Exhibit 10.122
Lease Agreement - Aladdin
SHOPPING CENTER LEASE
In consideration of the rents and covenants hereinafter set forth, Landlord
leases to Tenant, and Tenant leases from Landlord, the Premises upon the terms
and conditions of this Shopping Center Lease ("Lease") entered into and dated
("Execution Date").
ARTICLE 1
FUNDAMENTAL LEASE PROVISIONS
1.1 Landlord: ALADDIN BAZAAR, LLC,
a Delaware limited liability company
1.2 Tenant: TOYS INTERNATIONAL,
a California corporation
1.3 Tenant's Trade Name: TOYS INTERNATIONAL (Section 9.1)
1.4 Premises:
That certain retail space currently identified as "Space No.
1-H-(Sectiont2.1)hopping Center known as "Desert Passage at Aladdin," located in
the County of ▇▇▇▇▇, State of Nevada, containing 5,898 square feet of Floor Area
(subject to Section 2.7) with a frontage of approximately 48.5 feet. The
Premises are shown in that approximate location crosshatched on Exhibit A.
1.5 Lease Term:
Approximately ten (10) years. (Section 3.1)
1.6 Target Delivery Date:
Ninety (90) days prior to the initial opening o(Sectiono2.3)g Center.
1.7 Expiration Date:
The last day of the one hundred twentieth (120th) full
ca(Sectiono3.1)following the Rent Commencement Date (if the Rent Commencement
Date falls on the first (1st) day of a calendar month, then the calendar month
in which the Rent Commencement Date occurs shall be deemed to be the first full
calendar month for the determination of the Expiration Date).
1.8 Rent Commencement Date:
The earlier to occur of (a) that date which is t(Section 4.1)ccur of (i)
the initial opening of the Shopping Center or (ii) that date which is ninety
(90) days following Substantial Completion or (iii) March 1, 2000; or (b) the
date Tenant first opens for business in the Premises.
1.9 Minimum Annual Rent:
Eighty-Five and No/100 Dollars ($85.00) per ▇▇▇(Sectionq4.2) foot of Floor
Area of the Premises, beginning with the Rent Commencement Date and continuing
for the next two (2) full years of the Lease Term plus any partial calendar
month at the beginning of the Lease Term; then, Ninety-Five and No/100 Dollars
($95.00) per annum per square foot of Floor Area of the Premises for the next
three (3) full years; then, One Hundred and No/100 Dollars ($100.00) per annum
per square foot of Floor Area of the Premises for the remainder of the Lease
Term.
1.10 Percentage Rent:
Seven percent (7%) of Gross Sales in excess of t(Sectionp4.3).
1.11 Marketing Assessment:
Four and No/100 Dollars ($4.00) per annum per s(Sectiono8.2) Floor Area of
the Premises.
1.12 Addresses for Notices:
(Article 23)
To Landlord:
ALADDIN BAZAAR, LLC
c/o TrizecHahn Development
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Legal Department
and to: Landlord's manager at the Shopping Center.
and: Any notice of default required to be sent to Fleet National Bank in
accordance with Exhibit G to the Lease.
Fleet National Bank
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇ BO F11C
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (or her successor)
To Tenant:
TOYS INTERNATIONAL
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
1.13 Permitted Use: Primarily for the retail sale of upscale, brand name
toys and, at T(Sectiono9.1)n (but only to the extent incidental to the primary
operation of a toy store): better quality collectibles, hobbies, arts and
crafts, children's books, dolls, model kits (provided that the display of such
model kits shall not exceed twenty-five percent (25%) of the retail sales Floor
Area of the Premises), child-oriented games, child-oriented video and audio
cassettes, child-oriented compact and laser discs, and other technological
innovations thereof, child-oriented computer software, sporting goods, wheel
goods, stuffed animals, other juvenile and child-related goods, children's
apparel (provided that the display of such children's apparel shall not exceed
ten percent (10%) of the retail sales Floor Area of the Premises), and such
other items as are typically displayed in toy stores located within first-class
regional shopping centers. It is expressly agreed and understood by Tenant that
the Premises must at all times be merchandised in a unique, world class manner,
including, without limitation, a variety of themed boutiques (such as, by way of
example only, a "Barbie Boutique") as well as other unique theming consistent
with the quality of the theming of the Shopping Center. Tenant shall use the
Premises for no other use or purpose. The Permitted Use is expressly subject to
Section 9.4.
1.14 Security Deposit:
None. (Article 26)
1.15 Exhibit C Charge:
None. (Section 4.10)
1.16 Initial Assessment:
Four and No/100 Dollars ($4.00) per square foot of Floor
A(Sectionh8.4)emises.
The provisions of this Article 1 summarize certain terms of this Lease
which are more fully described in the balance of this Lease. In the event of a
conflict between the provisions of Article 1 and the balance of this Lease, the
latter shall control. Capitalized terms used in this Lease shall have the
meanings set forth or cross-referenced in Exhibit B or otherwise defined in the
body of this Lease.
ARTICLE 2
PREMISES
2.1 Condition. Landlord shall deliver to Tenant and Tenant shall accept
from Landlord, possession of the Premises upon Substantial Completion.
Landlord's certification of Substantial Completion shall be conclusive and
binding upon Landlord and Tenant, provided, however, that Tenant may within
thirty (30) days after Substantial Completion deliver to Landlord a list of any
claimed defects in Landlord's Work, and Landlord shall thereafter proceed to
cure any such defects. Further, Landlord shall warrant the Premises against
latent defects for a period of one (1) year following Substantial Completion.
2.2 Title of Premises. Tenant acknowledges that Tenant's leasehold interest
in the Premises is subject to (a) covenants, conditions, restrictions,
easements, Mortgages, and other matters of record, (b) the REA, (c) the effect
of all Legal Requirements, including any local zoning laws; and (d) general and
special taxes not delinquent. Landlord warrants that none of the matters
contained in the REA and/or the Mortgage shall adversely affect the Permitted
Use.
2.3 Delay in Delivery; Project Abandonment. If Landlord cannot deliver
possession of the Premises to Tenant on the Target Delivery Date for any reason,
Landlord shall not be subject to any liability therefor. Such failure of
delivery shall not affect the validity of this Lease or the obligations of
Tenant hereunder (except as expressly provided for in this Lease), or extend the
Expiration Date. If Landlord is unable to deliver possession of the Premises to
Tenant on or before January 1, 2001, for any reason (including without
limitation abandonment of the construction of the Shopping Center) then either
Landlord or Tenant, in either party's sole and absolute discretion, shall have
the option at any time thereafter (until possession is so delivered) to notify
the other party of its intent to terminate this Lease in which event this Lease
shall terminate and both Landlord and Tenant shall be released from any
liability or obligation under this Lease.
2.4 Relocation or Termination. If in connection with Landlord's expansion,
reduction, removal, renovation or construction of new or existing improvements
after the initial opening of the Shopping Center (but excluding reconfiguration
required solely to accommodate other Shopping Center tenants or to reconfigure
existing leasable spaces) Landlord reasonably determines that it is necessary
that Tenant vacate the Premises or that the Premises be altered, Landlord may
require that Tenant surrender possession of the Premises, provided Landlord, in
its sole and absolute discretion , either (a) amends this Lease to lease Tenant
other comparable premises within the Shopping Center on the same terms and
conditions as those contained in this Lease for the balance of the remaining
Lease Term, or (b) terminates this Lease and pays Tenant an amount equal to the
then unamortized net cost to Tenant of its Improvements, calculated using a
straight-line amortization schedule and an amortization period equal to the
Lease Term. The relocation of the Premises in accordance with (a) herein or the
payment of the consideration in accordance with (b) herein shall be Tenant's
sole remedy in the event Tenant is required to surrender possession of the
Premises as provided in this Section. It is expressly agreed and understood that
Landlord shall first offer to lease Tenant other comparable premises within the
Shopping Center if available, in Landlord's sole, yet reasonable discretion. The
foregoing provisions of this Section 2.4 shall be subject to the following:
(a) Comparable premises shall be deemed to mean premises which are
substantially the same in size (not less than 3,898 square feet or more than
7,898 square feet in size and having a mall frontage of 28.5 feet or more) and
similar in location with respect to vertical transportation within the Shopping
Center; provided, however, in no event shall Landlord be obligated to offer to
Tenant any location which Landlord is prevented from leasing to Tenant pursuant
to covenants of Landlord respecting radius, location, use, or exclusivity
contained in any other lease, financing agreement (including the Mortgage), or
other agreement affecting the Shopping Center. If more than one (1) comparable
premises is available in the Shopping Center as determined by Landlord's sole,
yet reasonable judgement, Landlord shall offer Tenant the comparable premises
that is closest in proximity to the Premises. Landlord shall pay the cost and
expense of finishing the new premises to the extent of the quality and condition
of the decor (including all Improvements but excluding Personal Property) which
existed in the Premises immediately prior to relocation;
(b) Landlord shall give Tenant at least ninety (90) days notice of
Landlord's intention to relocate the Tenant;
(c) Landlord shall not have the right to relocate the Tenant more than one
(1) time during the Lease Term and in no event shall relocation occur from
August 1st through October 31st;
(d) The physical relocation of Tenant's Personal Property from the Premises
to the new premises shall be accomplished by Landlord at Landlord's cost and
expense;
(e) Landlord shall exercise due diligence in the relocation of the Tenant
and Minimum Annual Rental and Additional Rent shall ▇▇▇▇▇ during any period that
the business conducted upon the Premises must be closed as a result of such
relocation, which closure shall not exceed seven (7) days;
(f) If the new premises differ in size from the Premises as it existed
before the relocation, Minimum Annual Rent and all Additional Rent that is
calculated based on Floor Area shall be calculated on the basis of the Floor
Area of the new premises;
(g) The parties shall immediately execute an amendment to this Lease
documenting the relocation of the Tenant and the reduction or increase in the
Floor Area of the Premises;
(h) All incidental costs incurred by Tenant as a result of the relocation
including without limitation, costs incurred in change of address on stationery,
business cards, directories, advertising, and other such items, shall be paid by
Landlord, in a sum not to exceed Seven Hundred Fifty Dollars ($750) in the
aggregate;
(i) If Tenant (in its sole and absolute discretion) and Landlord are unable
to agree upon comparable premises for the purposes of relocation pursuant to
this Section 2.4 within thirty (30) days of Landlord's notice to Tenant of its
intent to relocate Tenant, then this Lease shall terminate and Landlord shall
compensate Tenant for its reasonable damages. For purposes of this Section 2.4,
reasonable damages shall be defined as the unamortized net cost to Tenant of its
Improvements with a straight-line amortization period equal to the Lease Term.
2.5 Reserved Easement. Landlord shall have the right from time to time
during the Lease Term to install, relocate, maintain, and operate conduits,
facilities, and structures comprising the Air Conditioning System and permitting
the conveyance of Utilities in and through the space above the ceiling (or
ceiling line if there is no ceiling) in the Premises. If Landlord desires to
relocate any such conduits, facilities or structures, Tenant shall have the
right to approve such relocation, which approval shall not be unreasonably
withheld so long as such items remain above the ceiling or ceiling line.
Landlord further reserves the right to use up to one percent (1%) of the Floor
Area of the Premises as Landlord may designate at any time to accommodate items
serving other tenants or resulting from the remodeling or expansion of the
Shopping Center, including without limitation columns, shafts, ducts, and pipes,
provided such portion is located adjacent to a wall other than the storefront
and such items are either not visible from the Premises sales area or are
reasonably concealed in a manner which does not materially detract from the
appearance of Tenant's store.
2.6 Right to Enter. Landlord and/or its authorized representatives shall
have the right to enter the Premises at all reasonable times for the purpose of
showing the Premises to prospective purchasers or lenders. Tenant additionally
shall permit Landlord, or its authorized representatives, to enter the Premises
at all times during usual business hours upon reasonable notice (except in the
case of an emergency, in which case Landlord may enter as reasonably necessary)
to inspect the Premises, to perform its duties under this Lease, and to perform
any work therein (a) that may be necessary to comply with Legal Requirements,
(b) that Landlord may deem necessary to prevent waste or deterioration of the
Premises or Shopping Center, and (c) that Landlord may deem necessary in
connection with the expansion, reduction, remodeling or renovation of any
portion of the Shopping Center. Landlord agrees that it shall use reasonable
efforts to perform any work it is required or permitted to perform under this
Section 2.6 in such manner and at such times as to not unreasonably or
materially disturb Tenant's business operations, except in the case of an
emergency. In the event work is performed by Landlord in accordance with this
Section 2.6, except to the extent such work was caused by Tenant's failure to
perform its obligations under this Lease, and said work renders the Premises
untenantable for a period of at least three (3) consecutive days, thereafter
Minimum Annual Rent and recurrent Additional Rent (except Percentage Rent) shall
be abated proportionately with the degree in which Tenant's use of the Premises
is impaired and such abatement shall continue during the period in which Tenant
is unable to operate its business in the Premises as a result of such work.
