EXHIBIT 10.22
LEASE
HOLOWORLD, INC., A DELAWARE CORPORATION
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Tenant
"HOLOWORLD"
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Trade Name
N/A
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Guarantor
MARQoE HOUSTON DEVELOPMENT
CITY OF HOUSTON
STATE OF TEXAS
PROVISIONS ADDED TO THIS LEASE APPEAR ON THE DATA SHEET AND ON THE ATTACHED
RIDER AND, EXCEPT IN INSTANCES OF ADDITIONAL SENTENCES OR PARAGRAPHS BEING ADDED
AT THE END OF A SECTION OR PARAGRAPH, ARE INDICATED IN THE TEXT BY AN
UNDERSCORING OF THE LINE NUMBER IN THE LEFT-HAND MARGIN OF THE LINE BEING
CHANGED. ADDITIONAL LANGUAGE IS INSERTED EITHER IN PLACE OF DELETED LANGUAGE OR
AFTER AN UNDERSCORED WORD, EXCEPT AS OTHERWISE NOTED ABOVE.
TABLE OF CONTENTS
Page
DATA SHEET....................................................................1
EXECUTION/ACKNOWLEDGMENT......................................................1
ARTICLE X. XXXXX AND TERM........................................... ........1
SECTION 1.1. LEASED PREMISES..........................................1
SECTION 1.2. COMMENCEMENT AND ENDING DAY OF TERM........................2
SECTION 1.3. OPENING....................................................2
ARTICLE II. RENT.............................................................2
SECTION 2.1. MINIMUM RENT...............................................2
SECTION 2.2. PERCENTAGE RENT............................................2
SECTION 2.3. GROSS SALES................................................3
SECTION 2.4. RENT ADJUSTMENT............................................4
SECTION 2.5. TENANT'S TAX OBLIGATION....................................4
SECTION 2.6. PAYMENTS...................................................5
ARTICLE III. RECORDS AND BOOKS OF ACCOUNT....................................6
SECTION 3.1. TENANT'S RECORDS...........................................6
SECTION 3.2. REPORTS BY TENANT..........................................6
ARTICLE IV. AUDIT............................................................7
SECTION 4.1. RIGHT TO EXAMINE BOOKS.....................................7
Section 4.2 AUDIT. 7
ARTICLE V. CONSTRUCTION OF LEASED PREMISES...................................8
SECTION 5.1. CONSTRUCTION OF LEASED PREMISES............................8
SECTION 5.2. AVAILABILITY AND POSSESSION OF PREMISES FOR TENANT'S WORK..9
SECTION 5.3. LANDLORDS AND TENANT'S OPTIONAL RIGHT OF CANCELLATION.....10
ARTICLE VI. ALTERATIONS, CHANGES AND ADDITIONS..............................10
SECTION 6.1. INSTALLATION BY TENANT....................................10
SECTION 6.2. REMOVAL BY TENANT.........................................10
SECTION 6.3. CHANGES AND ADDITIONS.....................................11
ARTICLE VII. CONDUCT OF BUSINESS BY TENANT..................................11
SECTION 7.1. USE OF PREMISES...........................................11
SECTION 7.2. OPERATION OF BUSINESS.....................................12
SECTION 7.3. RADIUS. 14
SECTION 7.4. STORAGE, OFFICE SPACE.....................................14
SECTION 7.5. CARE OF PREMISES..........................................14
ARTICLE VIII. COMMON AREAS..................................................15
SECTION 8.1. OPERATION AND MAINTENANCE OF COMMON AREAS.................15
i
SECTION 8.2. USE OF COMMON AREAS.......................................15
SECTION 8.3. TENANT'S PRO RATA SHARE OF EXPENSES.......................16
ARTICLE IX. SIGNS...........................................................18
SECTION 9.1. SIGNS. ...................................................18
ARTICLE X. MAINTENANCE......................................................18
SECTION 10.1. LANDLORD'S OBLIGATIONS FOR MAINTENANCE...................18
SECTION 10.2. TENANT'S OBLIGATIONS FOR MAINTENANCE.....................19
ARTICLE XI. INSURANCE AND INDEMNITY..................................21
SECTION 11.1. TENANT'S INSURANCE.......................................21
SECTION 11.2. LANDLORD'S INSURANCE.....................................22
SECTION 11.3. COVENANT TO HOLD HARMLESS................................23
ARTICLE XII. UTILITY CHARGES................................................24
SECTION 12.1. UtILITY CHARGES..........................................24
ARTICLE XIII. ESTOPPEL STATEMENT, ATTORNMENT AND SUBORDINATION..............27
SECTION 13.1. ESTOPPEL STATEMENT.......................................27
SECTION 13.2. ATTORNMENT...............................................27
SECTION 13.3. SUBORDINATION............................................28
SECTION 13.4. REMEDIES.................................................28
ARTICLE XIV. ASSIGNMENT AND SUBLETTING......................................28
SECTION 14.1. NO ASSIGNMENT OR SUBLETTING..............................28
ARTICLE XV. WASTE...........................................................30
SECTION 15.1. WASTE OR NUISANCE........................................30
ARTICLE XVI. TRADE NAME, PROMOTIONAL CHARGE.................................30
SECTION 16.1. TRADE NAME...............................................30
SECTION 16.2. SOLICITATION OF BUSINESS.................................30
SECTION 16.2. PROMOTIONAL CHARGE.......................................30
ARTICLE XVII. DESTRUCTION OF LEASED PREMISES................................31
SECTION 17.1. RECONSTRUCTION OF DAMAGED PREMISES.......................31
SECTION 17.2. WAIVER OF SUBROGATION....................................33
ARTICLE XVIII. EMINENT DOMAIN...............................................33
SECTION 18.1. TOTAL CONDEMNATION OF LEASED PREMISES....................33
SECTION 18.2. PARTIAL CONDEMNATION.....................................33
SECTION 18.3. LANDLORD'S AND TENANT'S DAMAGES..........................34
ARTICLE XIX. DEFAULT........................................................34
SECTION 19.1. RIGHT TO RE-ENTER........................................34
SECTION 19.2. RIGHT TO RELET...........................................36
SECTION 19.3. EXPENSES.................................................36
SECTION 19.4. WAIVER OF COUNTERCLAIMS AND TRIAL BY JURY................37
ARTICLE XX. BANKRUPTCY OR INSOLVENCY........................................37
SECTION 20.1. TENANT'S INTEREST NOT TRANSFERABLE.......................37
ii
SECTION 20.2. TERMINATION..............................................37
SECTION 20.3. TENANT'S OBLIGATION TO AVOID CREDITORS' PROCEEDINGS......38
SECTION 20.4. RIGHTS AND OBLIGATIONS UNDER THE BANKRUPTCY CODE.........38
ARTICLE XXI. ACCESS BY LANDLORD.............................................39
SECTION 21.1. RIGHT OF ENTRY...........................................39
ARTICLE XXII. TENANT'S PROPERTY.............................................40
SECTION 22.1. TAXES ON TENANT'S PROPERTY...............................40
SECTION 22.2. LOSS AND DAMAGE..........................................40
SECTION 22.3. NOTICE BY TENANT.........................................40
ARTICLE XXIII. HOLDING OVER.................................................40
SECTION 23.1. HOLDING OVER.............................................40
SECTION 23.2. SUCCESSORS...............................................41
ARTICLE XXIV. RULES AND REGULATIONS.........................................41
SECTION 24.1. RULES AND REGULATIONS....................................41
ARTICLE XXV. QUIET ENJOYMENT................................................41
SECTION 25.1. LANDLORD'S COVENANT......................................41
SECTION 25.2. TENANT'S COVENANT........................................41
ARTICLE XXVI. SECURITY PROVISION............................................42
SECTION 26.1. SECURITY.................................................42
ARTICLE XXVII. MISCELLANEOUS................................................42
SECTION 27.1. WAIVER; ELECTION OF REMEDIES.............................42
SECTION 27.2. ENTIRE AGREEMENT.........................................43
SECTION 27.3. INTERPRETATION AND USE OF PRONOUNS.......................44
SECTION 27.4. DELAYS...................................................44
SECTION 27.5. NOTICES..................................................44
SECTION 27.6. CAPTIONS AND SECTION NUMBERS.............................45
SECTION 27.7. BROKER'S COMMISSION......................................45
SECTION 27.8. RECORDING................................................45
SECTION 27.9. FURNISHING OF FINANCIAL STATEMENTS.......................45
SECTION 27.10. LANDLORD'S USE OF COMMON AREAS...........................45
SECTION 27.11. TRANSFER OF LANDLORD'S INTEREST..........................45
SECTION 27.12. FLOOR AREA...............................................46
SECTION 27.13. INTEREST ON PAST DUE OBLIGATIONS.........................46
SECTION 27.14. LIABILITY OF LANDLORD....................................47
SECTION 27.15. ACCORD AND SATISFACTION..................................47
SECTION 27.16. EXECUTION OF LEASE; NO OPTION............................47
SECTION 27.17. GOVERNING LAW............................................48
SECTION 27.18. SPECIFIC PERFORMANCE OF LANDLORD'S RIGHTS................48
SECTION 27.19. CERTAIN RULES OF CONSTRUCTION............................48
SECTION 27.20. INDEX....................................................48
SECTION 27.21. SURVIVAL; NONDISCLOSURE; FREE ACT........................49
iii
EXHIBITS
EXHIBIT "A" SITE PLAN; LEASED PREMISES
EXHIBIT "B" LANDLORD'S WORK - TENANT'S WORK
EXHIBIT "B-2" (ADDITIONAL CONSTRUCTION INFORMATION AND PROCEDURES)
EXHIBIT "C" CENTRAL-AIR/CONDENSER-WATER SYSTEM (IF ANY)
EXHIBIT "D" SAMPLE FORM OF NOTICE OF LEASE TERM DATES
EXHIBIT "E" MENU
OTHER EXHIBITS (IF ANY)
RIDER
iv
MARQoE XXXXXXX XXXXXXXXXXX
XXXX XX XXXXXXX, XXXXX
THIS LEASE made as of this ______ day of ____________________, _______,
by and between ORIX PLC HOUSTON VENTURE, an Illinois general partnership, the
address of which is 00 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx
00000 ("Landlord"), and HOLOWORLD, INC., a Delaware corporation, the address of
which is 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxx Xxxxx, Xxxxxxxxxx 00000
("Tenant"). All of the provisions of the Lease, including the Data Sheet, the
standard provisions commencing with Article I and continuing through Article
XXVII of the Lease (hereinafter at times referred to as the "text of the Lease"
or the "Form"), all exhibits, and riders, if any, are incorporated in full in
this preamble as if fully set forth at this point.
DATA SHEET
The following references furnish data to be incorporated in the
specified Sections of the Lease and shall be construed to incorporate all of the
terms of the entire Section as stated in the said Lease:
(1) Section 1.1: Leased Premises: Store Number 440, having an
irregular shape and consisting of approximately twenty thousand (20,000) square
feet.
(2) Section 1.2: Commencement Date of Term: One hundred twenty
(120) days after the leased premises are available to Tenant.
Length of Term: Ten (10) years, plus two (2) option terms of
five (5) years each.
(3) Section 2.1 and Section 2.2: Name and Address for Rent Payments:
Payments from Tenant shall be made payable to ORIX REAL ESTATE EQUITIES, INC.,
and shall be sent to:
ORIX REAL ESTATE EQUITIES, INC.
000 X. Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
(4) Section 2.1: MINIMUM RENT:
Original Term:
(i) From the commencement of the original term of this
Lease and continuing through the fifth (5th) lease year of the original term
hereof, the sum of Five Hundred Forty Thousand and 00/100ths Dollars
($540,000.00) annually, which sum shall be payable by Tenant in equal
consecutive monthly installments of Forty-Five Thousand and 00/100ths Dollars
($45,000.00) each;
D1
(ii) Beginning with the sixth (6th) lease year of the
original term hereof and continuing through the expiration of the original term
hereof, the sum of Six Hundred Thousand and 00/100ths Dollars ($600,000.00)
annually, which sum shall be payable by Tenant in equal consecutive monthly
installments of Fifty Thousand and 00/l00ths Dollars ($50,000.00) each.
First Option Term:
Beginning with the first (1st) lease year of the First Option
Term and continuing through the expiration of the First Option Term hereof, the
sum of Six Hundred Forty Thousand and 00/l00ths Dollars ($640,000.00) annually,
which sum shall be payable by Tenant in equal consecutive monthly installments
of Fifty-Three Thousand Three Hundred Thirty-Three and 34/100ths Dollars
($53,333.33) each.
Second Option Term:
Beginning with the first (1st) lease year of the Second Option
Term and continuing through the expiration of the Second Option Term hereof, the
sum of Seven Hundred Twenty Thousand and 00/100th Dollars ($720,000.00)
annually, which sum shall be payable by Tenant in equal consecutive monthly
installments of Sixty Thousand and 00/100ths Dollars ($60,000.00) each.
(5) Section 2.2(a): PERCENTAGE RENT:
Original Term:
(i) From the commencement of the original term of this
Lease and continuing through the fifth (5th) lease year of the original term
hereof, a sum equal to eight percent (8%) (the "percentage rent factor") of all
"Gross Sales" resulting from business conducted in, on or from the leased
premises during each lease year in excess of Six Million Seven Hundred Fifty
Thousand and 00/l00ths Dollars ($6,750,000.00) ("Breakpoint");
(ii) Beginning with the sixth (6th) lease year of the
original term hereof and continuing through the expiration of the original term
hereof, a sum equal to eight percent (8%) (the "percentage rent factor") of all
"Gross Sales" resulting from business conducted in, on or from the leased
premises during each lease year in excess of Seven Million Five Hundred Thousand
and 00/100ths Dollars ($7,500,000.00) ("Breakpoint").
First Option Term:
Beginning with the first (1st) lease year of the First Option
Term of this Lease and continuing through the expiration of the First Option
Term hereof, a sum equal to eight percent (8%) (the "percentage rent factor") of
all "Gross Sales" resulting from business conducted in, on or from the leased
premises during each lease year in excess of Eight Million and 00/100ths Dollars
($8,000,000.00) ("Breakpoint").
D2
Second Option Term:
Beginning with the first (1st) lease year of the Second Option
Term of this Lease and continuing through the expiration of the Second Option
Term hereof, a sum equal to eight percent (8%) (the "percentage rent factor") of
all "Gross Sales" resulting from business conducted in, on or from the leased
premises during each lease year in excess of Nine Million and 00/100ths Dollars
($9,000,000.00) ("Breakpoint").
(6) Section 7.1: Permitted Use: For the following purpose(s) and
for no other purpose(s): the operation of a full service themed restaurant/bar
serving food and beverages pursuant to the menu attached as an Exhibit hereto.
Tenant shall be permitted to serve alcoholic beverages, provided Tenant obtains
all required licenses and permits for such use. Tenant shall also be permitted
to sell logo products such as hats, t-shirts and other apparel. Tenant shall
have the right to operate virtual reality video games, laser video games (such
as "laser tag") and a motion-based simulator theatre.
(7) Section 7.3: Radius: Fifteen (15) miles.
(8) Section 16.1: Trade Name: "Holoworld"
(9) Section 16.3: Original Annual Promotional Charge: Twenty
Thousand and 00/100ths Dollars ($20,000.00). Original annual promotional charge
to be paid in monthly installments of: One Thousand Six Hundred Sixty-Six and
66/l00ths Dollars ($1,666.66).
Section 16.3: Initial Promotional Charge: Twenty Thousand
and 00/l00ths Dollars ($20,000.00).
(10) Section 26.1: Security Deposit: Forty-Three Thousand Three
Hundred Thirty-Three and 33/100ths Dollars ($43,333.33).
(12) Guarantor(s): N/A
SPECIAL PROVISIONS:
Section 5.1: Provided that Tenant shall not be in default under
this Lease beyond applicable notice and cure periods, if any, then in accordance
with schedule set forth in Exhibit B, Landlord shall pay to Tenant, as a Tenant
Allowance, the sum of Four Hundred Thousand and 00/100ths Dollars ($400,000.00).
In the event that this Lease is terminated as a result of Tenant's default
beyond applicable notice and cure period, if any, prior to expiration of the
stated lease term, Tenant shall immediately repay to Landlord an amount equal to
the then unamortized portion of the Tenant Allowance paid to Tenant, which
amortization shall be on the straight-line basis over the full stated lease
term, plus interest on such unamortized portion at a rate equal to three (3)
percentage points above the prime rate then charged by a plurality of FDIC
member banks headquartered in the State, which interest shall accrue from the
date of payment of the Tenant inducement to Tenant through the date of
termination of the Lease. The cost of Tenant's leasehold improvements pursuant
to Section 1.2 hereof shall be less the amount of such Tenant Allowance.
D3
Section 8.3: Tenant's proportionate share of the costs and
expenses described in this Section 8.3 (exclusive of utilities, insurance and
security costs) are estimated, for the first year of the Lease term, at Four and
00/100ths Dollars ($4.00) per square foot of floor area in the leased premises,
but the same is subject to change without notice. The cumulative percentage
increase in Tenant's proportionate share of costs and expenses under this
Section shall not exceed three percent (3%) per annum compounded annually.
Section 16.3: The cumulative percentage increase in the annual
promotional charge under this Section shall not exceed three percent (3%) per
annum compounded annually.
[End of text of Data Sheet]
D4
EXECUTION/ACKNOWLEDGMENT
In confirmation of their agreement to enter into this Lease (including
the Preamble, Data Sheet, Form, all exhibits and the Rider (if any) attached
hereto), and intending to be bound hereby, Landlord and Tenant have signed and
sealed this Lease as of the day and year first above written on page D1 of this
Lease.
In the Presence of: LANDLORD:
ORIX PLC HOUSTON VENTURE,
an Illinois general partnership
By: ORIX Houston I Limited Partnership,
an Illinois limited partnership
Its: Partner
By: ORIX Houston I, Inc.,
an Illinois corporation
Its: General Partner
By:
Name:
Title:
AND
By: PLC Houston Complex L.P.,
a Delaware limited partnership
Its: Partner
By: PLC Houston Complex Holding L.P.,
a Delaware limited partnership
Its: General Partner
By: PLC-Xxxxxxx LLC,
a Delaware limited liability company
Its: General Partner
By: PLC Commercial LLC,
a Delaware limited liability company
Its: Manager
By: PLC Commercial Inc,
a California corporation
Its: Manager
E1
By: PLC Commercial Inc.,
a California corporation
Its: Manager
By:
Xxxxxxx Xxxxxx
Title:
By:
Xxxxx Xxxxxxxxxx
Title:
TENANT:
HOLOWORLD, INC., a Delaware corporation
By: /S/
--------------------
Print Name: Xxxxxx Xxxxxx
-------------
Its: President
Print Name:
AND
By:
Print Name:
Its:
Print Name:
Tenant's Federal Tax Identification Number
00-0000000
Tenant's corporate seal:
X0
XXXXXXXXXXXXXXX XX XXXXXXXX
XXXXX OF _____________ )
)
COUNTY OF __________ )
On this ________ day of _____________, 19___, before me personally
appeared and
------------------------------ --------------------------------
to me known to be the persons who executed the foregoing Lease and
acknowledged before me that they were duly authorized and did execute same on
behalf of ORIX PLC HOUSTON VENTURE, an Illinois general partnership.
Notary Public, _________________ County
My Commission expires:
------------------
ACKNOWLEDGEMENT OF CORPORATE TENANT
STATE OF ____________ )
)
COUNTY OF __________ )
On this ______ day of _____________, 19___, before me personally
appeared and
-------------------------------- --------------------------------
to me personally known, who, being by me duly sworn, did each for himself say
that he is, respectively, the and
------------------- -------------------------
of HOLOWORLD, INC., the corporation named in and which executed the within
instrument, and that the seal affixed to said instrument is the corporate seal
of said corporation, and that said instrument was signed and sealed on
behalf of said corporation by authority of its board of directors; and
said and
------------------------------ ------------------------------
acknowledged before me said instrument to be the free act and deed of said
corporation.
Notary Public, _____________ County
My Commission expires:
------------------
X0
XXXXXXXX - XXXXxX XXXXXXX DEVELOPMENT
All of the provisions set forth in this Addendum are in addition to,
and not in substitution for, the provisions of the lease form, except to the
extent specifically otherwise stated.
Section 1.1.(a). LEASED PREMISES: The entertainment and retail center
is commonly known as "MarqoE Houston Development," located in the City of
Houston, Texas.
[End of text of Addendum]
A1
ARTICLE X. XXXXX AND TERM
SECTION 1.1. LEASED PREMISES. (a) Landlord, in Consideration of the
rent to be paid and the covenants to be performed by Tenant, does hereby demise
and lease unto Tenant, and Tenant hereby rents and hires from Landlord, those
certain premises in the entertainment and retail center shown on Exhibit A,
subject to covenants, restrictions and easements of record, any declaration or
other instrument of covenants, conditions or restrictions now or hereinafter
entered into by Landlord, the terms and provisions of certain reciprocal
easement and/or operating agreements now or hereinafter entered into by Landlord
with the owners or lessees of the Major Store Sites, and the terms and
provisions of the underlying lease, if any. It is agreed that the term
"entertainment and retail center" as used herein shall mean and refer to the
Major Store Sites and the Development, including the buildings located or to be
located thereon, all as shown on the site plan which is set forth in Exhibit A
attached hereto and made a part hereof, and that the term "Development" shall,
except as otherwise specifically provided herein, mean and refer to the hatched
and the shaded portions of such site plan which portions from time to time open
directly on the mall, together with the mall (whether or not shaded or hatched).
The approximate location of the premises leased to Tenant hereunder is shown in
Exhibit A. The leased premises (herein referred to as the "leased premises" or
"premises") are described as set forth in the Data Sheet attached hereto. As
used in this Lease, the term "State" shall mean the state in which the
Development is located.
(b) The exterior walls and the roof of the leased premises and
the area beneath said premises are not demised hereunder, and the use thereof,
together with the right to locate, both vertically and horizontally, install,
maintain, use, repair and replace pipes, utility lines, ducts, conduits, flues,
refrigerant lines, drains, sprinkler mains and valves, access panels, wires and
structural elements leading through the leased premises serving other parts of
the entertainment and retail center, is hereby reserved unto Landlord. Landlord
reserves an easement in, over and through the area occupied by the storefront of
the leased premises, and an easement above Tenant's finished ceiling to the
roof, or to the bottom of the floor deck above the leased premises, for general
access purposes and in connection with the exercise of Landlord's other rights
under this Lease.
(c) The attached site plan of the entertainment and retail
center, Exhibit A, includes premises identified thereon as Major Store Sites,
including the buildings located or to be located thereon, which sites are
collectively hereinafter referred to as the "Major Store Sites" and/or "Major
Stores," unless otherwise specifically set forth. It is agreed that, wherever
the term "Development" is used herein, it shall be deemed to exclude the Major
Store Sites (even if such Sites shall be within the hatched and/or shaded area
shown on the site plan), except as otherwise specifically stated herein. In
addition, said site plan includes other portions of the Development which
Landlord may from time to time sell or lease for the purpose of construction
and/or use by one or more Major Stores (as defined in Section 27.12 hereof),
which portion(s) may thereupon, at landlord's option, be referred to and treated
as "Major Store Site(s)" and/or "Major Stores" upon occupancy thereof by a Major
Store, and which, at Landlord's option, may be excluded from the Development. In
the event Landlord elects to enlarge the entertainment and retail center, any
additional area may be included by Landlord in the definition of the Development
for purposes of this Lease. Landlord shall also have the general right from time
1
to time to include within and/or to exclude from the defined Development any
existing or future areas, and the floor area of the Development shall be
accordingly adjusted.
SECTION 1.2. COMMENCEMENT AND ENDING DAY OF TERM. The term of this
Lease shall commence upon (a) the commencement date set forth in the Data Sheet,
or (b) the date on which Tenant opens its store in the leased premises for
business to the public, whichever of said dates is the first to occur, and shall
end on the final day of the last lease year of the term or other specified date
as set forth in the Data Sheet, unless sooner terminated as hereinafter
provided. Once the commencement date is established, Tenant and Landlord shall
execute a notice setting forth certain terms of the Lease, substantially in the
form set forth on Exhibit D. For the purpose of this Lease, the first "lease
year" shall be a period commencing on the day the term of this Lease commences
and ending on January 31 next following; after the first lease year, the term
"lease year" shall mean a fiscal year of twelve (12) consecutive calendar months
commencing on February 1 of each calendar year, except that the final lease year
of the term shall be a period of less than twelve (12) consecutive calendar
months in the event that an expiration date other than January 31 is set forth
in the Data Sheet.
SECTION 1.3. OPENING. Tenant covenants and agrees to complete its
construction within the leased premises in accordance with the provisions of
this Lease and to open its store for business to the public on the date
established for commencement of the term of this Lease pursuant to Section 1.2
hereof.
ARTICLE II. RENT
SECTION 2.1. MINIMUM RENT. (a) The minimum rent during (he term of this
Lease shall be the amount set forth in the Data Sheet attached hereto as
adjusted pursuant to Section 2.4 or other provisions of this Lease, which sum
shall be payable by Tenant in equal consecutive monthly installments in the sum
set forth in the Data Sheet attached hereto, on or before the first day of each
month, in advance, payable as set forth, and at the address set forth, in the
Data Sheet attached hereto under "Name and Address for Rent Payments," or such
other place as the Landlord may designate in writing, such payments to be
without any prior demand therefor and without any deductions or setoff
whatsoever.
(b) Should the term of this Lease commence on a day other than the
first day of a calendar month, then the rent for such month shall be prorated on
a daily basis based upon a thirty (30) day calendar month. Should any lease year
contain less than twelve (12) calendar months, said annual rent shall be
prorated.
SECTION 2.2. PERCENTAGE RENT. (a) In addition to the payment of the
minimum rent, as hereinbefore provided, Tenant shall pay to Landlord for each
lease year of the term hereof, as percentage rent, an amount equal to the
percentage rent factor (see Data Sheet) multiplied by all Gross Sales resulting
from business conducted in, on or from the leased premises during such lease
year in excess of the amount of Gross Sales set forth in the Data Sheet
(hereinafter referred to as the "Breakpoint"). Subsequent to the date upon which
Tenant is initially obligated to open for business in the leased premises, in
addition to any and all other remedies afforded to Landlord under this Lease by
reason of default, the Breakpoint shall be reduced by 1/360th for each day or
2
portion thereof that Tenant does not operate its business pursuant to Section
7.2 hereof. The percentage rent shall be payable as set forth, and at the
address set forth, in the Data Sheet attached hereto under "Name and Address for
Rent Payments," or such other place as the Landlord may designate in writing,
such payments to be without any prior demand therefor and without any deductions
or setoff whatsoever.
(b) Such percentage rent shall be paid in monthly installments computed
on all Gross Sales in excess of the applicable Breakpoint. If the commencement
date of the lease term is other than February 1, then the applicable Breakpoint
for the first lease year shall be prorated so that the applicable Breakpoint
will be calculated by taking the number of days remaining in such lease year as
of the date the leased premises are initially opened for business to the general
public, dividing by 360, and multiplying the resulting quotient by the stated
Breakpoint figure. If the expiration date of the lease term is other than
January 31, then the applicable Breakpoint covering the final lease year
hereunder shall be calculated in a like manner. Such amounts shall be payable
within five (5) days following the end of the month, during each lease year, for
which Tenant's total Gross Sales for such lease year shall have exceeded the
applicable Breakpoint for such lease year; Tenant shall likewise pay percentage
rent within five (5) days following the end of each month thereafter during such
lease year with respect to all Gross Sales for each such month.
SECTION 2.3. GROSS SALES. The term "Gross Sales" as used herein shall
be construed to include the entire amount of the actual sales price, whether for
cash or otherwise, of all sales of merchandise or services and all other
receipts whatsoever of all business conducted in or from the leased premises by
Tenant, or by all concessionaires (as defined in Section 3.2 hereof) or
otherwise, including, without limitation, mail, catalogue or telephone orders
received or filled at the leased premises, all deposits not refunded to
purchasers, and orders taken, although said orders may be filled elsewhere. A
"sale" shall be deemed to have been consummated for the purposes of this Lease,
and the entire amount of the sales price shall be included in Gross Sales, at
such time that (i) the transaction is initially reflected in the books or
records of Tenant or a concessionaire (if a concessionaire makes the sale), or
(ii) Tenant or such concessionaire receives all or any portion of the sales
price, or (iii) the applicable goods or services are delivered to the customer,
whichever first occurs, irrespective of whether payment is made in installments,
the sale is for cash or for credit, or otherwise, or all or any portion of the
sales price has actually been paid at the time of inclusion in Gross Sales or at
any other time. No deduction shall be allowed for direct or indirect discounts,
rebates, or other reductions on sales to employees or others, unless generally
offered to the public on a uniform basis. In addition, no deduction shall be
allowed for uncollected or uncollectible credit accounts, or for trade-ins or
other credits on sales to employees or others. The term "Gross Sales" shall not
include, however, any sums collected and paid out by Tenant for any sales or
excise tax imposed by and accounted for by Tenant to any duly constituted
governmental authority, nor shall it include the exchange of merchandise between
the stores of Tenant, if any, where such exchange of goods or merchandise is
made solely for the convenient operation of the business of Tenant and not for
the purpose of consummating a sale which has theretofore been made in or from
the leased premises and/or for the purpose of depriving Landlord of the benefit
of a sale which otherwise would be made in or from the leased premises, nor
shall the term include the amount of returns to shippers or manufacturers, nor
proceeds from the sale of trade fixtures. There shall be deductible from Gross
3
Sales the amount of any cash or credit refund made upon any sale in or from the
leased premises, previously included in "Gross Sales" hereunder, not to exceed
the sum so previously included, where the merchandise sold is thereafter
returned by the purchaser and accepted by Tenant. The term "merchandise" as used
in this Lease shall include food and beverages if Tenant is permitted to sell
such items in Section 7.1 hereof.
SECTION 2.4. RENT ADJUSTMENT.
