PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED ON A REQUEST FOR CONFIDENTIAL
THE CONFIDENTIAL PORTIONS OF THIS EXHIBIT HAVE BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
BY AND BETWEEN
MALL OF AMERICA COMPANY,
a Minnesota General Partnership
LBE TECHNOLOGIES, INC.
MALL OF AMERICA
THIS LEASE made this 12th day of August, 1997 by and between MALL OF
AMERICA COMPANY, a Minnesota General Partnership, ("Landlord"), and LBE
TECHNOLOGIES, INC., ("Tenant"):
WITNESSETH THAT, inconsideration of the rents, covenants and agreements
hereafter set forth, such parties enter into the following agreement:
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
mall 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 kiosks 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
of the Premises (as hereinafter defined) in relation to the major department
stores shall not be substantially changed. LANDLORD SHALL NOT MODIFY THE COMMON
AREAS IN ANY MANNER THAT WOULD HAVE A MATERIAL ADVERSE EFFECT ON PEDESTRIAN AND
VEHICULAR TRAFFIC WITHIN THE CENTER OR THAT WOULD REDUCE THE NUMBER OF PARKING
SPACES SERVING THE CENTER BELOW APPLICABLE CODE REQUIREMENTS. FURTHER, EXCEPT
AS SHOWN ON EXHIBIT "B" AND EXCEPT AS IN EXISTENCE ON THE DATE OF THIS LEASE,
LANDLORD SHALL NOT LEASE OR OTHERWISE PERMIT TENANTS OR CONCESSIONAIRES TO
OCCUPY THAT PORTION OF THE COMMON AREAS FRONTING ON THE PREMISES CROSS-HATCHED
ON PAGE 2 OF EXHIBIT "B". THE FOREGOING SHALL NOT, HOWEVER, LIMIT LANDLORD'S
RIGHT TO MAKE NECESSARY REPAIRS, TO TAKE SUCH ACTIONS AS ARE REQUIRED IN AN
EMERGENCY SITUATION OR FOR SECURITY PURPOSES, OR TO COMPLY WITH GOVERNMENTAL
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-352 outlined in red on Exhibit
"B" (hereinafter called "the Premises"), irregularly shaped, but 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 5,899 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"), and the parties agree that, unless Tenant reasonably disputes the
same within sixty (60) days after the receipt of Landlord's certificate,
Landlord's determination shall be final, binding and conclusive. In the event
of a dispute as to the tore Floor Area in the Premises, Landlord and Tenant
agree to mutually field measure the Premises. If, after such field measurement
of the Premises, the parties still dispute the Store Floor Area, then the
parties shall employ the services of a reputable, independent, third-party
architect or engineer to measure the Premises and, absent manifest error, such
architect's or engineer's determination of the Store Floor Area shall be final,
binding and conclusive. The fee for such 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
exterior 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 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.
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 fifth (5th) Lease Year (hereinafter
defined) after the Commencement Date unless sooner terminated as herein
SUBJECT TO SECTION 3.2 HEREOF, TENANT IS REQUIRED TO OPEN FOR BUSINESS TO
THE PUBLIC IN THE PREMISES ON OR BEFORE NOVEMBER 30,1997.
Section 2.4. Lease Year Defined.
"Lease Year," as used herein, means a period of twelve (12) consecutive
months during the Lease Term commencing on February 1 of any calendar year, the
first Lease Year commencing on the first day of the first February occurring on
or 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.
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
[***] (subject to Section 24.20 below) 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.
The parties acknowledge that Landlord has delivered 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 forty-five (45) 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 fifteen (15) 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 reasonable approval.
Tenant shall within fifteen (15) days after receipt of any such notice cause
Tenant's Plans to be revised to the extent necessary to obtain Landlord's
reasonable 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. Landlord shall not unreasonably withhold or delay approval of
Tenant's Plans. If Landlord objects to Tenant's Plans, Landlord shall specify in
writing the basis for such objections and the changes Landlord requires to be
made to Tenant's Plans. 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.
Tenant shall commence Tenant's Work following the approval by Landlord of
the Tenant's Plans at a time reasonably acceptable to both parties and Tenant
shall 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 November 30, 1997, which
day shall be the Required Completion Date. Tenant hereby releases Landlord and
its contractors from any claim whatsoever for damages against Landlord or its
*** Confidential treatment requested.
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".
Landlord hereby grants Tenant the right to enter upon the Premises and to
have access through the Center for the purpose of completing the Tenant's
Plans, conducting review and analysis of Tenant's build-out and fixturing
requirements, and completion of the Tenant's Work.
Notwithstanding any provision of this Lease to the contrary, the Required
Completion Date and the Commencement Date shall not be deemed to have occurred
if the Tenant's Work is not completed and the Premises are not suitable for the
opening of business to the extent that any of the following occurs (collectively
referred to as "Unavoidable Delays"): (a) Landlord has unreasonably delayed
approving the Tenant's Plans within the time periods specified herein; (b)
Landlord has failed to provide Tenant and Tenant's architect, contractors and
subcontractors with reasonable access to the Premises to permit the completion
of the Tenant's Work; (c) the occurrence of a fire or other casualty; (d) delays
in obtaining approvals from any governmental entity or authority whose
permission or approval is required as a condition to the lawful construction of
the Tenant's Work or the use or occupancy of the Premises for the use of the
Premises contemplated by Tenant, provided Tenant promptly applied for such
permits and approvals and diligently pursues the same for approval; (e) any
default or breach of Landlord that causes a delay in completion of the Tenant's
Work; or (e) the occurrence of any event described in Section 24.5 of this Lease
or other event not within the reasonable control of Tenant or its contractor or
subcontractors. To the extent an Unavoidable Delay occurs and is continuing,
Tenant's obligation to complete the Tenant's Work and the Required Completion
Date shall be extended by a like number of days.