2.7 Right to Measure Floor Area of Premises. Within thirty (30) days
following Substantial Completion, Tenant, at its sole cost and expense, or
Landlord, at its sole cost and expense, may elect to cause the Floor Area of the
Premises to be measured by a licensed architect. In the event such calculation
reflects a deviation of more than one percent (1%) from the Floor Area set forth
in Section 1.4, and the other party approves the calculation, this Lease shall
be amended to reflect the recalculated Floor Area. If the parties do not
exercise their right to measure the Floor Area as provided herein, both Landlord
and Tenant hereby acknowledge and agree that each party shall automatically be
deemed to have absolutely and unconditionally (i) waived such right, (ii)
accepted the Floor Area calculation as set forth in Section 1.4, and (iii)
released and waived any rights the parties may have against one another in the
event the Floor Area calculation set forth in Section 1.4 is different from the
actual Floor Area.
ARTICLE 3
LEASE TERM
3.1 Duration. This Lease shall become fully effective and binding as of the
Effective Date. The "Lease Term" means that period commencing on the
Commencement Date and continuing through the Expiration Date, unless sooner
terminated as provided in this Lease or by law.
3.2 Surrender of the Premises. At the Expiration Date or earlier
termination of this Lease, Tenant shall remove all Personal Property from the
Premises and surrender possession of the Premises to Landlord in broom clean
condition and good state of repair, except ordinary wear and tear, damage or
destruction covered by Article 18, and any repair Landlord is obligated to
perform pursuant to this Lease.
3.3 Failure to Surrender Possession and Liquidated Damages. Landlord and
Tenant acknowledge and agree that any failure of Tenant to surrender possession
of the Premises on the Expiration Date or earlier termination of this Lease
shall result in substantial damages to Landlord, and that those damages are and
will be impossible or impracticable to measure. Accordingly, if Tenant does not
surrender possession of the Premises to Landlord as set forth herein, Tenant
shall be deemed a hold over tenant at sufferance . During the period of any such
hold over tenancy, Tenant shall pay to Landlord, as liquidated damages, for each
day that Tenant holds over in the Premises, an amount equal to two (2) times the
portion of the Minimum Annual Rent payable during the last month of the Lease
Term, plus an amount equal to the Additional Rent (including Percentage Rent)
which was payable by Tenant in the last full calendar year prior to the
Expiration Date or earlier termination of this Lease, prorated on the basis of a
365-day year; provided, however, that Tenant's obligation to pay such liquidated
damages shall not commence until the tenth (10th) day following Landlord's
notice to Tenant stating Landlord's intent to enforce the provisions of this
Section 3.3 and until the commencement of such liquidated damages, Tenant shall
pay the Minimum Annual Rent and Additional Rent as payable by Tenant in the last
full calendar year prior to the Expiration Date or earlier termination of this
Lease. No provision of this Lease shall be deemed to permit Tenant to retain
possession of the Premises after the Expiration Date or earlier termination of
this Lease. Except as otherwise specifically stated in this Lease, all of the
terms and conditions of this Lease shall remain in effect following any
extension, renewal or hold over of the original Lease Term.
ARTICLE 4
RENT
4.1 Rent Commencement Date. Tenant's obligation to pay Minimum Annual Rent
and Additional Rent shall commence upon the Rent Commencement Date.
Notwithstanding anything to the contrary contained herein, (i) in the event the
completion by Landlord of any punch list items pursuant to Section 2.1
materially interferes with Tenant's ability to perform Tenant's Work, the 90-day
period described in Section 1.8 shall be extended by one day for each full day
in which Tenant is so delayed and/or (ii) in the event that on the date of
delivery of the Premises to Tenant, the condition of the Premises is not in
substantial conformity with the Tenant Package provided by Landlord for Tenant's
use in the preparation of its plans and as a result the plans for Tenant's Work
must be revised, the 75-day period described in Section 1.8 shall be extended to
allow a commercially reasonable period of time (with Tenant acting diligently
and in good faith) for Tenant to prepare revised plans, obtain Landlord's
approval, and obtain a new building permit, if required.
4.2 Minimum Annual Rent. Tenant shall pay Minimum Annual Rent in twelve
(12) equal monthly installments during each year of the Lease Term, in advance,
on the first day of each calendar month, without setoff, deduction, prior notice
or demand.
Notwithstanding anything to the contrary contained herein, it is agreed
that commencing on the thirtieth (30th) day following the date Tenant has opened
for business and so long as Tenant continuously remains open for business, the
Minimum Annual Rent set forth in Article 1 shall be abated until such time (the
foregoing period is referred to as the "Initial Abatement Period") as there are
initially open for business tenants occupying at least seventy-five percent
(75%) of the total leasable Floor Area in the Shopping Center. Until such time
as the aforementioned contingency has been met, Tenant shall pay to Landlord the
lesser of (i) the monthly Minimum Annual Rent otherwise payable or (ii) the
amount equal to seven percent (7%) of Tenant's Gross Sales monthly in arrears on
or before the twentieth (20th) day of each month, and further provided that
during said prior period Tenant shall pay all other charges called for in the
manner provided for in this Lease except Minimum Annual Rent. The foregoing
abatement shall in no event change or modify the Rent Commencement Date.
Then, after the conditions for the Initial Abatement Period have been
satisfied and so long as Tenant continuously remains open for business, the
Minimum Annual Rent set forth in Article 1 shall be abated during any period
("On-Going Abatement Period") in which less than seventy-five percent (75%) of
the total leasable Floor Area in the Shopping Center is open for business in the
Shopping Center. During any such On-Going Abatement Period, Tenant shall pay to
Landlord the lesser of (i) the monthly Minimum Annual Rent otherwise payable or
(ii) the amount equal to seven percent (7%) of Tenant's Gross Sales monthly in
arrears on or before the twentieth (20th) day of each month, and further
provided that during the On-Going Abatement Period Tenant shall pay all other
charges called for in the manner provided for in this Lease except Minimum
Annual Rent.
In the event the Initial Abatement Period or the On-Going Abatement Period
continue for more than 365 consecutive days, then Landlord shall have the right
to terminate this Lease upon thirty (30) days written notice to Tenant,
provided, Tenant shall have the right to nullify Landlord's termination notice
by notifying Landlord of its intention to pay the Minimum Annual Rent in
accordance with Article 1, and Article 4, Section 4.2 of this Lease (followed by
actual compliance therewith). Upon such termination, both Landlord and Tenant
shall be released from any further liability under this Lease.
4.3 Percentage Rent.
(a) In General. Tenant shall pay Percentage Rent for each partial or full
calendar year of the Lease Term calculated based on Gross Sales for such period.
Said payments of Percentage Rent shall commence with the calendar month in which
Tenant's Gross Sales first exceed the Breakpoint for such full or partial
calendar year. Said payments shall equal that amount which is the product of the
Percentage Rent figure (specified in Article 1) multiplied by the amount of
Gross Sales in excess of the Breakpoint. Said payments shall be payable
concurrently with Tenant's submittal of the monthly statements of Gross Sales in
accordance with the provisions of Section 4.3(b). Anything to the contrary
notwithstanding, in the event Minimum Annual Rent is abated in accordance with
any provisions of this Lease (other than Section 4.2 and Section 9.6), the
Breakpoint shall be adjusted accordingly.
The total Percentage Rent due and payable for a calendar year shall be
computed based on Tenant's annual statement of Gross Sales for that year and if
Tenant paid an amount greater than the actual Percentage Rent payable, the
amount of such overpayment shall be credited against Tenant's next required
payment of Additional Rent or, at the end of this Lease Term, receive a refund
thereof from Landlord, except to the extent Tenant is in monetary default under
the terms of this Lease and no other amounts are owed to Landlord; if Tenant
paid an amount less than the required Percentage Rent, then Tenant shall pay
such difference to Landlord together with Tenant's annual statement of Gross
Sales for said calendar year.
Notwithstanding anything to the contrary contained in this Section 4.3, for
the purpose of computing Percentage Rent due for a partial calendar year
occurring at the beginning of the Lease Term, Gross Sales made during that
partial year shall be added to the Gross Sales made during the first full
calendar year after the Rent Commencement Date and said payments of Percentage
Rent shall commence with the calendar month in which Tenant's Gross Sales first
exceed the Breakpoint for this entire period
(b) Reporting of Gross Sales. Tenant agrees to furnish to Landlord a
statement of Gross Sales within twenty (20) days after the close of each
calendar month, and an annual statement, including a monthly breakdown of Gross
Sales, within forty-five (45) days after the close of each calendar year during
the Lease Term and any partial calendar year at the beginning or end of the
Lease Term; provided, however, that Tenant shall cause its store manager to
orally transmit to Landlord monthly Gross Sales within ten (10) days after the
close of each calendar month and annual Gross Sales within thirty (30) days
after the close of each calendar year. It is agreed, however, that should Tenant
fail twice during the Lease Term to submit its written report of monthly and/or
annual Gross Sales within the time periods as provided for herein, then Tenant
shall, for the remainder of the Lease Term, be required to submit its written
monthly statements of Gross Sales within ten (10) days after the close of each
calendar month and to submit its written annual statements of Gross Sales within
thirty (30) days after the close of each calendar year. Such statements shall
itemize all elements of Gross Sales and Gross Sales Adjustments, and shall be
certified as true and correct by a Responsible Officer of Tenant. The receipt by
Landlord of any statement or any payment of Percentage Rent for any period shall
not bind Landlord as to the correctness of such statement or payment. Upon
request, Tenant agrees to furnish to Landlord a copy of Tenant's state and local
sales and use tax returns, if required in the state where the Shopping Center is
located, but only to the extent such returns are limited to the business
conducted upon the Premises. Tenant shall record at the time of sale, in the
presence of the customer, all receipts from sales or other transactions using a
cash register or computer system that cumulatively numbers and records all
receipts. Tenant and its subtenants, licensees, and concessionaires, shall keep
(i) full and accurate books of account and records in accordance with generally
accepted accounting principles consistently applied, including without
limitation, a sales journal, general ledger, and all bank account statements
showing deposits of Gross Sales revenue, (ii) all cash register detail tapes
with regard to all transactions of Gross Sales, and (iii) detailed original
records of all Gross Sales Adjustments. Such books, receipts, and records shall
be kept by Tenant for a period of three (3) years after the close of each
calendar year and during such 3-year period shall be available for inspection
and audit by Landlord and its representatives at the Premises or Tenant's
principal place of business at all times during regular business hours upon no
less than twenty (20) days prior notice. It is agreed, however, that Landlord's
right to inspect or audit shall be limited to once every calendar year, provided
(i) that in the event any audit reveals an understatement of annual Gross Sales
of more than two percent (2%), said limit shall thereafter be inapplicable, and
(ii) that in the event any audit shall result in a dispute between Landlord and
Tenant, and such dispute may be resolved by another audit, Landlord shall be
entitled to a second audit. Any corrections or adjustments to Gross Sales
previously reported by Tenant which will result in a refund to Tenant must be
reported to Landlord within the three (3) year period following the end of the
calendar year in which such Gross Sales were made. If it shall be determined as
a result of an audit that there has been a deficiency in the payment of
Percentage Rent, then such deficiency shall become immediately due and payable
with interest at the Interest Rate from the date when said payment was due or if
such audit determines that there has been an overpayment of Percentage Rent the
amount of such overpayment shall be credited against Tenant's next required
payments of Additional Rent. In addition, if Tenant understates annual Gross
Sales by more than three percent (3%) and if Landlord is entitled to any
additional Percentage Rent as a result, or if an audit shows that Tenant has
failed to maintain the books of account and records as required or fails to
appear for and/or cooperate with Landlord's audit representative and, as a
result, Landlord is unable to verify the accuracy of Tenant's statement, then
Tenant shall pay to Landlord all reasonable costs and expenses incurred by
Landlord in conducting such audit and collecting any underpayment. Any
information gained from such audits, statements 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 statements 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.
