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PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED ON A REQUEST FOR CONFIDENTIAL
TREATMENT
EXHIBIT 10.18
UNIVERSAL STUDIOS CITYWALK HOLLYWOOD LEASE
Between
UNIVERSAL STUDIOS CITYWALK HOLLYWOOD,
A Division of Universal Studios Inc.
as Landlord
And
Silicon Entertainment, Inc.
A California Corporation
Executed as of July 20 , 1999
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TABLE OF CONTENTS
ARTICLE I: FUNDAMENTAL LEASE PROVISIONS
Section 1.1 Landlord
Section 1.2 Tenant
Section 1.3 Premises
Section 1.4 Lease Term
Section 1.5 Rent Commencement Date
Section 1.6 Minimum Annual Rental
Section 1.7 Percentage Rent
Section 1.8 Gross Sales Breakpoint
Section 1.9 Gross Sales Threshold
Section 1.10 Annual Advertising Amount
Section 1.11 Marketing Fund Contribution
Section 1.12 Delivery Date/Condition of Premises
Section 1.13 Permitted Use of the Premises
Section 1.14 Security Deposit
Section 1.15 Construction Allowance
Section 1.16 Tenant's Broker
Section 1.17 Addresses for Notices
Section 1.18 INTENTIONALLY DELETED
Section 1.19 Additional Documents
Exhibit A-1 Site Plan of the Project
Exhibit A-2 Parking Areas
Exhibit B-1 Floor Plan of Tenant's Premises
Exhibit B-2 Approved Exterior Facade and Exterior Signage
EXHIBIT B-3 Approved Preliminary Design Plan for Interior Layout
Exhibit C Provisions Relating to Construction of Tenant's Premises
Exhibit D Statement of Gross Sales
Exhibit E Intentionally Deleted
Exhibit F Sample Letter of Estoppel
Exhibit G Tenant's Initial Merchandise and Price List
Exhibit H Stairway Modification
ARTICLE II: PRIMARY LEASE PROVISIONS
Section 2.1 Use of the Premises
Section 2.2 Trade Name
Section 2.3 Operating Standards
Section 2.4 Sponsorships
Section 2.5 Principal's Involvement
Section 2.6 Radius Restriction
Section 2.7 Tenant's Exclusive
Section 2.8 Option to Extend
Section 2.9 Right to Relocate
Section 2.10 Deposit for Tenant's Work
Section 2.11 Intentionally Deleted
Section 2.12 Adjustment of Taxes
Section 2.13 Construction Allowance
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ARTICLE III: PREMISES
Section 3.1 Lease of Premises
Section 3.2 Definitions of "Floor Area" and "Tenant Areas"
Section 3.3 Certain Easements in Favor of Tenant
Section 3.4 Certain Easements in Favor of Landlord
ARTICLE IV: TERM
Section 4.1 Duration of Lease Term
Section 4.2 Acceptance of the Premises
Section 4.3 Delays in Completion of Landlord's Work
Section 4.4 Tenants Early Use Or Possession
Section 4.5 Tenant's Delivery of Documents
Section 4.6 Surrender of the Premises
Section 4.7 Holding Over Without Consent
Section 4.8 Landlord's Right of Termination
ARTICLE V: RENTAL
Section 5.1 Rent Commencement Date
Section 5.2 Minimum Annual Rental
Section 5.3 Percentage Rent
Section 5.4 Reporting of Gross Sales
Section 5.5 Additional Rent
Section 5.6 Late Payments
Section 5.7 No Set-Offs or Deductions
Section 5.8 Adjustment of Payments
Section 5.9 Audit Rights
ARTICLE VI: DEFINITION OF "GROSS SALES"
ARTICLE VII: UTILITIES
ARTICLE VIII: COMMON AREA AND PARKING AREAS
Section 8.1 Definition of "Common Area"
Section 8.2 Use of Common Area
Section 8.3 Control of Common Area
Section 8.4 Security
Section 8.5 Rules and Regulations
Section 8.6 Parking
Section 8.7 Parking Charges
ARTICLE IX: MARKETING AND ADVERTISING
Section 9.1 Tenant Advertising
Section 9.2 Marketing Fund
ARTICLE X: POSSESSION AND USE
Section 10.1 Permitted Uses
Section 10.2 Duties and Prohibited Conduct
Section 10.3 Deliveries/Trash Removal
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Section 10.4 Additional Costs
Section 10.5 Renovation
ARTICLE XI: TENANANT'S CONDUCT OF BUSINESS
Section 11.1 Operating Covenants
Section 11.2 Operating Days and Hours
Section 11.3 Compliance with Laws
ARTICLE XII: LIMITS ON SIGNS AND ADVERTISING
ARTICLE XIII: PERSONAL PROPERTY; IMPROVEMENTS; CERTAIN TAXES
Section 13.1 Removal and Replacement
Section 13.2 Improvements
Section 13.3 Certain Taxes
ARTICLE XIV: TENANT'S RIGHT TO MAKE IMPROVEMENTS
Section 14.1 Alterations
Section 14.2 Construction Requirements
ARTICLE XV: MECHANIC'S LIENS
ARTICLE XVI: REPAIRS AND MAINTENANCE
Section 16.1 Tenant's Obligations
Section 16.2 Landlord's Obligations
Section 16.3 Right to Enter
Section 16.4 Landlord's Liability
ARTICLE XVII: INDEMNITY; INSURANCE
Section 17.1 Indemnity by Tenant
Section 17.2 Tenant's Insurance Obligation
Section 17.2.1 General Liability
Section 17.2.2 Workers Compensation
Section 17.2.3 Plate Glass
Section 17.2.4 Equipment
Section 17.2.5 Tenant's Improvements and Personal Property
Section 17.2.6 Business Interruption
Section 17.3 Form of Policies
Section 17.4 Blanket Insurance Policies
Section 17.5 Landlord's Insurance Obligation
Section 17.6 Mutual Waivers of Rights
Section 17.7 Insurance Use Restrictions
ARTICLE XVIII: RECONSTRUCTION
Section 18.1 Insured Casualty
Section 18.1.1 Repair of Damage
Section 18.1.2 Damage Near End of Lease Term
Section 18.2 Uninsured Casualty
Section 18.3 Construction Provisions
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Section 18.4 Release of Liability
section 18.5 Major Destruction
ARTICLE XIX: OCCUPANCY TRANSACTIONS
Section 19.1 Restrictions
Section 19.2 Nullity
Section 19.3 Definitions
Section 19.3.1 "Occupancy Transaction"
Section 19.3.2 "Transferee"
Section 19.3.3 "Control"
Section 19.4 Landlord's Costs
ARTICLE XX: BANKRUPTCY; INVOLUNTARY TRANSFERS
Section 20.1 Right of Termination
Section 20.1.1 Receivership
Section 20.1.2 Attachment
Section 20.1.3 Bulk Sale
Section 20.1.4 Multiple Locations
Section 20.1.5 Guarantor
Section 20.2 Request for Information
section 20.3 Assignment by DIP or Trustee
ARTICLE XXI: SECURITY DEPOSIT
Section 21.1 Payment
Section 21.2 Application
Section 21.3 Transfer of Landlord's Interest
ARTICLE XXII: DEFAULTS BY TENANT; REMEDIES
Section 22.1 Event of Default
Section 22.1.1 Failure to Pay Rent
Section 22.1.2 Breach of Operating Covenants
Section 22.1.3 Other Curable Defaults
Section 22.2 Notices
Section 22.2.1 Failure to Pay Rent
Section 22.2.2 Breach of Operating Covenants
Section 22.2.3 Other Curable Defaults
Section 22.3 Non-Curable Defaults
Section 22.4 Landlord's Rights and Remedies
Section 22.4.1 Termination of Lease
Section 22.4.2 Reentry of the Premises
Section 22.4.3 Termination after Reentry
Section 22.4.4 Continued Enforcement of Lease
Section 22.5 Landlord's Damages
Section 22.5.1 Delinquent Rent
Section 22.5.2 Rent After Termination Until Judgment
Section 22.5.3 Rent After Judgment
Section 22.5.4 Other Compensation
Section 22.5.5 Additional or Alternative Documents
Section 22.5.6 Calculation of Damages
Section 22.6 Merchandise and Personal Property
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Section 22.7 Self-Help Cure Rights
Section 22.8 No Waiver
Section 22.9 Waiver of Notice
ARTICLE XXIII: DEFAULTS BY LANDLORD; REMEDIES
ARTICLE XXIV: EMINENT DOMAIN
ARTICLE XXV: SALE OR MORTGAGE BY LANDLORD
ARTICLE XXVI: SUBORDINATION; ATTORNMENT; ESTOPPEL
Section 26.1 Subordination
Section 26.2 Attornment
Section 26.3 Estoppel Certificate
ARTICLE XXVII: TITLE TO PREMISES
ARTICLE XXVIII: QUIET ENJOYMENT
ARTICLE XXIX: NOTICES AND CONSENTS
ARTICLE XXX: MISCELLANEOUS
Section 30.1 Lease Rate
Section 30.2 Financing Costs
Section 30.3 Waiver or Consent Limitation
Section 30.4 Force Majeure
Section 30.5 Avoidance of Labor Disputes
Section 30.6 Landlord Calculations, Determinations and Requirements
Section 30.7 Failure to Give Consent
Section 30.8 Reasonableness
Section 30.9 Relationship of the Parties
Section 30.10 Severability; Construction of Provisions
Section 30.11 Warranty of Authority
Section 30.12 Entire Agreement; Construction
Section 30.13 Time of Essence
Section 30.14 Joint and Several Liability
Section 30.15 Successors and Assigns
Section 30.16 Right to Lease
Section 30.17 Landlord's Right to Engage in Other Activities
Section 30.18 Landlord's Access
Section 30.19 Attorneys' Fees
Section 30.20 Brokers
Section 30.21 Recordation
Section 30.22 Nonbinding
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Universal Studios CityWalk Hollywood Lease
This Lease is executed as of July 20, 1999 (the "Effective Date"). In
consideration of the rents and covenants hereinafter set forth, Landlord
(identified in Section 1.1) hereby leases to Tenant (identified in Section 1.2)
and Tenant hereby leases from Landlord, the Premises upon the terms and
conditions hereinafter set forth.
CONDITION PRECEDENT:
THE VALIDITY OF THIS LEASE IS CONDITIONED ON THE APPROVAL BY THE
MUSICLAND GROUP, INC. (d/b/a ▇▇▇ ▇▇▇▇▇) ("MUSICLAND") ON OR BEFORE JULY 31, 1999
OF LANDLORD'S PRELIMINARY PLANS AND SPECIFICATIONS FOR LANDLORD'S WORK WITH
RESPECT TO THE LOCATION OF THE DEMISING WALL BETWEEN THE PREMISES AND THE SPACE
OCCUPIED BY MUSICLAND IMMEDIATELY ADJACENT TO THE PREMISES; PROVIDED, HOWEVER,
LANDLORD REPRESENTS AND WARRANTS THAT MUSICLAND WILL NOT HAVE ANY APPROVAL
RIGHTS OVER, AND THE VALIDITY OF THIS LEASE IS IN NO WAY CONDITIONED UPON
MUSICLAND'S APPROVAL OVER, TENANT OR TENANT'S DESIGN PLANS AND SPECIFICATIONS
FOR THE PREMISES, EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH. LANDLORD
SHALL DELIVER WRITTEN NOTICE TO TENANT PROMPTLY AFTER OBTAINING THE MUSICLAND
GROUP'S APPROVAL OF THE FOREGOING. LANDLORD'S FAILURE TO DELIVER TO TENANT
WRITTEN NOTICE OF MUSICLAND'S DISAPPROVAL OF THE FOREGOING ON OR BEFORE JULY 31,
1999 SHALL BE DEEMED LANDLORD'S ACKNOWLEDGEMENT AND REPRESENTATION THAT THE
AFORESAID CONDITION PRECEDENT HAS BEEN SATISFIED.
INITIAL TENANT OBLIGATIONS:
THIS PARAGRAPH SHALL SUPERSEDE ANYTHING TO THE CONTRARY CONTAINED IN
EXHIBIT C ATTACHED HERETO. TENANT HAS SUBMITTED, AND LANDLORD HAS APPROVED IN
ITS SOLE AND ABSOLUTE DISCRETION TENANT'S PRELIMINARY DESIGN PLANS FOR THE
EXTERIOR FACADE AND EXTERIOR SIGNAGE FOR THE PREMISES (WHICH DESIGNS ARE
ATTACHED HERETO AS EXHIBIT B-2), AND DOCUMENTS DETAILING TENANT'S CONCEPT. THE
FINAL DESIGN PLANS FOR THE EXTERIOR FACADE AND EXTERIOR SIGNAGE FOR THE PREMISES
SHALL BE SUBSTANTIALLY THE SAME AS EXHIBIT B-2. IF TENANT DESIRES TO MAKE ANY
CHANGES TO THE EXTERIOR FACADE AND/OR THE EXTERIOR SIGNAGE PRELIMINARY DESIGN
PLANS ATTACHED HERETO AS EXHIBIT B-2, SUCH CHANGES SHALL BE SUBMITTED TO
LANDLORD FOR APPROVAL BY LANDLORD WHICH APPROVAL SHALL BE IN LANDLORD'S
REASONABLE DISCRETION IF SUCH CHANGES ARE GENERALLY CONSISTENT WITH THE
PREVIOUSLY-APPROVED PRELIMINARY DESIGN PLANS OF TENANT, AND IN LANDLORD'S SOLE
DISCRETION IF SUCH CHANGES ARE NOT GENERALLY CONSISTENT WITH THE
PREVIOUSLY-APPROVED PRELIMINARY DESIGN PLANS OF TENANT. IN DETERMINING WHETHER
TO APPROVE TENANT'S EXTERIOR SIGNAGE, LANDLORD WILL CONSIDER WHETHER THE SAME IS
CONSISTENT WITH THE ARCHITECTURAL AND AESTHETIC STANDARDS PREVAILING WITHIN THE
PROJECT (AS DEFINED IN SECTION 1.19) AND WITH THE OVERALL CITYWALK 2000
EXPANSION PLAN AND SCHEME. TENANT ACKNOWLEDGES THAT, DUE TO THE UNIQUE
ENTERTAINMENT CHARACTER OF CITYWALK, THERE ARE SPECIFIC EXPECTATIONS IN PLACE
FOR EXTERIOR SIGNAGE. IN MAKING ANY CHANGES TO THE PREVIOUSLY-APPROVED EXTERIOR
SIGNAGE, TENANT WILL TAKE INTO ACCOUNT LANDLORD'S DESIRE THAT THE CONCEPT AND
DESIGN OF TENANT'S EXTERIOR SIGNAGE SHOULD EXHIBIT A HIGH LEVEL OF CREATIVITY
AND SHOULD BE OF SUFFICIENT SIZE WITH A "FLAIR FOR THE DRAMATIC," SUCH THAT IT
CAUSES IMMEDIATE BRAND RECOGNITION AND ENTICES PATRONS INTO TENANT'S SPACE.
FURTHERMORE, TENANT'S SIGN DESIGNER AND SIGN FABRICATOR MUST BE PRE-APPROVED BY
LANDLORD IN LANDLORD'S REASONABLE DISCRETION. TENANT HAS SUBMITTED AND LANDLORD
HAS APPROVED TENANT'S PRELIMINARY DESIGN PLANS FOR THE INTERIOR LAYOUT OF THE
PREMISES (WHICH DESIGNS ARE ATTACHED HERETO AS EXHIBIT B-3). IF TENANT DESIRES
TO MAKE ANY CHANGES TO THE INTERIOR LAYOUT PRELIMINARY DESIGN PLANS PREVIOUSLY
APPROVED BY LANDLORD, SUCH CHANGES SHALL BE SUBMITTED TO LANDLORD FOR APPROVAL
IN LANDLORD'S REASONABLE DISCRETION; PROVIDED, HOWEVER, LANDLORD SHALL HAVE
APPROVAL RIGHTS IN LANDLORD'S SOLE DISCRETION OVER SUCH
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ASPECTS OF THE INTERIOR LAYOUT OF THE PREMISES THAT AFFECT THE STRUCTURAL
INTEGRITY OF THE PREMISES AND/OR THE PROJECT. TENANT SHALL SUBMIT TENANT'S FINAL
DESIGN PLANS FOR THE EXTERIOR FACADE, EXTERIOR SIGNAGE, AND INTERIOR LAYOUT OF
THE PREMISES IN ACCORDANCE WITH SECTION III.E OF EXHIBIT C ATTACHED HERETO.
LANDLORD'S APPROVAL OF ALL DESIGN PLANS SUBMITTED TO LANDLORD BY TENANT (WHETHER
FOR THE FIRST TIME OR AS A RESULT OF ANY MODIFICATION THERETO) SHALL BE GRANTED
OR DENIED (AND IF DENIED, SUCH DENIAL SHALL BE ACCOMPANIED BY SPECIFIC, DETAILED
AND WRITTEN REASONS THEREFOR WITH ALTERNATIVE RECOMMENDATIONS BY LANDLORD)
WITHIN FIFTEEN (15) DAYS AFTER LANDLORD'S RECEIPT OF THE PLANS SUBMITTED BY
TENANT. IF LANDLORD DOES NOT NOTIFY TENANT OF ITS DENIAL OR APPROVAL OF TENANT'S
PLANS ON OR BEFORE THE EXPIRATION OF SUCH FIFTEEN (15) DAY PERIOD AND
THEREAFTER, WITHIN FIVE (5) DAYS AFTER TENANT PROVIDES WRITTEN NOTICE TO
LANDLORD THAT FAILURE OF LANDLORD TO TIMELY NOTIFY TENANT OF ITS DENIAL OR
APPROVAL SHALL BE DOOMED LANDLORD'S APPROVAL THEREOF, THEN LANDLORD'S FAILURE TO
TIMELY NOTIFY TENANT OF ITS DENIAL OR APPROVAL WITHIN SAID FIVE (5) DAY PERIOD
SHALL BE DEEMED LANDLORD'S APPROVAL THEREOF. In REVIEWING TENANT'S SIGNAGE AND
OTHER PLANS FOR THE PREMISES, LANDLORD SHALL TAKE INTO ACCOUNT AND ACKNOWLEDGE
THAT TENANT IS A PARTY TO A LICENSE AGREEMENT WITH NASCAR AND THAT TENANT'S USE
AND DISPLAY OF THE TRADE NAME AND THE LOGO AND TRADEMARKS ASSOCIATED THEREWITH
IS SUBJECT TO NASCAR'S CONSENT AS SET FORTH IN SUCH LICENSE AGREEMENT.
ARTICLE I. LEASE TERMS
The following terms, wherever initially capitalized in this Lease,
shall have the meanings set forth in this Article I:
1.1 Landlord: UNIVERSAL STUDIOS CITYWALK HOLLYWOOD, a division of Universal
Studios, Inc.
1.2 Tenant: Silicon Entertainment, Inc., a California corporation.
Tenant's Trade Name: NASCAR Silicon Motor Speedway (subject to Section
2.2).
1.3 Premises: That certain space having approximately 5,000 SQUARE FEET of
Floor Area ("Tenant's Floor Area") labeled SPACE Unit #120, as more
particularly shown in Exhibit B-1, (a portion of the first floor of the
former ▇▇▇ ▇▇▇▇▇ Records Space). Tenant's Floor Area shall be
re-measured in accordance with Section 3.2 below. Tenant's Floor Area
shall not include any mezzanine or catwalk floor area.
1.4 Lease Term: [***] years commencing on the Rent Commencement Date
("Initial Term") plus [***] year option period ("Option Term") on the
same terms and conditions except rent related terms (the term "Lease
Term" shall be used refer to the entire term of this Lease,
including the Option Term, if Tenant's option to extend the term of
this Lease is exercised).
1.5 Rent Commencement Date: Tenant shall not be obligated to commence the
payment of any rent under this Lease until the earlier of (a) ninety
(90) days following the date that Landlord delivers the Premises to
Tenant pursuant to Section 1.12 below, or (b) the date Tenant opens
for business to the public in the Premises If the Rent Commencement
Date is other than the first day of the month, then the first day of
the calendar month immediately following the actual Rent Commencement
Date shall be used for the purposes of calculating anniversaries of the
Rent Commencement Date.
Tenant shall use commercially reasonable efforts to open for
business within 10 weeks after Landlord delivers the Premises to
Tenant; provided, however, Landlord shall not be entitled to declare
Tenant to be in default under this Lease for failure to open for
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business in the Premises until such date that is one hundred
thirty-five (135) days after the date that Landlord delivers the
Premises to Tenant as required under this Lease. Furthermore, Tenant
shall be obligated to commence the payment of rent under this Lease as
of the Rent Commencement Date whether or not Tenant has opened for
business on or before 135 days following the date that Landlord
delivers the Premises to Tenant. Notwithstanding the foregoing, each of
the aforesaid periods (i.e., the Rent Commencement Date and the date
after which Tenant shall be in default if it has not opened the
Premises for business) shall be tolled by the number of days of delay
in Tenant's opening for business resulting from events of Force Majeure
(as defined in Section 30.4 below) and/or delays caused by Landlord.
1.6 Minimum Annual Rental: [***] per year. The Minimum Annual Rental stated
in this Section is based upon an "all in" rent of [***] per square foot
of Floor Area and an initial estimated Floor Area of 5,000 square feet.
Said rental amount is based upon a starting annual rental of [***] per
square foot plus [***] per square foot for all other charges including,
without limitation, Tenant's share of Operating Costs, CAM and Taxes
(including all real property taxes assessed against the Project and the
Premises, subject to Section 2.12), marketing and advertising
contributions, and insurance costs; provided, however that the
foregoing shall exclude real and personal property taxes, if any,
levied upon Tenant's improvements (including, without limitation,
Tenant's FF&E and Tenant's contents and liability insurance, both of
which shall be paid separately by Tenant). Upon the determination of
the final Floor Area of the Premises pursuant to Section 3.2, the
amount stated in this Section shall be adjusted to equal the amount of
[***] per square foot multiplied by that final Floor Area.
On each anniversary of the Rent Commencement Date, the "all
in" Minimum Annual Rental shall be increased by the percentage increase
in the Index, as defined in Section 5.8 and as provided in Section 5.2
(such increase not to exceed 3%) over the Index for the prior year,
provided, however, that upon the commencement of the [***] anniversary
of the Rent Commencement Date, the Minimum Annual Rental (as adjusted
by the Index in prior years) shall be increased to the greater of (i)
[***] of the rent on the Rent Commencement Date, or (ii) the rent for
the prior year adjusted by the percentage increase in the Index (not to
exceed [***]).
1.7 Percentage Rental: [***] of Gross Sales in excess of the Gross Sales
Breakpoint. Percentage Rental is defined in Section 5.3.
1.8 Gross Sales Breakpoint: [***] based on [***] per square foot per year.
The amount stated in this Section is based on [***] per square foot of
Floor Area, and the initial stated Floor Area of 5,000 square feet.
Upon the determination of the final Floor Area of the Premises pursuant
to Section 3.2, the amount stated in this Section shall be adjusted to
equal the amount of [***] per square foot multiplied by that final
Floor Area.
On each anniversary of the Rent Commencement Date, the Gross
Sales Breakpoint shall be increased by the percentage increase in the
Index, as defined in Section 5.8 and as provided in Section 5.3 (such
increase not to exceed [***]) over the Index for the prior year,
provided, however, upon the commencement of the fifth anniversary of
the Rent Commencement Date the Gross Sales Breakpoint (as adjusted by
the Index in prior years) shall be increased to the greater of (i)
[***] of the Gross Sales Breakpoint on the Rent Commencement Date, or
(ii) the Gross Sales Breakpoint for the prior year adjusted by the
percentage increase in the Index (not to exceed [***]).
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1.9 Gross Sales Threshold: [***], based on [***] per square foot per year.
The amount stated in this Section is based on [***] per square foot of
Floor Area, and the initial stated Floor Area of 5,000 square feet.
Upon the determination of the final Floor Area of the Premises pursuant
to Section 3.2, the amount stated in this Section shall be adjusted to
equal the amount of [***] per square foot multiplied by that final
Floor Area.
On each anniversary of the Rent Commencement Date, the Gross
Sales Threshold shall be increased by the percentage increase in the
Index, as defined in Section 5.8 and as provided in Section 4.8 (such
increase not to exceed [***]) over the Index for the prior year;
provided, however, upon the commencement of the fifth anniversary of
the Rent Commencement Date the Gross Sales Threshold (as adjusted by
the Index in prior years) shall be increased to the greater of (i)
[***] of the Gross Sales Threshold on the Rent Commencement Date, or
(ii) the Gross Sales Threshold for the prior year adjusted by the
percentage increase in the Index (not to exceed [***]).
1.10 Annual Advertising Amount: INTENTIONALLY DELETED.
1.11 Marketing Fund Contribution: INTENTIONALLY DELETED.
1.12 Delivery Date/Condition of Premises: Subject to Section 1.5 above,
Landlord shall use commercially reasonable efforts to deliver the
Premises to Tenant on or before August 31, 1999 subject to delays
caused by events of Force Majeure. Landlord shall deliver the Premises
to Tenant after completion of Landlord's Work, as described in Exhibit
C and Tenant shall complete Tenant's Work within 90 days after the date
of delivery of the Premises to Tenant with all of Landlord's Work
completed as required hereunder. Notwithstanding anything to the
contrary contained in this Lease, (y) if Landlord has not delivered the
Premises to Tenant with all of Landlord's Work completed as required
hereunder on or before September 30, 1999 (other than directly due to
and only to the extent caused by an act or omission of Tenant), then
Tenant shall not be required to commence Tenant's Work until November
3, 1999 (provided Landlord has delivered the Premises to Tenant prior
to November 3, 1999 and provided further if Landlord delivers the
Premises to Tenant between September 22, 1999 and November 3, 1999, for
purposes of determining the Rent Commencement Date under Section 1.5
above, the delivery date shall be deemed to be the earlier of the date
Tenant commences Tenant's Work or November 3, 1999), and (z) if
Landlord has not delivered the Premises to Tenant with all of
Landlord's Work completed as required hereunder on or before September
22, 2000 (subject to Force Majeure and not due to an act or omission of
Tenant), Tenant shall have the right to terminate this Lease by written
notice to Landlord delivered on or before November 22, 2000 and
Landlord shall reimburse Tenant for all reasonable out-of-pocket
expenses not to exceed [***].
Tenant shall receive in "rough shell" condition, as more fully
described in the attached Exhibit C - Provisions Relating to
Construction of Tenant's Premises -Landlord's Work. In addition to
Exhibit C, Landlord, at its cost and expense, shall (i) deliver the
space in broom clean condition, (ii) deliver the space in compliance
with legal, code and zoning requirements exclusive of any such
requirements relating to Tenant's Work including, but not limited to,
building or occupancy permits, (iii) deliver the utility systems to the
Premises as specified in Exhibit C in good working order, (iv) deliver
the rough shell building in good condition and repair, free of any
asbestos, (v) remove the existing mezzanine, catwalks (and the
supporting structures therefor) from the Premises, and (vi) modify the
existing exit stairway as provided in the attached Exhibit H, provided
that Tenant's Construction Allowance shall be reduced by the actual
cost of the stairway
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modification in an amount not to exceed [***]. In addition to Exhibit
C and the foregoing, other specifications regarding the rough shell
condition are as follows:
- Electric Service - Landlord shall provide and install
conduit from Landlord's electrical room stubbed to
the Premises at location specified by Tenant. Service
is separately metered. Meter and hook-up is at
Tenant's expense, subject to the last sentence of
this Section 1.12. Amperage requirements in excess of
Exhibit C (per Section I.E.1) is at Tenant's expense.
- Floor structure - which can handle +l/-0.5G force at
l50 lbs./square foot.
- 17 feet 6 inches of interior height - excluding
building service lines (i.e. sprinklers, electrical
conduits, roof drains, HVAC, etc.
- No finished ceiling requirements, subject to a
minimum aesthetic standard reasonably approved by
Landlord.
- Telephone conduit stubbed to space.
- Domestic (cold) water only brought to space. Tenant
supplies water heater.
- Interior walls and curtain walls within the Premises
are per Exhibit C. Interior studs are at demising
wall locations only.
- Doors and vestibules to service corridor and service
courts. Door hardware supplied by Tenant.
- Sprinkler system per Exhibit C.
- Sanitary lines stubbed under or to rear of the
Premises.
- Smoke Evacuation System is not required.
Tenant shall be allowed to keep its front doors open during business hours.
Tenant shall have the right, at Tenant's expense, to install and maintain on the
building's roof one satellite dish for Tenant's communications and data
transmission network, subject to Landlord's reasonable approval of the size,
location, manner of installation, necessary screening, and aesthetic appearance
of the satellite dish. Tenant shall supply at Tenant's expense its own rooftop
35 ton A/C unit subject to Landlord's reasonable approval of the location,
manner of installation, necessary screening and aesthetic appearance of the A/C
unit. Notwithstanding anything to the contrary contained in this Lease and
subject to the last two sentences of the second paragraph of Section 11.3,
Landlord hereby represents and warrants to Tenant that Landlord has obtained a
conditional use permit (or its equivalent) and all other zoning and other
discretionary permits and approvals (i.e., all consents and approvals, other
than a building permit (the "Building Permit")) conditioned only upon the
submission of plans and specifications which comply with applicable building
codes and the payment of statutory building permit fees necessary to permit the
construction of the Premises and all improvements to be constructed therein or
as a part thereof by Landlord and Tenant as contemplated in this Lease
(collectively, the "Discretionary Approvals") and the use of the Premises by
Tenant as permitted under this Lease. Landlord acknowledges that it is the
intent of this Lease that Tenant shall not be obligated to pay and Landlord
shall be responsible for any mitigation, discretionary, or impact fees.
1.13 Permitted Use of the Premises: Only for the operation of an automobile
racing ride simulators, as more fully described below in Section 2.1.
1.14 Security Deposit: [***] months rent based on 5,000 square feet of Floor
Area. The amount of the Security Deposit is equal to [***] month's
installments of the Minimum Annual
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Rental as initially stated in Section 1.6. In the event Minimum Annual
Rental is adjusted upon measurement of the Premises in accordance with
Section 3.2 below, then the amount of the Security Deposit shall be
adjusted to equal two (2) month's installments of such adjusted Minimum
Annual Rental.
1.15 Construction Allowance: [***] based on [***] per square foot.
Construction Allowance to be disbursed as per Section 2.13 (subject to
Section 1.12 which provides for a reduction to the Construction
Allowance for the stairway modification not to exceed [***]. The amount
stated in this Section is based on [***] per square foot of Floor Area,
and the initial stated Floor Area of 5,000 square feet. Upon the
determination of the final Floor Area of the Premises pursuant to
Section 3.2, the amount stated in this Section shall be adjusted to
equal the amount of [***] per square foot multiplied by that final
Floor Area.
1.16 Tenant's Broker: ▇▇▇▇▇▇▇ ▇. Friend, vice-president of Blatteis Realty
Co. Tenant agrees that it has selected, retained and hired Tenant's
Broker and that Landlord will not be responsible in any way for any
fees or commissions to Tenant's Broker associated with any services or
work which have or will be provided in connection with this Lease or
negotiation of this Lease. In addition, there is no fiduciary or other
relationship between Landlord and Tenant's Broker.
1.17 Addresses for Notices:
To Landlord: UNIVERSAL STUDIOS CITYWALK HOLLYWOOD,
a Division of Universal Studios, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇. ▇▇ 79;
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Senior Vice President,
General Manager
copy to: Universal CityWalk Legal Affairs
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇. ▇▇ 79;
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Director,
Business & Legal Affairs
To Tenant: Silicon Entertainment
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
copy to: Tenant at the address of the Premises
See Article XXIX
1.18 Intentionally Deleted.
1.19 Additional Documents: The following documents are attached hereto, and
such documents, as well as all drawings and documents prepared pursuant
thereto and all additional documents specified in Section 1.19, are
made a part of this Lease:
EXHIBIT A-1 - Site Plan of Universal CityWalk Phase II
development, a retail entertainment center being developed by
Landlord adjacent to the currently existing CityWalk Phase I
development (hereinafter Phase I & II and all future additions
to Universal CityWalk Phase I and Phase II are collectively
referred to as the "Project") and the Common Area associated
with the Project. Landlord shall have the right at any time to
expand, reduce, remove, demolish, renovate or
*** Confidential treatment requested.
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construct any existing or new improvements at the Project and/or the Common
Area.
EXHIBIT A-2 Parking Areas
EXHIBIT B-1 Floor Plan of Tenant's Premises.
EXHIBIT B-2 Approved Exterior Facade and Exterior Signage
EXHIBIT B-3 Approved Preliminary Design Plan for Interior Layout
EXHIBIT C Provisions Relating to Construction of Tenant's Premises
EXHIBIT D Statement of Gross Sales
EXHIBIT E Intentionally Deleted
EXHIBIT F Sample Letter of Estoppel
EXHIBIT G Tenant's Initial Merchandise and Price List
EXHIBIT H Stairway Modification
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ARTICLE II. PRIMARY LEASE PROVISIONS.
