pay landlord the cost of said audit.
Tenant shall, in any event, pay to Landlord the amount of any deficiency in
rents which is disclosed by such audit plus interest at two percent (2%) over
the prime rate announced by Citibank, N.A. as of the first day of the month on
which any sum was due and owing.
Section 4.4. Gross Sales Defined.
As used herein, Gross Sales means the sale prices of all goods, wares and
merchandise sold and the charges for all services performed by Tenant or any
other person or entity in, at, or from the Premises for cash, credit or
otherwise, without reserve or deduction for uncollected amounts except as
hereinafter specifically provided, including but not limited to sales and
services (i) where the orders originate in, at or from the Premises, regardless
from whence delivery or performance is made, (ii) pursuant to mail, telephone,
telegraph or otherwise received or filled at the Premises, (iii) resulting from
transactions originating in, at or from the Premises, and deposits not refunded
to customers. Excluded from Gross Sales shall be: (i)
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exchanges of merchandise between Tenant's stores made only for the convenient
operation of Tenant's business and not to consummate a sale made in, at or from
the Premises, (ii) returns to manufacturers, (iii) refunds or allowances made on
merchandise claimed to be defective or unsatisfactory to customers (but only to
the extent included in Gross Sales), (iv) sales of fixtures, machinery and
equipment after use in Tenant's business in the Premises, (v) all sales to
employees of Tenant while on duty which sales shall be at no less than any
discounted price allowed employees in accordance with Tenant's then-existing
policies, provided, however, the discounted portion of such sales to employees
not included in Gross Sales shall not exceed two percent (2%) of Tenant's annual
Gross Sales, (vi) bad debts, not to exceed two percent (2%) of Tenant's annual
Gross Sales, provided such bad debts were originally included in Gross Sales
when made and provided, further, any subsequent collection or recovery thereof
shall be included in Gross Sales in the year of collection or recovery, and
(vii) sales, excise or similar tax imposed by governmental authority and
collected from customers and paid out by Tenant. No other taxes shall be
deducted from Gross Sales. Gross Sales from vending devices located on the
Premises shall be limited to net proceeds from such vending devices received by
Tenant.
Section 4.5. Real Estate Taxes.
A. Definition. Landlord shall pay or cause to be paid all Real Estate
Taxes (as hereinafter defined) assessed or imposed upon the Center and the
Total Tract which become due or payable during the Lease Term. As used in this
Section 4.5 the term Real Estate Taxes shall mean and include all real estate
taxes, public and governmental charges and assessments, including all
extraordinary or special assessments, or assessments against any of Landlord's
personal property now or hereafter located in the Center, all costs, expenses
and attorney's fees incurred by Landlord in contesting or negotiating with
public authorities (Landlord having the sole authority to conduct such a
contest or enter into such negotiations) as to any of the same and all sewer
and other taxes and charges, but shall not include taxes on Tenant's business
in the Premises, machinery, equipment, inventory or other personal property or
assets of Tenant. Tenant agreeing to pay, before delinquency, all taxes upon or
attributable to such excluded items without apportionment.
B. Tenant's Share. Tenant shall pay to Landlord, as Additional Rent, its
proportionate share of all Real Estate Taxes upon the Center and the Total
Tract which become due or payable during the Lease Term, such proportionate
share to be prorated for periods at the beginning and end of the Lease Term
which do not constitute full calendar months or calendar years. Landlord shall
endeavor to have the Retail Space and Hotel Space separately assessed. If this
cannot be accomplished then Landlord, in its sole discretion, shall allocate
Real Estate Taxes among the Retail Space and Hotel Space based on its
determination of the assessed value of each such Space. This determination
shall control except in case of manifest error. Real Estate Taxes allocated by
Landlord to the Retail Space are referred to herein as "Retail Space Real
Estate Taxes". Tenant's proportionate share of any such Retail Space Real
Estate Taxes shall be that portion of such Retail Space Real Estate Taxes which
bears the same ratio to the total Retail Space Real Estate Taxes as the Store
Floor Area bears to the Rentable Floor Area rented or occupied in the Retail
Space (hereinafter called "Retail Rentable Floor Area") as of the Commencement
Date or the first day of the calendar year in which such taxes are due or
payable. The floor area of (i) a Major Tenant, (ii) any tenant in a free
standing Premises who is obligated to pay real estate taxes specifically upon
specific improvements or specific parcel of land, and (iii) Common Areas, as
hereinafter defined, shall not be included in the Retail Rentable Floor Area,
and any contributions to Real Estate Taxes received by Landlord from such
tenants shall be deducted from Retail Space Real Estate Taxes prior to the
calculation of Tenant's proportionate share.
C. Payment by Tenant. Tenant's proportionate share of Retail Space Real
Estate Taxes shall be paid in monthly installments commencing with the
Commencement Date, in amounts initially estimated by Landlord, one (1) such
installment being due on the first day of each full or partial month of each
full or partial calendar year during the Lease Term. Such monthly installments
shall increase or decrease upon notice from Landlord given after the actual or
anticipated amounts of Real Estate Taxes due or payable in a particular
calendar year are determined. Following the close of each full or partial
calendar year during the Lease Term, the actual amount of Retail Space Real
Estate Taxes due or payable shall be computed by Landlord and any excess paid
by Tenant during such calendar year over the actual amount Tenant is obligated
to pay hereunder shall be credited to Tenant within thirty (30) days, and
within thirty (30) days after written notice from Landlord any deficiency owed
shall be paid in full by Tenant. Tenant acknowledges and stipulates that
Landlord has made no representation or agreement of any kind as to the total
dollar amount of such real estate taxes, actual or estimated, or Tenant's
dollar share thereof.
D. Other Taxes. Tenant's proportionate share of any governmental tax or
charge (other than income tax, penalties, fines or additional interest which
are incurred as a result of Landlord's acts or omissions) levied, assessed, or
imposed on account of the payment by Tenant or receipt by Landlord, or based in
whole or in part upon, the rents in this Lease reserved or upon the Center or
the value thereof shall be paid by Tenant.
E. Larger Parcel. If the land under the Center is a part of a larger parcel
of land for assessment purposes (the "Larger Parcel"), the taxes and
assessments allocable to the land in the Center for the purpose of determining
Real Estate Taxes under this Section shall be deemed a fractional portion of
the taxes and assessments levied against the Larger Parcel, the numerator of
which is the acreage in the Center and the denominator of which is the acreage
in the Larger Parcel.
Section 4.6. Sprinkler System.
Landlord has installed and will maintain a sprinkler system in the
Premises and Tenant shall pay to Landlord as additional rent twenty-five cents
(25c) per square foot of Store Floor Area per Lease Year, prorated for Partial
Lease Years, in equal monthly installments in advance on the first day of each
full calendar month during the Lease Term.
Section 4.7. Additional Rent.
All amounts required or provided to be paid by Tenant under this Lease
other than Minimum Annual Rent and Percentage Rent shall be deemed additional
rent and Minimum Annual Rent, Percentage Rent and additional rent shall in all
events be deemed rent.
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Section 4.8. Landlord's Expenses.
If Landlord pays any monies or incurs any expenses to correct a breach of
this Lease as defined in Section 18.1 of this Lease by Tenant or to do anything
in this Lease required to be done by Tenant, or incurs any expense (including,
but not limited to reasonable attorneys' fees and court costs), as a result of
Tenant's failure to perform any of Tenant's obligations under this Lease, all
amounts so paid or incurred shall, on written notice to Tenant, be considered
additional rent payable in full by Tenant with the first Minimum Monthly Rent
installment thereafter becoming due and payable, and may be collected as by
law provided in the case of rent.
ARTICLE V
PARKING AND COMMON AREAS AND FACILITIES
Section 5.1. Common Areas.
All parking areas, access roads and facilities furnished, made available or
maintained by Landlord in or near the Center, including employee parking areas,
truck ways, driveways, loading docks and areas, delivery areas, multi-story
parking facilities, package pickup stations, elevators, escalators, pedestrian
sidewalks, malls, including the Enclosed Mall (as indicated for identification
purposes on Exhibit "B"), courts and ramps, landscaped areas, retaining walls,
stairways, bus stops, first-aid and comfort stations, lighting facilities,
sanitary systems, utility lines, water filtration and treatment facilities and
other areas in the Center (all herein called "Common Areas") shall at all times
be subject to the exclusive control and management of Landlord, and Landlord
shall have the right, from time to time, to establish, modify and enforce
reasonable rules and regulations with respect to all Common Areas. Tenant
agrees to comply with all rules and regulations set forth in Exhibit "D"
attached hereto and all reasonable and uniformly enforced amendments thereto.
Provided, however, in exercising its rights hereunder, Landlord shall not
permanently reduce the parking areas below code requirements.
Landlord shall have the right from time to time to: change or modify
and add to or subtract from the sizes, locations, shapes and arrangements of
parking areas, entrances, exits, parking aisle alignments and other Common
Areas; restrict parking by Tenant's employees to designated areas; construct
surface, sub-surface or elevated parking areas and facilities; establish and
from time to time change the level or grade of parking surfaces; enforce
parking charges (by meters or otherwise); add to or subtract from the buildings
in the Center; and do and perform such other acts in and to said Common Areas
as Landlord in its sole discretion, reasonably applied, deems advisable for the
use thereof by tenants and their customers. Provided, however, in exercising
its rights hereunder, Landlord shall not adversely and materially affect access
to the Premises, visibility of the Premises or identification of the Premises.
Section 5.2. Use of Common Areas.
Tenant and its business invitees, employees and customers shall have
the nonexclusive right, in common with Landlord and all others to whom Landlord
has granted or may hereafter grant rights, to use the Common Areas subject to
such reasonable regulations as Landlord may from time to time impose and the
rights of Landlord set forth above. Tenant agrees to fully advise its
employees of Landlord's parking rules, regulations and restrictions and
possible ensuing consequences in the event of a violation thereof and to
cooperate with Landlord in enforcing the obligation of Tenant's employees to
park their vehicles in designated employee parking areas. Landlord may tow or
cause to be towed any car of Tenant, a concessionaire, employee or agent of
Tenant from the Center that is parked outside any area designated by Landlord
for employee parking and Tenant shall indemnify and hold Landlord harmless with
respect thereto. Tenant shall abide by all rules and regulations and cause its
concessionaires, officers, employees and agents to abide thereby. Landlord may
at any time close temporarily any Common Areas to make repairs or changes,
prevent the acquisition of public rights therein, discourage noncustomer
parking, or for other reasonable purposes. Tenant shall furnish Landlord
license numbers and descriptions of cars used by Tenant and its
concessionaires, officers and employees. Tenant shall not interfere with
Landlord's or other tenants' rights to use any part of the Common Areas.
ARTICLE VI
COST AND MAINTENANCE OF COMMON AREAS
Section 6.1. Expense of Operating and Maintaining the Common Facilities.
Landlord will operate, manage, maintain and repair or cause to be
operated, managed, maintained or repaired, the Common Areas of the Center to
the extent the same is not done by any Major Tenant. "Landlord's Common Area
Costs" shall mean all costs of operating and maintaining the Common Areas in a
manner deemed by Landlord appropriate for the best interests of tenants and
other occupants in the Center. Included among the costs and expenses which
constitute Landlord's Common Area Costs, but not limited thereto, shall be, at
the option of Landlord, all costs and expenses of protecting, operating,
managing the Center (including attorneys' fees and other professional fees),
repairing, repaving, lighting, cleaning, painting, striping, insuring
(including but not limited to fire and extended coverage insurance on Common
Areas, insurance protecting Landlord against liability for personal injury,
death and property damage and workers' compensation insurance), removing of
snow, ice and debris, police protection, security and security patrol, fire
protection, regulating traffic, inspecting, repairing and maintaining of
machinery and equipment, depreciation of machinery and equipment, providing
heating, ventilating and air conditioning machinery and equipment, depreciation
of machinery and equipment, providing heating, ventilating and air conditioning
for the interior Common Areas initially determined and thereafter adjusted in
the manner described in Section 7.2 herein, cost and expense of inspecting,
maintaining, repairing and replacing storm and sanitary drainage systems,
sprinkler and other fire protection systems, electrical, gas, water, telephone
and irrigation systems, cost and
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expense of maintaining, repairing and replacing the Enclosed Mall and the
exterior of the buildings in the Center, including, but not limited to floors,
roofs, skylights, escalators, elevators, walls, stairs and signs, cost and
expense of installing, maintaining and repairing burglar or fire alarm systems
on the Retail Space, if installed, cost and expense of landscaping and
shrubbery, expenses of utilities, and administrative and overhead costs equal
to fifteen percent (15%) of all of the foregoing and all other of Landlord's
Common Area Costs.
Notwithstanding the foregoing, Tenant's Share of Landlord's Common Area
Costs shall not include the following:
1. Interest and financing charges on any debt service, amortization
payments on any mortgage and rent under any ground lease;
2. Wages, salaries, fees and fringe benefits paid or provided to
administrative or executive personnel or officers or partners of
Landlord above the grade of mall manager unless employed at competitive
rates as independent contractors, and except there may be included
wages, salaries, fees and fringe benefits of regional management of the
Common Areas to the extent the same are reasonable and proportionate to
the services rendered;
3. Costs of decorating, redecorating or special planning or other services
provided to an individual tenant and not provided to substantially all
tenants of the Center;
4. Landlord's income taxes, excess profits taxes, franchise taxes or
similar taxes on Landlord's business;
5. Costs relating to activities for the solicitation and execution of
leases of space in the Center including, but not limited to, leasing
commissions and attorneys' fees;
6. The costs of correcting defects in the construction of the Center or in
the equipment servicing the Center, except that conditions (not
occasioned by construction defects) resulting from ordinary wear and
tear will not be deemed defects for purposes hereof;
7. The costs of any repairs made by Landlord because of the total or
partial destruction of the Center or the condemnation of a portion of
the Center to the extent such costs are covered by Landlord's insurance
or by a damage award in a condemnation proceeding;
8. Any insurance premium to the extent Landlord is entitled to be
reimbursed for such insurance premium by Tenant under any other Section
of this Lease;
9. The costs of any items for which Landlord is reimbursed by insurance or
otherwise compensated by parties other than tenants of the Center;
10. The costs of any repairs, alterations, additions, changes,
replacements and any other items which under generally accepted
accounting principles are properly classified as expenditures for
capital improvements to the extent they upgrade or improve the Center
as opposed to repairing or replacing existing items which have worn out
except for capital improvements required: (i) by one of Landlord's
insurance carriers then insuring some aspect of the Center; (ii) by any
law, statute, rule, regulation, code, ordinance or order of a
governmental authority having jurisdiction over the Center; or (iii) to
reduce Landlord's Common Area Costs, but only to the extent Tenant's
proportionate share of Landlord's Common Area Costs is thereby
decreased. The cost of any such capital improvement which is included
in Landlord's Common Area Costs shall be amortized over the useful life
of such improvement. The cost of the repair or replacement of an
existing capital item that is included in Landlord's Common Area Costs
need not be amortized but may be included in its entirety in the
calendar year in which incurred.
11. Any operating expense representing an amount paid to a related
corporation, entity or person which is in excess of the amount which
would have been paid in the absence of such relationship;
12. The cost of overtime or other expense to Landlord in curing its defaults
or performing work expressly provided for in this Lease to be borne at
Landlord's expense.
Section 6.2. Tenant to Bear Pro Rata Share of Expenses.
Tenant will pay Landlord, in addition to all other amounts in this Lease
provided, such portion of Landlord's Common Area Costs for each calendar year
during the Lease Term (pro rated accordingly for a partial calendar year) which
bears the same ratio to the total of Landlord's Common Area Costs as fifty
percent (50%) of the Store Floor Area at the commencement of such calendar year
bears to all Rentable Floor Area rented or occupied by tenants in the Retail
Space. The floor area of (i) a Major Tenant, (ii) any tenant in a freestanding
Premises who is obligated to maintain specific areas or a specific parcel of
land, and (iii) Common Areas shall not be included in Rentable Floor Area, and
any contributions to Landlord's Common Area Costs received by Landlord from
such tenants shall be deducted from Landlord's Common Area Costs prior to the
calculation of Tenant's proportionate share.
Tenant's share of Landlord's Common Area Costs shall be paid in monthly
installments in amounts estimated from time to time by Landlord, one (1) such
installment being due on the first day of each month of each calendar year.