[deleted]
SECTION 2.5. TENANT'S TAX OBLIGATION. Tenant shall pay to Landlord its
proportionate share of all taxes and assessments which may be levied or assessed
by any lawful authority during the term of this Lease, or with respect to each
fiscal tax year falling in whole or in part during the term of this Lease, or
with respect to each fiscal year falling in whole or in part during the term of
this Lease, against the land, buildings and improvements comprising the
Development, and of all other taxes which Landlord becomes obligated to pay with
respect to the entertainment and retail center, irrespective of whether such
taxes are assessed against real or personal property. Tenant's proportionate
share of such taxes and assessments shall be equal to the product obtained by
multiplying such taxes and assessments by a fraction, the numerator of which
shall be the number of square feet of floor area in the leased premises and the
denominator of which shall be the total number of square feet of gross leased
and occupied floor area in the Development. In the event that any present or
future enactment of the State or any political subdivision thereof or any
governmental authority having jurisdiction thereover either: (a) imposes a
direct or indirect tax and/or assessment of any kind or nature upon, against or
with respect to the rents payable by tenants or occupants in the entertainment
and retail center to Landlord derived from the entertainment and retail center
or with respect to the Landlord's (or the individuals' or entities' which
constitute the partners of the partnership which is the Landlord) ownership of
the land and buildings comprising the entertainment and retail center, either in
addition to or by way of substitution for all or any part of the taxes and
assessments levied or assessed against such land and such buildings, including,
without limitation, any net profits tax or any comparable tax imposed on any
portion of Landlord's revenues from the entertainment and retail center; and/or
(b) imposes a direct or indirect tax or surcharge of any kind or nature, upon,
against or with respect to the parking areas or the number of parking spaces in
the entertainment and retail center, then in either or both of such events,
Tenant shall be obligated to pay its proportionate share thereof as provided
herein. For purposes of this Section, the term "entertainment and retail center"
shall be deemed to include the land upon which any parking facilities, temporary
or permanent off-site utility systems and any wooded area, lake, shoreline
thereof or island park serving the entertainment and retail center are located
with all improvements situated thereon.
Tenant's proportionate share of all of the aforesaid taxes and
assessments levied or assessed for or during the term hereof, as determined by
Landlord, shall be paid in monthly installments on or before the first day of
each calendar month, in advance, in an amount estimated by Landlord; provided
that Landlord shall have the right to initially determine monthly estimates and
to revise the estimates from time to time, and shall have the right to apply
such monthly installments to tax bills according to the formula being utilized
by Landlord from time to time. Upon receipt of all tax bills and assessment
4
bills attributable to any calendar or fiscal year during the term hereof,
Landlord shall furnish Tenant with a written statement of the actual amount of
Tenant's proportionate share of the taxes and assessments for such year. In the
event no tax xxxx is available, Landlord will compute the amount of such tax. If
the total amount paid by Tenant under this Section for any calendar or fiscal
year during the term of this Lease shall be less than the actual amount due from
Tenant for such year, as shown on such statement, Tenant shall pay to Landlord
the difference between the amount paid by Tenant and the actual amount due, such
deficiency to be paid within ten (10) days after demand therefor by Landlord;
and if the total amount paid by Tenant hereunder for any such calendar or fiscal
year shall exceed such actual amount due from Tenant for such year, such excess
shall be credited against the next installment of taxes and assessments due from
Tenant to Landlord hereunder. All amounts due hereunder shall be payable to
Landlord at the place where the minimum rent is payable. In the event Landlord
contests any taxes levied or assessed during the term hereof upon, against or
with respect to the Development or any portion thereof or interest therein, or
in the event of Landlord's negotiation with respect to assessed valuation for
the Development, Tenant shall pay its proportionate share of Landlord's costs,
expenses and attorneys' fees in connection therewith calculated on the same
basis as set forth above in this Section. For the calendar or fiscal years in
which this Lease commences and terminates, the provisions of this Section shall
apply, and Tenant's liability for its proportionate share of any taxes and
assessments for such years shall be subject to a pro rata adjustment based on
the number of days of said calendar or fiscal years during which the term of
this Lease is in effect. A copy of a tax xxxx or assessment xxxx submitted by
Landlord to Tenant shall at all times be sufficient evidence of the amount of
taxes and/or assessments assessed or levied against the property to which such
xxxx relates. Prior to or at the commencement of the term of this Lease and from
time to time thereafter throughout the term hereof, Landlord shall notify Tenant
in writing of Landlord's estimate of Tenant's monthly installments due
hereunder.
SECTION 2.6. PAYMENTS. Rent shall be defined in this Lease as (i)
minimum rent, (ii) percentage rent and (iii) all other charges of whatever
nature required to be paid by Tenant under this Lease, including the Exhibits
hereto. The rent charges described in item (iii) of the preceding sentence
shall, unless otherwise specified, be due and payable ten (10) days after
demand, without any deductions or setoff whatsoever, in the manner and at the
place where minimum rent is payable and Tenant's failure to pay rent shall carry
with it the consequences set forth under Article XIX hereof. Landlord's rights
and remedies pursuant to this Section shall be in addition to any and all other
rights and remedies provided under this Lease or at law. Notwithstanding
anything to the contrary contained in this Lease, Landlord's demand for any and
all rent may be sent to Tenant by regular mail. Rent is specifically agreed by
Tenant to be a minimum reasonable use and occupancy charge for the leased
premises. In the event any sums required hereunder to be paid are not received
on or before the tenth (10th) day after the same are due, then, for each and
every such payment, Tenant shall immediately pay, as additional rent, a service
charge of five percent (5%) of the outstanding amount due, which service charge
again shall be imposed for each month that such amount shall remain unpaid. In
the event of Tenant's failure to pay the foregoing service charge, Landlord may
deduct said charge from the deposit set forth in Section 26.1 hereof. The
provisions of this Section shall not be construed to extend the date of payment
of any sums required to be paid by Tenant under this Lease or to relieve Tenant
of its obligation to pay all such sums at the time or times herein stipulated,
and neither the demand for, nor collection by Landlord of, late payment service
5
charges pursuant to this Section shall be construed as a cure of any default in
payment by Tenant. It is agreed that the said service charge is a fair and
reasonable charge under the circumstances and shall not be construed as interest
on a debt payment. In the event any charge imposed hereunder or under any other
section of this Lease is either stated to be or construed as interest, then no
such interest charge shall be calculated at a rate which is higher than the
maximum rate which is allowed under the usury laws of the State, which maximum
rate of interest shall be substituted for the rate in excess thereof, if any,
computed pursuant to this Lease.
ARTICLE III. RECORDS AND BOOKS OF ACCOUNT
SECTION 3.1. TENANT'S RECORDS. Tenant shall prepare and keep full,
complete and proper books and source documents, in accordance with generally
accepted accounting principles, of the Gross Sales, whether for cash, credit or
otherwise, of each separate department at any time operated in the leased
premises and of the operations of each subtenant, concessionaire, licensee
and/or assignee, and shall require and cause all such parties to prepare and
keep books, source documents, records and accounts sufficient to substantiate
those kept by Tenant. The books and source documents to be kept by Tenant shall
include, without limitation, true copies of all Federal, State and local tax
returns and reports, records of inventories and receipts of merchandise, daily
receipts from all sales and other pertinent original sales records and records
of any other transactions conducted in or from the leased premises by Tenant and
any other persons conducting business in or from the leased premises. Pertinent
original sales records shall include, without limitation: (i) cash register
tapes, including tapes from temporary registers, (ii) serially pre-numbered
sales slips, (iii) the original records of all mail and telephone orders at and
to the leased premises, (iv) settlement report sheets of transactions with
subtenants, concessionaires, licensees and assignees, (v) original records
indicating that merchandise returned by customers was purchased at the leased
premises by such customers, (vi) memorandum receipts or other records of
merchandise taken out on approval, (vii) detailed original records of any
exclusions or deductions from Gross Sales, (viii) sales tax records, and (ix)
such other sales records, if any, which would normally be examined by an
independent accountant pursuant to accepted auditing standards in performing an
audit of Tenant's sales. Tenant shall record at the time of each sale or other
transaction, in the presence of the customer, all receipts from such sale or
other transaction, whether for cash, credit or otherwise, in a cash register or
cash registers having a cumulative total which shall be sealed in a manner
approved by Landlord and which shall possess such other features as shall be
required by Landlord. All of the foregoing books, source documents and records
shall be retained for a period of at least four (4) years after the expiration
of each lease year.
SECTION 3.2. REPORTS BY TENANT. Tenant shall furnish to Landlord within
thirty (30) days after the expiration of each lease year a complete statement,
certified by an independent certified public accountant, showing in all
reasonable detail the amount of such Gross Sales made by Tenant from the leased
premises during the preceding lease year. Tenant shall in all events furnish to
Landlord within five (5) days after the end of each month of the term of this
Lease a written statement of Gross Sales covering the preceding month, the
statement to be in such form and style and contain such details and breakdown as
the Landlord may reasonably require. Tenant shall require and cause all its
concessionaires, if any, to furnish statements at the times and in the form and
content specified in this Section, relating to their operations within the
6
leased premises. All reports of Gross Sales submitted or caused to be submitted
by Tenant to Landlord shall be conclusive and binding upon Tenant unless such
reports are corrected within two (2) years after the date of issuance. The term
"concessionaire" as used in this Lease shall mean and include any and all
concessionaires, licensees, franchisees, department operators, subtenants,
permittees or others directly or indirectly operating or conducting a business
in or from the leased premises.
ARTICLE IV. AUDIT
SECTION 4.1. RIGHT TO EXAMINE BOOKS. Notwithstanding the acceptance by
Landlord of payments of percentage rent, Landlord shall have the right to all
rents and other charges actually due hereunder, and the right to examine, make
extracts from and copy, at the leased premises or (at the option of Landlord) at
the corporate headquarters office of Tenant in the United States, Tenant's and
all concessionaires' books, source documents, accounts, records and sales tax
reports filed with applicable government agencies in order to verify the amount
of Gross Sales in and from the leased premises. Tenant shall make all such
documents and records available at the leased premises (or at Tenant's corporate
headquarters, if elected by Landlord) upon three (3) days' prior written notice
from Landlord.
SEE ATTACHED RIDERS FOR INSERTS
Section 4.2 AUDIT. At its option, Landlord may at any time, upon three
(3) days' prior written notice to Tenant, arrange for an auditor selected by
Landlord to conduct a complete audit (including a physical inventory) of the
entire records and operations of Tenant and/or any concessionaire concerning
business transacted upon or includable in Gross Sales from the leased premises
during the period covered by any statement issued by Tenant or a concessionaire
as above set forth in Article III. Tenant shall make available to Landlord's
auditor at the leased premises (or at Tenant's corporate headquarters, if
elected by Landlord) within three (3) days following Landlord's notice requiring
such audit, all of the books, source documents, accounts and records referred to
in Section 3.1 of this Lease and any other materials which such auditor deems
necessary or desirable for the purpose of making such audit. Tenant shall
promptly pay to Landlord the amount of any deficiency in percentage rent
payments disclosed by any such audit. If such audit shall disclose that Tenant's
statement of Gross Sales is at variance to the extent of a one percent (1%) or
more, Landlord may xxxx to Tenant the amount of any deficiency and the cost of
such audit, which shall be paid by Tenant within ten (10) days after Tenant's
receipt of Landlord's invoice; in the event Tenant fails to pay such discrepancy
and costs, Landlord may terminate this Lease as set forth below and/or shall
have such other rights and remedies as may be provided herein or at law arising
by virtue of Tenant's failure to pay rent. If such audit shall disclose that
Tenant's statement of Gross Sales is at variance to the extent of three percent
(3%) or more, then Landlord, in addition to the foregoing remedy and other
remedies available to Landlord, shall have the option, upon at least ten (10)
days' notice to Tenant, to declare this Lease terminated and the term ended, in
which event this Lease shall cease and terminate on the date specified in such
notice with the same force and effect as though the date set forth in such
notice were the date originally set forth herein and fixed for the expiration of
the term, and Tenant shall vacate and surrender the leased premises but shall
remain liable for all obligations arising during the balance of the original
stated term as provided in this Lease. In addition to the foregoing, and in
addition to all other remedies available to Landlord, in the event Landlord or
Landlord's
7
auditor shall schedule a date for an audit of Tenant's records in
accordance with this Section, and Tenant shall fail to be available or shall
otherwise fail to comply with the requirements for such audit, Tenant shall pay
all costs and expenses associated with the scheduled audit.
SEE ATTACHED RIDERS FOR INSERTS
ARTICLE V. CONSTRUCTION OF LEASED PREMISES
SECTION 5.1. CONSTRUCTION OF LEASED PREMISES. (a) The leased premises
shall be constructed substantially as set forth in Exhibit B, which is attached
hereto and made a part hereof. Each of the parties hereto does hereby agree to
perform the obligations imposed upon such party in said Exhibit B at the times
and in the manner therein provided. All references in the text of the Lease to
Exhibit B shall include Exhibit B-1, if any. Minor changes from any plans or
specifications covering Landlord's Work which may be, or which may have been,
necessary or appropriate during construction of the Development or leased
premises shall not affect or change this Lease or invalidate same. If this Lease
is executed after the opening of the entertainment and retail center or if the
leased premises are in an expansion wing of the entertainment and retail center
which opened prior to the date of this Lease, the parties hereto acknowledge
that the work to be performed by Landlord pursuant to Exhibit B has been fully
performed (except to the extent specifically otherwise set forth in Exhibit B).
SEE ATTACHED RIDERS FOR INSERTS
Tenant agrees, prior to the commencement of the term of this Lease, at
Tenant's sole cost and expense, to provide all work of whatsoever nature in
accordance with its obligations set forth in Exhibit B as "Tenant's Work."
Tenant agrees to furnish to Landlord the Preliminary Plans and Final Plans (and
Demolition Drawings, as applicable) with respect to the leased premises prepared
in the manner and within the time periods required in Exhibit B. If such
Preliminary Plans and Final Plans (and Demolition Drawings, as applicable) are
not furnished by Tenant to Landlord within the required time periods in form to
permit approval by Landlord, then Landlord may at its option at any time while
Tenant is in default of this provision, in addition to any and all other
remedies provided in this Lease, by notice to Tenant declare this Lease null and
void and of no further force or effect, in which event this Lease shall
terminate, but Tenant shall remain liable for all obligations arising during the
original stated term as provided in this Lease. In addition, if Landlord
determines that Landlord and Tenant are unable to agree upon either Preliminary
Plans or Final Plans (and Demolition Drawings, as applicable), Landlord shall
have the option, upon notice to Tenant, to declare this Lease null and void and
of no further force or effect, in which event this Lease shall terminate on the
date specified in such notice, in the same manner as provided in the preceding
sentence. No deviation from the final set of plans and specifications, once
approved by the Landlord, shall be made by Tenant without Landlord's prior
written consent. Approval of the plans and specifications by Landlord shall not
constitute the assumption of any responsibility by Landlord or Landlord's
architect for their accuracy, efficacy or sufficiency, and Tenant shall be
solely responsible for such items. Unless Landlord otherwise directs in writing,
Tenant shall not open the leased premises for business until all construction
has been completed pursuant to the provisions of Exhibit B. Until such time as
Tenant's Final Plans (and Demolition Drawings, as applicable) have been approved
in writing by Landlord, the right of Tenant to enter upon the leased premises
shall be solely for the purpose of inspection, measurement and obtaining
information necessary to prepare architectural drawings and
8
construct its premises. Tenant shall not be deemed to have taken possession of
the leased premises until, and Landlord shall be deemed to have delivered and
Tenant shall be deemed to have taken such possession when, Tenant actually
commences construction of its leasehold improvements following Landlord's
approval of Tenant's Final Plans (and Demolition Drawings, as applicable). Until
Tenant is so deemed to have taken possession, in the event of a default by
Tenant under this Article V, Landlord, upon notice to Tenant, shall have the
right to declare this Lease null and void and of no further force or effect and
thereafter may demise and lease the premises described in Section 1.1 free from
any rights of Tenant. Tenant shall not open its store for business until
Tenant's storefront sign is installed, the store is fully fixtured, lighted,
stocked with merchandise in place and staffed, and Tenant is prepared to engage
in the sale of goods and/or services to the public pursuant to Article VII.
Under no circumstances shall Tenant remove the storefront barricade, unless
Landlord shall specifically otherwise direct in writing. Landlord shall remove
the storefront barricade (or Tenant shall remove the same if so directed in
writing by Landlord) when Tenant is so prepared to open for business as
determined by Landlord, and Tenant shall reimburse Landlord for all costs and
expenses in connection with such removal (or Tenant shall pay for all such costs
and expenses directly (including transportation of the barricade to storage in
the entertainment and retail center), if Tenant shall be directed by Landlord to
perform such removal). If all or any part of the leased premises shall have been
previously occupied, Tenant acknowledges that the Tenant's Work described in
Exhibit B has been initially performed by a tenant previously occupying the
leased premises and that Tenant accepts the leased premises in an "as is"
condition without representation by the Landlord or any person, firm or
corporation on behalf of Landlord as to the condition thereof. Tenant shall
submit Preliminary Plans and Final Plans and Demolition Drawings showing the
work to be performed by Tenant to completely remodel and refurbish the leased
premises and, subject to Landlord's approval, will cause such work to be
performed prior to the commencement of the term of this Lease. All such
additional work and permitted alterations, repairs and improvements shall be in
accordance with the provisions of Exhibit B.
SEE ATTACHED RIDERS FOR INSERTS
SECTION 5.2. AVAILABILITY AND POSSESSION OF PREMISES FOR TENANT'S WORK.
(a) The leased premises shall be considered available to Tenant when Landlord
furnishes Tenant with a written notice to such effect (the "Notice of
Availability"). Upon receipt of such Notice of Availability, Tenant shall have
only limited access to the premises for purposes of inspection and measurement
verification. The Notice of Availability shall not constitute delivery of the
premises, and Landlord (or a current occupant of the premises) will retain
possession of the premises until delivery of possession is made to Tenant as
provided below. Landlord may furnish the Notice of Availability at any time
subsequent to Landlord's obtaining possession of the premises. If the leased
premises are presently occupied by another tenant, Landlord will not make the
premises available to Tenant until a date after Landlord regains possession of
the leased premises from the tenant presently occupying the same.
(b) Landlord covenants to deliver possession of the leased premises to
Tenant upon written approval by Landlord of Tenant's Final Plans. Upon receiving
actual possession, Tenant shall have access to the leased premises for all
purposes set forth under this Lease.
9
(c) Upon delivery of possession, Tenant accepts the premises and
acknowledges that the premises are in the condition required by this Lease,
subject to all field conditions existing at the time of delivery of possession.
Failure of Landlord to deliver possession of the leased premises in the manner
and condition as provided for in this Lease will not give rise to any claim for
damages by Tenant against Landlord, or against Landlord's contractor, or permit
Tenant to rescind or terminate this Lease.
SEE ATTACHED RIDERS FOR INSERTS
SECTION 5.3. LANDLORDS AND TENANT'S OPTIONAL RIGHT OF CANCELLATION. If
for any reason the leased premises are not ready for Tenant's Work on the date
thirty-six (36) months following the date of this Lease, then, for a period of
thirty (30) days thereafter, Tenant shall have the option, and for a period of
forty-five (45) days following such thirty-six (36) month period, Landlord shall
have the option, of canceling and terminating this Lease by not more than sixty
(60) days' written notice, one to the other, and, in the event that either party
shall exercise such option, this Lease shall terminate with neither party being
liable to the other in damages or otherwise, and any money deposited pursuant to
Section 26.1 hereof shall be returned to Tenant. In the event that neither
Tenant nor Landlord gives such written notice of cancellation, then said options
shall be null and void and of no further force or effect, and this Lease shall
be considered as continuing in full force and effect. In addition, if another
tenant is presently in possession of the leased premises, and Landlord shall not
have delivered possession of the leased premises to Tenant by the lease
commencement date (as specifically identified in the Data Sheet), then Landlord
shall have the right to thereafter terminate this Lease at any time prior to
delivery of possession to Tenant by written notice to Tenant, with like result
as set forth in the first sentence of this paragraph.
SEE ATTACHED RIDERS FOR INSERTS
ARTICLE VI. ALTERATIONS, CHANGES AND ADDITIONS
SECTION 6.1. INSTALLATION BY TENANT. Tenant shall not make or cause to
be made any alterations, additions or improvements to the leased premises (for
example, but without limiting the generality of the foregoing, Tenant shall not
install or cause to be installed any signs, floor covering, interior or exterior
lighting, plumbing fixtures, shades, canopies or awnings, electronic detection
devices, antennas, mechanical, electrical or sprinkler systems, or make any
changes to the storefront) without the prior written approval of Landlord in
each instance. Tenant shall present to Landlord plans and specifications for
such work at the time approval is sought, in accordance with criteria and
procedures as provided in Exhibit B.
SECTION 6.2. REMOVAL BY TENANT. All alterations, decorations,
additions, trade fixtures and improvements made by Tenant shall be deemed to
have attached to the leasehold and to have become the property of Landlord upon
such attachment. Upon expiration or earlier termination of the term of this
Lease, Tenant shall not remove any of such alterations, decorations, additions,
trade fixtures or improvements. Landlord may, however, designate by written
notice to Tenant those alterations, decorations, additions, improvements, or
trade fixtures
10
which shall be removed by Tenant at the expiration or earlier termination of the
Lease, and Tenant shall promptly remove the same and repair any damage to the
leased premises caused by such removal. Landlord shall have the right to padlock
or otherwise secure the leased premises upon the expiration or earlier
termination of the term of the Lease. Landlord shall also have the right, at any
time during the term of this Lease, and upon expiration or earlier termination
of the term of this Lease, to immediately enter the leased premises in order to
remove any items which shall be determined by Landlord to be a violation of
existing health, safety, security or other similar codes or regulations
affecting or applicable to the leased premises or the entertainment and retail
center. Landlord shall provide prior notification to Tenant of such removal,
subject to the then existing circumstances.
SEE ATTACHED RIDERS FOR INSERTS
SECTION 6.3. CHANGES AND ADDITIONS. Landlord, for itself and for the
underlying lessor, if any, hereby reserves the right at any time, and from time
to time, to make alterations to, and to build additional stories on the building
in which the leased premises are located, and to construct other buildings and
improvements in the entertainment and retail center, including any modifications
of the common areas in connection therewith, to enlarge or reduce the
Development or the entertainment and retail center, to add decks or elevated
parking facilities, and to sell or lease any part of the land comprising the
entertainment and retail center, as shown on the site plan attached hereto as
Exhibit A, for the construction thereon of a building(s) to be occupied by a
Major Store(s) which may or may not be pan of the entertainment and retail
center. Landlord also reserves for itself and for the underlying lessor, if any,
the right at any time, and from time to time, to change, modify, or abolish any
temporary off-site utility or any storm sewer or retention pond system (if
applicable) serving the entertainment and retail center. The purpose of Exhibit
A is to show the approximate location of the leased premises within the
Development and Landlord reserves for itself and for the underlying lessor, if
any, the right at any time to relocate, enlarge, or reconfigure the various
buildings, parking areas and other common areas on said site plan. Tenant hereby
consents to the exercise by Landlord of the rights set forth in this Section 6.3
and agrees that the exercise of such rights by Landlord or by the underlying
lessor, if any, shall not diminish Tenant's obligations under this Lease.
SEE ATTACHED RIDERS FOR INSERTS
ARTICLE VII. CONDUCT OF BUSINESS BY TENANT
SECTION 7.1. USE OF PREMISES. Tenant shall continuously use and occupy
the entire leased premises during the term of this Lease, which use and
occupancy shall be solely for the purpose of conducting the business
specifically set forth in the Data Sheet and for no other purpose or purposes.
It is agreed that the use specified in the Data Sheet has been, and is, a
material inducement to Landlord in entering into this Lease with Tenant, and
that Landlord would not enter into this Lease without this inducement. If any
governmental license or permit shall be required for the proper and lawful
conduct of Tenant's business or other activity carried on in the leased premises
or if a failure to procure such a license or permit might or would in any way
affect Landlord or the Development, then Tenant, at Tenant's expense, shall duly
procure and thereafter maintain such license or permit and submit the same for
inspection by Landlord.
11
Tenant, at Tenant's expense, shall, at all times, comply with the requirements
of each such license or permit.
SECTION 7.2. OPERATION OF BUSINESS. Tenant shall be open for business
and operate continuously, during all days and hours established by Landlord, in
all of the leased premises during the entire term of this Lease, and shall
conduct its business at all times in a first class and reputable manner,
maintaining at all times a full staff of employees and a full and complete stock
of merchandise. Failure by Tenant so to be open for business and to operate
shall entitle Landlord, in addition to other remedies provided in this Lease, to
mandatory injunctive relief, and shall give Landlord the right to erect a
storefront barricade in front of the leased premises at Tenant's expense, which
barricade shall not be removed except upon Landlord's prior written consent and
with Tenant paying the cost of such removal. The erection of such a barricade by
Landlord shall not be construed as a re-entry by Landlord into the leased
premises or as an acceptance by Landlord of any surrender of possession of the
leased premises by Tenant. In the event the maximum hours during which the
Development (or any separate part thereof) is legally permitted to be open to
the public are regulated by any lawful authority, then Landlord shall be the
sole judge of which days and hours shall be Development business days and hours
(and the days and hours applicable to any such separate part). Tenant shall
install and maintain at all times a display of merchandise in the display
windows, if any, of the leased premises and shall keep the same well lighted
during such hours as Landlord shall designate. Tenant, at Tenant's expense,
shall promptly comply with all present and future laws, ordinances, orders,
rules, regulations and requirements of all governmental authorities having
jurisdiction, affecting or applicable to the leased premises or the cleanliness,
safety, occupancy and use of the same, whether or not any such law, ordinance,
order, rule, regulation or requirement is substantial, or foreseen or
unforeseen, or ordinary or extraordinary, or shall necessitate structural
changes or improvements or interfere with the use and enjoyment of the leased
premises. Tenant shall not do or permit anything to be done in or about the
leased premises, or bring anything therein, which will in any way conflict with
any such law, ordinance, order, rule, regulation or requirement affecting the
occupancy or use of the leased premises or the entertainment and retail center
which is or may hereafter be enacted or promulgated by governmental authorities,
or in any way obstruct or interfere with the rights of others, nor shall Tenant
use or allow the premises to be used for any improper, immoral or objectionable
purposes as determined by Landlord. Tenant shall not cause or permit the use,
generation, storage or disposal in or about the leased premises or the
entertainment and retail center of any substances, materials or wastes subject
to regulation under any federal or state or local laws from time to time in
effect concerning hazardous, toxic or radioactive materials unless Tenant shall
have received Landlord's prior written consent, which Landlord may withhold or
at any time revoke in its sole discretion. Tenant shall comply with all federal,
state and local laws in effect from time to time prohibiting discrimination or
segregation by reason of race, color, creed, age, religion, sex or national
origin. No auction, liquidation, going out of business, fire or bankruptcy sales
may be conducted or advertised by sign or otherwise in the leased premises.
Tenant shall display and sell only better-quality, current-season merchandise
and Tenant's sales practices shall be in accord with standards and practices
generally acceptable in enclosed high-quality, value-oriented regional
developments. Tenant shall be obligated to permit returns of merchandise and
shall allow cash refunds on such returns, except in connection with special
sales and close outs. Tenant shall not offer any goods or services which
Landlord determines, in its sole discretion, to be inconsistent
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with the image of a high-quality, family-oriented entertainment and retail
center, nor shall Tenant display or sell any goods containing portrayals which
Landlord determines, in its sole discretion, to be lewd, graphically violent or
pornographic. Tenant agrees that it will conduct its business in good faith, and
will not do any act tending to injure the reputation of the Development (or any
part thereof) as determined by Landlord. Tenant shall not sell or display nay
paraphernalia used in the preparation or consumption of controlled substances.
In the event Landlord has approved Tenant's remaining open for business after
normal Development hours (and/or any hours applicable to that part of the
Development containing the leased premises), then such approval shall be
conditioned upon Tenant's paying for all additional costs incurred by Landlord
as a result thereof. Tenant shall not permit noise or odors in the leased
premises which are objected to by Landlord and, upon written notice from
Landlord, Tenant shall immediately cease and desist from causing such noise or
odor, and failing of which Landlord may deem the same a material breach of this
Lease. Tenant shall not permit the operation of any coin operated or vending
machines or pay telephones on the leased premises, other than in the areas
reserved solely for the use of Tenant's employees. Tenant shall not sell or
display any merchandise within five feet (5') of the storefront leaseline or
opening unless such sale or display shall be expressly approved on the Store
Design Drawings or otherwise approved by Landlord, in writing, except that
Tenant shall be permitted to display merchandise in the display windows, if any.
Tenant shall not use the areas adjacent to the leased premises for business
purposes. Tenant shall not store anything in service or exit corridors. Tenant
agrees that all receiving and delivery of goods and merchandise, and all removal
of merchandise, supplies, equipment, trash and garbage, and all storage of trash
and garbage, shall be made only by way of or in the areas provided therefor by
Landlord. Tenant shall not use or permit the use of any portion of the leased
premises as sleeping quarters, lodging rooms, or for any unlawful purposes.
Tenant shall nor install any radio or television or other similar device
exterior to the leased premises and shall not erect any aerial on the roof or
exterior walls of any building within the entertainment and retail center.
Landlord may direct the use of all pest extermination contractors at the sole
cost and expense of Tenant and at such intervals as Landlord may require.
Failure of Tenant to employ the pest extermination contractor designated by
Landlord shall entitle Landlord to employ such contractor with respect to
Tenant's premises and Tenant shall reimburse Landlord for the cost thereof.
Landlord shall have the option to provide pest extermination services for the
Development or the entertainment and retail center or any part thereof, in which
event Tenant shall pay to Landlord Tenant's proportionate share of the cost of
such service, with such proportionate share to be calculated in the manner
provided in Section 8.3 of this Lease. In the event that Tenant is permitted
pursuant to this Lease to engage in the sale of food and beverages from the
leased premises, then Tenant shall: (i) offer such food and beverages only
pursuant to a menu approved by Landlord, which shall not be changed without
Landlord's prior written consent (which consent Landlord may grant or withhold
in its sole and absolute discretion), (ii) serve its customers in containers or
dishes and with utensils to be approved by Landlord, (iii) be solely responsible
for prompt disposal within the premises of all trash, garbage and debris, and
(iv) inspect and maintain all grease traps, pans and hood ventilators in good
order, condition and repair, and shall contract for same if and as required by
Landlord. The covenants of Tenant regarding hazardous, toxic or radioactive
materials, as set forth in this Lease, shall survive the expiration or earlier
termination of the term of this Lease.
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SECTION 7.3. RADIUS. During the term of this Lease, in the event
Tenant, its parent corporation or subsidiary corporation, or its franchisor or
franchisee, or its licensor or licensee, or any person, firm, corporation or
other entity who or which controls or is controlled by Tenant, or by any person,
firm, corporation or other entity which directly or indirectly controls or is
controlled by Tenant, shall, directly or indirectly, either individually or as a
partner or stockholder or otherwise, own, operate or become financially
interested in any business similar to or in competition with the business of
Tenant described in Section 7.1 within a radius of miles from the leased
premises, then the Gross Sales (as defined in this Lease) of any such business
or businesses within said radius shall be included in the Gross Sales made from
the leased premises and the percentage rent hereunder shall be computed upon the
aggregate of the Gross Sales made from the leased premises and by any such other
business or businesses then conducted within said radius and Tenant shall report
and maintain records of such sales in the manner provided in Article III hereof.