The provisions of this Article shall serve to modify and to amend the
hereinafter specified provisions of, and otherwise to supplement, the Lease, as
follows, and shall supersede any contrary provisions contained in the balance of
the Lease:
2.1 Use of the Premises: Tenant covenants and agrees that, except as
otherwise specifically permitted in this Lease, it shall continuously use and
occupy the Premises solely and exclusively for the purposes and uses described
in this Section 2.1 and for no other purpose whatsoever ("Permitted Use").
Notwithstanding anything to the contrary contained in this Lease, Tenant shall
not be obligated to continuously operate from the Premises during such periods
in which (i) Tenant is carrying on remodeling activities (but in no event for
more than thirty (30) days in any lease year and no more than twice in any five
(5) year period), (ii) Tenant is unable to operate as a direct result of a Force
Majeure event to the Premises or the Project or as a result of any other
condition at the Premises or the Project that would expose Tenant's employees,
agents or invitees to an unreasonably high risk of physical injury or property
damage, and/or (iii) Tenant's use and occupancy of the Premises is prohibited by
any law, ordinance, order or other act of any judicial governmental or
quasi-governmental authority.
The Premises shall be used for the installation and operation of
automobile racing car ride simulators for guests with each ride separately
priced and no general admission price to the facility (other than group sales
and leagues). Tenant shall also be permitted to use the Premises for the
incidental sale of merchandise (excluding all food and beverage unless catered
for a group sales activity) related to motor sports (including NASCAR videos,
pictures, CD-ROMs, DVD's and other media and other such audio/visual items
featuring NASCAR racing, not to exceed 2% of Tenant's total floor area,
excluding videos of actual customer races recorded from the automobile racing
car ride simulators at the Premises which shall not be subject to the 2%
limitation) and/or related to NASCAR with the logo of NASCAR or NASCAR Silicon
Motor Speedway or such Trade Name as Tenant may operate under from time-to-time
in accordance with Section 2.2 below. Tenant, its employees and agents shall
have the right to enter the Premises 24 hours a day, 7 days a week, 52 weeks per
year, at all times. Tenant shall stay open consistent with the operating hours
of the Project as per the Project Rules and Regulations (which shall be applied
in a non-discriminatory manner); provided, further, Tenant may elect to stay
open beyond these hours and can open as early as 8:00 am and close as late as
2:00 am each day of the week. Notwithstanding the foregoing, Tenant shall not be
obligated to open for business during any such hours or on any such day as less
than fifty (50%) of the other tenants of the Project are open for business.
Tenant shall be allowed to conduct group sales at which time all or a
portion of the store will be temporarily closed to the public with the group
sales activity occurring in the closed portion of the Premises. Tenant shall use
reasonable efforts to limit group sales activity such that there are no more
than two group sales events per week, the events last no longer than 3 hours per
event, and the events do not occur during peak operating hours unless approved
by Landlord in its reasonable discretion. Conditioned on Tenant obtaining at
Tenant's expense any required licenses or permits relating to the sale of
alcoholic beverages, alcoholic beverages and other food may be served during
group sales provided that the alcoholic beverages and other food are available
only to group sales patrons and not to any other patrons in the Premises and
only when the Premises is temporarily closed to the public for a group sales
event.
Any change in Tenant's Permitted Use within the Premises (i.e.,
installation and operation of automobile racing car ride simulators for guests)
shall be subject to Landlord's approval to assure that Tenant maintains (a) a
quality level consistent and compatible with the overall image of the Protect
and Universal City, and (b) a product offering not unreasonably duplicative of
that
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offered by other existing or future tenants. Subject to Tenant's permitted use
of the Premises as set forth above, Tenant shall not use or permit or suffer the
use of the Premises in any manner inconsistent with this Paragraph or not in
keeping with the character and dignity of the Project and Universal City.
Landlord hereby represents and warrants to Tenant that to the best of Landlord's
knowledge Tenant's use of the Premises as contemplated herein does not violate
any exclusivity clause or other agreement between Landlord and any other tenant
of the Project. Landlord will indemnify Tenant for any claim by another tenant
of the Project arising out of Tenant's Use as described in Section 2.1 which
violates the tenant's exclusivity clause or other agreement between that tenant
and Landlord.
Except with respect to those items of merchandise specifically
permitted as part of Tenant's Permitted Use of the Premises and/or set forth in
the attached Exhibit G ("Tenant's Initial Merchandise and Price List"),
merchandise lines offered or used by Tenant within or from the Premises shall be
subject to Landlord's prior written reasonable approval, to assure: (i) a
quality level consistent and compatible with the overall image of the Project
and future tenants of the Project and Universal Studios Hollywood, and (ii) a
product offering not unreasonably duplicative of that offered by other existing
or future tenants of the Project; provided, however, Landlord and Tenant agree
that no "NASCAR" branded merchandise consistent with the Permitted Use and/or
set forth in Exhibit G shall be determined to be duplicative of that offered by
other existing or future tenants of the Project. Without limiting the foregoing
(e.g., subject to Tenant's express right above to sell NASCAR videos, pictures,
CD-ROMs, DVD's and other media and other such audio/visual items featuring
NASCAR racing set forth above), Tenant shall not, without Landlord's prior
express written approval, sell or offer for sale any film of any nature,
disposal cameras, photographic or movie cameras, or any other related film
products. Tenant expressly acknowledges and agrees that nothing contained herein
shall permit or be deemed to permit without the express prior written approval
of Landlord, which approval may be withheld at Landlord's sole and absolute
discretion, the sale or display of any merchandise licensed by or affiliated
with any "theme parks and related facilities" as defined herein (either alone or
in conjunction with or as part of any other word or name), including without
limitation any merchandise which uses or contains any of the characters or
designs associated with any theme parks and related facilities. For the purpose
of this Lease, the term "merchandise licensed by or affiliated with any theme
parks" shall include all licensed products issued by such theme park or any of
its affiliates or parent companies. (For example, any licensed product sold by
The Wait Disney Company shall be deemed to be a product that is affiliated with
Disney World, EPCOT, and/or MGM Studios, as the case may be). Tenant expressly
acknowledges and agrees that Tenant shall have no right to sell or display any
merchandise licensed by or affiliated with "UNIVERSAL," "UNIVERSAL STUDIOS,"
"UNIVERSAL STUDIOS HOLLYWOOD," "UNIVERSAL STUDIOS CITYWALK HOLLYWOOD" or
"CITYWALK" (either alone or in conjunction with or as a part of any other word
or name), including without limitation any merchandise which uses or contains
any of the fanciful characters or designs of Universal or any of its related,
affiliated or subsidiary companies or entities without Landlord's consent which
Landlord may grant or withhold in Landlord's sole and absolute discretion.
The Permitted Use has been approved by Landlord in accordance with
certain considerations of tenant mix and product balance developed by Landlord
for the Project, taking into account the rights of other tenants within the
Project. The foregoing provisions of this Section form a material part of the
consideration for Landlord's willingness to enter into this Lease. Accordingly,
in the event Tenant or any of its agents or employees fails to comply with the
provisions of this Section 2.1, then Tenant shall, without affecting or limiting
any of the rights and remedies otherwise available to Landlord pursuant to this
Lease, indemnify and save and hold Landlord harmless from and against all
claims, costs, expenses, actions, liabilities, suits, proceedings and losses of
whatever nature including all attorney's fees, arising from such failure to
comply with the provisions of this Section. The foregoing indemnification shall
survive the
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termination of this Lease. In addition, at Landlord's option, Tenant's failure
to comply with this Section 4.1 shall constitute an Event of Default.
2.2 Trade Name: Tenant represents and warrants that as of the date
hereof, Tenant has an agreement with NASCAR that permits Tenant to use the word
NASCAR in Tenant's Trade Name until August 12, 2001. Furthermore, Tenant
covenants that on or before June 30, 1999, Tenant will enter into an extension
agreement with NASCAR extending said date until December 31, 2004. Except to the
extent in Tenant's reasonable business judgment it is cost prohibitive or to the
extent in Tenant's reasonable business judgment, the NASCAR brand no longer
brings sufficient value to the business to justify paying a license fee, Tenant
shall use commercially reasonable efforts to further extend its rights to use
the word NASCAR in its Trade Name for the remainder of the Lease Term.
Throughout the Lease Term Tenant shall operate the Premises solely under the
trade name NASCAR Silicon Motor Speedway, conditioned on Tenant executing an
extension agreement (or agreements) with NASCAR, which will grant to Tenant the
right to use the trade name NASCAR in connection with the operation of the
Premises. If Tenant extends said agreement beyond August 12, 2001, Tenant shall
continue to operate only under the Trade Name or under another trade name using
the name "NASCAR". If Tenant does not extend said agreement during any part of
the Lease Term and as a result Tenant removes the word NASCAR from its Trade
Name, Tenant shall operate the Premises under the same trade name as all or
substantially all of the other stores previously operated by Tenant under the
name "NASCAR Silicon Motor Speedway". Any change of Tenant's Trade Name is
subject to Landlord's approval, except in the case where Tenant changes the name
of substantially all of its stores, in which case, Landlord's approval shall be
limited to whether in Landlord's reasonable judgment the new Trade Name is
offensive or if it conflicts or competes with any assets or operations of the
Project, Universal Studios, Inc. or any affiliates thereof. In the event during
the Lease Term Tenant loses the right to use "NASCAR" in their trade name and
the percentage change in Tenant's Gross Sales per square foot during the
consecutive 12 month period immediately following the name change is more than
[***] less than the percentage change in the Gross Sales per square foot for the
Project for the same 12 month period, then, as of the date of the name change
(and provided there has been a decrease in Tenant's Gross Sales per square foot,
Tenant's Annual Gross Sales Breakpoint shall be reduced to a level which yields
the same Percentage Rental computed for the 12 month period prior to the name
change. If Tenant was not liable for Percentage Rental during said 12 month
period prior to the name change, then there shall be no adjustment to Tenant's
Annual Gross Sales Breakpoint. By way of example, if Tenant's Gross Sales per
square foot decreased by [***] for the 12 month period after the name change,
and the Project's Gross Sales per square foot increased by [***] for the same 12
month period, then the percentage change in Tenant's sales per square foot is
[***] less than the percentage change in the Project's Gross Sales per square
foot, which exceeds the [***] threshold for adjusting Tenant's Annual Gross
Sales Breakpoint, and the Annual Gross Sales Breakpoint would be reduced to
equate the Percentage Rental for the 12 months following the name change to the
12 months preceding the name change. Notwithstanding the foregoing, if, during
any consecutive 12 month period after the reduction of the Annual Gross Sales
Breakpoint, Tenant's Gross Sales per square foot return to a level that is equal
to or higher than the Gross Sales per square foot that Tenant realized for the
12 month period prior to Tenant's change of trade name, then the Annual Gross
Sales Breakpoint will be increased to the amount of the Annual Gross Sales
Breakpoint prior to such reduction (i.e., the amount set forth in Section 1.8
above).
2.3 Operating Standards: Tenant shall at all times act in accordance
with the highest professional standards. Without limiting the foregoing, Tenant
shall render and perform all necessary services in connection with the operation
of the Premises as a retail store of a standard at least equivalent to the
standard of quality and performance of other like establishments located in the
Project as of the time such services are rendered or performed (the "Comparison
*** Confidential treatment requested.
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Standard") and shall make necessary repairs, replace worn-out, defective or
obsolete furniture, fixtures and equipment and generally maintain the Premises
in good order and repair equivalent to the Comparison Standard. Any specific
operating standards developed jointly by Landlord's retail consultant and
Tenant, and agreed to by Tenant, shall thereafter be deemed part of this Lease.
2.4 Sponsorships: If Landlord shall from time-to-time enter into a
Project Sponsorship Agreement with a product manufacturer or distributor (the
"Sponsor") and if at such time or thereafter products of the type manufactured
or distributed by the Sponsor are used or sold within the Premises, then upon
receipt of notice from Landlord, Tenant shall enter into a contract with the
Sponsor to purchase the Sponsor's products for retail sale within the Premises
(provided that there are no conflicts with (i) any Tenant contracts or other
commitments or arrangements at the time Landlord enters into a Project
Sponsorship Agreement, or (ii) any NASCAR sponsorship or licensing agreements,
commitments or arrangements without regard to the timing of any Landlord Project
Sponsorship Agreement), provided such products are comparable (in terms of
quality, cost, taste and promotional benefits) with products that Tenant would
otherwise purchase. Currently, Landlord has Project Sponsorship Agreements with
Pepsi-Cola (until February 1, 2000, thereafter with Cola-Cola) for carbonated
soft drinks and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ for bottled water. The foregoing shall not apply
to any credit cards which Tenant accepts from its customers.
Furthermore, Tenant shall participate in the Project promotions and
special events, so long as such participation is at no material out-of-pocket
cost to Tenant, as reasonably requested by Landlord.
2.5 Principal's Involvement: As a material inducement to Landlord to
enter into this Lease with Tenant, Tenant agrees to have an executive from
within its corporate structure who is experienced in Tenant's business
operations personally available on a reasonable basis to oversee the concept
development, design, construction, pre-opening training, operations and
management of the business establishment to be developed on the Premises to the
degree reasonably necessary to maximize the Gross Sales and to enhance the
reputation of such business establishment. In addition, such executive shall
meet with Landlord as reasonably requested by Landlord in order to discuss the
ongoing design, construction, operation and/or management of such business
establishment.
2.6 Radius Restriction: Tenant or Tenant's affiliates shall not
directly or indirectly operate, license, own or otherwise control a business
within the "Area of Exclusivity" (as defined below), the primary use of which is
the same or substantially similar to the primary Permitted Use, including
without limitation any venue with an entertainment experience substantially
similar to the Permitted Use and/or using the name, logo, marquee, tradename,
trademark or other identifying ▇▇▇▇/logo used by Tenant for the Premises of this
Lease, or using, in whole or in part, any other tradename for the Premises as
otherwise approved by Landlord; provided, however, notwithstanding the
foregoing, Tenant shall have the right, itself and/or through any other party,
to distribute any and all merchandise with the "Nascar" and/or "Silicon Motor
Speedway" name and/or any of Tenant's other tradenames, and/or any logo,
marquee, trademark or other identifying ▇▇▇▇/logo related to such tradenames,
within the Area of Exclusivity.
For the purposes hereof, the "Area of Exclusivity" shall be deemed to
mean: (i) that geographic area within a radius of 10 miles from the Project and
(ii) any and all Theme Parks located within the State of California. The phrase
"Theme Parks" shall mean tourist-oriented attractions that have some combination
of permanent and temporary entertainment facilities, recreational activities and
exhibitions based on or related to an unifying theme, facilities (other than
Theme Park Exclusions, none of which shall be considered a "Theme Park" for
purposes of this Lease), contained within a closed area with a controlled
entrance and charging an admission fee, which offer rides and related
attractions (which may include multimedia or virtual reality
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presentations), provided that the entirety of such facility, excluding parking
facilities and vehicle and pedestrian ingress and egress routes, shall encompass
an area equal to or greater than twenty (20) acres, as well as any open area,
non-admission based complexes (containing a combination of retail, restaurant
and entertainment facilities) which are attached or immediately adjacent to the
Theme Parks and related facilities, and which such complexes are controlled or
owned by the Theme Parks; provided, however, a "Theme Park" shall include all
the components or elements of such facility which are advertised, promoted or
otherwise held out to the general public as comprising a single or integrated
facility, even though some of the components or elements thereof may not be
contiguous or within one general admission, show or entertainment area;
provided, further, that Landlord and Tenant acknowledge and agree that the
following are non-exclusive examples of Theme Parks intended to be generally
illustrative of the types of entities which are intended by the parties to
constitute "Theme Parks": Disneyland, ▇▇▇▇▇'▇ ▇▇▇▇▇ Farm, ▇▇▇▇▇'▇ Camp Snoopy,
Six Flags Magic Mountain, LEGOLAND, and Sea World. "Theme Park Exclusions"
(except if attached or immediately adjacent to a Theme Park and controlled or
owned by a Theme Park) means casinos, gambling, or gaming facilities, race
tracks whether or not attached or immediately adjacent to a Theme Park (e.g.,
Riverside Raceway or California Speedway), retail or wholesale malls or shopping
centers; family entertainment centers (including miniature golf courses, often
with batting cages and car racing tracks); and public streets and areas and
other publicly owned attractions, movie theaters, movie and theater districts,
film festivals, music and sports venues, halls of fame, convention centers,
auditoriums, arenas and exhibit halls, airports and other transportation
terminals, art, historic, wax space and other museums, observatories and
planetariums, places of historical significance, zoos, wild animal parks, beach,
seaport, wharf and ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ and state fairs,
miniature golf courses and the Project (notwithstanding the fact that the
Project is attached to or immediately adjacent to a Theme Park).
2.7 Tenant's Exclusive: Landlord will not lease any space to any other
tenant in the Project (A) for a "Protected Use" (as defined below), or (B) whose
trade name contains the name "NASCAR" (including, for example, a "NASCAR Cafe"),
provided, however, this provision (B) shall automatically become null and void
if at any time Tenant ceases to have "NASCAR" in its Trade Name. The foregoing
sentence shall not apply to tenants in the Project with leases and amendments
thereof that were executed prior to the date of this Lease ("Existing Leases")
and which do not expressly prohibit (A) and/or (B) above. Existing Leases shall
include renewals and extensions of these leases at any time during the Lease
Term. Notwithstanding the foregoing sentence, if an Existing Lease (including
extensions or renewals thereto) is amended or modified to allow the tenant to
engage in a Protected Use or have the word NASCAR in its trade name, then
Landlord shall be in violation of this Section 2.7 if such tenant engages in a
Protected Use or changes its trade name to incorporate the word NASCAR.
2.7.1 "Protected Use" shall mean (i) the operation of automobile
driving motion-based simulator rides, excluding arcade center(s) within the
Project (which are like "GameWorks" or "▇▇▇▇ and Buster" type uses) which could
have similar type simulator rides or games or multi-passenger (defined as having
five or more passengers) motion-based simulator rides (such as the "Emaginator"
ride currently operating adjacent to the movie theater) and also excluding the
operation by a tenant of less than three single-passenger automobile driving
motion-based simulator rides, or (ii) the sale of "NASCAR" branded merchandise,
excluding the incidental sale of NASCAR branded merchandise. In the event Tenant
ceases to use the Premises for the sale of NASCAR branded merchandise for a
period of 45 days or more (subject to Force Majeure or remodeling by Tenant as
permitted by this Lease), then NASCAR branded merchandise shall cease to be a
Protected Use.
2.7.2 This Section 2.7 shall automatically become null and void if:
(i) there is a material monetary default under this Lease after all applicable
cure periods as set forth in Section 22.2 of this Lease have expired, or upon
termination of this Lease as a result of any Tenant
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default; or (ii) Tenant ceases to use the Premises as provided in Section 2.7.
(i) above with a minimum of ten (10) automobile driving motion-based simulator
rides for a period of 30 days or more (subject to Force Majeure or remodeling by
Tenant as permitted by this Lease).
2.8 option to Extend: Landlord hereby grants to Tenant an option to
extend the term of this Lease for the Option Term upon written notice given not
less than six (6) months and not more than twelve (12) months in advance of the
expiration of the Initial Term; provided however, that Tenant's exercise of such
option shall not be effective if (a) Tenant shall be in default beyond the
applicable cure period after notice from Landlord under any of the monetary or
other materials terms of this Lease either at the time of such exercise or at
the expiration of the then Initial Term; or (b) if Tenant has not met the Gross
Sales Threshold (as defined in Section 1.9 and adjusted per Section 5.8 each
year of the Lease Term) required for the preceding twelve (12) month period;
provided, further, Landlord may condition Tenant's extension of the Term of this
lease on Tenant's refurbishment of the Premises if such refurbishment is
reasonably necessary to maintain the Premises as a first class establishment in
accordance with Section 16.1 and Article 14. All terms and conditions applicable
to the Initial Term shall be applicable to the Option Term, including but not
limited to provisions regarding Minimum Annual Rental and Percentage Rental
annual increases; however, the provisions of Exhibit C regarding the initial
construction of the Premises shall not be applicable. In the event Tenant has
not met the Gross Sales Breakpoint (as defined in Section 1.8 and adjusted per
Section 5.3 each year of the Lease Term) required for the preceding (12) month
period, then the option to extend is personal to Tenant and may not be exercised
or be assigned, voluntarily or involuntarily, by or to any person or entity
other than Tenant.
2.9 Right to Relocate: Following expiration of the second Lease Year of
the Initial Term, Landlord shall have the right to relocate Tenant to different
space, which is equal to or better than the Premises in terms of layout, foot
traffic and visibility, in the Project at Landlord's sole cost. Subject to the
foregoing sentence, the new space will be in a location designated by Landlord
in its sole discretion and will be approximately the same size as the Premises,
Base Rent and all other square footage-based dollar obligations will be
calculated on the basis of the Floor Area of the new space (but in no event more
than the amount then being paid by Tenant for the existing space, subject to
adjustment as provided in this Lease). Otherwise, the terms and conditions of
this Lease will be fully applicable to the new space. Landlord will provide
Tenant with not less than ninety (90) days prior written notice of the
relocation. Tenant will have the right, by written notice to Landlord delivered
within twenty (20) days after Landlord's relocation notice, to terminate this
Lease provided that Tenant shall promptly vacate the Premises on the date set
forth in the relocation notice and shall pay Rent until the Premises are
vacated. If Tenant elects to terminate this Lease due to such relocation, then
this Lease shall terminate effective as of the date Landlord specified in its
notice that Tenant was to relocate to the new space and, provided Tenant vacates
the Premises as required in this Lease on or before such date, Landlord shall
pay Tenant the sum as provided in Section 4.8 below or withdraw its request to
relocate Tenant. If Landlord withdraws its request to relocate Tenant, then such
notice to relocate shall become null and void. In no event shall Landlord be
entitled to relocate Tenant before the date this is twenty-four (24) months
after the date that Tenant opens for business to the public in the Premises.
Landlord's right to relocate the Premises shall also be subject to the
following: (a) Landlord will, at Landlord's sole cost and expense (except for
the costs for Tenant's trade fixtures, personalty and inventory) fully construct
the new space and deliver the same to Tenant in the same condition as is the
Premises at the time of such relocation; provided, however, Tenant shall have
the right to request that Landlord build the new space with a design different
than that of the Premises (e.g., a new prototype for Tenant's stores) and
Landlord shall comply with Tenant's request so long as such design complies with
Landlord's design requirements; provided, further, Tenant shall reimburse
Landlord for such incremental portion of the construction and design costs of
the new space that result from Tenant's change of the design for the new space.
Subject to the foregoing sentence, Landlord's cost shall include any costs
associated with the store layout,
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preparation of architectural drawings for the new space and the cost of
leasehold improvements required to deliver the new space (exclusive Of fixtures
personalty and inventory) in a condition that is substantially identical to the
Premises at the time of such relocation (including, without limitation,
electrical capacity and distribution, telephone system installation, and
computer installation), subject only to such modifications as may be necessary
and approved by Tenant in order to accommodate the configuration of the new
space; (b) Landlord will pay all costs incurred in connection with moving Tenant
and Tenant's trade fixtures, inventory and personalty to the new space,
including any incidental costs incurred by Tenant in connection with said
relocation (such as costs for relocating computer and telecommunications systems
and equipment, new business cards, letterhead and attorney fees associated with
the documentation of the relocation) up to a maximum of [***] for such
incidental costs; (c) Tenant shall not be obligated to move until the relocation
space is fully built-out, fixturized and ready to open for business and Tenant
is not obligated to pay Rent for the period of time during which Tenant is
closed as a result of said relocation. If Landlord exercises its rights to
relocate Tenant during the Option Term and if Tenant does not accept the new
space and elects, in lieu thereof, to terminate this Lease, then, upon Tenant
promptly vacating and surrendering the Premises as required hereunder, Landlord
shall, within thirty (30) days of Tenant's surrender of the Premises, pay Tenant
the unamortized value of its leasehold improvements and fixtures, said
unamortized value to be determined on a straight-line depreciation method
allowed by the Internal Revenue Code of 1986 (as amended) assuming a useful life
equal to the remaining term of this Lease (e.g., if four years remain prior to
expiration of the Lease Term, then 4/10th of useful life shall remain
unamortized) at the time the improvement or fixture is placed in service or
installed in or upon the Premises. Tenant shall be permitted to close the
Premises during the period of time reasonably required by Tenant to relocate
from the Premises to the new space. Further, upon completion of such relocation
by Tenant and delivery of the Premises to Landlord, Tenant shall be released and
relieved of any further obligations under this Lease as pertains to the
Premises.
2.10 Deposit for Tenant's Work: In addition to the Security Deposit
specified in Section 1.14 and Article XXI, Tenant shall secure its obligations
to complete the Tenant's Work by depositing with Landlord or in an escrow
account with Bank of America NT & SA or other financial institution mutually
agreed to by Landlord and Tenant an amount equal to [***] (the "Construction
Account") prior to commencement of Tenant's Work. Tenant shall have the right
after Tenant has spent [***] on construction of Tenant's Work to draw upon the
Construction Account to pay bills and invoices for the costs of constructing
Tenant's Work based on percentage of completion of such Tenant's Work, provided
that Tenant shall provide documentation acceptable to Landlord of such costs and
shall otherwise comply with disbursement procedures prescribed by Landlord or
the depository institution. All interest on funds in the Construction Account
shall be payable to Tenant.
2.11 INTENTIONALLY DELETED.
2.12 Adjustment of Taxes: Landlord estimates its costs to be expended
for Taxes to be approximately $3.30 per square foot of Floor Area on a fully
assessed basis. Notwithstanding anything to the contrary set forth in this
Lease, if due to a change in the California tax legislation commonly known as
Proposition 13, whether by legislative or administrative action or by judicial
determination (a "Prop 13 Change"), Landlord's actual costs expended for Taxes
in any year after the year in which the Rent Commencement Date occurs (a
"Comparison Year") exceed the amount expended for Taxes for the year in which
the Rent Commencement Date occurs (the "Tax Base Year") as adjusted pursuant to
Section 5.8, Tenant shall pay its pro rata share (based on Tenant's Floor Area
as a fraction of the Floor Area of all of the premises included in the Project)
of any such excess (the "Excess Taxes") to Landlord, as additional rent, in the
manner set forth below. The foregoing adjustment shall be subject to the
following:
*** Confidential treatment requested.
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(i) Excess Taxes shall not include taxes or assessments imposed as
a result of a sale or other "change in ownership" (as defined in the California
Revenue and Taxation Code book) of the Project or the building in which the
Premises are located.
(ii) on or before May 1 of each Comparison Year after a Prop 13
Change (or as soon thereafter as is practical), Landlord shall deliver to Tenant
a statement setting forth Tenant's pro rata share of the Excess Taxes for the
preceding Comparison Year. The obligations of Tenant to make payments required
hereunder shall survive the expiration of the Lease Term. Tenant's pro rata
share of Excess Taxes in any partial Comparison Year at the end of the Lease
Term shall be appropriately prorated. Landlord's statement given pursuant to
this paragraph shall be conclusive and binding upon Tenant unless disputed by
Tenant in writing within thirty (30) days after its receipt thereof. If any such
dispute arises, Tenant shall have the right after reasonable notice and at
reasonable times to inspect Landlord's accounting records at Landlord's
accounting office and, if after such inspection Tenant still disputes the amount
of Additional Rent owed, a certification as to the proper amount shall be made
by an independent certified public accountant mutually agreeable to Landlord and
Tenant, which certification shall be final and conclusive. Tenant agrees to pay
the cost of such certification unless it is determined that Landlord's original
statement overstated Taxes by more than three percent (3%).
2.13 Construction Allowance: Landlord agrees to contribute the
Construction Allowance specified in Section 1.15. Disbursement of the
Construction Allowance shall be made in two equal payments (i.e., the
Construction Allowance is $150,000, then two payments of $75,000.00) in
accordance with the following procedure: Tenant shall submit to Landlord a
written statement (the "Payment Statement") setting forth (i) all the amounts
payable to Tenant's contractors and vendors; (ii) an architect's statement
certifying 50% or 100% completion of Tenant's Work, as applicable; (iii) a copy
of all bills and invoices pertaining to such Tenant's Work totaling a minimum of
one-half (1/2) the Construction Allowance (including "hard costs" and "soft
costs" (such "soft costs" including, for example, license and permit fees and
architect's fees, but excluding attorney's fees and internal overhead)) for the
first payment (otherwise, the first payment will be equal to such lesser amount
incurred by Tenant as shown on the bills and invoices, with the difference
between 1/2 of the Construction Allowance and the amount paid as the first
payment paid as part of the second payment) and a cumulative minimum amount of
the Construction Allowance (including "hard costs" and "soft costs" (such "soft
costs" including, for example, license and permit fees and architect's fees, but
excluding attorney's fees and internal overhead)) for the second payment
(otherwise, the second payment will be equal to such lesser amount incurred by
Tenant as shown on the bills and invoices, with the difference retained by
Landlord); (iv) unconditional lien releases and proof of payment with respect to
all bills and invoices covered by the Payment Statement; (v) a copy of the
occupancy permit for the Premises for the second disbursement of the
Construction Allowance; and (vi) a copy of Tenant's punch list which Landlord
has approved after inspection of Tenant's Work for the second disbursement of
the Construction Allowance. Landlord shall issue a check to Tenant for the first
payment and the second payment within ten (10) days after Landlord's receipt of
the Payment Statement for such payment provided that, at Landlord's option,
Landlord shall have the right to withhold fifteen percent (15%) of the
Construction Allowance out of the second payment until such time as Tenant has
completed all punch list items to Landlord's reasonable satisfaction and shall
be payable within ten (10) days after Landlord's receipt of a notice from
Tenant regarding Tenant's completion thereof. The cost of any additional work
performed by Landlord (provided Tenant has requested that Landlord perform the
additional work, or Landlord notified Tenant of a defect in Tenant's work prior
to commencing the work and Tenant has a reasonable period to cure the defect and
fails to do so in a timely manner) for the benefit of Tenant, as well as any
rental that is already due and owing under this Lease as of the date the payment
of the Construction Allowance is to be made, shall be deducted from the
Construction Allowance before said Construction Allowance is paid to Tenant.
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ARTICLE III. PREMISES
3.1 Lease of Premises: Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, the space specified in Section 1.3, referred to
herein as the "Premises" and described in Exhibit B-1.
3.2 Definitions of "Floor Area" and "tenant areas": The term "Floor
Area," as used throughout this Lease, shall mean and include the square footage
of all interior and exterior areas (including mezzanines) of the particular area
or areas being referred to, measured (to the extent applicable) (a) with respect
to the front and rear width thereof, from the exterior face of the adjacent
exterior or corridor wall to the opposite exterior face of the adjacent exterior
or corridor wall or, if none, to the center line of those walls separating the
area being measured from other tenant areas, and (b) with respect to the depth
thereof, from the front lease line to the exterior face of the rear exterior
wall or corridor wall or, if neither, to the center of the rear demising
partition; and in no case shall there be any deduction or exclusion shall be
made for columns or other structural elements or by reason of stairs, elevators,
corridors, interior partitions or other interior construction, improvements or
equipment. The term "tenant areas" as used throughout this Lease, shall mean all
interior and exterior areas in the Project which are available for exclusive use
and occupancy by tenants of the Project. When construction is completed, the
actual size and dimensions of the Premises shall be determined by Landlord by
means of an accurate measurement of the Premise from center line to center line
of those walls separating the area being measured without any deductions or
exclusions made for columns or other structural elements; provided, however,
Tenant shall have ten (10) business days from receipt of Landlord's
determination of the size and dimensions of the Premises to itself measure the
Premises and object to Landlord's determination. If Tenant timely objects to
such determination, Landlord and Tenant shall together re-measure the Premises
and mutually agree on the correct size and dimensions of the Premises. The total
Floor Area contained in the Premises as determined above shall be memorialized
in a letter from Landlord to Tenant, and shall be deemed to be the actual Floor
Area of the Premises of this Lease, and such Floor Area as is set forth in the
letter shall thereafter be used for the purpose of calculating Minimum Annual
Rental, Gross Sales Breakpoint, Gross Sales Threshold, Tenant Allowance and any
other charges based on square footage under the Lease.
3.3 Certain Easements In Favor of Tenant: Tenant shall have
non-exclusive access easements for the benefit of itself and its employees,
patrons, invitees, customers and other appropriate persons during the Lease Term
in connection with Tenants use and occupancy of the Premises over the Common
Areas, the parking areas and various private roads and sidewalks within
Universal City as Landlord may from time-to-time designate. In addition, Tenant
shall, subject to Landlord's prior approval, have a non-exclusive right of
access to shafts, ducts and other similar facilities within the Common Area for
the purpose of provision of utilities and maintenance.