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 on the Commencement Date, including, but not limited to, damages from
loss of Percentage Rent (hereinafter defined) from Tenant and other tenants,
diminished saleability, leasability, mortgageability or economic value of the
Center, if Tenant fails to diligently complete Tenant's Work, or to open for
business fully fixtured, stocked and staffed on or before the Commencement Date
Landlord may, if such failure is not cured within twenty (20) days after notice
to Tenant, collect rent from the Commencement 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, an amount equal
to [***] of 1/365ths of the Minimum Annual Rent for each day that Tenant has
failed to open for business on and after the Commencement Date, which later
amount shall be in lieu of Percentage Rent that might have earned had Tenant
opened in timely fashion. In addition, Landlord may, upon ninety (90) days prior
written notice to Tenant and Tenant's subsequent failure to open for business in
the Premises within such ninety (90) day period, terminate this Lease. 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
Section 3.4. Condition of Premises.
Tenant's taken possession of the Premises shall be conclusive evidence of
Tenant's acceptance thereof in good order and satisfactory condition. 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
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 [***] per square foot of Store Floor Area,
or [***] 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
*** Confidential treatment requested.
(ii) [***] of Gross Sales (hereinafter defined) during each Lease Year or
Partial Lease Year to the extent such Gross Sales exceed $[***] (the
"Simulator Breakpoint") (pro rated accordingly for a Partial Lease
Year) for such period for all Gross Sales generated by Tenant's
Simulators and [***] of Gross Sales during each Lease Year or Partial
Lease Year to the extent such Gross Sales exceed [***] (the
"Merchandise Breakpoint") (pro rated accordingly for a Partial Lease
Year) for such period for all Gross Sales generated by the sale of
merchandise (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
Section 4.2. Miscellaneous Rent Provisions.
Any rent or other amounts to be paid by Tenant which are not paid when due
and which remain unpaid for seven (7) days after Tenant's receipt of written
notice specifying such failure shall bear interest as of the first day of the
month on which any sum is due and owing at a rate equal to [***]
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 twenty-first (21st) day after the
close of each calendar month, deliver to Landlord a written statement certified
by an officer of Tenant to the best knowledge of such officer, showing Gross
Sales made in such calendar month; and (ii) not later than 30 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 an independent certified public accountant. 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 rights and remedies set forth in this Lease, (a) to
collect from Tenant a sum which shall be [***] per calendar 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 (which estimate shall be based upon
prior Lease Years' Gross Sales, if available, and reasonable extrapolations
which may be derived therefrom) and xxxx Tenant's Percentage Rent accordingly.
Landlord reserves the right, at Landlord's option, to adjust Percentage Rent
xxxxxxxx when actual Gross Sales reports are received.
On or before the twenty-first (21st) day of each May, August, November and
February, Tenant shall pay Landlord [***] of Gross Sales of Tenant generated by
Tenant's Simulators during the three (3) months (or less in a Partial Lease
Year) ending on the last day of the month preceding such payment date to the
extent such Gross Sales exceed [***] (pro rated accordingly for a period of less
than three  months) for such period and [***] of Gross Sales of Tenant
generated by the sale of merchandise during the three (3) months (or less in a
Partial Lease Year) ending on the last day of the month preceding such payment
date to the extent such Gross Sales exceed [***] (pro rated accordingly for a
period of less than three  months) 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.
The parties acknowledge that Gross Sales may fluctuate substantially
during different months of any annual period, and the parties agree that
Percentage Rent payable for a Partial Lease Year shall be determined in a
manner that approximates the monthly Percentage Rent that would be payable if
the Percentage Rent were determined on an annual basis. Accordingly, for
purposes of prorating Percentage Rent for a Partial Lease Year pursuant to
Section 4.1 and this Section 4.3, the Percentage Rent shall be determined as
The Simulator Breakpoint and the Merchandise Breakpoint, as the case may
be shall be prorated by multiplying such breakpoints by a fraction, the
numerator of which is the number of days in the Partial Lease Year and the
denominator of which is 365 days (such fraction herein called the "Partial
Lease Year Fraction"). As initially determined, the Percentage Rent shall be
[***] of Gross Sales during the Partial Lease Year to the extent
Gross Sales exceed the Simulator Breakpoint and shall be [***] of
Gross Sales during the Partial Lease Year to the extent Gross Sales exceed the
Merchandise Breakpoint, respectively, calculated in accordance with the
immediately preceding sentence. The Percentage Rent as determined in accordance
with this paragraph is referred to as the "Estimated Partial Lease Year
Percentage Rent" and shall be payable as provided in Section 4.3 of this Lease,
subject to adjustment as provided in the immediately following paragraph.
The Percentage Rent for a Partial Lease Year thereafter shall be adjusted
based on the actual Gross Sales for the annual period starting on the
Commencement Date and ending on the 365th day after the Commencement Date. The
Percentage Rent attributable to Gross Sales during such annual period shall be
computed based on the Simulator Breakpoint and Merchandise Breakpoint (each
computed without proration) in accordance with Section 4.1 (ii) above. The
Percentage Rent for the Partial Lease Year then shall be recalculated by
multiplying the Percentage Rent (as determined in accordance with the
immediately preceding sentence) by the Partial Lease Year Fraction. Any
underpayments of Percentage Rent by Tenant promptly shall be paid by Tenant and
overpayments of Percentage Rent shall be credited to the
*** Confidential treatment requested.
next installment or installments of Percentage Rent then coming due. The
foregoing shall not affect the provisions of this Lease relating to the
computation of Percentage Rent for the first or any subsequent full Lease Year.
Tenant will preserve for at least three (3) years at Tenant's notice
address (or at the Premises, at Tenant's discretion) all original books and
records disclosing information pertaining to Gross Sales, including, but not
limited to, cash register tapes, sales slips, sales checks, gross income and
sales tax returns, bank deposit records, sales journals and other supporting
data. Landlord and its agents shall have the right during business hours,
following not less than fifteen (15) days prior written notice, to examine and
audit such books and records preserved by Tenant, Tenant reserving the right to
be present during any such examination or audit. If such examination or audit
discloses a liability for Percentage Rent [***] 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 reimburse Landlord for Landlord's actual out-of pocket costs (not
to exceed customary and reasonable amounts) for said audit. Tenant shall, in any
event, pay to Landlord the amount of any deficiency in rents which is disclosed
by such audit. Landlord shall not disclose any information relating to any
examination performed by or for Landlord to other parties, except to Landlord's
lenders, accountants, attorneys and other employees (who shall be allowed access
to such information on a "need to know basis" and who in any event likewise
shall be obligated not to disclose such information to other parties) or to any
governmental agency or in accordance with any legal proceeding pursuant to a
duly issued subpoena.