This Section 7.3 shall not apply to any such business or businesses open and
being operated by Tenant within said radius as of the date of this Lease as long
as such business or businesses shall continue to be operated in the same
location(s) existing as of said date. If Tenant fails to make payments required
pursuant to this Section 7.3, Landlord or Landlord's authorized representative
or agent shall have the right at all reasonable times during the term hereof and
for a period of at least four (4) years after the expiration of the term of this
Lease, to inspect, audit, copy and/or make extracts of the books, source
documents, records and accounts pertaining to such other business or businesses
conducted within said radius, in accordance with the provisions of Article IV
hereof, for the purpose of determining or verifying the additional rents due to
Landlord pursuant to this Section. Moreover, in the event Tenant fails to supply
to Landlord sales records with respect to any such similar or competing
business, Landlord shall have the right to estimate the sales for such
businesses based upon Tenant's Gross Sales in the leased premises, and the
additional percentage rent generated from the inclusion of such estimated sales
and Tenant's Gross Sales shall be deemed additional rent to be paid by Tenant in
accordance with the provisions of Sections 2.2 and 2.6 of this Lease.
SECTION 7.4. STORAGE, OFFICE SPACE. Tenant shall warehouse, store
and/or stock in the leased premises only such goods, wares and merchandise as
Tenant intends to offer for sale at retail at, in, from or upon the leased
premises. This shall not preclude occasional emergency transfers of merchandise
from the other stores of Tenant, if any, not located in the Development. Tenant
shall use for office, clerical or other non-selling purposes only such space in
the leased premises as if from time to time reasonably required for Tenant's
business in the leased premises.
SEE ATTACHED RIDERS FOR INSERTS
SECTION 7.5. CARE OF PREMISES. Tenant, at Tenant's expense, shall at
all times keep the leased premises (including the service areas adjacent to the
premises, display windows and signs) orderly, neat, safe, clean and free from
rubbish and dirt, and vermin, and shall store all trash, garbage and other solid
waste within the leased premises. Tenant shall not burn any trash or garbage at
any time in or about the entertainment and retail center. Landlord may direct
the use by Tenant at Tenant's expense of all solid waste disposal contractors at
such intervals as Landlord may require. If Landlord shall provide or contract
for any services or facilities for solid waste pickup or sewer cleaning, then
Tenant shall be obligated to use the same and shall
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pay a proportionate share of the expense thereof within ten (10) days after
being billed therefor. If Landlord does not provide such services, Tenant shall
arrange for the regular pickup of all solid waste at Tenant's expense.
ARTICLE VIII. COMMON AREAS
SECTION 8.1. OPERATION AND MAINTENANCE OF COMMON AREAS. Landlord agrees
to cause to be operated and maintained during the term of this Lease all common
areas within the Development. The manner in which such areas and facilities
shall be operated and maintained, and the expenditures therefor, shall be at the
sole discretion of Landlord and the use of such areas and facilities shall be
subject to such regulations as Landlord shall make from time to time.
SECTION 8.2. USE OF COMMON AREAS. The term "common area," as used in
this Lease, shall mean (i) the following areas within the entertainment and
retail center: parking areas and facilities as determined by Landlord
(collectively "parking facilities"), roadways, pedestrian sidewalks and
walkways, pedestrian plazas, pedestrian passage areas, driveways, public
transportation loading and unloading facilities, truckways, loading docks,
delivery areas, landscaped areas, community rooms, office facilities, the mall,
berms, elevators and escalators and stairs and ramps and vertical transportation
facilities not contained within any leased premises, public restrooms and
comfort stations, service areas, service and fire and exit corridors,
passageways, retention ponds (if applicable), and other areas, amenities,
facilities and improvements provided by Landlord, (ii) those areas within the
entertainment and retail center and areas adjacent to the entertainment and
retail center which from time to time may be provided by the owners of such
areas for the convenience and use of Landlord, the tenants of the Development,
the owners and occupants of the Major Store Sites, and their respective
concessionaires, agents, employees, customers, invitees and all other licensees
and others entitled to the use thereof and (iii) any other facilities or areas,
whether within or outside the entertainment and retail center, as may be
designated by Landlord from time to time. The use and occupancy by Tenant of the
leased premises shall include the use of the common areas in common with
Landlord and with all others for whose convenience and use the common areas have
been or may hereafter be provided by Landlord or by the owners of common areas
not within the Development, subject, however, to rules and regulations for the
use thereof as prescribed from time to time by Landlord or the owner of such
common area, including, without limitation, the right of Landlord to determine
the hours and mode of operation of the elevators, escalators and vertical
transportation facilities serving the Development, and including the right of
Landlord or such owner to impose parking charges, whether by meter or otherwise,
with respect to any parking facilities. In no event, however, shall Tenant, its
agents or employees, use the common areas for the display or sale of
merchandise. Without limiting the generality of the foregoing, Landlord may
include in common areas those portions of the Development presently or hereafter
sold or leased to Major Stores, until the building thereon has been opened for
business, at which time there shall be withdrawn from the common areas those
areas not provided by the owner thereof for common use. Tenant and its employees
and agents shall park their cars and other vehicles only in areas specifically
designated from time to time by Landlord for that purpose, and shall not in any
case park their vehicles in any private or non-public portions of the parking
facilities. Tenant covenants that it will enforce the parking by its
15
employees and agents in such designated areas and in only public areas.
Automobile license numbers of employees' and agents' vehicles shall be furnished
by Tenant to Landlord upon Landlord's request. In the event any vehicle is
parked by Tenant or by an employee or agent of Tenant in a private or non-public
parking area or in any portion of the parking facilities other than the area of
such parking facilities as shall be designated by Landlord, Tenant shall be
obligated to pay Landlord the sum of One Hundred Dollars ($100) per day for each
such vehicle in order to partially compensate Landlord for the loss of
percentage rent arising from the business lost to Tenant and to other tenants in
the Development due to the lack of available parking space in the said parking
facilities, and Landlord shall have the right to cause the vehicle to be towed
to a location designated by Landlord and Tenant shall be obligated to reimburse
Landlord for all towing charges. Similarly, Landlord shall have the right to
cause any vehicle to be towed if the parking charges, if any, or the per diem
charge or reimbursement due to Landlord hereunder, with respect to such vehicle
have not been paid; with any such vehicle to be towed to a location designated
by Landlord and with Tenant being obligated to pay all parking charges, fines
and towing charges imposed by Landlord with respect to such vehicles. Tenant
further agrees to hold harmless Landlord and defend Landlord, its agents and
employees against any and all claims of the employee, agent and/or owner of the
vehicle towed. Landlord shall have the further option of prohibiting Tenant and
its employees and agents from parking their cars or other vehicles in the
parking facilities, and the violation of such prohibition shall be subject to
the same provisions as set forth above. Landlord may at any time close
temporarily any common area to make repairs or changes, to prevent the
acquisition of public rights in such area, to discourage non-customer parking,
to use areas for attendant or valet parking, and may do such other acts in and
to the common areas as in its judgment may be desirable to improve the
convenience thereof. Tenant shall not provide, nor shall Tenant authorize any
person or entity to provide, valet or attendant parking for Tenant's customers
or others; Landlord shall have the exclusive right, but shall not be obligated,
to provide valet or attendant parking at the entertainment and retail center.
SECTION 8.3. TENANT'S PRO RATA SHARE OF EXPENSES. (a) Tenant agrees to
pay to Landlord in the manner hereinafter provided, but not more often than once
each calendar month, Tenant's proportionate share of: (1) all costs and expenses
of every kind and nature paid or incurred by Landlord in operating, equipping,
policing and protecting, lighting, heating, air conditioning, providing
sanitation and sewer and other services, providing a music and public address
system, insuring (including self-insurance and the payment of deductible amounts
under insurance policies), repairing, replacing and maintaining (i) the common
areas and (ii) all buildings and roofs within the Development and (iii) all
other areas, facilities and buildings, including project offices, parking
facilities, vertical transportation facilities, retention ponds (if applicable),
and any and all facilities and improvements connecting the entertainment and
retail center to off-site buildings or areas, which are used in connection with
the maintenance and/or operation of, and whether located within or outside of,
the entertainment and retail center (hereinafter collectively referred to as
"project areas"); such costs and expenses shall include, but shall not be
limited to, the full cost of: illumination and maintenance of entertainment and
retail center signs, whether located on or off the entertainment and retail
center; holiday and seasonal lighting, decorations and displays; refuse
disposal, water, gas, sewage, electricity and other utilities (without
limitation), including any and all usage, service, hook-up, connection,
availability and/or standby fees or charges pertaining to same, and including
all costs associated
16
with the provision, maintenance and operation of any central telephone service
for the entertainment and retail center; the operation, maintenance, repair and
replacement of all or any part of the parking facilities; snow removal;
maintenance, operation, repair and replacement of any and all roads (temporary
or otherwise) servicing the entertainment and retail center, including, without
limitation, any landscaping or other work related to such roads; maintenance and
operation of any temporary or permanent utility, including a sewage disposal
system, within or without the entertainment and retail center, built, operated
and/or maintained for the specific purpose of servicing the entertainment and
retail center, together with hook up or connection fees and service charges;
compliance with laws, rules, regulations and orders of governmental authorities;
maintenance for wooded areas, retention ponds, lakes and shoreline areas (if
applicable); cleaning, lighting, striping and landscaping; curbs, gutters,
sidewalks, drainage and irrigation ditches, conduits, pipes and canals located
on or adjacent to the entertainment and retail center; premiums and all other
costs with respect to liability, casualty, and property insurance, and
compliance with insurance requirements; personal property taxes; licensing fees
and taxes; audit fees and expenses; supplies; the cost and expense of supplying
music to the entertainment and retail center; all costs and expenses of
enforcing the rules and regulations established by Landlord for the Development
and handling of claims or other matters arising from the operation of the
entertainment and retail center; cost, lease payment or depreciation of any
equipment, improvements or facilities used in the operation or maintenance of
the common areas or project areas, including, without limitation, any imputed
interest as may be applicable to costs paid or incurred by Landlord the full
amount of which is not included under this Section 8.3 in the year so paid or
incurred, and including any interest or other expense associated with any loans
obtained by Landlord with respect to any cost or expense included or includable
hereunder, including any portion of the long-term debt on the Development which
has been incurred for such purposes; total compensation and benefits (including
premiums for workers' compensation or any other insurance or other retirement or
employee benefits, and including all costs incurred in providing such benefits)
paid to or on behalf of employees involved in the performance of the work
specified in this Section 8.3 or employees otherwise providing services to
tenants or customers of the Development; and (2) an amount equal to fifteen
percent (15%) of the total of all of the foregoing costs and expenses for the
entertainment and retail center. The proportionate share to be paid by Tenant
shall be that portion of the foregoing costs and expenses which the number of
square feet of floor area in the leased premises bears to the total number of
square feet of gross leased and occupied floor area of all buildings in the
Development abutting on the mall. The gross leased and occupied floor area in
effect for the whole of any lease year shall be the average of the gross leased
and occupied floor area in effect on the first day of each calendar month in
such lease year.
(b) Tenant's proportionate share of such costs and expenses for each
lease year shall be paid in monthly installments on the first day of each
calendar month, in advance, in an amount estimated by Landlord from time to
time. Subsequent to the end of each calendar or fiscal year (at Landlord's
option), Landlord shall furnish Tenant with a statement of the actual amount of
Tenant's proportionate share of such cost and expenses for such period. If the
total amount paid by Tenant under this Section for any such year shall be less
than the actual amount due from Tenant for such year as shown on such statement,
Tenant shall pay to Landlord the difference between the amount paid by Tenant
and the actual amount due, such deficiency to be paid within ten (10) days after
the furnishing of each such statement, and if the total amount paid by Tenant
17
hereunder for any such year shall exceed such actual amount due from Tenant for
such year, such excess shall be credited against the next installment due from
Tenant to Landlord under this Section. Landlord may estimate the annual budget
and charge the estimated share to the Tenant on a monthly basis subject to
revision by Landlord of the budget from time to time and final annual adjustment
based upon actual expenses. Neither the provisions of this Section, nor any of
the other requirements or restrictions imposed upon Tenant under this Lease,
shall excuse Tenant from its obligation to comply with laws and ordinances and
other governmental requirements as set forth in Section 7.2 hereof.
ARTICLE IX. SIGNS
SECTION 9.1. SIGNS. Tenant shall affix a sign to the exterior surface
of the storefront of the leased premises fronting on the mall and shall maintain
said sign in good condition and repair during the entire term of this Lease.
Said sign shall conform to the criteria for signs contained in Exhibit B, and
the size, content, design and location thereof shall be subject to the prior
written approval of Landlord. Except as hereinabove mentioned, Tenant shall not
place or cause to be placed, erected or maintained on any exterior door, wall,
window or the roof of the leased premises, or on the glass of any window or door
of the leased premises, or on any sidewalk or other location outside the leased
premises, or within any display window space in the leased premises, or within
three (3) feet of the front of the storefront leaseline or opening, whether or
not there is a display window space in the leased premises, or within any
entrance to the leased premises, or otherwise visible from the mall, any sign
(flashing, moving, hanging, handwritten, or otherwise), decal, placard,
decoration, flashing, moving or hanging lights, lettering, or any other
advertising matter of any kind or description. Moreover, Tenant is prohibited
from utilizing any displays which are not part of the fixture plan approved in
writing by Landlord for the leased premises. If Tenant places or causes to be
placed or maintained any of the foregoing, the same may be removed by Landlord
or Landlord's representative without notice and without such removal
constituting a breach of this Lease or entitling Tenant to claim damages on
account thereof. No symbol, design, name, xxxx or insignia adopted by Landlord
for the Development shall be used without the prior written consent of Landlord.
No illuminated sign located in the interior of the leased premises and which is
visible from the outside thereof shall be permitted without the prior written
approval of Landlord. All signs located in the interior of the leased premises
shall be in good taste and professionally printed so as not to detract from the
general appearance of the leased premises and the Development.
ARTICLE X. MAINTENANCE
SECTION 10.1. LANDLORD'S OBLIGATIONS FOR MAINTENANCE. Landlord shall
keep and maintain the exterior surfaces of the exterior walls of the building in
which the leased premises are located (exclusive of doors, door frames, door
checks, other entrances, windows and window frames which are not part of common
areas, and storefronts) in good repair, except that Landlord shall not be called
upon to make any such repairs occasioned by the act or negligence of Tenant, its
agents, employees, invitees, licensees or contractors. Landlord shall not be
called upon to make any other improvements or repairs of any kind upon the
leased premises and appurtenances, except as may be required under Articles XVII
and XVIII hereof, and nothing contained in this Section 10.1 shall limit
Landlord's right to reimbursement from Tenant for maintenance, repair costs and
replacement costs conferred elsewhere in this Lease.
18
SECTION 10.2. TENANT'S OBLIGATIONS FOR MAINTENANCE. (a) Except as
provided in Section 10.1 of this Lease, Tenant, at Tenant's expense, shall keep
and maintain in high-quality appearance, in a condition at least equal to that
which existed when Tenant initially opened the leased premises for business, and
in good order, condition and repair as determined by Landlord (including
replacement of parts and equipment, if necessary) the leased premises and every
part thereof and any and all appurtenances thereto wherever located, including,
but without limitation, the interior surfaces of the exterior walls, the roof
membrane, the exterior and interior portion of all doors, door frames, door
checks, other entrances, windows, window frames, plate glass, storefronts, all
plumbing and sewage facilities within the leased premises, including free flow
up to the main sewer line, fixtures, ventilation, heating and air conditioning
and electrical systems (whether or not located in the leased premises),
sprinkler systems, walls, floors and ceilings, and all other repairs,
replacements, renewals and restorations, interior and exterior, ordinary and
extraordinary, foreseen and unforeseen, and all other work performed by or on
behalf of Tenant pursuant to the exhibits attached hereto or Articles V and VI
hereof or otherwise in accordance with the provisions of this Lease.
(b) Tenant shall keep and maintain the leased premises in a
clean, sanitary and safe condition in accordance with the laws of the State and
in accordance with all directions, rules and regulations of the health officer,
fire xxxxxxxx, building inspector, or other proper officials of the governmental
agencies having jurisdiction, and Tenant shall comply with all requirements of
law, ordinances and otherwise, affecting the leased premises, all at the sole
cost and expense of Tenant. At the time of the expiration or sooner termination
of the tenancy created herein, Tenant shall surrender the leased premises in
good order, condition and repair.
(c) Tenant shall keep the leased premises and all other parts of
the entertainment and retail center free from any and all liens arising out of
any work performed, materials furnished or obligations incurred by or for
Tenant, and agrees to bond against or discharge any such lien (including,
without limitation, any construction, mechanic's or materialman's lien) within
ten (10) days after written request therefor by Landlord. Tenant shall give
Landlord at least fifteen (15) days' notice prior to commencing or causing to be
commenced any work on the leased premises (whether prior or subsequent to the
commencement of the lease term), so that Landlord shall have reasonable
opportunity to file and post notices of non-responsibility for Tenant's work. In
addition, prior to commencing or causing to be commenced any work on the leased
premises, Tenant shall file a Notice of Commencement (or other similar
instrument limiting lien rights related to Tenant's Work) as provided by
applicable statutory provisions and shall deliver a copy of such Notice of
Commencement (or similar instrument) to Landlord. Tenant shall reimburse
Landlord for any and all costs and expenses which may be incurred by Landlord by
reason of the filing of any such liens and/or the removal of same, such
reimbursement to be made within ten (10) days after written notice from Landlord
to Tenant setting forth the amount of such costs and expenses.
(d) Tenant, at its own expense, shall install and maintain fire
extinguishers, other fire protection devices as may be required from time to
time by any agency having jurisdiction thereof. Should Landlord's insurance
carrier require that Tenant's fire protection system be modified, Tenant shall
make such modification at its sole expense within thirty (30) days after notice
in writing by Landlord. Failure of Tenant to do so shall entitle Landlord to
enter the
19
leased premises and make such modification at the expense of Tenant.
Tenant shall pay all charges billed by Landlord within ten (10) days after
invoice. Tenant shall also be liable for any additional insurance premiums
assessed to Landlord relating to the leased premises.
(e) (1) Tenant agrees to operate its heating and its ventilating and
air conditioning system(s) serving the leased premises during regular
Development business hours so as to maintain comfort conditions. Temperatures in
the leased premises shall be compatible with temperatures in the mall. Tenant's
installation of its heating and ventilating and air conditioning system shall be
as set forth in Exhibit B, attached hereto and made a part hereof Tenant shall
be fully obligated for its maintenance and repair. Tenant shall not drain heat
or ventilation or air conditioning from the mall into the leased premises and
Tenant shall at all times maintain adequate temperatures within the leased
premises to prevent any such drainage; likewise, Tenant shall not discharge air
from the leased premises into the mall or other interior areas. Landlord shall
not be obligated to Tenant for any damages or cost or expense resulting,
directly or indirectly, from any failure or malfunction of any air conditioning
supply system or condenser water system serving the Development or any component
parts of any such system.
(2) To the extent the leased premises shall be serviced
by a central air conditioning or condenser water system, Tenant's obligation for
connecting to, and all charges for, the central system, as well as Tenant's
installation, operation and maintenance of its heating and ventilating and air
conditioning portion of the system shall be as set forth in Exhibit B (and any
separate exhibit relating to such central system) attached hereto and made a
part hereof. Landlord shall not be obligated to Tenant for any damages or cost
or expense resulting, directly or indirectly, from any failure or malfunction of
the central air conditioning supply system (or central condenser water system,
as applicable) or any component parts thereof. Tenants approved by Landlord for
the installation of a separate heating, ventilating and air conditioning system,
serving the leased premises, shall construct the same in accordance with
Landlord's criteria. If Tenant shall install such a system, Tenant shall be
fully obligated for its maintenance and repair.
(f) Tenant expressly waives all rights to make repairs at the
expense of Landlord as provided for in any statute or law in effect during the
term of this Lease.
(g) In the event that Tenant fails, refuses or neglects to
commence and complete repairs promptly and adequately, to remove any lien, to
pay any cost or expense, to reimburse Landlord, or otherwise to perform any act
or fulfill any obligation required of Tenant pursuant to this Section 10.2,
Landlord may, but shall not be required to, make or complete any such repairs,
remove such lien (without inquiring into the validity thereof), pay such cost or
perform such act or the like without prior notice to, but at the sole cost and
expense of, Tenant, and Tenant shall reimburse Landlord for all costs and
expenses of Landlord thereby incurred within ten (10) days after receipt by
Tenant from Landlord of a statement setting forth the amount of such costs and
expenses. The failure by Tenant so to make repairs, to remove any lien, to pay
any such cost or expense, or to so reimburse Landlord (in the case of
reimbursement, within such ten-day period) shall constitute a default by Tenant
under this Lease and shall carry with it the same consequences as failure to pay
any installment of rent. Landlord's rights and remedies pursuant to this
subsection (g) shall be in addition to any and all other rights and remedies
provided under this Lease or at law.
20
ARTICLE XI. INSURANCE AND INDEMNITY
SECTION 11.1. TENANT'S INSURANCE. (a) Tenant, at its sole cost and
expense, shall, at all times, commencing with the date upon which the leased
premises shall be made available for Tenant's Work, procure, pay for and keep in
full force and effect: (i) a commercial general liability policy (ISO form or
equivalent), including insurance against assumed or contractual liability under
this Lease with respect to the leased premises and the operations of Tenant and
any subtenants of Tenant in, on or about the leased premises in which the limits
with respect to personal liability and property damage shall be not less than
Two Million Dollars ($2,000,000) per occurrence; (ii) all risk property
insurance, including theft and, if applicable, boiler and machinery coverage,
written at replacement cost value in an adequate amount to avoid coinsurance and
a replacement cost endorsement insuring Tenant's merchandise, trade fixtures,
furnishings, equipment and all items of personal property of Tenant and
including property of Tenant's customers located or in the leased premises;
(iii) workers' compensation coverage as required by law; (iv) with respect to
alterations, improvements and the like required or permitted to be made by
Tenant hereunder, contingent liability and builder's risk insurance, in amounts
satisfactory to Landlord; (v) product liability coverage, including, without
limitation (if this Lease covers leased premises in which food and/or beverages
are sold and/or consumed), liquor liability coverage (if applicable to Tenant's
business) and coverage for liability arising out of the consumption of food
and/or alcoholic beverages on or obtained at the leased premises, of not less
than Two Million Dollars ($2,000,000) per occurrence for personal injury and
death and property damage; (vi) the insurance required under Exhibit B; and
(vii) such insurance as may from time to time be required by city, county, state
or federal laws, codes, regulations or authorities, together with such other
insurance as is reasonably necessary or appropriate under the circumstances. The
minimum limits of coverage as set forth in this paragraph may from time to time,
at Landlord's option, be increased by nor more than ten percent (10%) per annum,
on a cumulative basis, with such increase to occur not more often than once
during each lease year during the term hereof. The deductibles under any of such
insurance policies to be carried by Tenant shall not exceed Five Thousand
Dollars ($5,000).
(b) All policies of insurance required to be carried by Tenant
pursuant to this Section 11.1 shall be written by responsible insurance
companies authorized to do business in the State and acceptable to Landlord. Any
such insurance required of Tenant hereunder may be furnished by Tenant under any
blanker policy carried by it or under a separate policy therefor; provided,
however, that: (1) any such blanket policy carried with respect to the insurance
required under subparagraphs (i), (iv), (v), (vi) and (vii) of Section 11.1(a)
shall contain a "per location" endorsement assuring that any aggregate limit
under such blanker policy shall apply separately to the leased premises and that
the insurer thereunder shall provide written notice to Landlord if the available
portion of such aggregate is reduced to less than the minimum amounts required
under Section 11.1(a) by either payment of claims or the establishment of
reserves for claims (whereupon Tenant shall be obligated to take immediate steps
to increase the amount of its insurance coverage in order to satisfy the minimum
requirements set forth above), and (2) any such blanker policy carried with
respect to the property insurance required under subparagraph (ii) of Section
11.1(a) shall contain an "agreed value" endorsement with respect to all of the
items of property identified in such subparagraph. A copy of each paid-up policy
evidencing such insurance (appropriately authenticated by the insurer) or a
certificate of the insurer,
21
certifying that such policy has been issued, providing the coverage required by
this Section and containing provisions specified herein, shall be delivered to
Landlord prior to the commencement of the term of this Lease and, upon renewals,
not less than thirty (30) days prior to the expiration of such coverage.
Landlord may, at any time, and from time to time, inspect and/or copy any and
all insurance policies required to be procured by Tenant hereunder.
(c) Each policy evidencing insurance required to be carried by
Tenant pursuant to this Section 11.1 shall provide coverage on an occurrence
basis (and not on a "claims-made" basis) and shall contain the following
provisions and/or clauses: (i) a cross-liability clause; (ii) a provision that
such policy and the coverage evidenced thereby shall be primary and
non-contributing with respect to any policies carried by Landlord, and that any
coverage carried by Landlord shall be excess insurance; (iii) a provision
including Landlord, the beneficial ownership entity of the Development (if any),
the managing agent of the Development and any other parties in interest
designated by Landlord or such beneficial ownership entity (if any), as
additional insureds (except with respect to workers' compensation insurance);
(iv) a waiver by the insurer of any right of subrogation against Landlord, the
underlying lessor, if any, and their respective agents, employees and
representatives which arises or might arise by reason of any payment under such
policy or by reason of any act or omission of Landlord, its agents, employees or
representatives; (v) a severability clause; (vi) a provision that the insurer
will not cancel, materially change or fail to renew the coverage provided by
such policy without first giving Landlord and the underlying lessor, if any,
thirty (30) days' prior written notice; and (vii) a provision (to the extent
available) that no act or omission of Landlord shall affect or limit the
obligation of the insurer to pay the amount of any loss sustained.
(d) In the event that Tenant fails to procure, maintain and/or
pay for, at the times and for the durations specified in this Section 11.1, any
insurance required by this Section, or fails to carry insurance required by law
or governmental regulation, Landlord may (but without obligation to do so) at
any time or from time to time, and without notice, procure such insurance and
pay the premiums therefor, in which event Tenant shall repay to Landlord all
sums so paid by Landlord together with interest thereon as provided elsewhere
herein and any costs or expenses incurred by Landlord in connection therewith,
within ten (10) days following Landlord's written demand to Tenant for such
payment.
(e) Tenant shall not carry any stock of goods or do anything in
or about the leased premises which will in any way tend to increase the
insurance rates on the Development, the entertainment and retail center, the
leased premises and/or the building of which they are a part and/or the contents
thereof. If Tenant installs any electrical equipment that overloads the lines in
the leased premises, Tenant shall at its own expense make whatever changes are
necessary to comply with the requirements of the insurance underwriters and
governmental authorities having jurisdiction.
SECTION 11.2. LANDLORD'S INSURANCE. (a) Landlord agrees, during the
term hereof, to provide, to the extent the same is available from Landlord's
insurance carrier, in amounts and coverages determined by Landlord, with or
without deductibles, insurance coverage against such risks as are from time to
time included in a standard extended coverage endorsement, insuring the
improvements to the leased premises provided by Tenant pursuant to this Lease
(exclusive of Tenant's merchandise, trade fixtures, furnishings, equipment,
plate glass,
22
signs and personal property of Tenant). Landlord may also carry at its option
special extended coverage endorsements and other special insurance coverage
(including, without limitation, earthquake coverage). Tenant shall submit to
Landlord an itemized statement setting forth the cost of such improvements
promptly after completion thereof and Tenant shall provide to Landlord, within
thirty (30) days after the end of each lease year of the term hereof, a written
appraisal of the then current replacement value of the leasehold improvements to
the leased premises, which appraisal shall be certified by an independent
insurance appraiser. In the event Tenant fails to provide such itemized
statement or any such appraisal, Landlord shall have the right to estimate the
value of said improvements, which estimate shall be binding upon Tenant. Tenant
agrees to pay Landlord for the total cost of so insuring such improvements,
including, without limitation, the payment of all applicable deductible amounts,
such payments (other than deductible amounts) to be made in equal monthly
installments on the first day of each calendar month, in advance, in an amount
estimated by Landlord; provided, however, that Landlord may elect to xxxx Tenant
for such costs on a basis less frequent than monthly. Deductible amounts shall
be paid by Tenant upon notice from Landlord. Subsequent to the receipt by
Landlord of an invoice for such insurance premium, Landlord shall furnish Tenant
with a written statement setting forth such cost. If the total amount paid by
Tenant under this Section for any calendar, lease or fiscal year (at Landlord's
option) shall be less than the actual amount due from Tenant for such year as
shown on such statement, Tenant shall pay to Landlord the difference between the
amount paid by Tenant and the actual amount due, such deficiency to be paid
within thirty (30) days after the furnishing of each such statement, and if the
total amount paid by Tenant hereunder for any such calendar year shall exceed
such actual amount due from Tenant for such calendar year, such excess shall be
credited against the next installment due from Tenant to Landlord under this
Section 11.2.
(b) Landlord agrees, during the term hereof, to carry rent
interruption insurance, which insurance may be carried in amounts equal to
Tenant's total minimum rent obligation for twelve (12) full months (or such
other period as Landlord may elect) under this Lease plus the total of the
estimated costs to Tenant of taxes, assessments, insurance premiums and common
area maintenance costs for such twelve (12) month period (or such other period
as Landlord may elect.) Tenant agrees from time to time, to reimburse Landlord
for the total cost of such insurance, such reimbursement to be made within ten
(10) days after receipt of a written statement from Landlord setting forth such
cost.
(c) Any insurance required of Landlord hereunder may be
furnished by or for Landlord under any blanket policy carried by or for Landlord
or under a separate policy therefor. The cost of the foregoing insurance under
this Section 11.2 is a part of the cost of the property insurance which may be
included in the costs and expenses set forth in Section 8.3 hereof. To the
extent that the foregoing insurance costs shall be so included under Section 8.3
and Tenant shall pay its proportionate share of costs and expenses pursuant to
said Section 8.3, such insurance costs shall not be separately charged to Tenant
under this Section 11.2.
SECTION 11.3. COVENANT TO HOLD HARMLESS. Tenant covenants to indemnify
Landlord, the underlying lessor, if any, and their respective officers,
directors, stockholders, beneficiaries, partners, representatives, agents and
employees, and save them harmless (except for loss or damage resulting solely
from the negligence of Landlord and not
23
required to be insured against by Tenant pursuant to this Article XI) from and
against any and all claims, actions, damages, liability, cost and expense,
including attorneys' fees, in connection with all losses, including loss of
life, personal injury and/or damage to property, arising from or out of any
occurrence in, upon or at the leased premises or the occupancy or use by Tenant
of the leased premises or any part thereof, or arising from or out of Tenant's
failure to comply with any provision of this Lease or occasioned wholly or in
part by any act or omission of Tenant, its concessionaires, agents, contractors,
suppliers, employees, servants, customers or licensees. For the purpose of this
Section 11.3, the leased premises shall include the service areas adjoining the
same and the loading platform area allocated to the use of Tenant and the
parking facilities servicing the Development. In case Landlord or any other
party so indemnified shall, without fault, be made a party to any litigation
commenced by or against Tenant, or if Landlord or any such party shall, in its
sole discretion, determine that it must intervene in such litigation to protect
its interest hereunder, including, without limitation, the incurring of costs,
expenses, and attorneys' fees in connection with relief of Tenant ordered
pursuant to the Bankruptcy Code (11 USC ss. 101 et seq.), then Tenant shall
protect and hold them harmless by attorneys satisfactory to Landlord and shall
pay all costs, expenses and reasonable attorneys' fees incurred or paid by such
party in connection with such litigation. Landlord shall have the right to
engage its own attorneys in connection with any of the provisions of this
Section 11.3 or any other provision of this Lease, including, without
limitation, any defense of Landlord or intervention by Landlord, notwithstanding
any contrary provisions or court decisions of the State. The foregoing
provisions of this Section shall survive the expiration or earlier termination
of the term of this Lease.