3.4 Certain Easements in Favor of Landlord: Landlord reserves to itself
the use of the exterior walls and roof and a nonexclusive easement to install,
maintain, use, repair and replace pipes, ducts, conduits, wires, conduits,
facilities and structures as may be used for ventilation and the conveyance of
Utilities in and through the Premises, including air space above ceiling height
or below the floor of the Premises for the common use and benefit of Landlord,
Tenant or other tenants; provided that any such installation, maintenance, use,
repair and replacement shall be conducted so as to avoid unreasonable
interference with Tenant's use of the Premises.
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ARTICLE IV. TERM
4.1 Duration of Lease Term: This Lease and the obligations of the
parties hereunder shall become effective as of the Effective Date. For purposes
of measuring the duration of this Lease, the Lease Term shall commence on the
"Rent Commencement Date" (as specified in Section 1.5) and shall continue for
the term specified in Section 1.4. If such Rent Commencement Date is other than
the first day of a calendar month, the first day of the calendar month
immediately following such date shall be used for purposes of calculating
anniversaries of the commencement of the Lease Term.
4.2 Acceptance of the Premises: Subject to Sections 1.5 and 1.1.2,
Landlord shall deliver, and Tenant shall accept from Landlord, possession of the
Premises on the "Delivery Date" (as specified in Section 1.12 above), and Tenant
shall commence construction of Tenant's Work as specified in Exhibit C and the
Addendum as soon as commercially reasonably possible after delivery of
possession of the Premises and diligently prosecute such construction so as to
complete and open the Premises for business. Landlord shall have the right, but
not the obligation, at Tenant's sole cost, to construct any improvements
included in Tenant's Work which Tenant shall have failed to construct as and
when required by this Lease if, ten (10) days after receiving written notice
from Landlord that Landlord intends to itself construct such improvements,
Tenant has not itself commenced construction of said improvements and/or
thereafter completed such construction within thirty (30) days.
Tenant shall be deemed to conclusively deemed to have accepted the
Premises, including Landlord's Work, in AS IS condition, except for any items
specified on a punch list delivered to Landlord within twenty (20) days after
Tenant occupies the Premises. Notwithstanding the foregoing, Tenant shall not be
deemed to have waived its right to require Landlord to correct any latent
defects as long as Tenant gives notice thereof to Landlord on the earlier of
fifteen (15) days after discovery of such defect or fifteen (15) days after
the date Tenant should have been alerted to the existence thereof had Tenant
acted reasonably.
4.3 Delays in Completion of Landlord's Work: If Landlord does not for
any reason complete Landlord's Work sufficiently to constitute substantial
completion of the Premises by the date specified in Section 1.12 above and/or
does not thereafter complete all items of Landlord's Work to enable Tenant to
open the Premises for business, Landlord shall not be subject to any liability
with respect hereto, and such delay shall not affect the validity of this Lease,
nor the obligations of Tenant hereunder, however, the Delivery Date shall be
postponed one day for each day's delay in Landlord's completing Landlord's Work,
but only to the extent that solely but for such delay, Tenant would have opened
the Premises for business by the Rent Commencement Date. If and to the extent
Landlord's failure to timely complete the various phases of Landlord's Work as
set forth in the prior sentence is due to delays by Tenant or failure by Tenant
to timely provide Landlord with plans or any other information or approvals, the
Rent Commencement Date shall not be postponed.
4.4 Tenant's Early Use Or Possession: Tenant's entry upon, or use or
possession of, the Premises for purposes other than the normal conduct of its
business activities prior to the Rent Commencement Date shall be subject to all
the terms and conditions of this Lease, other than Tenant's obligation to pay
any Rental as defined in Section V below.
4.5 Tenant's Delivery of Documents: Within thirty (30) days after the
earlier of completion of construction of Tenants Work or Tenant's opening for
business, Tenant shall deliver to Landlord the following items: (a) copies of
all mechanics' lien releases or other lien releases relating to Tenant's Work,
notarized and unconditional, in such form as Landlord shall have approved, or
evidence that same have been removed of record by bonding; (b) a copy of
Tenant's recorded valid Notice of Completion; (c) copies of all building
permits, business license and other
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certificates evidencing inspection, acceptance and/or approval of the Premises
by appropriate governmental authorities, including the underwriters approval of
Tenants electrical system; (d) a certification by Tenant's architect that the
Premises have been constructed substantially in accordance with Tenant's Plans
and in accordance with Exhibit C; (e) Tenant's certification as to the actual
cost of constructing Tenant's Work along with such documentation of such costs,
and payment thereof, as Landlord requires; (f) a complete list of the names,
addresses, telephone numbers and contract amounts for all contractors,
subcontractors, vendors and/or suppliers providing materials and/or labor for
Tenant's Work; (g) a set of "as-built" plans and specifications for Tenant's
Work in reproducible form prepared and sealed by Tenant's architect; (h) letter
of assurance from Tenant's contractor that the Premises and all equipment
installed therein can be maintained and operated as designed and installed; (i)
certified balance report that Tenant's HVAC system meets design requirements;
(j) copies of operation and maintenance manuals for all equipment installed at
the Premises; (k) emergency telephone numbers with respect to maintenance and
repair of the Premises; and (l) any other statements, certificates or agreements
reasonably requested by Landlord.
4.6 Surrender of the Premises: At the expiration of the Lease Term or
the earlier termination of this Lease, Tenant will surrender possession of the
Premises and deliver the same to Landlord. Upon surrender of the Premises,
Tenant shall deliver the Premises to Landlord in good order, condition and state
of repair, but shall not be responsible for damages resulting from ordinary wear
and tear, casualty losses which are Landlord's responsibility under Article
XVIII, or any items of repair which are Landlord's responsibility under Section
16.2. Unless waived by Landlord in writing and in response to Tenants request
for Landlord to review the space hereunder, Tenant shall accompany Landlord, or
one of Landlord's authorized representatives, on a joint inspection of the
Premises prior to such surrender.
4.7 Holding Over Without Consent: If, after the expiration or earlier
termination of the Lease Term, Tenant remains in possession of the Premises
without Landlord's express written consent, Tenant shall become a tenant at
sufferance only, subject to all of the provisions of this Lease (except as to
Lease Term), provided that the monthly installments of Minimum Annual Rental
payable by Tenant shall be increased to one hundred fifty percent (150%) of the
monthly average of the total Minimum Annual Rental and Percentage Rental which
was payable by Tenant during the Lease Term; the aforementioned new Minimum
Annual Rental payable during the aforementioned tenancy at sufferance shall be
prorated and paid in advance on a daily basis; and if and to the extent the
amount of the Percentage Rental payable with respect to the Lease Term is not
known when the tenancy at sufferance begins, the rate of Minimum Annual Rental
payable until the aforementioned amount of Percentage Rental has been determined
shall be at the daily rate specified by Landlord and when the correct figure is
determined an appropriate lump sum adjusting payment shall be made to correct
any overpayment or underpayment. Acceptance by Landlord of rental after such
expiration or earlier termination shall not result in a renewal or extension of
this Lease. The provisions of this Section are in addition to and do not affect
Landlord's right of re-entry or any rights of Landlord hereunder or as otherwise
provided by law. If Tenant fails to surrender the Premises upon the expiration
or earlier termination of this Lease, despite demand to do so by Landlord,
Tenant shall indemnify, defend and hold Landlord harmless from all loss or
liability, including any claim made by any succeeding tenant founded on or
resulting from such failure to surrender and any attorney fees and costs
associated therewith.
4.8 Landlord's Rights of Termination: If at any time following the
twenty fourth (24th) full month after the Rent Commencement Date, Tenant's Gross
Sales (as defined in Article VI) for any consecutive twelve (12) month period
(ending in or after the twenty-fifth (25th) full calendar month after the Rent
Commencement Date) do not exceed an amount equal to the Gross Sales Threshold
(specified in Section 1.9), Landlord may elect to terminate this Lease by notice
to Tenant delivered any time within one year after said consecutive twelve (12)
month period with a termination date designated at least (90) days after the
date of such notice. For the purposes of
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this Section 4.8, the definition of "Gross Sales" (as defined in Article VI
below) is modified to mean only those sales made to third parties, and not to
related or affiliated companies of Tenant. If Landlord elects to so terminate
this Lease, Landlord shall pay Tenant within fifteen (15) days after the last
to occur of the aforementioned designated termination date or the date Tenant
surrenders possession of the Premises in accordance with Section 4.6 a sum equal
to the unamortized portion of Tenant's actual cost of constructing Tenant's Work
(excluding "soft costs" and Tenant's Trade Fixtures) as certified pursuant to
Section 4.5 (after first subtracting Tenant's Construction Allowance, if any)
amortized on a straight line basis without interest over the Lease Term
(including the Option Term). Landlord shall be entitled to subtract from any
payment otherwise due and owing to Tenant under this Section all sums owed by
Tenant to Landlord. The Gross Sales Threshold shall be increased (but never
decreased) on each anniversary of the Rent Commencement Date during the Lease
Term in accordance with the procedure described in Section 5.8 (for which
purposes "Base Amount" shall mean the Gross Sales Threshold specified in Section
1.9, "Base Month" shall mean the month in which the Rent Commencement Date
occurs, and "Month of Adjustment" shall mean any month in which the Gross Sales
Threshold is to be increased pursuant to this Section).
ARTICLE V. RENTAL
5.1 Rent Commencement Date: Tenant's obligation to pay any amount of
"Minimum Annual Rental", "Percentage Rental" or "Additional Rent" (as defined in
this Article V) under this Lease shall commence on the Rent Commencement Date.
Tenant shall pay all rental and other payments to Landlord at its management
office in the Project, or at such other place as may from time-to-time be
designated by Landlord.
For the purposes of this Lease, the term "Rental" or "Rent" shall mean
and be defined as all Base Rent, Percentage Rental and Additional Rent due from
Tenant to Landlord hereunder.
5.2 Minimum Annual Rental: Tenant shall pay as rental the Minimum
Annual Rental specified and defined in Section 1.6 in advance and without notice
or invoice, on the first day of each calendar month. Minimum Annual Rental for
any fractional calendar month at the beginning or end of the Lease Term shall be
prorated on the basis of the number of days in that particular calendar month
and if the Rent Commencement Date occurs on other than the first day of a
calendar month, the prorated rent for that calendar month plus the rent for the
succeeding calendar month shall be paid in advance on the Rent Commencement
Date. On each anniversary of the Rent Commencement Date during the Lease Term,
the Minimum Annual Rental shall be increased (but never decreased) in accordance
with the procedure described in Section 5.8 (for which purposes "Base Amount"
shall mean the Minimum Annual Rental specified in Section 1.6 on the Rent
Commencement Date and the fifth anniversary of the Rent Commencement Date
depending on the period of adjustment, "Base Month" shall mean the month in
which the Rent Commencement Date and the fifth anniversary of the Rent
Commencement Date depending on the period of adjustment occurs, and "Month of
Adjustment" shall mean any month in which the Minimum Annual Rental is to be
increased pursuant to this Section).
The Minimum Annual Rental shall be deemed to include Tenant's share of
Operating Costs and Taxes. The term "Taxes" as used in this Lease is defined as
any and all real and personal property taxes, general and special assessments,
water and sewer charges, and similar impositions by any governmental authority
or agency upon the Project, the land upon which it is located, Landlord's Work,
and any improvements, fixtures, equipment or other property of Landlord located
in or used in connection with the operation or maintenance of the Project.
"Taxes" shall also include any tax on or measured by rental as well as any tax
hereafter imposed wholly or partly in lieu of any of the foregoing. "Taxes"
shall not include any net income, franchise, capital stock, estate or
inheritance taxes, or any tax hereafter imposed on the Project, on Landlord
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or on Tenant that is not imposed as of the Effective Date, or any taxes
(including sales and use taxes), assessments, license fees and public charges
levied, assessed or imposed upon it business operation at the Premises or upon
its merchandise, Improvements and Personal Property. The term "Operating Costs"
as used in this Lease is defined as the sum of the costs of all utilities,
building supplies, equipment, materials, repairs and maintenance, insurance
maintained by Landlord pursuant to Section 17.5, and cost of labor and services
of employees and independent contractors incurred by Landlord in maintaining,
repairing (or replacing in lieu thereof) and operating the Project, together
with all Common Areas and ancillary parking areas, access roads, walkways,
plazas, landscaped areas (the "Adjacent Areas") and any other property,
fixtures, equipment and improvements used in connection with the operation or
maintenance of the Project. "Operating Costs" shall also include: rental
expenses for (or a reasonable depreciation allowance on) personal property used
in the maintenance, operation or repair of the Project and/or the Adjacent
Areas; costs, expenditures or charges (whether capitalized or not) required by
any governmental or quasi-governmental authority; amortization of capital
expenses (including financing costs) made by Landlord to reduce Operating Costs;
a reasonable building management fee; and any other costs or expenses incurred
by Landlord in the performance of its obligations under this Lease and not
otherwise reimbursed by Project tenants or by insurance. Landlord reserves the
right to determine in its sole discretion what portion of Tenant's Minimum Rent
shall be allocated to cover the Operating Costs and Taxes; provided, however,
Tenant will not be obligated to pay any amount toward Operating Costs and/or
Taxes to the extent such Operating Costs and/or taxes are not included in the
Minimum Annual Rental collected from Tenant hereunder, unless expressly provided
in on Section 2.12 or Section 13.3.
5.3 Percentage Rental: In addition to the Annual Rental, Additional
Rent and other sums specified herein, Tenant shall pay percentage rent each year
commencing in the month in which the annual Gross Sales Breakpoint is exceeded
(hereinafter "Percentage Rental") calculated as a percentage of Tenant's "Gross
Sales" (as that term is defined in Article VI) made from or upon the Premises
during each calendar year or pro ration thereof. Percentage Rental shall be
calculated by (i) subtracting the "Gross Sales Breakpoint" specified in Section
1.8 from Tenant's Gross Sales, and then (ii) multiplying the resulting amount by
the percent specified in Section 1.7. Said Percentage Rental shall be computed
each calendar month and, on or before the fifteenth (15th) day after the close
of each such calendar month, Tenant shall submit to Landlord a Statement of
Gross Sales in the form set forth in Exhibit D and pay to Landlord the
"Percentage Rent Due" (if any) as computed pursuant to Exhibit D. Tenant shall
account for and pay Percentage Rental on any Gross Sales during any partial
calendar month or partial calendar year at the beginning or end of the Lease
Term in the same manner based on a pro rated Gross Sales Breakpoint calculated
on the basis of the number of days in such partial calendar month or year
divided by thirty (30) or three hundred sixty-five (365), as the case may be.
The Gross Sales Breakpoint shall be increased (but never decreased) on each
anniversary of the Rent Commencement Date during the Lease Term in accordance
with the procedure described in Section 5.8 (for which purposes "Base Amount"
shall mean the Gross Sales Threshold specified in Section 1.9 on the Rent
Commencement Date and the fifth anniversary of the Rent Commencement Date, "Base
Month" shall mean the month in which the Rent Commencement Date and the fifth
anniversary of the Rent Commencement Date occurs, and "Month of Adjustment"
shall mean any month in which the Gross Sales Breakpoint is to be increased
pursuant to this Section).
5.4 Reporting of Gross Sales: Tenant shall furnish Landlord with a
weekly report of its daily sales at the times and in the manner that Landlord
may request. If Landlord develops an automated mechanism (by computer or
otherwise) to collect such daily sales reports, Tenant shall cooperate with
Landlord's introduction of such automated mechanism and shall furnish such daily
sales reports using such automated mechanism; provided, however, that Tenant
will not be required to introduce such automated mechanism to the extent the
cost thereof would be greater than One Thousand Dollars ($1,000).
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Tenant shall furnish to Landlord a monthly Statement of Gross Sales of
Tenant within ten (10) business days after the close of each calendar month.
Each such Statement shall be in accordance with Exhibit D and shall show the
gross selling prices of all merchandise and services with all adjustments
allowed thereto pursuant to Article VI. Each such Statements shall be signed by
all individuals doing business as Tenant, by a general partner if Tenant is a
partnership, or by an authorized officer of Tenant if Tenant is a Corporation.
Each such Statement of Gross Sales shall also include a certification (in a form
approved by Landlord) by the chief financial officer of Tenant to the effect
that to such officer's knowledge such Statement is in material compliance with
the provisions of this Lease and (after the first such Statement) was prepared
in a manner consistent with all prior Statements.
Tenant shall record at the time of sale all receipts from sales or
other transactions, whether cash or credit, in a cash register or registers
(paid for and provided by Tenant) having a sealed and continuous tape which
cumulates and consecutively numbers all purchases. Tenant shall keep the
following items: (a) accurate books of account and records in accordance with
generally accepted accounting principles consistently applied, including, a
sales journal, general ledger, and all bank account statements showing deposits
of Gross Sales revenue; (b) all such cash register receipts with regard to the
Gross Sales and credits, refunds and other pertinent transactions made from or
upon the Premises (including the Gross Sales of any subtenant, licensee or
concessionaire); and (c) detailed original records of any exclusions or
deductions from Gross Sales, including vendor invoices, canceled checks, and any
other documents supporting such exclusions or deductions. Tenant shall also
follow such additional fiscal, accounting, and reporting procedures and maintain
such additional records as Landlord may from time-to-time reasonably require.
Such books, receipts and records shall be kept for a period of three (3) years
after Landlord's receipt of the Gross Sales Statement for each calendar year.
The receipt by Landlord of any statement or any payment of Percentage Rental for
any period shall not bind it as to the correctness of the statement or the
payment.
5.5 Additional Rent: In addition to Minimum Annual Rental and
Percentage Rental, Tenant shall pay all other sums of money or charges required
to be paid by Tenant under this Lease (which sums are referred to in this Lease
as "Additional Rent").
5.6 Late Payments: Any amount due from Tenant to Landlord hereunder
which is not paid within five (5) days after it is due shall be subject to a
late charge in the amount of [***] of the amount unpaid and shall in addition
bear interest at the Lease Rate, calculated from the due date until paid. The
payment of such late charge and/or interest shall, however, not excuse or cure
any default by Tenant under this Lease. The parties hereby agree that the
aforestated late charge represents a fair and reasonable estimate of the costs
Lessor will incur by reason of late payment by Tenant. Such costs include,
without limitation, processing and accounting charges and any late charges that
may be imposed on Landlord. If Tenant shall have been late in making Rental
payments three (3) times during any twelve (12) month period, Landlord shall
have the option, exercised by notice to Tenant, to require that beginning
immediately thereafter, Minimum Annual Rental shall no longer be made in monthly
installments on the first day of each calendar month, but each installment of
such Minimum Annual Rental shall be payable three (3) months in advance until
such time as Tenant has paid each installment of such Minimum Annual Rental in a
timely manner for twelve (12) consecutive months, at which time Tenant shall be
entitled to make payments of Minimum Annual Rental as regularly required under
Section 5.2 above (i.e., Tenant shall no longer be obligated to pay each
installment of Minimum Annual Rental three (3) months in advance).
5.7 No Set-Offs Or Deductions: All amounts of Minimum Annual Rental,
Percentage Rental and Additional Rent payable in a given month (also
collectively referred to in this Lease as "Rental") shall be deemed to comprise
a single rental obligation of Tenant to Landlord. Tenant
*** Confidential treatment requested.
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shall not, except as otherwise herein provided, have the right to set-off or any
right of deduction against any Rental provided for under this Lease.
5.8 Adjustment of Payments: Certain provisions of this Lease require
that adjustments be made to a sum of money or other consideration ("Base
Amount") in accordance with this Section. The measure for such percentage
increase, if any, shall be the Department of Labor, Bureau of Labor Statistics
Consumer Price Index for all Urban Consumers, Los Angeles-Anaheim-Riverside
(1982-1984 equals 100), hereinafter referred to as the "Index." The procedure
for making such adjustment shall be to increase the Base Amount by a percentage
(such increase not to exceed [***]) equal to the percentage increase, if any, in
the Index for the month which is three (3) months before the Month of Adjustment
as compared to the Index for the month which is three (3) months before the Base
Month. The terms "Month of Adjustment," "Base Month" and "Base Amount," as used
herein, are defined in the applicable sections of this Lease. Should said Bureau
discontinue the publication of the above Index, or publish the same less
frequently, or alter the same in some other manner, then Landlord shall adopt a
substitute procedure which reasonably reflects and monitors consumer prices
and/or shall substitute any official index published by the Bureau of Labor
Statistics or by such successor or similar governmental agency as may then be in
existence and shall be most nearly equivalent thereto as reasonably determined
by Landlord.
5.9 Audit Rights: Landlord shall have the right up to twice per annum
(provided, however, such limitation shall apply if Landlord finds a material
discrepancy in Tenant's books of account and records during its previous
inspection and/or audit), upon at least fifteen (15) days' reasonable advance
written notice, to inspect and audit all of the books of account and records of
Tenant (including the books of account and records of any subtenant, licensee or
concessionaire) required to be kept pursuant to Section 5.4. Tenant shall make
the books of account and records available for inspection and audit by
Landlord's representatives at the Premises or at a business office of Tenant in
Los Angeles County during regular business hours. In addition, upon request of
Landlord, Tenant shall furnish to Landlord a copy of Tenant's state and local
sales and use tax returns, and all taxing authority audit reports, delinquency
notices, and the like pertaining thereto, and, at Landlord's request, shall
obtain copies of the foregoing from the taxing authorities. Any information
gained from such statement or inspection shall be confidential and shall not be
disclosed other than to carry out the purpose hereof, provided, however,
Landlord shall be permitted to divulge the contents of any such statement in
connection with any contemplated sales, transfers, assignments, encumbrances or
financing arrangements of Landlord's interest in the Premises or in connection
with any administrative or judicial proceedings in which Landlord is involved
where Landlord may be required to divulge such information. If it shall be
determined as a result of such audit that there has been a deficiency in the
payment of Percentage Rental, then such deficiency shall become immediately due
and payable with interest at the Lease Rate from the date when said payment
should have been made. In addition, if Tenant understates Gross Sales by more
than [***], and if Landlord is entitled to any additional
Percentage Rental as a result of said understatement, or if such audit shows
that Tenant has failed to maintain the books of account and records required by
Section 5.4 so that Landlord is unable to verify the accuracy of Tenant's
statement, then Tenant shall pay to Landlord all reasonable costs and expenses
(including reasonable auditors' and attorneys' fees and costs) which may be
incurred by Landlord in conducting such audit and collecting such underpayment
if any and implement such corrective measures as may be required by Landlord to
maintain accurate books of account and records. If Tenant intentionally
understated Gross Sales, then, in addition to Landlord's aforesaid rights,
Landlord may terminate this Lease.
ARTICLE VI. DEFINITION OF "GROSS SALES"
The term "Gross Sales" of Tenant as used in this Lease is defined to be
the gross selling price of all merchandise or services sold in or from, and any
other gross receipts (including cover
*** Confidential treatment requested.
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charges and fees paid by third parties for sponsorships or celebrity appearances
or other promotional considerations) generated on or from, the Premises by
Tenant, its subtenants, licensees and concessionaires, whether for cash, credit
or barter, and whether made by store personnel or by approved vending, video,
pinball or gaming machines, which shall be adjusted only by excluding the
following:
(a) The selling price of all merchandise sold in or from the Premises
returned by customers and accepted for full credit or the amount of discounts
and allowances made thereon;
(b) Sales taxes, so-called luxury taxes, consumers' excise taxes, gross
receipts taxes, and other similar taxes now or hereafter imposed upon the sale
of merchandise or services included in Gross Sales and paid by Tenant to the
applicable governmental authorities;
(c) Sales of fixtures, equipment or property (including the racing
simulators) which are not stock in trade;
(d) Insurance proceeds, but to the extent any such proceeds are
intended to compensate for, or are measured by anticipated lost sales, such
proceeds shall be included in Gross Sales; and
(e) Sales which are "bulk transfers" of inventory, as that term is
defined in the California Commercial Code.
(f) Exchanges and transfer of goods and merchandise between, Tenant's
stores/locations made for the convenient operation of Tenants business and not
to consummate a sale made in, at, or from the Premises, and goods returned to
their sources or transferred to a warehouse owned by or affiliated with Tenant;
(g) Returns to manufacturer;
(h) Discounted or complimentary use of games or entertainment
attractions by, or discounted or complimentary merchandise given or sold to,
employees, guests or invitees of Tenant, provided that any consideration
received by Tenant in connection any discounted or complimentary transaction
shall be included in Gross Sales;
(i) Special promotional use of games or other entertainment
attractions, provided that any consideration received by Tenant in connection
with a promotion shall be included in Gross Sales;
(j) Revenue received from the sale of "debit cards," "game cards" or
"smart cards," or tokens except to the extent that such cards or token are
redeemed for use of games or other entertainment devices within the Premises;
(k) Sales of gift certificates (unless redeemed at the Premises);
(l) Sums and credits received in the settlement of claims for loss of
or damage to merchandise to the extent previously reported as Gross Sales;
(m) The price allowed on all merchandise traded in by customers for
credit to the extent the credit given is greater than the value of the
merchandise traded in (provided that such credit is not greater than the greater
of (y) the sales price originally paid for such merchandise or (z) the current
sales price for such merchandise);
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(n) Alteration workroom charges and delivery charges, if the amount of
any such charge received by Tenant is no greater than Tenant's cost of providing
the service;
(O) INTENTIONALLY DELETED.
(p) Reimbursement of the amount paid for minor service charges, such as
postage or delivery expenses;
(q) Receipts from sales of food and beverages by third-party caterers
to Tenant's employees and/or customers where such receipts are not retained by
Tenant;
(r) Fees paid by Tenant to credit card companies and/or banking
institutions (to the extent previously reported as Gross Sales) in accordance
with credit card purchase plans not to exceed five percent (5%) of the
merchandise sales price; and
(s) Tips and gratuities passed through and/or paid directly to Tenant's
employees.
All sales originating at the Premises or orders secured or received at
the Premises (whether by mail, telephone, facsimile transmission, telegraph, or
otherwise) shall be considered as made and completed therein, even though
bookkeeping, payment or collection of the account may take place elsewhere, and
even though actual filling of the sale or service order and actual delivery of
the merchandise may be made from a place other than the Premises. Each sale upon
installments or credit shall be treated as a sale for the full cash price at the
time of sale.
The term "merchandise" as used in this Lease is defined as any goods
and commodities, including foods and beverages, sold or offered for sale, unless
the context of the use of such term requires a different meaning.
ARTICLE VII. UTILITIES
Landlord will make available to Tenant, as set forth in Exhibit C,
facilities for removal of sewage and for delivery of water, electricity,
telephone services and natural gas (hereinafter collectively referred to herein
as "Utilities") to the Premises or, at Landlord's sole option, to a central
distribution point outside the Premises. Subject to Section 1.12 above, Tenant
shall, at its expense, connect to and use such Utilities throughout the Lease
Term.
Tenant shall install and maintain at its expense a separate meter for
any and all Utilities and pay to the appropriate utility company or Landlord the
cost of all such Utilities used upon the Premises. If any such charges are not
paid when due, Landlord may, but shall not be required to, pay the same, and any
amount so paid by Landlord shall immediately thereafter become due to Landlord
from Tenant as Additional Rent. In the event that Landlord elects to deliver
water or electricity to the Premises or to provide for the removal of sewage
from the Premises (the "Supplied Utilities"), Tenant shall pay, as Additional
Rent, a "Utilities Charge" to reimburse Landlord for charges related to delivery
or removal of the same. Such Utilities Charge shall be calculated on the basis
of Tenant's metered utility use and the rates charged by the local public
utility supplying such Supplied Utilities. The Utilities Charge will include
reimbursement to Landlord for direct and indirect costs of providing such
Supplied Utilities, but shall not exceed the charge of the local public utility
company had said company furnished such Supplied Utilities directly to Tenant.
Landlord shall not be liable, in damages or otherwise, for any
discontinuance, failure or interruption of service to the Premises or the Common
Areas of Utilities or of any air-conditioning
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system unless such discontinuance, failure or interruption results from
Landlord's (or its contractor's, agent's or employee's) negligence or willful
misconduct. No such discontinuance, failure or interruption shall be deemed a
constructive eviction of Tenant or entitle Tenant to terminate this Lease.
Except as provided in this paragraph below, no such discontinuance, failure or
interruption shall entitle Tenant to withhold payment of any rental due under
this Lease unless such discontinuance, failure or interruption (i) is due to
Landlord's voluntary action, negligence or willful misconduct and continues for
more than five (5) days or (ii) is not due to Landlord's voluntary action,
negligence or willful misconduct and continues for more than twenty (20) days,
but only to the extent Tenant's business interruption insurance does not pay
Tenant's rent due during such period; provided, finally, such discontinuance,
failure or interruption shall be deemed a constructive eviction of Tenant and
entitle Tenant to terminate this Lease if such discontinuance, failure or
interruption lasts for one hundred and eighty (180) days or more. In either
event, Landlord shall use reasonable efforts to restore any interrupted service.
ARTICLE VIII. COMMON AREA AND PARKING AREAS
8.1 Definition of "Common Area": The term "Common Area" refers to all
improved and unimproved areas that are now or hereafter made available for the
general use, convenience and benefit of Landlord, Tenant, other persons entitled
to occupy Floor Area in the Project and/or their customers, patrons, employees
and invitees, including floors, ceilings, roofs, skylights, windows, driveways,
open or enclosed malls, food court seating areas, service areas, loading docks,
vertical circulation facilities (other than those stairways, escalators and
elevators within tenant areas), sidewalks, curbs and landscaped areas that are
within the Project.
8.2 Use of Common Area: Subject to the provisions of this Section,
Tenant and its employees and invitees are authorized, empowered and privileged
to use the Common Area. Tenant and its employees shall have the right to use the
Common Area for access to the Premises at all times and Tenant's customers shall
have such right during all hours that Tenant is open for the conduct of
business. Notwithstanding the foregoing and subject to Section 8.3, Landlord
shall have the right to use the Common Areas for special events, during which
use Tenant shall remain open for business unless such use prohibits or
materially impairs (i.e., place or locate any physical barrier (whether
permanent or temporary; e.g., a stage, crowd-control ropes, booths, kiosks,
special event sound or lighting equipment, etc.), in such a manner as to make it
difficult and/or dangerous to gain) access to the Premises by Project patrons
(excluding event guest patronage of and use of Tenant's Premises) in which case,
Tenant shall have the right to close for business for the duration of the event.
Landlord agrees to construct, or cause to be constructed, the Common Area
generally upon the areas shown on Exhibit A and shall maintain and operate, or
cause to be maintained and operated (except as hereinafter provided with
reference to cost of maintenance) in a first-class condition and repair, said
Common Area at all times following completion thereof for the non-exclusive
benefit and use of the customers and patrons of Tenant, and of other tenants,
owners and occupants of the Project. All expenses in connection with the
original construction and installation of the Common Area shall be at the sole
cost and expense of Landlord and shall not be charged to Tenant. Landlord shall,
in a manner consistent with other facilities within Universal City, keep, or
cause to be kept, said Common Area in a neat, clean and orderly condition,
properly lighted and landscaped, and repair and maintain (or replace, if
necessary) all equipment and facilities thereof.
Subject to CityWalk Management approval and provided that there is no
interference with ingress or egress to and from other tenant spaces or with
pedestrian traffic in the common areas, Tenant's customers shall be allowed to
queue in the Common Areas for the purchasing of tickets and waiting for the use
of available simulator rides. Landlord shall have the right to approve, in
Landlord's sole discretion, Tenant's request to place an actual or model NASCAR
stockcar in the Common Areas fronting the Premises.
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8.3 Control of Common Area: Landlord shall at all times have the right
of determining the nature and extent of the Common Area and parking areas, and
of making such changes thereto from time-to-time which in its reasonable opinion
are deemed to be desirable, including the location and relocation of driveways,
entrances, exits, automobile parking spaces, the direction and flow of traffic,
designation of prohibited areas, landscaped areas, utilities and all other
facilities thereof, and the modification of the Common Area for the purpose of
expanding and/or remodeling the Project. Except as otherwise specifically
provided in this Lease, Landlord shall at all times after the Effective Date
have the sole and exclusive control of the Common Area and parking areas,
including the right to lease space within the Common Area to tenants for the
sale of merchandise and/or services and the right to permit advertising
displays, educational displays and entertainment in the Common Area. Landlord
shall also have the right at any time to exclude and restrain any person from
use thereof, excepting, however, bona fide customers, patrons and service
suppliers of Tenant and other tenants of Landlord who make use of said areas in
accordance with the rules and regulations established by Landlord from
time-to-time with respect thereto in accordance with Section 8.5. The rights of
Tenant with respect to the Common Area and parking areas shall at all times be
subject to the rights of Landlord, the other tenants of Landlord and the other
owners of the Project to use the same in common with Tenant. It shall be the
duty of Tenant to keep all of the Common Area free and clear of any obstructions
created or permitted by Tenant or resulting from Tenant's operation.
Notwithstanding the foregoing, Landlord shall not materially and adversely
impair public access (through any of Tenant's front entry doors) to the Premises
or the visibility of the Premises.