After the end of each calendar year the total Landlord's Common Area Costs for
such year (and at the end of the Lease Term, the total Landlord's Common Area
Costs for the period since the end of the immediately next preceding calendar
year) shall be determined by Landlord and Tenant's share paid for such period
shall immediately, upon such determination, be adjusted by credit of any excess
or payment of any deficiency. Within ninety (90) days after the end of each
calendar year, Landlord
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shall deliver to Tenant a statement showing Landlord's Common Area Costs for
the immediately preceding year including calculations showing how tenant's
share of Landlord's Common Area Costs was determined.
Tenant may audit Landlord's Common Area Costs in order to verify the
accuracy thereof, provided that: (a) Tenant specifically designates the year
Tenant intends to audit, which shall be a year during the Lease Term that is
also within three (3) years of the date of the audit; (b) such audit is
conducted only during regular business hours at the office where Landlord
maintains expense records of Landlord's Common Area Costs; (c) Tenant gives
Landlord fourteen (14) days prior written notice of Tenant's request to audit
and Tenant shall deliver to Landlord a copy of the results of such audit within
ten (10) days of its receipt by Tenant; (d) such audit must be conducted by
Tenant's employees or an independent nationally recognized accounting firm that
is not being compensated on a contingency fee basis; (e) no audit shall be
conducted if Tenant has previously conducted an audit for the same time period;
(f) such audit shall be at Tenant's sole cost and expense; and (g) any
financial or other information provided by Landlord or obtained by Tenant as a
result of such audit shall only be pursuant to duly executed confidentiality
agreements between Landlord, Tenant and Tenant's agents and employees to whom
disclosure is made. Tenant acknowledges that the Landlord considers its
financial and other operating information to be confidential and will not
disclose such information to any third party without Landlord's prior written
consent except to prospective buyers or lenders, Tenant's accountants and
attorneys, or in the case of compliance with a subpoena or other legal process
provided Tenant gives Landlord at least ten (10) days prior written notice of
Tenant's receipt of such subpoena or legal process and Tenant's intent to
disclose pursuant thereto. If the audit discloses that Tenant has underpaid,
Tenant shall promptly reimburse Landlord any amount owed. If the audit
accurately discloses that Tenant has overpaid, Landlord shall promptly refund
such excess.
ARTICLE VII
UTILITIES AND SERVICES
Section 7.1. Utilities.
Tenant shall not install any equipment which can exceed the capacity of
any utility facilities serving the Center and if any equipment installed by
Tenant requires additional utility facilities, the same shall be installed at
Tenant's expense in compliance with all code requirements and plans and
specifications which must be approved in writing by Landlord which consent
shall not be unreasonably withheld or delayed. Tenant shall be solely
responsible for and promptly pay all charges for its use or consumption of
sewer, gas, electricity, water and all other utility services. Landlord may
make electrical service available to the Premises as provided in Exhibit "C,"
and so long as Landlord continues to provide such electrical service Tenant
agrees to purchase the same from Landlord and pay Landlord for the electrical
service (based upon Landlord's determination from time to time of Tenant's
consumption of electricity), as additional rent, on the first day of each month
in advance (and prorated for partial months), commencing on the Commencement
Date at the same cost as would be charged to Tenant from time to time by the
utility company which otherwise would furnish such services to the Premises if
it provided such services and metered the same directly to the Premises, but in
no event at a cost which is less than the cost Landlord must pay in providing
such electrical service. Landlord may supply water and other utilities to the
Premises, and so long as Landlord continues to provide water or such other
utilities Tenant shall pay Landlord for same at the same cost as would be
charged to Tenant by the utility company which otherwise would furnish such
service to the Premises if it provided such service and metered the same
directly to the Premises, but in no event at a cost which is less than the cost
Landlord must pay in providing such service, and in no event less than the
minimum monthly charge which would have been charged by the utility company in
providing such service. Subject to the applicable rules and regulations of the
Minnesota Public Service Commission, Landlord may provide a shared tenant
telephone service to the Premises and so long as Landlord continues to provide
such telephone service Tenant agrees to purchase the same from Landlord and pay
Landlord for the telephone service at the same cost as would be charged to
Tenant by the utility company which otherwise would furnish such service to the
Premises if it provided such service directly to the Premises, but in no event
at a cost which is less than the cost Landlord must pay in providing such
telephone service.
Landlord may make additional services, including but not limited to, pest
control, trash compactor/trash removal, cleaning, and security, available to the
Premises and, in such event Tenant shall utilize such services, at Tenant's
expense.
Tenant shall operate its heating and air conditioning so that the
temperature in the Premises will be the same as that in the adjoining mall, and
set Tenant's thermostat at the same temperature as that thermostat in the mall
which is nearest the Premises. Tenant shall be responsible for the
installation, maintenance, repair and replacement of air conditioning, heating
and ventilation systems within and specifically for the Premises, including all
components such as air handling units, air distribution systems, motors,
controls, grilles, thermostats, filters and all other components. Tenant shall
operate ventilation so that the relative air pressure in the Premises will be
the same as or less than that in the adjoining mall as required by the
Landlord.
In the event Tenant requires the use of telecommunication services,
including, but not limited to, credit card verification and/or other data
transmission, then Tenant shall contract for such services with one of the
service providers available at the Center, provided such cost is competitive in
the industry in the geographic location of the Center.
Section 7.2. Air Conditioning of Premises.
Landlord will provide and maintain a central plant and a system of chilled
media to the Premises installed at a point determined by Landlord. Tenant
agrees to purchase the chilled media services from Landlord and pay Landlord
annually therefor as additional rent, in equal monthly installments, in advance
on the first day of each month the current Adjusted HVAC Plant Charge (which
shall consist of the Minimum Charge of $1.95 per square foot of Store Floor
Area per year, increased in the manner hereinafter provided).
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The Adjusted HVAC Plant Charge shall be recalculated from time to time
on dates selected by the Landlord (but no less often annually, each time the
Landlord's utility costs are changed, and/or each time field verification
indicates that Tenant's use of the system has changed.)
The current Adjusted HVAC Plant Charge shall be calculated by
multiplying the Minimum Charge by a series of adjusting multipliers as follows:
Adjusted HVAC Plant Charge = Minimum Charge xM xM xM xM
1 2 3 4
(a) M = Capacity Multiplier
1
The capacity multiplier shall be the greater of 1 or the
multiplier arrived at by applying the following formula:
M = 1+[0.6[BTUH/33-1]]
1
The factor "BTUH" shall mean BTUH/per Sq. Ft. of Store Floor Area and
shall be the calculated peak design total heat gain as determined in
accordance with ASHRAE procedures. Tenant's outdoor air or exhaust that is
derived via the Landlord's system, and total heat gain from the roof, lights,
fan motors and other items, shall be included in calculating the BTUH/per Sq.
Ft. factor of this section for purposes of determining the capacity multiplier.
The peak total heat gain shall be calculated using the same sun time hour as is
used by Landlord in determining the peak building heat gain. (Typically 1600
hours).
(b) M = Hours Multiplier
2
The hours multiplier shall be the greater of 1 or the
multiplier arrived at by applying the following formula:
M = 1+[Extra Hours/Regular Hours]
2
The term "Extra Hours" shall mean Tenant's hours use of
system during times other than the originally established regular weekly hours
of the Center. The term "Regular Hours" shall mean originally established
regular weekly hours of the Center.
(c) M = Utility Cost Multiplier
3
The utility cost multiplier shall be the multiplier arrived at
by applying the following formula:
M = 1+[0.5[Current Cost/Original Cost-1]]
3
The term "Current Cost" shall mean "Utility Cost" based on
rates in effect on the selected date. The term "Original Cost" shall
mean Utility Cost based on rates in effect on March 31, 1994. The term
"Utility Cost" shall mean the cost to Landlord of the utilities necessary for
furnishing chilled media to the Premises, including all charges made to
Landlord by the public utilities furnishing the same and based on the original
consumption and demands estimated for the Central HVAC System and building.
(d) M = Maintenance Cost Multiplier
4
The Maintenance Cost Multiplier shall be the greater of 1 or
the multiplier arrived at by applying the following formula:
M = 1+[0.1[Current CPI/Original CPI-1]]
4
The term "Current CPI" shall mean the "Consumer Price Index" on the
selected date. The term "Original CPI" shall mean the "Consumer Price Index"
for February 1, 1996. The term "Consumer Price Index" as used in this Section
7.2 and in Section 14.1 herein shall mean the Consumer Price Index All Items
for All Urban Consumers (CPI-U, 1982-4=100)" published by the Bureau of Labor
Statistics of the U.S. Department of Labor. If the publication of the Consumer
Price Index of the U.S. Bureau of Labor Statistics is discontinued, comparable
statistics on the purchasing power of the consumer dollar published by a
responsible financial periodical selected by Landlord shall be used for making
such computations.
Section 7.3. Enforcement and Termination
In the event of any default by Tenant, Landlord reserves the right,
upon at least ten (10) days prior written notice to Tenant, in addition to all
other rights and remedies available to Landlord, to cut off and discontinue,
without notice or liability to Tenant, any utilities or services provided in
accordance with the provisions of this Article VII. Landlord shall not be
liable to Tenant in damages or otherwise if any utilities or services, whether
or not furnished by Landlord hereunder, are interrupted or terminated because
of repairs, installation or improvements, or any cause beyond Landlord's
reasonable control, nor shall any such termination relieve Tenant of any of its
obligations under this Lease. Tenant shall operate the Premises in such a way
as shall note waste fuel, energy or natural resources. If Landlord provides
any utilities or services under Section 7.1 or 7.2 of this Lease to tenants.
Landlord may, upon written direction, require Tenant to obtain such services
from a third party provider without liability for the same. No discontinuance
of any utilities or services shall constitute a constructive eviction.
Notwithstanding anything in this Section 7.3 to the contrary, if any utility or
service provided by Landlord is interrupted by Landlord (other than due to
Tenant's default) for a period of more than three (3) consecutive business
days, rent shall be fairly and equitably abated to the extent such interruption
in service adversely affects Tenant's business operation in the
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Premises. Such abatement period shall be retroactive to the date the
respective utility or service was initially interrupted and continue until such
time as such utility or service is restored or an adequate alternate utility or
service is provided. Rent shall not ▇▇▇▇▇ if the interruption in such utility
or service is three (3) consecutive business days or less in duration.
ARTICLE VIII
CONDUCT OF BUSINESS BY TENANT
Section 8.1. Use of Premises.
The Premises shall be occupied and used by Tenant solely for the purpose
of conducting therein the business of a full service sit-down restaurant with a
predominantly "adventure" or "discovery" theme, including the sale of liquor
for on-premises consumption. Tenant's menu will feature American,
International, and Mexican entrees. Tenant shall not use or permit or suffer
the use of the Premises for any other business or purpose. Tenant is hereby
specifically prohibited from selling, offering for sale, giving away or
displaying Mall of America merchandise or any other merchandise or items that
bear the Mall of America name, trademark, service ▇▇▇▇ or logo thereon without
Landlord's prior written consent thereto which consent may be given or withheld
by Landlord in Landlord's sole and absolute discretion and Landlord's failure
to give such consent shall not be deemed unreasonable.
Section 8.2. Prompt Occupancy and Use.
Tenant will occupy the Premises upon the Commencement Date and thereafter
continuously operate and conduct in one hundred percent (100%) of the Premises
during each hour of the entire Lease Term when Tenant is required under this
Lease to be open for business the business permitted under Section 8.1 hereof,
with a full staff and full stock of merchandise, using only such minor portions
of the Premises for storage and office purposes as are reasonably required.
The parties agree that: Landlord has relied upon Tenant's occupancy and
operation in accordance with the foregoing provisions; because of the difficulty
or impossibility of determining Landlord's damages which would result from
Tenant's violation of such provisions, including but not limited to damages
from loss of Percentage Rent from Tenant and other tenants, and diminished
saleability, mortgageability and economic value, Landlord shall be entitled to
liquidated damages if it elects to pursue such remedy; therefore for any day
that Tenant does not fully comply with the provisions of this Section 8.2 the
Minimum Annual Rent, prorated on a daily basis, shall be increased by
twenty-five percent (25%), such increased sum representing the damages which
the parties agree Landlord will suffer by Tenant's noncompliance. In addition
to all other remedies, Landlord shall have the right to obtain specific
performance by Tenant upon Tenant's failure to comply with the provisions of
this Section 8.2.
Notwithstanding the foregoing, Tenant may temporarily cease operating its
business in the Premises for reasonable periods as approved by Landlord (which
approval shall not be unreasonably withheld) in which Tenant is carrying on
remodeling activities (which includes the repair or replacement of equipment),
provided Tenant gives Landlord's Center manager at least ten (10) days prior
notice of the anticipated dates Tenant will be closed and provided such
remodeling activities have Landlord's prior approval. Rent shall not ▇▇▇▇▇
while Tenant is closed for remodeling.
Section 8.3. Conduct of Business.
Such business shall be conducted (a) under the name HOTEL DISCOVERY unless
another name is previously approved in writing by the Landlord; and (b) in such
manner as shall assure the transaction of a maximum volume of business in and
at the Premises. Tenant's store shall be and remain open at least from 10:00
A.M. until 9:00 P.M. each day of the week (except Tenant may remain open until
Midnight with Landlord's prior approval), except Sunday, on Sunday from 12:00
P.M. until 6:00 P.M., and in addition, during all days, nights and hours
(including Sundays as permitted by law) but, in any event, not before 10:00
A.M., that any Major Tenant in the Center (as referred to in Section 4.2 above)
is open for business, and such other days, nights and hours as Landlord shall
require or approve in writing.
Section 8.4. Operation by Tenant.
Tenant covenants and agrees that it will: not place or maintain any
merchandise, vending machines or other articles in any vestibule or entry of
the Premises or outside the Premises; store garbage, trash, rubbish and other
refuse in rat-proof and insect-proof containers inside the Premises, and remove
the same frequently and regularly and, if directed by Landlord, by such means
and methods and at such times and intervals as are designated by Landlord, all
at Tenant's expense; not permit any sound system audible, or objectionable
advertising medium visible, outside the Premises; keep all mechanical equipment
free of vibration and noise and in good working order and condition; not commit
or permit waste or a nuisance upon the Premises; not permit or cause noxious
odors to emanate or be dispelled from the Premises; not solicit business in the
Common Areas nor distribute advertising matter to, in or upon any Common Areas;
not permit the loading or unloading or the parking or standing of delivery
vehicles outside any area designated therefor, nor permit any use of vehicles
which will interfere with the use of any Common Areas; comply with all laws,
recommendations, ordinances, rules and regulations of governmental, public,
private and other authorities and agencies, including those with authority over
insurance rates, with respect to the use or occupancy of the Premises, and
including but not limited to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Occupational Safety and
Health Act; light the show windows of the Premises and all signs each night of
the year for not less than one (1) hour after the Premises is permitted to be
closed; not permit any noxious, toxic or corrosive fuel or gas, dust, dirt or
fly ash on the Premises; not place a load on any floor in the Center which
exceeds the floor load per square foot which such floor was designed to carry.
Section 8.5. Storage.
Tenant shall store in the Premises only merchandise which Tenant intends
to sell at, in or from the Premises, within a reasonable time after receipt
thereof.
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Section 8.6. Painting, Decorating, Displays, Alterations.
Tenant will not paint, decorate or change the architectural treatment of
any part of the exterior of the Premises nor any part of the interior of the
Premises visible from the exterior nor make any structural alterations,
additions or changes in the Premises without Landlord's written approval
thereto, and will promptly remove any paint, decoration, alteration, addition
or changes applied or installed without Landlord's approval and restore the
Premises to an acceptable condition or take such other action with respect
thereto as Landlord directs. Notwithstanding the foregoing, Tenant shall be
permitted to paint, decorate, alter, add or change the interior of the Premises
(but not change the general "adventure" or "discovery" theme) without
Landlord's prior approval thereto provided such work does not exceed Twenty
Thousand and 00/100 Dollars ($20,000.00) in cost in any twelve (12) month
period and provided further such work shall be non-storefront, non-mechanical,
non-utility and non-structural in nature.
Tenant will install and maintain at all times, subject to the other
provisions of this Section 8.6, merchandise displays in any show windows on the
Premises; the arrangement, style, color and general appearance thereof and of
displays in the interior of the Premises which are visible from the exterior,
including, but not limited to, window displays, advertising matter, signs,
merchandise and store fixtures, shall be maintained in keeping with the
character and standards of the Center.
Section 8.7. Other Operations.