ARTICLE XII. UTILITY CHARGES
SECTION 12.1. UTILITY CHARGES. (a) Tenant shall be solely responsible
for and shall promptly pay all necessary fees, deposits and charges, including
use and/or connection fees, hook-up fees, standby fees, and/or penalties for
discontinued or interrupted service, and the like, for water, gas, heat,
electricity, centrally conditioned cold air supply, sewer and sanitation, solid
waste disposal and any other service or utility used in or upon or furnished to
the leased premises, irrespective of whether Landlord has paid for these
services in advance, or otherwise. Landlord, at its sole option, may elect to
furnish any or all of the above services on a "rent inclusion basis" without
separate charge therefor to Tenant, by metering or otherwise, such charge to be
included in the minimum rent payable hereunder, in which event the minimum rent
specified in Section 2.1 shall be increased to reflect the value of such
service(s) as provided in paragraph (h) below. Alternatively, Landlord, at its
sole option, may provide for any or all of such services on a separate-charge
basis, and in such event Tenant shall purchase such service(s) from Landlord,
and within ten (10) days after Landlord bills Tenant for any such service Tenant
shall pay Landlord such rates, charges and fees, upon terms and conditions as
Landlord may establish; provided that, if the rates, charges or fees for any
such service are regulated by a public agency, the rates, charges and/or fees to
Tenant shall be computed using the maximum rate schedules which would be
applicable if Tenant were at the time a direct customer of the applicable public
utility corporation. If the cost of any such service for any month has not been
made known to Landlord at the time of billing, Landlord shall have the right to
estimate the amount thereof, and to base its billing to Tenant upon said
estimated amount, and Landlord may adjust such billing when the actual amount is
made known to Landlord. Landlord shall also have
24
the right to periodically estimate the monthly amount required to be paid by
Tenant to Landlord with respect to any or all of such services provided by
Landlord and such estimated monthly amount or amounts shall be paid by Tenant on
the first day of each calendar month, in advance, at the place and in the manner
specified for payments of minimum rent hereunder. Landlord shall have the right
to change such estimated amount or amounts at any time and from time to time, by
notice to Tenant. If the total of the estimated monthly payments made by Tenant
for any lease year or calendar year shall be less than the actual amount due
from Tenant pursuant to the provisions of this Section, Tenant shall pay to
Landlord the difference between the amount paid by Tenant and the actual amount
due within ten (10) days after submission to Tenant of Landlord's statement and
invoice therefor; and if the total of the estimated payments made by Tenant for
any such year shall exceed the actual amount due from Tenant, the excess amount
paid shall be credited against the next payment due from Tenant to Landlord
under this Section. Landlord, at its sole option, may require Tenant to install
separate, appropriate meters for measuring Tenant's consumption of water,
electricity or the like, and may require Tenant to remove any or all such meters
upon Landlord's discontinuing the service in question to Tenant. The failure by
Tenant to pay when due any amount payable to Landlord under this Section 12.1
shall carry with it the same consequences as failure to pay any installment of
rent when due. Notwithstanding the foregoing, if a separate exhibit describing
applicable rates for a utility service is attached to this Lease, Tenant shall
pay for such service pursuant to such exhibit.
(c) Any furnishing by Landlord of electric current to the leased
premises shall be limited to the extent of the capacity of Landlord's existing
feeders, switches, risers, wiring installations and other electrical system
serving the leased premises (the "electric distribution system"). Tenant agrees
that Tenant's use of electrical current will at no time exceed the capacity of
the electric distribution system, and that Tenant will not make any alteration
or addition to the electric distribution system without Landlord's prior written
consent in each instance.
SEE ATTACHED RIDERS FOR INSERTS
(d) In the event that, at any time during the term of this
Lease, Tenant desires to connect or install any additional electric fixtures,
equipment or appliances to the electric distribution system and such fixtures,
equipment or appliances require additional electric current which, in
combination with Tenant's existing electrical requirements exceeds the capacity
of the electric distribution system, then, provided that Landlord shall have
consented in writing to such connections or installations, Landlord, upon the
written request of Tenant and at the sole cost and expense of Tenant, will
install any additional rider or risers (and all other equipment necessary and
proper in connection therewith) to supply Tenant's electric requirements, but
only if such riser or risers (and such other equipment) are necessary to supply
Tenant with the electric current required by it and will not cause permanent
damage or injury to the leased premises or the entertainment and retail center
of which the leased premises form a part or cause or create a dangerous or
hazardous condition or entail excessive or unreasonable alterations, repairs,
expense or interference with or disturbance of other tenants or occupants of the
entertainment and retail center. Notwithstanding any provisions contained in
this Section 12.1, Landlord shall not be obligated to provide any new utility
services or increased utility capacities to the leased premises to the extent
that the leased premises shall have been previously occupied by another
25
tenant, and, if the leased premises have not been previously occupied, Landlord
shall not be obligated to provide any utility services or utility capacities
other than as specifically set forth in Exhibit B. Tenant shall promptly advise
Landlord of any increase in Tenant's connected load to the electric distribution
system. Any additional utility services or any increase in utility capacities
beyond that in existence if the leased premises shall have been previously
occupied (or beyond the specifications set forth in Exhibit B if the leased
premises have not been previously occupied) shall be subject to the prior
written approval of Landlord, and such additional services or capacities shall
be provided at the sole cost and expense of Tenant.
(e) Tenant agrees further to provide and install, at Tenant's
sole cost and expense, all lamps, tubes, bulbs, starters, ballasts, transformers
and the like items used or required in the leased premises.
(f) At any time during the term hereof, Landlord may, upon the
thirty (3) days' prior written notice to Tenant, discontinue furnishing electric
current (or such other utility being furnished by Landlord) to the leased
premises without thereby affecting this Lease in any manner or otherwise
incurring any liability to Tenant, except that the minimum rent reserved herein
shall be reduced by the amount then being paid by Tenant on account of
Landlord's service of electricity (or such other utility) to the leased
premises, determined as provided above (as the same may have been adjusted from
time ho time pursuant to other provisions of this Article), and Landlord shall
no longer be obligated to furnish electric current (or such other utility) to
the leased premises. If Landlord shall give Tenant notice of intention to cease
furnishing electric current (or other utility) to the leased premises, Tenant
may contract for and receive such electric current (or such other utility)
directly from the public utility corporation then serving the Development, and
if Tenant does so, Landlord shall permit Tenant, at Tenant's sole cost, to use
Landlord's risers, wiring and electric installations (or other utility conduits,
as applicable) then serving the leased premises for such purpose to the extent
that the same are available, suitable and may be safely so used consistent with
concurrent and anticipated future use by Landlord and other tenants.
(g) If at any time after the date hereof, the electrical energy
rates (or other utility rates) as filed by the public utility corporation then
serving the Development shall be reduced or increased, or any tax shall be
imposed thereon (or subsequently increased or decreased), then the minimum rent
reserved herein shall be equitably adjusted as of the first day of the month
next following the effective date of such rate change to reflect the resulting
reduction or increase in the value of Landlord's service of providing Tenant
with electric current (or other utility service) on a rent inclusion basis, but
in no event shall the minimum rent be reduced below the amount stated in Article
II hereof.
(h)Notwithstanding any other provisions of this Lease, the
value of, or (as applicable) the rate for, each utility furnished by Landlord,
which utility shall be subject to regulation by a public agency, shall be
computed for the purposes of this Lease in accordance with the maximum rate
schedules which would be applicable if Tenant were at the time a direct customer
of the applicable public utility company serving the Development (subject to any
separate rate schedules for utility services as may be included in the exhibits
to this Lease). The value of, or (as applicable) the rate for, any nonregulated
utility service provided by Landlord shall be computed at the prevailing rates
which would be paid by Tenant for direct comparable
26
service from contractors in the local area, except to the extent that specific
rates are otherwise set forth in this Lease. The public utility corporation
referred to in this Section 12.1 shall be the utility company named in Exhibit B
attached hereto (if any), or the successor to such company or such other company
designated by Landlord.
(i) Landlord shall not be liable to Tenant for any loss, damage
or expense which Tenant may sustain if the quality or character of utilities
used upon or furnished to the leased premises are no longer available or
suitable for Tenant's requirements, or if said utilities are interrupted as a
result of actions by the public utility companies or any other cause and no such
change, interruption, or cessation of service shall constitute an eviction of
Tenant.
(j) Any obligation of Landlord to furnish light, heat,
conditioned air, or power or any utility service shall be conditioned upon the
availability of adequate energy sources. Landlord shall have the right to reduce
heat, lighting, air conditioning or other utility services within the
entertainment and retail center, including without limitation, the leased
premises and the common areas, as required by any mandatory or voluntary fuel or
energy saving allocation, or any similar statute, regulation, order or program
without such action diminishing Tenant's obligations hereunder.
ARTICLE XIII. ESTOPPEL STATEMENT, ATTORNMENT AND SUBORDINATION
SECTION 13.1. ESTOPPEL STATEMENT. Tenant shall, without charge, at any
time and from time to time, within ten (10) days after receipt by Tenant of
written request therefor from Landlord or from any mortgagee under any mortgage
or any beneficiary under any deed of trust on the real property on which the
building containing the leased premises is located or of which the leased
premises are a part, deliver, in recordable form, a duly executed and
acknowledged certificate or statement to the party requesting said certificate
or statement or to any other person, firm or corporation designated by Landlord,
certifying: (a) that this Lease is unmodified and in full force and effect, or,
if there has been any modification, that the same is in full force and effect as
modified, and stating any such modification; (b) the date of commencement of the
term of this Lease; (c) that rent is paid currently without any off-set or
defense thereto; (d) the dates to which the rent and other charges payable
hereunder by Tenant have been paid, and the amount of rent and other charges, if
any, paid in advance; (e) whether or not there is then existing any claim of
Landlord's default hereunder and, if so, specifying the nature thereof, and (f)
any other matters relating to the status of such Lease as shall be requested by
Landlord or any such mortgagee or beneficiary from time to time; provided that,
in fact, such facts are accurate and ascertainable. Any such certificate or
statement by Tenant may, at the election of the requesting party, include
Tenant's undertaking not to pay rents or other charges for more than a specified
period in advance of the due dates therefor set forth herein.
SECTION 13.2. ATTORNMENT. In the event any proceedings are brought for
the foreclosure of, or in the event of the conveyance by deed in lieu of
foreclosure of, or in the event of exercise of the power of sale under, any
mortgage and/or deed of trust made by Landlord covering the leased premises, or
in the event Landlord sells, conveys or otherwise transfers its interest in the
Development or any portion thereof containing the leased premises, this Lease
shall remain in full force and effect and Tenant hereby attorns to, and
covenants and agrees to execute an instrument in writing reasonably satisfactory
to the new owner whereby Tenant
27
attorns to such successor in interest and recognizes such successor as the
Landlord under this Lease. Payment by or performance of this Lease by any
person, firm or corporation claiming an interest in this Lease or the leased
premises by, through or under Tenant without Landlord's consent in writing shall
not constitute an attornment or create any interest in this Lease or the leased
premises.
SECTION 13.3. SUBORDINATION. Tenant agrees that this Lease shall, at
the request of Lar4rd, be subordinate to any underlying lease and to any
mortgages or deeds of trust that are now, or may hereafter be, placed upon the
leased premises and to any and all advances to be made thereunder, and to the
interest thereon, and all renewals, replacements and extensions thereof,
provided that the lessor under any such underlying lease or the mortgagees or
beneficiaries named in said mortgages or trust deeds shall agree to recognize
the interest of Tenant under this Lease in the event of foreclosure, if Tenant
is not then in default. Tenant also agrees that any underlying lessor or
mortgagee or beneficiary may elect to have this Lease constitute a prior lien to
its underlying lease or mortgage or deed of trust, and in the event of such
election and upon notification by such underlying lessor or such mortgagee or
beneficiary to Tenant to that effect, this Lease shall be deemed prior in lien
to such underlying lease or mortgage or deed of trust, whether this Lease is
dated prior to or subsequent to the date of said underlying lease or mortgage or
deed of trust. Tenant agrees that upon the request of Landlord, or any mortgagee
or beneficiary, Tenant shall execute whatever instruments may be required by
Landlord or by any mortgagee or beneficiary to carry out the intent of this
Section.
SECTION 13.4. REMEDIES. Failure of Tenant to execute any statements or
instruments necessary or desirable to effectuate the foregoing provisions of
this Article, within ten (10) days after written request so to do by Landlord,
shall constitute a breach of this Lease. In the event of such failure, Tenant
hereby irrevocably appoints Landlord as attorney-in-fact for Tenant with full
power and authority to execute and deliver in the name of Tenant any such
statements or instruments, which appointment shall be in addition to any other
rights or remedies available to Landlord.
ARTICLE XIV. ASSIGNMENT AND SUBLETTING
SECTION 14.1. NO ASSIGNMENT OR SUBLETTING. Notwithstanding any
provision herein to the contrary or reference herein to concessionaires or
subtenants or otherwise, Tenant agrees not to assign or in any manner transfer
this Lease or any estate or interest therein, and not to lease or sublet the
leased premises or any part or parts thereof or any right or privilege
appurtenant thereto, and not to allow anyone to conduct business at, upon or
from the leased premises (whether as concessionaire, franchisee, licensee,
permittee, subtenant, department operator or otherwise), or to come in, by,
through or under it, in all cases either by voluntary or involuntary act of
Tenant or by operation of law or otherwise. Without limiting any of the other
provisions contained in this Section 14.1, the restrictions of this Section
shall apply to any merger, consolidation or other reorganization of Tenant or of
Tenant's Guarantor or of any corporate entity which directly or indirectly
controls Tenant, and any such merger, consolidation or other reorganization
shall be deemed to be an assignment of this Lease within the meaning of this
Section 14.1. The sale, issuance or transfer of any voting capital stock of
Tenant or Tenant's Guarantor or any voting capital stock of any corporate entity
which directly or indirectly controls Tenant (if any one of such entities,
Tenant or Tenant's Guarantor or any such controlling
28
corporate entity, is a corporation the stock of which is not traded on the New
York Stock Exchange or the American Stock Exchange), or any interests in any
noncorporate entity which directly or indirectly controls Tenant or Tenant's
Guarantor which results in a change in the direct or indirect voting control (or
a change in the identity of any person, persons, entity or entities with the
power to vote or control at least fifty percent (50%) of the voting shares of
any class of stock) of Tenant, or Tenant's Guarantor, or any corporate or
noncorporate entity which directly or indirectly controls Tenant or Tenant's
Guarantor shall be deemed to be an assignment of this Lease within the meaning
of this Section 14.1 If Tenant is a partnership, trust or an unincorporated
association, then the sale, issuance or transfer of a controlling interest
therein, or the transfer of a majority interest in or a change in the voting
control of any partnership, trust, unincorporated association, or corporation
which directly or indirectly controls Tenant, or the transfer of any portion of
any general partnership or managing interest in Tenant or in any such entity, or
any change or conversion of Tenant or of any such entity to a limited liability
company, a limited liability partnership, or any other entity which possesses
the characteristics of limited liability, shall be deemed to be a prohibited
assignment of this Lease within the meaning of this Section 14.1. Any such
prohibited act by Tenant or Tenant's Guarantor (or any attempt at same), either
voluntarily or involuntarily or by operation of law or otherwise, shall, at
Landlord's option, terminate this Lease without relieving Tenant of any of its
obligations hereunder for the balance of the stated term, and any such act shall
be null and void. The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, or the termination thereof by Landlord pursuant to
any provision contained herein, shall not work a merger and shall, at the option
of Landlord, terminate all or any existing franchises, concessions, licenses,
permits, subleases, subtenancies, departmental operating arrangements or the
like, or may, at the option of Landlord, operate as an assignment to Landlord of
the same. Nothing contained elsewhere in this Lease shall authorize Tenant to
enter into any franchise, concession, license, permit, subtenancy, departmental
operating arrangement or the like, except pursuant to the provisions of this
Section. Landlord has entered into this Lease with Tenant in order to obtain for
the benefit of the entire entertainment and retail center the unique attraction
of Tenant's trade name set forth in Section 16.1 and the unique merchandising
mix and product line associated with Tenant's business as described in Section
7.1, and Landlord has specifically relied on the identity and special skill of
the Tenant in its ability to conduct the specific business identified in Section
7.1, and the foregoing prohibition on assignment or subletting or the like is
expressly agreed to by Tenant as an inducement to Landlord to lease to Tenant.
Tenant hereby acknowledges that the foregoing provisions of this Section 14.1
constitute a freely negotiated restraint on alienation. Without limiting any of
the foregoing provisions, neither Tenant nor any other person having an interest
in the possession, use, occupancy or utilization of the leased premises shall
enter into any lease, sublease, license, concession or other agreement for use,
occupancy or utilization of space in the leased premises which provides for rent
or other payment for such use, occupancy or utilization based in whole or in
part on the net income or profits derived by any person from the property
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 leased premises.
29
ARTICLE XV. WASTE
SECTION 15.1. WASTE OR NUISANCE. Tenant shall not commit or suffer to
be committed any waste upon the leased premises and shall not place a load upon
any floor of the leased premises which exceeds the floor load per square foot
which such floor was designed to carry. Tenant shall not commit or suffer to be
committed any nuisance or other act or thing which may disturb the quiet
enjoyment of any other occupant or tenant of the entertainment and retail
center. Tenant agrees that business machines and mechanical equipment used by
Tenant which cause vibration or noise that may be transmitted to the building or
buildings comprising the entertainment and retail center or to the leased
premises, to such a degree as to be reasonably objectionable to Landlord or to
any occupant, shall be placed and maintained by Tenant at its expense in
settings of cork, rubber or spring-type vibration isolators sufficient to
eliminate such vibrations or noise. Tenant shall take such action as Landlord
reasonably deems necessary to prevent or terminate any such nuisance or waste
arising out of Tenant's business, including, without limitation, any nuisance
created by employees, agents, contractors, invitees or licensees of Tenant.
ARTICLE XVI. TRADE NAME, PROMOTIONAL CHARGE
SECTION 16.1. TRADE NAME. Tenant agrees (a) to operate its business in
the leased premises under the name specifically set forth in the attached Data
Sheet; (b) not to change the advertised name or character of the business
operated in the leased premises; and (c) to refer to the Development by the name
set forth in Section 1.1 for the entertainment and retail center in designating
the location of the leased premises in all advertising and in all other
references to the location of the leased premises. Landlord shall have the right
to include Tenant's trade name in any public relations, promotional or
advertising materials or information. By its execution of this Lease, Tenant
authorizes Landlord to utilize Tenant's trade name in the foregoing manner.
SECTION 16.2. SOLICITATION OF BUSINESS. Tenant and Tenant's employees
and/or agents shall not solicit business in the parking areas or other common
areas, or any part of the entertainment and retail center other than the leased
premises, nor shall Tenant distribute any handbills or other advertising matter
in the parking area, other common areas, or any part of the entertainment and
retail center other than in the leased premises. Tenant shall not give samples
or approach customers outside the leased premises for purposes of soliciting
sales. Moreover, and generally, Tenant shall not give away any promotional items
which could create a nuisance or required Landlord to incur additional common
area expenses.
SECTION 16.2. PROMOTIONAL CHARGE. (a) Landlord shall provide or cause
to be provided a program of advertising or promotional events which, in
Landlord's sole judgment, will serve to promote the entertainment and retail
center. Landlord shall not be obligated to expend more than is actually
collected. Any promotional services and personnel so provided shall be under the
exclusive control and supervision of Landlord, who shall have the sole authority
to employ and discharge personnel and to establish a budget. Tenant agrees to
pay to
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Landlord, as Tenant's share of the cost of said advertising and promotional
program, an annual promotional charge which originally shall equal the amount as
shown in the Data Sheet for this Lease, which annual promotional charge shall,
at Landlord's option, be payable by Tenant in equal monthly installments at the
time and in the manner set forth for rent payments in this Lease. However, such
annual promotional charge payable by Tenant will be adjusted commencing January
1st immediately succeeding the commencement date of the term of this Lease and
annually thereafter, by a percentage equal to the percentage increase from the
base period of the Index (as defined in Section 27.20) to the respective January
1st or the closest month thereto that the Index is published (but in no event
shall Tenant pay less than the original promotional charge as specified above).
The term "base period" shall refer to the month of adjustment in such annual
promotional charge closest to and prior to the date of commencement of the term
of this Lease (i.e., the most recent month prior to the commencement date during
which such promotional charge has been adjusted), or the date of the opening of
the Development, whichever of such dates shall be the later to occur. In
addition to this cost of living adjustment, such annual promotional charge may
be increased from time to time by Landlord to the extent required by increases
in the costs of promotional, public relations or advertising services provided
pursuant to this Section (including, without limitation, changes in costs
arising from variations in the type, nature or extent of such services). Tenant
also agrees to pay to Landlord, within ten (10) days after demand therefor, an
initial promotional charge in the amount set forth in the Data Sheet in addition
to the foregoing promotional charges.
(b) All recurring payments, charges, dues and assessments (other than
the initial assessment) payable under this Section 16.3 shall be due in monthly
installments on the first day of each month during the term of this Lease, and
all such items, and the initial assessment, shall be paid without deduction or
offset. Failure by Tenant to pay all amounts when due shall carry with it the
same consequences under Article XIX hereof as Tenant's failure to pay rent.
ARTICLE XVII. DESTRUCTION OF LEASED PREMISES
SECTION 17.1. RECONSTRUCTION OF DAMAGED PREMISES. In the event the
leased premises shall be partially or totally destroyed by fire or other
casualty insured under the insurance carried by Landlord pursuant to Section
11.2 of this Lease so as to become partially or totally untenantable, then the
damage to the leased premises shall be promptly repaired (unless Landlord shall
elect not to rebuild as hereinafter provided), and the minimum rent and (to the
extent covered by the insurance carried by Landlord under Section 11.2(b)) other
charges payable by Tenant to Landlord (to the extent that such charges are based
upon the square foot area of the leased premises) shall be abated in proportion
to the floor area of the leased premises rendered untenantable, and the
Breakpoint above which percentage rent is computed and payable shall likewise be
proportionately reduced. Payment of full rent and all other charges so abated
shall commence and Tenant shall be obligated to reopen for business on the
thirtieth (30th) day following the date that Landlord advises Tenant that the
premises are tenantable, unless Tenant opens at an earlier time in the damaged
area or remains open in such area following destruction or damage, in which
event there shall be no abatement or any such abatement shall terminate as of
the date of Tenant's earlier reopening. If Landlord shall elect to cause Tenant
to make the necessary repairs to the leased premises, as provided below, payment
of full rent and all other charges so abated shall commence and Tenant shall be
obligated to
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reopen for business on the sixtieth (60th) day following the date
that Landlord advises Tenant of Landlord's election for Tenant to perform such
work. Landlord shall be obligated to cause such repairs to be made unless
Landlord, at its sole option, elects to cause Tenant to make such repairs, in
which event Tenant shall promptly complete the same and Landlord will make
available to Tenant for the sole purpose of reconstruction of Tenant's
improvements such portion of any insurance proceeds received by Landlord from
its insurance carrier, under a policy carried pursuant to Section 11.2 of this
Lease, allocated to the leased premises by Landlord. In the event of any such
reconstruction by Tenant, an architect duly registered in the State shall be
selected by Landlord and shall direct the payment of such insurance proceeds.
Such insurance proceeds shall be payable to Tenant only upon receipt by Landlord
of certificates of said architect stating that the payments specified therein
are properly payable for the purpose of reimbursing Tenant for expenditures
actually made by Tenant in connection with such work. At the election of
Landlord or Landlord's mortgagee, direct payments may be made to material
suppliers and laborers upon written certification by said architect that such
payments are due and payable. Any such insurance proceeds in excess of Tenant's
actual expenditures in restoring the damage or destruction shall belong to
Landlord. In making repairs, restoration or reconstruction, Tenant, at its
expense, shall comply with all laws, ordinances, and governmental rules or
regulations, and shall perform all work or cause such work to be performed with
due diligence and in a first-class manner. All permits required in connection
with said repairs, restoration and reconstruction shall be obtained by Tenant at
Tenant's sole cost and expense. Any amount expended by Tenant in excess of such
insurance proceeds received by Landlord and made available to Tenant shall be
the sole obligation of Tenant. In the event of reconstruction or repair by
Landlord, any amount expended by Landlord in repairing the leased premises in
excess of the proceeds of insurance received by Landlord pursuant to Section
11.2 of this Lease allocated to the leased premises shall be repayable by Tenant
to Landlord within ten (10) days after receipt by Tenant from Landlord of a
statement setting forth the amount of such excess. The party required hereunder
to repair the damage to the leased premises shall reconstruct such 1eased
premises in accordance with the working drawings originally approved by Landlord
or with (at Landlord's sole election) new drawings prepared by Tenant and
acceptable to Landlord and Tenant. In no event shall Landlord be required to
repair or replace Tenant's merchandise, trade fixtures, furnishings or
equipment. If (i) more than thirty-five percent (35%) of the floor area of the
building in which the leased premises are located or of the Development shall be
damaged or destroyed by fire or other casualty, or (ii) during the last three
(3) years of the term hereof more than twenty-five percent (25%) of the floor
area of the leased premises or of the building in which the leased premises are
located or of the Development shall be damaged or destroyed by fire or other
casualty, or (iii) all or any pan of the Development or said building or the
leased premises are damaged or destroyed at any time by the occurrence of any
risk not insured under the insurance carried by Landlord pursuant to Sections
8.3 or 11.2(a), then Landlord, at its sole option, may terminate this Lease by
giving written notice to Tenant of Landlord's election so to terminate, such
notice to be given within ninety (90) days after the occurrence of such damage
or destruction. If Landlord repairs or rebuilds, or requires Tenant to repair or
rebuild the leased premises as herein provided, Tenant, at Tenant's sole cost,
shall repair or replace Tenant's merchandise, trade fixtures, furnishings and
equipment in a manner and to at least a condition equal to that prior to the
damage or destruction thereof.
SEE ATTACHED RIDERS FOR INSERTS
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SECTION 17.2. WAIVER OF SUBROGATION. Each party hereto does hereby
waive, remise, release and discharge the other party hereto and any officer,
director, shareholder, beneficiary, partner, agent, employee or representative
of such other party, of and from any liability whatsoever hereafter arising from
loss, damage or injury caused by fire or other casualty for which insurance
containing a waiver of subrogation is carried by the injured party at the time
of such loss, damage or injury to the extent of any recovery by the injured
party under such insurance.
ARTICLE XVIII. EMINENT DOMAIN
SECTION 18.1. TOTAL CONDEMNATION OF LEASED PREMISES. If the whole of
the leased premises shall be taken by any public authority under the power of
eminent domain or sold to public authority under threat or in lieu of such a
taking, then the term of this Lease shall cease as of the day possession shall
be taken by such public authority, and the rent shall be paid up to that day
with a proportionate refund by Landlord of such rent and other charges as may
have been paid in advance for a period subsequent to the date of the taking.
SECTION 18.2. PARTIAL CONDEMNATION. (a)(i) If less than the whole but
more than twenty percent (20%) of the leased premises or more than fifty percent
(50%) of the common areas shall be so taken under eminent domain, or sold to
public authority under threat or in lieu of such a taking, Tenant shall have the
right either to terminate this Lease and declare the same null and void as of
the day possession is taken by public authority, or, subject to Landlord's right
of termination as set forth in Section 18.2(b) of this Article, to continue in
the possession of the remainder of the leased premises, upon notifying Landlord
in writing within ten (10) days after such taking of Tenant's intention. In the
event Tenant elects to remain in possession, all of the terms herein provided
shall continue in effect, except that, as of the day possession of such
percentage of the leased premises is taken by public authority, the minimum rent
and other charges payable by Tenant to Landlord (to the extent that such charges
are based upon the square foot area of the leased premises) shall be reduced in
proportion to the floor area of the leased premises taken and the Breakpoint
above which percentage rent is computed and payable shall likewise be
proportionately reduced; thereafter, Landlord shall, at its own cost and
expense, make all necessary repairs or alterations to the basic building, so as
to constitute the remaining leased premises a complete architectural unit, and
Tenant, at Tenant's sole cost, shall similarly act with respect to Tenant's
improvements, trade fixtures, furnishings and equipment.
(ii) If twenty percent (20%) or less of the leased premises shall be so
taken, the lease term shall cease only on the part so taken, as of the day
possession shall be taken by such public authority, and Tenant shall pay rent
and other charges up to that day, with appropriate credit by Landlord (toward
the next installment of such rent or charges due from Tenant) of such rent or
charges as may have been paid in advance for a period subsequent to the date of
the taking; thereafter, the minimum rent and other charges payable to Landlord
(to the extent that such charges are based upon the square foot area of the
leased premises) shall be reduced in proportion to the amount of the leased
premises taken and the Breakpoint above which percentage rent is computed and
payable shall likewise be proportionately reduced. Landlord shall, at its
expense, make all necessary repairs or alterations to the basic building, so as
to constitute the remaining leased premises a complete architectural unit, and
Tenant, at Tenant's
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sole cost, shall similarly act with respect to Tenant's improvements, trade
fixtures, furnishings and equipment.
(b) If more than fifty percent (50%) of the building in which
the leased premises are located, or more than fifty percent (50%) of the leased
premises, or more than fifty percent (50%) of the Development or of the common
areas, shall be taken under power of eminent domain, or sold to public authority
under the threat or in lieu of such a taking, Landlord may, by written notice to
Tenant delivered on or before the tenth (10th) day following the date of
surrendering possession to the public authority, terminate this Lease as of the
day possession is taken by public authority. The rent and other charges shall be
paid up to the day possession is taken by public authority, with an appropriate
refund by Landlord of such rent as may have been paid in advance for a period
subsequent to that date.