8.4 Security: Tenant acknowledges that, by providing any security
guards for the Common Area and parking areas, Landlord does not represent or
assume responsibility that Tenant will be free from any Claims (as defined in
Section 17.1) relating to such security guards, and Tenant further agree that
Section 17.1 shall relate to Claims arising out of the actions and inactions of
such security guards. Landlord shall have the right to recover from Tenant
reasonable additional security costs incurred by Landlord as a result of
Tenant's activities or a special event at the Premises reasonably necessitating
the expenditure of such additional security costs.
8.5 Rules and Regulations: Tenant acknowledges that it is aware that
Landlord and others are engaged in motion picture and television film
production, motion picture exhibition, hotel, restaurant, bar, studio tour
business and other businesses within Universal City (none of which they are
obligated to continue), and Landlord may promulgate, amend and require the
observance by Tenant and Tenant's customers, licensees, concessionaires and
employees, of reasonable rules and regulations uniformly imposed and enforced in
a non-discriminatory manner for the proper and efficient operation and/or
maintenance of the Common Area and parking areas or any portion thereof and so
as to preclude or minimize the possibility of disruption or conflict with the
other activities in Universal City. In the event of a conflict between such
rules and regulations and this Lease, the provisions of this Lease shall
prevail.
8.6 Parking: Landlord shall furnish space for parking by Tenant, its
customers and employees on a nonexclusive basis in common with customers and
employees of other Project tenants and of Landlord and its affiliated companies.
Tenant acknowledges that Landlord does not represent or guarantee that Tenant's
patrons will have immediate access to the parking at all times. The parking
areas initially designated for such use are designated on Exhibit A-2 as
"Parking Areas." Landlord may at its discretion change the configuration,
location and size of the parking areas, but except for emergency situations or
temporary interruptions, any such changes will provide parking areas
substantially equivalent to that which existed prior to such change. At all
times Landlord shall have the right, on a nondiscriminatory basis, to designate,
or change the designation of, the particular parking area to be used by any or
all Project tenants, their employees and customers and to designate discrete
areas for employee parking; provided,
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however, Tenant's employees shall be entitled to park in such designated areas
free of charge throughout the Lease Term unless all or substantially all of the
other tenants of the Project (or their employees) are required to pay for
employee parking and then Tenant (or Tenant's employees) shall pay for such
employee parking the lowest amount charged to any other Tenant of the Project.
If Tenant or its employees fail to park their cars in the designated parking
areas, Landlord may, charge Tenant an amount specified from time-to-time by
Landlord (as of execution of this Lease, such amount is Ten Dollars ($10)) per
car per day for each day or partial day that any car is parked in any area other
than those designated. All amounts due under provisions of this Section shall be
payable by Tenant within ten (10) days after demand by Landlord.
Tenant shall have the right to purchase valet parking validation stamps
at $2.00 per stamp. The stamp purchase price shall be increased (but never
decreased) on each anniversary of the Rent Commencement Date during the Lease
Term in accordance with the procedure described in Section 5.8 (for which
purposes "Base Amount" shall be $2.00, "Base Month" shall mean the month in
which the Rent Commencement Date occurs, and "Month of Adjustment" shall mean
any month in which the stamp purchase price is to be increased pursuant to this
Section). Subject to the availability of valet parking spaces in the Project,
the stamps may be used any day by Tenant's customers up until 4:00 PM and
entitle the customer to park in valet parking for two hours for $4.00. If the
customer parks in valet parking for longer than two hours, then the customer
will pay the standard valet parking rate for time parked exceeding two hours.
Landlord reserves the right to increase the rate it charges for valet parking
(including the $4.00 rate) based on demand and market conditions, provided that
any increase shall be applied in a non-discriminatory manner. Landlord and
Tenant acknowledge that the intent of this valet parking provision is to benefit
Tenant's customers who participate in racing league activity and therefore
Tenant is prohibited from advertising to the public or posting signage in or on
the Premises regarding the availability of valet parking stamps, provided,
however, Tenant may inform league patrons and Tenant's "Driver's Club" patrons
who pay an annual membership fee in exchange for special privileges of the valet
parking arrangement in brochures provided the brochures are not purposefully
sent or distributed to the public other than to the foregoing permitted
recipients. For purposes of customer satisfaction, Tenant may also offer to
validate a customer's parking to remedy a situation where a customer is
dissatisfied. Tenant shall have the right to get reimbursed by Landlord for the
full price paid by Tenant to Landlord for unused stamps which are returned to
Landlord within one year after issuance.
8.7 Parking Charges: Landlord shall have the right to charge all users
of the parking facilities made available by Landlord to Project tenants, their
customers, invitees and employees (subject to Section 8.6), and, in Landlord's
sole discretion, to establish a system for validating or waiving some or all of
said charges, provided that (i) Landlord may establish different rates based on
the type of use (e.g. restaurant, office, or retail), and (ii) Landlord shall
offer hourly, daily and monthly parking rates for employees, which rate shall
not exceed the then-prevailing rates in Universal City. If Landlord shall have
established a validation system for the Project which system shall be employed
in a non-discriminatory manner) and if a majority of Project tenants agree to
assume their allocable shares of the cost of such validation system, Tenant
shall contribute its pro rata portion based upon Tenant's Floor Area as a
fraction of the floor area of all of the premises located within the Project (or
some other equitable allocation method), of the cost of such validation system,
payable upon receipt of an invoice therefor from Landlord.
ARTICLE IX. MARKETING AND ADVERTISING
9.1 Tenant Advertising: If required by Section 1.10 above, beginning on
the Rent Commencement Date and continuing for the balance of the Lease Term,
Tenant shall expend during each full or partial calendar year the Annual
Advertising Amount set forth in Section 1.10 for the immediately preceding
calendar year, to purchase paid media or direct response
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advertising, in either print or broadcast form, to advertise Tenants business
conducted at the Premises. Such advertising shall specifically name the Project
and its location. Within sixty (60) days following the close of each calendar
year, Tenant shall furnish Landlord with such documentation as Landlord may
reasonably request evidencing Tenant's compliance with advertising requirements
set forth herein. If Tenant shall fail to advertise as provided for herein, then
Tenant shall pay Landlord upon demand, as Additional Rent, the difference
between (a) the amount actually expended by Tenant for advertising hereunder,
and (b) the amount which Tenant would have expended had Tenant complied with the
advertising requirements set forth in this Section 9.1.
9.2 Marketing Fund: If required by Section 1.11 above, Landlord shall
establish a marketing fund (the "Marketing Fund") to market, advertise and
promote the entire Project in accordance with long-range, coordinated marketing
plans including advertising through various media, a community relations
program, special events and promotions. Tenant shall make a contribution to the
Marketing Fund in the amount specified in Section 1.11. The Marketing Fund
contribution shall be increased (but never decreased), effective on the first
day of each calendar year during the Lease Term, in accordance with the
procedure described in Section 5.8 (for which purposes "Base Amount" shall mean
the amount specified in Section 1.11, "Base Month" shall mean the month in which
the Rent Commencement Date occurs, and "Month of Adjustment" shall mean any
month in which the Marketing Fund contribution is to be increased pursuant to
this Section). Such Marketing Fund contribution shall be made in advance as of
the first day of each calendar year upon receipt of landlord's invoice for same.
Landlord shall control and administer the Marketing Fund with advice from such
advisory group as a majority of the tenants at the Project shall select and
Landlord shall have the right to recoup from the Marketing Fund its costs of
administering the Marketing Fund.
ARTICLE X. POSSESSION AND USE
10.1 Permitted Uses: Tenant shall use the Premises solely for the
purpose or use specified in Section 1.13 and shall operate its business on the
Premises using only the exact trade name(s) specified above, and for no other
use whatsoever without Landlord's prior consent which may be withheld in
Landlord's sole discretion. Tenant shall procure and maintain all governmental
licenses and permits required for the proper and lawful conduct of Tenant's
business.
10.2 Duties and Prohibited Conduct: Tenant shall not use, or knowingly
permit any invitee or other person to use, the Premises for the sale or display
of, or for any activity involving, pornography, nudity, violence, drug
paraphernalia, or any goods and/or services and/or conduct which, in the sole
discretion of Landlord, are inconsistent with the image of a community- or
family-oriented establishment, or for a massage parlor, adult bookstore or
second-hand store or for the conduct of an auction, distress, fire, bankruptcy
or going-out-of-business sale. Tenant shall implement such procedures as
Landlord requires in order to effectuate the prior sentence, including retaining
qualified on-Premises security personnel and by making adjustments in the manner
Tenant conducts its business. Tenant shall not cause or permit waste to occur in
the Premises, or overload any floor, or abuse the plumbing in the Premises.
Tenant shall keep the Premises, and every part thereof, in a clean and wholesome
condition, free from any objectionable noises, music volumes, lights, odors or
nuisances, which may be detected from outside the Premises, except to the extent
the foregoing are generated from the normal operations associated with the
automobile racing car ride simulators in compliance with the Permitted Use
(including, for example, the noise made by the track announcer, but not
promotional announcements or "hawking" directed toward patrons of the Project
outside of the Premises), shall comply with all requirements of all governmental
authorities, and shall conduct its activities in a manner which is
environmentally sound. Landlord hereby consents to Tenant's use
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of hydraulic oil in connection with the operation of the automobile race car
driving simulators and cleaning and office products customarily used in retail
or office premises so long as such materials are used, handled and disposed of
in accordance with applicable laws. Unless otherwise permitted by the Lease,
Tenant shall keep no live animals of any kind in the Premises. Tenant shall not
display or sell merchandise or place carts, portable signs, devices or any other
objects, outside the defined exterior walls or roof and permanent doorways of
the Premises, nor will Tenant erect any aerial antenna or extra "dish." Tenant
shall not solicit or distribute material in any manner in any of the Common Area
of the Project. Tenant shall not sell merchandise from vending machines or allow
any coin- or token-operated vending, video, pinball or gaming machines in the
Premises (other than the automobile racing car ride simulators), except that
Tenant may install a coin operated telephone on the Premises for the use of its
employees.
10.3 Deliveries/Trash Removal: Tenant shall use its commercially
reasonable efforts to complete, or cause to be completed, all deliveries,
loading, unloading and services to the Premises prior to 10:00 a.m. of each day.
Tenant shall not cause, and shall use commercially reasonable efforts to attempt
to prevent, any delivery trucks or other vehicles serving the Premises from
parking or standing in front of, or at the rear of, the Premises from 10:00 a.m.
to 9:00 p.m. of each day. Landlord reserves the right to reasonably regulate
further the activities of Tenant in regard to deliveries and servicing of the
Premises, and Tenant agrees to abide by such further reasonable and
nondiscriminatory regulation of Landlord. Landlord will establish a system for
pick-up, disposal, cartage and recycling of refuse generated by Project tenants.
Tenant shall not burn trash or rubbish in or about the Premises and shall
deposit its trash and rubbish only in those receptacles provided by Landlord for
Tenant's use. Landlord shall cause such receptacles to be emptied and trash
removed at Tenant's expense.
10.4 Additional Costs: If Landlord shall incur additional costs as a
result of Tenants failure to observe the provisions of this Lease or its rules
and regulations, such as failure to deposit trash and rubbish in proper
receptacles or Tenant's misuse of any portion of the Project outside of the
Premises, Tenant shall pay, to Landlord, as Additional Rent, the sums required
to reimburse Landlord for such additional reasonable, out-of-pocket costs plus
Landlord's reasonable administrative fee related thereto.
10.5 Renovation: Subject to Sections 2.3 and 2.7, Tenant shall renovate
and refurbish the Premises as reasonably required from time to time by Landlord
in order to maintain the Premises in substantially the same condition as when
Tenant first opened for business (provided, however, this Section is not
intended nor shall it be construed to impose any obligation on Tenant to update
the technology relating to the automobile driving simulators or other
equipment). Such renovation or refurbishment may include new carpeting,
painting, new wall covering and/or new tenant fixtures. Any such work by Tenant
pursuant to this Section shall be commenced within three (3) months after
Tenant's receipt of notice from Landlord and shall be completed within three (3)
months after the commencement thereof.
ARTICLE XI. TENANT'S CONDUCT OF BUSINESS
11.1 Operating Covenants: Tenant covenants and agrees that it will open
for business and thereafter continuously and uninterruptedly (a) operate and
conduct within the Premises during the required operating hours the business
which it is permitted to operate and conduct under the provisions hereof, except
while the Premises are untenantable by reason of fire or other casualty, and (b)
maintain within the Premises during the entire Lease Term an adequate stock of
in-season merchandise together with sufficient personnel and Personal Property
to service and supply the usual and ordinary requirements of its customers and
to maximize Gross Sales. Tenant acknowledges that the Project is intended to
provide only the highest quality of service and merchandising for the patrons of
the Project and that Tenant will operate and conduct all
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aspects of its operations in accordance with this standard. Prior to substantial
completion of the Premises, Tenant shall provide Landlord with an initial first
year Profit and loss proforma. Tenant will not be in breach of the foregoing
sentence until ten (10) days after Landlord provides written notice to Tenant
requesting said proforma. Landlord shall include provisions substantially
similar to this Section 11.1 in the lease agreements of all other tenants of
the Project and shall enforce such provisions in a non-discriminatory manner.
As used herein, the term "merchandise" or "merchandising" shall mean
items of merchandise typically associated with the Permitted Use, including
food, beverages, themed apparel and related products and other goods and
commodities.
11.2 Operating Days and Hours: Subject to the limitations set forth in
Section 11.1 above, recognizing that it is in the interests of both Tenant and
Landlord to have regulated hours of business for all of the Project, Tenant
shall, commencing with the opening for business by Tenant in the Premises and
for the remainder of the Lease Term, be open for business continuously with its
window displays, exterior signs and exterior advertising displays adequately
illuminated during all hours on all days on which Landlord, in its sole
discretion, determines to open the Project for business to the public. In that
connection, Tenant acknowledges and agrees that Project hours may change
seasonally, and that due to regulatory requirements, hours may vary for patrons
depending on patron age. If Tenant shall open late, close early or fails to be
open at any time in violation of this Lease without the express written consent
of Landlord, which consent Landlord may grant or withhold in its sole
discretion, Landlord may assess Tenant, and Tenant shall pay the amount so
assessed as Additional Rent, at the rate of Two Hundred Dollars ($200.00) per
full or partial hour of Tenant's unauthorized closure; provided, however,
Tenant shall not be required to pay the amount assessed to Tenant if Tenant's
failure to open or to stay open resulted from a Force Majeure event. It is
agreed, however, that the foregoing provisions shall be subject to the hours of
operation prescribed by any governmental regulations or labor union contracts
which may govern the operation or business of Landlord or Tenant.
11.3 Compliance with Laws: Subject to Section 1.12, Tenant shall, at
its sole cost and expense, promptly comply with all laws, statutes, ordinances
and governmental rules, regulations or requirements (including, without
limitation, ABC liquor license and liquor conditional use, permits, mitigation
plans and best management practices from time-to-time required to be obtained or
implemented by Landlord or Tenant to satisfy legal requirements) now or
hereafter in force, and with the requirements of any board of fire underwriters
or other similar bodies now or hereafter constituted relating to or affecting
the condition, use or occupancy of the Premises, in each case excluding
structural changes not related to or affected by Tenant's improvements or acts,
which shall be Landlord's obligation. Tenant shall immediately notify Landlord
in writing, and provide Landlord copies, of any threatened or actual claim,
notice, citation, violation, warning, complaint or report that Tenant may
receive with respect to Tenant's failure to comply with Tenant's obligations
under this provision. Except for the approval by the Los Angeles County regional
planning department of a parking calculation taking into account Tenant's use,
Landlord represents and warrants that to the best of Landlord's knowledge, the
Premises are in compliance with all applicable zoning ordinances and all
mitigation plans applicable to the Premises have been satisfied. Landlord shall
obtain said approval on or before July 1, 1999.
Tenant shall disclose all ABC liquor license information to Landlord;
including but not limited to any restrictions imposed on Tenant's ABC liquor
license. In addition, Tenant understands that the Project and Universal Studios
Hollywood have extensive resources and experiences with land use issues (past,
current and future public approval projects), local agencies and a special
sensitivity to its local residential neighbors. As a result Tenant agrees to
allow Landlord to coordinate and manage all of the public approval processes
(including any public hearings) for any necessary permits including but not
limited to the liquor conditional use permit. Landlord represents and warrant
that there is nothing inherent or specific to the Project or
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Landlord or constituent owners of Landlord that will prevent Tenant from using a
catering service for the services of food and alcoholic beverages provided that
the caterer complies with all laws and regulations relating to the services of
food and alcoholic beverages.
ARTICLE XII. LIMITS ON SIGNS AND ADVERTISING
Subject to the paragraph entitled "Initial Tenant Obligations" after
the preamble of this Lease, all exterior Tenant signage and the sign designer
and fabricator shall be subject to the review and approval of Landlord, in
accordance with the procedures set forth in Exhibit C and the Tenant's Manual.
Tenant shall not place any signs, placards, names, insignia, trademarks, or
any other similar item or items outside, on or within thirty-six inches (36")
of, the front lease line, or on the store front, the glass panes and supports of
the show windows, or on any window, door, roof or perimeter wall of the
Premises, or which is otherwise visible from the Project common areas (except
for the standard design elements reflected on Tenant's plans and specifications
for the initial build out of the Premises), except such as Landlord shall
approve in its sole discretion. Notwithstanding anything to the contrary in this
Lease, Tenant shall not affix any signs to the roof of the Premises. Tenant
shall utilize no advertising medium (other than signage permitted or approved
pursuant to the preceding sentence) within the Premises or within the Common
Area which can be heard or experienced outside the Premises (excluding Tenant's
track announcer or the automobile driving simulator rides). Tenant shall not
display, paint or place any handbills or other advertising devices on any
vehicle parked in the parking area of the Project, whether belonging to Tenant
or to any other person, nor shall Tenant distribute in the Project any handbills
or other advertising devices. Other than Tenant's signage, Landlord represents
and warrants that it will not place any signage on the front building facade of
the Premises.
ARTICLE XIII. PERSONAL PROPERTY; IMPROVEMENTS; CERTAIN TAXES
13.1 Removal and Replacement: All of Tenant's trade fixtures,
furniture, furnishings, signs and other personal property not permanently
affixed to the Premises (collectively referred to herein as "Personal Property")
must be either new or antique and, in either case of a quality consistent with
the Project when installed in, or attached to, the Premises by Tenant. Subject
to the provisions of Section 13.2, any such Personal Property shall remain the
property of Tenant. Provided Tenant is not in default beyond the applicable cure
period after notice from Landlord under any of the monetary or other materials
terms of this Lease, Tenant shall have the right to remove any or all of its
Personal Property which it may have stored or installed in the Premises;
provided, however, if this Lease is still in effect, Tenant shall immediately
replace the same with similar Personal Property of comparable or better quality.
At Landlord's option, Landlord may require Tenant to remove any and all Personal
Property from the Premises upon the expiration of the Lease Term. Tenant shall,
at its expense, immediately repair any damage occasioned to the Premises by
reason of the removal of any Personal Property.
13.2 Improvements: Tenant's Alterations (as specified in Section 14.1)
and Tenant's Work (as specified in Exhibit C) are collectively referred to in
this Lease as "Improvements" and shall become the property of Landlord upon the
expiration or earlier termination of this Lease.
13.3 Certain Taxes: Tenant shall pay before delinquency all taxes
(including sales and use taxes), assessments, license fees and public charges
levied, assessed or imposed upon its business operation at the Premises as well
as upon its merchandise, Improvements and Personal Property. If any such items
of property are assessed with property of Landlord or a third party, then, and
in such event, such assessment shall be equitably divided between Tenant and
either Landlord or such third party, as the case may be.
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ARTICLE XIV. TENANT'S RIGHT TO MAKE IMPROVEMENTS
14.1 Alterations: At Tenant's own expense, after giving Landlord notice
of its intentions to do so, Tenant may, from time-to-time after completion of
all work in accordance with Exhibit C, make such permanent and nonstructural
alterations, replacements, additions, changes and/or improvements (collectively
referred to in this Lease as "Alterations") to Tenant's Work previously
completed in accordance with Exhibit C or to prior Alterations as Tenant may
find necessary or convenient for its purposes, provided that: (i) any such
Alterations which are structural or on the exterior of the Premises and/or
visible from the exterior may not be made without Landlord's prior written
consent which Landlord may withhold in its sole and absolute discretion; (ii)
the value of the Premises is not thereby diminished; and (iii) no Alterations
costing in excess of [***] for any one work of improvement, or in excess of
[***] in the aggregate for multiple works of improvement during any period of
twelve (12) consecutive months during the Lease Term, may be made without
obtaining the prior approval of Landlord, which Landlord may withhold in its
reasonable discretion. Tenant shall reimburse Landlord for all reasonable
out-of-pocket costs and expenses (including, any architect and/or engineer fees)
incurred by Landlord in approving or disapproving Tenant's plans for Alterations
up to [***].
14.2 Construction Requirements: All Alterations to be made to the
Premises which require the approval of Landlord shall be made under the
supervision of a competent architect or licensed structural engineer and in
accordance with plans and specifications prepared and constructed in conformity
with the structural, mechanical, electrical, design and quality standards,
requirements and/or criteria specified in Exhibit C. Such plans and
specifications shall be submitted to Landlord for its approval prior to
commencement of the work, in accordance with such procedures as Landlord shall
reasonably specify. Upon the expiration or earlier termination of this Lease,
such Alterations (unless they comprise Personal Property or trade fixtures)
shall not be removed by Tenant but shall become a part of the Premises unless
Landlord requires their removal, in which event Tenant shall remove such
Alterations promptly upon vacating the Premises. In performing the work of any
such Alterations, Tenant shall have the work performed in such a manner as not
to obstruct access to the premises of any other tenant in the Project.
ARTICLE XV. MECHANICS' LIENS
Except as otherwise provided in this Lease, Tenant shall pay all costs
of labor, services and materials supplied in the prosecution of any work, except
for "Landlord's Work" as specified in Exhibit C, or other work undertaken by
Landlord in discharge of its responsibilities under this Lease, done, or caused
to be done, on the Premises. Landlord and Tenant will keep the Premises free and
clear of all mechanics' liens and other such liens on account of work done by
Landlord and Tenant or persons claiming under Landlord and Tenant. [Construction
surety bond requirement waived subject to satisfactory review of Tenant's
financials] Tenant shall forthwith notify Landlord of any claim of lien filed
against the Premises of which Tenant has notice or the commencement of any
action affecting the title thereto. Landlord and its representatives shall have
the right to post and keep posted thereon notices of non-responsibility or such
other notices which Landlord may deem to be proper for the protection of
Landlord's interest in the Premises. Before the commencement of any work which
might result in any such lien, Tenant shall give to Landlord written notice of
its intention to do so, specifying the date on which such work shall commence,
in sufficient time to enable Landlord to post and record such notices in
accordance with the laws and/or statutory requirements of the State of
California.
*** Confidential treatment requested.
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ARTICLE XVI. REPAIRS AND MAINTENANCE
16.1 Tenant's Obligations: From and after substantial completion of the
Premises and, except for punch list items as provided in Section 4.2, Tenant
shall at all times repair, maintain in good and tenantable condition and
replace, as necessary, the Premises and every part thereof (except that portion
of Premises to be maintained by Landlord under Section 16.2). All replacements
made by Tenant in accordance with this Section 16.1 shall be of like size, kind
and quality to the items replaced as they existed when originally installed and
shall be subject to Landlord's reasonable approval.
16.2 Landlord's Obligations: Subject to Sections 16.1 and 8.3, Landlord
shall repair, maintain in good and tenantable condition and replace, as
necessary, the roof, exterior walls and structural parts of the Premises
(including the structural floor) and all meters, pipes, conduits, equipment,
components and facilities that supply the Premises with Utilities installed by
Landlord (except as the appropriate utility company has assumed these duties);
provided however that Landlord shall not be required, and Tenant shall be
required, to make repairs necessitated by reason of the negligence or willful
misconduct of Tenant or anyone claiming under Tenant, or by reason of the
failure of Tenant to perform or observe any conditions or agreements of this
Lease, or by reason of Improvements made by Tenant or anyone claiming under
Tenant. As used in this Article XVI, "exterior walls" shall exclude storefronts,
plate glass, window cases and window frames, doors and door frames, security
grills and similar enclosures, the repair and maintenance of which are Tenant's
responsibility. Landlord shall have no obligation to repair, replace or maintain
the Premises or the mechanical equipment exclusively serving the Premises at any
time, except as this Lease expressly provides. Landlord shall perform its
obligations under this Section in a manner consistent with first-class retail
centers in Southern California. All of Landlord's costs and expenses arising out
of Landlord's complying with its obligations and exercising its rights under
this Section 16.2 shall constitute Operating Costs as defined in Section 5.2,
except that Landlord's costs and expenses of repairing and maintaining meters,
pipes, conduits, equipment and facilities that supply Tenant's Premises
exclusively shall be allocated entirely to Tenant.
16.3 Right to Enter: Tenant shall permit Landlord, or its authorized
representatives, upon reasonable notice (except in an emergency in which case no
notice shall be required), to enter the Premises at all times during usual
business hours to inspect the same, to perform its duties under Section 16.2,
and to perform any work therein that Landlord may reasonably deem necessary or
that is Landlord's obligation under this Lease. No exercise by Landlord of any
rights reserved in this Section 16.3 shall entitle Tenant to any compensation,
damages or abatement of rent from Landlord for any injury or inconvenience
occasioned thereby.
16.4 Landlord's Liability: Landlord shall be liable and assumes the
risk for any damage occasioned by reason of the construction of the Premises or
for failure to keep the Premises in repair, provided Landlord is obligated to
construct same or make such repairs under the terms hereof, and further provided
that notice of the need for repairs has been given to Landlord, a reasonable
time has elapsed and Landlord has failed to make such repairs. Landlord shall
also be liable for its negligence or willful misconduct in performing any
repairs that Landlord undertakes hereunder. Except as hereinabove set forth,
Landlord shall not be liable for any damage done or occasioned by or from the
electrical system, heating or air conditioning system, and plumbing and sewer
systems in, upon or about the Premises or the building of which the Premises are
a part, nor for damages occasioned by water, snow or ice being upon or coming
through the roof, trap door, walls, windows, doors or otherwise, nor for any
damage arising from acts of negligence of tenants or other occupants of the
building or buildings of which the Premises may be a part, or the acts of any
owners or occupants of adjoining or contiguous properties, and in any event,
Landlord shall not be liable for any damage to Tenants Improvements, Personal
Property, or merchandise resulting from fire or other insurable hazards,
regardless of the cause thereof other than as results from the gross negligence
or willful misconduct of Landlord, its employees or agents, and ▇▇▇▇▇▇,
▇▇
▇▇
subject to the provisions of Section 17.1, hereby releases Landlord from all
liability for such damage other than as results from the gross negligence or
willful misconduct of Landlord, its employees or agents.
ARTICLE XVII. INDEMNITY; INSURANCE
17.1 Indemnification:
17.1.1 Indemnification by Tenant: Landlord shall not be liable
for, and Tenant shall defend (unless Landlord waives its right to such defense,
and in any event with counsel satisfactory to Landlord), indemnify and protect
Landlord from, any claim, liability, fine, loss, or expense (including
reasonable actual attorneys' fees and court costs) arising directly or
indirectly from (a) any labor dispute involving Tenant or its contractors or
agents, or (b) the construction, repair, alteration, improvement, use, occupancy
or enjoyment of the Premises by Tenant, or (c) any activities in connection with
Tenant's business, including any activities relating to advertising copy
supplied by Tenant under Article IX, or (d) any loss or damage to Tenant's
property (hereinafter referred to as "Claim"); provided, however, Tenant shall
have no obligation to defend, indemnify or protect Landlord from Claims (y) made
by Tenant in accordance with Article XXIII, or (z) caused by the sole negligent
or willful acts of Landlord and/or its agents or employees. Landlord shall give
notice to Tenant as to litigation that is instituted against Landlord that may
subject Tenant to liability under this Section.
17.2 Tenant's Insurance Obligation: From and after the earlier of
commencement of Tenant's Work or Tenant's entry upon the Premises, Tenant will
carry and maintain the following types of insurance, in the amounts specified
and in the form hereinafter provided for:
17.2.1 General Liability: Commercial general liability insurance
(and/or excess umbrella liability) written on an occurrence form with a combined
single limit of not less than [***] per occurrence. Said policy must be written
on the CG0001 11/85 or 11/88 ISO occurrence form or broader, with no additional
exclusions, and must include:
1. primary, not contributing coverage
2. blanket contractual
3. broadform property damage
4. personal/advertising injury
5. products completed operations
6. liquor liability, if tenant is a restaurant
7. X, C and U, if necessary due to the nature of the work
All such bodily injury liability insurance and property damage liability
insurance shall specifically insure the performance by Tenant of that part of
the indemnity agreement contained in Section 17.1 relating to liability for
injury to or death of persons and damage to property, as well as contractual
liability.
17.2.2 Workers' Compensation: Statutory workers' compensation
including employers liability insurance with a limit of not less than [***].
Tenant shall cause its workers' compensation carrier to waive insurer's right of
subrogation with respect to Universal Studios Recreation Services, Universal
Studios, Inc., and its affiliates, and such additional individuals or entities
as Landlord shall from time-to-time designate.
17.2.3 Plate Glass: Insurance covering full replacement cost of
all plate glass on the Premises. Tenant shall have the option either to insure
commercially or to self-insure the risk.
*** Confidential treatment requested.
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17.2.4 Equipment: Machinery insurance on all air-conditioning
equipment and systems exclusively serving the Premises. if said equipment and
the damage it may cause are not covered by Tenant's "All Risks" insurance (as
specified in Subsection 17.2.5 below), then the insurance specified in this
Subsection 17.2.4 shall be in an amount not less than One Hundred Thousand
Dollars ($100,000); if Tenant requires boilers or other pressure vessels to
serve the Premises, they shall also be insured for the same amount.
17.2.5 Tenant's Improvements and Personal Property: Insurance
covering Tenant's (a) merchandise; (b) "Improvements" (as defined in Section
13.2) including "Alterations" (as defined in Section 14.2); and (c) "Personal
Property" (as defined in Section 13.1) from time-to-time in, on or upon the
Premises, in an amount not less than [***] of their full replacement cost,
providing protection against any peril included within the classification "All
Risks," including coverage for sprinkler and water damage and theft. Any policy
proceeds shall be used for the repair or replacement of the property damaged or
destroyed unless this Lease shall cease and terminate under the provisions of
Article XVIII, in which event Landlord and Tenant shall share in such proceeds
as their respective interests may appear.
17.2.6 Business Interruption: Insurance covering Tenant's
anticipated continuing expenses (including Rental) and lost profits following a
casualty for a period of twelve (12) months.
Notwithstanding the foregoing, Tenant may cause any of the policies
which it maintains to carry such deductibles as are commercially reasonable.
Notwithstanding the types of insurance and dollar amounts specified above in
this Section 17.2, Landlord may by notice to Tenant given from time-to-time
require additional types and/or higher limits of insurance coverage as Landlord
may reasonably specify as being appropriate, provided, however, that Landlord
shall not so change the insurance requirements more than [***] years and
provided further that such additional types or higher limits are customary for
developments similar to the Project in the City of Los Angeles. Tenant shall be
responsible for paying any additional premiums charged by its insurer(s) for
additional insurance or waivers reasonably specified by Landlord.
17.3 Form of Policies: All policies of insurance provided for herein
shall be issued by insurance companies qualified to do business in the State of
California and with a rating of at least "A X" in Best's Key Rating Guide. All
such policies (except to the extent inconsistent with the type of policy) shall
contain cross-liability endorsements and shall name Landlord and Universal
Studios, Inc. and Universal Studios, Inc.'s affiliated companies, mortgagees or
beneficiaries and such additional individuals or entities as Landlord shall from
time-to-time reasonably designated as "Additional Insureds." Satisfactory
evidence of each insurance coverage, on the standard ▇▇▇▇▇ form or a form
acceptable to Universal Studios shall be delivered to Landlord within ten (10)
days prior to Tenant's entry onto the Premises and, thereafter, executed copies
of renewal policies or certificates thereof shall be delivered to Landlord
within thirty (30) days prior to the expiration of the term of each such policy.
When any such policy shall expire or terminate, renewal or additional policies
shall be procured and maintained by Tenant in like manner and to like extent.
All policies must contain a provision that the company writing said policy will
give to Landlord thirty (30) days' written notice in advance of any
cancellation, lapse, reduction in the amount of coverage or other adverse change
respecting such insurance. All general liability, property damage and other
casualty policies shall be written as primary policies, not contributing with or
secondary to coverage which Landlord may carry. The stipulated limits of
coverage above shall not be construed as a limitation of any potential liability
to Landlord, and failure to deliver said insurance certificate or Landlord's
failure to request delivery shall in no way be construed as a waiver of Tenant's
obligation to provide the insurance coverage specified.