If during the Lease Term Tenant directly or indirectly operates, manages
or has any interest whatsoever in any other store or business operated for a
purpose or business substantially similar to the business permitted under
Section 8.1 hereof within a radius of five (5) miles of the Center (excluding
downtown Minneapolis), it will injure Landlord's ability and right to receive
Percentage Rent (such ability and right being a major consideration for this
Lease and the construction of the Center). Accordingly, if Tenant operates,
manages or has such interest in any such store or business within such radius,
100% of all sales made from any such other store or business shall be included
in the computation of Gross Sales for the purpose of determining Percentage
Rent under this Lease as though said Gross Sales had actually been made at, in
or from the Premises. Landlord shall have all rights of inspection of books
and records with respect to such stores or businesses as it has with respect to
the Premises; and Tenant shall furnish to Landlord such reports with respect to
Gross Sales from such other store or business as it is herein required to
furnish with respect to the Premises.
Section 8.8. Emissions and Hazardous Materials.
Tenant shall not, without the prior written consent of Landlord, cause or
permit, knowingly or unknowingly, any Hazardous Material (hereinafter defined)
to be brought or remain upon, kept, used, discharged, leaked, or emitted in or
about, or treated at the Premises or the Center. As used in this Lease,
"Hazardous Material(s)" shall mean any hazardous, toxic or radioactive
substance, material, matter or waste which is or becomes regulated by any
federal, state or local law, ordinance, order, rule, regulation, code or any
other governmental restriction or requirement, and shall include asbestos,
petroleum products and the terms "Hazardous Substance" and "Hazardous Waste" as
defined in the Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), as amended, 42 U.S.C. Section 9601 et seq., and the Resource
Conservation and Recovery Act ("RCRA"), as amended, 42 U.S.C. Section 6901 et
seq. However, "Hazardous Materials" shall not include substances which are
used in the ordinary course of a business similar to Tenant's business as
permitted pursuant to Section 8.1 of this Lease provided, however, that such
substances are used, handled, transported, stored and disposed of in strict
compliance with any applicable federal, state or local law, statute, rule,
regulation, code, ordinance or any other governmental restriction or
requirement. If such substances are not so used, handled, transported, stored
or disposed of then they shall be deemed "Hazardous Materials" for purposes of
this Lease. To obtain Landlord's consent, Tenant shall prepare an
"Environmental Audit" for Landlord's review. Such Environmental Audit shall
list: (1) the name(s) of each Hazardous Material and a Material Safety Data
Sheet (MSDS) as required by the Occupational Safety and Health Act; (2) the
volume proposed to be used, stored and/or treated at the Premises (monthly);
(3) the purpose of such Hazardous Material; (4) the proposed on-premises
storage location(s); (5) the name(s) of the proposed off-premises disposal
entity; and (6) an emergency preparedness plan in the event of a release.
Additionally, the Environmental Audit shall include copies of all required
federal, state, and local permits concerning or related to the proposed use,
storage, or treatment of any Hazardous Material(s) at the Premises. Tenant
shall submit a new Environmental Audit whenever it proposes to use, store, or
treat a new Hazardous Material at the Premises or when the volume of existing
Hazardous Materials to be used, stored, or treated at the Premises expands by
ten percent (10%) during any thirty (30) day period. If Landlord in its
reasonable judgment finds the Environmental Audit acceptable, then Landlord
shall deliver to Tenant Landlord's written consent. Notwithstanding such
consent, Landlord may revoke its consent upon: (1) Tenant's failure to remain
in full compliance with applicable environmental permits and/or any other
requirements under any federal, state, or local law, ordinance, order, rule,
regulation, code or any other governmental restriction or requirement
(including but not limited to the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), as amended, 42 U.S.C. Section 9601
et seq., and the Resource Conservation and Recovery Act ("RCRA"), as amended,
42 U.S.C. Section 6901 et seq.) related to environmental safety, human health,
or employee safety; (2) the Tenant's business operations pose or potentially
pose a human health risk to other Tenants; or (3) the Tenant expands its use,
storage, or treatment of any Hazardous Material(s) in a manner inconsistent
with the safe operation of a shopping center. Should Landlord consent in
writing to Tenant bringing, using, storing or treating any Hazardous
Material(s) in or upon the Premises or the Center, Tenant shall strictly obey
and adhere to any and all federal, state or local laws, ordinances, orders,
rules, regulations, codes or any other governmental restrictions or
requirements (including but not limited to the Comprehensive Environmental
Response, Compensation and Liability Act ("CERCLA"), as amended, 42 U.S.C.
Section 9601 et seq., and the Resource Conservation and Recovery Act ("RCRA"),
as amended, 42 U.S.C. Section 6901 et seq.) which in any way regulate, govern
or impact Tenant's possession, use, storage, treatment or disposal of said
Hazardous Material(s). In addition, Tenant represents and warrants to Landlord
that (1) Tenant shall apply for and remain in compliance with any and all
federal, state or local permits in regard to Hazardous Materials; (2) Tenant
shall report to any and all applicable governmental authorities any release of
reportable quantities of any Hazardous Material(s) as required by any and all
federal, state or local laws, ordinances, orders, rules, regulations, codes or
any other governmental restrictions or requirements; (3) Tenant, within five
(5) days of receipt, shall send to Landlord a copy of any notice, order,
inspection report, or other document issued by any governmental authority
relevant to the Tenant's compliance status with environmental or
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health and safety laws; and (4) Tenant shall remove from the Premises all
Hazardous Materials at the termination of this Lease.
In addition to, and in no way limiting, Tenant's duties and obligations
as set forth in Section 11.6 of this Lease, should Tenant breach any of its
duties and obligations as set forth in this Section 8.8 of this Lease, or if
the presence of any Hazardous Material(s) on the Premises results in
contamination of the Premises, the Center, any land other than the Center, the
atmosphere, or any water or waterway (including groundwater), or if
contamination of the Premises or of the Center by any Hazardous Material(s)
otherwise occurs for which Tenant is otherwise legally liable to Landlord for
damages resulting therefrom. Tenant shall indemnify, save harmless and, at
Landlord's option and with attorneys approved in writing by Landlord, defend
Landlord, and its contractors, agents, employees, partners, officers, directors,
and mortgagees, if any, from any and all claims, demands, damages, expenses,
fees, costs, fines, penalties, suits, proceedings, actions, causes of action,
and losses of any and every kind and nature (including, without limitation,
diminution in value of the Premises or the Center, damages for the loss or
restriction on use of the rentable or usable space or of any amenity of the
Premises or the Center, damages arising from any adverse impact on marketing
space in the Center, and sums paid in settlement of claims and for attorney's
fees, consultant fees and expert fees, which may arise during or after the
Lease Term or any extension thereof as a result of such contamination). This
includes, without limitation, costs and expenses, incurred in connection with
any investigation of site conditions or any cleanup, remedial, removal or
restoration work required by any federal, state or local governmental agency or
political subdivision because of the presence of Hazardous Material(s) on or
about the Premises or the Center, or because of the presence of Hazardous
Material(s) anywhere else which came or otherwise emanated from Tenant or the
Premises. Without limiting the foregoing, if the presence of any Hazardous
Material(s) on or about the Premises or the Center caused or permitted by
Tenant results in any contamination of the Premises or the Center, Tenant
shall, at its sole expense, promptly take all actions and expense as are
necessary to return the Premises and/or the Center to the condition existing
prior to the introduction of any such Hazardous Material(s) to the Premises or
the Center; provided, however, that Landlord's approval of such actions shall
first be obtained in writing.
Section 8.9. Sales and Dignified Use.
No public or private auction or any fire, "going out of business,"
bankruptcy or similar sales or auctions shall be conducted in or from the
Premises and the Premises shall not be used except in a dignified and ethical
manner consistent with the general high standards of merchandising in the
Center and not in a disreputable or immoral manner or in violation of national,
state or local laws. The foregoing shall not, however, restrict Tenant from
conducting periodic sales of retail merchandise from the Premises.
ARTICLE IX
MAINTENANCE OF LEASED PREMISES
Section 9.1. Maintenance by Landlord.
Landlord shall keep or cause to be kept the foundations, roof and
structural portions of the walls of the Premises in good order, repair and
condition except for damage thereto due to the acts or omissions of Tenant, its
agents, employees or invitees. Landlord shall commence required repairs as
soon as reasonably practicable after receiving written notice from Tenant
thereof. This Section 9.1 shall not apply in case of damage or destruction by
fire or other casualty or condemnation or eminent domain, in which events the
obligations of Landlord shall be controlled by Article XVI and XVII. Except as
provided in this Section 9.1 Landlord shall not be obligated to make repairs,
replacements or improvements of any kind upon the Premises unless caused by
the negligent or intentional acts or omissions of Landlord, or to any
equipment, merchandise, stock in trade, facilities or fixtures therein, all of
which shall be Tenant's responsibility, but Tenant shall give Landlord prompt
written notice of any accident, casualty, damage or other similar occurrence in
or to the Premises or the Common Areas of which Tenant has knowledge. In
performing its work hereunder, Landlord agrees that it shall comply with all
laws, ordinance, rules, regulations and orders of governmental bodies and
agencies having jurisdiction thereover applicable as of the date such work is
performed or caused to be performed by Landlord.
Section 9.2. Maintenance by Tenant.
Tenant shall at all times keep the Premises (including all entrances
and vestibules) and all partitions, window and window frames and mouldings,
glass, store fronts, doors, door openers, fixtures, equipment and appurtenances
thereof (including lighting, heating, electrical, plumbing, ventilating and air
conditioning fixtures and systems and other mechanical equipment and
appurtenances) and all parts of the Premises, and parts of Tenant's Work not on
the Premises, not required herein to be maintained by Landlord, in good order,
condition and repair and clean, orderly, sanitary and safe, damage by
unavoidable casualty excepted, (including but not limited to doing such things
as are necessary to cause the Premises to comply with applicable laws,
ordinances, rules, regulations and orders of governmental and public bodies and
agencies, such as but not limited to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇ Occupational Safety
and Health Act). If replacement of equipment, fixtures and appurtenances
thereto is necessary, Tenant shall replace the same with new or completely
reconditioned equipment, fixtures and appurtenances, and repair all damages
done in or by such replacement. If Tenant fails to perform its obligations
hereunder, Landlord with notice may, but shall not be obligated to, perform
Tenant's obligations or perform work resulting from Tenant's acts, actions or
omissions and add the cost of the same to the next installment of Minimum
Monthly Rent due hereunder to be repaid in full.
Section 9.3. Surrender of Premises.
At the expiration or earlier termination of the Lease Term, Tenant
shall surrender the Premises in the same condition as they were required to be
in on the Required Completion Date, reasonable wear and tear and damage by
unavoidable casualty excepted, and deliver all keys for, and all combinations on
locks, safes and vaults in, the Premises to Landlord at Landlord's notice
address as specified in Section 24.7 or, at Landlord's option, to the office of
the Center's general manager.
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ARTICLE X
SIGNS, AWNINGS, CANOPIES, FIXTURES, ALTERATIONS
Section 10.1. Fixtures.
All fixtures installed by Tenant shall be new. At least every five (5)
years, upon the request of Landlord, Tenant shall refurbish all or any portion
of the interior of the Premises so that the furnishings, furniture, flooring,
wall fixtures and coverings, equipment and other appurtenances in the Premises
shall be in keeping with the contemporary decor of the Center.
Section 10.2. Removal and Restoration by Tenant.
All alterations, changes and additions and all improvements (excluding
Tenant's furniture, trades fixtures and equipment and other personal property
not belonging to Tenant), including leasehold improvements, made by Tenant, or
made by Landlord on Tenant's behalf, whether part of Tenant's Work or not and
whether or not paid for wholly or in part by Landlord, shall remain Tenant's
property for the Lease Term. Any alterations, changes, additions and
improvements shall immediately upon the termination of this Lease become
Landlord's property, be considered part of the Premises, and not be removed at
or prior to the end of the Lease Term without Landlord's written consent. If
Tenant fails to remove any shelving, decorations, equipment, trade fixtures or
personal property from the Premises prior to the end of the Lease Term, they
shall become Landlord's property and Tenant shall repair or pay for the repair
of any damage done to the Premises resulting from removing same but not for
painting or redecorating the Premises.
Section 10.3. Tenant's Liens.
A. Tenant shall not suffer any mechanics' or materialmen's lien to be
filed against the Premises or the Center by reason of work, labor, services or
materials performed or furnished to Tenant or anyone holding any part of the
Premises under Tenant. If any such lien shall at any time be filed as
aforesaid. Tenant may contest the same in good faith, but, notwithstanding such
contest, Tenant shall, within thirty (30) days (or such shorter period of time
as may be reaonably necessary if Landlord's or Landlord's mortgagee's interest
in the Premises or the Center is in immediate jeopardy or if Landlord's
ability to sell, finance or re-finance the Center or any portion thereof is
adversely affected as a result of such lien) after the filing thereof, cause
such lien to be released of record by payment, bond, order of a court of
competent jurisdiction, or otherwise in a manner satisfactory to Landlord and
its mortgagee. In the event of Tenant's failure to release of record any such
lien within the aforesaid period, Landlord, any affiliate of Landlord or any
party who delivered a guaranty with respect to any financing of the Center or
the Premises may remove said lien by paying the full amount thereof or by
bonding or in any other manner Landlord, any affiliate of Landlord or any
party who delivered a guaranty with respect to any financing of the Center or
the Premises deems appropriate, without investigating the validity thereof,
and irrespective of the fact that Tenant may contest the propriety or the
amount thereof, and Tenant, upon demand, shall pay Landlord the amount so paid
out by Landlord in connection withe the discharge of said lien, together with
interest thereon at the rate set forth in Section 4.2 herein and reasonable
expenses incurred in connection therewith, including reasonable attorneys'
fees, which amounts are due and payable in full to Landlord as additional rent
on the first day of the next following month. Nothing contained in this Lease
shall be construed as a consent on the part of Landlord to subject Landlord's
estate in the Premises to any lien or liability under the lien laws of the
State of Minnesota. Tenant's obligation to observe and perform any of the
provisions of this Section 10.3 shall survive the expiration of the Lease Term
or the earlier termination of this Lease.
B. Tenant shall not create or suffer to be created a security interest or
other lien against any improvements, additions or other construction
made by Tenant in or to the Premises or against any equipment or fixtures
installed by Tenant therein (other than Tenant's property), and should any
security interest be created in breach of the foregoing, Landlord, any
affiliate of Landlord or any party who delivered a guaranty with respect to any
financing of the Center or the Premises shall be entitled to discharge the same
by exercising the rights and remedies afforded it under paragraph A of this
Section. Notwithstanding anything herein in this Section 10.3B, which may be
to the contrary, Tenant shall have the right, at any time during the Lease
Term, to grant to a bona-fide third party lender or other financial institution
a lien or security interest on all or a part of Tenant's personal property,
furniture, inventory, trade fixtures (but not permanently affixed leasehold
improvements which by the terms of this Lease become Landlord's property),
business equipment and other chattels for fianancing purposes. Landlord hereby
waives any lien or security interest it may have in Tenant's personal property,
furniture, inventory, trade fixtures (but not permanently affixed leasehold
improvements which by the terms of this Lease become Landlord's property),
business equipment and other chattels used by Tenant as collateral or security
for financing purposes, and upon Tenants, written request, if no default exists
hereunder, Landlord agrees to execute an instrument confirming the same. In no
event shall Tenant be permitted to use the Lease as collateral or security for
financing purposes and in no event whatsoever shall Landlord be obligated or
required to consent to or recognize a collateral assignment of this Lease by
Tenant.
Section 10.4. Signs, Awnings and Canopies.
Tenant will not place or permit on any exterior door or window or any
exterior wall of the Premises any sign, awning, canopy, advertising matter,
decoration, lettering or other thing of any kind which does not comply with the
Sign Criteria set forth in Exhibit "E" attached hereto.
ARTICLE XI
INSURANCE
Section 11.1. By Landlord.
Landlord shall carry public liability insurance on those portions of the
Common Areas included in the Total Tract providing coverage of not less than
$5,000,000.00 against liability for bodily injury including death and personal
injury for
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any one (1) occurrence and $1,000,000.00 property damage insurance, or combined
single limit insurance in the amount of $5,000,000.00.
Landlord shall also carry insurance for fire, extended coverage, vandalism,
malicious mischief and other endorsements deemed advisable by Landlord, insuring
all improvements on the Total Tract, including the Premises and all leasehold
improvements thereon and appurtenances thereto (excluding Tenant's merchandise,
trade fixtures, furnishings, equipment, personal property and excluding plate
glass) for the full insurable value thereof, with such deductibles as Landlord
deems advisable, such insurance coverage to include improvements provided by
Tenant as set forth in Exhibit "C" and "C-2" as Tenant's Work (excluding wall
covering, floor covering, carpeting and drapes) and Landlord's Work as defined
in Exhibit "C"; Tenant agrees to pay Landlord, as additional rent, 25 cents per
year for each square foot of Store Floor Area payable in equal installments on
the first day of every calendar month during the Lease Term, as Tenant's share
of the cost of the premiums for such insurance described above in this sentence.