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 form
transactions originating in, at or from the Premises, and deposits not refunded
to customers. Excluded from Gross Sales shall be: (i) 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 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) sales of merchandise or services
at a discount to Tenant's employees, not to exceed [***] of annual Gross Sales,
(vi) amounts that are determined by Tenant to be uncollectible from customers,
including checks returned for lack of sufficient funds and credit card
chargebacks, not to exceed [***] of annual Gross Sales, provided such amounts
were originally included in Gross Sales when made and provided, further, any
subsequent collection or recover thereof shall be included in Gross Sales in the
Lease Year of collection or recovery, (vii) discounts given for promotional
coupons that are redeemed from time to time, not to exceed [***] of annual Gross
Sales, (viii) gift certificates until such time as the gift certificates are
redeemed, (ix) fees charged by credit card companies for transactions
originating in, at or from the Premises not to exceed [***] of annual Gross
Sales, and (x) 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.
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 applicable to the Center, or assessments against any of Landlord's
personal property now or hereafter located in the Center, all reasonable costs,
expenses and attorneys' 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. With respect to any
special assessments made by governmental authorities for street improvement,
traffic mitigation or similar physical improvements, Landlord may, at its
option, pay any such special assessments in one lump sum when due or, if
permitted by law, Landlord may elect to pay such special assessments in
installments. In the event Landlord shall pay any special assessment in full
when due, Tenant shall nevertheless reimburse Landlord for its share thereof
based upon the installment payments including principal and interest which
Landlord would have been obligated to pay had Landlord elected to pay the
special installment in the maximum number of installments permitted. Tenant's
installment payments for such special assessment shall be due and payable on the
same dates that they would have been payable to the taxing authority had
Landlord elected to pay the special assessment in installments.
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 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
*** Confidential treatment requested.
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 PROVIDED SUCH ADJUSTMENTS SHALL BE MADE NOT MORE THAN ONCE
ANNUALLY. 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, 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 agreement of any kind as
to the total dollar amount of such real estate taxes or Tenant's dollar share
thereof. LANDLORD DOES, HOWEVER, REPRESENT THAT IT IS CURRENTLY ESCROWING REAL
ESTATE TAXES FOR CALENDAR YEAR 1997 AT A RATE OF $17.75 PER SQUARE FOOT OF STORE
FLOOR AREA. THE FOREGOING SHALL NOT BE DEEMED, CONSTRUED OR INTERPRETED AS AN
AGREEMENT OF ANY KIND THAT TENANT'S ACTUAL SHARE OF REAL ESTATE TAXES FOR
CALENDAR YEAR 1997 WILL BE $17.75 PER SQUARE FOOT OF STORE FLOOR AREA.
D. Other Taxes. Tenant's proportionate share of any governmental
tax or charge (other than income tax) 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.
Section 4.8. LANDLORD'S EXPENSES.
TO THE EXTENT THAT LANDLORD HAS THE RIGHT UNDER THIS LEASE AND TO THE
EXTENT THAT Landlord pays any monies or incurs any expense to correct a
breach 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, attorneys'
fees and court costs), as a result of Tenant's failure to perform any of
Tenant's obligations under this Lease, all REASONABLE amounts so paid or
incurred shall, on 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. NOTHING HEREIN SHALL BE DEEMED TO AUTHORIZE LANDLORD TO TAKE ANY SUCH
ACTIONS EXCEPT AS OTHERWISE SPECIFIED HEREIN.
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, COMMON AREA PLUMBING AND sanitary systems, utility lines, COMMON
AREA HVAC SYSTEMS AND EQUIPMENT, water filtration and treatment facilities and
other areas and improvements provided by Landlord for the general use in common
of tenants and their customers and department stores 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
amendments thereto. ANY MODIFICATIONS TO THE RULES AND REGULATIONS THAT ARE
ADOPTED BY LANDLORD SHALL BE NON-DISCRIMINATORY WITH RESPECT TO ALL TENANTS OF
THE CENTER AND SHALL BECOME EFFECTIVE ONLY AFTER NOT LESS THAN THIRTY (30) DAYS
PRIOR WRITTEN NOTICE TO TENANT. IN THE EVENT OF ANY INCONSISTENCY BETWEEN ANY
SUCH RULES AND REGULATIONS AND THE PROVISIONS OF THIS LEASE (INCLUDING ANY
INCONSISTENCY BETWEEN RIGHTS GRANTED UNDER THIS LEASE AND RESTRICTIONS CREATED
UNDER THE RULES AND REGULATIONS), THE TERMS OF THIS LEASE SHALL PREVAIL.
Landlord shall have the right from time to time IN ITS REASONABLE
DISCRETION 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 costs in and to said
Common Areas as Landlord in its reasonable discretion deems advisable for the
use thereof by tenants and their customers.
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 shall use its best efforts to ensure
that all concessionaires, employees and agents of Tenant shall use the areas
designated by Landlord for employee parking. After the first such violation of
Landlord's employee parking regulations in a Lease Year, Tenant shall pay
Landlord, upon demand, $10.00 for each day thereafter during such Lease Year on
which a car of Tenant, a concessionaire, employee or agent of Tenant is parked
outside any area designated by Landlord for employee parking. Tenant authorizes
Landlord to cause any such car to be towed from the Center and Tenant shall
reimburse Landlord for the cost thereof upon demand. Tenant shall abide by all
rules and regulations adopted by Landlord in accordance with Section 5.1 and
cause its concessionaires, officers, employees, agents, customers and invitees
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.
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 so as to maintain the
Center in good condition and repair. "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
attorney's 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 used in the operation of
the Common Areas, including heating, ventilating and air conditioning machinery
and equipment, depreciation of machinery and equipment used in the operation or
maintenance of the Center, 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 expense of maintaining, repairing and
replacing the Enclosed Mall and the exterior of the buildings in the Center
(except as otherwise specifically provided to the contrary in the following
paragraph), 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 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 [***] of all of the foregoing and all other of Landlord's
Common Area Costs, exclusive of real estate taxes and insurance.
Notwithstanding any other provision herein to the contrary, Tenant
shall not be responsible for payment of any of the following as a Common Area
Costs, whether or not otherwise included in the definition of "Landlord's
Common Area Costs":
1. Interest, loan fees, ground lease rental and other carrying costs
related to any mortgage or indebtedness secured by the Center.