17.4 Blanket Insurance Policies: Tenant's obligation to carry the
insurance provided for above may be satisfied by inclusion of the Premises
within the coverage of a so-called
*** Confidential treatment requested.
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"blanket" policy or Policies of insurance carried and maintained by Tenant;
provided, however, that Landlord and Landlord's affiliated companies, mortgagees
or beneficiaries shall be named as additional insureds thereunder as their
interests may appear and that the coverage afforded Landlord will not be reduced
or diminished by reason of the use of such blanket policies of insurance, and
provided further that the requirements set forth herein are otherwise satisfied.
Tenant shall permit Landlord at all reasonable times to inspect any policies of
insurance maintained by Tenant covering risks upon the Premises or related to
Tenant's occupancy of the Premises if such policies have not been previously
delivered to Landlord.
17.5 Landlord's Insurance Obligation: At all times from and after the
Effective Date, Landlord shall maintain in effect a policy or policies of
insurance providing protection for the following liabilities and/or risks: (a)
general liability for bodily injury and property damage arising from Landlord's
ownership and/or operation of the Project with coverage limits at least equal to
those Tenant is required to maintain in accordance with Subsections 17.2.1, and
(b) all perils insurable under an All Risks policy (with, at Landlord's
election, coverage for other risks such as flood and earthquake, providing such
coverage is available at commercially reasonable cost) covering the Project,
exclusive of any item insured by Tenant pursuant to Section 17.2 and by other
Project tenants, in an amount at least equal to eighty percent (80%) of the
insured improvements' full replacement cost (exclusive of the cost of
excavations, foundation and footings). Insurance provided for in this Section
17.5 may be carried by inclusion within the coverage of any blanket policy or
policies of insurance carried and maintained by Landlord, provided that the
coverage accorded will not be reduced or diminished by reason of the use of such
blanket policies of insurance. Notwithstanding the above, Landlord may cause any
of the policies which it maintains to carry such deductibles as are commercially
reasonable. Landlord (itself or through an affiliate) may self-insure any of the
risks set forth in this Section 17.5.
17.6 Mutual Waivers of Rights: Landlord (for itself and its insurer) and
Tenant (for itself and its insurer) each hereby waive any rights, including
rights of subrogation, either may have against the other, and Tenant hereby
waives any rights it may have against other tenants of the Project (provided
such other tenants have waived such rights against Tenant and to the extent that
Tenant is insured for the loss) for compensation of any loss or damage
occasioned to Landlord or Tenant, as the case may be, with regard to their
respective property, the Premises, its contents or portions of the Project,
arising from any risk generally covered by the All Risks insurance Landlord and
Tenant shall carry and maintain under Sections 17.2 and 17.5. The foregoing
waivers shall be in operation only so long as insurance coverage recognizing
such waivers is available in the State of California and so long as no policy is
invalidated thereby. Each party may conclusively presume that the waiver by the
other party is in full force and effect unless and to the extent the other party
notifies the presuming party to the contrary. Nothing in this Section 17.6 shall
derogate from the generality of Section 17.1, which Section 17.1 shall prevail.
17.7 Insurance Use Restrictions: Tenant will not carry any goods or do
anything in or about the Premises which will in any way tend to increase the
insurance rates for any insurance maintained by Landlord above the levels
generally applicable to low-risk commercial rental space. Nothing in this
Section 17.7 shall in any way limit such Permitted Use or require Tenant to
compensate Landlord for increased insurance rates under this Section 17.7 as a
result of Tenants use of the Premises for the Permitted Use. Subject to the
foregoing sentence, Tenant shall pay to Landlord forthwith upon demand the
amount of any increase in premiums charged to Landlord for insurance carried by
Landlord pursuant to Section 17.5, which increase results from Tenants violation
of the foregoing restrictions. Tenant shall make all changes to its Premises and
install any fire extinguishing equipment and/or other safeguards that Landlord's
insurance underwriters or applicable fire, safety and building codes and
regulations may reasonably require in order to obtain and maintain favorable
premium rates and terms; Landlord shall notify Tenant prior to Tenant's
commencement of Tenant's Work of any such installations and/or other safeguards
that,
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to Landlord's best knowledge regarding safeguards that Landlord's insurance
underwriters require, Tenant will be required to perform or construct in order
to comply with this Section 17.7.
ARTICLE XVIII. RECONSTRUCTION
18.1 Insured Casualty: If the Premises are damaged by fire or other
perils covered by Landlord's insurance or self-insurance:
18.1.1 Repair of Damage: As soon as is reasonably possible, but
no later than ninety (90) days after the date of such damage, Landlord shall
commence repair, reconstruction and restoration (collectively referred to as
"Reconstruction" in this Article XVIII) of that portion of the Premises
described as Landlord's Work in Exhibit C and prosecute the same diligently to
completion, in which event this Lease shall continue in full force and effect;
or
18.1.2 Damage Near End of Lease Term: In the event of partial or
total destruction of the Premises during the last two (2) years of the Lease
Term, Landlord and Tenant shall each have the option to terminate this Lease on
notice to the other of exercise thereof within thirty (30) days after such
destruction. For purposes of this Article XVIII, "partial destruction" shall
mean destruction to an extent of more than thirty-three and one-third percent
(33-1/3%) of the full replacement cost of the Premises as of the date of
destruction.
18.2 Uninsured Casualty: If the Premises are damaged by any casualty not
required to be covered by Landlord's insurance or self-insurance or if the cost
of Reconstruction exceeds the insurance proceeds recoverable by Landlord,
Landlord shall have the election, and shall within ninety (90) days following
the date of such damage give Tenant notice of Landlord's election, either (i) to
commence Reconstruction of that portion of the Premises described as Landlord's
Work in Exhibit C and prosecute the same diligently to completion, in which
event this Lease shall continue in full force and effect, or (ii) not to perform
such Reconstruction of such portion of the Premises, in which event this Lease
shall cease and terminate not later than sixty (60) days after Landlord's notice
of its election to terminate.
18.3 Construction Provisions: In the event of any Reconstruction of the
Premises under this Article XVIII, said Reconstruction shall substantially
conform to the provisions of Exhibit C and shall cover all of the work set forth
therein under "Description of Landlord's Work" and "Description of Tenant's
Work." Landlord shall reconstruct the Premises only to the extent of the work
described as "Landlord's Work" in Exhibit C. Tenant, at it sole cost and
expense, shall reconstruct all items described as "Tenant's Work" in Exhibit C
and shall replace its merchandise and Personal Property. Tenant shall commence
such reconstruction of Tenant's Work and replacement of Tenant's merchandise and
Personal Property promptly upon delivery to it of possession of the Premises and
shall diligently prosecute the same to completion.
18.4 Release of Liability: Upon any termination of this Lease under any
of the provisions of this Article XVIII, the parties shall be released thereby
without further obligation to the other party coincident with the surrender of
possession of the Premises to Landlord, except for obligations which have
theretofore accrued and are then unpaid. In the event of termination, Landlord
and Tenant shall share in the proceeds from Tenant's insurance (including
selfinsurance and deductibles) maintained pursuant to Subsection 17.2.5 as their
respective interests may appear.
18.5 Waiver of Statutory Rights. Tenant hereby waives any statutory
rights of termination which may arise by reason of any partial or total
destruction of the Premises which Landlord is obligated to restore or may
restore under any of the provisions of this Lease.
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18.6 Major Destruction: Notwithstanding any of the foregoing provisions
of this Article XVIII, if either the Project or the Premises are damaged to an
extent of more than thirty-three and one-third percent (33-1/3%) of the full
replacement cost of the Project or the Premises (as the case may be) as of the
date of destruction, or is totally destroyed, Landlord shall have the right to
terminate this Lease by giving notice of such termination to Tenant within
ninety (90) days after such destruction.
ARTICLE XIX. OCCUPANCY TRANSACTIONS
19.1 Restrictions: Except as otherwise provided herein, Tenant shall not
enter into, or consent to, an Occupancy Transaction nor shall an Occupancy
Transaction occur, without first procuring Landlord's consent (except that in
the case of a non-consensual Occupancy Transaction, Tenant shall request
Landlord's consent as soon as possible), and any attempt to do so without such
prior written consent shall be void and at Landlord's option shall terminate
this Lease. Subject to the provisions of the next succeeding paragraph hereof,
Landlord shall not withhold its consent unreasonably but may condition such
consent upon compliance with this Article. The parties agree, however, that the
exact use, manner of operation of the Premises and conduct of business thereon
by Tenant will have an impact on the quality and reputation of the Project.
Accordingly, the parties agree that without limiting any other reasonable
criteria which Landlord may utilize, Landlord may withhold its consent, and in
so doing will not be deemed to be acting unreasonably, if Landlord in the
exercise of reasonable business judgment determines that the Transferee has
insufficient business reputation or experience in the operation of the business
being conducted by Tenant (or by Tenant's then-current Transferee, if any), or
that the financial condition of the Transferee is inadequate (notwithstanding
that Tenant may remain liable) or that it is likely that the Transferee will not
be able to generate the same level of Percentage Rental as would Tenant, or that
the transfer may lead to a breach of this Lease. In the event that Tenant
desires to gain Landlord's consent to a proposed Occupancy Transaction pursuant
to this Article 19, Tenant shall provide Landlord with written request for
consent to such Occupancy Transaction, accompanied by information reasonably
sufficient to enable Landlord to evaluate Tenant's request for consent in
accordance with the aforesaid factors. In the event that prior to the exercise
by Tenant of its Option to extend the term of this Lease, Landlord consents to
an Occupancy Transaction requested by Tenant where such consent is required
under this Article XIX, then Tenant shall be relieved of liability under this
Lease for the Option Term.
Notwithstanding the foregoing, at any time within thirty (30) days after
receiving Tenant's written notice of a proposed Occupancy Transaction, Landlord
shall have the right, in its sole discretion, to either: (i) grant or withhold
its consent in accordance with the foregoing paragraph, accompanied by specific
reason(s) for its decision in the event that Landlord denies consent; or (ii)
terminate this Lease with respect to the portion of the Premises that Tenant
proposes to assign or sublease; Landlord's right to terminate this Lease under
this section may be revoked if the Tenant rescinds the assignment request within
thirty (30) days after Landlord receiving Tenant's written notice of a proposed
assignment or sublease. In the event of any such sublease or assignment approved
by Landlord, Landlord shall receive [***] of the net sales price directly
attributable to the Lease assignment/sublease (e.g., after deduction for
Tenant's costs of sale (such as commissions, improvement costs, fees, etc.) and
after deduction of the unamortized value of Tenant's leasehold improvements and
fixtures (after deducting any Landlord Construction Allowance) installed in the
Premises by or at the direction of Tenant which are sold as part of the
assignment or sublease, said unamortized value to be determined on a
straight-line depreciation method allowed by the Internal Revenue Code of 1986
(as amended) assuming a useful life equal to the remainder of the Lease Term
(including the Option Term) at the time the improvement or fixture is placed in
service or installed in or upon the Premises). Landlord shall notify Tenant of
its consent or denial of consent to any proposed Occupancy Transaction in
accordance with the provisions of this paragraph within 10 days after receipt of
Tenant's written request and any
*** Confidential treatment requested.
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documents or information reasonably requested by Landlord and relating to such
proposed Occupancy Transaction.
19.2 Nullity: Any purported Occupancy Transaction consummated in
violation of the provisions of this Article XIX shall be null and void and of no
force or effect.
19.3 Definitions: As used in this Article, the following definitions
shall apply:
19.3.1 "Occupancy Transaction" means any (i) assignment of some
or all of Tenant's interest and rights in the Lease and/or the Premises,
including Tenant's right to use, occupy and possess the Premises, or (ii)
sublease of Tenant's right to use, occupy and possess the Premises, in whole or
in part, or (iii) granting of a concession or management arrangement pertaining
to the Premises in whole or part, or (iv) mortgage, deed of trust, pledge,
hypothecation, lien, or other security arrangement with respect to Tenants
interest in the Lease, foreclosure of which may result in an Occupancy
Transaction; provided, however, furniture, fixture and equipment financing shall
not constitute an "Occupancy Transaction", or (v) change of Control of Tenant,
or (vi) permitting the Premises or any part thereof to be occupied by anyone
other than Tenant or Tenant's employees (as such employees may change from time
to time). Notwithstanding anything to the contrary contained in this Article 19,
an "Occupancy Transaction" shall not include, and Tenant shall not be required
to obtain Landlord's consent for any of the following transactions: (a) any
assignment, sublease or other transfer of this Lease of all of the Premises to
(A) any person or entity which is a parent (owning all or substantially all of
the ownership interest of Tenant) or a wholly-owned subsidiary of Tenant, or (B)
any corporation or other entity into which or with which all or substantially
all of the assets or ownership interests of Tenant are merged or consolidated;
or (b) any assignment, sublease or other transfer of this Lease of all of the
Premises to any person or entity acquiring all or substantially all of the
assets of Tenant operating under the same trade name of Tenant as of the date of
such transfer, or (c) any sale, assignment, or other transfer of all of the
shares of stock, partnership interests, limited liability company membership
interests, or other ownership interests in Tenant resulting in a change in the
Control of Tenant; or (d) in connection with any public offering of stock in
Tenant, transfer of stock between, or among any partners, members, owners,
limited partners, or other persons or entities having an ownership interest in
Tenant. Tenant covenants that in the event of the occurrence of any of the
foregoing transactions (a) through (d) above (excluding an initial public
offering under item (d)), that, as a result thereof, there will not be a
material and adverse change in Tenant's net worth (or if there is a material and
adverse change in Tenant's net worth, Tenant will provide reasonable additional
financial security to Landlord to compensate for the material and adverse
change); and, there will not be a material change in Tenant's senior management
(or if there is a material change in Tenant's senior management, there will be
competent and experienced new senior management with regard to the Permitted
Use).
19.3.2 "Transferee" means a proposed buyer, assignee, sublessee,
mortgagee, beneficiary, pledge, concessionaire, manager or other recipient of
Tenant's interests, rights or duties in this Lease or the Premises in an
Occupancy Transaction.
19.3.3 "Control" (including the terms "controlling," "controlled
by" and "under common control with") means the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a person, whether through the ownership of voting securities, by contract, or
otherwise.
19.4 Landlord's Costs: Tenant shall pay to Landlord the amount of [***]
for each Occupancy Transaction to which Landlord shall
have consented, which amount shall be deemed to reimburse Landlord for its
expenses in reviewing and approving Tenant's request for Landlord's consent, in
addition to the sales percentage price described in Section 19.1 above.
*** Confidential treatment requested.
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ARTICLE XX. BANKRUPTCY; INVOLUNTARY TRANSFERS
20.1 Right of Termination: Should any of the following events occur,
Landlord shall have the right (but not the obligation) to terminate this Lease
and any interest of Tenant herein, effective with the commencement of the event:
20.1.1 Receivership: Proceedings are instituted whereby all, or
substantially all, of Tenant's assets are placed in the hands of a receiver,
trustee or assignee for the benefit of Tenant's creditors, and not placed back
in Tenant's hands within ninety (90) days;
20.1.2 Attachment: Any creditor of Tenant institutes judicial or
administrative process to execute on, attach or otherwise seize any of Tenant's
merchandise or Personal Property, located on the Premises and Tenant fails to
discharge, set aside, exonerate by posting a bond, or otherwise obtain a release
of such property within thirty (30) days;
20.1.3 Bulk Sale: Tenant makes a bulk sale of all, or
substantially all, of Tenant's merchandise or Personal Property located on the
Premises, except in accordance with Section 13.1, or except in a permitted
Occupancy Transaction under Article XIX, and fails to replace the same with
similar items of equal or greater value and utility within ten (10) days; or
20.1.4 Intentionally Deleted.
20.2 Requests for Information: Within ten (10) days after Landlord's
request therefor, Tenant shall provide Landlord and Landlord's mortgagee or
proposed mortgagee, as Landlord shall specify, such financial, legal and
business information concerning any of the events described in Section 20.1 as
Landlord shall request.
20.3 Assignment by DIP or Trustee: Notwithstanding anything to the
contrary contained herein, if Tenant, as a debtor-in-possession (the "DIP"), or
a trustee for the estate in bankruptcy of Tenant (the "Trustee"), assumes this
Lease and proposes to assign this Lease, or sublet the Premises (or any portion
thereof), pursuant to the provisions of the Federal Bankruptcy Code, 11 U.S.C.
Sections 101 et seq. (the "Bankruptcy Code") to any person, partnership,
corporation or other entity (the "Proposed Assignee"), then such assumption of
this Lease and any such assignment or sublease shall be subject to all of the
following:
20.3.1 The DIP, or the Trustee, as the case may be, shall give
Landlord written notice at least ten (10) days prior to the date that the DIP or
the Trustee, as the case may be, shall make application to a court of competent
jurisdiction for authority and approval to enter into such assumption and
assignment or subletting, which notice shall set forth: (i) the name and address
of the Proposed Assignee; (ii) all of the terms and conditions of the Proposed
Assignee's offer; and (iii) the adequate assurances to be provided Landlord to
assure such Proposed Assignee's future performance under this Lease, including,
without limitation, the assurances referred to in Section 365(b)(3) of the
Bankruptcy Code. Landlord, upon receipt of such notice, shall have the prior
right and option, to be exercised by notice to the DIP or the Trustee, as the
case may be, given at any time prior to the effective date of such proposed
assignment or sublease, to accept an assignment or sublease of this Lease by any
other assignee or sublessee acceptable to Landlord, upon the same terms and
conditions and for the same consideration, if any, as the Proposed Assignee,
less any brokerage commissions which may be payable out of the consideration to
be paid by or for the assignment of this Lease;
20.3.2 If the rental agreed upon between the DIP or the Trustee,
as the case may be, and the Proposed Assignee under any proposed assignment or
sublease of the Premises
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(or any part thereof) is greater than the rental rate that Tenant must pay
Landlord hereunder for that portion of the premises that is subject to such
proposed assignment or sublease, or if any consideration shall be received by
the DIP or the Trustee, as the case may be, in connection with any such proposed
assignment or sublease, then all such excess rental or such consideration shall
be paid or delivered to Landlord, and shall not constitute property of the DIP,
the Trustee, or of the estate of Tenant, as the case may be, within the meaning
of the Bankruptcy Code; and
20.3.3 Any proposed assignment or sublease of this Lease by the
DIP or the Trustee, as the case may be, pursuant to provisions of the Bankruptcy
Code shall provide adequate assurance of future performance under this Lease by
the Proposed Assignee, which adequate assurance shall include, as a minimum, the
following: (i) any Proposed Assignee of the Lease shall deliver to Landlord a
security deposit in an amount equal to at least three (3) months Minimum Annual
Rental accruing under this Lease; (ii) any Proposed Assignee of the Lease shall
provide to Landlord an unaudited financial statement, certified to be accurate
by such Proposed Assignee or by an officer, director or partner thereof and
dated no later than six (6) months prior to the effective date of such proposed
assignment or sublease, which financial statement shall show the Proposed
Assignee to have a net worth equal to at least the Minimum Annual Rental that
shall accrue under this Lease for the next year of the Lease Term, (iii) any
Proposed Assignee shall pay all Rental not previously paid under this Lease
including all payments which have been suspended, mitigated, nullified or
reduced to a claim of any kind against Tenant or Tenant's property, by operation
of law or otherwise; and (iv) any Proposed Assignee shall assume Tenant's
obligation to pay Landlord's attorneys' fees pursuant to Section 30.25 hereof.
This Section 20.3 shall not apply to any assignment or sublease other
than pursuant to the provisions of the Bankruptcy Code, nor shall it in any way
limit Landlord's rights to damages or other relief in a proceeding under the
Bankruptcy Code.
ARTICLE XXI. SECURITY DEPOSIT
21.1 Payment: On or before the Effective Date, Tenant shall deposit with
Landlord the sum specified in Section 1.14 as "Security Deposit." Said deposit
shall be held by Landlord without liability for interest as security for the
faithful performance by Tenant of all of its obligations under this Lease.
21.2 Application: If any of the rental herein reserved or any other sum
payable by Tenant to Landlord shall be overdue or paid by Landlord on behalf of
Tenant, or if Tenant shall otherwise be in default beyond the applicable cure
period after notice from Landlord under any of the other monetary or other terms
of this Lease, then Landlord may, at its option and without prejudice to any
other remedy which Landlord may have on account thereof, appropriate and apply
said entire Security Deposit, or so much thereof as may be necessary, to
compensate Landlord for such rental or other sum, or out-of-pocket loss or
damage (i.e., excluding (except if pursuant to a judgment) consequential and
special damages but including, for example, reasonable attorneys' fees)
sustained by Landlord as a result thereof, and Tenant shall forthwith upon
demand restore said Security Deposit to the original sum deposited. Subject to
the foregoing sentence, said Security Deposit shall be refunded in full to
Tenant no later than thirty (30) days after Tenant has surrendered possession of
the Premises to Landlord at the expiration or earlier termination of the Lease
Term. If Landlord claims deductions against the Security Deposit, Landlord shall
return any remaining portion to Tenant within such thirty (30) day period. In
the event of bankruptcy or other debtor-creditor proceedings against Tenant, as
specified in Section 20.1, the Security Deposit shall be deemed to be applied
first to the payment of rental and other charges due Landlord for the earliest
periods prior to the filing of such proceedings.
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21.3 Transfer of Landlord's Interest: Landlord may deliver the funds
deposited hereunder by Tenant to the purchaser or assignee of Landlord's
interest in the Premises in the event that such interest is transferred and
thereupon Landlord shall be discharged from any further liability with respect
to such Security Deposit. This Section 21.3 shall also apply to any subsequent
transfers of any successor Landlord's interest in the Premises.
ARTICLE XXII. DEFAULTS BY TENANT; REMEDIES
22.1 Events of Default: The occurrence of any of the following shall
constitute a default by Tenant and a breach of this Lease:
22.1.1 Failure to Pay Rent: Failing or refusing to pay any amount
of Rental when due in accordance with the provisions of this Lease;
22.1.2 Breach of Operating Covenants: Failing or refusing to
occupy and operate the Premises in accordance with Article XI; or
22.1.3 Other Curable Defaults: Failing or refusing to perform
fully and promptly any covenant or condition of this Lease, other than those
specified in Subsections 22.1.1 and 22.1.2 above, the breach of which Tenant is
reasonably capable of curing after notice from Landlord.
22.2 Notices: When this Lease requires service of a notice, that notice
shall replace rather than supplement any equivalent or similar statutory notice,
including any notices required by California Code of Civil Procedure section
1161 or any similar or successor statute. Following the occurrence of any of the
events specified in Sections 22.1, Landlord shall give Tenant, and any
subtenant, a written notice specifying the nature of the default and the
provisions of this Lease breached and demanding that Tenant, and any subtenant,
either fully cure each such default within the time period specified in the
corresponding subsections below or quit the Premises and surrender the same to
Landlord:
22.2.1 Failure to Pay Rent: For nonpayment of any amount of
Rental, ten (10) days after receiving written notice from Landlord regarding the
same;
22.2.2 Breach of Operating Covenants: For breach of Article XI,
ten (10) days after receiving written notice from Landlord regarding the same,
except as otherwise provided in Section 22.3; and
22.2.3 Other Curable Defaults: For other curable defaults, thirty
(30) days after receiving written notice from Landlord regarding the same;
provided, however, that if such default cannot be cured within said time period,
Tenant shall be deemed to have cured such default if Tenant commences cure of
the default within said time period, and thereafter diligently and in good faith
continues with and actually completes said cure. Tenant shall promptly notify
Landlord of Tenant's commencement of such cure.
To the extent permitted by applicable State law, the time periods
provided in this Section 22.2 for cure of Tenant's defaults under this Lease or
for surrender of the Premises shall be in lieu of, and not in addition to, any
similar time periods prescribed by applicable State law as a condition precedent
to the commencement of legal action against Tenant for possession of the
Premises.
22.3 Non-Curable Defaults: With regard to any breach of this Lease
which is not capable of cure or if Tenant shall have committed three (3) or more
material curable breaches of
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Tenant's operating covenants (each for which Tenant was provided a notice to
cure pursuant to Section 22.2.2) during any twelve (12) month period after the
Effective Date, Landlord shall have the right to give Tenant and any subtenant,
a notice specifying the nature of the default and the provisions of this Lease
so breached, and Landlord shall have the right to demand in said notice that
Tenant close the Premises for business within five (5) days after Tenant
receives such notice and vacate the Premises within thirty (30) days after
tenant receives such notice.
22.4 Landlord's Rights and Remedies: Should Tenant fail to cure within
the time periods specified in Section 22.2 any default specified in Subsections
22.1.1, 22.1.2 or 22.1.3, or fail to quit the Premises in accordance with
Section 22.3, Landlord may exercise any of the following rights without further
notice or demand of any kind to Tenant or any other person, except as required
by applicable State law:
22.4.1 Termination of Lease: The right of Landlord to terminate
this Lease and Tenant's right to possession of the Premises and to reenter the
Premises, take possession thereof and remove all persons therefrom, following
which Tenant shall have no further claim thereon or hereunder; and
22.4.2 Reentry of the Premises: The right of Landlord, without
terminating this Lease and Tenant's right to possession of the Premises, to
reenter the Premises and occupy the whole or any part thereof for and on account
of Tenant and to collect any unpaid rentals and other charges which have become
payable or which may thereafter become payable; and
22.4.3 Termination after Reentry: The right of Landlord, even
though it may have reentered the Premises in accordance with Subsection 22.4.2,
to elect thereafter to terminate this Lease and Tenant's right to possession of
the Premises; and
22.4.4 Continued Enforcement of Lease: The right of Landlord to
continue to enforce all Landlord's rights and remedies under this Lease,
including the right to recover rental as it becomes due under this Lease.
Tenant further covenants that the service by Landlord of any notice
pursuant to the unlawful detainer statutes of the State of California and the
surrender of possession pursuant to such notice shall not (unless Landlord
elects to the contrary at the time of, or at any time subsequent to, the serving
of such notice and such election is evidenced by a notice to Tenant) be deemed
to be a termination of this Lease. The rights and remedies given to Landlord in
this Section 22.4 shall be additional and supplemental to all other rights or
remedies which Landlord may have under laws in force when the default occurs.
22.5 Landlord's Damages: Should Landlord terminate this Lease and
Tenant's right to possession of the Premises pursuant to the provisions of
Subsections 22.4.1 or 22.4.3 or the provisions of Section 20.1, Landlord may
recover from Tenant as damages all of the following:
22.5.1 Delinquent Rent: The worth at the time of award of any
unpaid rental that had been earned at the time of such termination;
22.5.2 Rent After Termination Until Judgment: The worth at the
time of award of the amount by which the unpaid rental that would have been
earned after termination until the time of award exceeds such rental loss Tenant
proves could have been reasonably avoided;
22.5.3 Rent After Judgment: The worth at the time of award of the
amount by which the unpaid rental for the balance of the Lease Term after the
time of award exceeds the amount of such rental loss that Tenant proves could be
reasonably avoided;
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22.5.4 Other Compensation: Any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant's failure
to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including any costs or expense
incurred by Landlord in (a) retaking possession of the Premises, including
reasonable attorney fees therefor, (b) maintaining or preserving the Premises
after such default, (c) preparing the Premises for reletting to a new tenant,
including repairs or alterations to the Premises for such reletting, (d) leasing
commissions, and (e) any other costs necessary or appropriate to relet the
Premises; and
22.5.5 Additional or Alternative Documents: At Landlord's
election, such other amounts in addition to or in lieu of the foregoing as may
be permitted from time-to-time by the laws of the State of California; and
22.5.6 Calculation of Damages: As used in Subsections 22.5.1 and
22.5.2, the "worth at the time of award" is computed by allowing [***]. As used
in Subsection 22.5.3, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the [***]. All rental other than
Minimum Annual Rental shall, for the purposes of calculating any amount due
under the provisions of Subsection 22.5.3, be computed on the basis of the
average monthly amount thereof accruing during the immediately preceding sixty
(60) month period, except that, if it becomes necessary to compute such rental
before such a sixty (60) month period has occurred, then such rental shall be
computed on the basis of the average monthly amount hereof accruing during such
shorter period.
22.6 Merchandise and Personal Property: Without limitation of Landlord's
rights under Section 13.1, in the event of default by Tenant (i.e., after
notice and expiration of any applicable cure period set forth in such Article
XXII) pursuant to which Tenant either vacates the Premises or is dispossessed of
the Premises, all of Tenant's merchandise and Personal Property including the
driving simulators and Tenant's other related fixtures and equipment) shall, at
Landlord's option: (a) remain on the Premises and, Landlord, continuing during
the length of said default, shall have the right to take the exclusive
possession of same and to use the same free of rent or charge until all defaults
have been cured if and only if (i) no secured party has a lien on such
merchandise and Personal Property, and (ii) if required by NASCAR, Landlord has
a license to use the "NASCAR" name and related intellectual property pursuant to
a license agreement with NASCAR or such other licensor that has the rights to so
license such intellectual property, and (iii) such license agreement (if any)
and Landlord's use of the "NASCAR" name and related intellectual property does
not conflict with any agreement between Tenant and NASCAR or such other licensor
that has the rights to so license such intellectual property; provided, however,
if Landlord takes possession of such merchandise and/or Personal Property, any
and all revenues derived therefrom by Landlord shall be applied toward the
mitigation of Tenant's default under this Lease; (b) be removed by Landlord from
the Premises and placed in storage at a public warehouse at the expense and risk
of Tenant; or (c) be removed by Tenant upon demand by Landlord.
22.7 Self-Help Cure Rights: If Tenant is in default (after notice and
expiration of any applicable cure period) under any provisions of this Lease,
Landlord may, but shall not be obligated to, take such action as Landlord in
good faith determines to be appropriate to remedy or mitigate such default.
Tenant shall pay, as Additional Rent, all reasonable out-of-pocket costs
incurred by Landlord in following such course and in remedying or mitigating
such default. The exercise of rights by Landlord shall not constitute a waiver
of any default by Tenant or of any of Landlord's other rights or remedies.
22.8 No Waiver: The waiver by either Landlord or Tenant of any breach of
any term, covenant or condition contained in this Lease shall not be deemed to
be a waiver of such term, covenant or condition or any subsequent breach
thereof, or of any other term, covenant or
*** Confidential treatment requested.
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condition contained in this Lease. Landlord's subsequent acceptance of partial
rental or performance by Tenant shall not be deemed to be an accord and
satisfaction or a waiver of any preceding breach by Tenant of any term, covenant
or condition of this Lease or of any right of Landlord to a forfeiture of the
Lease by reason of such breach, regardless of Landlord's knowledge of such
preceding breach at the time of Landlord's acceptance.
22.9 Waiver of Notice: Notwithstanding anything to the contrary
contained in this Article XXII, Tenant waives (to the fullest extent permitted
under law) any written notice, other than such notice as this Article XXII
specifically requires or as required by law for the service of process in legal
proceedings, which any statute or law now or hereafter in force prescribes be
given Tenant.
ARTICLE XXIII. DEFAULTS BY LANDLORD; REMEDIES
If Landlord shall neglect or fail to perform or observe any of the
terms, covenants, or conditions contained in this Lease on its part to be
performed or observed within thirty (30) days after notice from Tenant of
default or, when more than thirty (30) days shall be required to cure the
default, if Landlord shall fail to commence such cure within said thirty (30)
day period or thereafter fail to proceed diligently to cure such default, then
Landlord shall be liable to Tenant for any and all damages sustained by Tenant
as a result of Landlord's breach.
ARTICLE XXIV. EMINENT DOMAIN
The word "taking" (and its variants, such as "taken") as used in this
Article shall mean any appropriation, condemnation or taking under the power of
eminent domain by any public or quasi-public authority or any other entity
having the right to exercise such power and includes a voluntary sale or
conveyance under imminent threat and in lieu of condemnation. If a taking occurs
which involves real property and/or improvements constituting the Project having
a fair market value of at least thirty-three and one-third percent (33 1/3%) of
the fair market value of the entire Project, whether or not the Premises thereof
are also taken, Landlord or Tenant shall have the right to terminate this Lease
on forty-five (45) days' written notice to the other party. If more than
twenty-five percent (25%) of the Floor Area of the Premises is taken, Tenant
shall have the right to terminate the Lease upon forty-five (45) days' written
notice to Landlord. In the event of such termination, both Landlord and Tenant
shall thereupon be released from any liability thereafter accruing hereunder. If
this Lease is not terminated following a taking, then Tenant shall continue to
occupy that portion of the Premises which shall not have been appropriated or
taken and the parties shall proceed as follows: (a) at Landlord's cost and
expense and as soon as reasonably possible, Landlord shall restore the Premises
on the land remaining to a complete unit of like quality and character as
existed prior to such appropriation or taking, and (b) the Minimum Annual Rental
shall be reduced on an equitable basis, taking into account the relative values
of the portion taken as compared to the portion remaining. Tenant hereby waives
any statutory rights of termination which may arise by reason of any partial
taking of the Premises under the power of eminent domain. If this Lease is
terminated or modified as hereinabove provided, Landlord shall be entitled to
receive the entire condemnation award for the taking of all real property
interests in the Premises. The rental and other charges for the last month of
Tenant's occupancy shall be prorated, and Landlord shall refund to Tenant any
rental or other charges paid in advance. Tenant's right to receive a
condemnation award for the taking of its merchandise, Personal Property,
goodwill, relocation expense and/or interest in other than the real property
taken shall not be affected in any manner by the provisions of this Article,
provided Tenant's award does not reduce or affect Landlord's award.