At the end of the first Partial Lease Year and each Lease Year thereafter, the
amount thus to be paid by Tenant shall be adjusted upward or downward (but shall
never be less than the above amount) in direct ratio to the increase or decrease
in the cost of the premiums paid by Landlord for such insurance coverage. Upon
Tenant's written request therefor, Landlord shall provide Tenant with a copy of
the ▇▇▇▇ for Landlord's insurance premiums.
Section 11.2. By Tenant.
Tenant agrees to carry public liability insurance on the Premises during
the Lease Term, covering the Tenant and naming the Landlord, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Group, Inc. and M.S. Management Associates, Inc., as additional named insured,
with terms and companies satisfactory to Landlord, for limits of not less than
$5,000,000.00 for bodily injury, including death, and personal injury for any
one (1) occurrence, $1,000,000.00 property damage insurance or a combined
single limit of $5,000,000.00. Tenant's insurance will include contractual
liability coverage recognizing this Lease, products and completed operations
liability and providing that Landlord and Tenant shall be given a minimum of
sixty (60) days written notice by the insurance company prior to cancellation,
termination or change in such insurance. Tenant also agrees to carry insurance
against fire and such other risks as are from time to time required by
Landlord, including, but not limited to, a standard "All-Risk" policy of
property insurance protecting against all risk of physical loss or damage,
including without limitation, sprinkler leakage coverage and plate glass
insurance covering all plate glass in the Premises (including store fronts), in
amounts not less than the actual replacement cost, covering all of Tenant's
merchandise, trade fixtures, furnishing, wall covering, floor covering,
carpeting, drapes, equipment and all items of personal property of Tenant
located on or within the Premises. Tenant shall provide Landlord with
certificates evidencing that such insurance is in full force and effect and
stating the terms thereof. The minimum limits of the comprehensive general
liability policy of insurance shall in no way limit or diminish Tenant's
liability under Section 11.6 hereof and shall be subject to increase at any
time, and from time to time. Within ten (10) days after demand therefor by
Landlord, Tenant shall furnish Landlord with evidence that it has complied with
such demand.
Section 11.3. Mutual Waiver of Subrogation Rights.
Landlord and Tenant and all parties claiming under them mutually release
and discharge each other from all claims and liabilities arising from or caused
by any casualty or hazard covered or required hereunder to be covered in whole
or in part by insurance on the Premises or in connection with property on or
activities conducted on the Premises, and waive any right of subrogation which
might otherwise exist in or accrue to any person on account thereof and
evidence such waiver by endorsement to the required insurance policies,
provided that such release shall not operate in any case where the effect is to
invalidate or increase the cost of such insurance coverage (provided, that in
the case of increased cost, the other party shall have the right, within thirty
(30) days following written notice, to pay such increased cost, thereby keeping
such release and waiver in full force and effect).
Section 11.4. Waiver.
Except for the intentional misconduct or negligence of Landlord, its
agents or employees, Landlord, its agents and employees, shall not be liable
for, and Tenant waives all claims for, damage, including but not limited to
consequential damages, to person, property or otherwise, sustained by Tenant or
any person claiming through Tenant resulting from any accident or occurrence in
or upon any part of the Center including, but not limited to, claims for damage
resulting from: (a) any equipment or appurtenances becoming out of repair; (b)
Landlord's failure to keep any part of the Center in repair; (c) injury done or
caused by wind, water, or other natural element; (d) any defect in or failure
of plumbing, heating or air conditioning equipment, electric wiring or
installation thereof, gas, water, and steam pipes, stairs, porches, railings or
walks; (e) broken glass; (f) the backing up of any sewer pipe or downspout; (g)
the bursting, leaking or running of any tank, tub, washstand, water closet,
waste pipe, drain or any other pipe or tank in, upon or about the Premises; (h)
the escape of steam or hot water; (i) water, snow or ice upon the Premises; (j)
the falling of any fixture, plaster or stucco; (k) damage to or loss by theft
or otherwise of property of Tenant or others; (l) acts or omissions of persons
in the Premises, other tenants in the Center, occupants of nearby properties,
or any other persons; and (m) any act or omission of owners of adjacent or
contiguous property. All property of Tenant kept in the Premises shall be so
kept at Tenant's risk only and Tenant shall save Landlord harmless from claims
arising out of damage to the same, including subrogation claims by Tenant's
insurance carrier.
Section 11.5. Insurance - Tenant's Operation.
Tenant will not do or suffer to be done anything which will contravene
Landlord's insurance policies or prevent Landlord from procuring such policies
in amounts and companies selected by Landlord. If anything done, omitted to be
done or suffered to be done by Tenant in, upon or about the Premises shall
cause the rates of any insurance effected or carried by Landlord on the
Premises or other property to be increased beyond the regular rate from time to
time applicable to the Premises for use for the purpose permitted under this
Lease, or such other property for the use or uses made thereof, Tenant will pay
the amount of such increase promptly upon Landlord's demand and Landlord shall
have the right to correct any such condition at Tenant's expense. In the event
that this Lease so permits and Tenant engages in the preparation of food or
packaged foods or engages in the use, sale or storage of inflammable or
combustible material, Tenant shall install chemical
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extinguishing devices (such as ansul) approved by Underwriters Laboratories
and Factory Mutual and the installation thereof must be approved by the
appropriate local authority. Tenant shall keep such devices under service as
required by such organizations. If gas is used in the Premises, Tenant shall
install gas cut-off devices (manual and automatic).
Section 11.6. Indemnification.
Except to the extent caused by the negligent act or intentional
misconduct of Landlord, its partners, agents, employees or property manager,
Tenant shall save harmless, indemnify, and at Landlord's option, defend
Landlord, its agents and employees, and mortgagee, if any, from and against any
and all liability, liens, claims, demands, damages, expenses, fees (including
reasonable attorneys' fees), costs, fines, penalties, suits, proceedings,
actions and causes of action of any and every kind and nature arising or
growing out of or in any way connected with Tenant's use, occupancy, management
or control of the Premises or Tenant's operations, conduct or activities in the
Center.
Except to the extent caused by the negligent act or intentional
misconduct of Tenant, its partners, agents, employees or store manager, and
except for claims waived by Tenant pursuant to Section 11.4 above, Landlord
shall save harmless, indemnify, and at Tenant's option, defend Tenant, its
agents and employees from and against any and all liability, liens, claims,
demands, damages, expenses, fees (including reasonable attorneys' fees), costs,
fines, penalties, suits, proceedings, actions and causes of action of any and
every kind and nature arising or growing out of or in any way connected with
Landlord's use, occupancy, management or control of the Common Areas or
Landlord's operations, conduct or activities in the Center.
Section 11.7. Dramshop Insurance.
The Tenant agrees that it will purchase and maintain so-called
"dramshop" insurance insuring both Landlord and Tenant with adequate limits in
the event the State of Minnesota now has, or hereafter enacts a statute which
provides that a judgment obtained against a retailer, or any other person or
entity, who dispenses alcoholic beverages to unauthorized persons, as defined
by said statute, shall be a lien against the real estate from which said
alcoholic beverages were illegally dispensed (sometimes referred to as a dram
shop act).
ARTICLE XII
OFFSET STATEMENT, ATTORNMENT, SUBORDINATION
Section 12.1. Offset Statement.
With ten (10) days after either party's written request the other
party shall deliver, executed in recordable form a declaration to any person
designated by such party (a) ratifying this Lease; (b) stating the commencement
and termination dates; and (c) certifying (i) that this Lease is in full force
and effect and has not been assigned, modified, supplemented or amended (except
by such writings as shall be stated), (ii) that all conditions under this Lease
to be performed by Landlord or Tenant (as the case may be) have been satisfied
(stating exceptions, if any), (iii) that to the best of such party's knowledge,
without further inquiry, no defenses or offsets against the enforcement of this
Lease by Landlord exist (or stating those claimed): (iv) as to advance rent, if
any, paid by Tenant, (v) the date to which rent has been paid, (vi) as to the
amount of security deposited with Landlord, and such other information as the
requesting party reasonably requires. Persons receiving such statements shall
be entitled to rely upon them.
Section 12.2. Attornment.
Tenant shall, in the event of a sale or assignment of Landlord's
interest in the Premises or the building in which the Premises is located or
this Lease or the Total Tract, or if the Premises or such building comes into
the hands of a mortgagee, ground lessor or any other person whether because of a
mortgage foreclosure, exercise of a power of sale under a mortgage, termination
of the ground lease, or otherwise, attorn to the purchaser or such mortgagee or
other person and recognize the same as Landlord hereunder. Tenant shall
execute, at Landlord's request, any reasonable attornment agreement required by
any mortgagee, ground lessor or other such person to be executed, containing
such provisions as such mortgagee, ground lessor or other person reasonably
requires so long as Tenant's rights under this Lease are not reduced or
obligations increased.
Section 12.3. Subordination.
A. Mortgage. This Lease shall be secondary, junior and inferior at
all times to the lien of any mortgage and to the lien of any deed of trust or
other method of financing or refinancing (hereinafter collectively referred to
as "mortgage") now or hereafter existing against all or a part of the Total
Tract, and to all renewals, modifications, replacements, consolidations and
extensions thereof, and Tenant shall execute and deliver all reasonable
documents requested by any mortgagee or security holder to effect such
subordination so long as Tenant's rights under this Lease are not reduced or
obligations increased.
B. Construction, Operation and Reciprocal Easement Agreements. This
Lease is subject and subordinate to one (1) or more construction, operation,
reciprocal easement or similar agreements (hereinafter referred to as
"Operating Agreements") entered into or hereafter to be entered into between
Landlord and other owners or lessees of real estate (including but not limited
to owners and operators of department stores) within or near the Center (which
Operating Agreements have been or will be recorded in the official records of
the County wherein the Center is located) and to any and all easements and
easement agreements which may be or have been entered into with or granted to
any persons heretofore or hereafter, whether such persons are located within or
upon the Center or not, and Tenant shall execute such reasonable instruments as
Landlord requests to evidence such subordination.
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Section 12.4 Failure to Execute Instruments.
Tenant's failure to execute instruments or certificates provided for in
this Article XII within thirty (30) days after the mailing by Landlord of a
written request shall be a default under this Lease.
Section 12.5. Non-Disturbance.
Upon Tenant's written request, Landlord agrees to request from its
mortgagee or other security holder whose interest in the Premises is superior
to Tenant's interest therein a non-disturbance agreement which shall provide
that in the event Landlord defaults under such mortgage or other security
instrument, Tenant's possession of the Premises shall not be disturbed so long
as Tenant is not in breach of or default of this Lease. Landlord shall not be
liable or responsible for any fees or expenses charged by such mortgagee or
security holder in attempting to secure such non-disturbance agreement.
Further, any mortgagee's or security holder's failure or refusal to execute a
non-disturbance shall not be deemed to be a breach or default of this Lease by
Landlord.
ARTICLE XIII
ASSIGNMENT, SUBLETTING AND CONCESSIONS
Section 13.1. Consent Required.
Tenant shall not sell, assign, mortgage, pledge or in any manner transfer
this Lease or any interest therein, nor sublet all or any part of the Premises,
nor license concessions nor lease departments therein, without Landlord's prior
written consent in each instance which consent shall not be unreasonably
withheld or delayed, provided Tenant and its proposed assignee, sublessee or
other transferee comply with and satisfy the terms, conditions and provisions
of subparagraphs #1 through #6 below. Consent by Landlord to any assignment or
subletting shall not waive the necessity for consent to any subsequent
assignment or subletting. This prohibition shall include a prohibition against
any subletting or assignment by operation of law. If this Lease is assigned or
the Premises or any part sublet or occupied by anybody other than Tenant,
Landlord may collect rent from the assignee, subtenant or occupant and apply
the same to the rent herein reserved, but no such assignment, subletting,
occupancy or collection of rent shall be deemed a waiver of any restrictive
covenant contained in this Section 13.1 or the acceptance of the assignee,
subtenant or occupant as tenant, or a release of Tenant from the performance by
Tenant of any covenants on the part of Tenant herein contained. Any assignment
(a) as to which Landlord has consented; or (b) which is required by reason of a
final nonappealable order of a court of competent jurisdiction; or (c) which is
made by reason of and in accordance with the provisions of any law or statute,
including, without limitation, the laws governing bankruptcy, insolvency or
receivership shall be subject to all terms and conditions of this Lease, and
shall not be effective or deemed valid unless, at the time of such assignment:
1. Each assignee or sublessee shall agree, in a written agreement
satisfactory to Landlord, to assume and abide by all of the terms and
provisions of this Lease, including those which govern the permitted
uses of the Premises described in Article VIII herein; and
2. Each assignee or sublessee has submitted a current financial
statement, prepared by a certified public accountant, showing a net
worth at least equal to Tenant's net worth as of the date of this
Lease or the date immediately preceding the date of such assignment or
subletting, whichever is greater; and
3. Each assignee or sublessee has submitted, in writing, evidence
satisfactory to Landlord of retailing or restaurant experience in
regional shopping centers; and
4. The business reputation of each assignee or sublessee shall meet or
exceed generally acceptable commercial standards; and
5. The use of the Premises by each assignee or sublessee shall not
violate, or create any potential violation of applicable laws, codes or
ordinances, nor violate any other agreements affecting the Premises,
Landlord or other tenants in the Center.
6. Tenant shall pay Landlord an Assignment Fee as reimbursement for
administrative and legal expenses incurred by Landlord in connection
with any assignment or subletting. The Assignment Fee initially will
be One Thousand and 00/100 Dollars ($1,000.00) and shall increase by
One Hundred and 00/100 Dollars ($100.00) at the end of each full Lease
Year of the Lease Term.
In the event of any assignment or subletting as provided above, there shall
be paid to Landlord, in addition to the Minimum Annual Rent and other charges
due Landlord pursuant to this Lease, such additional consideration as shall be
attributable to the right of use and occupancy of the Premises, whenever the
same is receivable by Tenant, together with, as additional rent, the excess, if
any, of the rent and other charges payable by the assignee or sublessee over
the Minimum Annual Rent and other charges payable under the Lease to Landlord
by Tenant pursuant to this Lease. Such additional rent shall be paid to
Landlord concurrently with the payments of Minimum Annual Rent required under
this Lease, and Tenant shall remain primarily liable for such payments.
Notwithstanding any assignment or subletting, Tenant shall remain fully liable
on this Lease and for the performance of all terms, covenants and provisions of
this Lease.
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Anything contained in the foregoing provisions of this Section to the
contrary notwithstanding, neither Tenant nor any other person having an
interest in the possession, use, occupancy or utilization of the Premises shall
enter into any lease, sublease, license, concession or other agreement for use,
occupancy or utilization of space in the Premises which provides for rental or
other payment for such use, occupancy or utilization based, in whole or part,
on the net income or profits derived by any person from the Premises leased,
used, occupied, or utilized (other than an amount based on a fixed percentage
or percentages of receipts or sales), and any such purported lease, sublease,
license, concession or other agreement shall be absolutely void and ineffective
as a conveyance of any right or interest in the possession, use, occupancy or
utilization of any part of the Premises.
Section 13.2. Change in Ownership.
If Tenant or the guarantor of this Lease, if any, is a corporation the
stock of which is not traded on any national securities exchange (as defined in
the Securities Exchange Act of 1934, as amended) or the NASDAQ Stock Market,
then the following shall constitute an assignment of this Lease for all
purposes of this Article XIII: (i) the merger, consolidation or reorganization
of such corporation; and/or (ii) the sale, issuance, or transfer, cumulatively
or in one transaction, of any voting stock, by Tenant or the guarantor of this
Lease or the stockholders of record of either as of the date of this Lease,
which results in a change in the voting control of Tenant or the guarantor of
this Lease, except any such transfer by inheritance or testamentary
disposition. If Tenant or the guarantor of this Lease, if any, is a joint
venture, partnership, or other association, then for all purposes of this
Article XIII, the sale, issuance or transfer, cumulatively or in one
transaction, of either voting control or of a fifty percent (50%) interest, or
the termination of any joint venture, partnership or other association, shall
constitute an assignment, except any such transfer by inheritance or
testamentary disposition.
ARTICLE XIV
MARKETING FUND AND ADVERTISING
Section 14.1. Provisions Relating to Marketing Fund.