2. Premiums or deductibles to the extent any other tenant in the Center
causes Landlord's insurance premiums relating to the Premises to
increase or obligates Landlord to purchase additional insurance, or any
damage resulting from the negligent or willful acts or omissions or
breach of any other tenant of the Center.
3. New buildings or other improvements constructed on or within the Center.
4. Expenses that under generally accepted accounting principles are
treated as capital expenditures to the extent they improve the Common
Areas to beyond their original condition or utility (other than those
capital expenditures reasonably required for maintenance, repair and
replacement of existing capital items which costs Landlord shall
amortize over a period of years as reasonably determined by Landlord and
which amortized amount may be included in Landlord's Common Area Costs).
5. Leasing fees, commissions or other brokerage commissions of any kind,
or advertising or promotional expenditures (including costs incurred in
leasing or procuring new tenants with allowances, concessions, or
inducements provided by Landlord, such as the cost of leasehold
improvements), attorney's fee, or other comparable expenses incurred in
connection with attracting any prospective tenant to the Center or with
respect to disputes or litigation with such tenants.
*** Confidential treatment requested.
6. Costs incurred due to a violation by Landlord or any tenant (other
than Tenant) of the Center of the terms of this Lease or any other
lease or condition, covenant or restriction affecting the Center, or
any laws, rules, regulations or ordinances applicable to the Center.
7. Costs of repairs, replacements or other work occasioned by fire,
windstorm, earthquake or other casualty, or the exercise by
governmental authorities of the right of eminent domain.
8. Costs and expenses reimbursed by Tenant or any other third party,
except for reimbursements of Common Area Costs.
9. The cost of repair necessitated by the negligence, willful misconduct
or breach of any written agreement by Landlord or Landlord's agents
or any other tenant of the Center.
10. Cost of repairs, replacements, alterations or improvements necessary
to make the Center comply with applicable past, present of future
laws, except to the extent compliance with such laws is required as
the result of Tenant's particular use of the Premises or alterations
or additions made or requested to be made by Tenant.
11. The cost incurred in performing work or furnishing services for
individual tenants in the Center to the extent such work or services
are in excess of the work and services required to be provided to
Tenant under the Lease, and costs incurred for the benefit of
particular tenants and not generally beneficial to the tenants of the
12. Expenses for repair or replacement paid by proceeds of insurance,
condemnation awards, warranties or guarantees, or reimbursed by
tenants of the Center.
13. Costs and expenses incurred in connection with the investigation,
remediation, or clean up of Hazardous Materials existing on or under
the Center prior to the Commencement Date, or Hazardous Materials
thereafter introduced thereon or thereunder, except to the extent
such investigation, remediation or clean up is required as the result
of the acts of Tenant and Tenant's agents, contractors or employees.
14. Costs of salaries, wages and other employment benefits, except to the
extent such costs are fairly allocable to the Center and not to other
shopping centers or projects.
15. Amounts that are payable or reimbursable by Landlord to Tenant with
respect to any tenant improvement allowance or contribution provided
by Landlord to Tenant in connection with Tenant's construction of
leasehold improvements at the Premises.
16. Costs and expenses (including maintenance, repair, replacement,
insurance or taxes) that are for the sole benefit of the Hotel Space
or for other buildings not comprising part of the Retail Space.
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 which bears the same ratio to the total of Landlord's
Common Area Costs as 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 subject to Section 6.1 above any contributions to Landlord's Common
Area Costs received by Landlord from such tenants shall be deducted from
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
Tenant's share of Landlord's Common Area Costs shall be paid in monthly
installments in amounts estimated from time to time by Landlord (provided any
such adjustment shall not be made more than once annually), 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.
Tenant may audit Landlord's Common Area Costs for such year 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 t he 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 fifteen (15) 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.
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 (such approval not
to be unreasonably withheld). Tenant shall be solely responsible for and
promptly pay all charges for use or consumption of sewer, gas, electricity,
water and all other utility services delivered to the Premises. 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.
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 shall operate its heating and air conditioning so that the
temperature in the Premises will be approximately 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 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
reasonably 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.
In addition to any rental abatement to which Tenant otherwise is entitled,
if Tenant is prevented from using the Premises or any portion thereof for five
(5) consecutive days or ten (10) days in any twelve (12) consecutive month
period (the "Eligibility Period") as a result of Landlord's failure to provide
utilities or services to the Premises, then Tenant's rent shall be abated after
the expiration of the eligibility period for such time that Tenant continues to
be so prevented from using the Premises or portion thereof, in the proportion
that the rentable area of the portion of the Premises that Tenant is prevented
from using bears to the total rentable area of the Premises. However, in the
event that Tenant is prevented from so conducting its business in any portion
of the Premises for a period in excess of the Eligibility Period, and the
remaining portion of the premises is not sufficient to allow Tenant to
effectively conduct its business therein, then for such time after expiration
of the Eligibility Period during which Tenant is so prevented from effectively
conducting its business therein, the rent for the entire Premises shall be
abated; provided, however, if Tenant reoccupies and conducts its business from
any portion of the Premises during such period, the rent allocable to such
reoccupied portion, based on the proportion that the rentable area of such
reoccupied portion of the Premises bears to the total rentable area of the
Premises, shall be payable by Tenant from the date such business operations
commence. Notwithstanding anything herein in this paragraph which may be to the
contrary, Tenant shall not be permitted to xxxxx rent as hereinabove otherwise
provided if the failure to provide any such utilities or services to the
Premises is as a result of Tenant's failure to pay for the same or due to the
negligence or willful misconduct of Tenant, its employees, agents or
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 for the
effective cooling of the Premises. 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 Minimum Charge of
$2.00 per square foot of Store Floor Area per year, increased in the manner
The Adjusted HVAC Plant Charge shall be recalculated from time to time on
dates selected by the Landlord (but no more often than 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 x M1 x M2 x M3 x M4
(a) M1 = Capacity Multiplier
The capacity multiplier shall be the greater of 1 or the multiplier
arrived at by applying the following formula:
M1 = 1 + [0.6[BTUH/33 - 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) M2 = Hours Multiplier
The hours multiplier shall be the greater of 1 or the multiplier
arrived at by applying the following formula:
M2 = 1 = [Extra Hours/Regular Hours]
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) M3 = Utility Cost Multiplier
The utility cost multiplier shall be the multiplier arrived at by
applying the following formula:
M3 = 1 + [0.5[Current Cost/Original Cost - 1]]
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) M4 = Maintenance Cost Multiplier
The Maintenance Cost Multiplier shall be the greater of 1 or the
multiplier arrived at by applying the following formula:
M4 = 1 + [0.1 [Current CPI/Original CPI - 1]]
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 material default by Tenant (as defined in Section 18.1
below), Landlord reserves the right, 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. Except as otherwise provided herein to the
contrary, 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 not unreasonably waste fuel, energy, and
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.