(c) New Locations. If during the Lease Term, Tenant, or any director or
officer of Tenant, or any parent, subsidiary or other affiliate of Tenant,
directly or indirectly, operates or owns under Tenant's Trade Name or otherwise
any similar type of business ("Competing Business") not so operated or owned on
the Execution Date within a radius of five (5) miles from the location of the
Shopping Center (excluding a store in the shopping center commonly known as the
"Venetian"), Tenant's right to terminate pursuant to Section 4.3(d) of this
Lease shall be null and void.
(d) Mutual Right to Terminate Based on Gross Sales. Landlord or Tenant
shall have a one (1) time right to terminate this Lease by written notice to the
other party, which notice must be given, if at all, during the first ninety (90)
days following the thirty-sixth (36th) full calendar month of the Lease Term.
Such termination shall be effective on the ninetieth (90th) day after such
notice is given. This right to terminate shall be null and void in the event
Tenant's Gross Sales exceed Three Million and No/100 Dollars ($3,000,000.00)
during any one of the first three (3) years (year being defined as twelve [12]
consecutive full calendar months) of the Lease Term and, further, Tenant's right
to terminate shall be null and void in the event Tenant is in default of this
Lease, beyond any applicable cure period, as of the date of the termination
notice. Notwithstanding anything to the contrary contained herein, Tenant's
right to terminate this Lease pursuant to this Section 4.3(d) shall be null and
void in the event a Competing Business exists as provided in Section 4.3(c) of
this Lease.
4.4 Additional Rent. Tenant shall pay all Additional Rent without setoff,
deduction, prior notice or demand in the amounts and in the manner set forth in
this Lease.
Tenant's payments of Additional Rent pursuant to Articles 5, 6, and 7 shall
be payable in the following manner:
(a) Estimate. Commencing with the Rent Commencement Date and continuing
throughout the balance of the Lease Term, Tenant shall pay Landlord, on the
first day of each calendar month, those amounts Landlord estimates to be
Tenant's share of the aforementioned Additional Rent. Landlord may adjust such
monthly estimates at the end of any calendar quarter on the basis of Landlord's
experience and reasonably anticipated costs.
(b) Reconciliation. Following the end of each calendar year or property tax
installment period, as applicable, Landlord shall furnish Tenant separate
statements for the Additional Rent payable by Tenant pursuant to Articles 5, 6,
and 7. Such statements shall cover the billing period showing the total of the
applicable Additional Rent expenses, Tenant's share of such expenses for such
billing period, and the total prior amounts payable by Tenant with respect to
such period in accordance with subsection (a) of this Section. Upon written
request, Landlord will provide Tenant with the method of calculation of Tenant's
share. If Tenant's share of the Additional Rent expenses exceeds the total of
Tenant's payments with respect thereto, Tenant shall pay Landlord the deficiency
within thirty (30) days after receipt of such statement. If said payments exceed
Tenant's share of the specified Additional Rent expenses, such excess shall be
offset against the payments next due Landlord for the same Additional Rent
expense with a refund of any excess remaining at the expiration or earlier
termination of the Lease Term except to the extent Tenant is in monetary default
under this Lease. If it shall be determined as a result of an audit that there
has been an overpayment in the payment of Additional Rent due to Landlord's
miscalculation of the year end reconciliation, then such overpayment shall be
credited to Tenant's next payment of Additional Rent with a refund of any excess
remaining at the expiration or earlier termination of the Lease Term except to
the extent Tenant is in monetary default under this Lease.
(c) Tenant's Right to Audit. Provided Tenant is not in default under any
provision of this Lease after notice and expiration of the applicable cure
period, if any, provided for in Article 16, within twelve (12) months after the
receipt by Tenant of the annual statement with respect to any item of Additional
Rent for a calendar year, or tax year, if applicable with respect to taxes,
Tenant may, upon no less than thirty (30) days' prior written notice to
Landlord, audit Landlord's books pertaining to such Additional Rent payable by
Tenant pursuant to Articles 5, 6, and 7 for such calendar year or tax year, as
the case may be. Tenant's audit shall be performed by a certified public
accountant who is retained strictly on a non-contingency basis. The audit shall
be conducted at the office designated by Landlord and shall be during usual
business hours. Tenant's right to audit shall be restricted to one (1) per
calendar year and shall be at the sole cost and expense of Tenant. In no event
shall Tenant's right to audit relieve Tenant of its obligation to pay all
amounts due as provided in this Lease. Tenant shall deliver a copy of the
results of such audit to Landlord within fifteen (15) days of its receipt by
Tenant. Any information gained from such audit shall be confidential and shall
not be disclosed by Tenant, its agents and/or employees except to Tenant's
attorneys, accountants, and consultants or in connection with any contemplated
assignments or in connection with any administrative or judicial proceedings in
which Tenant may be required to divulge such information.
(d) Payment Directly to Third Party. Landlord, in its sole and absolute
discretion, shall have the option to require that Tenant pay the reasonable
costs of certain services directly to the provider of such services. In such
event, such costs shall not be payable to Landlord as provided in the applicable
provision of this Lease unless Tenant fails to pay any such amount when due . If
Tenant fails to pay any such amount when due and such failure continues for ten
(10) days after Tenant s receipt of notice thereof from Landlord, Landlord shall
have the right, but not the obligation, to pay such amount on behalf of Tenant
and Tenant shall, upon demand, pay such amount to Landlord plus Landlord's
Administrative Fee.
4.5 Proration of Rent for Partial Month. Rent payable by Tenant for any
partial calendar month at the beginning or end of the Lease Term which is
calculated on the basis of a full calendar year shall be computed on a daily
basis to reflect the actual number of days in said partial month at an amount
equal to one-three hundred sixty-fifth (1/365th) of such annual Rent for each
day of said partial month.
4.6 Landlord's Right to Offset. If any sums are payable by Landlord
pursuant to any provision of this Lease, Landlord shall have the right to first
offset from such sum any amounts that are currently payable by Tenant to
Landlord pursuant to any provision contained in this Lease.
4.7 Failure to Pay Rent When Due. If Tenant fails to pay any amount of
Minimum Annual Rent or Additional Rent within five (5) days of when due, such
unpaid amount shall bear interest at the Interest Rate from the date such sum
was due . In addition, Tenant acknowledges that the late payment by Tenant of
any installment of Minimum Annual Rent or Additional Rent within five (5) days
of when due will cause Landlord to incur certain costs and expenses not
contemplated under this Lease, the exact amount of which costs are extremely
difficult or impracticable to determine. Therefore, if any such installment is
not received by Landlord from Tenant within five (5) days of when due, Tenant
shall immediately pay to Landlord a late charge of Four Hundred Dollars ($400).
Landlord and Tenant agree that such late charge represents a reasonable estimate
of such costs and expenses and is fair compensation to Landlord for its loss
caused by Tenant's late payment.
4.8 Priority of Payments. Notwithstanding anything to the contrary
contained in this Lease, all payments made by Tenant and received by Landlord
may, in Landlord's sole and absolute discretion, be applied to any outstanding
arrearages owed by Tenant to Landlord, irrespective of any payment
characterization Tenant may designate for any such payment.
4.9 Address for Payments. Tenant shall pay all rent and other payments due
Landlord at Landlord's management office in the Shopping Center, or at such
place as Landlord may from time to time designate in writing.
4.10 Exhibit C Charge. Intentionally Omitted.
ARTICLE 5
PREMISES TAX AND INSURANCE EXPENSES
Tenant agrees to pay to Landlord (a) the amount of all taxes, similar
assessments, and special assessments levied for any reason on, or attributable
to, the Premises and/or the realty underlying the Premises (whether separately
or as part of a larger parcel as provided in this Article) and reasonable costs
associated with challenging such taxes and assessments and (b) the cost to
Landlord of the insurance covering the Premises under Section 13.3. In no event
shall Tenant be required to pay: (a) any portion of Landlord's general income,
franchise, inheritance, estate or gift taxes, or (b) any assessment levied for
the purpose of financing Landlord's cost to develop or construct any portion of
the Shopping Center.
With respect to any assessment which may be levied against or upon the
Premises and the Shopping Center, or which under the laws then in force may be
evidenced by improvement bonds or other bonds, and which may be paid in annual
installments, only the amount of such annual installment (with appropriate
proration for any partial calendar year of the Lease Term) shall be included
within the computation of Tenant's pro rata share of taxes and assessments for
any particular year.
Upon Tenant's written request therefor, Landlord will provide Tenant with
copies of applicable tax bills for the immediately preceding tax period or other
information upon which Landlord has relied for its determinations hereunder.
For the purpose of this Article, the term "larger parcel" is such portion
of the Shopping Center containing the Premises and other realty and/or
improvements for which taxes and assessments are levied, but excluding any
portion whose taxes are included in the Common Area Expenses. In the event the
Premises and the realty underlying the Premises are not separately assessed for
computation of taxes and assessments or are separately assessed and billed as
part of a larger parcel then, in either event, taxes and assessments on the
Premises and the realty underlying the Premises shall be that proportion of the
taxes and assessments on such larger parcel which the Floor Area of the Premises
bears to the Floor Area of all the areas available for exclusive use and
occupancy by tenants of such larger parcel, whether or not actually occupied and
open for business, provided that an equitable adjustment shall be made for
buildings which are partially completed on the date such taxes and assessments
are levied.
In the event the cost to Landlord of the insurance covering the Premises is
not separately charged to Landlord, Tenant's share of insurance as set forth
herein shall be the proportion of the total insurance expenses (excluding any
insurance which is included in Common Area Expenses) which the Floor Area of the
Premises bears to the Floor Area of all the areas available for exclusive use
and occupancy by tenants of the Shopping Center, whether or not actually
occupied and open for business, exclusive of Floor Area which is separately
insured.
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 as well as upon its merchandise,
Improvements, and Personal Property. In the event such items of Tenant's
property are assessed with property of Landlord, Landlord shall allocate such
assessment, on the basis of assessed value or such other reasonable allocation,
between Landlord and Tenant so that Tenant shall pay only its equitable portion.
ARTICLE 6
UTILITIES AND AIR CONDITIONING
6.1 Utilities. The Utilities that Landlord shall make available to the
Premises or to a central distribution point outside the Premises, are as set
forth in Landlord's Work. Landlord shall have no obligation whatsoever to make
any other Utilities available for the benefit of Tenant.
Tenant shall use the Utilities, if any, provided, or contracted for, by
Landlord to the Premises throughout the Lease Term, and shall not contract
separately for the same without the prior written consent of Landlord which
Landlord may grant or withhold in its sole and absolute discretion. Further,
Landlord shall have the right at any time and from time to time during the Lease
Term to contract for Utility services from alternative service providers in
which event Tenant shall use such Utilities and shall not contract separately
for the same without the prior written consent of Landlord which Landlord may
grant or withhold in its sole and absolute discretion.
6.2 Utilities Charge. Tenant shall pay the Utilities Charge in accordance
with Section 4.4.
6.3 Calculation of Utilities Charge. The "Utilities Charge" shall be
Tenant's payment of the costs of any and all Utilities furnished by Landlord to
the Premises or otherwise for the benefit of Tenant (including, without
limitation, maintenance, repair, installation, and service costs associated
therewith), with the exception of the cost of any Utilities that are included in
Common Area Expenses. Tenant shall install at its sole expense any separate
meter required by Landlord or Tenant, or the Utility provider for any Utilities.
If any Utilities are not separately metered to the Premises and are instead
provided in common with others, then Landlord shall reasonably determine
Tenant's share of the Utilities so provided (not to exceed the rates of the
local public utility company if such service had been provided directly to
Tenant), and such determination shall be used in the calculation of the
Utilities Charge; provided, however, that Tenant shall be permitted to install a
submeter to monitor Tenant's usage. If Landlord does not provide all of the
Utilities, Tenant agrees, at its own expense, to pay to the appropriate utility
company the cost of any such Utilities.
6.4 Air Conditioning. Landlord shall provide the Air Conditioning System in
accordance with Exhibit C, Description of Landlord's Work.