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ARTICLE XXV. SALE OR MORTGAGE BY LANDLORD
From and after a sale or other conveyance of Landlord's interest in and
to the Project, Landlord shall be released from all liability to Tenant and
Tenant's successors and assigns arising from this Lease because of any act,
occurrence or omission of Landlord occurring after such sale.
ARTICLE XXVI. SUBORDINATION/NONDISTURBANCE; ATTORNMENT; ESTOPPEL
26.1 Subordination/Nondisturbance: Within twenty (20) days after the
receipt of a request from Landlord, Tenant will subordinate its rights under
this Lease to the rights or lien or security interest of any present or future
mortgage, deed of trust on the Project (including all future advances made
thereunder subsequent to the Effective Date of this Lease), lease of the entire
Project in which Landlord is the lessee, or any reciprocal easement agreement,
as such may now or in the future burden the Premises or any building hereafter
placed upon the land of which the Premises are a part. Notwithstanding the
foregoing Tenant shall not be required to subordinate to any future lease,
security interest, mortgage, or deed of trust unless the secured party or lessor
delivers a nondisturbance agreement in a recordable, commercially reasonable
form as long as Tenant is not in default hereunder (after notice and expiration
of any cure period), and subject to the terms of this Lease.
26.2 Attornment: If landlord conveys in a sale all of its rights and
duties in and to the Lease and/or the Premises and the realty underlying the
Premises, or if an interest in Landlord or Landlord's equity of redemption or
other interest in the Lease and the Premises under a mortgage, deed of trust,
pledge or security agreement is foreclosed judicially or nonjudicially, upon the
request of Landlord's lawful successor, Tenant shall attorn to said successor,
provided said successor accepts the Premises subject to this Lease and agrees to
perform all of Landlord's obligations under the Lease.
26.3 Estoppel Certificate: At any time and from time-to-time on not more
than twenty (20) days' notice from Landlord, Tenant shall execute and deliver to
Landlord a statement (the "Estoppel Certificate"), in a form reasonably
acceptable to Landlord, ratifying this Lease and certifying as to the date that
Tenant accepted and began occupancy of the Premises, the amount of Minimum
Annual Rental then payable under this Lease and the period through which such
Rental has been paid, the expiration date of the Lease, and such other matters
as Landlord may reasonably request. Unless Tenant shall have notified Landlord
within said twenty (20) day period of any qualifications Tenant may have to the
statements in the Estoppel Certificate, anyone transacting with Landlord in a
sale or mortgage of the Premises shall have the right to rely on the accuracy of
such statements in the Estoppel Certificate or deemed made by Tenant pursuant to
this Section.
ARTICLE XXVII. TITLE TO PREMISES
Landlord represents and warrants that as of the Effective Date Landlord
shall have good and marketable title to the Premises subject to (a) covenants,
conditions, restrictions, easements and rights of record and (b) the effect of
any zoning laws of the city, county and state where the Project is located and
(c) general and special Taxes not delinquent. Landlord covenants that Tenant
will not be unreasonably interfered with as a result of any of the covenants,
conditions, restrictions, easements and rights of record, provided Tenant is in
full compliance with the provisions of this Lease.
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ARTICLE XXVIII. QUIET ENJOYMENT
Landlord agrees that Tenant, upon paying the rental and performing the
terms, covenants and conditions of this Lease, may quietly have, hold and enjoy
the Premises from and after Landlord's delivery of the Premises to Tenant in
accordance with Section 4.2, and until the end of the Lease Term, subject,
however, to the other provisions of this Lease.
ARTICLE XXIX. NOTICES AND CONSENTS
All notices, consents, approvals, requests, demands, releases, waivers,
certifications, and other communications permitted or required to be given
under, or referred to in, this Lease shall be in writing and shall be and deemed
duly served or given (i) when actually delivered, if personally delivered or
delivered by overnight or other courier or delivery service which confirms
delivery in writing, or (ii) within five (5) business days after deposit in the
U.S. Mail, if sent by certified mail, postage prepaid, return receipt requested.
Such notices shall be addressed to all persons entitled to receive notice for
such party pursuant to Section 1.17. Landlord and Tenant may, from time-to-time
by notice to the other, designate another place for receipt of future notices.
ARTICLE XXX. MISCELLANEOUS
30.1 Lease Rate: For purposes of this Lease, the term "Lease Rate" shall
be deemed to mean [***] above the annualized rate of interest publicly announced
from time-to-time by Bank of America National Trust and Savings Association in
San Francisco, California (or such other bank as Landlord may from time-to-time
specify), as its "reference rate" or its "prime rate" unless such rate exceeds
the maximum lawful rate under usury or similar laws in the State of California
in which case it shall be deemed to mean such maximum lawful rate.
30.2 Financing Costs: Whenever in this Lease provision is made for
Landlord to charge certain costs or expenses to Tenant which include financing
costs, the amount of interest to be included in that calculation shall be two
percent (2%) above the annual rate of yield available at the time of the
particular transaction on a Treasury Note or bond of the United States of
America maturing at approximately the end of the useful life or other relevant
period selected by Landlord unless such rate exceeds the maximum lawful rate
under usury or similar laws in the State of California in which case it shall be
deemed to mean such maximum lawful rate.
30.3 Waiver or Consent Limitation: No term, covenant or condition of
this Lease shall be deemed to have been waived by Landlord or Tenant unless such
waiver is in writing and signed by the party to be charged with the waiver. A
waiver of any given breach or default shall not be a waiver of any other breach
or default. Consent to or approval of any act by one party requiring the other
party's consent or approval shall not be deemed to waive or render unnecessary
such other party's consent to or approval of any subsequent similar act.
30.4 Force Majeure: The occurrence of any of the following events shall
constitute "Force Majeure" hereunder and excuse such obligations of Landlord or
Tenant as are thereby rendered impossible or reasonably impracticable for so
long as such event continues: lockouts; labor disputes; acts of God; inability
to obtain labor, materials or reasonable substitutes therefor; governmental
restrictions regulations or controls; judicial orders; enemy or hostile
governmental action; civil commotion; fire or other casualty; and other causes
beyond the reasonable control of the party obligated to perform. Notwithstanding
the foregoing, the occurrence of such events shall not excuse Tenant's
obligations to pay Minimum Annual Rental and Additional Rent (except to the
extent that the payment of Minimum Annual Rental and/or Additional Rent is
abated pursuant to
*** Confidential treatment requested.
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the terms or conditions of this Lease) or excuse such obligations as this Lease
may otherwise impose on the party to obey, remedy or avoid such event.
30.5 Avoidance of Labor Disputes: In constructing or causing its
contractor to construct, Alterations (as defined in Section 14.1) and Tenant's
Work (as defined in Exhibit C) and throughout the Lease Term, Tenant shall
conduct its activities in such a manner as to avoid any labor dispute which
causes or is likely to cause stoppage or impairment of work, deliveries or any
other services in the Project. If there shall be any such stoppage or impairment
as the result of any such labor dispute or potential labor dispute, Tenant shall
immediately undertake such action as may be necessary to eliminate such dispute
or potential dispute, including (a) removing all disputants from the job site
until such time as the labor dispute no longer exists, (b) seeking a temporary
restraining order and other injunctive relief with regard to illegal union
activities or a breach of contract between Tenant and Tenant's contractor, and
(c) filing appropriate unfair labor practice charges. Should Landlord incur or
sustain any Claims (as defined in Section 17.1) in connection with any such
labor dispute or potential labor dispute, the provisions of Section 17.1 shall
apply regardless of whether Tenant has performed its duties under this Section
30.5.
30.6 Landlord Calculations, Determinations and Requirements: Whenever
this Lease contemplates that Landlord will make particular determinations,
calculations, specifications, requirements, estimates or the like with respect
to amounts payable by Tenant, Landlord shall make such determinations, etc.,
including the amount, allocation, proration and composition of charges and
expenses, in a reasonable and equitable manner and acting in good faith.
30.7 Failure to Give Consent: If Landlord or Tenant fails to give any
consent or approval referred to in this Lease, the other party hereto shall be
entitled to specific performance in equity and shall have such other remedies as
are reserved to it under this Lease, but in no event shall Landlord or Tenant be
responsible in monetary damages for such failure to give consent or approval
unless withholding maliciously or in bad faith.
30.8 Reasonableness: Except as expressly provided in this Lease,
whenever this Lease provides that consent or approval of either party is
required, such consent or approval will not be unreasonably withheld or delayed.
The parties acknowledge that there are recent California cases interpreting
lease provisions and imposing covenants of good faith and fair dealing together
with reasonableness standards in connection with lease consents. There are
certain provisions of this Lease, however, in which either Landlord or Tenant
may withhold its consent "in its sole discretion." These specific provisions,
which may be viewed as allowing such party in such instance to deviate from a
standard of reasonableness which is imposed on Landlord and Tenant in connection
with other provisions of this Lease, have been lengthily negotiated and
bargained for and represent a material part of the consideration to be received
by each party. The parties, bearing in mind the rights, duties and obligations
of the parties to honor the implied covenants of good faith and fair dealing,
have specifically negotiated for and agreed that it is the intent of the parties
that Landlord or Tenant, where expressly provided, may exercise their respective
consent authority pursuant to a standard of sole discretion.
30.9 Relationship of the Parties: Nothing contained in this Lease shall
be deemed or construed as creating a partnership, joint venture,
principal-agent, or employer-employee relationship between Landlord and any
other person or entity (including Tenant) or as causing Landlord to be
responsible in any way for the debts or obligations of such other person or
entity.
30.10 Severability; Construction of Provisions: If any provision of this
Lease shall be determined to be void by any court of competent jurisdiction,
then such determination shall not affect any other provision of this Lease and
all such other provisions shall remain in full force and effect. It is the
intention of the parties hereto that if any provision of this Lease is capable
of two
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(2) constructions, one of which would render the Provision void and the other of
which would render the provision valid, then the provision shall have the
meaning which renders it valid.
30.11 Warranty of Authority: If either Landlord or Tenant is a
corporation, the person or persons executing this Lease on behalf of either
Landlord or Tenant hereby covenant and warrant as of the Effective Date that:
(a) such corporation is a duly constituted corporation, qualified to do business
in the State of California; (b) such corporation has paid all applicable
franchise and corporate taxes; and (c) such corporation will file or pay when
due all future forms, reports, fees and other documents necessary to comply with
applicable laws.
30.12 Entire Agreement; Construction: This Lease supersedes and cancels
any and all previous negotiations, arrangements, representations, brochures,
displays, projections, estimates, agreements and understandings, if any, made by
or between Landlord and Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret, construe, supplement or contradict this
Lease. Phrases such as "including" and "for example" shall in no circumstances
be construed as phrases of limitation but shall be treated as merely providing
examples of the more general language which more general language shall be
broadly and fairly construed.
30.13 Time of Essence: Time is of the essence in the performance of all
covenants and conditions in this Lease for which time is a factor.
30.14 Joint and Several Liability: If two (2) or more persons or
corporations execute this Lease as Landlord or Tenant, then and in such event
the words "Landlord" or "Tenant' as used in this Lease shall refer to all such
persons or corporations, and the liability of such persons or corporation for
compliance with the performance of all the terms, covenants and conditions of
this Lease shall be joint and several.
30.15 Successors and Assigns: The parties hereto agree that all the
provisions of this Lease are to be construed as covenants and agreements and,
except as otherwise specified, that said provisions shall bind and inure to the
benefit of the parties hereto and their respective heirs, legal representatives,
successors and assigns.
30.16 Right to Lease: The Project is being designed and will be
constructed as a dining, retail and entertainment complex. Notwithstanding the
foregoing, Landlord reserves the absolute right to effect such other tenancies
in the Project as Landlord, in the exercise of its sole business judgment, shall
determine to best promote the interest of the Project. Tenant does not rely on
the fact, nor does Landlord represent, that there shall be any specified
occupants or number of occupants of space in the Project after the Effective
Date.
30.17 Landlord's Right to Engage In Other Activities: Landlord may allow
or cause additional structures and facilities to be constructed adjacent to the
Project or in any part of Universal City, California, or elsewhere, including
motion picture theaters, hotels, motels, retail shops, office buildings,
restaurants and bars, including any business operations which might be
competitive with that of Tenant's. Tenant expressly acknowledges Landlord's
absolute right to own, operate, lease, franchise or otherwise be affiliated with
the foregoing.
30.18 Landlord's Access: Landlord and Landlord's agents shall have the
right, upon prior notice to Tenant, to enter the Premises at reasonable times
for the purpose of inspecting the same, showing the same to prospective
purchasers, lenders, or tenants provided that Landlord shall attempt to minimize
interference with Tenant's business. Landlord may at any time during the last
one hundred twenty (120) days of the Lease Term place on or about the Premises
any ordinary "For Lease" signs, all without rebate of rent or liability to
Tenant.
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30.19 Attorneys' Fees: if, at any time after the Effective Date, either
Landlord or Tenant institutes any action or proceeding against the other
relating to the provisions of this Lease, the nonprevailing party in such action
or proceeding shall reimburse the prevailing party for the reasonable expenses
of attorneys' fees and all costs and disbursements incurred therein by the
prevailing party, including any such fees, costs or disbursements incurred on
any appeal from such action or proceedings.
30.20 Brokers: Landlord and Tenant warrant that neither has had any
dealings with any realtor, broker, or agent, in connection with the negotiation
of this Lease, excepting the person or persons specified in Section 1.16 and
agrees to indemnify, defend and hold the other harmless from any cost, expense,
or liability for any compensation, commission, or charges claimed by any
realtor, broker, or agent, other than those named above, with respect to this
Lease or the negotiation of this Lease if it has had dealings or negotiations
with the broker making the claim.
30.21 Recordation: Tenant shall not record this Lease without prior
consent from Landlord.
30.22 Nonbinding: This Lease and the terms and conditions set forth
herein shall be of no force and effect, and neither party shall be bound hereby,
unless and until this Lease has been duly executed and delivered by Landlord and
Tenant.
30.23 Applicable Law/Jury Proceedings: This Lease shall be governed by
and construed in accordance with the laws of the State of California. In the
event of legal proceedings, Tenant and Landlord hereby knowingly, voluntarily
and intentionally WAIVE THE RIGHT EITHER OF THEM OR THEIR HEIRS,
REPRESENTATIVES, SUCCESSORS OR ASSIGNS MAY HAVE TO A TRIAL BY JURY WITH RESPECT
TO ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE OR ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY COURSE OF
CONDUCT, DEALING, STATEMENTS OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A
MATERIAL INDUCEMENT TO LANDLORD'S ACCEPTING THIS LEASE.
"LANDLORD" "TENANT"
UNIVERSAL STUDIOS CITYWALK SILICON ENTERTAINMENT, INC.
HOLLYWOOD
A Division of Universal Studios, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ By: /s/ [ILLEGIBLE]
------------------------------- -------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Senior Vice President Title: V.P.
Date: July 20, 1999 Date: 7/14/99
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EXHIBIT A-1
SITE PLAN OF PROPERTY
1 OF 4
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EXHIBIT A-1
SITE PLAN OF PROPERTY
2 OF 4
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EXHIBIT A-1
SITE PLAN OF PROPERTY
3 OF 4
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EXHIBIT A-1
SITE PLAN OF PROPERTY
4 OF 4
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EXHIBIT ▇-▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇ ▇-▇
FLOOR PLAN OF TENANT PREMISES
[GRAPHIC]
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1 SIGN Metal Face w/"Pop-through" Graphics
Projected from Scrim similar design to
our Irvine Spectrum Sign
2 SCRIM Perforated Metal w/Faux Painted Race
Track. Will provide shop dwgs. for final
Approval.
3 RACERS Authentic NASCAR Stock Cars
4 MARQUEE Checkerboard Metal Fascia w/Crossed
Flags mounted on existing ellipsoidal
Sign frame
5 LIGHTING Lit remotely from building across
the courtyard
6 TRANSOM Replace existing lightbox faces with
"NASCAR" logos
7 DOORS Clear Butt-glass Doors w/Crossed Flag
Graphic
8 THEMING (2) Free-standing lightboxes
9 VIDEO (2) 50" Projection Monitors in Custom
Cabinets Video presentations must be
related to the Permitted Use.
10 ENTRY Checkerboard tile in existing tile
locations only.
[GRAPHIC]
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[GRAPHIC]
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EXHIBIT B-3
APPROVED PRELIMINARY DESIGN PLAN FOR INTERIOR LAYOUT
[GRAPHIC]
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EXHIBIT C
PROVISIONS RELATING TO CONSTRUCTION OF TENANT'S PREMISES
1. LANDLORD'S WORK: Except as otherwise provided in this Exhibit C, Landlord, at
its own cost and expense, will construct the following, ALL of which are herein
collectively referred to as "Landlord's Work."
A. Building of Which Premises Shall Form a Part: The building of which
the Premises forms a part (herein referred to as the "Building") shall be
constructed in accordance with the following criteria:
1. Structure: The structural frame including columns, beams,
joists, and such other non-combustible materials as may be specified by
Landlord.
2. Roof: The roof will be either a metal standing seam roof with
an inverted roof membrane or a built-up roofing system, and will be insulated in
accordance with applicable governmental requirements.
3. Exterior Walls: The exterior walls will be of masonry,
pre-fabricated panels, structural metal studs, exterior gypsum sheathing with
cementitious-finished wall system or such other materials as may be specified by
Landlord and will have an R value in conformance with applicable governmental
requirements.
4. Interior Walls: The exposed interior face of exterior facing
walls will be exposed studs with exterior insulation only.
B. Common Areas as set forth in Section 8.1 of the Lease:
C. Heating, Air Conditioning and Ventilation: Equipment locations will
be identified, via the Lease Outline Drawings, on the roof and/or mechanical
▇▇▇▇▇ for Tenants packaged heat pumps and, as appropriate, kitchen make-up air
and exhaust units. Chase locations will be provided for running refrigerant
pipes and controls through other tenant spaces. Locations for duct chases and/or
exterior wall louvers for fresh air, return air and toilet exhaust for Tenant
use will be identified on the Lease Outline Drawings.
D. Work Within Tenant's Premises: Landlord's Work within the Premises
shall be limited to the following:
1. Demising Walls: The demising walls which separate the Premises
from other tenant areas and Common Areas will extend from the finished floor to
the underside of the structural beam or roof deck. Gypsum board will be supplied
and installed by Tenant at Tenant's expense.
2. Floors: For ground floor restaurant Premises which are not
over structured slabs, Landlord will furnish a gravel bed at four inches (4")
below the finished floor elevation selected by Landlord; tenants of such
Premises shall not install a floor slab thicker than four inches (4") or change
the floor elevation without Landlord's approval. For all other Premises,
Landlord will provide a recessed concrete sub-slab with a brushed finish
installed at an elevation identified on the Lease outline drawings.
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3. Service doors: The service door supplied by Landlord, if any,
shall be provided at or about the location shown on the Lease Outline Drawings.
While Landlord may elect to provide hardware for the service door, it is
Tenant's responsibility to provide hardware and locking devices adequate for
Tenant's service and security requirements. Repair and replacement of the
service door are Tenant's responsibility.
4. Ceilings: The ceilings will be exposed structure with exposed
plumbing, conduit and other building services as required. Heights of exposed
elements will be noted on the Lease Outline Drawings.
E. Utility Services in the Premises:
1. Electric Service: Landlord will provide conduit from the meter
base in the Project's main electrical room to the Premises. Electric service
will be made available for the Premises at a location designated by Landlord in
the Project's main electrical room and will be 400 Amps, 277/480 volts, 3 phase,
4 wire, 60 cycle alternating current.
2. Water Service: Landlord will provide a domestic cold water
line with shutoff valve to a point in or adjacent to the Premises designated by
Landlord. Such domestic cold water line shall have either a two (2) inch
diameter if serving Premises to be used as a restaurant or a three-quarter (3/4)
inch diameter for other Premises. Approximate location will be identified on the
Lease Outline Drawings. Tenant shall install a water meter of a type and at a
location approved by Landlord.
3. Telephone Service: Landlord will arrange with the telephone
utility company to provide service at the Project's main telephone room with a
minimum two (2) inch conduit to the Premises. Approximate location will be
identified on the Lease Outline Drawings.
4. Gas service: If the Premises are to used as a restaurant,
Landlord will provide an interior three-(3) inch natural gas branch, valved and
capped at a location selected by Landlord. Approximate location will be
identified on the Lease Outline Drawings.
5. Sanitary Sewer Service: If the Premises are to used as a
restaurant, Landlord will stub two plugged four (4) inch sanitary outlets (one
for grease waste and one for regular waste) at locations selected by Landlord to
which Tenant shall connect. Otherwise, Landlord will provide a four (4) inch
sanitary line under slab in the Premises to which Tenant shall connect. Retail
Tenant Spaces will have vent line installed as indicated on the Lease Outline
Drawings.
6. Sprinkler Service: A fire protection sprinkler system
including feeds and/or cross mains and branch lines installed in a grid pattern
designed to Factory Mutual standards for unoccupied space, will be located
within the Premises at an elevation above the maximum ceiling height. The design
of the system hydraulically shall provide coverage densities established by
Factory Mutual. Their criteria for retail spaces is 0.15 density per 2,500
square feet of area and 0.10 density per 1,500 square feet for restaurant
spaces. Modifications of the system to meet Tenant's design will be provided by
Landlord at Tenant's expense or, at Landlord's option, by Tenant provided that
Tenant uses a Landlord approved licensed sprinkler contractor. Tenant's
sprinkler layout shall not exceed the base building design parameters.
F. Openings: Any structural openings or penetrations in roofs, demising
walls, exterior walls or floor slabs for any purpose will be furnished at
Landlord's option by Landlord at Tenant's expense. Landlord reserves the right
to refuse to permit the furnishing of any openings which exceed the capability
of the structural system or which, in Landlord's opinion, would have an
appearance detrimental to the Building.
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II. TENANT'S WORK: All work set forth in this Section 11 and all other work not
specifically designated as Landlord's Work by Section I which is necessary to
complete the Premises in accordance with Tenant's Plans and for the Premises to
be ready to open for business to the public shall be done by Tenant at Tenant's
expense, and is herein collectively referred to as "Tenant's Work."
A. Construction Type: All Tenant construction must be non-combustible.
All finishes shall comply with applicable governmental requirements for both
flame spread and smoke ratings. All concealed framing above ceiling or soffit
shall be made of steel studs or other fireproof materials.
B. Demising Partitions: All demising partitions between Tenant's space
and adjacent space must be fully sheathed using 5/8" Type X gypsum board, taped
and finished, from floor to structure above.
C. Mezzanines: Landlord acknowledges that Tenant will be installing a
mezzanine for its observation deck subject to Landlord's approval of Tenant's
final plans. All mezzanines, if approved, must meet local building codes, be of
fireproof construction, have complete sprinkler coverage, and be approved by
Landlord's structural engineer with respect to design and attachment to the
Building.
D. Floors: The maximum live floor load shall be one hundred (100) pounds
per square foot on the first floor. Above the first floor, the maximum live
floor load shall be eighty (80) pounds per square foot plus twenty (20) pounds
per square foot load for partitions.
1. Sales Area: The floor slab shall be covered with floor finish
materials approved by Landlord. All Tenant floor finishes must be installed to
taper or match the elevation of the projects adjacent finished walkway surfaces.
All tapers must be one quarter (1/4) inch per foot or less.
2. Stock Room, Service or Other Non-Sales Areas: The concrete
floor slab provided by Landlord must be sealed by Tenant with a sealant approved
by Landlord. If the concrete floor slab is covered, floor finish materials must
be approved by Landlord.
3. Kitchens, Bars, Food Preparation Areas: Floors shall be
thick-set quarry tile with minimum one quarter (1/4) inch to a foot slope to all
required drains. A waterproof membrane shall be installed between the setting
bed and structural slab, and shall run a minimum of six (6) inches up all walls,
curbs, and other vertical surfaces. Membrane shall be Latacrete 9235 or equal.
All floor penetrations shall be sleeved, grouted, and made waterproof in
accordance with details shown in the Lease Outline Drawings. All floor drains
and floor sinks shall have a minimum two (2) foot by two (2) foot lead flashing
in accordance with details in the Lease Outline Drawings. Floor drains shall be
required at each compartmentalized utensil sink, dishwashing machine, janitorial
sink, and ice machine.
4. Toilet Rooms: All toilet rooms must have a non-porous floor
covering with a waterproofing membrane installed under the finished flooring and
an integral six (6) inch high base sealed to the floor finish material. All
non-porous floor covering shall be of commercial grade with a non-slip surface.
Tenant shall provide a minimum of one (1) floor drain in each toilet room.
E. Painting and Decorating: Exposed walls shall have a minimum two coat
finish and all natural wood a minimum of one sealer coat. The, walls and
ceilings of the toilet rooms shall have a two-coat, semi-gloss finish.
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F. Ceilings: All ceilings must be suspended from beams and/or floor
decking. No ceiling may be suspended from roof decking. Any ceiling weighing
over five (5) pounds per square foot must attach to primary structural members.
All existing fireproofing or insulation must be protected and repaired if
damaged. All ceiling attachment methods must be approved by Landlord's
structural engineer. All ceiling tile shall meet the following specifications: a
noise reduction coefficient of .60 to .70, minimum room to room attenuation
factor of 40.0 decibels, a flame spread of 0 to 25, smoke development of 0 to 15
and full contribution of 0 to 25, tested in accordance with A.S.T.M.E. -84. If
gypsum board or plaster ceilings are used, access panels must be installed by
Tenant to allow Landlord access to all suspended Project equipment or systems
above the ceiling. Access panels must be installed flush and finished to match
adjacent surfaces. All above ceiling storage is prohibited.
G. Store Fixture Supports: All Tenant improvements, other than ceiling
and lighting fixtures, shall be floor mounted unless Landlord's approval is
obtained to support improvements otherwise.
H. Egress Door Hardware: Egress door hardware is all hardware other than
that supplied as part of Landlord's Work. Secondary locks or latches are not
allowable. Door closers are required.
I. Mechanical, Electrical and Plumbing Work by Tenant: (in order to
coordinate Tenant's Mechanical and Electrical Design, reference should be made
to Section XII of this Exhibit C.)
1. Mechanical Systems: Tenant shall design and install the air
conditioning system for the Premises including the air conditioning units, fans,
piping, duct work, any controls or circuitry, and any related elements required
for the operation of said system. Tenant shall not install the rooftop air
conditioning system and return/exhaust fans unless and until Landlord has
approved the contractor proposed to install the equipment, the method of
installation, the type of equipment and the location of equipment and routing of
ducts and pipes outside of the Premises. The air conditioning system shall be in
compliance with applicable governmental requirements, including building and
energy codes. If Tenant's business is an odor-producing operation, the air
conditioning system shall be designed and installed so as to prevent such odors
from migrating to other areas within the Project.
2. Electrical: All electrical facilities shall conform with
applicable governmental requirements. Tenant shall extend the service conduit
stub-in provided by Landlord to Tenant's main distribution service panel. Tenant
shall install feeder wires through the conduit from the switch in Landlord's
electrical room to Tenant's service panel and make all connections. Requirements
greater than that provided by Landlord shall be made, if power is available, at
Tenant's expense.
3. Plumbing: Tenant shall install drain and soil lines to the
point of entry provided by Landlord. Requirements greater than that provided by
Landlord must be shown on Tenant's working drawings and will be made at Tenant's
expense. Tenant shall install all plumbing fixtures and rough-in plumbing except
as provided above in Section 1. Any increase in the size of the water service
required by Tenant which necessitates a branch water line larger than as
specified in Section I will be furnished by Landlord at Tenants expense.
4. Sprinkler Service: Revisions to Landlord's system or
additional sprinkler heads in excess of those provided by Landlord will be
provided by Landlord at Tenant's expense. Landlord reserves the right to refuse
to permit the installation of additional heads if such additional heads exceed
the supplying capacity of Landlord's bulk mains.
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5. Costs: Tenant shall pay the costs of any meters or
pressure-reducing valves or other devices as well as any connection fees or
charges related to the provision of utility services to the Premises.
J. Appurtenances: No appurtenances (including light fixtures, antennas,
signs, etc.) will be affixed to the exterior walls of the Building without
Landlord's approval.
K. Fire Alarm System: Landlord shall provide, at Tenant's expense,
extension of Landlord's fire alarm system throughout Tenant's premises in
accordance with Tenant's approved plans, and Fire Department requirements.
L. Exiting: If Tenant is required by applicable governmental
requirements to have a second means of egress from its Premises, either to an
adjacent corridor or public area, Tenant shall provide such egress at its own
expense in a location and of a design specifically approved by Landlord.
M. Miscellaneous: Tenant shall install the following:
1. Internal communication, alarm, fire protection, or smoke
detection systems in compliance with applicable governmental requirements;
2. Storefronts, Tenant's sign(s), show window display platforms,
window backs, interior finish in show windows, store fixtures, and furnishings;
3. Double-studded walls and sound insulation of the walls,
glazing, floors and ceilings, and such other sound insulation measures as
required by Landlord in its sole and absolute discretion when, in the sole and
absolute judgment of the Landlord, Tenant's business operations create sounds or
noises which may disturb Landlord, other tenants, patrons of other tenants or
the occupant of any space in the Project; and
4. If the Premises are used as a restaurant, kitchen exhaust
fans, make-up air fans, special door opening "air curtains" fan systems and
other provisions required by applicable government requirements for restaurants.
III. TENANT'S PLANS:
A. Landlord's Design Criteria: After the execution of the Lease,
Landlord will deliver to Tenant one sepia and one print of a measured drawing of
the Premises (the "Lease Outline Drawings") and such other plans, criteria
drawings and information as Landlord deems necessary or appropriate (herein
collectively referred to as the "Landlord's Design Criteria").
B. Tenant's Preliminary Plans: Within thirty (30) days after receipt by
Tenant of Landlord's Design Criteria, Tenant shall submit for Landlord's
approval the plans and other items set forth below ("Tenant's Preliminary
Plans"), all in accordance with the criteria set forth in Landlord's Design
Criteria and with conceptual presentations, if any, made by Tenant to Landlord
prior to Lease execution. The submission must be complete in order for Landlord
to evaluate the proposal fairly and to prevent continuation of work on an
unacceptable design. Failure to provide adequate information may be cause for
return of the submission with no review. Such submittal shall include the
following:
1. Three (3) sets of prints and one (1) sepia of (a) floor plans
(at 1/4" scale) showing all partitions, doors, store fixtures, plumbing
fixtures, electrical and telephone panels and transformer, and other
construction; signage plan (at 1/4" scale) showing all signs, plus elevations
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of sign elements at a scale appropriate to understand clearly the sign design
and message; reflected ceiling plan (at 1/4" scale) showing all light fixtures,
Plus a description and fixture cut for each lighting fixture correlated with the
reflected ceiling plan; plans (at 1/2" scale) showing storefront elevations and
sections through the storefront, including signage, graphics, and decorative
fixtures; and plans and/or elevations with dimensions and preliminary details as
necessary to locate and identify any penetrations of the floor, demising walls,
and adjacent walls of the Premises and the roof structure above the Premises,
all at a scale appropriate to show clearly the intended penetrations;
2. Samples of storefront and interior materials and colors
mounted on foam core or card stock not exceeding 30" by 42", with all materials
clearly labeled and referenced on an attached room finish schedule;
3. A one point perspective color rendering of Tenant's proposed
storefront design, including signage and graphics; and
4. Three (3) copies of Tenant's estimated cooling, heating and
electrical load data, on forms provided by Landlord.
C. Landlord's Review: Landlord will review Tenant's Preliminary Plans
and, within fifteen (15) days of its receipt of such Plans, either return such
Plans to Tenant marked approved or marked to show the corrections required or
give Tenant notice of disapproval of Tenant's Preliminary Plans together with
the reasons therefor. If Landlord gives Tenant notice of disapproval, Tenant
shall have twenty (20) days from the date of such notice of disapproval to
submit revised Tenant's Preliminary Plans subject to subsequent markups and/or
disapprovals and corrections in the manner set forth above.
D. Tenant's Working Drawings: Within ninety (90) days after the date of
receipt by Tenant of the Lease Outline Drawings and Landlord's Design Criteria,
regardless of whether Tenant's Preliminary Plans have been submitted, Tenant
shall submit to Landlord six (6) sets of prints and one (1) sepia of fully
detailed and dimensioned working drawings and specifications as set forth below
("Tenant's Working Drawings"). Upon receipt of Tenant's Working Drawings
Landlord shall have the same rights of approval, markup and disapproval, and
Tenant shall have the same obligations as to resubmissions, as are set forth
with regard to Preliminary Plans. Tenant's Working Drawings shall include the
following:
1. Key plan showing location of Tenant's Premises.
2. Floor plans.
3. Interior elevations.
4. Reflected ceiling plan, including type of ceiling tile and
rating requirements as listed in UL Building Material manual.