CONDUCT OF BUSINESS BY TENANT
Section 8.1. Use of Premises.
The Premises shall be occupied and used by Tenant for the purpose of
conducting therein the business of an auto racing entertainment center and other
related retail uses. The entertainment facility may include a combination of
driving simulators, but shall not include coin operated machines as typically
found in conventional video arcade game room type operations. Tenant shall be
permitted to use the Premises for the display and retail sale of auto racing and
other auto racing themed or related entertainment merchandise. Tenant shall be
permitted to sell some concessions from the Premises as mutually agreed to from
time to time by Landlord and Tenant. 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 xxxx 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 ten percent (10%), 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 in which: (i) Tenant is
carrying on remodeling activities, 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; (ii) Tenant is closed for the taking of inventory not to exceed three
(3) non-consecutive days in any period of twelve (12) consecutive months
provided Tenant has given Landlord's Center manager notification of the
anticipated date Tenant intends to close for inventory purposes at least five
(5) days in advance; (iii) Tenant is unable or reasonably unwilling to operate
as a result of casualty or natural disaster, condemnation, interruption of
utilities or services, extremely inclement weather, civil unrest, operation of
the business would expose Tenant's employees, agents or invitees to an
unreasonable risk of physical injury or property damage, or other force majeure
events of the type of described in Section 24.5 hereof.
Section 8.3. Conduct of Business.
Such business shall be conducted (a) under the name NASCAR(R) SILICON
MOTOR SPEEDWAY or SILICON MOTOR SPEEDWAY unless another name is previously
approved in writing by the Landlord which approval shall not be unreasonably
withheld provided: (i) Tenant gives Landlord at least thirty (30) days prior
written notice of such new trade name; (ii) Tenant provides Landlord with sign
plans for Landlord's review and approval prior to the fabrication and
installation thereof; and (iii) such new trends name is not the same as or
confusingly similar to the trade name of any other tenant or occupant in the
Center; and (b) in such manner as shall promote the transaction of a maximum
volume of business in and at the Premises. Tenant's store shall be and remain
open from 10:00 A.M. until 9:00 P.M. each day of the week except Sunday, on
Sunday from 12:00 P.M. until 6:00 P.M. Tenant shall have the right (but not be
obligated to) operate during such other hours as any other tenant in the Retail
Store remains open for business.
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
reasonably objectionable advertising medium visible, outside the Premises; keep
all mechanical equipment free of vibration and noise that has an adverse
effect on the operation of the Center or interferes with any other tenant's
quiet enjoyment of its premises, and in good working order and condition; not
commit or permit waste or a nuisance upon the Premises; not permit or cause
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 Tenant's particular use or occupancy of the
Premises, and including but not limited to the Xxxxxxxx-Xxxxxxx Occupational
Safety and Health Act but excluding any structural portions of the Premises
maintained by Landlord except as arises out of Tenant's particular use of the
Premises and except for Tenant's compliance with the Americans With
Disabilities Act ("ADA") within the Premises; 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. Landlord acknowledges that Tenant will place
and operate within the Premises racing automobile
simulators that, among other things will create sound emissions and visual
effects incidental to Tenant's activities from the Premises. Landlord hereby
approves of the installation of the simulators and related equipment and
systems, as shown on Tenant's Plans as approved by Landlord. The foregoing
shall not, however, relieve Tenant of compliance with applicable code
requirements or other provisions of this Section 8.4.
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
Section 8.6. Painting, Decorating, Displays, Alterations.
Tenant will not paint (other than touch-up paint from time to time),
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, which approval shall not
be unreasonably withheld or delayed, 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 make interior, non-storefront,
non-structural, non-mechanical and non-utility alterations and improvements to
the Premises without Landlord's prior consent thereto so long as the cost of
such work does not exceed Ten Thousand and no/100 Dollars ($10,000.00) in any
period of twelve (12) consecutive months.
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 operates or manages in any other
store or business operated for a purpose of business in direct competition with
all or part of the business permitted under Section 8.1 hereof within a radius
of ten (10) miles of the Center, 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, 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. 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 (but only if an MSDS is required for the use or storage of such
Hazardous Materials); (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 (if required) concerning or
related to the proposed use, storage, or treatment by Tenant, its employees,
agents or contractors 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 use of Hazardous Materials poses 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 of ("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 used or stored by Tenant: (2) Tenant shall
report to any and all applicable governmental authorities any release by
Tenant, its employees, agents or contractors 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 health and safety laws; and, (4) Tenant
shall remove from the Premises all Hazardous Materials brought, placed or
installed on the Premises by Tenant, its employees, agents or contractors 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
release of any Hazardous Material(s) brought, placed or installed on the
Premises by Tenant, its employees, agents or contractors 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 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, the Landlord's approval of such actions shall first be obtained in
Notwithstanding any provision hereof to the contrary, Landlord hereby
consents to Tenant's use of hydraulic oil in connection with the operation of
the simulators and cleaning and office products customarily used in retail or
office premises so long as such materials are used, handled, stored and
disposed of in accordance with applicable laws. Landlord hereby acknowledges
that such materials are approved and satisfy the Environmental Audit
requirements otherwise applicable to such materials.
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.
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 or
upon Landlord's obtaining actual knowledge that repair is warranted. 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, 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.