6.5 Air Conditioning Charge. Tenant shall pay the Air Conditioning Charge
as provided in Section 4.4.
6.6 Calculation of Air Conditioning Charge. The "Air Conditioning Charge"
shall be Tenant's share of the total expense associated with the operation and
maintenance of the non-exclusive portions of the Air Conditioning System
(including Amortization of Capital Items) for any given calendar year and the
Administrative Fee with respect to all such expenses. Initially, such share
shall be equal to the proportion that Tenant's Engineered Value bears to the
total of the Engineered Values of all tenants utilizing the Air Conditioning
System during each calendar month of the calendar year and averaged for that
calendar year. Within thirty (30) days after Tenant opens the Premises for
business, Tenant shall submit to Landlord a certified air balance report stating
the amount of CFM actually being used by Tenant in the Premises. If Tenant fails
to submit such certified air balance report to Landlord within said thirty (30)
day period, Landlord may obtain such a certified air balance report at Tenant's
expense, which air balance report as completed by Landlord shall be binding and
conclusive. If the Air Conditioning System supplies chilled water or other fluid
refrigerant to the Premises, Landlord shall measure the GPM actually being used
by Tenant in the Premises on the basis of the air balance report. Either party
may, at any time, install meters to verify the amount of CFM/GPM used by Tenant.
After receipt and verification of the air balance report and/or the metered CFM
or GPM readings, Landlord shall use such actual CFM or GPM in the foregoing
formula, in lieu of Tenant's Engineered Value.
6.7 Tenant's Engineered Value. Tenant shall not at any time cause an
increase in the Engineered Value without the prior written approval of Landlord.
Upon Landlord's request, Tenant shall submit to Landlord the current
calculations requested under Exhibit F.
ARTICLE 7
COMMON AREA
7.1 Tenant's License to Use. Landlord grants to Tenant and its employees,
agents, customers, and invitees a non-exclusive license to use the Common Area
during the Lease Term, subject to the rights of Landlord, the other tenants of
Landlord, any Ground Lessor, the parties to the REA, the other owners of the
Shopping Center and such parties' employees, agents, customers, and invitees to
use the same in common with Tenant.
7.2 Operation and Maintenance of Common Area. Landlord shall keep the
Common Area in a neat, clean, and orderly condition, and shall repair, maintain
or replace all equipment and facilities thereof as Landlord shall deem
necessary. Landlord may cause any or all of the services concerning the Common
Area to be provided by an independent contractor(s) or by an affiliate(s) of
Landlord. If Landlord does not maintain all of the Common Areas of the Shopping
Center because one or more of the Major Tenants or the parties to the REA
maintains a portion thereof, then, for so long as such condition exists,
Landlord's responsibility hereunder shall extend to only those portions of the
Common Area not maintained by Major Tenants or parties to the REA and the Common
Area expenses described in this Article shall refer only to the portions
maintained by Landlord.
7.3 Common Area Expenses.
(a) In General. "Common Area Expenses" shall mean all expenses in
connection with the use, ownership (i.e., property taxes), operation, and
maintenance of the Common Area, including without limitation, all general
maintenance and repairs deemed necessary by Landlord or as may be required by
Governmental Authority; work performed by Landlord in accordance with Section
12.2; resurfacing, restriping, and repair of all parking areas; painting;
cleaning; trash removal; snow and ice removal; sweeping and janitorial services;
seasonal decor; signs; fire protection systems; the cost of Utilities including,
without limitation, costs or fees paid to a private utility provider; personnel
to implement any of the foregoing services including, if Landlord deems
necessary, the cost of security officers and security systems; all taxes,
similar assessments, and special assessments levied for any reason on the Common
Area and the realty underlying the Common Area and all reasonable costs
associated with challenging such taxes and assessments; all personal property
taxes levied for any reason on any personalty of the Common Area; the cost to
Landlord of the insurance covering the Shopping Center; the Amortization of
Capital Items; all on-site costs and personnel expenses of Landlord incurred in
managing the Shopping Center; Common Area theming (including, without
limitation, live and simulated entertainment) and all maintenance, repair and/or
operational expenses associated therewith; all maintenance, repair and/or
operational expenses reimbursable by Landlord to Ground Lessor and/or the
parties to the REA for areas that are utilized in common by Landlord and Ground
Lessor and/or the parties to the REA; all costs associated with shuttle or other
transportation services designed to transport Shopping Center customers and/or
employees to and from the Shopping Center; and the Administrative Fee with
respect to all such expenses. Common Area Expenses shall be reduced (prior to
the calculation of Tenant's share) by the contributions required to be made by
the Major Tenants thereto, and shall not include any costs in connection with
the original construction and installation of the Common Area. Further, Interior
Mall Expenses shall be reduced (prior to the calculation of Tenant's share) by
the Licensees Contribution. There shall be no duplication to Tenant of the costs
for insurance and taxes as provided in Article 5 and this Section.
Notwithstanding anything to the contrary contained in this Lease, Tenant
shall not be required to pay its share of any costs which (i) have been
reimbursed to Landlord from insurance proceeds or warranties or eminent domain
award (and to the extent Tenant does pay for any such costs which are
subsequently reimbursed to Landlord, Tenant shall be entitled to a refund), (ii)
are incurred in connection with the expansion or renovation of the Shopping
Center except to the extent such expenses are deferred maintenance expenses or
otherwise appropriate operation and/or maintenance expenses; (iii) are
associated with the removal and/or abatement of Hazardous Materials from
portions of the Shopping Center other than the Premises; or (iv) are incurred by
Landlord pursuant to Section 8.5 of this Lease. Further, Tenant shall not be
required to pay both depreciation and the replacement cost for the same item.
In no event shall Tenant's share of expenses in any calendar year in
connection with any work associated with an Insured Casualty or an Uninsured
Casualty exceed an amount equal to fifteen percent (15%) of Tenant's total share
of Common Area Expenses for such year; provided, however, that commercially
reasonable deductibles, co-insurance, and/or self-insurance funds shall not be
subject to the foregoing limitation so long as the potential exposure to the
Landlord as a result of such deductibles, co-insurance, and/or self insurance
does not exceed an amount equal to 25% of the total replacement cost of the
Shopping Center).
(b) Calculation. Tenant shall pay its share of Common Area Expenses in the
manner provided in Section 4.4. Tenant's share of Common Area Expenses shall be
calculated as follows:
(i) Tenant's share of Common Area Expenses for the previous calendar year
shall be the proportion of all such expenses, exclusive of Interior Mall
Expenses and Food Court Expenses, that the Floor Area of the Premises bears to
the total Floor Area of all premises in the Shopping Center that are leased and
open as of the commencement of each calendar year or, at Landlord's sole and
absolute discretion, each calendar quarter and averaged for that calendar year,
exclusive of the Major Tenants' Floor Area and Licensees' Floor Area; (provided,
however, that during the Lease Term, in no event will Tenant's share of such
Common Area Expenses be calculated on the basis of less than eighty percent
(80%) occupancy of the Floor Area of the Shopping Center, exclusive of the Major
▇▇▇▇▇▇▇' ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇' ▇▇▇▇▇ ▇▇▇▇);
(ii) If the storefront of the Premises is located on the Interior Mall,
Tenant's share of Interior Mall Expenses for the previous calendar year shall be
the proportion of all Interior Mall Expenses that the Floor Area of the Premises
bears to the Floor Area of all premises that are part of the Shopping Center
(i.e., excluding any Casino property having frontage on the Interior Mall)
having storefronts on the Interior Mall that are leased and open as of the
commencement of each calendar year or, at Landlord's sole and absolute
discretion, each calendar quarter and averaged for that calendar year, exclusive
of the Major Tenants' Floor Area and Licensees' Floor Area (provided, however,
that during the Lease Term, in no event will Tenant's share of such Interior
Mall Expenses be calculated on the basis of less than eighty percent (80%)
occupancy of the Floor Area of premises having store fronts on the Interior
Mall, exclusive of the Major ▇▇▇▇▇▇▇' ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇' ▇▇▇▇▇ ▇▇▇▇); and
(iii) If the Premises is located within the Food Court of the Shopping
Center and the use of the Premises involves the sale of food, Tenant's share of
Food Court Expenses for the previous calendar year shall be the proportion of
all Food Court Expenses that the Floor Area of the Premises bears to the Floor
Area of all food use tenants within the Food Court that are leased and open as
of the commencement of each calendar year or, at Landlord's sole and absolute
discretion, each calendar quarter and averaged for that calendar year.
(c) Limitation on Tenant's Share of Common Area Expenses. Notwithstanding
the foregoing to the contrary, in no event shall Tenant's share of Common Area
Expenses for the calendar year 2000 ("Base Year") exceed an amount equal to
Twenty Dollars ($20) per square foot of Floor Area of the Premises. After the
Base Year, increases in Tenant's share of Common Area Expenses (excluding Common
Area taxes, insurance and utility expenses) in any calendar year shall not
exceed an amount equal to six percent (6%) per annum on a cumulative basis of
the Tenant's share of such Common Area Expenses for the Base Year (in the event
the Base Year is a partial calendar year, Tenant's share of Common Area Expenses
for the Base Year shall be annualized for the purpose of the foregoing
calculation). By way of example but not limitation, Tenant's share of such
Common Area Expenses for the fourth (4th) full calendar year of the Lease Term
shall not exceed an amount derived by the following formula: {[(BA x 1.06) x
1.06] x 1.06}, where "BA" equals Tenant's share of such Common Area Expenses for
the Base Year (annualized in the event the Base Year is a partial calendar
year).
7.4 Extended Hours Services. If Tenant desires to operate its business in
the Premises beyond the normal Shopping Center hours of operation, Tenant shall
request Landlord's permission to do so, which request shall be subject to
Landlord's approval, and thereafter shall notify Landlord of any changes in the
times or dates of the extended hours of operation. Landlord will provide those
extended hours services that it deems necessary and Tenant shall reimburse
Landlord for Tenant's equitable share of the increased costs incurred by
Landlord for such extended hours services, including without limitation
lighting, security, Utilities, and Landlord's Administrative Fee with respect to
all such expenses. Tenant shall pay such increased costs as part of Additional
Rent in accordance with Section 4.4.
7.5 Control of Common Area. Landlord shall at all times have the right to
determine the nature and extent of the Common Area, whether the same be surface,
underground or multiple-deck, and to make such changes thereto as it shall
elect, including without limitation the location and relocation of driveways,
entrances, exits, and automobile parking spaces, the direction and flow of
traffic, and the installation of prohibited areas, landscaped areas and Utility
Installations. Landlord shall at all times have the sole and exclusive control
of the Common Area, including, without limitation, 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, including kiosks, carts, and other temporary
or permanent stands; provided, however, no permanent facility which materially
and adversely affects the access to or visibility of the Premises shall be
located within ten feet (10') directly in front of Tenant's Premises as limited
by an imaginary ten foot (10') extension of Tenant's Interior Demising
Partitions without Tenant's prior consent. Landlord's control and operation of
the Common Area shall at all times be subject to Landlord's obligation to comply
with all Legal Requirements. Landlord shall also have the right at any time and
from time to time to exclude and restrain any person from the use or occupancy
of the Common Area. 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.
Tenant acknowledges and agrees that Landlord intends to design the Common
Area and specifically, the Interior Mall area, in such a manner that will result
in a wide variety of both permanent and temporary facilities and design elements
(collectively referred to herein as "facilities") located throughout the Common
Area. Tenant further acknowledges and agrees that Landlord will not be
restricted in any manner by this Lease in the placement and/or design of any
such facilities; provided, however, no permanent facility which materially and
adversely affects the access to or visibility of the Premises shall be located
within ten feet (10') directly in front of Tenant's Premises as limited by an
imaginary ten foot (10') extension of Tenant's Interior Demising Partitions
without Tenant's prior consent.
Tenant further acknowledges that the Interior Mall may, in Landlord's sole
and absolute discretion, remain open to the public twenty-four (24) hours per
day, on each and every day of the year.
7.6 Security Officers. Tenant acknowledges that if Landlord provides
security officers for the Common Area, Landlord does not represent, guarantee or
assume responsibility that Tenant will be secure from any Claims relating to
such security officers. Landlord shall have no obligation to hire, maintain or
provide such services, which may be withdrawn or changed at any time with or
without notice to Tenant or any other person and without liability to Landlord.