Landlord may, at its option, create and maintain a marketing fund
(hereinafter referred to as the "Fund"), the primary purpose of which is to
provide sums necessary for professional marketing services which benefit the
tenants in the Center. In the event Landlord does create and maintain the
Fund, Tenant agrees to contribute to such Fund, beginning upon the later to
occur of (a) the Commencement Date, or (b) the date the Fund is created, $0.50
per square foot of Store Floor Area, during each calendar year of the Lease Term
(hereinafter referred to as "Fixed Contribution") payable in equal monthly
installments, in advance, on the first day of each and every month (pro rated
for partial months). Landlord shall contribute an amount equal to 1/4 of the
monies collected from all tenants in the Center during each calendar year,
which sum may be paid in whole or in part by Landlord, at its option, by
providing the services of a Marketing Director or other person or persons under
Landlord's exclusive control to help organize and implement marketing programs
using assets from the Fund. Any overpayment or underpayment of such amount by
Landlord shall be adjusted annually. The Fixed Contribution shall be increased
annually commencing with the creation of the Fund based upon the increase of the
Consumer Price index (as defined in Section 7.2 above) during the preceding
twelve (12) month period. In addition to its other obligations contained
herein, Tenant agrees that it shall participate and cooperate in all special
sales and promotions sponsored by the Fund. The failure of any other tenant or
any department store to contribute to the Fund shall not affect Tenant's
obligations hereunder.
Section 14.2. Advertising.
Tenant shall furnish to Landlord an annual statement at the end of each
Lease Year showing the amounts spent by Tenant on white space advertising,
other advertising media, and local store marketing or promotions. Each such
annual statement shall be made a part of the Gross Sales annual report required
to be furnished by Tenant under Section 4.3. If Tenant's annual statement
shows that Tenant has expended for such advertising, during the preceding Lease
Year, less than one percent (1%) of its Gross Sales for said period, Tenant
shall within thirty (30) days after the required delivery date of its annual
statement contribute to the Marketing Fund referred to in Section 14.1 above
the difference between the amount actually expended for such advertising and
one percent (1%) of such Gross Sales. Contributions or other payments payable
by Tenant to the said Marketing Fund shall not be deemed an amount expended for
advertising within the meaning of this Section 14.2. All expenditures made by
Tenant for advertising in connection with Tenant's other stores, if any, within
a fifteen (15) mile radius from the nearest perimeter boundary of the whole
Center, may be included by Tenant to comply with this Section 14.2, provided
such advertising in all instances includes the Premises and encompasses or is
distributed to the geographical trade area in which the whole Center is
located.
Section 14.3. Media Fund.
Landlord may, at its option, create and maintain a Media Fund, the
exclusive purpose of which shall be to pay all costs and expenses associated
with the purchase of electronic, print or outdoor advertising for the promotion
of the Center. In the event Landlord does create and maintain the Media Fund,
Tenant agrees to contribute to such Fund, beginning upon the later to occur of
(a) the Commencement Date or (b) the date the Media Fund is created, a sum
equal to $0.50 per square foot of Store Floor Area during each calendar year of
the Lease Term (hereinafter referred to as "Media Fund Charge"), payable in
equal monthly installments, in advance, on the first day of each and every
month (pro rated for partial months).
The Media Fund Charge shall be adjusted annually by a percentage equal to
the percentage increase or decrease in the electronic, print and outdoor
advertising rates of the media used for advertising and promotions in the
preceding calendar year in the media market in which the Center is located,
provided, however that said charge shall not be less than as originally set
forth herein. Within ninety (90) days following the close of each calendar
year, Landlord shall furnish Tenant a statement for the preceding calendar year
showing the amounts expended by Landlord for media advertising. Tenant hereby
authorizes Landlord to use Tenant's trade name and a brief description of
Tenant's business in connection with any media advertising purchased pursuant
to this Section.
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Section 14.4. Merchants' Association.
Landlord may, at its option, create and maintain a Merchants' Association
(the "Association") in lieu of the Fund and the Media Fund. In that event,
Tenant agrees to contribute to the Association, beginning upon the later to
occur of (a) the Commencement Date or (b) the date the Association is created,
the sum of the amounts Tenant would be obligated to contribute to the Fund and
the Media Fund under Section 14.1 and 14.3 had Landlord created and maintained
the Fund and the Media Fund. Such amount shall be payable by Tenant to the
Association in equal monthly installments, in advance, on the first day of each
and every month (prorated for partial months). Landlord shall contribute to the
Association during each calendar year an amount equal to the amount Landlord
would otherwise be required to contribute to the Fund in accordance with Section
14.1 above. Any overpayment or underpayment of such amount by Landlord shall be
adjusted annually.
ARTICLE XV
SECURITY DEPOSIT
Section 15.1. Amount of Deposit. INTENTIONALLY DELETED.
ARTICLE XVI
DAMAGE AND DESTRUCTION
If the premises are hereafter damaged or destroyed or rendered partially
untenantable for their accustomed use by fire or other casualty insured under
the coverage which Landlord is obligated to carry pursuant to Section 11.1
hereof, Landlord shall promptly repair the same to substantially the condition
which they were in immediately prior to the happening of such casualty
(excluding stock in trade, fixtures, furniture, furnishings, carpeting, floor
covering, wall covering, drapes, ceiling and equipment), and from the date of
such casualty until the Premises are so repaired and restored, the Minimum
Monthly Rent payments payable hereunder shall ▇▇▇▇▇ in such proportion as the
part of said Premises thus destroyed or rendered untenantable bears to the total
Premises; and in the event the kitchen area in the Premises is rendered unusable
as a result of such damage or destruction, all rent, except Real Estate Taxes,
shall ▇▇▇▇▇ (unless such damage or destruction was caused by the Tenant, its
agents, employees or contractors in which event rent shall not ▇▇▇▇▇) until the
kitchen area is again rendered usable; provided, however, that Landlord shall
not be obligated to repair and restore if such casualty is not covered by the
insurance which Landlord is obligated to carry pursuant to Section 11.1 hereof
and no portion of the Minimum Monthly Rent and other payments payable hereunder
shall ▇▇▇▇▇, and provided, further, that Landlord shall not be obligated to
expend for any repair or restoration an amount in excess of the insurance
proceeds recovered by Landlord therefor, and provided, further, that if the
Premises be damaged, destroyed or rendered untenantable for their accustomed
uses by fire or other casualty to the extent of more than fifty percent (50%) of
the cost to replace the Premises during the last three (3) years of the Lease
Term, then Landlord or Tenant shall have the right to terminate this Lease
effective as of the date of such casualty by giving to the other party within
sixty (60) days after the happening of such casualty, written notice of such
termination. If such notice be given, this Lease shall terminate and Landlord
shall promptly repay to Tenant any rent theretofore paid in advance which was
not earned at the date of such casualty. Any time that Landlord repairs or
restores the Premises after damage or destruction, then Tenant shall promptly
repair or replace its stock in trade, fixtures, furnishings, furniture,
carpeting, wall covering, floor covering, drapes, ceiling and equipment to the
same condition as they were in immediately prior to the casualty, and if Tenant
has closed its business, Tenant shall promptly reopen for business upon the
completion of such repairs.
Notwithstanding anything to the contrary set forth herein, in the event all
or any portion of the Center shall be damaged or destroyed by fire or other
cause (notwithstanding that the Premises may be unaffected thereby), to the
extent the cost of restoration thereof would exceed fifteen percent (15%) of the
amount it would have cost to replace the Center in its entirety at the time such
damage or destruction occurred, then Landlord may terminate this Lease by giving
Tenant thirty (30) days prior notice of Landlord's election to do so, which
notice shall be given, if at all, within ninety (90) days following the date of
such occurrence. In the event of the termination of this Lease as aforesaid,
this Lease shall cease thirty (30) days after such notice is given, and the rent
and other charges hereunder shall be adjusted as of that date.
Notwithstanding anything to the contrary set forth herein, in the event all
or any portion of the Center shall be damaged or destroyed by fire or other
cause (notwithstanding that the Premises may be unaffected thereby), to the
extent the cost of restoration thereof would exceed thirty-five percent (35%) of
the amount it would have cost to replace the Center in its entirety at the time
such damage or destruction occurred, then Tenant may terminate this Lease by
giving Landlord thirty (30) days prior notice of Tenant's election to do so,
which notice shall be given, if at all, within ninety (90) days following date
of such occurrence. In the event of the termination of this Lease as aforesaid,
this Lease shall cease thirty (30) days after such notice is given, and the rent
and other charges hereunder shall be adjusted as of that date.
ARTICLE XVII
EMINENT DOMAIN
Section 17.1. Condemnation.
If ten percent (10%) or more of the Store Floor Area or fifteen percent
(15%) or more of the Center (excluding land not currently developed) shall be
acquired or condemned by right of eminent domain for any public or quasi
public use or purpose, or if an Operating Agreement is terminated as a result
of such an acquisition or condemnation, then Landlord or Tenant at its election
may terminate this Lease by giving notice to Tenant of its election, and in such
event rentals shall be apportioned and adjusted as of the date of termination.
If the Lease shall not be terminated as aforesaid, then it shall continue
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in full force and effect, and Landlord shall within a reasonable time after
possession is physically taken (subject to delays due to shortage of labor,
materials or equipment, labor difficulties, breakdown of equipment, government
restrictions, fires, other casualties or other causes beyond the reasonable
control of Landlord) repair or rebuild what remains of the Premises for
Tenant's occupancy; and a just proportion of the Minimum Annual Rent shall be
abated, according to the nature and extent of the injury to the Premises until
such repairs and rebuilding are completed and thereafter for the balance of the
Lease Term.
Section 17.2. Damages.
Landlord reserves, and Tenant assigns to Landlord, all rights to damages on
account of any taking or condemnation or any act of any public or quasi public
authority for which damages are payable. Tenant shall execute such instruments
of assignment as Landlord requires, join with Landlord in any action for the
recovery of damages, if requested by Landlord, and turn over to Landlord any
damages recovered in any proceeding. If Tenant fails to execute instruments
required by Landlord, or undertake such other steps as requested. Landlord shall
be deemed the duly authorized irrevocable agent and attorney-in-fact of Tenant
to execute such instruments and undertake such steps on behalf of Tenant.
However, Landlord does not reserve any damages payable for trade fixtures
installed by Tenant at its own cost which are not part of the realty. However,
Landlord shall not be entitled to the award made to Tenant for loss of business,
relocation, depreciation to and costs of removal of stock and fixtures installed
by Tenant at its own cost which are not part of the realty or other losses
Tenant may be entitled to recover other than diminution in value of the
leasehold; provided, however, any claim for the same is made against the
condemning authority and not against the Landlord or Landlord's mortgagee and
provided, further, Tenant's claim for losses or damages shall not diminish any
award made to Landlord or Landlord's mortgagee therefor.
ARTICLE XVIII
DEFAULT BY TENANT
Section 18.1. Right to Re-Enter.
The following shall be considered for all purposes to be defaults under and
breaches of this Lease: (a) any failure of Tenant to pay any rent or other
amount within five (5) days after Tenant's receipt of written notice from
Landlord that the same is past due hereunder; (b) any failure by Tenant to
perform or observe any other of the terms, provisions, conditions and covenants
of this Lease for more than thirty (30) days after written notice of such
failure or such longer period of time as may be reasonably required provided
Tenant has commenced to cure the same within such thirty (30) day period and is
diligently pursuing such cure to completion; (c) a determination by Landlord
that Tenant has submitted any materially false report required to be furnished
hereunder; (d) anything done by Tenant upon or in connection with the Premises
or the construction of any part thereof which directly or indirectly interferes
in any way with, or results in a work stoppage in connection with, construction
of any part of the Center or any other tenant's space and Tenant fails to
promptly take such action as Landlord shall specify, orally or in writing from
Landlord or Landlord's authorized representative, in order to promptly prevent,
avoid or terminate such interference or work stoppage (or the threat thereof) in
connection with construction of any part of the Center or any other tenant's
space; (e) the bankruptcy or insolvency of Tenant or the filing by or against
Tenant of a petition in bankruptcy or for reorganization or arrangement or for
the appointment of a receiver or trustee of all or a portion of Tenant's
property, or Tenant's assignment for the benefit of creditors; (f) if Tenant
abandons or vacates or does not do business in the Premises when required to do
so under this Lease, or (g) this Lease or Tenant's interest herein or in the
Premises or any improvements thereon or any property of Tenant are executed upon
or attached; or (h) the Premises come into the hands of any person other than
expressly permitted under this Lease (i) repetition or continuation of any
failure to pay rent or other sums due hereunder where such failure shall
continue or be repeated for two consecutive months or a total of four months in
any period of twelve consecutive months. In any such event, and without any
additional grace period (except as provided in this Lease), demand or notice
(the same being hereby waived by Tenant), Landlord, in addition to all other
rights or remedies it may have, shall have the right thereupon or at any time
thereafter to terminate this Lease by giving notice to Tenant stating the date
upon which such termination shall be effective, and shall have the right, either
before or after any such termination, to re-enter and take possession of the
Premises, remove all persons and property from the Premises, store such property
at Tenant's expense, and sell such property if necessary to satisfy any
deficiency in payments by Tenant as required hereunder, all without notice or
resort to legal process and without being deemed guilty of trespass or
constructive eviction or becoming liable for any loss or damage occasioned
thereby. Nothing herein shall be construed to require Landlord to give any
notice before exercising any of its rights and remedies provided for in Section
3.3 of this Lease. Notwithstanding anything to the contrary herein contained,
if Tenant commits any non-monetary default hereunder for or precedent to which
or with respect to which notice is herein required, and commits such defaults
within twelve (12) months thereafter, no notice shall thereafter be required to
be given by Landlord as to or precedent to any such subsequent default during
such twelve (12) month period (as Tenant hereby waiving the same) before
exercising any or all remedies available to Landlord.
Section 18.2. Right to Relet.
If Landlord re-enters the Premises as above provided, or if it takes
possession pursuant to legal proceedings or otherwise, it may either terminate
this Lease or it may, from time to time, without terminating this Lease, make
such alterations and repairs as it deems advisable to relet the Premises, and
relet the Premises or any part thereof for such term or terms (which may extend
beyond the Lease Term) and at such rentals and upon such other terms and
conditions as Landlord in its sole discretion deems advisable; upon each such
reletting all rentals received by Landlord therefrom shall be applied, first, to
any indebtedness other than rent due hereunder from Tenant to Landlord; second,
to pay any costs and expenses of reletting, including without limitation,
brokers and attorneys' fees and costs of advertising, alterations and repairs;
third, to rent due hereunder, and the residue, if any, shall be held by Landlord
and applied in payment of future rent as it becomes due hereunder.
If rentals received from such reletting during any month are less than that
to be paid during that month by Tenant hereunder, Tenant shall immediately pay
any such deficiency to Landlord. No re-entry or taking possession of the
Premises by
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Landlord shall be construed as an election to terminate this Lease unless a
written notice of such termination is given by Landlord.
Notwithstanding any such reletting without termination, Landlord may at any
time thereafter terminate this Lease for any prior breach or default. If
Landlord terminates this Lease for any breach, or otherwise takes any action on
account of Tenant's breach or default hereunder, in addition to any other
remedies it may have, it may recover from Tenant all damages incurred by reason
of such breach or default, all costs of retaking the Premises and including the
excess, if any, of the total rent and charges reserved in this Lease for the
remainder of the Lease Term over the then reasonable rental value of the
Premises for the remainder of the Lease Term, all of which shall be immediately
due and payable by Tenant to Landlord. Further, if Tenant defaults in the
performance or observance of any of the terms, conditions, covenants or
obligations contained in this Lease and Landlord places the enforcement of all
or any part of this Lease, the collection of any rent due or to become due or
the recovery of possession of the Premises in the hands of an attorney, or if
Landlord incurs any fees or out-of-pocket costs in any litigation, negotiation
or transaction in which Tenant causes Landlord to be involved or concerned,
Tenant agrees to reimburse Landlord for the reasonable attorneys' fees and costs
incurred thereby, whether or not suit is actually filed. In determining the
rent payable by Tenant hereunder subsequent to default, the Minimum Annual Rent
for each year of the unexpired portion of the Lease Term shall equal the average
Minimum Annual and Percentage Rents which Tenant was obligated to pay from the
commencement of the Lease Term to the time of default, or during the preceding
three (3) full calendar years, whichever period is shorter.
Section 18.3. Counterclaim.