Section 9.3. 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 located within the Premises or exclusively servicing the
Premises) 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 casualty
and ordinary wear and tear excepted. Tenant shall be responsible for compliance
with applicable laws relating to Tenant's particular use of the Premises and
the completion of Tenant's Work, including the Xxxxxxxx-Xxxxxxx
Occupational and Safety Health Acts and the Americans With Disabilities Act
("ADA"); provided, however, that Landlord shall be responsible for completing,
at Landlord's sole cost and expense, any structural changes to the Premises
arising from any failure of the structural components of the Premises to comply
with applicable laws unless such failure arises out of or is as a result of
Tenant's particular use of the Premises or compliance with ADA requirements. If
replacement of equipment, fixtures and appurtenances required to be maintained
by Tenant 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, and if such failure continues for thirty (30) days after written
notice to Tenant, Landlord 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 alterations and
improvements approved by Landlord and damage by 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.
SIGNS, AWNINGS, CANOPIES, FIXTURES, ALTERATIONS
Section 10.1. Fixtures.
All fixtures installed by Tenant shall be new or reconditioned and in good
Section 10.2. Removal and Restoration by Tenant.
All alterations, changes and additions and all improvements, 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.
Upon expiration of the Lease Term or prior termination of this Lease,
Tenant shall have the right to remove any simulators or fixtures, whether or
not attached to the Premises, (but not permanently affixed leasehold
improvements) provided Tenant repairs any damage resulting from such removal.
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 15 days 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 with 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 permanently affixed leasehold improvements, additions or
other construction made by Tenant in or to the Premises or against any
equipment or fixtures installed by Tenant (other than Tenant's personal
property, trade fixtures, equipment, furniture, inventory and simulators), 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
Section 10.4. Signs, Awnings and Canopies
Tenant will not place or permit on any exterior door or window or any wall
of the Premises or otherwise, 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.
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
[***] against liability for bodily injury including death and personal
injury for any one (1) occurrence and [***] property damage insurance,
or combined single limit insurance in the amount of [***].
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.
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, Xxxxx XxXxxxxxx
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
[***] for bodily injury, including death, and personal injury for any one (1)
occurrence, [***] property damage insurance or a combined single limit of [***].
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 thirty (30) days written notice by the
insurance company prior to cancellation or termination of 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 or, at Landlord's request, copies of the policies, 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 to the extent resulting from the Landlord's breach of this Lease or
the negligence or misconduct of Landlord or 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 unless Landlord shall have had prior
actual knowledge of the need for such repair and subsequently failed to make
such repair within a reasonable period of time thereafter; (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
*** Confidential treatment requested.
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 knowingly suffer to be done anything which will
contravene Landlord's insurance policies or prevent Landlord from procuring
such policies, 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
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.
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
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 of the Premises or Tenant's operations,
conduct or activities in the Center.
Landlord shall indemnify, defend, protect and hold harmless Tenant and its
agents and employees from any loss, damage, expense, suit, proceeding, penalty,
liability or claim arising from the breach of this Lease by Landlord or the
negligence or misconduct of Landlord or its agents or employees.
OFFSET STATEMENT, ATTORNMENT, SUBORDINATION
Section 12.1. Offset Statement.
Within ten (10) days after receipt of written request by either party, the
other party shall deliver, executed in recordable form a declaration to any
person designated by Landlord (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 the other party have been satisfied (stating
exceptions, if any), (iii) that no defenses or offsets against the enforcement
of this Lease by the other party (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, provided such purchaser,
mortgagee or other person recognizes Tenant's possession of the Premises and
rights under this Lease. 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 requires, provided that such mortgagee, purchaser
or other person, if requested by Tenant, executes a non-disturbance agreement in
favor of Tenant.
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,
provided the mortgagee or security holder agrees in writing that if Landlord
defaults under the mortgage, said mortgagee or security holder shall not
disturb Tenant's possession of the Premises and rights under this Lease while
Tenant is not in default hereunder. Landlord represents that as of the date of
this lease, there is no mortgagee with an interest superior to Tenant's
interest in the Premises.
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 ??
Tenant shall execute such instruments as Landlord requests to evidence such
Section 12.4. Failure to Execute Instruments.
Tenant's failure to execute instruments or certificates provided for in
this Article XII within fifteen (15) days after Tenant's receipt from Landlord
of a written request shall be a default under this Lease.
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 shall not be unreasonably withheld or
delayed provided Tenant and its proposed assignee, sublessee or other
transferee comply with and otherwise satisfy the terms and conditions 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 other than as provided in
section 13.3 below. 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, audited by a certified public accountant, showing a net
worth of not less than Tenant's net worth existing as of the
Commencement Date or the date immediately prior to the date of such
transfer, whichever is greater; and
3. Each assignee or sublessee has submitted, in writing, evidence
satisfactory to Landlord of substantial retailing experience in
shopping centers of comparable size to the Center and in the sale of
merchandise and services permitted under Article VIII of this Lease;
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, after first deducting the
reasonable and documented out-of-pocket costs and expenses actually incurred by
Tenant to procure such assignment or subletting including, without limitation,
legal fees and costs, brokerage commissions, and inducements and concessions to
the subtenant or assignee related to such subletting or assignment. 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.
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. INTENTIONALLY DELETED.
Section 13.3. Permitted Transfers.
Anything in this Lease to the contrary notwithstanding, Tenant shall have
the right to assign this Lease or sublet the Premises without Landlord's consent
to: (i) any parent, affiliate or operating subsidiary of Tenant; or (ii) to a
corporation with which Tenant may merge, consolidate or sell substantially all
of its assets. Tenant agrees that it shall notify Landlord in advance of its
intention to transfer this Lease pursuant to this Section 13.3. Further, the
transferee shall remain subject to all of the terms, covenants, conditions and
provisions of this Lease on Tenant's part to be performed hereunder including,
but not limited to, the permitted use of the Premises. Notwithstanding any
assignment or subletting made pursuant to this Section 13.3, Tenant shall remain
fully liable on this Lease and for the performance of all of the terms,
covenants, conditions and provisions of this Lease on Tenant's part to be
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, [***] 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 [***] 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 adjusted annually
commencing with the creation of the Fund based upon the increase or decrease of
the Consumer Price Index (as defined in Section 7.2 above) during the preceding
twelve (12) month period but shall never be less than the above-stated amount.
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 or
other advertising media. 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 [***] 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 [***] 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 [***] 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.