7.7 Rules and Regulations. In addition to any rules and regulations of
record governing the Shopping Center, Tenant shall abide by the rules and
regulations set forth in Exhibit D. Landlord shall have the right to establish
additional reasonable and equitable rules and regulations, and to adopt
reasonable and equitable amendments to the same from time to time for the proper
and efficient operation and/or maintenance of the Common Area or any portion
thereof, as Landlord determines in its discretion.
7.8 Validated Parking. Landlord shall have the right to adopt a
nondiscriminatory, uniform policy, charge and/or validation system for the
parking facilities in the Common Area.
ARTICLE 8
MARKETING
8.1 Marketing. Tenant shall, at Landlord's option, either participate in a
marketing fund ("Marketing Fund") or a merchants' association ("Merchants'
Association") which shall be organized to market the Shopping Center (and may
include, without limitation, joint marketing with the Casino[s]). Landlord shall
control and administer the Marketing Fund, if established, with advice from an
advisory group comprised of representatives of various Shopping Center tenants.
The activities of the Marketing Fund or the Merchants' Association, as the case
may be, shall be financed by an annual budget based on an appropriate fiscal
year. The annual budget shall be the sum of the annual marketing assessments of
all tenants at the Shopping Center plus the contributions of Landlord as
provided in this Article 8.
8.2 Tenant's Marketing Assessment. Tenant shall pay the Marketing
Assessment to Landlord if Landlord has established the Marketing Fund, or as
dues to the Merchants' Association if Landlord has not established the Marketing
Fund. Tenant shall pay the Marketing Assessment in equal monthly installments,
payable in advance commencing on the Rent Commencement Date and thereafter on
the first day of each calendar month of each year. Tenant's Marketing Assessment
shall be adjusted annually in accordance with the CPI Adjustment Procedures;
provided, however, in no event shall the Marketing Assessment increase in any
year by more than five percent (5%) over the Marketing Assessment for the
previous year. The Base Month shall be the month of October immediately
preceding the Rent Commencement Date; the Month of Adjustment shall be the month
of October during each year of the Lease Term thereafter. The adjustment shall
be effective as of the first day of January following the Month of Adjustment.
8.3 Landlord's Contribution. Landlord shall contribute on a noncumulative
basis an amount equal to twelve and one-half percent (12.5%) of the total
contributions by all tenants of the Shopping Center to the Marketing Fund;
provided, however, in no event shall Landlord be required to contribute more
than Twenty-Five Thousand Dollars ($25,000) in any fiscal year. At Landlord's
option, Landlord may elect to contribute part or all of the marketing and
graphic arts services required by the Marketing Fund or the Merchants'
Association in lieu of making its contribution in cash. In any event, Landlord
shall maintain the sole and absolute authority to employ and discharge any
member of its marketing and graphic arts staffs providing said services.
8.4 Initial Assessment. Tenant shall pay the Initial Assessment to Landlord
on or before the Rent Commencement Date. The Initial Assessment shall be used by
Landlord for promoting the initial opening of the Shopping Center and shall be
payable by Tenant whether or not Tenant participates in or is open for business
at the initial opening of the Shopping Center.
8.5 Daily Sales. Landlord may, in its sole and absolute discretion, provide
a program for the purpose of collecting daily sales information directly from
Tenant via Tenant's designated representative at the Premises and Tenant agrees
to participate in any such program. The daily sales information would include
gross daily receipts collected at the Premises. The program shall be in the form
of automated, computerized telecommunication. The costs and expenses in
connection with the operation of the program would be paid for either by the
Landlord or by proceeds from the Marketing Fund. The information collected may
be utilized by Landlord for the purpose of evaluating and responding to market
trends and determining merchandising category rankings.
ARTICLE 9
USE
9.1 Permitted Use. Tenant shall operate the Premises only under Tenant's
Trade Name and shall only use the Premises for the Permitted Use, and for no
other use or purpose. Landlord shall not unreasonably withhold its consent to a
change in Tenant's Trade Name in connection with an approved Occupancy
Transaction.
9.2 Duties and Prohibited Conduct. Tenant shall at all times comply with
all Legal Requirements. At Tenant's sole expense, Tenant shall procure,
maintain, and make available for Landlord's inspection any governmental license
or permit required for the proper and lawful conduct of Tenant's business.
Tenant shall not use the Premises, or permit or fail to prevent the Premises to
be used, (a) for any purpose or in any manner that violates any Legal
Requirement and/or the requirements of the insurance underwriter(s) for the
Shopping Center, (b) for the sale or display of pornography, nudity, graphic
violence, drug paraphernalia, or any goods and/or services that, in the sole and
absolute discretion of Landlord, are inconsistent with the image of a community
or family-oriented shopping center, (c) as a massage parlor, adult bookstore or
second-hand store, (d) to conduct an auction, distress, fire, bankruptcy or
going-out-of business sale or similar sales, (e) to sell merchandise from
vending machines (except vending machines installed and made available solely
for use by Tenant's employees), (f) to operate any video, pinball, Gaming
Devices, or other gaming machines, or conduct any Gaming Activities (although
Tenant shall be allowed to display and demonstrate to customers and/or allow
customers to operate items which Tenant has for sale), or (g) to keep live
animals of any kind unless otherwise permitted by this Lease. Tenant shall not
place, affix or maintain any signs, advertising placards, names, insignia,
trademarks, descriptive material or any other similar item or items outside, on
or within twenty-four inches (24") of the Lease Line, the storefront, the glass
panes and supports of the show windows, or any window, door, roof or the
exterior side of any Perimeter Demising Partition of the Premises, except such
signs as Landlord shall approve in writing in accordance with Exhibit C. Tenant
shall use the sales Floor Area within six feet (6') of the storefront Lease
Line, if at all, for the promotional display of merchandise only; stacking or
stocking merchandise within said area or in the window area is expressly
prohibited. Tenant shall not cause or permit any waste to occur in the Premises
and shall not overload the floor, or any mechanical, electrical, plumbing or
Utility systems serving the Premises. Tenant shall keep the Premises, and every
part thereof, in a clean and wholesome condition, free from any objectionable
noises, loud music, odors or nuisances. If the Permitted Use includes the sale
of and/or preparation of food, Tenant shall at all times maintain a health
department rating of "A" (or such other highest health department or similar
rating as is available).
9.3 Hazardous Materials.
(a) In General. Tenant shall not use, generate, manufacture, produce,
store, transport, treat, dispose or permit the escape or release on, under,
about or from the Premises, or any part thereof, of any Hazardous Materials. If
Tenant's Permitted Use requires the use and/or storage of any Hazardous
Materials on, under or about the Premises, Tenant shall provide written notice
to Landlord, prior to final execution of this Lease, of the identity of such
materials and Tenant's proposed plan for the use, storage, and disposal thereof;
such use, storage, and disposal shall be subject to Landlord's approval, in
Landlord's sole and absolute discretion. If Landlord approves such proposed use,
storage, and disposal of specific Hazardous Materials, Tenant may use and store
upon the Premises only such specifically approved materials and shall comply
with any conditions to such approval as Landlord may impose in its sole and
absolute discretion. Landlord's permission hereunder may be withdrawn or
modified at any time in Landlord's sole and absolute discretion. Tenant shall
fully and promptly comply with all Hazardous Materials Laws at all times during
the Lease Term, and at the expiration or earlier termination of the Lease Term,
Tenant shall remove and dispose of all Hazardous Materials affecting the
Premises and the Shopping Center resulting from the use or occupancy thereof by
Tenant or its agents, employees, suppliers, contractors, subtenants, successors,
and assigns regardless of whether such removal is required by any Hazardous
Materials Law. Notwithstanding the foregoing, Landlord consents to Tenant's
above-ground use, storage, and off-site disposal of products containing small
quantities of Hazardous Materials, which products are of a type customarily used
in operations specifically mentioned as a Permitted Use, provided that Tenant
shall handle, use, store, and dispose of such Hazardous Materials in a safe and
lawful manner and shall not allow Hazardous Materials to contaminate the
Premises or the Shopping Center.
(b) Indemnity. Tenant shall indemnify, protect, defend, and hold Landlord
(and its partners, joint venturers, shareholders, affiliates, and property
managers, and their respective officers, directors, employees, and agents) and
any Mortgagee (including, without limitation, any Ground Lessor) harmless from
and against any and all Claims arising out of, in connection with, or directly
or indirectly arising out of the use, generation, manufacture, production,
storage, treatment, release, disposal or transportation of Hazardous Materials
by Tenant, or any successor, assignee or sublessee of Tenant, or their
respective agents, contractors, employees, or licensees, on, under, about or
from the Premises or the Shopping Center, including, but not limited to, all
foreseeable and unforeseeable costs, expenses, and liabilities related to any
testing, repair, cleanup, removal costs, detoxification or decontamination and
the preparation and implementation of any closure, remedial action, site
assessment costs or other required plans in connection therewith deemed
required, necessary or advisable by Landlord or any Governmental Authority, and
any foreseeable or unforeseeable consequential damages. Any defense of Landlord
pursuant to the foregoing indemnity shall be by counsel reasonably acceptable to
Landlord. Neither the consent by Landlord to the use, generation, storage,
release, disposal or transportation of Hazardous Materials, nor Tenant's strict
compliance with all Hazardous Materials Laws, shall excuse Tenant from Tenant's
indemnification obligations hereunder. The foregoing indemnity shall be in
addition to and not a limitation of the other indemnification provisions of this
Lease. Tenant's obligations hereunder shall survive the termination or
expiration of this Lease.
(c) Reporting. Tenant shall notify Landlord in writing, promptly after any
of the following: (i) Tenant has knowledge, or has reasonable cause to believe,
that any Hazardous Materials have been released, discharged or located on, under
or about the Premises or, to the extent caused by Tenant, the Shopping Center,
whether or not the same is in quantities that would otherwise be reportable to a
public agency, (ii) Tenant receives any warning, notice of inspection, notice of
violation or alleged violation, or Tenant receives notice or knowledge of any
proceeding, investigation, order or enforcement action, under any Hazardous
Materials Law concerning the Premises or, to the extent caused by Tenant, the
Shopping Center, or (iii) Tenant becomes aware of any Claims made or threatened
by any third party concerning the Premises or, to the extent caused by Tenant,
the Shopping Center respecting Hazardous Materials.
(d) Confirmation of Tenant's Knowledge. Upon request from Landlord or
Landlord's Mortgagee at any time, Tenant shall promptly execute all affidavits,
representations, and any other similar documents as Landlord or Landlord's
Mortgagee may request concerning Tenant's best knowledge and belief regarding
the presence or absence, or the use, generation, storage, disposal or
transportation of Hazardous Materials, under, about or from the Premises or, to
the extent caused by Tenant, the Shopping Center.
(e) Asbestos. If any asbestos containing materials exist in the Premises
that were introduced into the Premises by Tenant, its affiliates, agents,
contractors, employees, assignors, predecessors, successors or Transferees at
any time, Tenant shall remove all such asbestos containing materials prior to
(i) the expiration or earlier termination of this Lease and/or (ii) making
Improvements to the Premises and, in either event, regardless of whether such
removal is required by any Hazardous Materials Law.
(f) Landlord's Right to Terminate. If the Premises or any part of the
Shopping Center becomes or is discovered to be contaminated with any Hazardous
Materials, and if any handling of any nature is undertaken in connection
therewith (either at Landlord's own initiative or pursuant to the requirements
of any Government Authority), and if Tenant is not responsible for any handling
or indemnification in connection therewith under this Lease or otherwise, then
Landlord shall have the right to terminate this Lease upon thirty (30) days'
notice to Tenant in the event the estimated cost of any such handling exceeds an
amount equal Two Hundred Fifty Thousand Dollars ($250,000) and such cost is not
covered by insurance, provided, however, that Landlord's notice shall include
the estimated cost of such handling. Tenant shall have the option to pay the
cost of such handling in excess of $250,000 which option must be exercised, if
at all, within twenty (20) days following Tenant's receipt of Landlord's notice
by written notice to Landlord and by depositing an amount equal to the estimated
cost of such handling in excess of $250,000 in a third party escrow account in
which event Landlord's notice to terminate will be null and void provided Tenant
pays for the entire cost of such handling in excess of $250,000 in a timely and
reasonable manner. In no event shall Landlord terminate this Lease unless
Landlord terminates the leases of all other tenants similarly affected by such
circumstances.