If Landlord commences any proceedings for non-payment of rent (Minimum
Annual Rent, Percentage Rent or additional rent), Tenant will not interpose any
counterclaim of any nature or description in such proceedings. This shall not,
however, be construed as a waiver of Tenant's right to assert such claims in a
separate action brought by Tenant. The covenants to pay rent and other amounts
hereunder are independent covenants and Tenant shall have no right to hold back,
offset or fail to pay any such amounts for default by Landlord or any other
reason whatsoever, it being understood and acknowledged by Tenant that Tenant's
only recourse is to seek an independent action against Landlord.
Section 18.4. Waiver of Rights of Redemption.
To the extent permitted by law, Tenant waives any and all rights of
redemption granted by or under any present or future laws if Tenant is evicted
or dispossessed for any cause, or if Landlord obtains possession of the Premises
due to Tenant's default hereunder or otherwise.
Section 18.5. Waiver of Trial by Jury.
To the extent permitted by applicable law, Tenant hereby waives trial by
jury in any summary action or proceeding brought by Landlord against Tenant, the
only issue in such summary action or proceeding being the non-payment of rent by
Tenant.
Section 18.6. Bankruptcy.
A. Assumption of Lease. In the event Tenant shall become a Debtor under
Chapter 7 of the Bankruptcy Code ("Code") or a petition for reorganization or
adjustment of debts is filed concerning Tenant under Chapters 11 or 13 of the
Code, or a proceeding is filed under Chapter 7 and is transferred to Chapters 11
or 13, the Trustee or Tenant, as Debtor and as Debtor-in-Possession, may not
elect to assume this Lease unless, at the time of such assumption, the Trustee
or Tenant has:
1. Cured or provided Landlord "Adequate Assurance" (as defined below)
that:
(a) Within ten (10) days from the date of such assumption the Trustee
or Tenant will cure all monetary defaults under this Lease and
compensate Landlord for any actual pecuniary loss resulting from
any existing default, including without limitation, Landlord's
reasonable costs, expenses, accrued interest as set forth in
Section 4.2 of the Lease, and attorneys' fees incurred as a
result of the default;
(b) Within thirty (30) days from the date of such assumption the
Trustee or Tenant will cure all non-monetary defaults under this
Lease; and
(c) The assumption will be subject to all of the provisions of this
Lease.
2. For purposes of this Section 18.6. Landlord and Tenant acknowledge
that, in the context of a bankruptcy proceeding of Tenant, at a
minimum "Adequate Assurance" shall mean:
(a) The Trustee or Tenant has and will continue to have sufficient
unencumbered assets after the payment of all secured obligations
and administrative expenses to assure Landlord that the Trustee
or Tenant will have sufficient funds to fulfill the obligations
of Tenant under this Lease, and to keep the Premises stocked with
merchandise and properly staffed with sufficient employees to
conduct a fully-operational, actively promoted business in the
Premises; and
(b) The Bankruptcy Court shall have entered an Order segregating
sufficient cash payable to Landlord and/or the Trustee or Tenant
shall have granted a valid and preferred first lien and security
interest and/or mortgage in property of Trustee or Tenant
acceptable as to value and kind to Landlord, to secure to
Landlord the obligation of the Trustee or Tenant to cure the
monetary and/or non-monetary defaults under this Lease within the
time periods set forth above; and
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(c) The Trustee or Tenant at the very least shall deposit a
sum, in addition to the Security Deposit, equal to one
(1) month's rent to be held by Landlord (without any
allowance for interest thereon) to secure Tenant's
future performance under the Lease.
B. Assignment of Lease. If the Trustee or Tenant has assumed the
Lease pursuant to the provisions of this Section 18.6 for the purpose of
assigning Tenant's interest hereunder to any other person or entity, such
interest may be assigned only after the Trustee, Tenant or the proposed
assignee have complied with all of the terms, covenants and conditions of
Section 13.1 herein, including, without limitation, those with respect to
additional rent and the use of the Premises only as permitted in Article VIII
herein; Landlord and Tenant acknowledging that such terms, covenants and
conditions are commercially reasonable in the context of a bankruptcy
proceeding of Tenant. Any person or entity to which this Lease is assigned
pursuant to the provisions of the Code shall be deemed without further act or
deed to have assumed all of the obligations arising under this Lease on and
after the date of such assignment. Any such assignee shall upon request
execute and deliver to Landlord an instrument confirming such assignment.
C. Adequate Protection. Upon the filing of a petition by or
against Tenant under the Code, Tenant, as Debtor and as Debtor-in-Possession,
and any Trustee who may be appointed agree to adequately protect Landlord as
follows:
(1) To perform each and every obligation of Tenant under
this Lease until such time as this Lease is either
rejected or assumed by Order of the Bankruptcy Court;
and
(2) To pay all monetary obligations required under this
Lease, including without limitation, the payment of
Minimum Monthly Rent, and such other additional rent
charges payable hereunder which is considered
reasonable compensation for the use and occupancy of
the Premises; and
(3) Provide Landlord a minimum 30 days prior written
notice, unless a shorter period is agreed to in
writing by the parties, of any proceeding relating to
any assumption of this Lease or any intent to abandon
the Premises, which abandonment shall be deemed a
rejection of this Lease; and
(4) To perform to the benefit of Landlord otherwise
required under the Code.
The failure of Tenant to comply with the above shall result in an
automatic rejection of this Lease.
D. Accumulative Rights. The rights, remedies and liabilities of
Landlord and Tenant set forth in this Section 18.6 shall be in addition to
those which may now or hereafter be accorded, or imposed upon, Landlord and
Tenant by the Code.
ARTICLE XIX
DEFAULT BY LANDLORD
Section 19.1. Default Defined, Notice.
Landlord shall in no event be charged with default in any of its
obligations hereunder unless and until Landlord shall have failed to perform
such obligations within thirty (30) days (or such additional time as is
reasonably required to correct any such default) after written notice as set
forth in Section 24.7 to Landlord by Tenant, specifically describing such
failure.
Section 19.2. Notice to First Mortgagee.
If the holder of the first mortgage covering the Premises shall have
given written notice to Tenant of the address to which notices to such holder
are to be sent, Tenant shall give such holder written notice simultaneously
with any notice given to Landlord of any default of Landlord, and if Landlord
fails to cure any default asserted in said notice within the time provided
above, Tenant shall notify such holder in writing of the failure to cure, and
said holder shall have the right but not the obligation, within thirty (30) days
after receipt of such second notice and within thirty (30) days of receipt
thereof, to cure such default before Tenant may take any action by reason of
such default.
ARTICLE XX
TENANT'S PROPERTY
Section 20.1. Taxes on Leasehold.
Tenant shall be responsible for and shall pay before delinquent all
municipal, county, federal or state taxes whether enacted now or in the future
coming due during or after the Lease Term against Tenant's interest in this
Lease or against personal property of any kind owned or placed in, upon or
about the Premises by Tenant.
Section 20.2. Assets of Tenant. INTENTIONALLY DELETED.
ARTICLE XXI
ACCESS BY LANDLORD
Section 21.1. Right of Entry.
Landlord, its agents and employees shall have the right to enter the
Premises from time to time at reasonable times upon at least two (2) hours oral
notice to Tenant's store manager (no notice shall be required in an emergency)
to examine
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the same, show them to prospective purchasers and other persons, and make such
repairs, alterations, improvements or additions as Landlord deems desirable.
Rent shall not ▇▇▇▇▇ while any such repairs, alterations, improvements, or
additions are being made. In addition, during any apparent emergency, Landlord
or its agents may enter the Premises forcibly without liability therefor and
without in any manner affecting Tenant's obligations under this Lease. Nothing
herein contained, however, shall be deemed to impose upon Landlord any
obligation, responsibility or liability whatsoever, for any care, maintenance
or repair except as otherwise herein expressly provided.
ARTICLE XXII
HOLDING OVER, SUCCESSORS
Section 22.1. Holding Over.
If Tenant holds over or occupies the Premises beyond the Lease Term (it
being agreed there shall be no such holding over or occupancy without
Landlord's written consent), Tenant shall pay Landlord for each day of such
holding over a sum equal to the greater of (a) twice the Minimum Monthly Rent
prorated for the number of days of such holding over, or (b) Minimum Annual
Rent plus Percentage Rent prorated for the number of days of such holding over,
plus, whichever of (a) or (b) is applicable, a prorata portion of all other
amounts which Tenant would have been required to pay hereunder had this Lease
been in effect. If Tenant holds over with or without Landlord's written
consent Tenant shall occupy the Premises on a tenancy at sufferance but all
other terms and provisions of this Lease shall be applicable to such period.
Section 22.2. Successors.
All rights and liabilities herein given to or imposed upon the respective
parties hereto shall bind and inure to the several respective heirs,
successors, administrators, executors and assigns of the parties and if Tenant
is more than one (1) person, they shall be bound jointly and severally by this
Lease except that no rights shall inure to the benefit of any assignee or
subtenant of Tenant unless the assignment or sublease was approved by Landlord
in writing as provided in Section 13.1 hereof. Landlord, at any time and from
time to time, may make an assignment of its interest in this Lease and, in the
event of such assignment, Landlord and its successors and assigns (other than
the assignee of Landlord's interest in this Lease) shall be released from any
and all liability thereafter accruing hereunder.
ARTICLE XXIII
QUIET ENJOYMENT
Section 23.1. Landlord's Covenant.
If Tenant pays the rents and other amounts herein provided, observes and
performs all the covenants, terms and conditions hereof, Tenant shall peaceably
and quietly hold and enjoy the Premises for the Lease Term without interruption
by Landlord or any person or persons claiming by, through or under Landlord,
subject, nevertheless, to the terms and conditions of this Lease.
ARTICLE XXIV
MISCELLANEOUS
Section 24.1. Waiver.
No waiver by Landlord or Tenant of any breach of any term, covenant or
condition hereof shall be deemed a waiver of the same or any subsequent breach
of the same or any other term, covenant or condition. The acceptance of rent
by Landlord shall not be deemed a waiver of any earlier breach by Tenant of any
term, covenant or condition hereof, regardless of Landlord's knowledge of such
breach when such rent is accepted. No covenant, term or condition of this
Lease shall be deemed waived by Landlord or Tenant unless waived in writing.
Section 24.2. Accord and Satisfaction.
Landlord is entitled to accept, receive and cash or deposit any payment
made by Tenant for any reason or purpose or in any amount whatsoever, and apply
the same at Landlord's option to any obligation of Tenant and the same shall
not constitute payment of any amount owed except that to which Landlord has
applied the same. No endorsement or statement on any check or letter of Tenant
shall be deemed an accord and satisfaction or otherwise recognized for any
purpose whatsoever. The acceptance of any such check or payment shall be
without prejudice to Landlord's right to recover any and all amounts owed by
Tenant hereunder and Landlord's right to pursue any other available remedy.
Section 24.3. Entire Agreement.
There are no representations, covenants, warranties, promises, agreements,
conditions or undertakings, oral or written, between Landlord and Tenant other
than herein set forth. Except as herein otherwise provided, no subsequent
alteration, amendment, change or addition to this Lease shall be binding upon
Landlord or Tenant unless in writing, signed by them and approved by Landlord's
mortgagee.
Section 24.4. No Partnership.
Landlord does not, in any way or for any purpose, become a partner,
employer, principal, master, agent or joint venturer of or with Tenant.
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Section 24.5. Force Majeure.
If either party hereto shall be delayed or hindered in or prevented from
the performance of any act required hereunder by reason of strikes, lockouts,
labor troubles, inability to procure material, failure of power, restrictive
governmental laws or regulations, riots, insurrection, war or other reason of a
like nature not the fault of the party delayed in performing work or doing acts
required under this Lease, the period for the performance of any such act shall
be extended for a period equivalent to the period of such delay.
Notwithstanding the foregoing, the provisions of this Section 24.5 shall at no
time after the Commencement Date (as the same may be extended pursuant to
Section 3.3 above) operate to excuse Tenant from any obligations for payment of
Minimum Annual Rent, Percentage Rent, additional rent or any other payments
required by the terms of this Lease when the same are due, and all such amounts
shall be paid when due.
Section 24.6. Submission of Lease.
Submission of this Lease to Tenant does not constitute an offer to lease;
this Lease shall become effective only upon execution and delivery thereof by
Landlord and Tenant. Upon execution of this Lease by Tenant, Landlord is
granted an irrevocable option for fifteen (15) days to execute this Lease
within said period and thereafter return a fully executed copy to Tenant. The
effective date of this Lease shall be the date filled in on Page 1 hereof by
Landlord, which shall be the date of execution by the last of the parties to
execute the Lease.
Section 24.7. Notices.
All notices from Tenant to Landlord required or permitted by any provision
of this agreement shall be directed to Landlord as follows:
MALL OF AMERICA COMPANY
c/o M.S. Management Associates Inc.
National City Center
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Prior to the Commencement Date such notices shall only be effective if
given to Landlord at the address shown above and to Landlord at the address
shown below:
MALL OF AMERICA COMPANY
c/o M.S. Management Associates Inc.
Construction Department
National City Center
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
All notices from Landlord to Tenant required or permitted hereunder shall be
directed as follows, namely:
Hotel Discovery, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
All notices to be given hereunder by either party shall be written and sent
by registered or certified mail, return receipt requested, postage pre-paid or
by an express mail delivery service, addressed to the party intended to be
notified at the address set forth above. Either party may, at any time, or
from time to time, notify the other in writing of a substitute address for that
above set forth, and thereafter notices shall be directed to such substitute
address. Notice given as aforesaid shall be sufficient service thereof and
shall be deemed given as of the date received, as evidenced by the return
receipt of the registered or certified mail or the express mail delivery
receipt, as the case may be. A duplicate copy of all notices from Tenant shall
be sent to any mortgagee as provided for in Section 19.2.
Section 24.8. Captions and Section Numbers.
This Lease shall be construed without reference to titles of Articles and
Sections, which are inserted only for convenience of reference.
Section 24.9. Number and Gender.
The use herein of a singular term shall include the plural and use of the
masculine, feminine or neuter genders shall include all others.
Section 24.10. Objection to Statements.
Notwithstanding the provisions of Section 24.1, Tenant's failure to object
to any statement, invoice or billing rendered by Landlord within a period of
thirty (30) days after receipt thereof shall constitute Tenant's acquiescence
with respect thereto and shall render such statement, invoice or billing an
account stated between Landlord and Tenant.
Section 24.11. Representation by Corporate Tenant.
If Tenant is or will be a corporation, the persons executing this Lease on
behalf of Tenant hereby covenant and warrant that Tenant is a duly qualified
corporation authorized to do business in the State of Minnesota, that all
franchise and corporate taxes have been paid to date and all future forms,
reports, fees and other documents necessary to comply with
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applicable laws will be filed when due, and the person signing this Lease on
behalf of the corporation is an officer of Tenant and is duly authorized to sign
and execute this Lease.
Section 24.12. Joint and Several Liability.
If Tenant is a partnership or other business organization the members
of which are subject to personal liability, the liability of each such member
shall be deemed to be joint and several.
Section 24.13. Limitation of Liability.
Anything to the contrary herein contained, notwithstanding there shall
be absolutely no personal liability on persons, firms or entities who constitute
Landlord with respect to any of the terms, covenants, conditions and provisions
of this Lease, and Tenant shall, subject to the rights of any first mortgagee,
look solely to the interest of Landlord, its successors and assigns, in
Landlord's Tract for the satisfaction of each and every remedy of Tenant in
the event of default by Landlord hereunder; such exculpation of personal
liability is absolute and without any exception whatsoever.
Section 24.14. Broker's Commission.
Each party represents and warrants that it has caused or incurred no
claims for brokerage commissions or finder's fees in connection with the
execution of this Lease, and each party shall indemnify and hold the other
harmless against and from all liabilities arising from any such claims caused
or incurred by it (including without limitation, the cost of attorneys' fees in
connection therewith).
Section 24.15. Partial Invalidity.
If any provision of this Lease or the application thereof to any
person or circumstance shall to any extent be invalid or unenforceable, the
remainder of this Lease, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby and each provision of this Lease shall be valid
and enforceable to the fullest extent permitted by law.
Section 24.16. Recording.
The parties agree not to place this Lease of record but each party
shall, at the request of the other, execute and acknowledge so that the same may
be recorded a Short Form Lease or Memorandum of Lease, indicating the Lease
Term, but omitting rent and other terms and an Agreement specifying the date of
commencement and termination of the Lease Term; provided, however, that the
failure to record said Short Form Lease, Memorandum of Lease or Agreement shall
not affect or impair the validity and effectiveness of this Lease. Tenant
shall pay all costs, taxes, fees and other expenses in connection with or
prerequisite to recording.