Notwithstanding anything herein in this Section 14.3 which may be to the
contrary, Tenant shall have the right to negotiate with Landlord's Center
marketing representative with respect to performing certain promotional
activities as may be mutually agreed upon by the parties with Tenant's cost for
such promotional activities credited, in whole or in part, to Tenant's Media
Fund Charge Obligation under this Section 14.3. The foregoing shall not,
however, require Landlord and/or Landlord's Center marketing representative to
agree to Tenant's proposed promotional activity and/or to any credit to Tenant's
Media Fund Charge obligation payable hereunder unless otherwise specified to the
contrary in a separate written agreement between Landlord and Tenant.
*** Confidential treatment requested.
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 Sections 14.1 and 14.3 had Landlord create 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.
Section 15.1. Amount of Deposit. INTENTIONALLY DELETED.
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). From the date of any
casualty (whether or not insured or required to be insured) until the Premises
are so repaired and restored, the Minimum Monthly Rent payments and all other
rent payments payable hereunder, except Real Estate Taxes, shall xxxxx in such
proportion as the part of said Premises thus destroyed or rendered untenantable
bears to the total Premises; 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 or is
caused directly by the negligence of Tenant, its agents or employees 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 (other than applicable deductibles), 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 thirty (30) 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 sixty (60) 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.
If the Premises are damaged and the reasonably estimated time to repair
the damage will exceed one hundred eighty (180) days, then either party shall
have the right to terminate this Lease by delivering written notice tot he
other party within thirty (30) days after the estimated time for rebuilding is
Section 17.1. Condemnation.
If ten percent (10%) or more of the Store Floor Area or fifteen percent
(15%) or more of the Center 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 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 shall continue 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 restriction 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 assignments 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 nor for any other damages Tenant may be entitled to recover by law as a
result of such taking or condemnation provided Tenant's claim therefor is made
against the condemning authority and not against the Landlord or Landlord's
mortgagee, if any, and provided, further, Tenant's damage award does not reduce
or diminish any damage award payable to Landlord or Landlord's mortgagee.
DEFAULT BY TENANT
Section 18.1. Rights 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 ten (10) days after receipt of written notice from Landlord that
such amount 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 and the continuance of such failure for more than thirty (30) days after
written notice of such failure provided, however, if such failure cannot
reasonably be cured within such thirty (30) day period, Tenant shall be allowed
such longer period as reasonably may be required so long as Tenant promptly
commences and diligently completes such cure; (c) a determination by Landlord
that Tenant has submitted any 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 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 the failure of such interruption to be cured
within five (5) days after written notice to Tenant and Tenant shall
immediately, upon oral or written direction from Landlord or Landlord's
authorized representative, take such action as Landlord shall specify in order
to promptly prevent, avoid or terminate such interference or work stoppage 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 and Tenant subsequently fails to reopen for business in the
Premises within five (5) days after Tenant's receipt of Landlord's written
demand therefor; 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, 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.
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.
Landlord shall use reasonable efforts to mitigate any damages resulting from
Tenant's default including reasonable efforts to relet the Premises upon
commercially reasonable terms in accordance with then currently market
conditions. Landlord shall not, however, be required to give the Premises
preference over other space in the Center in attempting to re-let the same.
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 Landlord shall be construed as an election to terminate this Lease
unless a written notice of such termination is given by Landlord.
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 following not less than forty-eight (48) hours prior
notice, oral or written, to Tenant or Tenant's store manager (except in an
emergency, no notice shall be required) at reasonable times to examine the
same, show them to prospective purchasers and other persons, and make such
repairs, alterations, improvements or additions as Landlord deems necessary.
Rent shall not xxxxx while any such repairs, alterations, improvements, or
additions are being made. During the last six (6) months of the Lease Term,
Landlord may exhibit the Premises to prospective tenants. 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.
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 [***] of the Minimum Monthly Rent prorated for the number of days
of such holding over, plus 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.
Section 23.1. Landlord's Covenant.
So long as Tenant is not in default under this Lease, 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.
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
*** Confidential treatment requested.
amendment, change or additions to this Lease shall be binding upon Landlord
or Tenant unless in writing, signed by them and approved by Landlord's
Section 24.4. No Partnership.
Landlord does not, by virtue of this Lease or the performance of the
parties under this Lease, become a partner, employee, principal, master, agent
or joint venturer of or with Tenant.
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 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 upon execution and delivery thereof by
Landlord and 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
000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
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
MALL OF AMERICA COMPANY
c/o M.S. Management Associates Inc.
National City Center
000 X. Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
All notices from Landlord to Tenant required or permitted hereunder shall
be sent to the Premises and also directed as follows, namely:
LBE Technologies, Inc. with a copy of Xxxx, Xxxx, Xxxx & Freidenrich
00000 Xxxx Xxxx default notices to: 000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000 Xxxx Xxxx, Xxxxxxxxxx 00000
Attn.: Xxxxx Xxxxxxxx
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 whose address has been furnished to Tenant as provided
for in Section 19.2.
Section 24.8. Captions and Section Numbers.
This Lease shall be construed without reference to titles of Article 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. INTENTIONALLY DELETED.
Section 24.11 Representation, 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 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
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
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. The party
requesting recording 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 strict accordance with
Exhibit "C" and "C-2" by the Required Completion Date, and furnishes evidence
satisfactory to Landlord of such completion including the total cost thereof as
certified by Tenant's architect in a form 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 3.4 and 4.1 hereof or otherwise
and has opened its store for business and accepted the Premises in writing in a
form prescribed by Landlord or its mortgagee, and executed and delivered to
Landlord the certificate provided for in Section 2.1 hereof and has executed
such other instruments and documents as are required by Landlord's mortgagee to
be executed, Landlord shall pay to Tenant as Landlord's contribution toward
Tenant's Work the sum of $35.00 per square foot of Store Floor Area, determined
as provided for in Section 2.1 hereof and nor more, provided if Tenant fails to
open for business on the required Commencement Date as set out in Section 2.3
of this Lease herein, then Landlord shall have the right, in addition to its
other rights and remedies as provided herein, to reduce Landlord's Contribution
Toward Tenant's Work (as defined herein) by one-half (1/2) of the total amount
of Landlord's contribution. Provided Tenant satisfies the terms, conditions and
provisions of this Section 24.20 by the tenth (10th) day of a month, Landlord's
Contribution shall be paid to Tenant by the fifteenth (15th) day of the
Section 24.21. Unrelated Business Taxable Income.