(g) Initial Inspection. Tenant may, within fifteen (15) days after Tenant
takes possession of the Premises with Landlord's consent, provided this Lease is
fully executed and Tenant has not commenced any work in the Premises, perform an
inspection of the Premises by a recognized, certified environmental consultant
for the purpose of determining whether any Hazardous Materials exist in the
Premises.
In the event such inspection determines that Hazardous Materials do exist
and further that they require specific handling in accordance with applicable
Hazardous Materials Laws and provided said Hazardous Materials are not present
by reason of Tenant's Work (as defined in Exhibit C and to the extent made or
caused to be made by Tenant or an affiliate of Tenant), then Tenant shall have
the right to, within ten (10) days of such determination, notify Landlord of the
results of the inspection, in which event Landlord, at its sole cost and
expense, shall perform the necessary reasonable steps to handle such Hazardous
Materials (hereinafter referred to as "Remedial Work"). Notwithstanding the
foregoing to the contrary, if Landlord determines that the cost of such Remedial
Work, in Landlord's reasonable opinion, is excessive, or that such Remedial Work
would unreasonably interfere with the operation of the Shopping Center or other
businesses in the Shopping Center, Landlord may terminate this Lease and all
liability hereunder shall cease.
In the event any such Remedial Work delays the commencement of Tenant's
work in the Premises, the date certain referred to in Section 1.8, in connection
with the definition of the Rent Commencement Date shall be delayed by the
corresponding number of days that it takes to complete the Remedial Work,
calculated from the date Landlord receives Tenant's notice of the results of the
inspection and continuing until the Remedial Work is completed. Tenant shall not
be entitled to any further compensation or damages from Landlord arising
directly or indirectly from the Remedial Work including but not limited to loss
of use of the whole or any part of the Premises, the building of which the
Premises are a part, Tenant's Personal Property, or any inconvenience or
annoyance reasonably occasioned by the existence of Hazardous Materials and the
subsequent Remedial Work.
In no event does Tenant's right to inspect extend beyond the fifteen (15)
day period set forth above and, in the event Tenant waives its right to
inspection of the Premises, the right to inspect shall be of no force or effect;
upon the expiration of said fifteen (15) day period or upon Tenant's waiver of
its right to inspection, the handling or removal of Hazardous Materials shall be
governed in accordance with the provisions of Article 12 of this Lease.
9.4 Compliance with Exclusive License Agreements. Tenant hereby expressly
acknowledges and agrees that Landlord intends to enter into various license
agreements or other similar agreements in connection with the Shopping Center
whereby Landlord will grant exclusive licenses to third parties for the use of
certain products or brand names that will be required to be sold in the Shopping
Center (by way of example, but not by way of limitation, a license may require
that specific brand name soda beverages will be the exclusive soda beverages for
the Shopping Center). Tenant further expressly agrees and acknowledges that
Tenant's use of the Premises shall at all times be subject to any such
licenses/agreements regardless of whether or not such licenses/agreements were
entered into as of the Effective Date; provided, however, in no event shall any
such licenses/agreements limit the merchandise that Tenant is permitted to sell
as provided in Section 1.13. To the extent Landlord enters into any such
licenses/agreements, Landlord will provide at least thirty (30) days prior
written notice to Tenant in the event the Tenant's use of the Premises will be
affected by such licenses/agreements.
9.5 Gaming Provisions.
(a) Acknowledgment Regarding Gaming. Tenant hereby expressly acknowledges
and agrees that the Shopping Center is a part of a complex that includes Gaming
Activities.
(b) Exclusive Gaming Rights. Tenant hereby expressly acknowledges and
agrees that the Casino(s) and/or its gaming nominee has the sole and exclusive
right pursuant to the REA to conduct Gaming Activities. Tenant shall not be
permitted to conduct Gaming Activities or to utilize Gaming Devices in the
Premises.
(c) Tenant's Obligations. Tenant and Tenant's Agents shall promptly apply
for and obtain any and all Gaming Licenses required by any Gaming Authority upon
notice from the Gaming Authority or Landlord. "Tenant's Agents" is defined as
any of Tenant's employees, stockholders, members, directors, managers, officers,
general partners, agents or representatives. In the event (i) Tenant or any of
Tenant's Agents fails to make such application, or fails to obtain the requisite
Gaming License, or to otherwise satisfy the requirements of the Gaming
Authorities, or (ii) any Gaming Licenses of the Casino(s) are, or are threatened
to be, denied, curtailed, suspended, or revoked by any Gaming Authority due to
the activities or relationships of Tenant or Tenant's Agents, Landlord may
immediately terminate this Lease.
Tenant agrees to provide any documentation and/or other evidence requested
by any Gaming Authority as may be appropriate in order for such Gaming Authority
to determine whether or not Tenant is in compliance with this Section 9.5. A
violation of this Section 9.5 shall be a non-curable default pursuant to the
provisions of Section 16.1(d) of this Lease.
9.6 Competing Tenant. In the event that at any time during the Lease Term,
Landlord enters into a lease with a tenant in the Shopping Center whose Primary
Use (as defined herein) is the retail sale of children's toys (hereinafter
"Competing Tenant"), and such Competing Tenant is open and operating in the
Shopping Center, then Tenant shall give Landlord written notice of such
Competing Tenant and Landlord shall have sixty (60) days to remedy the situation
("Cure Period"). In the event Landlord has not remedied the situation within the
Cure Period, then commencing with the first (1st) full calendar month after the
Cure Period and continuing until the earlier of (i) such time as the Competing
Tenant ceases operating at the Shopping Center or (ii) the remainder of the
Lease Term, Tenant's Minimum Annual Rent and Percentage Rent payable pursuant to
Article 1 shall be decreased by fifty percent (50%). The aforementioned
reduction shall in no event be deemed to modify, reduce, or ▇▇▇▇▇ Tenant's
obligation to pay all other Additional Rent under the Lease.
In addition, both Landlord and Tenant shall have the right to terminate
this Lease upon notice to the other party given at any time after a Competing
Tenant has been open for a period of one (1) year following the expiration of
the Cure Period and so long as such Competing Tenant continues to operate its
business. In the event Landlord exercises such right to terminate, Tenant shall
have the right to nullify Landlord's termination notice by (i) notifying
Landlord, within ten (10) days following Landlord's notice of termination, of
its intention to waive the fifty percent (50%) reduction in Minimum Annual Rent
and Percentage Rent, and (ii) immediately commencing the payment of the full
amount of such rental payable pursuant to the terms of this Lease (absent the
terms of this Section 9.6). In the event of the termination of this Lease by
Landlord as provided herein, Landlord shall pay Tenant, within thirty (30) days
after the effective date of termination, an amount equal to the unamortized
portion of the cost incurred by Tenant in connection with Tenant's Work,
amortized on a straight-line basis from the Rent Commencement Date through and
including the original Expiration Date.
In the event the Competing Tenant ceases operating in the Shopping Center,
then Minimum Annual Rent and Percentage Rent shall revert to the amount
specified in Article 1.
The term "Primary Use" as used in this Section 9.6 means more than
twenty-five percent [25%] of the sales Floor Area of the entire premises,
including aisle space, is used for the display of such merchandise.
Notwithstanding the foregoing to the contrary: is agreed and understood
that the following shall be excluded from the definition of a Competing Tenant:
(i) one (1) tenant whose Primary Use is the sale of children's toys and whose
premises contain less than 2,000 square feet of Floor Area; and (ii) any tenant
whose Primary Use is the sale of educational or similar specialty toys (such as,
by way of example only, the stores doing business under the trade name of Store
of Knowledge, Learningsmith, or Discovery Store); and (iii) one (1) tenant whose
Primary Use is the sale of a specific type or category of children's toy (such
as, by way of example, "Build-A-Bear") and whose premises does not exceed 4,000
square feet of Floor Area; and (iv) any tenant whose principal use of its
premises and primary concept is the sale of apparel or gifts with the incidental
sale of children's toys provided no more than thirty-five percent [35%] of the
sales Floor Area of any such tenant's entire premises, including aisle space, is
used for the display of such children's toys; and (v) any kiosk or cart tenant
(provided, however, in no event shall a kiosk or cart selling children's toys be
located in the area directly in front of the Premises). In no event shall the
provisions of this Section 9.6 be deemed to restrict Landlord from leasing the
space in the Shopping Center as provided in Section 9.6 to any Competing Tenant.
Nothing herein shall be deemed to affect Tenant's obligation to keep its
business in the Premises in continuous operation (pursuant to the terms of this
Lease) and to pay Additional Rent as set forth in this Lease during any period a
Competing Tenant is operating in the Shopping Center.
The provisions of this Section 9.6 shall be automatically null and void if
(i) Tenant is in default under this Lease (which default remains uncured beyond
the applicable time periods set forth in Article 16, Section 16.2); (ii) Tenant
enters into an Occupancy Transaction pursuant to Article 15 of this Lease (other
than an Occupancy Transaction as to which Landlord's consent was not required);
or (iii) Tenant's Premises ceases to be used primarily for the permitted use
which is stated in Article 1, Section 1.13 of this Lease.
ARTICLE 10
TENANT'S OPERATING COVENANTS
10.1 Operating Covenants. Tenant shall, continuously and uninterruptedly
from and after its initial opening for business, (a) operate and conduct within
the entire Premises the business that it is permitted to operate and conduct
under the provisions hereof, except while the Premises are untenantable by
reason of fire or other casualty, (b) maintain within the Premises an adequate
stock of merchandise together with sufficient personnel and Personal Property to
service and supply the usual and ordinary requirements of its customers, and (c)
keep the Premises in a neat, clean, and orderly condition.
10.2 Operating Days and Hours. It is in the interests of both Tenant and
Landlord to have regulated hours of business for all of the Shopping Center.
Commencing with the opening for business by Tenant in the Premises and for the
remainder of the Lease Term, Tenant shall be open for business daily and shall
continuously remain open for business with its window displays, exterior signs,
and exterior advertising displays adequately illuminated during all hours on all
days on which Landlord, in its sole and absolute discretion, determines to open
the Shopping Center for business to the public and which hours may, in
Landlord's sole and absolute discretion, be unique and extended to provide for
optimum sales generation. If the Shopping Center contains Common Area which is
enclosed for the purpose of providing climatic control, Landlord shall not be
obligated to open the enclosed area so that Tenant may conduct business except
on those days and hours when tenants in the Shopping Center occupying at least
fifty percent (50%) of the Floor Area thereof shall have given reasonable
advance notice to Landlord that they desire to be open for business during such
time.
Notwithstanding anything to the contrary contained in this Lease, in no
event shall Tenant be required to open for business on any day earlier than
10:00 a.m. or later than Midnight, or on Christmas Day or Thanksgiving Day,
unless at least fifty percent (50%) of the other Shopping Center Tenants are
open during such period(s).
Tenant shall be permitted to be closed two (2) days per calendar year (on a
non-cumulative basis) for the purpose of taking inventory. Tenant shall provide
written notice to the Shopping Center General Manager at least ten (10) days
prior to the date of closing and shall display appropriate signage advising its
customers of such closure. In no event shall Tenant be permitted to close for
inventory during the period in any calendar year commencing November 1st and
ending December 31st.
ARTICLE 11
IMPROVEMENTS
11.1 Initial Construction of the Premises. Tenant shall submit Tenant's
Plans to Landlord for the construction of Tenant's storefront and store interior
in accordance with Exhibit C and the Tenant Package. Tenant shall commence and
diligently proceed with construction so as to complete the work contemplated
thereby and open for business in the Premises on or before the Rent Commencement
Date. All Personal Property must be new when installed in, or attached to, the
Premises.
Notwithstanding anything to the contrary contained in this Lease and as an
inducement for the Tenant to enter into this lease prior to the receipt by
Tenant of the Tenant Package, Landlord agrees to the following: (i) Tenant shall
not be required to perform any work not specifically provided for in the Lease;
(ii)Tenant shall not be required to pay Landlord for any service, work, etc. or
other fee unless specifically provided for in the Lease; (iii) in the event of a
conflict between the Tenant Package and a requirement specifically provided for
in the Lease, the Lease shall prevail; and (iv) in the event of a conflict
between the Landlord approved plans and the Tenant Package, the approved plans
shall prevail except to the extent such discrepancy would result in a violation
of building code or other local building department requirement.