Section 24.17. Applicable Law.
This Lease shall be construed under the laws of the State of Minnesota.
Section 24.18. Mortgagee's Approval. INTENTIONALLY DELETED.
Section 24.19. Reservation of Air Rights.
There has been no representation or warranty by the Landlord and
Tenant acknowledges that there is no inducement or reliance to lease the
Premises on the basis that the existing access to light, air and views from the
Premises would continue unabated. Tenant acknowledges and understands that it
shall have no rights to the airspace above the Retail Space and those rights
shall be the sole property of Landlord.
Section 24.20. Landlord's Contribution Toward Tenant's Work.
When Tenant has completed all of Tenant's Work in substantial
accordance with Exhibit "C" and "C-2" and furnishes evidence satisfactory to
Landlord of such completion including the total cost thereof as certified by
Tenant in a form reasonably acceptable to Landlord, and that all of Tenant's
Work has been paid for in full and no liens have attached or may attach as the
result thereof, and no default in, breach of, or failure to perform this Lease
exists and Tenant has paid or reimbursed Landlord all amounts owed to Landlord
pursuant to Sections 3.3 and 4.1 hereof or otherwise and has opened its
operation for business. Landlord shall pay to Tenant as Landlord's
contribution toward Tenant's Work the sum of $100.00 per square foot of Store
Floor Area, determined as provided for in Section 2.1 hereof and no more.
Provided Tenant fulfills the requirements of this Section 24.20 by the 10th day
of a calendar month, Landlord shall pay Tenant's contribution by the
fifteenth (15th) day of the following calendar month.
Section 24.21. Unrelated Business Taxable Income.
A. If at any time and from time to time during the term of this Lease
Landlord is advised by its counsel or counsel to an exempt partner of Landlord
or of the managing partner of Landlord (an "Exempt Partner") that any provision
of this Lease, including without limitation the provisions relating to the
payment of rent and additional rent, or the absence of any provision might give
rise to unrelated business taxable income within the meaning of section 512 of
the Internal Revenue Code of 1986, as amended, or the regulations issued
thereunder, or may jeopardize the ability of an Exempt Partner to obtain or
retain its tax-exempt status, then this Lease may be unilaterally amended by
Landlord in such manner as shall meet the requirements specified by such
counsel, and Tenant agrees that it will execute all documents or instruments
necessary to effect such amendment or amendments, provided that no such
amendment shall result on an estimated basis in Tenant having to pay
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in the aggregate more money on account of its occupancy of the Premises than it
would be required to pay under the terms of this Lease, or having to receive
fewer services or services of a lesser quality than it is presently entitled to
receive under this Lease.
B. Any services which Landlord is required to furnish pursuant to the
provisions of this Lease may, at Landlord's option, be furnished from time to
time, in whole or in part, by employees of Landlord or the managing agent of the
Project or its employees or by one or more third persons hired by Landlord or
the managing agent of the Project. Tenant agrees that upon Landlord's written
request it will enter into direct agreements with the managing agent of the
Project or other parties designated by Landlord for the furnishing of any such
services required to be furnished by Landlord hereunder, in form and content
approved by Landlord, provided however that no such contract shall result on an
estimated basis in Tenant having to pay in the aggregate more money on account
of its occupancy of the Premises under the terms of this Lease, or having to
receive fewer services or services of a lesser quality than it is presently
entitled to receive under this Lease.
IN WITNESS WHEREOF, Landlord and Tenant have signed and sealed this Lease
as of the day and year first above written.
(LANDLORD)
MALL OF AMERICA COMPANY, a Minnesota General Partnership
By: MOAC LIMITED PARTNERSHIP, a Minnesota Limited
Partnership, its General Partner
By: MALL OF AMERICA ASSOCIATES, a Minnesota General
Partnership, its General Partner
By: SI-MINN DEVELOPERS LIMITED PARTNERSHIP,
an Indiana Limited Partnership, its
General Partner
By: SI-MINN, INC., an Indiana Corporation,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, President
(TENANT)
If Corporation HOTEL MEXICO, INC., d/b/a/ Hotel Discovery
By: [SIG]
---------------------------------------
Attest: [SIG]
-----------------------------------
25
▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ - 3rd Addition according to the plat
thereof on file as of record as Document No. 2211073 in the office of the
Registrar of Titles for Hennepin County, Minnesota.
That part of ▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ 4th Addition except that part
embraced within that part of the Northwest Quarter of the Southeast Quarter of
Section 1, Township 27, Range 24 described as follows: Beginning at the
Northeast corner of said Northwest Quarter of the Southeast Quarter of said
Section 1, thence West along the North line of said ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇
feet; thence South 330 feet, thence East and parallel with the North line of
said ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ feet to the East line of
Northwest Quarter of Southeast Quarter of said Section 1, thence North to the
point of beginning, according to the plat thereof on file or of record in the
office of the Registrar of Titles in and for said County.
That part of ▇▇▇ ▇, ▇▇▇▇▇ ▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ 4th Addition embraced within that
part of the Northwest Quarter of the Southeast Quarter of Section 1, Township
27, Range 24 described as follows: Beginning at the Northeast corner of said
Northwest Quarter of the Southeast Quarter of said Section 1, thence West along
the North line of said ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ feet; thence South 330 feet,
thence East and parallel with the North line of said ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ feet to the East line of Northwest Quarter of Southeast
Quarter of said Section 1, thence North to the point of beginning, according to
the plat thereof on file or of record in the office of the Registrar of Titles
in and for said County.
EXHIBIT "A"
Page 1
29
[MAP OF MALL]
EXHIBIT "B"
Level 3
30
DESCRIPTION OF TENANT'S WORK
TENANT'S WORK - The following work required to complete and place the
premises in finished condition ready to open for business is to be performed by
the Tenant at the Tenant's own expense and shall be in addition to any work
described in the Tenant Handbook and Tenant Contractor's Handbook. In the
event there is any conflict between the provisions of this Exhibit "C"
and the Tenant Handbook or the Tenant Contractor's Handbook, the provisions of
the Tenant Handbook and Tenant Contractor's Handbook shall control. Tenant's
Work includes, but is not limited to, the following:
A. GENERAL PROVISIONS
All work done by Tenant shall be governed in all respects by, and be
subject to, the following:
1. Landlord shall have the right to require Tenant to furnish
payment and performance bonds or other security in form
satisfactory to Landlord for the prompt and faithful performance
of Tenant's Work, assuring completion of Tenant's Work and
conditioned that Landlord will be held harmless from payment of
any claim either by way of damages or liens on account of bills
for labor or material in connection with Tenant's Work. Tenant's
Work shall at all times be conducted consistent with the Project
Labor Agreement for the Center and in such manner so that Tenant
shall not be in violation of Section 18.1 of the Lease.
2. It is understood and agreed between Landlord and Tenant that costs
incurred by Landlord, if any, as a result of Tenant's failure or
delay in providing the information as required in this Exhibit and
in the Lease to which this Exhibit is attached, shall be the sole
responsibility of Tenant and he will pay such costs, if any,
promptly upon Landlord's demand.
3. All Tenant's Work shall conform to applicable statutes, ordinances,
regulations and codes and the requirements of Factory Mutual and
all rating bureaus and the Tenant Handbook which contains the
basic architectural, electrical and mechanical information
necessary for the preparation of Tenant's Plans, and which by this
reference is incorporated into and made a part of this Lease.
Tenant shall obtain and convey to Landlord all approvals with
respect to electrical, water, sewer, heating, cooling and
telephone work, all as may be required by any agency or utility
company.
4. No approval by Landlord shall be deemed valid unless in writing and
signed by Landlord.
5. Prior to commencement of Tenant's Work and until completion
thereof, or commencement of the Lease Term, whichever is the last
to occur, Tenant shall effect and maintain Builder's Risk Insurance
covering Landlord, Tenant, Tenant's contractors and Tenant's
subcontractors, as their interest may appear, against loss or
damage by fire, vandalism and malicious mischief and such
other risks as are customarily covered by a standard "All Risk"
policy of insurance protecting against all risk of physical loss
or damage to all Tenant's Work in place and all materials stored
at the site of Tenant's Work, and all materials, equipment,
supplies and temporary structures of all kinds incidental to
Tenant's Work, and equipment, all while forming a part of or
contained in such improvements or temporary structures, or while
on the premises or within the Total Tract, all to the actual
replacement cost thereof at all times on a completed value basis.
In addition, Tenant agrees to indemnify and hold Landlord harmless
against any and all claims for injury to persons or damage to
property by reason of the use of the premises for the performance of
Tenant's Work, and claims, fines, and penalties arising out of any
failure of Tenant or its agents, contractors and employees to
comply with any law, ordinance, code requirement, regulations or
other requirement applicable to Tenant's Work and Tenant agrees to
require all contractors and subcontractors engaged in the
performance of Tenant's Work to effect and maintain and deliver
to Tenant and Landlord, certificates evidencing the existence of,
and covering Landlord, City of Bloomington, Minnesota, Port
Authority of the City of Bloomington, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Group, Inc.,
M.S. Management Associates, Inc., Tenant and Tenant's contractors,
prior to commencement of Tenant's Work and until completion
thereof, the following insurance coverages:
a. Workmen's Compensation and Occupational Disease Insurance
in accordance with the laws of the State in which the
property is located, including Employer's insurance to the
limit of $100,000.
b. Comprehensive or Commercial General Liability insurance
affording limits of not less than $5,000,000 per
occurrence for bodily injury, personal injury and death,
and for not less than $1,000,000 per occurrence for
property damage, or not less than $5,000,000 per
occurrence. Combined Single Limit. Such insurance
shall include protection arising from contractual liability,
completed operations, independent contractors, as well as
for the hazards of underground, collapse and explosion.
c. Comprehensive Automobile Insurance, including "non-owned"
automobiles, against bodily injury, including death
resulting therefrom, in the limits of $1,000,000 for any
one occurrence and $250,000 property damage or a combined
single limit of $1,000,000.
d. Owners and contractors protective liability coverage for an
amount not less than $5,000,000.
EXHIBIT "C"
Page 1
31
6. Tenant agrees that the contract of every contractor, subcontractor,
mechanic, journeyman, laborer, material supplier or other
person or entity performing labor upon, or furnishing materials or
equipment to, the Premises in connection with Tenant's Work shall
contain the following provision:
"Contractor acknowledges that this provision is required under
Tenant's lease of the premises to be improved under this Contract
(Lease Premises) from Mall of America Company (Lease). In
consideration of Tenant's engagement of Contractor to perform the work
hereunder, and as an inducement to Tenant to enter into this Contract
with Contractor, Contractor acknowledges, covenants and agrees that
any mechanic's lien which it may hereafter file, claim, hold or assert
with respect to the work hereunder (i) shall attach only to Tenant's
interest in the Lease Premises under the Lease and (ii) shall be
subject, subordinate and inferior to the lien of any mortgage(s) now
or hereafter held upon and against the Mall of America by any
lender(s) now or hereafter providing funds for the financing for the
Mall of America, notwithstanding that any such mortgage(s) may be
recorded after the commencement of the work hereunder and that
Contractor's mechanic's lien otherwise might be entitled to priority
over any such mortgage(s). For such purposes, Contractor also shall
execute, acknowledge and deliver a separate subordination agreement
upon request by Tenant, Mall of America Company, or any such
lender(s), prior to making any application or request for payment
hereunder and as a condition precedent to Contractor's right to
receive any payment hereunder. Contractor likewise shall cause the
liens and lien rights of all subcontractors, sub-subcontractors,
materialmen, suppliers, laborers and all other persons furnishing
work, labor, materials, equipment and services on or in connection
with the Lease Premises to be limited to the Tenant's interest in the
Lease Premises under the Lease and to be subordinated to such
mortgage(s), and Contractor shall obtain and deliver to Tenant a
similar subordination agreement duly executed and acknowledged by each
such subcontractor, sub-subcontractor, materialman, supplier, laborer
and other person prior to making any application or request for
payment hereunder and as a condition precedent to Contractor's right
to receive any payment hereunder. Contractor shall indemnify, defend
and hold harmless Tenant, Mall of America Company, and such lender(s)
from and against any and all loss, costs, damage, expense (including,
without limitation, reasonable attorney fees), liability, suits,
actions and judgments arising or resulting from Contractor's failure
to cause all such mechanic's and materialmen's liens to be limited to
Tenant's interest in the Lease Premises under the Lease and to be
subordinated to said mortgage(s) as herein provided, in addition to
all other indemnities contained herein with respect to such liens."
Tenant shall indemnify, defend and hold harmless Landlord and
such lender(s) from and against any and all loss, costs, damage,
expense (including, without limitation, reasonable attorney fees),
liability, suits, action and judgments arising or resulting from
Tenant's failure to cause all such mechanic's and materialmen's liens
to be limited to Tenant's interest in the Premises under this Lease
and to be subordinated to said mortgage(s) as herein provided, in
addition to all other indemnities contained herein with respect to
such liens.
B. FLOOR SLAB
No penetrations shall be allowed for electrical outlets in floor slabs.
All tenants with restroom facilities or food preparation areas shall
install a floor slab waterproofing membrane in the Premises. All floor
penetrations must be sleeved and waterproofed.
C. SECURITY SCREEN OR MALL FRONTAGE
1. Mall frontages shall be designed and constructed in accordance with
the requirements outlined in the Tenant Handbook. Security for
"open fronts" shall be by means of anodized aluminum roll up grilles
or anodized aluminum sliding and/or sliding glass doors. No mall
frontage shall be constructed without the written approval of
Landlord.
2. All materials employed in the construction of mall frontage shall be
as approved by Landlord and as defined by applicable building codes.
3. Mall Frontage Colors - It is the desire of the Landlord to give Tenant
the greatest practicable freedom in the choice of mall frontage
colors; but:
a. Colors must harmonize with the color scheme of the Center itself.
b. Colors must harmonize with the color scheme of the surrounding
stores. To assist Tenant, a general color range will be developed,
with a sufficiently large selection to permit a reasonable latitude
for individual expression.
EXHIBIT "C"
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32
4. All swinging entrance doors must be recessed in such a manner that the
door, when open, will not project beyond the lease line.
5. Tenants with exterior glazing must install show window or display.
D. CEILING
1. All ceilings and coves shall not exceed 12'0" above the finished
floor, unless otherwise approved by Landlord on Tenant's Plans.
2. Tenant's ceilings shall be suspended by adequate suspension systems to
conform to final requirements of governing authorities and Landlord.
3. The space above the ceiling line, which is not occupied or allotted to
Landlord's Work (structural members, duct work, piping, etc.) may be
used for the installation of suspended ceiling, recessed lighting
fixtures and duct work. Under no circumstances will Tenant's Work be
hung or suspended from non-structural construction. Any Tenant Work
involving the hanging or suspension of construction shall be
accomplished only by methods, in locations and by use of assemblies
approved by Landlord.
4. Tenant shall provide ceiling access panels in the ceiling of the
Premises as required by Landlord to service Landlord equipment.
▇. ▇▇▇▇▇.
All interior walls and curtain walls within the premises, including all
interior lath and plastering and gypsum board thereon, and including lath
and plastering, and/or dry wall on Landlord's exposed masonry or stud party
wall partitions. Dividing wall between premises shall meet Code
requirements and be continuous from floor to the underside of the roof or
floor deck. Tenant shall provide and install bracing and/or studs and/or
blocking as necessary to support wall mounted fixtures. Cracks, joints and
openings in walls to be filled with appropriate fire resistant materials.
Return air openings shall be provided in the dividing walls between
premises as required for proper air movement. Tenant shall install
insulation on the exterior walls of the Premises.
F. DOORS.
Doors and vestibules to Service Courts and Corridors - where required, a
vestibule and a door 3'0" in width, with hardware, shall be provided and
installed by Tenant at Tenant's expense, between the Premises and the
service courts or between the Premises and a public corridor or mall
leading to the service courts.
G. INTERIOR PAINTING
All interior painting and decoration.
H. FLOOR COVERINGS
All floor coverings and floor finishes including recesses for special floor
finishes. It is Tenant's responsibility to join neatly to the mall finish.
Floor Tile and Base - Tenant will install floor tile and base in accordance
with the materials and applications specified in the Tenant Handbook along
the storefront of the Premises, the width of which shall be determined by
Landlord.
I. SHOW WINDOW BACKGROUNDS
All show window backgrounds, show windows, show window floors and ceilings,
and show window lighting installations. All show windows shall be
adequately ventilated.
J. FURNITURE, FIXTURES AND SIGNS
All furnishings, trade fixtures, signs, and related parts, including
installation. Location and design of all signs subject to prior written
consent of Landlord.