SECTION 18.3. LANDLORD'S AND TENANT'S DAMAGES. All damages awarded for
such taking under the power of eminent domain or sale under threat or in lieu of
such a taking, whether for the whole or a part of the leased premises, shall
belong to and be the property of Landlord, irrespective of whether such damages
shall be awarded as compensation for diminution in value to the leasehold or to
the fee of the leased premises, and Tenant shall have no claim against either
Landlord or the condemning authority with respect thereto; provided, however,
that Landlord shall not be entitled to any award specifically designated as
compensation for, depreciation to, and cost of removal of, Tenant's stock and
trade fixtures.
ARTICLE XIX. DEFAULT
SECTION 19.1. RIGHT TO RE-ENTER. (a) In the event of (1) any failure of
Tenant to pay any rent or other charges due hereunder when due, or (2) if Tenant
shall fail to move into the premises and to commence the conduct of its business
on the date specified in Section 1.2 hereof, or fail to perform any obligation
hereunder prior to such commencement date, or fail to continuously operate its
business pursuant to Section 7.2 for the purpose specified in Section 7.1
hereof, or fail to operate under the name specified in Section 16.1 hereof, or
if Tenant shall abandon said premises, or permit this Lease to be taken under
any writ of execution, or if there shall be any default by Tenant (or by any
person or entity which, directly or indirectly, controls, is controlled by, or
is under common control with Tenant) under any other lease with Landlord (or
with any person or entity which is affiliated with Landlord or which, directly
or indirectly, controls, is controlled by, or is under common control with
Landlord, or which is managed by the managing agent utilized by Landlord for the
Development) which shall not be remedied within the applicable grace period, if
any, provided therefor under such other lease, or if there shall be any default
by Tenant or any entity affiliated with Tenant with respect to any financing
instrument or arrangement, if any, relating to any items used in, or the
operation of business upon, the leased premises, or (3) any failure to perform
any other of the terms, conditions or covenants of this Lease to be observed or
performed by Tenant for more than thirty (30) days after written notice of such
default shall have been mailed to Tenant; then Landlord, besides other rights or
remedies it may have, shall have the right to declare this Lease terminated and
the term ended (in which event, this Lease and the term hereof shall expire,
cease and terminate with the same force and effect as though the date set forth
in any required notice were the date originally set forth herein and fixed for
the expiration of the term and Tenant shall vacate and surrender the premises
but shall remain liable for all obligations arising during the balance of the
34
original stated term as hereafter provided as if this Lease had remained in full
force and effect) and Landlord shall have the right to bring a special
proceeding to recover possession from Tenant holding over and/or Landlord may,
in any of such events, without notice, re-enter the leased premises either by
force or otherwise, and dispossess, by summary proceedings or otherwise, Tenant
and the legal representative of Tenant or other occupant of the leased premises
and remove their effects and hold the premises as if this Lease had not been
made, and Tenant hereby waives the service of notice of intention to re-enter or
to institute legal proceedings to that end.
(b) In addition to the remedies set forth herein for such
failure by Tenant, Landlord shall have the further remedy of erecting a
barricade at the storefront of the leased premises at such time as possession of
the leased premises is deemed vested in Landlord, which barricade may be
erected, at Tenant's expense, and without notice to Tenant or resort to legal
process, and without Landlord in any manner becoming liable for any loss or
damage which may be occasioned thereby. Notwithstanding the foregoing provisions
of this Section, in the event Tenant shall fail to perform or shall default in
the performance of any term, covenant or condition of this Lease on two (2) or
more separate occasions during any twelve-month period, then, even though such
failures or defaults may have been cured by Tenant, any further failure or
default by Tenant during the term of this Lease shall be deemed a default
without the ability for cure by Tenant. During the continuance of any failure of
performance or any default by Tenant in the performance of any term, covenant or
condition of this Lease, Tenant shall not be entitled to exercise any rights or
options, or to receive any funds or proceeds being held under or pursuant to
this Lease, notwithstanding any contrary provisions contained herein. In the
event of re-entry by Landlord, Landlord may remove all persons and property from
the leased premises and such property may be stored in a public warehouse or
elsewhere at the cost of, and for the account of Tenant, without notice or
resort to legal process and without Landlord being deemed guilty of trespass, or
becoming liable for any loss or damage which may be occasioned thereby. In
addition, and to the extent permitted by law, in the event of re-entry by
Landlord, Landlord may, but shall not be required to, padlock or otherwise
secure the entrances to the leased premises without prior notice or resort to
legal process and without being deemed guilty of trespass or becoming liable for
any loss or damage; all costs and expenses incurred by Landlord in securing the
entrances to the leased premises shall be borne by Tenant and shall be payable
to Landlord on ten (10) days' written notice; and any such padlocking or
securing of the premises shall not constitute or be deemed as an election on
Landlord's part to terminate this Lease unless a written notice of such
intention shall be given to Tenant or unless the termination of this Lease is
decreed by a court of competent jurisdiction. In the event Tenant shall not
remove its property from the leased premises within ten (10) days after Tenant
has vacated the premises, then such property shall be deemed abandoned by Tenant
and Landlord may dispose of the same without liability to Tenant. At any time
that Tenant has failed to pay rent or other charges within ten (10) days after
the same shall be due, thereafter Landlord shall not be obligated to accept any
payment from Tenant unless such payment is made in certified funds. To the
extent that this Lease specifically provides for any abatement of rent otherwise
payable by Tenant under this Lease, or any payment by Landlord to Tenant, such
abatement shall not be effective, nor shall such payment be required to be made,
if Tenant shall have failed to observe or perform any of Tenant's obligations
hereunder or if Tenant shall otherwise be in default hereunder, and Tenant shall
be obligated to immediately repay to Landlord the amount of any rent previously
abated or
35
the amount of any payment previously made by Landlord to Tenant
hereunder, notwithstanding anything contained in this Lease to the contrary.
SECTION 19.2. RIGHT TO RELET. Should Landlord elect to re-enter, as
herein provided, or should it take possession pursuant to legal proceedings or
pursuant to any notice provided for by law, it may either terminate this Lease
or it may from time to time, without terminating this Lease, make such
alterations and repairs as may be necessary in order to relet the premises, and
relet said premises or any part thereof for such term or terms (which may be for
a term extending beyond the term of this Lease) and at such rent and upon such
other terms and conditions as Landlord in its sole discretion may deem
advisable. Upon each such reletting all rents and other sums received by
Landlord from such reletting shall be applied, first, to the payment of any
indebtedness other than rent due hereunder from Tenant to Landlord; second, to
the payment of any costs and expenses of such reletting, including reasonable
brokerage fees and attorneys' fees and the costs of any alterations and repairs;
third, to the payment of rent and other charges due and unpaid hereunder; and
the residue, if any, shall be held by Landlord and applied in payment of future
rent as the same may become due and payable hereunder. If such rents and other
sums received from such reletting during any month be less than that to be paid
during that month by Tenant hereunder, Tenant shall pay such deficiency to
Landlord; if such rents and the sums shall be more, Tenant shall have no right
to, and shall receive no credit for, the excess. Such deficiency shall be
calculated and paid monthly. No re-entry or taking possession of the leased
premises by Landlord shall be construed as an election on its part to terminate
this Lease unless a written notice of such intention is given to Tenant or
unless the termination thereof is decreed by a court of competent jurisdiction.
Notwithstanding any such reletting without termination, Landlord may at any time
elect to terminate this Lease for such previous breach. Should Landlord at any
time terminate this Lease for any breach, in addition to any other remedies it
may have, it may recover from Tenant all damages it may incur by reason of such
breach, including the cost of recovering the leased premises, reasonable
attorneys' fees, and including the worth at the time of such termination of the
excess, if any, of the amount of rent and charges equivalent to rent reserved in
this Lease for the remainder of the stated term over the then reasonable rental
value of the leased premises for the remainder of the stated term, all of which
amounts shall be immediately due and payable from Tenant to Landlord. In
determining the rent which would be payable under this Lease by Tenant
subsequent to default, the percentage rent for each year of the unexpired
portion of the term shall be equal to the average percentage rent payable by
Tenant from the commencement of the term to the time of default, or during the
preceding three (3) full lease years, whichever period is shorter. The failure
or refusal of Landlord to relet the premises shall not affect Tenant's
liability. The terms "entry" and "re-entry" are not limited to their technical
meanings. Nothing contained in this Lease shall be construed to limit or
prejudice the right of Landlord to prove for and obtain as damages by reason of
the termination of this Lease or re-entry of the leased premises for the default
of Tenant under this Lease an amount equal to the maximum allowed by any statute
or rule of law in effect at the time when, and governing the proceedings in
which, such damages are to be proved, whether or not such amount shall be
greater than any of the sums referred to in this Section 19.2.
SECTION 19.3. EXPENSES. In case suit shall be brought for recovery of
possession of the leased premises, for the recovery of rent or any other amount
due under the provisions of
36
this Lease, or because of the breach of any other covenant herein contained on
the part of Tenant to be kept and performed, and a breach shall be established,
Tenant shall pay to Landlord all expenses incurred therefor, including
reasonable attorneys' fees. In addition, in the event Landlord shall incur
expenses, including reasonable attorneys' fees, as a result of Tenant's failure
to perform or comply with any term, covenant or condition set forth in this
Lease, Tenant shall pay to Landlord all such expenses. Any amounts payable by
Tenant to Landlord pursuant to this Section 19.3 or Section 11.3 of this Lease
may be included in any subsequent monthly rent xxxx to Tenant, and the failure
of Tenant to promptly pay same shall entitle Landlord to all remedies for
failure to pay rent as available under this Lease or at law or in equity.
SECTION 19.4. WAIVER OF COUNTERCLAIMS AND TRIAL BY JURY. Landlord and
Tenant waive their right to trial by jury in any action, proceeding or
counterclaim brought by either of the parties hereto against the other (except
for personal injury or property damage) on any matters whatsoever arising out of
or in any way connected with this Lease, the relationship of Landlord and
Tenant, Tenant's use of or occupancy of said premises, and any emergency
statutory or any other statutory remedy. Tenant shall not interpose any
counterclaim or counterclaims or claims for set-off, recoupment or deduction of
rent in a summary proceeding for nonpayment of rent or other action or summary
proceeding based on termination, holdover or other default in which Landlord
seeks repossession of the leased premises from Tenant.
ARTICLE XX. BANKRUPTCY OR INSOLVENCY
SECTION 20.1. TENANT'S INTEREST NOT TRANSFERABLE. Neither Tenant's
interest in this Lease, nor any estate hereby created in Tenant nor any interest
herein or therein, shall pass to any trustee, except as may specifically be
provided pursuant to the Bankruptcy Code (11 USC ss. 101 et seq.), or to any
receiver or assignee for the benefit of creditors or otherwise by operation of
law.
SECTION 20.2. TERMINATION. In the event the interest or estate created
in Tenant hereby shall be taken in execution or by other process of law, or if
Tenant or Tenant's Guarantor, if any, or Tenant's executors, administrators, or
assigns, if any, shall be adjudicated insolvent or bankrupt pursuant to the
provisions of any state law or an order for the relief of such entity shall be
entered pursuant to the Bankruptcy Code, or if a receiver or trustee of the
property of Tenant or Tenant's Guarantor, if any, shall be appointed by reason
of the insolvency or inability of Tenant or Tenant's Guarantor, if any, to pay
its debts, or if any assignment shall be made of the property of Tenant or
Tenant's Guarantor, if any, for the benefit of creditors, then and in any such
events, this Lease and all rights of Tenant hereunder shall automatically cease
and terminate with the same force and effect as though the date of such event
were the date originally established herein and fixed for the expiration of the
term, and Tenant shall vacate and surrender the leased premises but shall remain
liable as herein provided. Notwithstanding the foregoing provisions of this
Section, in the event that such termination shall result solely from the
bankruptcy or insolvency of, or such other described event relating to, Tenant's
Guarantor, Landlord shall have the option to reinstate all of the provisions of
this Lease (including, without limitation, the obligation of Tenant to
continuously operate pursuant to Article VII hereof) upon written notice to
Tenant.
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SECTION 20.3. TENANT'S OBLIGATION TO AVOID CREDITORS' PROCEEDINGS.
Tenant or Tenant's Guarantor, if any, shall not cause or give cause for the
appointment of a trustee or receiver of the assets of Tenant or Tenant's
Guarantor, if any, and shall not make any assignment for the benefit of
creditors, or become or be adjudicated insolvent. The allowance of any petition
under any insolvency law except under the Bankruptcy Code or the appointment of
a trustee or receiver of Tenant or Tenant's Guarantor, if any, or of the assets
of either of them, shall be conclusive evidence that Tenant caused, or gave
cause, therefor, unless such allowance of the petition, or the appointment of a
trustee or receiver, is vacated within thirty (30) days after such allowance or
appointment. Any act described in this Section 20.3 shall be deemed a material
breach of Tenant's obligations hereunder, and this Lease shall thereupon
automatically terminate in the same manner and with the same force and effect as
set forth in Section 20.2 hereof. Landlord does, in addition, reserve any and
all other remedies provided in this Lease or in law. Notwithstanding the
foregoing provisions of this Section, in the event that such termination shall
result solely from the bankruptcy or insolvency of, or such other described
event relating to, Tenant's Guarantor, Landlord shall have the option to
reinstate all of the provisions of this Lease (including, without limitation,
the obligation of Tenant to continuously operate pursuant to Article VII hereof)
upon written notice to Tenant.
SECTION 20.4. RIGHTS AND OBLIGATIONS UNDER THE BANKRUPTCY CODE. (a)
Upon the filing of a petition by or against Tenant under the Bankruptcy Code,
Tenant as debtor and as debtor in possession, and any trustee who may be
appointed agree as follows: (i) to perform each and every obligation of Tenant
under this Lease including, but not limited to, the manner of "operation" as
provided in Section 7.2 of this Lease until such time as this Lease is either
rejected or assumed by order of the United States Bankruptcy Court; (ii) to pay
monthly in advance on the first day of each month, as reasonable compensation
for use and occupancy of the leased premises, an amount equal to all minimum
rent and other charges otherwise due pursuant to this Lease and to pay
percentage rent monthly at the percentage set forth in this Lease for the lease
year in which such month falls on all sales during such month in excess of one
twelfth (1/12th) of the Breakpoint for such lease year, with payment of all such
percentage rent to be made by the tenth (10th) day of the succeeding month;
(iii) to reject or assume this Lease within sixty (60) days of the appointment
of such trustee under Chapter 7 of the Bankruptcy Code or within sixty (60) days
(or such shorter term as Landlord, in its sole discretion, may deem reasonable,
so long as notice of such period is given) of the filing of a petition under any
other Chapter; provided that no extension of either of the foregoing periods by
or on behalf of Tenant shall be permitted; (iv) to give Landlord at least
forty-five (45) days' prior written notice of any proceeding relating to any
assumption of this Lease; (v) to give at least thirty (30) days' prior written
notice of any abandonment of the leased premises, with any such abandonment to
be deemed a rejection of this Lease and an abandonment of any property not
previously removed from the leased premises; (vi) to do all other things of
benefit to Landlord otherwise required under the Bankruptcy Code; (vii) to be
deemed to have rejected this Lease in the event of the failure to comply with
any of the above; and (viii) to have consented to the entry of an order by an
appropriate United States Bankruptcy Court providing all of the above, waiving
notice and hearing of the entry of same.
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(b) No default of this Lease by Tenant, either prior to or
subsequent to the filing of such a petition, shall be deemed to have been waived
unless expressly done so in writing by Landlord.
(c) It is understood and agreed that this is a Lease of real
property in a shopping center and that, therefore, Section 365(b)(3) of the
Bankruptcy Code is applicable to any proposed assumption of this Lease in a
bankruptcy case.
(d) Included within and in addition to any other conditions or
obligations imposed upon Tenant or its successor in the event of assumption
and/or assignment are the following: (i) the cure of any monetary defaults and
the reimbursement of pecuniary loss immediately upon entry of a court order
providing for assumption and/or assignment; (ii) the deposit of an additional
sum equal to three (3) months' rent to be held pursuant to the terms of Section
26.1 of this Lease (notwithstanding any alteration or modification of the terms
of said Section); (iii) the use of the leased premises as set forth in Section
7.1 of this Lease and the quality, quantity and/or lines of merchandise of any
goods or services required to be offered for sale are unchanged; (iv) the
payment of any sums which may then be due or which may thereafter become due
pursuant to the provisions of Section 2.4 of this Lease; (v) the debtor, debtor
in possession, trustee, or assignee of such entity demonstrates in writing that
it has sufficient background including, but not limited to, substantial
retailing experience in Developments of comparable size and financial ability to
operate a retail establishment out of the leased premises in the manner
contemplated in this Lease, and meets all other reasonable criteria of Landlord
as did Tenant upon execution of this Lease; (vi) the prior written consent of
any mortgagee to which this Lease has been assigned as collateral security; and
(vii) the premises, at all times, remains a single store and no physical changes
of any kind may be made to the premises unless in compliance with the applicable
provisions of this Lease.
(e) Any person or entity to which this Lease is assigned
pursuant to the provisions of the Bankruptcy Code shall be deemed without
further act or deed to have assumed all of the obligations arising under this
Lease on and after the date of such assignment. Any such assignee shall, upon
demand, execute and deliver to Landlord an instrument confirming such
assumption.
ARTICLE XXI. ACCESS BY LANDLORD
SECTION 21.1. RIGHT OF ENTRY. Landlord or Landlord's agents shall have
the right to enter the leased premises at all reasonable times to examine the
same and to show them to prospective purchasers or mortgagees. Landlord or
Landlord's agents shall have the further right to enter the leased premises to
make such repairs, alterations, improvements or additions as Landlord may deem
necessary or desirable, irrespective of whether the work shall be for the leased
premises of for other premises or facilities, and Landlord shall be allowed to
take all material into and upon the leased premises that may be required
therefor without the same constituting an eviction of Tenant in whole or in
part, and the rent and other charges reserved shall in no wise xxxxx while said
repairs, alterations, improvements, or additions are being made, by reason of
loss or interruption of business of Tenant, or otherwise. Landlord may, at any
time, exhibit the leased premises to prospective tenants. If an excavation shall
be made upon land adjacent to the leased premises, or shall be authorized to be
made, Tenant shall afford to the person causing or authorized to cause such
excavation, license to enter upon the leased premises
39
for the purpose of doing such work as said person shall deem necessary to
preserve the wall or the building of which leased premises form a part from
injury or damage and to support the same by proper foundations without any claim
for damages or indemnity against Landlord, or diminution or abatement of rent.
SEE ATTACHED RIDERS FOR INSERTS
ARTICLE XXII. TENANT'S PROPERTY
SECTION 22.1. TAXES ON TENANT'S PROPERTY. Tenant shall be responsible
for, and shall pay, prior to delinquency, any and all taxes, assessments,
levies, fees and other governmental charges of every kind or nature (for all
purposes under this Lease, collectively called "taxes") levied or assessed by
municipal, county, state, federal or other taxing or assessing authority upon,
against or with respect to (i) the leased premises or any leasehold interest,
(ii) all furniture, fixtures, equipment and any personal property of any kind
owned by Tenant or any previous tenant and occupant, and placed, installed or
located in, within, upon or about the leased premises, (iii) all alterations,
additions or improvements of whatsoever kind or nature, if any, made to the
leased premises, by Tenant or any previous tenant or occupant, and (iv) rents or
other charges payable by Tenant to Landlord, irrespective of whether any of the
terms described in clauses (i) through (iv) above are assessed against real or
personal property, and irrespective of whether any of such items are assessed to
or against Landlord or Tenant. If at any time during the term of this Lease any
of such taxes are not levied and assessed separately and directly to Tenant (for
example, if the same are levied or assessed to Landlord, or upon or against the
building containing the leased premises and/or the land underlying said
building), Tenant shall pay to Landlord Tenant's share thereof as determined by
Landlord.
SECTION 22.2. LOSS AND DAMAGE. Landlord shall not be responsible or
liable to Tenant for any loss or damage that may be occasioned by or through the
acts or omissions of persons occupying adjoining premises or any part of the
premises adjacent to or connected with the premises hereby leased or any part of
the building of which the leased premises are a part, or any other area in the
entertainment and retail center, or for any loss or damage resulting to Tenant
or its property from bursting, stoppage or leaking of water, gas, sewer or steam
pipes, or (without limiting the foregoing) for any damages or loss of property
within the leased premises from any cause whatsoever.
SECTION 22.3. NOTICE BY TENANT. Tenant shall give immediate notice to
Landlord in case of any damage to or destruction of all or any part of, or
accidents in, the leased premises or of defects therein or in alterations,
decorations, additions or improvements, including, without limitation, any
fixtures or equipment.
ARTICLE XXIII. HOLDING OVER
SECTION 23.1. HOLDING OVER. Any holding over after the expiration of
the term hereof with the consent of the Landlord, shall be construed to be a
tenancy from month to month at a monthly minimum rent of not less than one-sixth
(1/6) the annual minimum rent effective for the final lease year or partial
lease year preceding expiration of the term (subject to further adjustment
pursuant to the various provisions of this Lease, including, without limitation,
40
Section 2.4), together with an amount estimated by Landlord for the monthly
additional charges payable pursuant to this Lease, and shall otherwise be on the
same terms and conditions (including, without limitation, payment of percentage
rent) as herein specified so far as applicable, subject to any changes in any of
the foregoing terms or conditions as may be submitted by Landlord to Tenant. Any
holding over without Landlord's consent shall entitle Landlord to re-enter the
leased premises as provided in Section 19.1 of this Lease.
SECTION 23.2. SUCCESSORS. All rights and liabilities herein given to,
or imposed upon, the respective parties hereto shall extend to and bind the
several respective heirs, executors, administrators, successors, and assigns of
the said parties; and if there shall be more than one person or entity
comprising Tenant, they shall all be bound jointly and severally by the terms,
covenants and agreements herein. No rights, however, shall inure to the benefit
of any assignee of Tenant.
ARTICLE XXIV. RULES AND REGULATIONS
SECTION 24.1. RULES AND REGULATIONS Tenant agrees to comply with and
observe all rules and regulations established by Landlord from time to time,
including those shown on Exhibit C, attached to this Lease, provided the same
shall apply uniformly to all tenants of the Development. Tenant's failure to
keep and observe said rules and regulations shall constitute a breach of the
terms of this Lease in the same manner as of the rules and regulations were
contained herein as covenants. In the case of any conflict between said rules
and regulations and this Lease, this Lease shall be controlling.
ARTICLE XXV. QUIET ENJOYMENT
SECTION 25.1. LANDLORD'S COVENANT. Upon payment by Tenant of the rents
herein provided, and upon the observance and performance of all covenants, terms
and conditions on Tenant's part to be observed and performed, Tenant shall
peaceably and quietly hold and enjoy the leased premises for the term hereby
demised without hindrance or interruption by Landlord or any other person or
persons lawfully or equitably claiming by, through or under Landlord, subject,
nevertheless, to the terms and conditions of this Lease and any mortgage, deed
of trust or underlying lease to which this Lease is subordinate.
SECTION 25.2. TENANT'S COVENANT. Tenant hereby acknowledges and agrees
that Landlord has specifically relied upon the identity, skill, product line,
and trade name of Tenant in entering into this Lease with Tenant. Tenant
recognizes that its use of the leased premises in accordance with the use clause
set forth in the Data Sheet and its compliance with the particular provisions of
Article VII hereof, regarding the conduct and continuous operation of Tenant's
business in the leased premises throughout the term of this Lease, forms a
material inducement to Landlord, and Tenant specifically covenants that it will
strictly adhere to these provisions. Any ambiguities in Article VII or in the
use clause set forth in the Data Sheet shall be construed against Tenant and in
favor of Landlord. Tenant further acknowledges and agrees that any indebtedness
from Tenant to Landlord existing as of the date of this Lease shall be deemed
additional rent hereunder, and Tenant's commitment and obligation to pay all
such indebtedness as additional rent under this Lease has formed an additional
necessary
41
consideration to Landlord in entering into this Lease and in hereby
granting Tenant the right to use the leased premises as set forth herein.
ARTICLE XXVI. SECURITY PROVISION
SECTION 26.1. SECURITY. The amount set forth in the Data Sheet as a
security deposit is payable by Tenant, upon the execution of this Lease by
Tenant, in the manner and at the place where minimum rent is payable. Landlord
is to retain said amount as security for the faithful performance of all
covenants, conditions and agreements of this Lease. Such amount is occasionally
referred to herein as the "security." Landlord may, at its option, apply the
security to remedy defaults in the payment of any rent or other charge
hereunder, to repair damages to the leased premises caused by Tenant, or to
clean the leased premises upon the expiration or termination of this Lease; in
no event however, shall Landlord be obligated so to apply the security.
Landlord's right to bring a special proceeding to recover or otherwise to obtain
possession of the leased premises before or after Landlord's declaration of the
termination of this Lease for nonpayment of rent or for any other reason shall
not in any event be affected by reason of the fact that Landlord holds such
security. Such security, if not applied toward the payment of rent in arrears or
toward the payment of damages suffered by Landlord by reason of Tenant's breach
of the covenants, conditions and agreements of this Lease, is to be returned to
Tenant without interest, except as provided by law, when this Lease is
terminated according to its terms, but in no event is such security to be
returned until Tenant has vacated the leased premises and delivered possession
thereof to Landlord. In the event that Landlord repossesses itself of the leased
premises, whether by special proceeding or re-entry or otherwise, because of
Tenant's default or failure to carry out the covenants, conditions and
agreements of this Lease, Landlord may apply such security upon all damages
suffered to the date of said repossession and may retain the security to apply
upon such damages as may be suffered or shall accrue thereafter by reason of
Tenant's default or breach. In the event any bankruptcy, insolvency,
reorganization or other creditor-debtor proceedings shall be instituted by or
against Tenant, or its successors or assigns, or any guarantor of Tenant
hereunder, such security shall be deemed to be applied first to the payment of
any rents and/or other charges due Landlord for all periods prior to the
institution of such proceedings, and the balance, if any, of such security may
be retained by Landlord in partial liquidation of Landlord's damages. Landlord
shall not be obligated to keep such security as a separate fund but may
commingle the security with its own funds. In the event Landlord applies the
security in whole or in part, Tenant shall, upon demand by Landlord, deposit
sufficient funds to maintain the security in the initial amount. Failure of
Tenant to deposit such additional security shall entitle Landlord to avail
itself of the remedies provided in this Lease for nonpayment of rent by Tenant.
The acceptance by Landlord of the security deposit submitted by Tenant shall not
render this Lease effective unless and until Landlord shall have executed and
actually delivered to Tenant a fully-executed copy of this Lease.
ARTICLE XXVII. MISCELLANEOUS
SECTION 27.1. WAIVER; ELECTION OF REMEDIES. The subsequent acceptance
of rent hereunder by Landlord shall not be deemed to be a waiver of any
preceding breach by Tenant of any term, covenant or condition of this Lease,
other than the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent. In particular, but without limitation, if
42
Tenant assigns or transfers its interest in this Lease contrary to the terms of
this Lease, any acceptance by Landlord of such assignee's or transferee's
payment shall not be deemed to be a waiver of the restrictions set forth in
Section 14.1 hereof. In the event that Tenant shall be at any time in default of
both monetary and nonmonetary terms, covenants or conditions of this Lease, any
acceptance by Landlord of any payment rendered by Tenant shall not have the
effect of curing Tenant's nonmonetary defaults and shall not have the effect of
curing any monetary default other than the particular amount owing for which
such payment is specifically accepted by Landlord. Following notice of
termination or any other remedy exercised by Landlord with respect to any
monetary default of Tenant, such default shall not be deemed cured by the
payment of rent owing by Tenant for the current period only, and Landlord may
apply such payments to current rent only without any effect upon Tenant's
existing indebtedness and continuing monetary default, notwithstanding any
contrary instructions by or on behalf of Tenant, which instructions shall be
null and void and of no effect. In addition, after the service of notice or the
commencement of a suit, or after final judgment for the possession of the leased
premises, Landlord may receive and collect rent due from Tenant, and the payment
of rent by Tenant shall not waive or affect said notice or suit or judgment. One
or more waivers of any covenant or condition by Landlord shall not be construed
as a waiver of a subsequent breach of the same covenant or condition, and the
consent or approval by Landlord to or of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to render unnecessary Landlord's consent
or approval to or of any subsequent similar act by Tenant. The failure of
Landlord to insist upon a strict performance of any term, condition or covenant
contained in this Lease shall not be deemed a waiver of any rights or remedies
that Landlord may have and shall not be deemed a waiver of any subsequent breach
or default in the terms, conditions or covenants herein contained, and any such
failure shall not be construed as creating a custom of Landlord's accepting
other than strict performance or as modifying in any way the terms, covenants or
conditions of this Lease. No breach by Tenant of a covenant or condition of this
Lease shall be deemed to have been waived by Landlord unless such waiver is in
writing signed by Landlord. No act or thing done by Landlord or Landlord's
agents shall be deemed an acceptance of surrender of the leased premises and no
agreement to accept such surrender shall be valid unless in writing signed by
Landlord. In addition to any and all other remedies available to Landlord,
Landlord may obtain an injunction to restrain any breach or threatened breach of
any term, covenant or condition of this Lease. The rights and remedies of
Landlord under this Lease or under any specific section, subsection or clause
hereof shall be cumulative and in addition to any and all other rights and
remedies which Landlord has or may have elsewhere under this Lease or at law or
equity, whether or not such section, subsection or clause expressly so states.
Nothing contained in this Lease shall be construed to confer upon any person or
entity other than Landlord or Tenant any rights, benefits or causes of action,
except to the extent specifically otherwise provided in this Lease and except to
the extent provided for the benefit of any mortgagee, deed-of-trust beneficiary,
ground lessor or trustee for the Development.
SECTION 27.2. ENTIRE AGREEMENT. The exhibits and riders, if any,
attached hereto form a part of this Lease and shall be given full force and
effect, as fully as if set forth at length herein. This Lease and said exhibits
and riders, if any, so attached hereto and forming a part hereof, set forth all
the covenants, promises, agreements, conditions and understandings between
Landlord and Tenant concerning the leased premises, and there are no covenants,
promises, agreements, conditions or understandings, either oral or written,
between them other
43
than as are herein set forth. Tenant has not relied upon any
representation of Landlord or its agents, other than any items contained in this
Lease, as an inducement to enter into this Lease. No alteration, amendment,
change or addition to this Lease shall be binding upon Landlord or Tenant unless
reduced to writing and signed by each party.
SECTION 27.3. INTERPRETATION AND USE OF PRONOUNS. Nothing contained
herein shall be deemed or construed by the parties hereto, nor by any third
party, as creating the relationship of principal and agent or of partnership or
of joint venture between the parties hereto, it being understood and agreed that
neither the method of computation of rent, nor any other provision contained
herein, nor any acts of the parties herein shall be deemed to create any
relationship between the parties hereto other than the relationship of Landlord
and Tenant. Whenever herein the singular number is used the same shall include
the plural, and the masculine gender shall include the feminine and neuter
genders.