Notwithstanding anything to the contrary contained herein, Tenant agrees
that this Lease is being entered into on the reliance that Tenant's storefront
and store interior design shall be acceptable to Landlord, and Tenant's Plans
shall fully and strictly comply with the Tenant Package and Landlord's design
concept for the Shopping Center as well as being of equal or greater quality as
the design of a first-class toy store operation. If it is determined, in
Landlord's sole judgment, that Tenant's Plans, the design and quality of all
work and installations by Tenant in the Premises are not in conformance with
Landlord's criteria or such other first-class toy store operation, Landlord
shall have the right to require Tenant to conform at Tenant's sole cost and
expense or Landlord may terminate this Lease.
Tenant acknowledges that the financial success of the Shopping Center
depends, in part, on Tenant's opening the Premises for business
contemporaneously with the Rent Commencement Date and that Landlord's damages
arising from Tenant's failure to do so are extremely difficult and impracticable
to fix. Therefore, subject to Section 25.7, should Tenant fail to open the
Premises for business upon the Rent Commencement Date, Tenant shall pay to
Landlord, upon receipt of invoice, the sum of Four Hundred Dollars ($400) per
day for each day Tenant delays its opening after and including the Rent
Commencement Date, which sum Tenant agrees is fair compensation to Landlord for
said damages. Tenant shall not open the Premises for business prior to the
initial opening of the Shopping Center without the prior consent of Landlord.
11.2 Improvements. After the initial construction of the Premises by
Tenant, at Tenant's own expense and in accordance with Exhibit C, after giving
Landlord written notice of its intentions to do so, Tenant may, from time to
time, make such Improvements to the Premises as Tenant may find necessary or
convenient for its purposes so long as the value of the Premises is not thereby
materially diminished and subject to Landlord's approval as provided in this
Section. Tenant shall not make any of the following Improvements without
Landlord's prior written consent in each instance: Improvements costing more
than Ten Thousand Dollars ($10,000) in the aggregate per occurrence;
Improvements to the mechanical or electrical systems, to the exterior walls or
roof of the Premises, or to any storefront or area of the Premises within three
feet (3') of the storefront; the addition of any mezzanine or Improvements that
increase the size of any existing mezzanine; and any penetration into or through
the roof, ceiling or floor of the Premises. With the exception of the plans in
connection with the Tenant's initial construction and opening of the Premises,
Tenant shall reimburse Landlord for all reasonable costs and expenses
(including, without limitation, any reasonable architect or engineer fees)
incurred by Landlord in approving or disapproving Tenant's plans for
Improvements. Tenant shall certify to Landlord Tenant's actual cost of
constructing its Improvements within thirty (30) days after completing the same.
11.3 Mechanics' Liens.
(a) General. Tenant shall pay or cause to be paid all costs of labor,
services, and materials supplied in the prosecution of any work done in the
Premises on behalf of Tenant, and Tenant shall keep the Premises free and clear
of all mechanics' liens and other liens arising out of any work done for Tenant
or persons claiming under Tenant. Tenant shall promptly notify Landlord of any
Claim or lien filed against the Premises or the commencement of any action
affecting the title thereto.
(b) Contest of Lien. If Tenant desires to contest the claim of any
mechanics' lien, Tenant shall (i) either post a release bond issued by a
responsible corporate surety as prescribed by law, or furnish Landlord with
adequate security for the amount of the claim plus estimated costs and interest,
and (ii) promptly pay or cause to be paid any and all sums awarded to the
claimant on its suit.
(c) Landlord's Right to Cure. If Tenant fails to provide security for or
satisfaction of any mechanics' lien, then Landlord, in addition to any other
rights or remedies it may have, may (but shall not be obligated to) discharge
said lien by (i) paying the claimant an amount sufficient to settle and
discharge the claim, (ii) posting a release bond, or (iii) taking such action as
Landlord shall deem appropriate, and Tenant shall pay to Landlord on demand all
costs incurred by Landlord in settling and discharging such lien (including
reasonable attorney fees and bond premiums).
(d) Notice of Non-responsibility. Landlord or it's representatives
shall have the right to go upon and inspect the Premises at all reasonable
times, and shall have the right to post and keep posted thereon during the
performance by Tenant of any work described in this Article 11 notices of
non-responsibility or such other notices that Landlord may deem to be proper for
the protection of Landlord's interest in the Premises. Tenant shall give
Landlord and Ground Lessor at least ten (10) days advance written notice of its
intention to commence any work that might result in a lien described in this
Article.
11.4 Title to Improvements. All Improvements shall become the property of
Landlord upon expiration or earlier termination of this Lease. Landlord's
reversionary interest in the Improvements shall at all times be prior and
superior to any interest of any lender of Tenant, or of any other entity
claiming any purchase money lien or other interest in the Improvements.
ARTICLE 12
REPAIRS; MAINTENANCE
12.1 Tenant's Obligations. Tenant agrees at all times from and after the
Commencement Date, at its own cost and expense, to repair, maintain in good and
tenantable condition and replace, as necessary, the Premises and every part
thereof (except portions of the Premises specifically required to be maintained
by Landlord pursuant to this Lease), including without limitation all equipment
and Utility Installations exclusively serving the Premises; any Air Conditioning
System or portion thereof exclusively serving the Premises; exterior and
interior glass; signs; locks and closing devices, window sashes, casements and
frames; doors and door frames; floor coverings; any grease traps, grease lines,
and/or piping; the storefront; and all items of repair, maintenance, alteration,
improvement or reconstruction as may be required by any Legal Requirement or the
insurance underwriter(s) for the Shopping Center. In no event shall Tenant be
required to make repairs necessitated by the negligence or willful acts of
Landlord or anyone claiming under Landlord, because of the failure of Landlord
to perform or observe any term or condition of this Lease, or because of
Improvements made by Landlord except to the extent otherwise covered by the
insurance Tenant is required to carry under this Lease. All replacements made by
Tenant 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 prior
approval. Tenant shall have the benefit of any warranty(ies) in connection with
Landlord's Work to the extent any such warranty covers portions of the Premises
Tenant is obligated to repair and maintain hereunder.
12.2 Landlord's Obligations. Landlord shall repair, maintain in good and
tenantable condition (and in compliance with Legal Requirements and requirements
of the insurance underwriter(s) for the Shopping Center) and replace, as
necessary, the roof, exterior walls, and structural parts of the Premises
(including the structural floor), and all Utility Installations serving the
Premises on a nonexclusive basis (except where the appropriate utility company
performs such duties) or that form a centralized Air Conditioning System serving
the Premises on a nonexclusive basis. In no event shall Landlord be required to
make repairs necessitated by the negligence or willful acts of Tenant or anyone
claiming under Tenant, because of the failure of Tenant to perform or observe
any term or condition of this Lease, or because of Improvements made by Tenant
except to the extent otherwise covered by the insurance Landlord is required to
carry under this Lease. Landlord shall be under 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. Notwithstanding
anything to the contrary contained in this Lease, Landlord shall not in any way
be liable to Tenant for failure to make repairs as herein specifically required
of it unless Tenant has previously notified Landlord of the need for such
repairs and Landlord has failed to commence and complete said repairs within a
reasonable period following receipt of Tenant's notification. As used in this
Article 12, "exterior walls" shall exclude storefronts, plate glass, window
cases or window frames, doors or door frames, security grilles or similar
enclosures. The definition of Common Area Expenses includes all work performed
by Landlord in accordance with this Section except as otherwise expressly
provided for in this Lease.
12.3 Performance of Work by Landlord. If Tenant refuses or neglects to
repair, replace, or maintain the Premises, or any part thereof, in a manner
reasonably satisfactory to Landlord, Landlord shall have the right but not the
obligation, upon giving Tenant reasonable notice of its election to do so, to
enter the Premises and make such repairs or perform such maintenance or
replacements on behalf of and for the account of Tenant. Nothing herein
contained shall imply any duty of Landlord to do any work that, under any
provision of this Lease, Tenant is required to do, nor shall Landlord's
performance of any repairs on behalf of Tenant constitute a waiver of Tenant's
default in failing to do the same. No exercise by Landlord of any rights herein
reserved shall entitle Tenant to any compensation, damages or abatement of Rent
from Landlord for any injury or inconvenience occasioned thereby. If Landlord
performs any maintenance or other obligations that Tenant is required to perform
under the terms of this Lease, Tenant shall upon demand pay to Landlord the
costs and expenses incurred by Landlord in doing the same (or shall deposit with
Landlord the anticipated amounts thereof), plus Landlord's Administrative Fee.
12.4 Service Contracts. Tenant shall contract with a qualified air
conditioning service company designated by Landlord (provided that the rates
charged by such service company are competitive in the trade area for
commensurate contractors) for the inspection and maintenance at least once every
calendar year and the repair and replacement, as necessary, of the distribution
portion of the Air Conditioning System serving the Premises. If at any time
during the Lease Term, an Air Conditioning System which exclusively serves the
Premises is installed, Tenant shall contract with a qualified air conditioning
service company approved by Landlord for the monthly maintenance and the repair
and replacement, as necessary, of the Air Conditioning System. Tenant shall
contract with a qualified service company for the cleaning and maintenance of
any grease traps and/or grease lines which are Tenant's responsibility to
maintain. Tenant shall provide Landlord with a copy of any contract required
under this Section within ten (10) days after the Commencement Date, together
with a copy of any subsequent contracts within ten (10) days after their
execution.
ARTICLE 13
INSURANCE OBLIGATIONS
13.1 Tenant's Insurance Obligations. At all times from and after the
Commencement Date, Tenant shall procure and maintain, at its sole cost and
expense, the following policies of insurance:
(a) Liability. Commercial general liability insurance with broad form
contractual liability coverage and with coverage limits of not less than Two
Million Dollars ($2,000,000) combined single limit, per occurrence, specifically
including liquor liability insurance covering consumption of alcoholic beverages
by customers of Tenant, if the sale of alcoholic beverages is permitted in the
Premises. Such policy shall insure Tenant's performance of the indemnity
provisions of this Lease, but the amount of such insurance shall not limit
Tenant's liability nor relieve Tenant of any obligation hereunder.
(b) Workers' Compensation. Workers' compensation insurance in the amount
required by the state in which the Shopping Center is located for the benefit of
Tenant's employees.
(c) Plate Glass. Insurance covering the full replacement cost of all plate
glass on the Premises; Tenant may self-insure such risk .
(d) Equipment. Boiler and machinery insurance on the Air Conditioning
System (or any part thereof) exclusively serving the Premises.
(e) Tenant's Personal Property and Improvements. Property insurance
covering any peril generally included in the classification "all risks"
(excluding earthquake and flood) in the area in which the Shopping Center is
located covering all (i) merchandise, (ii) Improvements, and (iii) Personal
Property owned or leased by Tenant (or for which Tenant is legally liable) and
located in the Shopping Center, in an amount not less than ninety percent (90%)
of their full replacement cost with a commercially reasonable deductible. Any
policy proceeds shall be used for the repair or replacement of the property
damaged or destroyed, unless this Lease is terminated under the provisions of
Article 18.
13.2 Policy Requirements. All policies of insurance provided for herein
shall be issued by insurance companies that have a general policyholder's rating
of not less than "A" and a financial rating equivalent to a policyholder's
surplus of at least One Hundred Million Dollars ($100,000,000), as rated in the
most current available "Best's" Insurance Reports, and that have been admitted
or qualified to do business in the state where the Shopping Center is located by
the insurance commission or other highest board, body or official responsible
for overseeing the insurance business in such state. Tenant's general liability
policy as required in Section 13.1(a) shall contain cross-liability
endorsements. All policies of insurance provided for herein (with the exception
of workers' compensation insurance) shall name Landlord, Landlord's property
manager, all Mortgagees and such other individuals or entities as Landlord may
from time to time designate, as "additional insureds." Certificates of all
insurance required of Tenant hereunder expressly providing for the waiver of
subrogation as required in Section 13.4 shall be delivered to Landlord at least
ten (10) days prior to the Commencement Date. Tenant shall provide to Landlord,
at least thirty (30) days prior to expiration, certificates of insurance to
evidence any renewal or additional insurance procured by Tenant. All
certificates of insurance delivered to Landlord shall contain an agreement by
the company issuing said policy to give Landlord twenty (20) days' advance
written notice of any cancellation, lapse, reduction or other adverse change
respecting such insurance. All commercial general liability insurance, property
damage or other casualty policies shall be written as primary policies, not
contributory with or secondary to coverage that Landlord may carry.