A. If at any time and from time to time during the term of this Lease
Landlord receives a written opinion from 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 reasonably specified by such
counsel and Tenant agrees that it will execute all documents or instruments
reasonable necessary to effect such amendment or amendments, provided that no
such amendment shall result on an estimated basis in Tenant having to pay 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.
Section 24.22. Option to Renew.
Landlord hereby grants to Tenant the option to renew this Lease for one
(1) additional term of five (5) years, which shall commence upon the expiration
of the original term. Such option, with respect to the Renewal Term, shall only
be exercised by Tenant mailing to Landlord (ATTN: Executive Vice President --
Leasing), at Landlord's Notice Address, by United States mail, postage prepaid,
certified or registered, return receipt requested, with a copy to the attention
of Managing Attorney -- Legal Leasing, notice of the exercise of such option,
not later than one hundred eighty (180) days prior to the expiration of the
original term. No exercise of any option herein granted shall be effective if
any default under or breach of this Lease (a) exists either at the time of
exercise or on the expiration of the term during which it was exercised.
In the event such option is effectively exercised with respect to the
Renewal Term, all terms and conditions of this Lease shall be applicable to
such Renewal Term except that:
(i) The Minimum Annual Rent due and payable by Tenant to Landlord for each
Lease Year of the Renewal Term shall be [***] per square foot of Store Floor
Area, or [***] per annum (based on 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 during the renewal term; and
(ii) Tenant shall have no further renewal options after the expiration or
sooner termination of the option hereinabove set forth.
Notwithstanding anything to the contrary in this Lease contained, the term
"Lease Term" whenever used in this Lease, shall be defined to include the
original term and all renewals and extensions thereof.
IN WITNESS WHEREOF, Landlord and Tenant have signed and sealed this Lease
as of the day and year first above written.
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
By: SI-MINN, INC., an Indiana Corporation,
its General Partner
By: /s/ XXXXXXX XXXXX
Xxxxxxx Xxxxx, President
If Corporation LBE TECHNOLOGIES, INC.
By: /s/ XXXXX SET XXXXXX
Xxxxx Set Xxxxxx
WITNESS: /s/ XXXX X. PORT
Xxxx X. Port
*** Confidential treatment requested.
MALL OF AMERICA
Xxxx 0 xxxxxxx 0, Xxxxx 0, Xxxx xx Xxxxxxx - 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 Xxx 0, Xxxxx 0, Xxxx xx Xxxxxxx 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 Xxxxxxxxx Xxxxxxx, 000 feet;
thence South 330 feet, thence East and parallel with the North line of said
Xxxxxxxxx Xxxxxxx xx Xxxxxxxxx Xxxxxxx 000 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 Xxx 0, Xxxxx 0, Xxxx xx Xxxxxxx 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 xxxxx of said
Northwest Quarter of the Southeast Quarter of said Section 1, thence West along
the North line of said Xxxxxxxxx Xxxxxxx, 000 feet; thence South 330 feet,
thence East and parallel with the North line of said Xxxxxxxxx Xxxxxxx xx
Xxxxxxxxx Xxxxxxx 000 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.
Xxxxxxxxxx Xxxx per
Article I cross-hatched.
DESCRIPTION OF TENANT'S WORK
TENANT'S WORK - Tile 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, Xxxxx XxXxxxxxx 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
b. Comprehensive or Commercial General Liability insurance
affording limits of not less than [***] per occurrence for
bodily injury, personal injury and death, and for not less
than [***] per occurrence for property damage, or not less
than [***] 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
C. Comprehensive Automobile Insurance, including "non-owned"
automobiles, against bodily injury including death resulting
therefrom, in the limits of [***] for any one occurrence and
[***] property damage or a combined single limit of [***].
d. Owners and contractors protective liability coverage for an
amount not less than [***].
*** Confidential treatment requested.
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
"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.
From the commencement of Tenant's Work through the date Tenant
obtains its certificate of occupancy, Tenant shall submit and
Landlord shall receive lien waivers no later than the fifth (5th)
day of each month for all work, material, services or machinery
furnished by Tenant's general contractor, subcontractors,
materialmen or suppliers in connection with Tenant's Work during the
preceding month. The failure of Tenant to submit such lien waivers
in accordance with this provision shall constitute a default under
Section 18.1 of this Lease.
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
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
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.
4. All sliding entrance doors must be recessed in such manner that the
door, when open, will not project beyond the lease line.
5. Tenants with exterior glazing must install show window or display.
1. All ceilings and coves shall not exceed 12'0" above the finished
2. Tenant's ceilings shall be suspended by adequate suspension systems
to conform to final requirements of governing authorities and
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.
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
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.
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
Domestic electric hot water heater, where required, including final
M. TOILET ROOM FIXTURES
Furnishing and installation of wiring, lighting fixtures, mechanical
toilet exhaust systems, towel cabinets, soap dishes, hand dryers,
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
xxxxx and Tenant's estimated store population (employees and
2. Tenant's cooling system shall be adequate for cooling the premises
to 75 degrees F 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 F DB during peak periods.
3. Tenant's heating method shall be adequate for heating the premises
to 55 degrees F 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
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
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 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.
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 contractors. The
lighting contractors will be inter-locked with the Landlord's Energy
Management System for automatic control during other than regular
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.
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. During construction, Tenant's use of the service elevators shall be
at Tenant's expense.
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, ???
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 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.
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. Notwithstanding the foregoing but provided the same have
been approved by Landlord on Tenant's Plans, Tenant shall be allowed to
place a full size race car within the Premises in the area immediately
fronting on Tenant's entrance to the Premises. Landlord acknowledges that
the race car may be fitted with operating lights, including flashing
lights, a "fogging" device to simulate exhaust emissions and race car
sound effects. However, Tenant's operation of such race car shall remain
subject to the terms and conditions of the Lease (including, but not
limited to, Section 8.4 thereof) and shall not cause an adverse effect on
the Center or activities conducted in or from the Common Areas or
interfere with any other tenant's quiet enjoyment of its premises.
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
10. Tenant 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
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
(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.
(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.
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.
(1) 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
(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
(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.
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 construed, that do not conform to the Tenant Handbook