SECTION 27.4. DELAYS. In the event that either party hereto shall be
delayed in the performance of its initial construction or maintenance and/or
repair obligations by reason of strikes, lockouts, labor troubles, inability to
procure materials or shall at any time be so delayed by reason of failure of
power, restrictive governmental laws or reasons of a similar nature not the
fault of the party delayed in performing work or doing acts required under the
terms of this Lease, then performance of such act shall be excused for the
period of the delay and the period for the performance of any such act shall be
extended for a period equivalent to the period of such delay. Nothing contained
in this Section shall excuse Tenant from the continuous operation of its
business in the leased premises in accordance with the provisions of Sections
7.1 and 7.2 hereof. The provisions of this Section 27.4 shall not operate to
delay the commencement of the term of this Lease or to excuse Tenant from
payment of minimum rent, percentage rent or any other payments required by the
terms of this Lease; provided, however, that the obligation of Tenant to open
for business pursuant to Section 1.3 hereof may be delayed pursuant to the
provisions of this Section 27.4. Further, Landlord's reduction of heat, light,
air conditioning, or any other services whatsoever to the Development because of
any similar or dissimilar event constituting a cause for excusable delay
hereunder shall not relieve Tenant from its obligations under Article VII of
this Lease.
SECTION 27.5. NOTICES. Unless specifically stated to the contrary in
this Lease, any notice, demand, request or other instrument which may be or is
required to be given by Tenant under this Lease or by law shall be sent by
United States certified mail, return receipt requested, postage prepaid, and
shall be deemed to have been given as of the third day following receipt of same
by Landlord; or, if required to be given by Landlord under this Lease or by law,
such notice, demand, request or other instrument may be sent by certified mail,
by regular mail, by overnight courier (using Federal Express, United Parcel
Service, or a similar reputable courier service), by personal delivery or by
other comparably reliable means, and shall be deemed to have been given upon the
date of mailing or the date of other submission to Tenant, whichever of such
dates shall be the first to occur; and shall be addressed (a) if to Landlord, at
the address set forth for Landlord on Page D1 of this Lease or at such other
address as Landlord may designate by written notice, Attention Lease
Administration, together with copies thereof to such other parties designated by
Landlord, and (b) if to Tenant, at the leased premises or the address set forth
for Tenant on Page D1 of this Lease, or such other address as Tenant shall
designate by
44
written notice. All notices given from Landlord to Tenant,
including, without limitation, notices of default and/or termination of Tenant's
interests under this Lease, may be given by Landlord's attorney acting as agent
on behalf of Landlord.
SECTION 27.6. CAPTIONS AND SECTION NUMBERS. The captions, section
numbers, article numbers, and index appearing in this Lease are inserted only as
a matter of convenience and in no way define, limit, construe, or describe the
scope or intent of such sections or articles of this Lease, nor in any way
affect this Lease.
SECTION 27.7. BROKER'S COMMISSION. Each party represents and warrants
to the other party that the warrantor has dealt with no brokers and that there
are no claims for brokerage commissions or finder's fees, nor will there be any
such claim, arising from any act or omission of the warrantor in connection with
this Lease, and the warrantor agrees to indemnify the other party and hold it
harmless from all liabilities arising from any such claim, including, without
limitation, the cost of attorneys' fees in connection therewith. Such agreement
shall survive the termination of this Lease.
SECTION 27.8. RECORDING. Tenant shall not record this Lease or any
memorandum, affidavit or other notice of this Lease.
SECTION 27.9. FURNISHING OF FINANCIAL STATEMENTS. Upon the execution of
this Lease by Tenant and upon each succeeding anniversary date of the date of
this Lease, or at any earlier time upon Landlord's written request, Tenant shall
promptly furnish Landlord, from time to time, with financial statements
(including, without limitation, operating statements including an annual profit
and loss statement for the individual store unit covered by this Lease)
reflecting Tenant's current financial condition, and written evidence of then
current ownership of managing and controlling interests in Tenant and in any
entities which directly or indirectly control or manage Tenant (which written
evidence shall include, without limitation, the names of all existing managers,
shareholders and partners, as applicable, of record and their respective
management/ownership interests as of the date of such writing), which financial
statements and written evidence shall be certified as being true and correct by
the chief financial officer or partner and by the chief executive officer or
partner of Tenant.
SECTION 27.10. LANDLORD'S USE OF COMMON AREAS. Landlord reserves the
right, from time to time, to utilize portions of the common areas for carnival
type shows, rides and entertainment, outdoor shows, displays, automobile and
other product shows, the leasing of permanent and temporary kiosks, or such
other uses which in Landlord's judgment tend to attract the public. Further,
Landlord reserves the right to utilize the lighting standards and other areas in
the parking facilities for advertising purposes. Any revenues derived by
Landlord from the use of common areas, whether from usage fees or otherwise,
shall not be applied as a deduction against any cost or expense required to be
paid by Tenant under this Lease.
SECTION 27.11. TRANSFER OF LANDLORD'S INTEREST. In the event of any
transfer or transfers of Landlord's interest in the premises, including a
so-called sale-leaseback, the transferor shall be automatically relieved of any
and all obligations on the part of Landlord accruing from and after the date of
such transfer, provided that (a) the interest of the transferor,
45
as Landlord, in any funds then in the hands of Landlord in which Tenant has an
interest shall be turned over, subject to such interest, to the then transferee;
and (b) notice of such sale, transfer or lease shall be delivered to Tenant as
required by law. Upon the termination of any such lease in a sale-leaseback
transaction prior to termination of this Lease, the former lessee thereunder
shall become and remain liable as Landlord hereunder until a further transfer.
No holder of a mortgage or deed of trust, or underlying lessor on an underlying
lease, to which this Lease is or may be subordinate, and no lessor under a
so-called sale-leaseback shall be responsible in connection with the security
deposited hereunder, unless such mortgagee, holder of such deed of trust,
underlying lessor or lessor shall have actually received the security deposited
hereunder.
SECTION 27.12. FLOOR AREA. (a) The term "floor area" as used in this
Lease means, with respect to any leasable area in the Development or in the
entertainment and retail center, the aggregate number of square feet of floor
space of all floor levels therein, including any mezzanine space (to the extent
reflected as floor area in the applicable leases), measured from (i) the outside
faces of all perimeter walls thereof other than any party wall separating such
premises from other leasable premises, (ii) the center line of any such party
wall, (iii) the outside face of any interior wall, and (iv) the building and/or
leaseline adjacent to any entrance to such premises. In the event Landlord
determines that the square foot area of the leased premises is at variance with
the square foot area stated in this Lease, Landlord may, at its option, adjust
the floor area of the leased premises and make proportional adjustments in
minimum rent, percentage rent, and promotional/Merchants' Association charges,
and other charges to Tenant under this Lease.
(b) For the purpose of this Lease, in determining the gross
leasable floor area or the gross leased and occupied floor area of the
Development, there shall be excluded therefrom, at the sole option of Landlord,
the leasable area of 15,000 square feet or more occupied by a single entity
(which, for purposes of this Lease, shall be defined as a Major Store), the
floor area of any premises leased for the operation of a post-office type or
packaging or delivery facility or other public/consumer-service or governmental
facility, the floor area of any space without direct customer access from the
mall, and the total floor area utilized by Landlord for the operation of a
skating rink or other recreational area, child care center, community room,
library, project offices, and related rooms, common areas and project areas,
which shall be deemed amenities to the Development. The term "gross leased and
occupied floor area" shall include only such areas as are leased and occupied by
tenants subsequent to the dates of commencement of the terms of their respective
leases. Areas shall not be considered occupied to the extent that Landlord shall
not be receiving full proportionate share contributions for the same. No
deduction or exclusion from floor area shall be made by reason of columns,
ducts, stairs, elevators, escalators, shafts, or other interior construction or
equipment.
SECTION 27.13. INTEREST ON PAST DUE OBLIGATIONS. Any amount due from
Tenant to Landlord hereunder which is not paid when due (including, without
limitation, amounts due as reimbursement to Landlord for costs incurred by
Landlord in performing obligations of Tenant hereunder upon Tenant's failure to
so perform) shall bear interest at the highest rate then allowed under the usury
laws of the State from the date due until paid, unless otherwise specifically
provided herein, but the payment of such interest shall not excuse or cure any
default by Tenant under this Lease.
46
SECTION 27.14. LIABILITY OF LANDLORD. If Landlord shall fail to perform
any covenant, term or condition of this Lease upon Landlord's part to be
performed, and if as a consequence of such default Tenant shall recover a money
judgment against Landlord, such judgment shall be satisfied only out of the
proceeds of sale received upon execution of such judgment and levied thereon
against the right, title and interest of Landlord in the Development and out of
net income from such property received by Landlord, or out of the consideration
received by Landlord from the sale or other disposition of all or any part of
Landlord's right, title and interest in the Development, subject, nevertheless,
to the rights of Landlord's mortgage, and neither Landlord, nor the individuals
or entities which constitute the partners of the partnership which is the
beneficiary of the Trust of which Landlord is Trustee (if applicable), shall be
liable for any deficiency. If Landlord is identified in this Lease as a Trustee,
Tenant hereby recognizes that Landlord is executing this Lease as Trustee under
an express trust, and it is expressly understood and agreed by and between the
parties hereto, anything herein to the contrary notwithstanding, that each and
all of the representations, covenants, undertakings and agreements herein made
on the part of the Landlord while in form purporting (except as herein otherwise
expressed) to be the representations, covenants, undertakings, and agreements of
the Landlord are nevertheless each and every one of them, made and intended not
as personal representations, covenants, undertakings and agreements by the
Landlord or for the purpose or with the intention of binding said Landlord
personally but are made and intended for the purpose of binding only that
portion of the trust property specifically leased hereunder, and this Lease is
executed and delivered by said Landlord not in its own right, but solely in the
exercise of the powers conferred upon it as such Trustee; that no duty shall
rest upon Landlord to sequester the trust estate or the rents, issues and
profits arising therefrom, or the proceeds arising from any sale or other
disposition thereof; and that no personal liability or personal responsibility
is assumed by nor shall at any time be asserted or enforceable against Trustee,
or any successor trustee, or any of the beneficiaries under said trust, on
account of this Lease or on account of any representation, covenant, undertaking
or agreement of the said Landlord in this Lease contained, either expressed or
implied, all such personal liability, if any, being expressly waived and
released by the Tenant herein and by all persons claiming by, through or under
said Tenant.
SECTION 27.15. ACCORD AND SATISFACTION. Payment by Tenant or receipt by
Landlord of a lesser amount than the rent or other charges herein stipulated may
be, at Landlord's sole option, deemed to be on account of the earliest due
stipulated rent or other charges, or deemed to be on account of rent owing for
the current period only, notwithstanding any instructions by or on behalf of
Tenant to the contrary, which instructions shall be null and void, and no
endorsement or statement on any check or any letter accompanying any check
payment as rent or other charges shall be deemed an accord and satisfaction, and
Landlord shall accept such check or payment without prejudice to Landlord's
right to recover the balance of such rent or other charges or pursue any other
remedy in this Lease or in law or in equity against Tenant.
SECTION 27.16. EXECUTION OF LEASE; NO OPTION. The submission of this
Lease to Tenant shall be for examination purposes only, and does not and shall
not constitute a reservation of or option for Tenant to lease, or otherwise
create any interest of Tenant in the leased premises or any other premises
situated in the Development. Execution of this Lease by Tenant shall be
irrevocable. The return to Landlord of Tenant-executed copies of this Lease
47
shall not be binding upon Landlord, notwithstanding any preparation or
anticipatory reliance or expenditures by Tenant or any time interval, until
Landlord has in fact executed and actually delivered a fully-executed copy of
this Lease to Tenant.
SECTION 27.17. GOVERNING LAW. This Lease shall be governed by and
construed in accordance with the laws of the State. If any provision of this
Lease or the application thereof to any person or circumstances shall, to any
extent, be invalid or unenforceable, the remainder of this Lease shall not be
affected thereby and each remaining provision of the Lease shall be valid and
enforceable to the full extent permitted by the law. Tenant appoints the
following persons at the following locations as agent to receive service of
process, writs, notices, summonses, or other legal documents in any suit, action
or proceeding which Landlord may commence against Tenant: (a) the person in
charge at the leased premises, or (b) any officer, partner or other principal of
Tenant, or any person in charge, at the Tenant's address as set forth on Page Dl
of this Lease. Where permitted by law or local court rule, Tenant consents to
service of such process by United States mail, in the manner specified in the
applicable law or court rule.
SECTION 27.18. SPECIFIC PERFORMANCE OF LANDLORD'S RIGHTS. Landlord
shall have the right to obtain specific performance of any and all of the
covenants or obligations of Tenant under this Lease, and nothing contained in
this Lease shall be construed as or shall have the effect of abridging such
right.
SECTION 27.19. CERTAIN RULES OF CONSTRUCTION. Time is of the essence in
this Lease. Notwithstanding the fact that certain references elsewhere in this
Lease to acts required to be performed by Tenant hereunder omit to state that
such acts shall be performed at Tenant's sole cost and expense, unless the
context clearly implies to the contrary, each and every act to be performed or
obligations to be fulfilled by Tenant pursuant to this Lease shall be performed
or fulfilled at Tenant's sole cost and expense. Any breach or default by Tenant
of its obligations under this Lease shall be deemed material. Tenant shall be
fully responsible and liable for the observance and compliance by
concessionaires with all the terms and conditions of this Lease, which terms and
conditions shall be applicable to concessionaires as fully as if such
concessionaires were the Tenant hereunder; any failure by a concessionaire fully
to observe and comply with the terms and conditions of this Lease shall
constitute a default hereunder by Tenant. Nothing contained in the preceding
sentence shall constitute a consent by Landlord to any concession, subletting or
other arrangement proscribed by Section 14.1. All provisions of this Lease have
been freely negotiated by and between the parties.
SECTION 27.20. INDEX. The term "Index" as used in this Lease shall be
the "Consumer Price Index for All Urban Consumers (1982-84 = 100), U.S. City
Average, All Items," as published by the Bureau of Labor Statistics of the
United States Department of Labor. If the Index is not published by the Bureau
of Labor Statistics or another governmental agency at any time during the term
of this Lease, or if the Index is otherwise re-named, discontinued or
superseded, then the calculations based on the Index shall be made using the
most closely comparable statistics on the purchasing power of the consumer
dollar as published by a responsible financial authority and selected by
Landlord.
48
SECTION 27.21. SURVIVAL; NONDISCLOSURE; FREE ACT. The obligations of
Tenant for payment of rent and charges under this Lease shall survive the
expiration or earlier termination of the term of this Lease. Tenant covenants
that neither Tenant nor any attorney or other representative for Tenant shall
disclose the contents of this Lease to any other person or entity. Tenant shall
be fully responsible for the actions of its attorneys and representatives. By
its execution of this Lease, Tenant acknowledges and agrees that it has read
this Lease, understands the contents hereof, and is signing this Lease as its
own free act and deed, and as the free act and deed of the representatives
signing on Tenant's behalf, without any persuasion or coercion by any person or
entity, and with full advice of counsel.
49
EXHIBIT "A"
SITE PLAN
(DIAGRAM)
EXHIBIT "A"
PREMISES FLOOR PLAN
(DIAGRAM)
EXHIBIT "B"
CONSTRUCTION AGREEMENT
THIS CONSTRUCTION AGREEMENT ("Construction Agreement") is entered into
as of this _______ day of _____________________, _____, by and between ORIX PLC
HOUSTON VENTURE, an Illinois general partnership ("Landlord"), and HOLOWORLD,
INC., a Delaware corporation, doing business as HOLOWORLD ("Tenant").
RECITALS:
A. Landlord and Tenant have entered into a lease (the "Lease")
dated as of the date hereof, covering certain premises (the "leased premises")
more particularly described in the Lease. This Construction Agreement is
attached to the Lease as Exhibit "B". The Lease is hereby incorporated into this
Construction Agreement by this reference. Capitalized terms not defined in this
Construction Agreement shall have the meanings given to such terms in the Lease.
B. In consideration of the mutual covenants contained in the
Lease and this Construction Agreement, Landlord and Tenant hereby agree as
follows:
1. Building Improvements. As used in this Construction
Agreement and in the Lease, "Building Improvements" shall mean the shell
improvements comprising approximately three hundred twenty-five thousand
(325,000) square feet of area in a single story building which square footage
shall be built in accordance with the shell building specifications attached
hereto as Exhibit "1" (the "Building"), together with utility services for the
Building and all other improvements and facilities appurtenant to the Building
as described on Exhibit "1" as well as all work of restoration for any portions
of the Common Area of the entertainment and retail center previously installed
by Landlord, if any, which is damaged, altered or affected by the construction
and installation of such items (collectively, "Landlord's Work").
2. Intentionally Omitted.
3. Tenant's Work and Tenant's FF&E. As used in this
Construction Agreement and in the Lease, "Tenant's Work" shall mean all
improvements to the Building beyond the scope of the Building Improvements shell
specifications set forth in Exhibit "1" hereto, including, without limitation,
the work and improvements described on Exhibit "2" and Exhibit "3" attached
hereto. Tenant's Work and the Building Improvements are sometimes referred to
herein collectively as the "Improvements". Tenant's Work is to be completed by
Tenant in accordance with the terms of this Construction Agreement and the
Lease. As used herein, "Tenant's FF&E" shall mean all furniture, trade fixtures,
equipment and personal property such as, without limitation, movable partitions,
shelving, furniture, displays, kitchen equipment, telephone and computer
equipment and other equipment and personal property associated with the
operation of Tenant's business from the leased premises.
4. Completion Schedule. Attached hereto as Exhibit "4" is a
schedule (the "Work Schedule") which sets forth a time table for the design and
construction by Landlord of the Building Improvements, as well as for the design
and installation by Tenant of Tenant's Work
Page 1
EXHIBIT "B"
and the installation by Tenant of Tenant's FF&E. The Work Schedule includes
dates certain for selection of the "Contractor" and for the establishment of the
final pricing of Tenant's Work. Such dates shall apply subject only to the
parties' agreements set forth in the Lease and in this Construction Agreement to
the contrary.
5. Intentionally Omitted.
6. Improvement Plans.
(a) Approval of Tenant's Architect/Space Planner. In
accordance with the Work Schedule, Tenant shall submit to Landlord for
Landlord's review and approval, Tenant's proposed architect or space planner.
Within the applicable time period set forth in the Work Schedule, Landlord shall
approve or reasonably disapprove with specific objections, Tenant's
architect/space planner. If Landlord shall reasonably disapprove Tenant's
architect/space planner, the parties shall meet and attempt in good faith and
with due diligence to resolve Landlord's objections until an architect/space
planner satisfactory to both Landlord and Tenant have been selected..
(b) Preliminary Plans. In accordance with the Work
Schedule, Tenant shall cause its architect/space planner to prepare and submit
to Landlord two (2) copies of preliminary plans and specifications for the
Tenant's Work and detailed description of Tenant's FF&E (the "Preliminary
Plans"). The Preliminary Plans shall conform to the building shell
specifications attached hereto as Exhibit "1" and shall include the proposed
location of Tenant's signs, the designation of materials, colors and elevations,
the designation of the type and quality of Tenant's Work and a preliminary
estimate of the cost of purchasing, constructing and installing Tenant's Work
and Tenant's FF&E. The Preliminary Plans shall reasonably conform to the
standards of quality and design currently established by Landlord for the
entertainment and retail center. Within the applicable time period set forth in
the Work Schedule following Landlord's receipt of the Preliminary Plans,
Landlord shall review and approve or reasonably disapprove the Preliminary
Plans. Landlord's approval shall not be unreasonably withheld. If Landlord
disapproves the Preliminary Plans in whole or in part, Landlord shall inform
Tenant of the reasons for such disapproval in writing and Tenant shall have the
applicable time period set forth in the Work Schedule following Landlord's
disapproval within which to revise and resubmit the Preliminary Plans. Following
Tenant's revision and resubmittal to Landlord of the Preliminary Plans, Landlord
shall have up to twelve (12) working days to review and either approve or
disapprove the revised Preliminary Plans. Landlord's failure to approve the
Preliminary Plans within such twelve (12) working day period shall constitute
Landlord's disapproval thereof. In accordance with the Work Schedule, the
parties shall repeat the review and approval procedure described herein until
they shall mutually agree on the Preliminary Plans. If the parties are not able
to agree upon the Preliminary Plans within the timeframe contained in the Work
Schedule, Landlord shall have the right to terminate the Lease upon written
notice to Tenant.
(c) Submittal of Preliminary Plans. In accordance with
the Work Schedule, promptly following approval of the Preliminary Plans by
Landlord (but in no event later than five (5) working days thereafter), Tenant
Page 2
EXHIBIT "B"
shall submit the Preliminary Plans to the Planning Department of the City of
Houston ("Planning Department") for review and approval. Tenant shall also
promptly prepare and submit to the Planning Department any studies, drawings and
other documents or items and shall prepare and submit any revisions to the
Preliminary Plans which may be required by the Planning Department in order to
obtain the Planning Department's approval thereto; provided, however, that any
revisions to the Preliminary Plans submitted by Tenant shall be subject to
Landlord's approval, which approval Landlord shall not unreasonably withhold. In
connection therewith, Tenant shall deliver to Landlord any proposed revision to
the Preliminary Plans prior to Tenant's submission of same for approval by the
Planning Department. Within twelve (12) working days after receipt of any such
proposed revision, Landlord shall either approve same or deliver to Tenant its
specific objections thereto together with their proposed solution to each
objection.
(d) Final Plans. In accordance with the Work Schedule,
following approval of the Preliminary Plans by Landlord and the Planning
Department, Tenant shall cause its architect/space planner to prepare and
deliver to Landlord two (2) copies of final working drawings and specifications
for the Improvements based upon and conforming in all respects to the approved
Preliminary Plans (the "Final Plans"). Within the applicable time period set
forth in the Work Schedule following Landlord's receipt of the Final Plans,
Landlord shall approve or reasonably disapprove the Final Plans; provided,
however, Landlord shall have no right to disapprove the Final Plans to the
extent they are consistent with the Preliminary Plans approved by Landlord.
Landlord's failure to disapprove the Final Plans within such twelve (12) working
day period shall constitute Landlord's approval thereof.
(e) Plan Approval. If Landlord objects to the
Preliminary Plans and/or the Final Plans or to any aspect thereof, Landlord and
Tenant's design and/or construction representatives shall, promptly after
Tenant's receipt of Landlord's notice of objections, meet and attempt in good
faith to resolve Landlord's objections. If the parties are unable to resolve
Landlord's objections to the Preliminary Plans and/or the Final Plans within
thirty (30) days after Tenant has received notice of Landlord's objections,
Landlord shall have the right to terminate this Lease effective as of the date
of Landlord's delivery to Tenant of notice of such termination, in which event,
neither party shall have any further obligation or liability to the other.
Landlord may provide Tenant with Landlord's approvals through Landlord's
architect or designated construction representative.
(f) Submittal of Final Plans. Promptly following
Landlord's written approval of the Final Plans, Tenant shall (i) submit the
Final Plans to the Planning Department and all other appropriate governmental
agencies and prepare and submit to the same any applications, documents,
studies, reports or other items necessary to obtain all approvals and permits
required by law for the construction of the Improvements including, without
limitation, a building permit for Tenant's Work (collectively, "Building
Permits"); (ii) in all other respects diligently pursue the obtaining of
Building Permits; (iii) pay all necessary fees incidental to Tenant's Work and
Tenant FF&E (subject to reimbursement out of Landlord's Contribution for
Tenant's Work, if any, as described below); and (iv) furnish Landlord such
evidence thereof as is satisfactory to Landlord. Tenant agrees to diligently and
in good faith process any and all applications required from the city, county
and any other governmental authority necessary to obtain Building Permits. If
any of the Building Permits have not been obtained on or before the date
occurring one hundred twenty (120) days after possession of the leased premises
is to be delivered to Tenant,
Page 3
EXHIBIT "B"
Landlord, at its option, may (i) extend the time for Tenant to obtain such
permits and approvals for a period of thirty (30) days, or (ii) terminate this
Lease, in which event neither party shall have any further liability hereunder.
If, after such thirty (30) day extension, despite Tenant's good faith and
diligent efforts to obtain all Building Permits, Tenant has still not obtained
all such permits and approvals, Landlord, at its option, may (a) extend the time
for Tenant to obtain such permits and approvals for an additional period of
thirty (30) days, or (b) terminate this Lease, in which event neither party
shall have any further liability hereunder. Such process shall continue until
the earlier to occur of Tenant's obtaining of all Building Permits or the
termination of this Lease.
(g) Selection of Tenant's Contractors. In accordance
with the Work Schedule and concurrently with the submittal of the Final Plans to
Landlord and Tenant, Tenant shall deliver to Landlord for Landlord's approval,
which approval shall not be unreasonably withheld, the name of the contractor
Tenant intends to employ for the construction of Tenant's Work (thereafter, the
"Tenant Contractor").
(h) Pricing of the Tenant's Work. In accordance with
the Work Schedule, promptly following selection of the Tenant Contractor, Tenant
shall cause the Tenant Contractor to prepare for Landlord's review and approval,
a final pricing ("Final Pricing") for the costs of Tenant's Work. Landlord's
approval of the Final Pricing shall be limited to Tenant's Work items set forth
in Exhibit "3" hereto. The Final Pricing shall take into account any
modifications which may be required to reflect changes to the Preliminary Plans
and/or Final Plans required by the appropriate governmental agencies. The Final
Pricing shall include a detailed breakdown, by trade, of all aspects of Tenant's
Work and Tenant FF&E. After final approval of the Final Plans and the Final
Pricing, any further material changes to the Final Plans shall require the prior
written approval of both Landlord and Tenant, which approval shall not be
unreasonably withheld or delayed.
7. Construction of Building Improvements. In accordance with
the Work Schedule, Landlord shall enter into a construction contract (the
"Construction Contract") with a contractor selected by Landlord ("Landlord
Contractor") for the construction of the Building Improvements in accordance
with the Final Plans. Landlord agrees to use diligent efforts to cause
construction of the Building Improvements to commence promptly following the
issuance of the Building Permits for the Building Improvements and to supervise
the completion of Landlord's Work and shall use diligent efforts to secure
completion of the Building Improvements in a good and workmanlike manner in
accordance with the Final Plans, the Construction Contract and the Work
Schedule. Upon "Substantial Completion" of Landlord's Work as defined in
Paragraph 13 below, Landlord will turn over possession of the leased premises to
Tenant so that Tenant may construct Tenant's Work.
8. Payment of the Costs of Landlord's Work. Landlord shall pay
for all Construction Costs for the Building Improvements per the specifications
attached hereto as Exhibit "1." If, as a result of any changes or substitutions
to Exhihit "1" or the Final Plans requested by Tenant, the Construction Costs
for the Building Improvements are increased, any such excess costs shall be paid
for out of and deducted from Landlord's TI Contribution, if any, described in
Paragraph 11(b) below.
Page 4
EXHIBIT "B"
9. Construction and Installation of Tenant's Work. In
accordance with the Work Schedule, Tenant shall enter into a construction
contract (the "TI Construction Contract") with the Tenant Contractor, on a form
and in substance reasonably acceptable to Landlord and Tenant, for the
installation of Tenant's Work in accordance with the Final Plans. The TI
Construction Contract shall contain a provision specifying that any change
orders are subject to the prior written approval of Landlord and Tenant, which
approval neither party will unreasonably withhold. Tenant shall supervise the
construction of such work and shall use diligent efforts to secure construction
of Tenant's Work in a good and workmanlike manner in accordance with the Final
Plans, the TI Construction Contract and the Work Schedule. Landlord shall have
the right to approve all change order requests; provided Landlord responds to a
change order request within ten (10) business days of request. Tenant agrees to
use diligent efforts to cause construction of Tenant's work to commence promptly
following the issuance of Building Permits for Tenant's Work and delivery to
Tenant of possession of the leased premises with Landlord's Work substantially
completed. Notwithstanding the foregoing, Tenant agrees to complete construction
of Tenant's Work within one hundred sixty (160) days
10. Installation of Tenant's FF&E. Following completion or
concurrently with the construction of Tenant's Work and in accordance with the
Work Schedule, Tenant shall cause the leased premises to be fully equipped with
Tenant's FF&E in accordance with the Final Plans at Tenant's sole cost and
expense.
11. Payment of the Costs of Tenant's Work.
-------------------------------------
(a) Construction Costs. For purposes of this Construction
Agreement, "TI Costs" shall mean the cost of construction of Tenant's Work
incurred after the date hereof, including, without limitation, the following:
(i) The cost of preparing the Preliminary
Plans and the Final Plans, including mechanical, electrical, plumbing
and structural drawings and all other aspects necessary to complete
such plans, and the Contractor's construction fees under the approved
Construction Contract;
(ii) Tenant's architectural and engineering fees;
(iii) The payment of all permit and license fees
relating to construction of Tenant's Work;
(iv) Construction of Tenant's Work incurred after
the date hereof, including, without limitation, the following:
(1) Installation within the leased
premises of all floors, walls, ceiling, partitioning, doors,
floor coverings, finishes, ceilings, wall coverings and
painting, millwork and similar items;
(2) All electrical wiring, lighting
fixtures, outlets and switches, and other electrical work to
be installed within the leased premises;
Page 5
EXHIBIT "B"
(3) The furnishing and installation of the
heating, ventilation and air conditioning systems within the
leased premises;
(4) Any additional Tenant requirements
including, but not limited to, odor control filtration
systems, special heating, ventilation and air conditioning,
noise or vibration control or other special systems;
(5) All fire and life safety control
systems such as fire walls, sprinklers, halon, fire alarms,
including piping, wiring and accessories installed within the
leased premises, including any and all third-party monitoring
thereof;
(6) All plumbing, fixtures, pipes, grease
traps, clarifiers and accessories to be installed within the
leased premises; and
(7) Any other improvements provided they are
affixed on or about the leased premises and are agreed to by
Landlord.
(b) Tenant Allowance. Landlord hereby agrees to pay to
Tenant the amount set forth in the Data Sheet as the Tenant Allowance which
shall be applied only towards those TI Costs as set forth in Exhibit "2" and
Exhibit "3" hereto (the "Tenant Allowance"). Tenant acknowledges that the Tenant
Allowance, as specifically set forth in Exhibit "3" attached hereto, shall be
applied only to "hard" TI Costs, and shall not be applied to any "soft" TI
Costs. Any unused portion of the Tenant Allowance will not be disbursed to
Tenant or otherwise made available to Tenant on completion of the work, but
shall be retained by Landlord. Any TI Costs in excess of the Tenant Allowance
shall be the sole responsibility of Tenant ("Tenant's TI Contribution"), without
any right to reimbursement from Landlord for Tenant's TI Contribution.