5. Longitudinal section through the storefront.
6. Plan, elevation and section of the storefront.
7. Details of storefront.
8. Details of special conditions.
9. Door schedule with jamb, head and sill details.
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10. Finish material and color schedule.
11. Mechanical HVAC plans.
12. Plumbing plans.
13. Fire protection system modifications to Landlord's standard grid
layout.
14. Electrical power and lighting plans.
15. Electrical details, fixtures, panel schedules, and riser
diagram, including circuitry plans, panel schedules, riser
diagrams, load calculations and all other calculations and forms
required by applicable governmental requirements.
16. Mechanical details and equipment schedules.
17. Required Title 24 analysis and calculations.
18. Store fixture plan showing catalog cut sheets of all trade
fixtures and location of any heavyweight equipment such as
safes, equipment cases, refrigeration equipment, etc.
19. Fixture drawings and specifications.
20. Technical specifications.
21. Samples of finish materials.
22. Kitchen exhaust drawings.
23. Kitchen equipment plans.
24. Signage details and specifications.
25. Waterproofing details and specifications.
E. Tenant's Final Plans: After Landlord's approval of Tenant's Working
Drawings, any subsequent changes, modifications or alterations requested by
Tenant before completion of Tenant's Work shall be processed by Landlord, and
Tenant shall pay any reasonable out-of-pocket costs and expenses incurred by
Landlord in connection with said processing, including any additional fees of
Landlord's architects and engineers. Landlord shall have the right to demand
that Tenant pay such costs and expenses in advance of Landlord's processing such
a request. No such changes, modifications or alterations in Tenant's Working
Drawings shall be made without prior consent of Landlord after written request
therefor by Tenant. The total of all of Tenant's Preliminary Plans and Tenant's
Working Drawings, as approved by Landlord, are collectively referred to herein
as "Tenant's Plans."
F. Preparation of Tenant's Plans: All of Tenant's Plans shall be
prepared by architects or engineers licensed by the State of California and
employed by Tenant at its expense. If possible, such architects or engineers
shall have experience working with the building departments of the City of Los
Angeles and/or the County of Los Angeles. Tenant shall not submit plans and
specifications which have been prepared by contractors, subcontractors or
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suppliers, as such plans will not be accepted by Landlord. It is the
responsibility of Tenant's architect to verify all dimensions and field
conditions.
G. Landlord's Consents Interpreted: Any approval or consent by Landlord
of any and all of Tenant's Plans, criteria or systems shall neither constitute
an assumption of responsibility by Landlord for any aspect of such Tenant's
Plans, criteria or systems including their accuracy or efficiency nor obligate
Landlord in any manner with respect to Tenant's Work, and Tenant shall be solely
responsible for any deficiency in design or construction of all portions of
Tenant's Work for which Tenant is responsible. Landlord's approval shall not be
deemed to certify that Tenant's Plans comply with applicable governmental
requirements and shall not relieve Tenant of Tenant's responsibility to verify
all job conditions including dimensions, locations, clearances and property
lines, prior to Tenant's preparation of its plans as well as prior to starting
construction.
IV. CONSTRUCTION PROCEDURES:
A. General Regulations: All of Tenant's Work shall be done in accordance
with Tenant's Plans, all applicable governmental requirements, the regulations
of Landlord's fire underwriters and Landlord's Design Criteria. At any time and
from time-to-time during the performance of Tenant's Work, Landlord or
Landlord's contractor may enter upon the Premises and inspect the work being
performed by Tenant and take such steps as they may deem necessary or desirable
to assure the proper performance by Tenant of Tenant's Work and/or for the
protection of the Building and/or areas adjacent to the Premises. Any entry by
Landlord or Landlord's contractor shall be in a manner calculated not to
interfere unreasonably with the progress of Tenant's Work. In addition, Tenant's
Work shall be performed in a thoroughly first class and workmanlike manner,
shall incorporate only new materials, and shall be in good and usable condition
at the date of completion.
B. Building Permit: Landlord or its designated representative shall
assist Tenant in obtaining a building permit for the construction of Tenant's
Work by coordinating Tenant's submission of Tenant's Plans to the applicable
governing agencies. The fact that Landlord shall assist Tenant shall not relieve
Tenant of the responsibility for the processing of the building permit. If any
such governing agency shall reject Tenant's Plans and thereby prevent the
issuance of a building permit, Tenant shall, subject to Landlord's approval,
immediately make all necessary corrections required by said agency. Upon said
agency's approval of Tenant's plan check and permit application, Tenant or
Tenant's contractor shall obtain the building permit from said agency. Tenant
shall apply for and obtain all approvals and permits from the local health
department, as required.
C. Completion of Tenant's Work: Tenant shall complete Tenant's Work as
quickly as possible. Delays in the completion of the Premises caused by Tenant's
contractor shall not relieve Tenant of any obligation under this Lease. If the
Premises have not been constructed substantially in accordance with Tenant's
Plans in the judgment of Landlord's architect, then Tenant shall not be
permitted to open the Premises for business until the Premises do so comply, and
Tenant shall not be excused from the performance of any obligations under this
Lease.
D. Financial Requirements: Landlord may require Tenant, upon entering on
the Premises to commence Tenant's Work, to give Landlord proof satisfactory to
Landlord of Tenant's financial ability to comply with and fully pay for Tenant's
Work in a timely manner.
E. Insurance: In addition to and not in lieu of the other policies of
insurance required by the Lease, at all times during the period commencing with
the start of construction of Tenant's Work and terminating on the date of the
acceptance by Landlord of Tenant's Work as being completed in accordance with
the provisions in this Exhibit C (such period is herein referred to as
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"Tenant's Construction Period"), Tenant, at its expense, shall maintain in
effect with a responsible insurance company, a policy of Builder's "All Risk"
Insurance in the standard California form. Said insurance shall cover the full
replacement value of all work done or to be done and all fixtures and equipment
installed or to be installed at the Premises by Tenant without co-insurance and
without any deductible clauses.
F. Fees and Charges: Tenant shall obtain and pay for all necessary
permits and shall pay all plan check and other fees required by public
authorities or utility companies with respect to Tenant's Work. Unless otherwise
provided, Tenant shall pay Landlord, as Additional Rent, all fees and other
charges and/or payments for which Tenant is obligated pursuant to this Exhibit C
within thirty (30) days after demand therefor is made by Landlord.
G. Temporary Utility Service: Temporary utility services, as well as
Tenant's connection therefor during construction, including light and power,
shall be obtained by Tenant at Tenant's expense from appropriate public utility
companies or Landlord's utility service. Temporary heat, if any, is to be
provided by the temporary electrical service.
H. Cleanup: Tenant shall maintain the Premises and the adjacent Common
Areas in a clean and orderly condition during construction. Tenant shall
promptly deposit all unused construction materials, equipment, shopping
containers, packaging, debris, and waste from the building site and deposit it
in Landlord-provided receptacles. Tenant shall contain all construction
materials, equipment, fixtures, merchandise, shipping containers and debris
within the Premises. Trash storage for the Premises shall be confined to covered
metal containers. Tenant shall reimburse Landlord for the removal from the
Project by Landlord of trash and debris generated by Tenant or Tenant's
contractors and subcontractors during Tenant's Construction Period.
I. Violations: If Tenant is notified of any violations of applicable
governmental requirements, either by appropriate governmental agencies or by
Landlord, Tenant shall correct such violations as soon as reasonably possible.
Should Tenant fail to correct such violations promptly, Landlord shall have the
right to correct such violations at Landlord's actual cost plus a [***]
administrative charge.
J. Notice of Completion: Tenant shall obtain and record a Notice of
Completion promptly following completion of Tenants Work.
V. TENANT'S USE OF A CONTRACTOR:
A. Contractor Selection: Tenant may select any contractor for the
construction of Tenant's Work provided such contractor is bondable, is licensed
by and meets all insurance requirements established by appropriate governmental
agencies and is approved by Landlord, which approval shall not be unreasonably
withheld. To the end that there shall be no labor dispute which would interfere
with the construction completion or operation of the Project or any part thereof
including the Premises, Tenant shall engage the services of only such
contractors or subcontractors as will work in harmony and without causing any
labor dispute with each other and with contractors and subcontractors of working
for Landlord or others in or upon the Project or any part thereof. Tenant shall
enforce strict discipline and good order among the employees of Tenant's
contractors.
B. Plans: Tenant's contractor shall have one (1) set of Landlord and
Building Department approved Plans at the job site at all times during Tenant's
Construction Period and may not commence work until Tenant's Plans are on the
Premises.
*** Confidential treatment requested.
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C. Insurance: At all times during Tenant's Construction Period, Tenant's
contractor(s) shall maintain and pay for all premium costs for the following
insurance coverages on the forms and in the amounts not less than hereinafter
specified:
1. Statutory workers compensation including employers liability
insurance with a limit of not less than [***]. Tenant's contractor shall waive
and cause its workers compensation carrier to waive their respective rights of
subrogation against Landlord, Universal Studios, Inc. and Universal Studios,
Inc.'s affiliated companies.
2. Comprehensive or commercial general liability insurance
(and/or excess umbrella liability) written on an occurrence basis for bodily
injury and property damage with coverage limits of not less than [***] combined
single limit per occurrence in the aggregate. Said policy shall be written on
the 1985 ISO occurrence form or broader, with no additional exclusions and must
include (a) severability of interest, (b) primary, not contributing coverage,
and (c) blanket contractual. Landlord, Universal Studios, Inc., and Universal
Studios, Inc.'s affiliated companies must be indicated as additional insureds
and a waiver of subrogation must be granted.
3. Business auto liability and/or excess umbrella liability for
all owned, hired or non-owned vehicles to be driven onto Landlord's private
facilities, with a combined single limit of not less than one million dollars
($1,000,000). Landlord, Universal Studios, Inc., and Universal Studios, Inc.'s
affiliated companies must be indicated as additional insureds.
4. All risk property insurance covering all of such contractor's
property to be brought onto Landlord's private property, including a waiver of
subrogation in favor of Landlord, Universal Studios, Inc., and Universal
Studios, Inc.'s affiliated companies.
All policies of insurance provided for herein shall be issued by
insurance companies qualified to do business in the State of California and
satisfactory to Landlord. When any such policy shall expire or terminate,
renewal or additional policies shall be procured and maintained by such
contractor in like manner and to like extent. All policies must contain a
provision that the company writing said policy will give to Landlord thirty (30)
days' written notice in advance of any cancellation, lapse, reduction in the
amount of coverage or other adverse change respecting such insurance. The
stipulated limits of coverage above shall not be construed as a limitation of
any potential liability to Landlord, and failure to deliver said insurance
certificate or Landlord's failure to request delivery shall in no way be
construed as a waiver of such contractor's obligation to provide the insurance
coverage specified.
Tenant's contractor shall require all of its subcontractors to
maintain in effect Workers' Compensation Insurance as required by the laws of
the State of California and comprehensive general liability insurance with such
limits of liability and coverage endorsements that will cover the scope of their
respective work activities consistent with the reasonable and prudent practice
of similar subcontractors doing similar work in Los Angeles County.
D. Contract with Contractor: Tenant shall provide Landlord with a copy
of the contract with its contractor prior to commencement of Tenant's Work.
Tenant shall incorporate into such contract the following items as "Special
Conditions":
1. Schedule: Prior to commencement of Tenant's Work, Tenant's contractor
shall provide Landlord with a construction schedule in "bar graph" form
indicating the completion dates of all phases of Tenant's Work.
2. Interference with Others: Tenant's contractor shall diligently
perform Tenant's Work in a manner and at times which do not impede or delay
Landlord in the completion
*** Confidential treatment requested.
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of the Premises or any other portion of the Project. Tenant's contractor shall
coordinate Tenant's Work with all work being performed or to be performed by
Landlord and other occupants of the Project. Tenant's contractor and each of its
subcontractors shall comply with all procedures and regulations prescribed by
Landlord or its agents for integration of Tenant's Work with that to be
performed in connection with the construction of the Project.
3. Temporary Storage Areas: Tenant's contractor shall store all
construction materials and contain all operations within the Premises and such
other space as Landlord may specifically permit. Should Tenant be assigned space
outside of the Premises, Tenant shall move to such other space as Landlord shall
reasonably direct from time-to-time to avoid interference or other delays with
other work. All trash, construction debris and surplus construction materials
shall be promptly removed and placed in Landlord-provided receptacles. if any
such contractor and/or subcontractor shall use any space in the Project for any
or all of its aforesaid enumerated purposes or any other similar purpose without
obtaining Landlord's approval, Landlord shall have the right to terminate such
use and remove all of such contractor's or subcontractor's material, equipment
and other property from such space, without Landlord being liable to Tenant
and/or to such contractor or subcontractor, and the cost of such termination
and/or removal shall be paid by Tenant to Landlord.
4. Protection of Work: Tenant's contractor and subcontractors
shall maintain continuous protection of adjacent property and improvements
against damage by reason of the performance of Tenant's Work. Tenant's
contractor shall be responsible for the repair, replacement or clean-up of any
damage caused by Tenant's contractor to any other contractor's work in any area
of the Project.
5. Labor Disputes: Any and all work performed by Tenant's
contractor shall be performed in a manner so as to avoid any labor dispute which
results in a stoppage or impairment or work, deliveries or any other service in
the Project.
6. Penetrations of Roof, Floor and Walls: Tenant's contractor
shall not make any structural penetration or opening in any roof, floor slab,
demising wall or exterior wall of the Project. All such penetrations, at
Landlord's option, shall be done by Landlord at Tenant's expense.
7. Weekend Work: No work shall be done by Tenant's contractor on
weekends or other than normal job hours without Landlord's prior approval.
Tenant shall pay all costs associated therewith. Notwithstanding the foregoing,
Landlord hereby pre-approves weekend work provided that the work is confined to
the interior of the Premises.
8. Safety: Tenant's contractor shall comply with all applicable
governmental requirements (including OSHA) governing the performance of Tenant's
Work, including all applicable safety regulations established by Landlord and
Landlord's general contractor for the Project.
9. Signs: Tenant's contractor or subcontractors shall not post
signs on any part of the Project or the Premises.
10. Intentionally Deleted.
11. Guarantees: Each contractor and subcontractor participating
in Tenant's Work, prior to the commencement of that portion of such work for
which such contractor or subcontractor is responsible, shall guarantee or
warrant in writing, in the manner hereinafter set forth, that such portion will
be free from any defects in workmanship and materials for the period of time of
not less than one year after the Premises first opens for business to the
public. All such
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guarantees and/or warranties (collectively referred to as "guarantees") shall be
contained in the contracts and subcontracts for the performance of Tenant's
Work, shall include the obligation to repair and replace in a first-class and
workmanlike manner, and without any additional charge, all of Tenant's Work done
or furnished by the contractor or subcontractor, his employees, or agents which
shall be or become defective within such one (1) year period and shall be
written so as to insure to the benefit of Landlord and Tenant as their
respective interests may appear and so as to be directly enforceable by either
Landlord or Tenant. All such guarantees shall also include the agreement by the
contractor or subcontractor to pay for all expenses and damages incidental to
the removal, replacement or repair of any other part of Tenant's Work which may
be damaged or disturbed thereby.
VI. REMEDIES:
If Tenant fails or omits to make timely submission or resubmissions to
Landlord of Tenant's Preliminary Plans or Tenant's Working Drawings or
electrical load data or fails to or delays in submitting or supplying
information or in giving authorizations or in performing or completing Tenant's
Work or in any manner delays or interferes with the performance of Landlord's
Work, Landlord, in addition to any other right or remedy it may have under this
Lease, at law or in equity, may require Tenant to pay to Landlord, as Additional
Rent hereunder, the cost to Landlord of completing the Premises in accordance
with, the terms of this Lease over and above what would have been such cost had
there been no such failure, omission or delay.
VII. DESIGN INTENT AND DESCRIPTIVE INFORMATION:
The Project is located in Universal City, California, adjoining the
Universal Studios Tour, the Universal Amphitheater, and the Universal City
Cinemas. The Project is an expansive carfree promenade connecting all of
Universal City's attractions. Approximately 1,600 feet in length, the Project is
the length of Westwood Village, from Wilshire Boulevard to the gates of UCLA, or
Rodeo Drive in ▇▇▇▇▇▇▇ Hills. It is designed to include over 50 retail,
restaurant, and entertainment outlets carefully selected for their interest
value and quality of merchandise. Street entertainers and roaming push carts
further enhance the festive and colorful atmosphere. Additionally, there are
second and third level office spaces and some community service facilities
including the East Valley Campus classrooms for the UCLA Extension program. The
Project is serviced by more than 5,000 on-grade and structured parking spaces
with easy freeway access.
The Project is a one-of-a-kind, up-beat and active street, collecting
distinctive shops, restaurants, offices, community classrooms and entertainment
elements in an outdoor urban district. Rather than establishing finite goals or
limitations on the design of facades, graphics, or lighting, Landlord encourages
Tenant to create innovative, distinctive and original designs that reflect the
eclectic architectural characteristics of Los Angeles, and that are supportive
of the character of the Projects themed districts. The goal of Landlord's design
criteria is to provide for a variety of design, not a consistency of appearance.
The Project can be seen as three districts, each with a distinct
character, and which may be described as follows:
The WEST WALK district is similar to nearby areas known as
"Sunset Plaza" and "Larchmont Village," an intimately scaled "people street" set
against a textured backdrop of building styles indigenous to Los Angeles. It
consists primarily of retail shops and specialty food merchants at the street
level with second and third story office or retail space above. The west end of
WEST WALK fronts on the existing Tour Plaza. The east end leads to the Central
Courtyard.
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The FOUNTAIN COURT is an elegantly landscaped district fashioned as the
street arboretum that Los Angeles has never had. With filtered light, exotic
palms, densely planted wall arbors and water fountains, this garden plaza will
serve as the crossroads of the Project. It will link EAST WALK and WEST WALK and
serve as the main entrance from the nearby parking areas. On each of the two
levels around the FOUNTAIN COURT are restaurants and entertainment venues, many
of which have outdoor dining terraces.
The CINEMA PLAZA district centers around the eighteen-screen Universal
City Cinemas and the Hard Rock Cafe and will emulate the glitzy excitement and
frenetic energy of "Sunset Boulevard" and/or "Times Square". With animated
lighting systems and signage, the energy of CINEMA PLAZA is youthful and
exciting. The retail shops, theaters, and food venues are to be designed around
an entertainment theme and are encouraged to participate in the "Times Square"
atmosphere.
The design criteria for the Project's three distinctive districts should
stimulate Tenant to expand its design development beyond the concept of
traditional retail. Tenant's design should reflect the urban context of the
highly designed "LA street" theme. Tenant is encouraged to take a fresh and
innovative approach as to ways in which its Premises can be designed to fit the
Project's special atmosphere. Tenants are also encouraged to consider how
climatic conditions, pride of ownership, and the context of a city street
determine the quality, type of materials and design features of traditional
street retail shops. Tenant's overall design concept should coordinate its
storefront design, interior design and the merchandising plan. Tenant should
consider creative adaptations to its interior design and planning to create a
store for the Project that is unique and to build a total store design concept
around unique aspects of its business operation or product.
VIII. STOREFRONT CRITERIA:
A. General: The storefront design is defined as the display windows,
entrance ways, opaque panels, fascias, soffits, graphics, lighting, landscaping,
adjoining finished surfaces, and any display fixtures directly associated with
the storefront elements. Tenant is encouraged to design a highly creative and
memorable storefront and to create icon images out of its storefront design.
Each storefront design will be evaluated on an individual basis. Signage should
be considered as a key ingredient in the development of the facade. The
storefront should reinforce the idea of "streetness" as a total store design
concept and convey a memorable image of an exterior urban facade that is
supportive of the merchandising therein. The conceptual theme of each of the
districts provides an appropriate point of departure for the design of all
Tenant storefronts. Tenant is encouraged to have a large, visually open glass
storefront, utilizing the entire storefront opening provided by Landlord,
subject to Tenant's obligation to meet California Title 24 requirements and
comply with applicable governmental requirements, including energy codes, with
respect to the overall ratio of wall to glass area on Tenant's storefront.
Generic "mail" designs or standard storefront design concepts which have been
developed for typical shopping center locations are not appropriate for the
Project and use of such designs is discouraged. National and regional chain
stores with predetermined design concepts should adapt their standard design to
complement the theme of the three districts of the Project.
B. Location: Storefronts may be located at the lease line or recessed
behind the lease line or a combination of both. If Tenants storefront is set
back from the lease line, Tenant is responsible for finishing the adjoining
exposed surfaces out to the lease line. Tenant may choose to match the existing
materials and construction of adjoining surfaces or propose its own design
solution. Tenant may propose to continue the finished exterior surface and other
elements of the storefront design onto Landlord's adjoining building surfaces.
That is, the exterior finishes of the storefront design, such as decorative
tile, applied ornamentation, painted murals, lighting and signage/graphics may
bleed over onto the adjoining wall surfaces in a creative way. Construction
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of any adjoining surfaces outside of Tenant's lease space will be performed by
Landlord's contractor at Tenant's expense. Landlord will review such proposals
on an individual basis.
C. Materials: Storefronts may be constructed of any materials that will
fit the image and intent of the Project design criteria, provided that they are
fully weatherproof, new and of high quality, appropriate for exterior
applications, conform to applicable governmental requirements, and are approved
by Landlord and its architect. Materials that will not be approved by Landlord
include painted gypsum board or materials deemed by Landlord to be of low
quality, non-durable and/or difficult to maintain.
D. Awnings/Canopies: Awnings, where desired, may be of conventional
design; however, creative shapes, sizes, materials, and designs are encouraged.
If fabric awnings are used, Tenant must consider the retractability and flame
retardant specifications of applicable governmental requirements. It is highly
recommended that awnings utilize translucent fabrics and incorporate lighting
for nighttime effects. Use of canopies and projecting metal framework is
encouraged. Designs may be of various shapes, sizes and materials. No awning,
canopy or projecting metal framework may hang below eight (8) feet above the
finished floor surface.
E. Flags/Banners: Flags and banners identifying Tenant can provide a
colorful and festive supplement to the storefront design and image. Graphic
messages on flags or banners should be limited to a generic logo or symbol of
the product type of Tenant. Printed copy may be permitted on an individual
basis. Flags and banners may not hang below eight (8) above the finished floor
surface. Flag and banner material must be lightweight fabric and meet applicable
governmental requirements for flame spread and smoke generation ratings.
F. Construction: All storefront construction, including doors,
projecting elements, awnings, canopies, signs and lighting elements shall be
self-supporting and independent from Landlord's building structure whenever
possible. Any loading of Landlord's structure is subject to Landlord's approval
and shall conform to applicable governmental requirements.
G. Security Devices: All security devices must be physically integrated
into storefront construction. No free-standing pedestals containing sensor
equipment will be allowed at entrances. No overhead or horizontal rolling
security screens, inside or outside of the storefront will be permitted. Door
key devices, controls and other operating components shall be mounted flush and
integrated within the storefront design. All face plates for such components
shall be finished to blend with the background into which they are installed.
Burglar alarm tape, contact stickers, etc. are not permitted.
IX. SIGNAGE CRITERIA:
A. General: Tenant signage represents one of the most critical elements
of the Project. One horizontal and one blade sign or other graphic treatment is
required per store elevation. See Lease outline drawings for additional
criteria. All signs must be installed and operational before Tenant opens its
Premises for business. Tenant is encouraged to incorporate signage as a key
design element in the development of its store's retail image. It is strongly
recommended that Tenant employ a competent graphic designer and use exceptional
creativity in developing the signage concept for its storefront identity.
Landlord will supply upon request a list of suggested designers. Landlord has
not specified a uniform signband requirement so as to encourage creativity and
individuality in the design of the storefronts. Signage may occur anywhere
within the limits of the basic storefront and may run over onto the adjoining
Landlord wall surfaces with Landlord's approval.
B. Content: The advertising or informative content of Tenant's signs
shall be limited to letters designating Tenant's trade name set forth in this
Lease. The use of any brand name or
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brand name logo will not be allowed on the sign unless it is specifically
included in Tenant's "doing business as" (d.b.a.) designation. Crests, corporate
▇▇▇▇▇▇▇ or logos may be permitted at the discretion of Landlord. Tenant's sign
shall not include specification of the merchandise offered for sale or of the
services rendered. No advertising placards, banners, pennants, signs, devices,
slogans, symbols or marks other than those specifically approved by Landlord
shall be affixed upon the glass panes or supports of the store windows, doors,
or upon the exterior of the storefront, or within three feet (3'-0") of the
lease line, except that symbols or names reflecting accepted credit cards may be
so displayed in a manner reasonably approved by Landlord. Signs may not display,
on any portion, the name, stamps or decals of the sign manufacturer or
installer. Tenant may install on its storefront, if required by the U.S. Post
Office, the numbers only for the street address in an exact location stipulated
by Landlord's architect. Size, type, color and style of numbers shall be as
stipulated by Landlord's architect.
C. Construction: All signage must be fully weatherproof and shall be
constructed of premium quality, weather resistant materials. All illuminated
signs shall be fabricated and installed in compliance with all applicable
building and electrical codes and shall bear an Underwriters Laboratory (UL)
label. No exposed raceways, crossovers or conduits will be permitted. All
cabinets, conductors, transformers or other equipment related to lighting
controls must be concealed from the public view or accessibility unless they are
an integral part of the design. All exterior Tenant signage is to be controlled
by a time clock. All permits for signs and their installation will be obtained
by Tenant with a copy sent to Landlord's Tenant Coordinator prior to
installation.
X. LIGHTING CRITERIA:
Tenant is responsible for all lighting within its Premises. Tenant's
lighting design must comply with Title 24 energy requirements. All display
windows must have adequate lighting, employing dimmable, concealed light
sources. Tenant should keep night time considerations in mind as it designs its
storefront and interiors. Tenant is encouraged to put on a "show business" hat
to convey a dramatic and exciting appearance to its Premises. Special lighting
of merchandise and attention to lighting design details are encouraged. All
fixtures within Tenants public areas shall be decorative. All fixtures shall be
new and bear the Underwriters Laboratory (UL) label. Floor-mounted fixtures are
prohibited unless specifically approved by Landlord in writing. All storefront
plans and internal reflected ceiling plane shall indicate all illuminating
devices. Specifications and catalog cut sheets shall be submitted for review and
approval by Landlord for all lighting fixtures and elements.
Emergency lighting and exit signs are required as per applicable
governmental requirements. All emergency lighting shall be self-contained. Any
battery packs for such lighting in sales areas shall be concealed.
Landlord shall provide lighting for public areas of the Project. Tenant
shall control the brightness of its lighting and avoid any direct glare from its
Premises into the Common Areas. Excessively bright or flashing lights shall only
be permitted with Landlord's approval.
All of Tenant's storefront lighting and signage within three (3) feet of
Tenant's front lease line, including Tenant's entry vestibule (if any) and
display windows, shall be separately circuited for control by Tenant's time
clock.
XI. INTERIOR CRITERIA:
A. General: Development of the interior of Tenant's space should be an
extension of Tenant's storefront image. Tenants are expected to continue the
quality and design level established in the storefronts throughout the public
areas of Tenant's Premises. All exposed
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surfaces should be of exceptional quality. Elements of particular concern are
show windows, display platforms, floors, ceilings, walls, doors, screens,
ornamental work, glass and metal work. Landlord and its architect will carefully
review all submissions to ensure Compliance with the criteria set forth in this
Section XI as well as elsewhere in this Lease and Exhibit C.
B. Flooring: Tenant shall not use vinyl composition or sheet vinyl in
the public areas of its Premises.
C. Partitions: Landlord's demising walls are not designed to accommodate
cantilevered or eccentric loads. If Tenant plans to use a demising wall for
support of any elements of equipment or fixturing, Tenant shall reinforce the
wall as needed. The design to reinforce the wall structure must be approved by
Landlord prior to work commencing. Where demising walls occur on structural
column lines, at structural braces, at structural expansion joints or at pipe
chases, projections may occur.
D. Ceilings/Acoustical Tile: Retail, restaurant and fast food/beverage
Tenants are encouraged not to use acoustical tile ceilings in areas that are
visible to the public. If acoustical tile is used, only concealed spline
ceilings will be acceptable. Acoustical tile ceilings may be used in other
areas, but two (2) foot by four (4) foot lay-in ceilings are not permissible.
The use of acoustical tile shall be limited to horizontal ceiling surfaces only.
Tenant may, at its option and upon approval of Landlord, expose the structure as
long as all visible elements receive a painted finish. All exposed elements
shall be fabricated in a neat and ▇▇▇▇▇▇▇-like manner. It shall be Tenant's
responsibility to adequately seal and finish all common building elements
including utilities, ducts, conduit and shafts.
E. Structural: Overhead loading to the structure above shall not exceed
ten (10) pounds per square foot. Tenant's architect shall indicate on Tenant's
Plans the precise location, size and weight of all elements that may exceed the
per square foot weight limits and shall include references to column grid lines
and structural supporting members. Any alterations, additions or reinforcements
to Landlord's structure required to accommodate Tenant's loading of the
structure that may exceed the allowable floor loads shall be designed by
Landlord's structural engineer and performed by Landlord's contractor at
Tenant's expense.
F. Shelving: All stock shelving over eight (8) feet in height requires
structural calculations prepared by an engineer licensed in the state of
California. Shelving and its contents shall not interfere with sprinkler head
water flow.
XII. MECHANICAL, ELECTRICAL AND PLUMBING CRITERIA:
A. General Criteria:
1. All plans, specifications and calculations for Tenant's
mechanical, electrical and plumbing work shall be prepared under the supervision
of a registered professional engineer holding a valid registration in the State
of California in the applicable fields of engineering. Tenant's engineer shall
refer to the Lease Outline Drawings and this Exhibit C for requirements
governing the design and construction of Tenant's Premises.
2. The design and appearance of all light fixtures and exposed
ductwork and piping which are visible from the public areas are critical to the
overall visual effect and are subject to detailed review and approval by
Landlord. All piping and ductwork is to be installed as high as reasonably
possible. All holes through structural members must be approved by Landlord's
structural engineer prior to the start of any work.
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3. Noise and Vibration Control: All equipment installed by Tenant
shall be provided with vibration isolators, sound traps, duct lining, acoustic
housings, acoustical louvers and other noise and vibration control apparatus so
as to limit intrusion into adjacent spaces. It is the intent of Landlord and
Tenant that noise levels caused by Tenant in adjacent tenant spaces and exterior
spaces be maintained below levels which are an annoyance and disruption to
Landlord or adjacent tenants. With the above qualitative intent as the
overriding goal, the Landlord may make quantitative compliance determinations as
follows: Intrusive noise levels between ▇▇▇ ▇▇▇▇▇ and Tenant shall not exceed
NC-35 and between NASCAR and the space above NASCAR shall not exceed NC-25 when
measured in such adjacent tenant areas. Tenant equipment noise emitted to the
exterior shall not exceed 65 DBA in any occupied exterior space. Tenant shall
provide vibration isolation of ductwork, piping and equipment in accordance with
practices described in the latest ASHRAE Fundamentals Handbook so that the
numerical difference between flat and C-Scale measurements made in adjacent
spaces does not exceed five decibels.
4. Test for Noise and Vibration Control: At any time within the
first six months after either initial occupancy or installation of any new
equipment which produces noise and vibration, Landlord may request a test by an
acoustical consultant of its choice to verify compliance with the above minimum
acoustical requirements. If such test determines that Tenant is in compliance,
Landlord will pay the costs of the testing. If such test determines that Tenant
is not in compliance, Tenant will pay the costs of the initial testing, make
whatever changes are required to bring the installation into compliance and pay
the costs of all subsequent testing by an acoustical consultant approved by
Landlord to verify compliance.
5. Field conditions may vary from those shown on the Lease
Outline Drawings. Tenant's design team is encouraged to visit the site and
verify field conditions which may affect the design.
B. HVAC Criteria:
1. System Types: Ground Floor Tenants will use split HVAC systems
consisting of fan coil units in Tenant's Premises fed by refrigerant lines from
roof top compressor and condenser units. Make-up air and exhaust will be through
louvered openings in the Building. Second and Third Floor Tenants throughout the
Project will use rooftop packaged units ducted to each Tenant's Premises through
rated shafts.
2. Balancing: If any HVAC units, ductwork and/or diffusers or
outlets are provided by Tenant, Tenant shall engage the services of a certified
air balance contractor to adjust and completely balance Tenant's portion of the
system to the design air and condenser water quantities, and Tenant shall
provide to Landlord a copy of the certified balance report showing design and
measured quantities, static pressures, fan motor RPM, motor current and exhaust
quantities.