K. PLUMBING
All plumbing and plumbing fixtures as required by applicable codes except
utility service to the area, including a properly sized water meter if the
same is required by Landlord, in which latter event Tenant shall make any
required utility deposits.
L. HOT WATER HEATER
EXHIBIT "C"
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33
Domestic electric hot water heater, where required, including final
connections.
M. TOILET ROOM FIXTURES
Furnishing and installation of wiring, lighting fixtures, mechanical toilet
exhaust systems, towel cabinets, soap dishes, hand driers, deodorizers,
mirrors and other similar items in toilet rooms within the premises or as
additionally required by code.
N. HEATING, VENTILATING AND AIR CONDITIONING
1. Complete HVAC Systems shall be designed, furnished and installed
within the premises by the Tenant. The HVAC systems, calculations,
designs and installations shall be as recommended in ASHRAE
Publications and the Landlord's Tenant Finish Mechanical Criteria.
Tenant's systems and ventilation shall meet all codes and ASHRAE
standards. Tenant shall furnish Landlord with complete load
calculations including information as to Tenant's lighting load in
▇▇▇▇▇ and Tenant's estimated store population (employees and
customers).
2. Tenant's cooling system shall be adequate for cooling the premises to
75 degrees Fahrenheit DB and 50% RH based on the latest ASHRAE guide
outdoor design dry bulb and design wet bulb temperatures for the area
as tabulated in the 2-1/2% columns, with a rise of not more than 3
degrees Fahrenheit DB during peak periods.
3. Tenant's heating method shall be adequate for heating the premises to
55 degrees Fahrenheit DB during times other than regular business
hours based on the latest ASHRAE guide outdoor design temperature for
the area as tabulated in the 99% column. The Tenant's heating method
shall be independent of the central cooling system. The Tenant's
lighting system shall be used to heat the sales area during regular
business hours in the heating season. The Tenant's lighting system
may be used to maintain the required sales area minimum temperature
level during other then regular business hours in the heating season.
4. Tenant's exhaust systems shall provide the required exhaust air
capacities and shall be independent of the central cooling system.
The Tenant's exhaust systems shall be inoperative during other than
regular business hours. Replacement air for the Tenant's exhaust will
be provided through the Tenant's air supply system up to the design
air supply quantity. Any additional replacement air required will be
drawn from the mall. Independent air make-up air systems shall not be
installed by the Tenant.
5. Tenant's HVAC systems shall be complete with air distribution systems,
ventilating systems, control systems, insulation and all other
components required to make a complete system. Tenant's systems shall
be specifically designed to coordinate with variable air volume
cooling temperature control. Tenant's HVAC system components shall be
installed in locations as designated by the Landlord.
6. Tenant shall provide and install fire dampers, in accordance with all
codes, in the right hand side (as viewed when facing the rear of the
Premises) demising partition of its Premises if its Premises adjoin
another tenant space. Tenant shall also provide and install fire
dampers where the Tenant's ductwork passes through service corridor
walls or other fire separations. Tenant's installation shall include
complete access and access panels to all valves, dampers and similar
service devices (including the Landlord's) required for testing,
balancing and servicing. Tenant shall utilize only fire damper
products as specified by the Tenant Handbook.
7. Tenant shall connect to Landlord's central cooling system and shall
use Landlord's Design Criteria in designing systems and controls.
Alterations to the Landlord's central system required due to Tenant's
design shall be done by Landlord at Tenant's sole expense.
8. If directed to do so by Landlord, Tenant shall paint and/or screen
from ground level view by parapet walls or other appropriate
screening, all of Tenant's outdoor equipment. Any such painting or
screening must be done at Tenant's sole expense and approved in
advance by Landlord.
O. MECHANICAL EQUIPMENT
All mechanical equipment including dumb-waiters, elevators, escalators,
freight elevators, conveyors, and their shafts and doors, located within
the premises, including electrical work for these items. Locations, size
and design of roof vents, HVAC equipment, units, hoods and caps shall be
approved by Landlord. Landlord reserves the right of disapproval of any
equipment to be placed on the roof. Tenant shall install equipment at
locations where structural reinforcements are provided. All changes in
structural design caused by Tenant's equipment shall be made by Landlord
and paid for by Tenant.
Any roof cuts or openings required to be made pursuant to Tenant's Plans
shall be performed by a contractor designated by Landlord at Tenant's
expense. In addition, all cant strips, base furnishings and other work
necessary to complete permanent weather proofing of Landlord's roof as a
result of roof cuts or openings required by Tenant shall be performed by a
contractor designated by Landlord at Tenant's expense.
EXHIBIT "C"
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P. ELECTRICAL
1. All interior distribution panels, lighting panels, power panels,
conduits, outlet boxes, switches, outlets and wires within the
premises. Tenant shall provide electric conduit and boxes in the
ceiling and walls, including all electrical service panels, pull
boxes and equipment.
2. All electrical fixtures, including lighting fixtures and equipment,
and installation thereof. Lighting systems (except security and
emergency lighting) must be controlled by lighting contactors. The
lighting contactors will be inter-locked with the Landlord's Energy
Management System for automatic control during other than regular
business hours.
3. All systems, where required for intercommunication, music antenna,
material handling or conveyor, burglar alarm, vault wiring, fire
protection alarm, time clock and demand control.
4. All conduit for necessary telephone wires in the premises.
5. Feeder conductors from Landlord's facilities to the Premises, including
the connections to Tenant's equipment.
6. Final connection to the Landlord's switch gear shall be done by a
contractor designated by Landlord at Tenant's expense. Tenant's
contractor will be responsible for the feeder conductors and
connections to tenant's equipment and for supplying proper fuses to
Landlord's designated contractor at the time of final connection.
Q. TEMPORARY SERVICES
Any temporary services required by Tenant during its construction period,
including heat, water or electrical service shall be secured by the Tenant,
at Tenant's sole cost and expense.
R. SUBSEQUENT REPAIRS AND ALTERATIONS
Landlord reserves the right to require changes in Tenant's Work when
necessary by reason of code requirements.
S. SIGNS
In order to assure orderly and aesthetically coordinated signing, plans for
all Tenant's signs must conform to Exhibit "E" hereto attached and the
applicable Mall criteria and before installation must be approved by
Landlord. No permission is granted, expressed or implied to permit Tenant
to erect an exterior sign of any type.
T. DOORS AND EXITING REQUIREMENTS
1. Tenant will be responsible for adherence to exiting codes.
2. Tenant will maintain a clear exiting path through the stockroom to
Tenant's rear door for those premises that contain a rear door.
U. CONSTRUCTION ACTIVITIES
1. During premises interior construction Tenant shall use rear opening to
premises for moving in/out of materials, for those premises that
contain a rear door.
2. If any roof cuts or penetrations are required by Tenant, all curbs,
supports, blocking, temporary flashing, counterflashing or other work
necessary for installation shall be provided and installed by Tenant
at its expense. Tenant shall promptly notify Landlord in advance, of
the need for such cuts or penetrations and shall utilize Landlord's
designated roofing contractor for this work. Tenant's contractor
shall be responsible for contracting with Landlord's roofing contractor
to perform this work.
3.
4. Landlord shall be responsible for the installation of the temporary
store front or barricade shielding the interior of the Premises from
the Mall, at Tenant's expense.
5. Tenant acknowledges that its construction activities in the Premises
and the Center are subject to a certain Project Labor Agreement for
Construction of the Mall of America executed on or about the 19th day
of November, 1985, by and among Triple Five Corporation, P.C.L.
Construction Services, Inc., and The Minneapolis Building and
Construction Trades Council. Such Project Labor Agreement is fully
incorporated herein by reference. As a material consideration of
Landlord entering into and executing this Lease with Tenant, Tenant
agrees to abide by the terms, conditions and provisions of
EXHIBIT "C"
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35
the Project Labor Agreement as such Project Labor Agreement effects Tenant's
construction activities in the Premises and the Center. Tenant's failure to
abide by the same may be deemed a default of this Lease if such failure
results, either directly or indirectly, in a work stoppage or interference or
the threat of the same in the construction activities in the Center or any
other tenant's space. Landlord or Landlord's authorized representative may
take such action as Landlord or its authorized representative deems necessary
in order to immediately enforce the terms of the Project Labor Agreement and in
order to prevent, avoid or terminate any interference or work stoppage (or the
threat thereof) in connection with the construction of any part of the Center
or any other tenant's space. Such action may include, but shall not be limited
to, the issuance of a cease and desist directive to Tenant. Tenant shall
reimburse Landlord or any other tenant in the Center for any losses, fees,
expenses or damages suffered or incurred by Landlord or such other tenant in
the Center as a result of Tenant's failure to comply with the Project
Labor Agreement.
EXHIBIT "C"
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36
RULES AND REGULATIONS
1. Tenant shall advise and cause its vendors to deliver all merchandise before
noon on Mondays through Fridays, not at other times.
2. All deliveries are to be made to designated service or receiving areas and
Tenant shall request delivery trucks to approach their service or receiving
areas by designated service routes and drives.
3. Tractor trailers which must be unhooked or parked must use steel plates
under dolly wheels to prevent damage to the asphalt paving surface. In
addition, wheel blocking must be available for use. Tractor trailers are
to be removed from the loading areas after unloading. No parking or
storing of such trailers will be permitted in the Center.
4. Except for small parcel packages, no deliveries will be permitted through
the malls unless Tenant does not have a rear service door. In such event,
prior arrangements must be made with the Resident Mall Supervisor for
delivery. Merchandise being received shall immediately be moved into
Tenant's Premises and not be left in the service or receiving areas.
5. Tenant is responsible for storage and removal of its trash, refuse and
garbage. Tenant shall not dispose of the following items in drains,
sinks or commodes: plastic products (plastic bags, straws, boxes); sanitary
napkins; tea bags; cooking fats, cooking oils; any meat scraps or cutting
residue; petroleum products (gasoline, naptha, kerosene, lubricating
oils); paint products (thinner, brushes); or any other item which the same
are not designed to receive. All Store Floor Area of Tenant, including
vestibules, entrances and returns, doors, fixtures, windows and plate
glass, shall be maintained in a safe, neat and clean condition.
6. Other than as permitted under the provisions of Section 10.4 or Exhibit
"E," Tenant shall not permit or suffer any advertising medium to be
placed on mall walls, on Tenant's mall or exterior windows, on standards in
the mall, on the sidewalks or on the parking lot areas or light poles. No
permission, expressed or implied, is granted to exhibit or display any
banner, pennant, sign, and trade or seasonal decoration of any size, style
or material within the Center, outside the Premises.
7. Tenant shall not permit or suffer the use of any advertising medium which
can be heard or experienced outside of the Premises, including, without
limiting the generality of the foregoing, flashing lights, searchlights,
loud speakers, phonographs, radios or television. No radio, television, or
other communication antenna equipment or device is to be mounted, attached,
or secured to any part of the roof, exterior surface, or anywhere outside
the Premises, unless Landlord has previously given its written consent.
8. Tenant shall not permit or suffer merchandise of any kind at any time to be
placed, exhibited or displayed outside its Premises, nor shall Tenant
use the exterior sidewalks or exterior walkways of its Premises to display,
store or place any merchandise. No sale of merchandise by tent sale, truck
load sale or the like, shall be permitted on the parking lot or other
common areas.
9. Tenant shall not permit or suffer any portion of the Premises to be used
for lodging purposes, nor conduct or permit any unusual firing, explosion or
other damaging or dangerous hazard within the Premises or the Common Area.
10. Tenants shall not permit or suffer any portion of the Premises to be used
for any warehouse operation, or any assembling, manufacturing,
distilling, refining, smelting, industrial, agricultural, drilling or
mining operation, adult bookstore or cinema, peepshow, entertainment or
sale of products of an obscene or pornographic nature or predominately
sexual nature.
11. Tenant shall not, in or on any part of the Common Area:
(a) Vend, peddle or solicit orders for sale or distribution of any
merchandise, device, service, periodical, book, pamphlet or other
matter whatsoever.
(b) Exhibit any sign, placard, banner, notice or other written material,
except for activities as approved in writing by Landlord.
(c) Distribute any circular, booklet, handbill, placard or other material,
except for activities as approved in writing by Landlord.
(d) Solicit membership in any organization, group or association or
contribution for any purpose.
(e) Create a nuisance.
(f) Use any Common Areas (including the Enclosed Mall) for any purpose
when none of the other retail establishments within the Center is open
for business or employment, except for activities as approved in
writing by Landlord.
(g) Throw, discard or deposit any paper, glass or extraneous matter of any
kind except in designated receptacles, or create litter or hazards of
any kind.
EXHIBIT "D"
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(h) Deface, damage or demolish any sign, light standard or fixture,
landscaping materials or other improvement within the Center, or the
property of customers, business invitees or employees situated within
the Center.
EXHIBIT "D"
Page 2
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SIGN CRITERIA
Tenant will not erect any signs except in conformity with the following policy:
(a) Wording on storefront signs shall be limited to store or trade name only.
Each party's customary signature or logo, hallmark, insignia, or other
trade identification will be respected.
(b) Signs of the flashing, blinking, rotating, moving, or animated types or
audible type signs are not permitted except for portions of East Broadway.
(c) The size of all Tenant's signs shall be limited. The scale and concept of
the enclosed mall requires the use of signs which are not larger than
necessary to be legible from within the mall. Thus, except for department
store signs, Tenant's signs shall be located within the limits of its
storefront and shall not project more than 6 inches beyond the storefront
and shall conform to the following proportionate height criteria:
(1) 30' storefront: 18" capitals 12" body
(2) 30' to 60' storefront: 24" capital 18" body
(3) 60' and over storefront: 30" capital 24" body
In addition to complying with the above criteria, signs in the enclosed
malls shall be limited in length to 70% of Tenant's frontage on the mall,
and shall in no case exceed a length of 30 feet.
(d) Secondary blade signs may be installed at right angles to the mall
storefront(s) provided they are adjacent to the Tenant's premises and
otherwise conform to the provisions of the Tenant Handbook Criteria.
(e) Signs on the building's exterior are strictly prohibited.
(f) Public safety decals or artwork on glass in minimum sizes to comply with
applicable Code, subject to the approval of Landlord, may be used, as
required by building codes or other governmental regulations.
(g) Paper signs, stickers, banners or flags are prohibited.
(h) No exposed raceways, ballast boxes or electrical transformers will be
permitted except as required by Code.
(i) Sign company names or stamps shall be concealed (Code permitting).
(j) Except as otherwise approved in writing by Landlord and by a Major Tenant
with respect to stores within one hundred fifty feet (150') of the entrance
of such Major Tenant's Building, only one (1) primary sign and one (1)
secondary blade sign for a Tenant's location will be permitted within the
Enclosed Mall areas; provided, however, that if a Tenant has (a) more than
sixty feet (60') of storefront and (b) more than one (1) entrance, such
Tenant will be permitted one (1) primary sign and one (1) secondary blade
sign for each of its entrances. Corner Tenants may have one (1) primary
sign and one (1) secondary blade sign on each side of the corner Tenant's
location fronting the Mall.
(k) Signs and identifying marks shall be placed entirely within the boundaries
of Tenant's Premises except blade signs as specified in paragraph (d) above
with no part higher than 13 feet above the finished floor line, or lower
than 8 feet to the finished floor line.
(l) Sign letters may be back-lighted with lamps or tubes entirely concealed
within the depth of the letter or may be opaque or translucent plastic face
with no visible openings. Maximum brightness allowed for interior
(enclosed mall) signs will be 100 foot lamberts taken at the letter face
and must comply with all building and electrical codes.
(m) Exposed sign illumination or illuminated sign cabinets or modules are not
permitted.
(n) Tenant shall not install any roof top signs.
(o) Tenant shall not install any pylon signs.
(p) All signs shall be subject to the Landlord's written approval before
fabrication.
(q) Three (3) complete sets of sign drawings must be submitted to the Landlord
for written approval before fabrication. Tenant's sign drawings must
include the following:
1. Elevation view of storefront showing sign (drawn to accurate scale)
with dimensions of height of letters and length of sign.
2. Color sample of sign panel.
3. Color sample of sign letters.
EXHIBIT "E"
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39
4. Cross section view through sign letter and sign panel showing location
of sign relative to the storefront line and showing the dimensioned
projection of the face of the letter from the storefront face.
The Landlord shall not be responsible for the cost of refabrication of signs
fabricated, ordered or constructed, that do not conform to the Tenant Handbook
Signage Criteria.
EXHIBIT "E"
Page 2