(c) Disbursement of the Tenant Allowance. Provided
Tenant is not in default under the Lease or this Construction Agreement,
Landlord shall disburse the Tenant Allowance to Tenant to reimburse Tenant for
the actual TI Costs which Tenant incurs in connection with the construction of
Tenant's Work in accordance with the following:
(i) Twenty percent (20%) of the Tenant
Allowance shall be disbursed to Tenant when Landlord shall have
received "Evidence of Completion and Payment" as to thirty percent
(30%) of Tenant's Work having been completed and paid for by Tenant as
described hereinbelow;
(ii) An additional twenty percent (20%) of the
Tenant Allowance shall be disbursed to Tenant when Landlord shall have
received "Evidence of Completion and Payment" as to fifty percent (50%)
of Tenant's Work having been completed and paid for by Tenant as
described hereinbelow;
(iii) An additional twenty-five percent (25%) of
the Tenant Allowance shall be disbursed to Tenant when Landlord shall
have received "Evidence of Completion and Payment" as to seventy-five
percent (75%) of Tenant's Work having been completed and paid for by
Tenant as described hereinbelow;
Page 6
EXHIBIT "B"
(iv) An additional fifteen percent (15%) of the
Tenant Allowance shall be disbursed to Tenant when Landlord shall have
received "Evidence of Completion and Payment" as to ninety percent
(90%) of Tenant's Work having been completed and paid for by Tenant as
described hereinbelow;
(v) The final twenty percent (20%) of the
Tenant Allowance shall be disbursed to Tenant when Landlord shall have
received "Evidence of Completion and Payment" as to one hundred percent
(100%) of Tenant's Work having been completed and paid for by Tenant as
described hereinbelow and satisfaction of the items described in
subparagraph (vii) below;
(vi) As to each phase of completion of Tenant's
Work described in subparagraphs (i) through (v) above, the appropriate
portion of the Tenant Allowance shall be disbursed to Tenant only when
Landlord has received the following "Evidence of Completion and
Payment":
(A) Tenant has delivered to Landlord a
draw request ("Draw Request") in the form of AIA Document G702
and G703 with respect to the Improvements specifying that the
requisite portion of Tenant's Work have been completed,
together with invoices, receipts and bills evidencing the
costs and expenses set forth in such Draw Request and evidence
of payment by Tenant for all costs which are payable in
connection with such Tenant's Work covered by the Draw
Request. The Draw Request shall constitute a representation by
Tenant that Tenant's Work identified therein has been
completed in a good and workmanlike manner and in accordance
with the Final Plans and the Work Schedule and has been paid
for;
(B) The architect for the Improvements
has certified to Landlord that Tenant's Work have been
completed to the level indicated in the Draw Request in
accordance with the Final Plans;
(C) Tenant has delivered to Landlord
such other evidence of Tenant's payment of the Contractor and
subcontractors for the portions of Tenant's Work covered by
the Draw Request and the absence of any liens generated by
such portions of Tenant's Work as may reasonably be required
by Landlord (i.e., either lien releases or release bond(s));
and
(D) Landlord or Landlord's architect
or construction representative has inspected Tenant's Work and
determined that the portion of Tenant's Work covered by the
Draw Request has been completed in a good and workmanlike
manner.
(vii) The final disbursement of the balance of
the Tenant Allowance shall be disbursed to Tenant only when Landlord
has received Evidence of Completion and Payment as to all of Tenant's
Work as provided hereinabove and the following conditions have been
satisfied:
Page 7
EXHIBIT "B"
(A) Thirty-five (35) days shall have
elapsed following the filing of a valid notice of completion
by Tenant for Tenant's Work;
(B) A certificate of occupancy for
Tenant's Work and the leased premises has been issued by the
appropriate governmental body;
(C) Tenant shall have delivered to
Landlord one set of "As Built" plans for the Improvements as
prepared by Tenant's architect;
(D) Tenant shall have accepted
possession of the leased premises and opened for business in
the leased premises in accordance with the provisions of the
Lease;
(E) The satisfaction of any other
reasonable requirements or conditions which may be required or
imposed by Landlord's lender with respect to the construction
of Tenant's Work; and
(F) Tenant shall have delivered to
Landlord unconditional lien releases or release bond(s) as to
all of the work of improvement.
(viii) All construction costs in excess of
Landlord's TI Contribution shall be paid by Tenant.
(d) Books and Records. At its option, Landlord, at any
time within two (2) years after Tenant takes possession of the leased premises
and upon at least five (5) business days prior written notice to Tenant, may
cause an audit to be made of Tenant's books and records relating to Tenant's
expenditures in connection with the construction of the Improvements. Tenant
shall maintain complete and accurate books and records in accordance with
generally accepted accounting principles of these expenditures for at least two
(2) years. Tenant shall make available to Landlord's auditor within three (3)
business days following Landlord's notice requiring the audit, all books and
records maintained by Tenant pertaining to the construction and completion of
the Improvements. In addition to all other remedies which Landlord may have
pursuant to the Lease, Landlord may recover from Tenant the reasonable cost of
its audit if the audit discloses that Tenant incorrectly reported to Landlord
expenditures in a material amount which were not in fact made or incorrectly
reported a material amount of any expenditure or the aggregate expenditures.
12. Miscellaneous Construction Covenants.
------------------------------------
(a) Compliance with Laws. Landlord will cause the
Landlord Contractor to construct the Building Improvements in a safe and lawful
manner and in substantial compliance with the Building Permits. Copies of all
filed documents and all permits and licenses shall be provided to Landlord and
Tenant.
(b) Coordination with Lease. Nothing herein contained
shall be construed as (i) constituting Tenant as Landlord's agent for any
purpose whatsoever, or (ii) a waiver by Landlord or Tenant of any of the terms
or provisions of the Lease. Any default by either party
Page 8
EXHIBIT "B"
with respect to any portion of this Construction Agreement, shall be deemed a
breach of the Lease for which Landlord and Tenant shall have all the rights and
remedies as in the case of a breach of the Lease by the other party.
(c) Tenant's Cooperation. Each party agrees to
cooperate and to cause its employees, agents and contractors to cooperate with
the other party, its employees, agents and contractors to coordinate any work
being performed within the leased premises by the first party, its employees,
agents and contractors so as to avoid interference with the completion of the
Work of the other party.
(d) No Liens. At no time shall Tenant do or permit
anything to be done whereby the Improvements or the leased premises may be
subjected to any mechanic's, materialmen's or other liens or encumbrances
arising out of the construction of the Improvements, and if any mechanic or
materialmen liens are filed against the Improvements or the leased premises as a
result of or in connection with the construction of the Improvements, Tenant
shall immediately cause such liens to be removed of record by either paying off
the lien or procuring and recording a release bond. If Tenant fails to remove
such lien, and such failure continues for ten (10) days after written demand by
Landlord to do so, Landlord shall have the right, but not the obligation, in
addition to all other rights and remedies available to Landlord under the Lease
and this Construction Agreement, to procure and cause to be recorded a statutory
lien release bond and to deduct from the Construction Allowance all costs
incurred in procuring such bond. Landlord shall have the right at any time and
from time to time to post and maintain on the leased premises such notices as
may be necessary to protect the Improvements and the Property and Landlord from
mechanic's liens, materialmen's liens or liens of a similar nature. Tenant shall
give notice to Landlord not later than thirty-five (35) days prior to the
commencement of any work of any nature contemplated by the Lease. At no time
shall Landlord do or permit anything to be done whereby the Building may be
subject to any liens or encumbrances arising out of construction of Landlord's
Work.
(e) Compliance with Laws. Tenant will construct
Tenant's Work in a safe and lawful manner. Tenant shall, at its sole cost and
expenses, subject to proper application by Landlord's TI Contribution as
provided herein, comply with all applicable laws and all regulations and
requirements of, and all licenses and permits issued by, all municipal or other
governmental bodies with jurisdiction. Copies of all filed documents and all
permits and licenses shall be provided to Landlord. Any portion of Tenant's Work
which is not acceptable to any applicable governmental body, agency or
department, or not reasonably satisfactory to Landlord, shall be promptly
repaired or replaced by Tenant at Tenant's expense. Notwithstanding any failure
by Landlord to object to any such Tenant's Work, Landlord shall have no
responsibility therefor. Tenant shall notify Landlord in writing not less than
ten (10) days prior to the commencement of the construction of any portion of
Tenant's Work as to name,
Page 9
EXHIBIT "B"
telephone number and responsible party for each and every contractor and/or
subcontractor who is about to commence work at the leased premises.
(f) Indemnification. Tenant hereby indemnifies and
agrees to defend and hold Landlord, the leased premises and Building harmless
from and against any and all suits, claims, actions, losses, costs or expenses
(including, without limitation, claims for workers' compensation) of any nature
whatsoever, together with reasonable attorneys' fees for counsel of choice,
arising out of or in connection with the construction of Tenant's Work or
installation of Tenant FF&E (including, but not limited to, claims for breach of
warranty, personal injury or property damage).
(g) Insurance. In addition to the insurance
requirements set forth in Section 20 of the Lease, Construction of Tenant's Work
shall not proceed without Tenant first acquiring workers' compensation and
comprehensive general public liability insurance and property damage insurance
as well as ISO special form extended coverage builders' risk insurance, with
minimum coverage of Two Million Dollars ($2,000,000) issued by an insurance
company reasonably satisfactory to Landlord. Not less than thirty (30) days
before commencing the construction of Tenant's Work, certificates of such
insurance shall be furnished to Landlord or, if requested, the original policies
thereof shall be submitted for Landlord's approval. All such policies shall
provide that thirty (30) days prior notice must be given to Landlord before
modification, termination or cancellation. All insurance policies maintained by
Tenant pursuant to this Construction Agreement shall name Landlord and any
lender with an interest in the leased premises as additional insureds and comply
with all of the applicable terms and provisions of the Lease relating to
insurance. The Contractor shall be required to maintain the same insurance
policies as Tenant, and such policies shall name Tenant, Landlord and any lender
with an interest in the leased premises as additional insureds.
(h) Construction Defects. Landlord shall have no
responsibility for Tenant's Work and Tenant will remedy, at Tenant's own
expense, and be responsible for any and all defects in Tenant's Work that may
appear during or after the completion thereof whether the same shall affect
Tenant's Work in particular or any parts of the leased premises in general.
Tenant shall reimburse Landlord for any costs or expenses incurred by Landlord
by reason of any defect in any portion of Tenant's Work constructed by Tenant or
the Contractor or subcontractors, by reason of delays caused by the construction
of Tenant's Work, or by reason of inadequate cleanup following completion of
Tenant's Work.
Tenant shall have no responsibility for Landlord's Work and
Landlord will remedy, at Landlord's own expense, and be responsible for any and
all defects in Landlord's Work that may appear during or after the completion
thereof whether the same shall affect Landlord's Work in particular or any parts
of the leased premises in general. Landlord shall reimburse Tenant for any costs
or expenses incurred by Tenant by reason of any defect in any portion of
Landlord's Work constructed by Landlord or the Contractor or subcontractors, by
reason of delays caused by the construction of Landlord's Work, or by reason of
inadequate cleanup following completion of Landlord's Work.
Page 10
EXHIBIT "B"
(i) Additional Services. If the construction of
Tenant's Work shall require that additional services or facilities (including,
but not limited to, hoisting, cleanup or other cleaning services, trash removal,
field supervision, or ordering of materials) be provided by Landlord, then
Tenant shall pay Landlord a reasonable charge therefor.
(j) Coordination of Labor. All of Tenant's contractors,
subcontractors, employees, servants and agents must work in harmony with and
shall not interfere with any labor employed by Landlord, or Landlord's
contractors or by any other tenant or its contractors with respect to any
portion of the entertainment and retail center.
(k) Work in Adjacent Areas. Any work to be performed in
areas adjacent to the leased premises shall be performed only after obtaining
Landlord's express written permission and shall be done only if an agent or
employee of Landlord is present; Tenant will reimburse Landlord for the expense
of any such employee or agent.
(l) HVAC Systems. Tenant agrees to be entirely
responsible for the maintenance or the balancing of any heating, ventilating or
air conditioning system installed by Tenant and/or maintenance of the electrical
or plumbing work installed by Tenant and/or for maintenance of lighting
fixtures, partitions, doors, hardware or any other installations made by Tenant.
(m) Approval of Plans. Landlord will not check Tenant's
drawings for building code compliance. Approval of the Final Plans by Landlord
is not a representation that the drawings are in compliance with the
requirements of governing authorities, and it shall be Tenant's responsibility
to meet and comply with all federal, state, and local code requirements.
Approval of the Final Plans does not constitute assumption of responsibility by
Landlord or its architect for their accuracy, sufficiency or efficiency, and
Tenant shall be totally responsible for such matters.
(n) Tenant's Deliveries. Tenant shall deliver to Landlord,
at least five (5) days prior to the commencement of construction of Tenant's
Work, the following information:
(i) The names and addresses of the general,
mechanical, plumbing, fire sprinkler, life safety, and electrical
contractors Tenant intends to engage in connection with construction of
Tenant's Work and installation of Tenant's FF&E, provided, however,
Tenant shall deliver to Landlord a list of references for all such
contractors at least ten (10) days prior to execution of agreements
with such contractors; or
(ii) The date on which Tenant's Work will
commence, together with the estimated dates of completion of Tenant's
construction and fixturing work, and the date on which Tenant expects
to be ready to open for business in the Building;
(iii) A copy of the fully executed TI Construction
Contract; and
Page 11
EXHIBIT "B"
(iv) An itemized statement of estimated
construction costs, including architectural, engineering and
contractors' fees.
(o) Qualification of Contractors. All contractors
engaged by Tenant shall be bondable, licensed contractors, possessing good labor
relations, capable of performing quality workmanship and working in harmony with
Landlord' s general contractor and other contractors on the job. All work shall
be coordinated with the general project work.
(p) Warranties. Tenant shall cause its contractor to
provide warranties for not less than one (1) year against defects in
workmanship, materials and equipment, which warranties shall run to the benefit
of Landlord or shall be assignable to Landlord.
(q) Landlord's Performance of Work. Within ten (10)
working days after receipt of Landlord's notice of Tenant's failure to perform
its obligations under this Construction Agreement, if Tenant shall fail to
commence to cure such failure, Landlord shall have the right, but not the
obligation, to perform, on behalf of and for the account of Tenant, subject to
reimbursement of the cost thereof by Tenant, any and all of Tenant's Work which
Landlord determines, in its reasonable discretion, should be performed
immediately and on an emergency basis for the best interest of the entertainment
and retail center including, without limitation, work which pertains to
structural components, mechanical, sprinkler and general utility systems,
roofing and removal of unduly accumulated construction material and debris;
provided, however, Landlord shall use reasonable efforts to give Tenant at least
ten (10) days prior notice to the performance of any of Tenant's Work.
(r) Tenant's Performance of Work. Tenant, or Tenant's
contractor, shall comply with the following regulations in connection with
construction of Tenant's Work and installation of Tenant's FF&E:
(i) Intentionally Omitted;
(ii) Tenant's contractor shall stage its work in
an area provided by Landlord and in no other area;
(iii) At the end of each work day, the
entertainment and retail center, except for the interior of the
Tenant's leased premises, shall be free of any and all of Tenant's
contractor's materials and equipment;
(iv) Tenant's contractor will be responsible for
its own trash removal. Trash must be stored in locations designated by
Landlord;
(v) Temporary power will be provided up to 100
amps at a location designated by Landlord. Additional power, if
available, may be provided at Tenant's expense;
(vi) After-hours work is prohibited unless
authorized in writing by Landlord or Landlord's agent. Working hours
must conform to those allowable by the
Page 12
EXHIBIT "B"
City of Houston. If a variance is required to work weekends or
after-hours, Tenant shall be required to obtain such variance; and
(vii) Such other reasonable regulations as
Landlord may promulgate from time to time.
(s) Temporary Facilities During Construction. Tenant
shall provide and pay for all temporary utility facilities and the removal of
debris, as necessary and required in connection with the performance of Tenant's
Work. Storage of Tenant's contractors' construction materials, tools, equipment
and debris shall be confined to the leased premises and in areas which may be
designated for such purposes by Landlord.
(t) As-Built Drawings. Tenant shall cause "As-Built
Drawings" (excluding furniture, fixtures and equipment) to be delivered to
Landlord and/or Landlord's representative no later than sixty (60) days after
the completion of Tenant's Work. In the event these drawings are not received by
such date, Landlord may, at its election, cause said drawings to be obtained and
Tenant shall pay to Landlord, as additional rent, the cost of producing these
drawings.
(u) Tenant Delay. For purposes of this Construction
Agreement, any delay in the completion of the Building Improvements or Tenant's
Work which results from any of the following shall be deemed a "Tenant Delay":
(i) Tenant's failure to approve any items or
perform any other obligation in accordance with and by the date
specified in the Work Schedule;
(ii) Tenant's changes in the Final Plans after
the previous approval of the Final Plans by Landlord and Tenant;
(iii) Tenant's failure to complete Tenant's Work
in accordance with and by the date specified in the Work Schedule
subject to Force Majeure as provided in Section 27.4 of the Lease;
(iv) Tenant's failure to timely satisfy any of the
conditions for the disbursement of Landlord's TI Contribution; or
(v) Any other delay reasonably attributable to
the fault of Tenant.
13. Completion and Commencement Date. As provided in the Lease,
the commencement date of the term of the Lease and Tenant's obligation for the
payment of rent under the Lease shall commence upon the earlier of
("commencement date"): (i) the date upon which Tenant opens for business which
shall be, at the latest, concurrent with the opening of the theater in the
entertainment and retail center, or (ii) one hundred sixty (160) days from the
date of Substantial Completion of Landlord's Work. For purposes of this
Construction Agreement and the Lease, the "Substantial Completion" of Landlord's
Work shall occur when the Project Architect and the Contractor shall each have
certified to Landlord and Tenant in writing that Landlord's Work is complete
substantially in accordance with the Final Plans, but for "punch-list" items
which will not interfere with Tenant's construction work.
Page 13
EXHIBIT "B"
14. Arbitration. All claims, disputes, and other matters in
question between the parties to this Construction Agreement, arising out of or
relating to this Construction Agreement or the breach thereof, shall be decided
by arbitration in accordance with the Arbitration Rules of the American
Arbitration Association then obtaining, unless the parties mutually agree
otherwise. Any arbitration, arising out of or relating to this Construction
Agreement, may include, by consolidation, joinder, or joint filing, any
additional person or entity not a party to this agreement to the extent
necessary to the final resolution of the matter in controversy. This
Construction Agreement to arbitrate and any agreement to arbitrate with an
additional person or persons duly consented to by the parties to this
Construction Agreement shall be specifically enforceable under the prevailing
arbitration law. Any arbitration pursuant to the terms of this Paragraph 14
shall be subject to the following:
(a) Notice of demand for arbitration shall be filed in
writing with the other party to this Construction Agreement and parties to be
joined, and with the American Arbitration Association. The demand shall be made
within a reasonable time after the claim, dispute or other matter in question
has arisen. In no event shall the demand for arbitration be made after the date
when institution of legal or equitable proceedings based on such claim, dispute
or other matter in question would be barred by the applicable statute of
limitations.
(b) The award rendered by the arbitrators shall be
final, and judgment may be entered upon it in accordance with applicable law in
any court having jurisdiction thereof.
(c) Notwithstanding the foregoing, this agreement to
arbitrate shall not be binding on either party hereto if a party necessary for
the full resolution of the claim, dispute or controversy cannot be joined in the
arbitration proceeding, and bound by the award of the arbitrators.
(d) In the event of an arbitration pursuant to this
Construction Agreement, or if either party to this Construction Agreement brings
a legal action or proceeding against the other party to enforce the provisions
of this Construction Agreement, or on account of a claim or dispute arising out
of this Construction Agreement, then the prevailing party in such arbitration or
legal action or proceeding shall be entitled to reimbursement by the other party
of the legal fees and costs, including reasonable attorneys' fees, incurred by
the prevailing party in connection wit the arbitration or legal action or
proceeding.
Page 14
IN WITNESS WHEREOF, this Construction Agreement is executed as of the
date first written above.
In the Presence of: LANDLORD:
ORIX PLC HOUSTON VENTURE, an Illinois
general partnership
By: ORIX Houston I Limited Partnership, an
Illinois limited partnership
Its:Partner
By: ORIX Houston I, Inc., an Illinois
corporation
Its: General Partner
By:
------------------------
Name:
Title:
By: PLC Houston Complex L.P.,
a Delaware limited partnership
Its:Partner
By: PLC Houston Complex Holding L.P.,
a Delaware limited partnership
Its: General Partner
By: PLC-Xxxxxxx LLC, a Delaware limited
liability company
Its:General Partner
By: PLC Commercial LLC, a Delaware
limited liability company
Its: Manager
By: PLC Commercial Inc., a California
corporation
Its: Manager
By:
--------------------------------
Name:
Title:
Page 15
EXHIBIT "B"
In the Presence of: TENANT:
HOLOWORLD, INC.,
a Delaware corporation
By: /s/
-------------------- -----------------------
Name: Xxxxxx Xxxxxx
Title: President
Page 16
EXHIBIT "B"
Exhibit "1"
to EXHIBIT "B"
MARQoE HOUSTON DEVELOPMENT
CONSTRUCTION PROVISIONS
BUILDING IMPROVEMENTS - LANDLORD WORK
Except as herein provided, the leased premises are leased to Tenant on
an "as-is" basis.
The Building Improvements of Landlord's Work as used in this Lease
shall mean the items specified in items A through L below. Landlord shall not be
obligated to perform or provide any facilities in relation to the leased
premises or entertainment and retail center except as specified in items A
through N below, or as otherwise specifically set forth in this Lease. Where two
(2) types of materials or structures are indicated, Landlord will have the
option of using either:
A. Floor: Landlord will provide a reinforced concrete
slab floor per Plans & Specifications.
B. Storefront: Landlord will provide opening for storefront.
Storefront system to be installed by Tenant.
C. Int. Walls: Landlord shall provide demising walls
consisting of code minimum metal studs. Cost
of supply and installation of drywall from
underside of root to slab is the
responsibility of Tenant (Code minimum). All
code required area separation walls to be
provided by Landlord as indicated on LOD's.
D. Ext. Walls: Exterior walls are concrete. Furring and
insulation of such walls are Tenant's
responsibility
E. Egress Door: Landlord will provide one egress door with
appropriate hardware. If required by code,
Tenant shall provide at Tenant's expense
additional service doors and/or fire exit
doors which shall conform to code requirement.
F. Clear Height: Landlord shall provide maximum clear height
available.
G. Electrical: See Schedule 1. If Tenant requires a
different size main electrical switch and/or
empty conduit, Landlord may provide same, if
available, at Tenant's expense. Landlord
shall make available all temporary power for
Tenant's construction. Tenants will pay for
direct distribute cost.
Page 1
EXHIBIT "B"
H. H.V.A.C.: Landlord shall provide no HVAC. Cost of HVAC
unit, with electric or gas, fired
Installation and distribution of is the
Tenant's responsibility. (With regard to roof
loading, see "M below.)
I. Plumbing:: Landlord shall bring sewer and water laterals
stubbed to the rear of the leased premises,
per the Drawings.
J. Gas: Landlord shall provide gas service for anchor
and restaurant stores to within five (5) feet
of the building in which the leased premises
is located, for in-line stores only a manifold
will be provided and stubbed into building in
one location per plan. Distribution of gas in
Tenant's space is the responsibility of the
Tenant as is application for service.
K. Telephone: For in-line stores only Landlord shall supply
empty 1' conduit from the main telephone panel
to the leased premises. Restaurant and anchor
stores will be provided with conduit as shown
and sized on plan into the building in one
location as indicated on plan.
L. Fire Sprinklers: Landlord shall provide a fire sprinkler main
above the leased premises and shall distribute
with heads facing roof in conformance with
NFPA and local fire jurisdiction requirements
for ordinary hazard. Tenant shall be
responsible for fire alarm monitoring,
additional head and/or modification monitoring
equipment and any third-party requirements
mandated by code.
M. Grease Traps: For restaurant shell only, Landlord shall
provide grease traps in rear of leased
premises and piping sized per plan to one
location within the building.
N. Roof: Roof load is a shown on plan; additional
reinforcing is by Tenant. See Drawings for
load bearing capacity of roof structures.
Landlord will provide rigid insulation at roof
per plan.
O. Patio: Landlord will provide rough grade in Tenant
outside dining areas.
Page 2
EXHIBIT "B"
Schedule "1"
to Exhibit "1"
to EXHIBIT "B"
Schedule 1
MARQoE HOUSTON DEVELOPMENT
CONSTRUCTION PROVISIONS
1) Space 0100 & 0101
-----------------
A. Landlord to supply empty conduit from HL & P transformer pad to
North West electric room.
B. Landlord to supply conduit from North West electric room stub
into tenant space.
C. Utility transformer and empty conduit sizes are based on 480V,
3-phase, 4 wire, 30 xxxxx per square foot for space 0100 and 15
xxxxx per square foot for space 0101.
D. Tenant to furnish and Install its main fuse switch with fuses and
service wire from HL & P transformer to main switch. Tenant to
install HL & P furnished C.T., P.T., and meter socket. Tenant to
furnish and install its service wire from its main switch to its
space.
2) Space 105, 110, 115, 120
------------------------
A. Landlord to supply 200A, 480V, 3-phase, 4 wire fuse switch at
North West electric room tenant meter gutter (TMG-NW).
B. Landlord to supply empty conduit from North West electric room to
tenant space (stub in). Conduit size based on 480V, 3-phase, 4
wire, 80 xxxxx per square foot for space 105 and 115. 15 xxxxx
per square foot for space 110; 40 xxxxx per square foot for space
120.
C. Tenant to furnish and install fuses for its main switch, HL & P
meter socket and service wire to its space.
3) Space 200
---------
A. Landlord to supply empty conduit from HL & P transformer pad to
South West electrical room.
B. Landlord to supply empty conduit from South West electrical room
(stub into tenant space).
C. Utility transformer and empty conduit sizes are based on 480V,
3-phase, 4 wire at 30 xxxxx per square foot.
Page 1
EXHIBIT "B"
D. Tenant to furnish and install its main fuse switch and service
wire from HL & P transformer to main switch. Tenant to install
HL & P furnished C.T., P.T. and meter socket. Tenant to
furnish and install service wire from its main switch to its
space.
4) Spaces 205, 210, 215, 220 and 225
---------------------------------
A. Landlord to supply 200A, 480V, 3-phase, 4 wire fuse switch at
the South West electrical room, tenant meter gutter (TMG-SW).
B. Landlord to supply empty conduit from South West electrical room
to tenant space (stub in). Conduit size based on 480V, 3-phase,
4 wire, 15 xxxxx per square foot for spaces 205 and 215; 80
xxxxx per square foot for space 210; and 30 xxxxx per square
foot for spaces 220 and 225.
C. Tenant to furnish and install fuses for its main switch, HL & P
meter socket, and service wire to its space.
5) Spaces 300 and 355
------------------
A. Landlord to supply empty conduit from HL & P transformer pad to
North electrical room.
B. Landlord to supply empty conduit from North electrical room stub
into tenant space.
C. Utility transformers and empty conduit sizes are based on 480V,
3-phase, 4 wire, 40 xxxxx per square foot.
D. Tenant to furnish and install its main fuse switch with fuses
and service wire from HL & P's transformers to its main switch.
Tenant to install HL & P furnished C.T., P.T. and meter socket.
Tenant to furnish and install its service wire from its main
switch to its space.
6) Spaces 305, 310, 315, 320, 330, 335, 340, 345 and 350
-----------------------------------------------------
A. Landlord to supply 200A, 480V, 3-phase, 4 wire fuse switch at
North electrical room tenant meter gutter (TMG-N).
B. Landlord to supply empty conduit from North electrical room to
tenant space (stub in). Conduit size is based on 480V, 3-phase,
4 wire, 15 xxxxx per square foot for spaces 320 and 325; 40
xxxxx per square foot for spaces 315 and 350; 80 xxxxx per
square foot for spaces 305, 330, 335, 340 and 345.
Page 2
EXHIBIT "B"
C. Tenant to furnish and install fuses for its main switch, HL & P
meter socket and service wire to its space.
7) Spaces 408, 431 and 435
-----------------------
A. Landlord to supply empty conduit from HL & P's transformer pad
to South electrical room.
B. Landlord to supply empty conduit from South electrical room stub
into tenant stub.
C. Utility transformers and empty conduit sizes are based on 480V,
3-phase, 4 wire, 15 xxxxx per square foot for space 435; and 40
xxxxx per square foot for spaces 408 and 431.
D. Tenant to furnish and install its main fuse switch with fuses
and service wire from HL & P's transformers to main switch.
Tenant to install HL & P furnished C.T., P.T. and meter socket.
Tenant to furnish and install its service wire from its main
switch to its space.
8) Spaces 400, 410, 412, 415, 420, 425, 430 and 445
------------------------------------------------
A. Landlord to supply 200A, 480V, 3-phase, 4 wire fuse switch at
South electrical room tenant meter gutter (TMG-S).
B. Landlord to supply empty conduit from South electrical room
to tenant space (stub in). Conduit size is based on 480V,
3-phase, 4 wire, 15 xxxxx per square foot for spaces 415,
420,425, 430 and 445; and 80 xxxxx per square foot for spaces
400, 410 and 412.
C. Tenant to furnish and install fuses for its main switch,
HL & P meter socket and service wire to its space.
9) Spaces 440, 450, 455, 460 and 465
---------------------------------
A. Landlord to supply empty conduit from HL & P transformer pad
to East electrical room.
B. Landlord to supply empty conduit from East electrical room
stub into tenant space.
C. Utility transformer and empty conduit sizes are based on 480V,
3-phase, 4 wire, 40 xxxxx per square foot for space 450, 455,
460 and 465.
Page 3
EXHIBIT "B"
D. Tenant to furnish and install its main fuse switch with fuses
and service wire from HL & P transformer to main switch.
Tenant to install HL & P furnished C.T., P.T. and meter
socket. Tenant to furnish and install its service wire from
its main switch to its spaces.
Page 4
EXHIBIT "B"
EXHIBIT "2"
to EXHIBIT "B"
MARQoE HOUSTON DEVELOPMENT
CONSTRUCTION PROVISIONS
TENANT'S WORK
"Tenant's Work," as used in this Lease, shall mean all work, other than
Building Improvements of Landlords Work as specified in Exhibit "1" to this
Exhibit "B," which shall be necessary to complete the leased premises to a
finished condition from which business can be conducted. Tenant acknowledges
receipt of a space outline plan for the leased premises and all the Tenant
Design and Construction Criteria for the MarqoE Houston Development ("Tenant
Criteria"). All of Tenant's Work shall be performed in accordance with the
provisions of Final Working Drawings (as herein described) for Tenant's Work,
and all applicable codes.