3. Calculations: All of Tenant's design calculations shall be in
accordance with the latest edition of the ASHRAE Fundamentals Handbook, all
applicable governmental requirements and good engineering practice. All
calculations shall be certified by a registered professional engineer and
submitted to Landlord for approval. Heat loss from the spaces shall be
calculated to maintain a minimum of 68oF DB when the temperature outdoors is
31oF DB with a 15 mph wind. Cooling load calculations shall be calculated to
maintain a maximum temperature of 76oF DB with relative humidity not exceeding
55% when the outdoor conditions do not exceed 98oF DB or 67oF (coincidental) WB
with a 7.5 mph wind. Cooling load calculations shall take into account all
interior heat producing items.
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4. Data Forms: Tenant shall complete and submit for Landlord's
approval on the forms annexed hereto the Heating and Cooling Calculation
Schedule and the HVAC Equipment Schedule. Tenant's calculations shall include
(i) block peak cooling load; (ii) block peak heating load; (iii) instantaneous
peak cooling load for each space served by a separate terminal unit; (iv)
circulated CFM required for peak cooling load; (v) instantaneous heating load
for each heated space; (vi) toilet room exhaust air calculation, including
static pressure if applicable; (vii) calculation of static pressure required
from Tenant's air-conditioning equipment; (viii) exhaust quantities and static
pressure calculations for kitchen exhaust, if applicable; and (ix) make-up
quantity and static pressure calculations for make-up air, if applicable.
5. Ventilation: Tenant's air conditioning system shall provide
outside air ventilation of a quantity equal to the greater of (i) 7.5 CFM per
person for all areas or (ii) the quantity required by applicable governmental
requirements. To help in containing food odors, ventilation air from the
restaurant dining and waiting areas shall be transferred into the kitchen so as
to constitute at least fifteen percent (15%) of the total quantity of the
make-up air for the kitchen exhaust. Outside air for ventilation shall be
available either from roof top intake or sidewall louvers, depending on the
location of Tenant's Premises. Such intakes shall be provided by Tenant with
Landlord's approval. No exhaust or vent will be located within ten (10) feet of
any supply or air intake, or such distance as may be approved by Landlord.
Tenant shall not install any mechanical equipment or any connecting duct work or
pipe chases outside of the Premises without Landlord's approval.
6. Ductwork: All ductwork shall be fabricated from galvanized
sheet steel in accordance with the best recommended practices of the American
Society of Heating, Refrigeration and Air Conditioning Engineers (ASHRAE) and in
strict compliance with all the applicable standards of the Sheet Metal and Air
Conditioning contractors National Association (SMACNA), latest editions.
Branches from the main low velocity trunk ductwork shall be furnished with
splitter dampers or similar balancing devices in general accordance with the
latest standards of the Associated Air Balance Council. Access panels are
required for these devices in ceilings. All supply and outside air ductwork
shall be insulated with one (1) inch thick glass fiber insulation with foil
vapor barrier, except those portions which are lined for acoustical purposes and
supply air ductwork within air conditioned spaces (not return air plenums).
7. Air Distribution Devices: Air distribution devices shall be
grilles or ceiling diffusers installed as required to achieve draft-free air
distribution in accordance with good engineering practice. Diffusers or grilles
shall have lockable individual manual volume control devices.
8. Fire Dampers: Tenant shall indicate the location of fire
dampers on Tenant's Plans. Tenant shall provide for ready access to reset each
fire damper. All fire dampers must carry evidence of UL approval.
9. Piping Systems: All piping systems must be compatible with the
type of materials used by Landlord. Condenser water piping shall be black steel
schedule 40, ASTM A53 with threaded ends and malleable iron threaded fittings.
Tenant may use Type L copper tubing as specified under "Plumbing Criteria" in
this Exhibit C. Dielectric couplings shall be provided between dissimilar
metals. Pipe supports and valves shall be as specified under "Plumbing Criteria"
in this Exhibit C unless noted otherwise.
10. Life Safety Interface: All spaces which require
interconnection to the base building system by the local Fire ▇▇▇▇▇▇▇▇ shall
have conduit and wire run, by Tenant, to Landlord's base building fire alarm
CDT, located in accordance with the Lease Outline Drawings.
C. Plumbing Criteria:
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1. Connections: Landlord shall provide sewer, vent and water
connections for the installation of Tenant equipment at the locations specified
on the Lease Outline Drawings.
2. Water Pressure: Landlord's domestic cold water system is
designed to provide the minimum pressure of 30 PSI at the ceiling. If Tenant
requires additional water pressure, Tenant shall provide a local booster pump.
3. Hot Water: If Tenant desires hot water service, Tenant shall
furnish and install its own electric water heater, fully insulated and steel
jacketed. Instantaneous recovery type water heaters are not permitted.
4. Collars: If Tenant's Premises are located on floors above
grade, Tenant shall provide flashing collars and/or flange collars on all floor
drains and pipe sleeves to restore area waterproofing.
5. Gas Piping: Gas piping shall be approved by Landlord.
6. Materials: All piping systems must be compatible with the type
of materials used by Landlord. Drainage and vent pipe and fittings for above
grade use shall be service weight, hubless cast iron with rubber sealing sleeve
and stainless steel coupling joints with stainless steel clamps and bolts as
manufactured by Tyler Pipe or equivalent. Drainage and vent pipe and fittings
for below grade use shall be service weight, ▇▇▇▇ and spigot cast iron with lead
and oakum or gasketed joints. No PVC is permitted. Water piping above grade
shall be Type L copper tubing, seamless drawn, hard temper with plain ends ASTM
B88. Fittings shall be wrought or cast copper with socket ends for lead-free
solder. Gas piping shall be black steel pipe schedule 40, ASTM A53 with threaded
ends and malleable iron threaded fittings. Piping installed in return air
plenums shall be welded joint.
7. Valves: All valves for domestic water to be 125 PSI test all
bronze wedge gate valves or line size quarter-turn installed in the proper
orientation ball valves as manufactured by either NIBCO, Crane or Wafts. Valves
for gas piping system shall be all bronze ball valves with threaded or welded
ends as manufactured by Crane or equivalent. All valves shall be accessible for
ease of operations.
8. Piping support: Pipes supported from steel structure shall be
supported from steel beams and joists with approved clamps and other structural
attachments. In areas with concrete flat slabs and concrete on metal deck
inserts, self-drilling anchors, or powder driven anchors will be allowed. No
pipe hangers will be supported from the metal roof deck. Hangers shall not
▇▇▇▇▇▇ piping insulation vapor barrier. Appearance and spacing of hangers
exposed to public view are important aspects of the final visual environment.
All steel hangers, rods, beam clamps, etc. exposed to public view shall be
painted to match adjacent finishes and shall be as manufactured by F & M,
▇▇▇▇▇▇▇▇ or Central Foundry. Specific details of support methods and location of
hangers must be indicated on Tenant's Plans and are subject to Landlord's
approval. All hangers must be evenly spaced and grouped as much as possible with
supports for other trades to minimize visual clutter in the upper portions of
all spaces exposed to public view. Support systems must be neat and workmanlike,
and free of extra length of support rods below the supported member. Hardware
and accessories must be selected with a smooth finished appearance for the
completed support assembly. Hangers exposed to public view shall be of the
clevis or trapeze type complete with bolts, rods and nuts. All pipe insulation
in areas exposed to public view shall be installed in the most workmanlike
manner and is subject to the approval of Landlord for appearance. Minimum hanger
rod diameter shall not be less than, and the maximum spacing of supports for
steel and copper horizontal piping shall not be greater than, the values in the
latest issue of the ASHRAE Equipment Handbook. Cast iron pipe must be supported
at least
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every five feet and at every joint and fitting. Cast iron pipe branches must
have hangers four foot on center maximum. Where required to meet minimum Spacing
of hangers, Tenant's plumbing contractor is responsible for installing
additional intermediate structural supports.
9. Escutcheons: Tenant shall provide cast brass or chrome
escutcheons with set screw, deep type, to cover sleeves or of a size to cover
fitting projections. Tenant shall provide escutcheons for all exposed piping
through walls, floors and exposed ceiling.
10. Fire protection: Landlord will provide a wet pipe fire
sprinkler system. All modifications, additions or relocations to fire protection
systems shall be performed by Landlord sprinkler contractor at Tenant's expense.
Any proposed changes to materials such as fire sprinkler heads shall be
submitted by Tenant to Landlord for approval. Sprinkler head grid provided in
Tenant spaces shall be as indicated on the Lease Outline Drawings.
11. Condensate drainage: Tenant shall dispose of all condensate
flow within Tenant's Premises. The installation of condensate drainage shall be
through an indirect connection to the sanitary sewer system in accordance with
all applicable governmental requirements.
12. Traps: If the Premises are to be used as a restaurant, Tenant
shall provide back flow prevention and grease traps for all food preparation
areas having pot sinks or any grease-producing appliances that discharge into
the waste system.
D. Electrical Design Criteria:
1. Maximum Demand: The maximum demand of Tenant's electrical
system shall not exceed fifteen (15) ▇▇▇▇▇ per square foot without Landlord's
approval. Any increase in service capability will be at Tenant's expense.
2. Materials: Materials, products and equipment, including all
components thereof shall be new and be identified by Underwriter's Laboratories
as suitable for the purpose, and shall meet the specifications of the National
Electrical Code ("NEC") and applicable governmental requirements. Materials,
products and equipment, including all components thereof, shall be sized in
conformity with the requirements of other recognized standards such as ASTM,
IEEE, IPCEA, NFPA and NEMA, where the requirements of such standards are more
stringent than those cited above. All conductors shall be soft-drawn annealed
copper. Minimum size shall be #12 for power wiring and #14 for control wiring.
Wire shall be 600 volt insulated, NEC type THW, or THHN/THWN. All wire shall be
run in rigid conduit or EMT. No plastic conduit is permitted.
3. Service: Electrical service provided for Tenant will be
277/480 volts, three phase, four wire, 60 cycle. Landlord will provide such
service consisting of a fusible switch or circuit breaker located in the meter
room. From the service point Landlord will provide a conduit sized to
accommodate the maximum allowable Tenant load to a point within or adjacent to
Tenant's Premises. Tenant will provide its own transformer for other voltages as
required. Transformer installations shall conform to NEC and applicable
governmental requirements with respect to location, mounting, grounding and
over-current protection. Transformers shall be drytype, and shall not be hung
from the structure without Landlord's approval. Tenant shall provide feeders,
meter socket, and a disconnect switch for its Premises and shall provide all
wiring and electrical equipment in its Premises.
4. Panelboards: Tenant's distribution and lighting panelboards
within its Premises shall be of the three phase, four wire distributed phasing
type. Tenant's circuiting shall be arranged to present, as nearly as possible,
an evenly balanced load on all phases.
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Panelboards shall be circuit breaker type. All circuit breakers shall have
interrupting capacity at least ten percent (10%) greater than the available
fault current at the breaker location. Available fault current will be stated on
Tenant's panelboard schedule.
5. Installation: All electrical work shall be installed so as to
be readily accessible for operating, servicing, maintaining and repairing. All
conduit shall be concealed where possible. Exposed conduit shall be in straight
lines parallel with, or at right angles to, column lines or beams and separated
by at least three (3) inches from water lines whenever they run alongside or
across such lines. Hangers shall be fastened to steel, concrete or masonry, but
not to piping. Hangers and support systems are an integral part of the visual
environment. All hangers and supports exposed to public view must be shown in
detail on plans submitted to Landlord for approval of appearance. All hangers
must be uniformly spaced and neatly installed with no excess material beyond
what is required for the support function. Tenant shall select accessories and
hardware with a smooth, neat finished appearance and paint all exposed conduit
hangers to match the adjacent finishes.
6. Grounding: Grounding shall consist of copper conductors in
conduit with bolted or brazed connection to cold water line for the neutral.
Grounding and bonding shall comply with NEC Article 250. All metallic raceways
shall be grounded.
7. Timers: Contractors for control of show window lighting and
signs shall be Automatic Switch Company Bulletin 920 series, electrically
operated and mechanically held, or equivalent. Time switches for control of show
window lighting and signs shall be Sangamo Electric Company Type L-12 or
equivalent.
8. Motors: Manual motor starters with overload protection may be
used for fractional horsepower motors. Single phase starters shall be Square D
or equivalent. Threephase starters shall be provided with overload relay in each
phase. Magnetic motor starters shall be used for integral horsepower motors.
Combination starters, when used, shall contain fusible switches. Reduced voltage
starters shall be used for all motors 100 HP and larger. All magnetic motor
starters shall have a control transformer, HOA switch and red pilot light.
Motors shall be designed to latest NEMA Standards. Motors rated 3/4 HP and
larger shall be 460 volt, three phase. Motors rated less than 3/4 HP shall be
115 volt, single phase.
9. Lights: Incandescent fixtures shall be as required by Tenant.
Fluorescent fixtures, where permitted, shall be either rapid start or slimline
lamps with high power factor ballast individually fused. All ballasts for four
(4) foot fluorescent lamps shall be the high efficiency type. Preheat and/or
trigger start fixtures shall be used only in special applications requiring
lamps less than four feet in length. All fixtures shall be selected so as not to
produce, in Landlord's opinion, objectionable glare. Tenants engineer should
also refer to the Lighting Criteria and Signage Criteria sections of this
Exhibit C for additional requirements regarding light fixtures and signage
lighting.
10. Water Heaters: Water heaters in Tenant's Premises that are
rated less than 5000 ▇▇▇▇▇ may be 120 volts single phase or 208 volts single
phase or 227 volts single phase. Those larger than 7000 ▇▇▇▇▇ shall be 480 volt
three phase. Instantaneous type water heaters will not be permitted.
11. NEC/Data Forms: Tenant shall perform all electrical work in
accordance with NEC and all applicable governmental requirements and in
accordance with good engineering practice. All calculations shall conform to the
appropriate articles in NEC. Calculation shall include all branch circuits and
feeder (service) tabulation. Tenant shall complete and submit for Landlord's
approval the forms annexed hereto with respect to Tenant's Service Requirements,
Tenant Electrical Data and the Panelboard Schedule. Tenant's estimated maximum
demand load
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shall be based on the summation of (i) 100% of the air conditioning and
ventilation load (the greater load of cooling or heating); plus (ii) the
percentage of the connected load for kitchen equipment, including refrigerators,
freezers. etc., in accordance with Article 220-20 of the NEC; plus (iii) 100% of
the connected load for electric water heaters; plus (iv) 100% of connected
lighting load (based on lamp wattage for incandescent lamps and ▇▇▇▇▇ input to
the ballast for fluorescent lamps); plus (v) 65% of the connected load of all
appliances not mentioned above; plus illuminated signs (based on the equipment
connected load set forth on the equipment nameplate); plus receptacles (based on
NEC specification).
E. KITCHEN EXHAUST SYSTEMS: (Applicable if Tenant's Premises are used
for restaurant purposes.)
1. General: Tenant shall furnish, install and maintain its own
individual kitchen exhaust and make-up air systems. Make-up air fans and
equipment and kitchen exhaust fans shall be located in equipment areas
designated by Landlord. Kitchen exhaust ducts shall discharge vertically through
the roof. Tenant-provided kitchen hoods will be designed to operate with 85%
direct connected outside air supply from their tempered make-up air system.
Tenant is responsible for providing whatever tempering is required for make-up
air. The balance of the kitchen exhaust shall be drawn from the conditioned
space, in conformance with all applicable codes. Kitchen hoods shall bear
evidence of both UL and FM approval. Kitchen hoods must incorporate a UL listed
fire damper. Make-up air and exhaust systems shall have wiring interconnected so
that one (1) switch operates both units.
2. Fire Protection: Tenant shall furnish, install and maintain in
proper working order a UL-listed fire extinguishing system to protect all
kitchen hoods above cooking areas. Fire extinguishing system must be approved by
Landlord, and meet the requirements of NFPA 96, applicable governmental
requirements, Landlord's insurance carrier and Factory Mutual data sheets 4-10
and 2-8N. Sprinkler heads will be installed by Landlord at Tenant expense in the
horizontal kitchen exhaust ductwork at the midpoint of each offset not more than
ten (10) foot on center and at the top of all vertical kitchen exhaust
ductwork. Sprinkler heads must be located on both sides of a fire damper. Tenant
shall provide a 1/2 inch pipe coupling welded into the side wall of the duct at
each sprinkler head location, as well as the access doors described below.
3. Materials: Make-up air ductwork shall be fabricated from
galvanized sheet metal in accordance with the standards of the Sheet Metal and
Air Conditioning Contractors National Association of America, latest edition.
Kitchen exhaust ductwork shall be constructed of galvanized steel of a thickness
not less than sixteen (16) gauge. Tenant shall continuously weld all
longitudinal joints and transverse joints or provide flanges with 2" x 2" x 18"
galvanized structural rolled angles with high temperature gasket and sealer.
Where applicable, ducts shall be enclosed as required by NFPA 96. Kitchen
exhaust ducts shall be fully insulated with at least 1 1/2 inch of calcium
silicate, or thermally equivalent thickness of other insulation specifically
approved for kitchen exhaust duct insulation. Ductwork for dishwater exhaust
shall be properly pitched to drain to the hood connection and constructed of
rectangular low pressure stainless steel or aluminum material of a thickness not
less than twenty (20) gauge. Ductwork joints shall be fully sealed to prevent
leaking.
4. Cleaning Systems: Cleanout doors shall be provided by Tenant
10' - 0" on centers on the side of the kitchen exhaust duct. Cleanout doors
shall be located to provide access to each sprinkler head located inside the
duct. Bottom edge of cleanout door shall be not less than two inches above the
bottom of the duct. Every run shall have at least one cleanout door. Tenant
shall provide a cleanout door and grease drain at the base of each vertical
section of kitchen exhaust duct. Cleanout door and frame shall be fabricated of
the same gage metal as the duct. Tenant shall provide 1/8 inch thick high
temperature gasket, approved for use on kitchen exhaust ducts, between frame and
duct and between door and frame. If Tenant uses
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water wash type hoods with direct connected water supply for cleaning, Tenant
shall provide a full size waste water connection running to the kitchen drainage
System.
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EXHIBIT D "STATEMENT OF GROSS SALES"
Attn: ▇▇▇▇▇ ▇▇▇▇ Tel# (▇▇▇) ▇▇▇-▇▇▇▇
Fax# (▇▇▇) ▇▇▇-▇▇▇▇
STATEMENT OF GROSS SALES
FOR VENUE: --------------------_
for the period ended: ----------
Month Year-to-date
----- ------------
SALES
Merchandise -------------- --------------
Services -------------- --------------
Vending -------------- --------------
Gift Certificates Sold -------------- --------------
Other (Describe) -------------- --------------
Other (describe) -------------- --------------
TOTAL SALES =================================
LESS ADJUSTMENTS
Voided Transactions -------------- --------------
Returns & Refunds -------------- --------------
Gift Certificates Redeemed -------------- --------------
Coupons -------------- --------------
Taxes included in sales above -------------- --------------
Other (Describe) -------------- --------------
Other (Describe) -------------- --------------
TOTAL ADJUSTMENTS -------------- --------------
=================================
=================================
GROSS SALES (AS DEFINED)
=================================
GROSS SALES BREAKPOINT
---------------------------------
EXCESS
=================================
PERCENTAGE RENT RATE % %
---------------------------------
TOTAL PERCENTAGE RENTAL
=================================
Less Percentage Rental Previously Paid N/A
---------------------------------
PERCENTAGE RENTAL DUE CHECK NO. DATE
-------- --------------
--------------------------------------------------------------------------------
I certify that (i) the above amounts are true and correct, and (ii) this
statement has been prepared in accordance with the provisions of the lease and
is consistent with all prior statements.
--------------------------------------- ---------------------------
NAME & TITLE DATE
--------------------------------------------------------------------------------
90
EXHIBIT F
TENANT'S ESTOPPEL CERTIFICATE
Date:___________, 19__
Tenant's Address: ____________________
____________________
____________________
Gentlemen:
The undersigned, as Tenant, has entered into that certain lease ("Lease"),
dated __________, 199__, with Universal Studios CityWalk Hollywood, a division
of Universal Studios, Inc., as Landlord, for the leasing of certain premises
("Premises") at Universal City commonly known as "CityWalk" the "Project").
Tenant understands that you have offered or committed to enter into a
transaction with Landlord with respect to an interest in Landlord and/or the
Lease and/or the Premises and/or the realty underlying the Premises and/or a
portion of or interest in the realty or improvements in the Project owned or
hereafter acquired by Landlord.
You have requested this Certificate from Tenant as a condition precedent
to consummation of one of the following transactions: sale, purchase, exchange,
transfer, assignment, lease, conveyance, encumbrance, pledge, mortgage or
hypothecation. Any party to any of the aforementioned transactions (a "Relying
Party") may rely upon this Certificate.
In accordance with the terms of the Lease, Tenant ratifies the Lease and
certifies that:
1. The undersigned accepted and began occupancy of the Premises described in
said Lease on ______________, 199__, and the Rent Commencement Date was
_____________, 199__;
2. The undersigned is presently open and conducting business with the public
in the Premises;
3. Minimum Annual Rental in the amount of $__________ is currently payable
under the Lease, and such Minimum Annual Rental has been paid through the
end of the current calendar month;
4. Said Lease is in full force and effect and has not been assigned,
modified, supplemented or amended in any way (except by agreement[s] dated
______________), and neither party thereto is in default thereunder;
91
5. The Lease (as modified by the agreements, if any, listed in Item 4 above)
represents the entire agreement between the parties as to this leasing;
6. The Lease Term expires on ______________, 199__;
7. All conditions under the Lease to be performed by Landlord have been
satisfied, including, without limitation, all co-tenancy requirements
thereunder;
8. All required contributions by Landlord to Tenant on account of Tenant's
improvements have been received;
9. On this date there are no existing defenses, offsets, counterclaims, or
deductions against rental which the undersigned has against the
enforcement of the Lease by Landlord; and
10. No rental has been paid more than one (1) month in advance and no security
(other than a security deposit in the amount of $__________) has been
deposited with Landlord.
Statements made in this Certificate shall be deemed continually updated and
may continue to be relied upon by any Relying Party until ______________, 199__
unless and until notice to the contrary is given by Tenant and received at the
address to which rent is then being paid and also at the following address:
________________________________
________________________________
________________________________
Very truly yours,
________________________________ (Tenant)
By: _________________________
Title: _________________________
2
92
EXHIBIT G
TENANTS INITIAL MERCHANDISE & PRICE LIST
1 OF 6
1999 MASTER MERCHANDISE LIST
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TEES Update 05/04/99
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ITEM YOUTH RETAIL
--------------------------------------------------------------------------------
BL * Full Throttle $ 20.00
Track Schedule $ 20.00 MoA/Dallas Only
Extreme Machine x $ 15.50
DE * DE Crew $ 30.00
DE Heavyweight $ 38.00
DE Racer $ 24.00
Grandstand $ 22.00
It's/Name $ 22.00
Standing $ 22.00
Hot Rod x $ 15.50
DE Jr. * Checkered/Cir $ 20.00
Coast/Coast $ 20.00
New Breed $ 20.00
New Kid x $ 15.50
DJ * DJ Heavyweight $ 38.00
Objects/Mirror $ 20.00
Sponsor $ 20.00
In Motion x $ 15.50
JG * Business/Good $ 24.00
Driving/Force $ 30.00
JG Crew $ 30.00
JG Heavyweight $ 38.00
JG Racer $ 24.00
Fighting Finish $ 18.00
No/Signs $ 22.00
Race Tech $ 18.00
Pepsi Crew $ 30.00
Pepsi Power $ 22.00
Star Wars D/F $ 22.00
Super Race $ 22.00
Superteam $ 18.00
Driving Force x $ 15.50
Generation... x $ 15.50
Star Wars D/F(y) x $ 16.50
Superteam(y) x $ 16.50
MM * Dominator $ 22.00
Race Idol $ 18.00
RW * Atti2ude $ 22.00
RW Heavyweight $ 38.00
True Blue $ 20.00
Taking/Limit x $ 15.50
93
EXHIBIT G
TENANTS INITIAL MERCHANDISE AND PRICE LIST
2 OF 6
--------------------------------------------------------------------------------
TEES, cont.
--------------------------------------------------------------------------------
ITEM YOUTH RETAIL
--------------------------------------------------------------------------------
TL * Don't Mess $ 20.00
Rocket Man x $ 15.50
TS * Toughest $ 20.00
Heavy Duty $ 24.00
BL & TL Two/Texas $ 20.00
DE & Jr. Two Faces x $ 28.00
--------------------------------------------------------------------------------
HATS
--------------------------------------------------------------------------------
ITEM YOUTH RETAIL
--------------------------------------------------------------------------------
BL * ▇▇ ▇▇▇▇▇▇▇▇ $ 23.00
Pit $ 22.00 MoA/Dallas Only
DE * 3 Track $ 23.00
GM/Plus $ 25.00
The Drip $ 20.00
Victory Lane $ 23.00
Wrangler $ 20.00
Be #3 x $ 16.00
DE Jr. * Flag $ 20.00
Oval $ 18.00
▇▇▇▇▇ Champ $ 23.00
DJ * FQCS/FC $ 23.00
Sponsor $ 18.00
DJ Car x $ 16.00
JG * Big Car $ 25.00
Blk. Slouch $ 23.00
Brush Stroke $ 24.00
Pepsi Racing $ 23.00
Pepsi Visor $ 23.00
Star Wars $ 24.00
Superman $ 23.00
Be #24 x $ 16.00
Star Wars(y) x $ 16.50
Superman(y) x $ 16.50
MM * MM Domestic $ 20.00
RW * ▇▇▇▇▇▇/Flame $ 24.00
Twist/Open $ 18.00
RW Car x $ 16.00
TL * ▇▇ ▇▇▇▇▇▇▇▇ $ 23.00
TS * Sandwich $ 23.00
Up Front x $ 20.00
--------------------------------------------------------------------------------
SPECIALTY
--------------------------------------------------------------------------------
ITEM YOUTH RETAIL
--------------------------------------------------------------------------------
Logo L/S Tee $ 16.50
DE * DE Crew Jkt. $155.00
94
EXHIBIT G
TENANTS INITIAL MERCHANDISE AND PRICE LIST
3 OF 6
DE Yth Jkt. x $ 75.00
--------------------------------------------------------------------------------
SPECIALTY
--------------------------------------------------------------------------------
ITEM YOUTH RETAIL
--------------------------------------------------------------------------------
DE Top Groove $ 38.00
DE HW Jersey
DJ * DJ Crew Jkt. $155.00
DJ DJ Top Groove $ 38.00
DJ HW Jersey
JG * JG Crew Jkt. $155.00
JG Twill $120.00
JG Yth Jkt. $ 75.00
JG Top Groove $ 38.00
JG HW Jersey
MM MM Twill $155.00
RW * RW Crew Jkt. $120.00
RW Twill Jkt. $155.00
RW Top Groove $ 38.00
RS HW Jersey
--------------------------------------------------------------------------------
SWEATS
--------------------------------------------------------------------------------
ITEM YOUTH RETAIL
--------------------------------------------------------------------------------
DE * Steel Hood
Team Color Block
DJ * Team Color Block
JG * Steel Hood
Team Color Block
MM * Team Color Block
RW Team Color Block
--------------------------------------------------------------------------------
DIE-CAST
--------------------------------------------------------------------------------
ITEM YOUTH RETAIL
--------------------------------------------------------------------------------
BL * 1:24 Interstate $ 49.95
1:64 Interstate $ 9.95
DE * Bank 25th ▇▇▇. $ 59.95
Crystal 25th ▇▇▇. $109.95
Pedal 25th ▇▇▇. $ 39.95
1:24 25th ▇▇▇. $ 59.95
1:64 25th ▇▇▇. $ 11.95
* Bank GW Plus $ 49.95
Crystal GW Plus $ 89.95
Pop Up GW Plus
1:24 GW Plus $ 49.95
1:64 GW Plus $ 9.95
* Bank Wrangler
1:24 Wrangler
1:64 Wrangler
DE Jr. * Pedal AC Delco
95
EXHIBIT G
TENANTS INITIAL MERCHANDISE & PRICE LIST
4 OF 6
Pop Up AC Delco $ 49.95
1:24 AC Delco $ 9.95
1:64 AC Delco $ 49.95
DE, Jr. * Bank Bud $ 89.95
Crystal Bud
Pedal Bud $ 49.95
1:24 Bud $ 9.95
1:64 Bud $ 42.95
Pump Bud
Crystal Superman(Jr.)
Pedal Superman(Jr.)
1:24 Superman(Jr.)
1:64 Superman(Jr.)
DJ * Bank QC $ 49.95
1:24 QC $ 49.95
1:64 QC $ 9.95
1:24 Winston
1:64 Winston
EI * Bank Crispy
1:24 Crispy
1:64 Crispy
JG * Crystal Baby ▇▇▇▇ $ 89.95
* 1:24 Carolina '91 $ 49.95
* Bank Dupont $ 49.95
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ $ 89.95
Pedal Dupont
Pop Up Dupont
1:24 Dupont $ 49.95
1:64 Dupont $ 9.95
Pump Dupont $ 42.95
* Bank Pepsi $ 49.95
1:24 Pepsi $ 49.95
1:64 Pepsi $ 9.95
* Bank Star Wars
Helmet Star Wars
Pedal Star Wars
Pit Wagon Star Wars
1:24 Star Wars
1:64 Star Wars
* Crystal Superman(JG)
Pedal Superman(JG)
1:24 Superman(JG) $ 79.95
1:64 Superman(JG) $ 14.95
JM * Bank Ky Derby $ 49.95
1:24 Ky Derby
1:64 Ky Derby
96
EXHIBIT G
TENANTS INITIAL MERCHANDISE & PRICE LIST
5 OF 6
* 1:24 Mobil 1
1:64 Mobil 1
KI * 1:24 Texaco $ 49.95
--------------------------------------------------------------------------------
DI-CAST, cont.
--------------------------------------------------------------------------------
ITEM YOUTH RETAIL
--------------------------------------------------------------------------------
RW * 1:24 Texas '99 $ 62.95
1:64 Texas '99 $ 11.95
SM * 1:24 J Wayne
TL * Bank Kellogg's $ 49.95
1:24 Kellogg's $ 49.95
1:64 Kellogg's $ 9.95
TS * Bank Home Depot $ 49.95
1:24 Home Depot $ 49.95
1:64 Home Depot $ 9.95
--------------------------------------------------------------------------------
ACCESSORIES
--------------------------------------------------------------------------------
ITEM YOUTH RETAIL
--------------------------------------------------------------------------------
Acrylic Std. $ 25.00
Acrylic Tilt $ 25.00
Acrylic Dbl. $ 60.00
DE * Hood $110.00
Night Light $ 15.00
Switch Plate $ 6.50
DJ * Hood $110.00
Night Light $ 15.00
Switch Plate $ 6.50
JG * Hood $110.00
Night Light $ 15.00
Switch Plate $ 6.50
RW * Hood $110.00
Night Light $ 15.00
Switch Plate $ 6.50
--------------------------------------------------------------------------------
SOUVENIRS
--------------------------------------------------------------------------------
ITEM YOUTH RETAIL
--------------------------------------------------------------------------------
* 99 Track Map $ 5.95
BL * BL 1:87 Keychain $ 6.50
BL Tattoo $ 2.75
DE * DE 1:87 Keychain $ 6.50
DE Shot Glass $ 6.50
DE Tattoo $ 2.75
DJ * DJ Tattoo $ 2.75
JG * JG 1:87 Keychain $ 6.50
JG Shot Glass $ 6.75
* JG Tattoo $ 2.75
RW * RW Shot Glass $ 6.75
RW Tattoo $ 2.75
97
EXHIBIT G
TENANTS INITIAL MERCHANDISE & PRICE LIST
6 OF 6
TL TL 1:87 Keychain $ 6.50
▇▇ ▇▇ ▇▇▇▇ $ 5.50
DE DE Hood $ 5.50
DJ ▇▇ ▇▇▇▇ $ 5.50
▇▇ ▇▇ ▇▇▇▇ $ 5.50
--------------------------------------------------------------------------------
SOUVENIRS
--------------------------------------------------------------------------------
ITEM YOUTH RETAIL
--------------------------------------------------------------------------------
Pepsi $ 5.50
RW RWHood $ 5.50
TL ▇▇ ▇▇▇▇ $ 5.50
98
EXHIBIT H
STAIRWAY MODIFICATION
1 OF 2
[FLOOR PLAN]
▇▇▇ ▇▇▇▇▇ RENOVATION
STAIR MODIFICATION@SC79
EAST EXIT STAIR
FIRST ▇▇▇▇▇
▇-▇▇-▇▇
▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ MODIFICATION
2 OF 2
[FLOOR PLAN]
▇▇▇ ▇▇▇▇▇ RENOVATION
STAIR MODIFICATION@SC79
EAST EXIT STAIR
UPPER PORTION OF SPACE
6-24-99