Tenant shall perform or cause to be performed Tenant's Work at Tenant's
expense. Tenant's work shall include, but not be limited to, the following:
A. Floor: Tenant shall make all penetrations of the slab for
utility installation. Tenant is responsible for
repairing penetrations to the slab so that the
structural integrity of the leased premises prior to
the penetrations is maintained. All floor coverings,
and adhesion specifications/requirements are Tenant's
responsibility.
B. Storefront: Tenant to provide storefront. Landlord will provide
criteria for storefront improvement according to
which Tenant must build out the storefront at
Tenant's cost. The cost of paving/tile area immediate
adjacent to the storefront to two feet from
storefront is the Tenant's responsibility. (See
Tenant storefront criteria.)
X. Xxxxx: Tenant to provide all interior walls and partitions.
Tenant responsible for wall coverings on all walls,
including demising walls. Should Tenant add
improvements to any wall or hang materials or
decorations from a wall it shall be Tenant's
responsibility to assure that the structural and code
integrity of the leased premises is not compromised
and make all improvements required to maintain and/or
restore such structural integrity. All work to the
leased premises to maintain/restore such structural
integrity shall require the review and approval of
Landlord's structural engineer which shall be at
Tenant's reasonable cost. Structural revision that
may be required will be designed by Landlords
structural engineer. Tenant to provide all wall
Insulation as required by code or sound continuation.
D. Restrooms: Tenant shall provide all restrooms.
Page 1
EXHIBIT "B"
E. Ceiling: Tenant shall provide the ceiling in the leased
premises and any necessary catwalks or access panels
in accordance with the Tenant Criteria. Penetrations
through any roof structures must have prior written
approval from Landlord, and, in some cases, must be
performed by Landlord's roofing contractor. Should
Tenant's ceiling improvements or decorations impair
the structural integrity of the leased premises, it
shall be Tenant's responsibility to assure that all
improvements are made to maintain and/or restore such
structural integrity and code requirements. All work
to the leased premises to maintain/restore such
structural integrity shall require the review and
approval of Landlord's architect structural engineer
which shall be at Tenant's reasonable cost.
F. Electrical: Tenant shall provide all electrical work, equipment,
fixtures and services for the leased premises. Tenant
shall arrange and pay for electrical service from
the applicable electrical utility company. Any
upgrade from the electrical capacity set forth in
Landlord's Work (Exhibit I) shall be the Tenant's
responsibility and reviewed and approved by
Landlord's electrical engineer.
G. H.V.A.C.: Tenant shall provide roof-top HVAC units. Tenant
shall provide for all distribution of the HVAC within
leased premises, makeup air and an air exhaust system
for the leased premises. If internal loading of
Tenant exceeds the maximum design load, Landlord may,
at its option, provide additional capacity.
Additional equipment, construction, and engineering
costs shall be at Tenant's expense. All work to the
leased premises required to maintain/restore
structural integrity shall be at Tenant's cost and
shall require the review and design by Landlord's
structural engineer which shall be at Tenant's
reasonable cost.
H. Grease Lines: Tenant shall distribute grease lines from P.O.C. as
shown on Landlord plans.
I. Plumbing: Tenant shall provide all plumbing within the leased
premises. Any necessary roof penetrations may be
provided by Landlord, at its option, at Tenant's
expense. Tenant must use Landlord's designated
contractor for all roof repairs. (Repairs shall be
made per Landlord's specifications.)
J. Gas: Tenant shall be responsible for distribution of all
gas service within the Premise and application for
service and as shown on LOD's and Landlord's plans.
K. Telephone: Tenant shall provide all telephone equipment for the
leased premises and connections to the main panel
board. Restaurant
Page 2
EXHIBIT "B"
anchors will provide all equipment, backboards and
distribution from conduit stubbed to leased premises.
L. Fire Sprinklers: Tenant shall make any additions or changes to the
sprinkler system provided by Landlord necessary to
meet the minimum criteria of Landlord or governmental
or insurance standards. Tenant shall use Landlord's
designated contractor for this work.
M. Signs: Tenant shall provide signs in accordance with the
sign criteria set forth in the Tenant Criteria.
N. Service/Fire
Exit Doors: If required by applicable codes, Tenant shall
provide additional service doors and/or fire exit
doors which shall conform with code requirements. All
work to the leased premises required to maintain/
restore structural integrity shall be at Tenant's
cost and the design revisions will be done by the
Landlord's structural engineer which shall be at
Tenant's cost. All direct costs will be agreed to in
writing prior to design work commencement. Landlord
may perform work at his option.
O. Code-Related
Items: Tenant shall be responsible for complying with any
code requirements applicable to its type of business
or its operation in the leased premises.
P. Change to
Base Building: Any change to base building is a Tenant cost. Such
changes must be designed by base building architect
and structural engineer at Tenant's expense.
Q. Trade Fixtures: Where required, tenant shall be responsible for
attaching trade fixtures to the roof. All work to
the leased premises required to maintain/restore
structural integrity shall be at Tenant's cost and
shall require the review and approval of Landlord's
structural engineer which shall be at Tenant's
reasonable cost.
R. Utilities: Tenant shall be responsible for all deposits and
fees required to originate utilities serving the
leased premises in Tenant's name.
S. Patios: Patios will be the responsibility of the Tenant.
Design of hardscape and any government required
barriers to be provided in plan and profile approved
by Landlord and at Tenant's sole cost.
T: ADA: Approved by TDLR and City of Houston for Tenant's
Work is by Tenant.
Page 3
EXHIBIT "B"
REGULATIONS FOR INSTALLATION OF TENANT'S WORK
1. Tenant's contractor shall access the leased premises through
the rear/service exits only and not through the front walkway. (If no rear
access is available, Landlord will provide access through the front entry.)
2. Tenant's contractor shall stage its work in an area provided by
Landlord and in no other area.
3. At the end of each work day, the project, except for the Interior
of the leased premises, shall be free of any and all of Tenant's contractors
materials and equipment
4. Tenant's contractor shall be responsible for Its own trash
removal. Trash must be stored in locations designated by Landlord.
5. Temporary power will be provided up to 100 amp at a location
designated by Landlord. Additional power, if available, will be provided at
Tenant's expense.
6. After hours work is prohibited unless authorized In writing
by Landlord or Landlord's agent. Working hours must conform to those allowable
by the City of Houston. If a variance is required to work weekends or after
hours, Tenant shall be required to obtain such variance.
7. Tenant's contractor shall abide by such further rules and
regulations established by Landlord.
Page 4
EXHIBIT "B"
EXHIBIT "3"
to EXHIBIT "B"
MAXIMUM TI CONTRIBUTION
[EXAMPLE]
COST BREAKDOWN
Budget Category Maximum
Contribution
1. Store Front
2. Signage
3. Interior Decor (artwork, decorative light
fixtures, not carpet, wallpaper, paint, etc.)
---
4. Ceramic Tile & Slate
5. Quarry Tile
6. Ceiling/Suspended Acoustic Tile
7. Flooring
8. Carpet and Carpet Installation
9. Paint and Wallcoverings
10. HVAC (Pre-Selected)
11. Fire Sprinklers (Sprinkler Riser & Back Flow)
12. Plumbing (Back Flow Devices, Grease Trap, Etc.)
13. Electrical
14. Gas
15. Fire/Life Safety (Hood protection - other)
16. Restrooms
17. Millwork
18. Finish Hardware
19. Service/Fire Exit Doors
TOTAL TI CONTRIBUTION $
================================================================================
Page 1
EXHIBIT "B"
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Item Item Start Item End Item Start Item End Item Item
Date Date Date Date Duration - Duration -
(Retail) (Retail) (Restaurant) (Restaurant) Retail Restaurant
(Calendar (Calendar
Days) Days)
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Tenant's designation of Tenant's Day 1* Day 2 Day 1 Day 2 2 2
architect -Landlord's approval/
disapproval of Tenant's architect
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Preparation of preliminary plans Day 3 Day 17 Day 3 Day 24 15 22
by Tenant's architect & submittal
to Landlord
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Tenant submittal of contractor Day 7 Day 11 Day 7 Day 11 5 5
bid list to Landlord-- Landlord
approval/disapproval of Tenant's
contractor
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Landlord's approval/ disapproval Day 18 Day 27 Day 25 Day 36 10 12
of Tenant's preliminary plans
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Tenant's revision of preliminary Day 28 Day 34 Day 37 Day 46 7 10
plans &
resubmittal to Landlord
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Landlord's approval/ disapproval Day 35 Day 41 Day 47 Day 56 7 10
of revised preliminary plans
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Preparation of final plans by Day 42 Day 56 Day 57 Day 78 15 22
Tenant's architect & submittal to
Landlord
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Landlord's approval/ disapproval Day 57 Day 66 Day 79 Day 90 10 12
of final Plans
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Tenant's submittal of final plans Day 67 Day 80 Day 91 Day 114 14 24
to City - City approval/
disapproval
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Tenant's contractor performs Day 67 Day 78 Day 91 Day 110 12 20
preliminary pricing and schedule
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Tenant revises final plans per Day 81 Day 85 Day 115 Day 121 5 7
City comments
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Tenant's submittal of contractor Day 79 Day 83 Day 111 Day 119 5 9
preliminary pricing to Landlord
--Landlord approval/ disapproval
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Tenant's resubmittal of final Day 86 Day 90 Day 122 Day 128 5 7
plans to City--City review
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Tenant contractor performs final Day 91 Day 97 Day 129 Day 140 7 12
pricing and schedule
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Tenant submits final plans with Day 92 Day 101 Day 130 Day 141 10 12
City changes to Landlord--
Landlord approval/ disapproval
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Tenant submits Tenant's Day 98 Day 102 Day 141 Day 145 4 6
contractor's pricing to Landlord
- Landlord approval/ disapproval
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
Tenant contractor constructs Day 103 Day 162 Day 146 Day 265 60 120
Tenant's space
----------------------------------- ------------- -------------- -------------- ------------- -------------- --------------
-------------------------------------------------------------------------------------------------------------------
* Day 1 is seven (7) business days after the Lease has been executed by both
parties.
Page 2
EXHIBIT "B"
EXHIBIT "5"
to EXHIBIT "B"
page 5
SIGN CRITERIA
The purpose of MarqoE's Signage and Graphics Design Criteria is to ensure that
the design of the Tenant signage is appropriate for the store and surrounding
context, is visually attractive, and contributes to the center's image and
character as an entertainment center.
SIGN DESIGN PHILOSOPHY
Unlike many other retail centers, MarqoE is an entertainment center with
entertainment-oriented uses and venues. This very fact warrants a unique and
original approach to signing and graphics. The primary intent of these criteria
is to enhance this concept of "entertainment" by providing the groundwork for
imaginative graphics and signage for the shops and their storefronts. Each
tenant is encouraged to develop two and three-dimensional signage ad graphics
which are varied and bold in image, color, materials, and design approach.
Signage should not only incorporate text that identifies Tenant, but also
graphics and forms which indicate identity, character, and image.
GENERAL STORE SIGNAGE AND GRAPHIC GUIDELINES
The following are general graphic guidelines to be use in the development of all
signage and graphics elements:
- Signage and environmental graphics should be conceived as an integral part
of the design, and not applied as an afterthought.
- Primary storefront identification shall be limited to Tenant's trade name,
as approved in the lease, or as otherwise pre-approved by Landlord in
writing.
- Nationally recognized tenants may use a crest, shield, logo, or other
established corporate insignias, but are encouraged to incorporate them in
a three-dimensional manner.
- Store/shops may utilize awnings, blade signs, and/or storefront graphics
for identity.
- All signs should fit comfortably into their storefront architecture,
leaving sufficient margins and negative space on all sides. Thickness,
height, and colors of sign lettering and graphics should be visually
balanced and in proportion to other signs on the building.
- All illuminated signs must be controlled by Tenant's time clock and lighted
during general operating hours, as defined by Landlord.
- All submitted building elevations shall show proposed signage in each phase
of presentation.
- Tenants will be allowed to place signage and graphics anywhere within the
signage zone (signage zones are shown in figures 1-5 in the MarqoE Tenant
Design Criteria booklet).
Page 1
EXHIBIT "B"
- All signs shall be presented to Landlord for written approval prior to
commencement of fabrication.
- All signage should be placed out of reach.
- Signage and graphics applied directly to the storefront glass should have
matching letters and features on both sides of the glass to create a finish
look when viewed from either side.
- All signage lighting should be baffled or concealed.
- Exposed signage lamps and fixtures are subject to approval by the Landlord
and its architect.
- Light leaks will not be permitted.
ACCEPTED SIGN APPROACHES AND TYPES
The following are generally accepted sign types to be used as a guideline for
the development of each tenant's unique signage design:
- Mixed-media signs incorporating multi-dimensional forms and combinations of
colors, shapes, materials, and lighting.
- Contemporary elements to create an avant garde appearance.
- Application of innovative technologies.
- Dimensional letter forms with seamless edge treatments.
- Reverse channel lettering.
- Exposed neon tubes forming letters and/or logos. Neon must be used in
conjunction with a backdrop or cutout letters to establish presence of sign
during the daytime.
- Cut or fabricated steel, painted or unfinished.
- Etched metal or glass, sandblasted glass.
- Polished metal.
- Screens, lattice, or mesh.
- Dimensional shapes and forms of metal, hardwood, glass, or other materials
with a permanent appearance.
Psge 2
EXHIBIT "B"
- Dimensional geometric shapes and three-dimensional forms.
- Glazed ceramic tile work forming patterns and/or fields.
- Halo pr exposed channel neon.
- Fiber optics.
- Silhouette illumination.
- Front lighting, i.e., billboard lighting.
- Channel letters with light transmitting acrylic faces are allowable for
Tenants with street facing storefronts only.
- Moving neon or animated signs will be acceptable only with prior written
approval from Landlord.
PROHIBITED SIGN APPROACHES AND TYPES
The following sign types are not permitted:
- Conventional plastic-faced box or cabinet signs.
- Formed plastic or injection molded plastic signs.
- Channel letters with light transmitting acrylic faces (unless
outward-facing).
- Luminous vacuum formed letters.
- Temporary wall signs, window signs, pennants, banners, flags, inflatable
displays, or sandwich boards.
- Cloth, paper, cardboard or foam signs, or decals hung around on or behind
storefronts.
- Animated signs: signs consisting of anything swinging, rotating, flashing,
blinking, scintillating, strobing, including any moving electronic message
boards or centers, or temporary lighting, such as but not limited to
search, flood, or fluorescent gel lights, except as otherwise approved by
Landlord, such approval not to be unreasonably withheld.
- Internally illuminated awnings with or without signage.
- Noise-making or odor producing signs, except as otherwise approved by
Landlord, such approval not to be unreasonably withheld.
Page 3
EXHIBIT "B"
- Temporary or promotional signs or banners.
SPECIAL SIGNAGE CRITERIA
ENTRY CANOPY SIGNAGE
Anchor Entries for TYPE Al Storefronts:
--------------------------------------
All Major tenant entry elements have been provided with a metal canopy at the
entry points of each Tenant location upon which their signage and/or graphics
can be placed (see figure 1 Marq o E Tenant Design Criteria Booklet). In
addition to the above General Store Signage and Graphics Guidelines, the
following criteria should also be followed for all Type Al Storefronts:
- Any accepted sign or graphic described above in Accepted Sign Approaches
and Types is permitted on the provided canopy.
- Any costs associated with the application of any signage will be the
responsibility of Tenant and not Landlord.
- The Tenant is responsible for any costs associated with any required
upgrades to the structural support of the canopy, and will be designed by
Landlord's structural engineer at Tenant's cost.
- My improvements or alterations, including structural upgrades to the
Landlord-provided canopy, is subject to Landlord's prior written approval
and is all at Tenant's expense.
- Any and all signage must comply with local signage Code and any other
applicable Codes.
SIGN SHELF SIGNAGE
Major Tenants and Restaurants:
-----------------------------
All Major Tenants, as well as some restaurant tenants, are permitted to place
signage on the face of the building. Each Major Tenant or restaurant tenant
should refer to its Lease Outline Drawings for designated locations. In addition
to the above General Store Signage and Graphics Guidelines, the following
criteria should also be followed for all Major Tenants and restaurant tenants:
- Any accepted sign or graphic described above in Accepted Sign Approaches
and Types is permitted on the sign shelf.
- Landlord will provide a pre-designed/pre-engineered sign shelf for Tenant
as specifically shown on the plans.
- Any costs associated with the application of any signage will be the
responsibility of Tenant and not Landlord.
Page 4
EXHIBIT "B"
- Tenant is responsible for any costs associated with any required upgrades
to the structure and structural supports of the sign shelf.
- Structural modifications will be designed by Landlord's structural engineer
at Tenant's cost.
- Any improvements or alterations, including structural, to the sign shelf is
subject to Landlord's prior written approval, and is considered a Tenant
Improvement cost.
- Any and all signage must comply with local signage Codes and any other
applicable Codes.
Page 5
EXHIBIT "C"
RULES AND REGULATIONS
No sign, advertisement, name or notice shall be installed or displayed on any
part of the outside or inside of the building of the entertainment or retail
center or in any part of the common area without the prior written consent of
Landlord. Landlord shall have the right to remove, at Tenant's expense and
without notice, any sign installed or displayed in violation of this rule. All
approved signs or lettering on doors and walls shall be printed, painted,
affixed or inscribed at the expense of Tenant by a person approved by Landlord,
using materials and in a style and format approved by Landlord.
Tenant shall not place anything or allow anything to be placed near the glass of
any window, door, partition or wall which may appear unsightly from outside the
leased premises, in Landlord's sole discretion. No awnings, canopies or other
projection shall be attached to the outside walls of the building without the
prior written consent of Landlord.
Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances, or
loading docks of the building. Neither Tenant nor any employee, invitee, agent,
licensee or contractor of Tenant shall go upon or be entitled to use any portion
of the roof of the building.
Unless expressly set forth to the contrary in Tenant's Lease, Tenant shall have
no right or entitlement to the display of Tenant's name or logo on any building
of the entertainment center sign, monument sign or pylon sign.
All cleaning and janitorial services for the leased premises shall be provided,
at Tenant's sole cost and expense, exclusively by or through Tenant or Tenant's
janitorial contractors in accordance with the provisions of Tenant's Lease.
Tenant shall not cause any unnecessary labor by carelessness or indifference to
the good order and cleanliness of the leased premises.
Tenant, upon termination of its tenancy, shall deliver to Landlord the keys of
all doors to or in the leased premises.
Burglar alarms or other similar apparatus shall not be installed in the leased
premises except with the approval and under the direction of Landlord.
Tenant shall not use or keep in the leased premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited quantities
necessary for the operation or maintenance of office equipment, subject to any
express provisions of Tenant's Lease to the contrary. Tenant shall not use or
permit to be used in the leased premises any foul or noxious gas or substance,
or permit or allow the leased premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the building by
reason of noise, odors or vibrations, nor shall Tenant bring into or keep in or
about the leased premises any birds or animals.
Landlord reserves the right from time to time, in Landlord's sole and absolute
discretion, exercisable without prior notice and without liability to Tenant:
(a) to name or change the name
Page 1
EXHIBIT "C"
of the entertainment and retail center, (b) to
change the address of the building; and/or (c) to install, replace or change any
signs in, on or about the common areas or entertainment and retail center
(except for Tenant's signs, if any, which are expressly permitted by Tenant's
Lease).
Tenant shall not install any loudspeaker or other similar device on the roof or
exterior walls of the building. Without limiting the generality of the
foregoing, no advertising medium shall be utilized by Tenant which can be heard
or seen outside the leased premises, including, without limitation, flashing
lights, search lights, phonographs, radios or televisions.
Canvassing, soliciting and distribution of handbills or any other written
material, and peddling in the common area and other portions of the
entertainment and retail center are expressly prohibited, and each tenant shall
cooperate to prevent same.
Landlord reserves the right to exclude or expel from the entertainment and
retail center any person who, in Landlord's judgment, is intoxicated or under
the influence of liquor or drugs or who, is in violation of any of the Rules and
Regulations of the entertainment and retail center.
Tenant shall store all its trash and garbage within its leased premises or in
designated trash containers or enclosures within the entertainment and retail
center. Trash shall be stored in compliance with all applicable laws and in a
neat and sanitary condition. Tenant shall not place in any trash box or
receptacle any material which cannot be disposed of in the ordinary and
customary manner of trash and garbage disposal. All garbage and refuse disposal
shall be made in accordance with directions reasonably issued from time to time
by Landlord Tenant shall transport all trash, garbage, waste and other refuse
from the leased premises to a trash collection area in the Project in wheeled
container.
Tenant agrees that it shall comply with all fire and security regulations that
may be issued from time to time by Landlord, and Tenant also shall provide
Landlord with the name of a designated responsible principal or employee to
represent Tenant in all matters pertaining to such fire or security regulations.
Tenant shall cooperate fully with Landlord in all matters concerning fire and
other emergency procedures.
The requirements of Tenant will be attended to only upon the appropriate
application to Landlord or Landlord's designated representative by an authorized
individual. Employees of Landlord shall not perform any work or do anything
outside of their regular duties unless under special instructions from Landlord.
Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of Tenant or any
other such tenant, nor prevent Landlord from thereafter enforcing any such Rules
and Regulations against any and all of the tenants in the building.
These Rules and Regulations are in addition to, and shall not be construed to in
any way modify or amend, in whole or in part, the terms, covenants, agreements
and conditions of any lease of leased premises in the entertainment and retail
center.
page 2
EXHIBIT "C"
Landlord reserves the right to make such other and reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for safety,
security, care and cleanliness of the entertainment and retail center and for
the preservation of good order therein. Tenant agrees to abide by all such Rules
and Regulations hereinabove stated and any additional rules and regulations
which are adopted.
Tenant shall be responsible for the observance of all of the foregoing rules by
Tenant's employees, agents, clients, customers, invitees or guests.
Page 3
EXHIBIT "C"
PARKING RULES AND REGULATIONS
In addition to the foregoing rules and regulations and the parking provisions
contained in the Lease to which this Exhibit "C" is attached, the following
rules and regulations shall apply with respect to the use of the entertainment
and retail centers parking areas.
1. Except for valet parking which may be implemented at the entertainment and
retail center, every xxxxxx is required to park and lock his/her own
vehicle. All responsibility for damage to or loss of vehicles is assumed by
the xxxxxx and Landlord shall not be responsible for any such damage or
loss by water, fire, defective brakes, the act or omissions of others,
theft, or for any other cause.
2. Tenant shall not leave vehicles in the parking areas overnight nor park any
vehicles in the parking areas other than automobiles, motorcycles, motor
driven or non-motor driven bicycles or four wheeled trucks.
3. No overnight or extended term storage of vehicles shall be permitted.
4. Vehicles must be parked entirely within painted stall lines of a single
parking stall.
5. All directional signs and arrows must be observed.
6. The speed limit within all parking areas shall be five (5) miles per hour.
7. Parking is prohibited: (a) in areas not striped for parking; (b) in aisles;
(c) where "no parking" signs are posted; (d) on ramps; (e) in cross-hatched
areas; and (9 in reserved spaces and in such other areas as may be
designated by Landlord.
8. Washing, waxing, cleaning or servicing of any vehicle in any area not
specifically reserved for such purpose is prohibited.
9. Landlord may refuse to permit any person who violates these rules to park
in the parking areas, and any violation of the rules shall subject the
vehicle to removal, at such vehicle owner's expense.
Page 4
EXHIBIT "D"
SAMPLE FORM OF NOTICE OF LEASE TERM DATES
To: Date:
--------------------------- ----------------
Lease: Development Lease dated __________,19____ between ____________________
Landlord, and ________________ Tenant, concerning Suite ________
("leased premises") located at___________________
Gentlemen:
In accordance with the above-referenced Lease, we wish to advise and/or
confirm as follows:
That the leased premises have been accepted by Tenant as being
substantially complete in accordance with the Lease, and that there is
no deficiency in construction.
That Tenant has accepted and is in possession of the leased premises,
and acknowledges that under the provisions of the Lease, the Term of
the Lease is ________ years, with ______ option(s) to renew for _______
years each, and commenced upon the commencement date of
_______________, _______ and is currently scheduled to expire on
_______________, subject to earlier termination as provided in the
Lease.
That in accordance with the Lease, rental payment has commenced
(or shall commence) on ______________.
If the commencement date of the Lease is other than the first day of
the month, the first billing will contain a pro rata adjustment. Each
billing thereafter, with the exception of the final billing, shall be
for the full amount of the monthly installment as provided for in the
Lease.
Rent is due and payable in advance on the first day of each and every
month during the Term of the Lease. Your rent checks should be made
payable to _________________________ at__________________.
The exact Floor Area within the leased premises is _________ square
feet.
Tenant's initial charge under Section 8.3 of the Lease (Common Areas)
is ____________________________
Page 1
EXHIBIT "D"
AGREED AND ACCEPTED
TENANT: LANDLORD:
______________________________ _________________________________
By: By:
------------------------- ---------------------------
By: By:
------------------------- ---------------------------
SAMPLE ONLY [NOT FOR EXECUTION]
Page 2
EXHIBIT "E"
MENU
TO BE PROVIDED
HOLOWORLD RIDER
----------------------------------------------------------------
Section 2.1: At the end of the Section, insert "Provided Tenant is not
in default hereof, Tenant shall have the option to extend the original term
hereof for two (2) additional consecutive periods of five (5) years each. Each
option shall be exercised, if at all, by written notice to Landlord at least one
hundred eighty (180) days prior to the expiration of the then current term
hereof. All terms and conditions contained in this Lease shall apply during each
such option period, except the minimum rent and percentage rent shall be as
provided in Sections 2.1 and 2.2 hereof. In the event Tenant does not exercise
either of the foregoing options to renew this Lease within the required time
period, then each such option (and any subsequent option) shall, upon expiration
of the applicable period, become null and void and be of no further force or
effect."
Section 4.1: On page 5, line 62, in place of the deletion, insert
"thirty (30)"
Section 2.2: On page 5, line 64, in place of the deletion, insert
"thirty (30)"
On page 6, line 5, in place of the deletion, insert
"thirty (30)"
On page 6, line 10, in place of the deletion, insert
"five percent (5%)"
On page 6, line 11, after the word "the", insert
"actual"
On page 6, line 15, in place of the deletion, insert
"seven percent (7%)"
Section 5.1(b): On page 7, line 4, after the word "by", insert "no less
than fifteen (15) days"
On page 7, line 4, after the word "Tenant,", insert
"with opportunity for Tenant to
cure within such 15-day period,"
On page 7, line 9, after the word "upon", insert "no
less than fifteen (15) days"
On page 7, line 9, after the word "Tenant,", insert
"with opportunity for Tenant to
cure within such 15-day period,"
On page 7, line 11, after the word "sentence.",
insert "Upon Tenant's written request, Landlord shall give Tenant a reasonably
detailed explanation of any reason Landlord may have for rejecting Tenant's
plans and specifications."
On page 7, line 24, after the roman numeral "V,",
insert "beyond applicable cure periods, if any,"
Page 1
HOLOWORLD RIDER
Section 5.2(b): On page 7, line 57, in place of the deletion, insert
"promptly after"
Section 5.2(c): On page 8, line 2, after the word "Lease.", delete
the period and insert ", but Tenant shall have the right to seek injunctive
relieve, in such event."
Section 5.3: On page 8, line 6, in place of the deletion, insert
"twenty-four (24)"
On page 8, line 7, in place of the deletion, insert
"twenty-fourth (24th)"
Section 6.2: On page 8, line 45, after the word "provide", insert
"at least fifteen (15) days"
On page 8, line 45, after the word "removal,", delete
the comma and insert "(with opportunity for Tenant to cure within such
15-day period)"
Section 6.3: On page 8, line 49, after the word "time,", delete
the comma and insert "during the term of this Lease,"
At the end of the Section, insert "In exercising its
rights under this Section 6.3, Landlord shall minimize any resulting
interference with access to or visibility of the leased premises from the
enclosed mall area."
Section 7.3: On page 10, line 37, in place of the deleting, insert
"fifteen (15)
Section 12.1(c): At the end of the subsection, insert "Electrical
service to the leased premises shall be 1200 amp/3 phase."
Section 14.1: At the end of the Section, insert "Notwithstanding the
provisions of this Section 14.1 to the contrary, Landlord shall not withhold its
consent to an assignment of this Lease by Tenant (by merger, consolidation or
otherwise) to another entity simultaneously acquiring a controlling interest in
Tenant's stock or all or substantially all of Tenant's assets, including,
without limitation, the entire chain of stores conducted under the trade name
herein set forth, provided that: (1) the assignee shall simultaneously be
acquiring control of the entire chain of stores conducted under the trade name
herein set forth and such chain must consist of at least as many stores on the
date of and prior to the effective date of the assignment as Tenant's chain
presently consists of and in no event shall such chain consist of less than ten
(10) stores, (2) Tenant shall not at the time of such assignment be in default
under any of the terms, covenants and conditions of this Lease, (3) such
assignee shall, as of the date immediately prior to the effective date of the
assignment, have a net worth (based on assets contained within the United
States) equal to or greater than the combined net worth of Tenant and Tenant's
Guarantor (if any) as of the date of Tenant's execution of this Lease or as of
the date immediately preceding the effective date of such transfer, whichever of
such net worth amounts shall be the greater, (4) such assignee shall agree in
writing to perform all of the unperformed terms, covenants and conditions of
this Lease (whether accruing prior to, on, or after the effective date of the
assignment), (5) Tenant and Tenant's Guarantor (if any) shall agree in writing
to at all times remain primarily obligated for the performance of the terms,
covenants and conditions of this Lease, (6) such assignee shall have
demonstrated experience in the operation of first class retail
Page 2
HOLOWORLD RIDER
stores of the type described in Section 7.1 of the Data Sheet (or shall have
retained management personnel with such experience) and (7) no later than thirty
(30) days prior to the effective date of the assignment, Tenant shall have
supplied Landlord with all back-up information reasonably required by Landlord
to establish that all of the foregoing conditions have been satisfied."
Section 17.1: At the end of the Section, insert "In no event
shall Tenant be obligated to undertake work equivalent to Landlord's Work in the
leased premises."
Section 21.1: At the end of the Section, insert "In the event
Landlord shall enter the leased premises under non-emergency situations in order
to perform alterations, improvements, additions or repairs to other portions of
the Shopping Center (including the leased premises), and the same are not
necessitated by Tenant's act, neglect or breach of this Lease, and as a result
thereof Tenant cannot, in the exercise of reasonable business judgment, operate
its business and in fact closes the entire premises to the public, and if such
closing continues for a period of three (3) business days or more, Landlord
agrees that minimum rent shall be abated as Tenant's sole remedy commencing with
expiration of such three (3) business day period and continuing until such time
as the condition giving rise to the Tenant closing has been corrected at which
time Tenant shall resume the payments.
Schedule 1 to Exhibit "1" to Exhibit "B": On page 2, paragraph 9) C.,
after the word "space", insert "440,"
[End of text of the Rider; signature and acknowledgement pages appear at
the end of the Data Sheet.]
Page 3