Notwithstanding anything to the contrary contained herein, Tenant shall be
permitted to have Tenant's primary commercial general liability insurance policy
written in a lesser amount than specified in Section 13.1(a) (in no event less
than fifty percent [50%] of the required coverage) provided Tenant carries and
maintains an "excess liability" and/or "umbrella policy" to cover the balance of
the required coverage and provided that all the requirements set forth herein
are otherwise satisfied. Further, Tenant shall be permitted to have any required
insurance covered as part of a blanket policy with a so called "agreed amount
endorsement" for the business conducted upon the Premises providing the
insurance coverage required under this Lease.
13.3 Landlord's Insurance Obligation. At all times from and after the
Commencement Date, Landlord shall maintain in effect insurance providing
protection for the following liabilities and/or risks: (a) commercial general
liability insurance for bodily injury and property damage arising from
Landlord's ownership and/or operation of the Shopping Center with coverage
limits at least equal to those Tenant is required to maintain as provided
herein, and (b) any peril included in the classification "all risks" in the
geographic area in which the Shopping Center is located, including earthquake
coverage and/or any other coverage Landlord deems reasonably necessary (e.g.,
so-called "Difference in Conditions" coverage), covering the Shopping Center,
exclusive of any item that Tenant is required to insure or any item, building or
improvement that another party is required to insure, in an amount that is the
greater of eighty percent (80%) of its full replacement cost (exclusive of the
cost of excavations, foundations, and footings), or such greater amount as any
Mortgagee may require Landlord to maintain.
13.4 Mutual Waivers of Rights. Notwithstanding anything to the contrary
contained in this Lease, Landlord (for itself and its insurer), waives any
rights, including rights of subrogation, and Tenant (for itself and its
insurer), waives any rights, including rights of subrogation, each may have
against the other, and Tenant (for itself and its insurer) waives any rights,
including rights of subrogation, it may have against any of the parties to the
REA, for compensation of any loss or damage occasioned to Landlord or Tenant
arising from any risk generally covered by the all risks insurance required to
be carried by Landlord and Tenant. The foregoing waivers shall be operative only
so long as available in the state where the Shopping Center is located. The
foregoing waivers shall be effective whether or not the parties maintain the
insurance required to be carried pursuant to this Lease.
ARTICLE 14
INDEMNITY
From and after the Commencement Date, Tenant shall indemnify, protect,
defend, and hold Landlord (and its partners, joint venturers, shareholders,
Mortgagee, affiliates, and property managers, and their respective officers,
directors, employees, and agents) harmless from and against any and all Claims
arising out of or in connection with loss of life, personal injury, property
damage or otherwise arising from (a) the use, occupation, improvement or
maintenance of the Premises or the Shopping Center or any work or activity in or
about the Premises or Shopping Center by Tenant or its assignees or subtenants
or their respective agents, employees, contractors, or licensees , (b) any
activity, condition or occurrence in or about the Premises, (c) the filing or
potential filing of any mechanic's or materialmen's lien against the Premises or
the Shopping Center in connection with any work done or caused to be done by
Tenant, (d) any breach or failure to perform any obligation imposed on Tenant
under this Lease, or (e) any act or omission of Tenant or its assignees or
subtenants or their respective agents, contractors, employees, or licensees.
Upon notice from Landlord, Tenant shall, at Tenant's sole expense and by counsel
reasonably satisfactory to Landlord, defend any action or proceeding brought
against Landlord by reason of any such Claim. If Landlord (or its partners,
joint venturers, shareholders, Mortgagee, affiliates, and property managers, or
their respective officers, directors, employees, and agents), without fault on
its part, is made a party to any litigation commenced by or against Tenant, then
Tenant shall indemnify, protect, defend, and hold each of such persons harmless
from and against any and all Claims arising out of such litigation incurred or
paid by any such person in connection with such litigation. The obligations of
this Article shall survive the expiration or earlier termination of this Lease.
In no event shall Tenant's obligations pursuant to this Article 14 extend to
Claims arising out of the sole negligence or willful misconduct of Landlord, or
its agents, employees or contractors (acting on behalf of Landlord).
ARTICLE 15
OCCUPANCY TRANSACTIONS
15.1 Restrictions.
(a) No Encumbrances. Tenant shall not make, consent to, or suffer any
Encumbrance without the prior written consent of Landlord, which Landlord may
grant or withhold in its sole and absolute discretion.
(b) Other Occupancy Transactions. Tenant shall not enter into or
consent to any Occupancy Transaction other than an Encumbrance without first
obtaining Landlord's written consent, which Landlord shall not withhold
unreasonably. Landlord may withhold its consent on any reasonable ground,
including without limitation any of the following situations: (i) the
Transferee's contemplated use of the Premises following the proposed Occupancy
Transaction is not identical to the Permitted Use, (ii) in Landlord's reasonable
business judgment, the Transferee lacks sufficient business reputation or
experience to operate a business of the type and quality permitted under this
Lease, (iii) the present net worth and working capital of the Transferee are
less than that of Tenant, or Tenant and Tenant's Guarantor, as the case may be,
at the Effective Date or at the time of the request, whichever is higher, (iv)
the proposed Occupancy Transaction would breach any covenant of Landlord or
Tenant respecting radius restriction, location, use or exclusivity in any other
lease, financing agreement, or other agreement relating to the Shopping Center
(including, but not limited to, Section 9.5 [i.e., the Gaming Provisions]), or
(v) the proposed Occupancy Transaction provides for rentals thereunder based on
the net income or profits derived by the Transferee from the Premises.
15.2 Condition Precedent. Tenant shall not have the right or power to enter
into an Occupancy Transaction if Tenant shall be in default beyond any
applicable notice and cure period pursuant to Article 16 under any provision of
this Lease .
15.3 Procedures. Should Tenant desire to enter into an Occupancy
Transaction which requires Landlord's consent, Tenant shall request Landlord's
consent to such transaction in writing at least forty-five (45) days before the
effective date of any such transaction. Such request shall include the
following:
(a) A detailed description of the proposed transaction, including its
nature, effective date, the purchase price, payment terms, allocation among
leasehold interest, Personal Property, Improvements, goodwill, inventory, and
other items;
(b) Copies of any offers, agreements, subleases, assignments, letters of
commitment or intent, and other documents or correspondence pertaining to the
proposed transaction;
(c) A description of the identity, financial condition, and previous
business experience of Tenant and Transferee, including, without limitation,
copies of latest income statement, balance sheet, and statement of cash flows
(with accompanying notes and disclosures of all material changes thereto) in
audited form, if available, and certified as accurate by Tenant or Transferee
respectively, together with a statement authorizing Landlord or its designated
representative(s) to investigate Tenant's and Transferee's business experience,
credit, and financial responsibility; and
(d) A statement by Tenant and Transferee agreeing that it is their
intention to complete the transaction if Landlord consents thereto.
15.4 Response by Landlord; Documentation. Within thirty (30) days after
receipt of Tenant's request for consent and all items required under Section
15.3, Landlord shall (a) consent to the proposed Occupancy Transaction, (b)
exercise its rights under Section 15.6, or (c) refuse to consent to the
Occupancy Transaction. Any consent by Landlord to any Occupancy Transaction
shall be evidenced by an instrument prepared by Landlord and executed by Tenant
and Transferee. As a condition to the completion of any assignment or transfer
of Tenant's interest in this Lease, Transferee shall agree in writing to assume
and perform all of the terms, covenants, and conditions of this Lease that are
obligations of Tenant. Tenant shall remain fully liable to perform its duties
under this Lease following the Occupancy Transaction. Tenant shall, on demand of
Landlord, reimburse Landlord for all Landlord's reasonable costs, including
attorney fees, incurred in obtaining advice and preparing documentation for each
requested Occupancy Transaction not to exceed One Thousand Dollars ($1,000.00)
per occurrence.
15.5 Consideration to Landlord. Except for those Occupancy Transactions
permitted pursuant to the provisions of Section 15.8 without Landlord's prior
consent, if Tenant enters into an Occupancy Transaction, the Minimum Annual Rent
then payable and any scheduled increases thereto shall be increased on the
effective date of such transaction to the highest of: (a) the total Minimum
Annual Rent payable by the Transferee to Tenant; (b) an amount equal to the
total of the Minimum Annual Rent plus Percentage Rent required to be paid by
Tenant pursuant to this Lease during the calendar year immediately preceding
such transaction; or (c) the Minimum Annual Rent payable in the first full year
of the Lease Term, increased in accordance with the CPI Adjustment Procedures
using the Rent Commencement Date as the Base Month and the effective date of
such transaction as the Month of Adjustment. In no event shall the Minimum
Annual Rent, as adjusted, be less than the Minimum Annual Rent in effect prior
to the effective date of the Occupancy Transaction.
15.6 Landlord's Right of First Refusal. If Tenant requests consent to an
Occupancy Transaction in accordance with this Article, Landlord shall have the
right to purchase the leasehold interest of Tenant in this Lease and the
Premises (referred to in this Section as "Tenant's interest"), to the exclusion
of the prospective Transferee, at the purchase price and terms offered by the
prospective Transferee. Such right shall be exercisable by Landlord by giving
Tenant notice of its election to purchase as provided in Section 15.4. Upon such
election, the proposed Transferee shall have no right to purchase Tenant's
interest, Landlord and Tenant shall execute an agreement setting forth the terms
and conditions of the purchase, and the proposed Occupancy Transaction shall be
deemed to have been disapproved. No failure of Landlord to elect to exercise its
rights hereunder shall be construed as consent to the proposed Occupancy
Transaction or a waiver of such rights with respect to any future proposed
Occupancy Transaction.
15.7 Nullity. Any Occupancy Transaction purportedly consummated in
violation of the provisions of this Article shall be null and void and of no
force or effect.
15.8 Permitted Occupancy Transactions. Notwithstanding anything to the
contrary contained in this Article 15, so long as the Tenant (i) is the tenant
entity named in Section 1.2 of this Lease and (ii) is not in default as provided
in Section 15.2, Tenant shall have the right, without the prior written consent
of Landlord, to enter into an Occupancy Transaction, other than an Encumbrance,
with a person or entity which: [a] is Tenant's parent organization; or [b] is a
wholly-owned subsidiary of Tenant; or [c] is a corporation of which Tenant or
Tenant's parent organization owns in excess of fifty percent (50%) of the
outstanding capital stock; or [d] as a result of a consolidation or merger with
Tenant and/or Tenant's parent corporation shall own all the capital stock of
Tenant or Tenant's parent corporation; or [e] purchases all or substantially all
of Tenant's assets provided such acquisition includes at least ten (10) stores
operating under the Trade Name (or a trade name similar to the Trade Name)
permitted under this Lease; or [f] acquires stock constituting effective control
of Tenant provided that at the time of such acquisition Tenant operates at least
ten (10) stores under the Trade Name (or a trade name similar to the Trade Name)
permitted under this Lease. Any Occupancy Transaction pursuant to [a], [b], [c],
[d], [e], or [f] above shall be subject to the following conditions: (1) Tenant
shall remain fully liable during the unexpired Lease Term; (2) any such
Occupancy Transaction shall be subject to all of the terms, covenants and
conditions of this Lease and any such Transferee shall expressly assume for the
benefit of Landlord the obligations of Tenant under this Lease by a document
prepared by Landlord; (3) the resulting entity pursuant to [d], [e], and [f]
above shall have a net worth equal to or greater than Four Million Dollars
($4,000,000.00); (4) Tenant shall give Landlord notice of such Occupancy
Transaction at least twenty (20) days prior to its effective date (which notice
shall include all documentation necessary to verify the conditions contained in
this paragraph); and (5) Tenant shall reimburse Landlord for Landlord's
reasonable documentation fees incurred in conjunction with the processing and
preparation of documentation for any such Occupancy Transaction, not to exceed
One Thousand Dollars ($1,000.00) per occurrence.
ARTICLE 16
DEFAULTS BY TENANT; LANDLORD REMEDIES
16.1 Events of Default. The occurrence of any of the following shall
constitute a default by Tenant and a breach of this Lease.
(a) Failing or refusing to pay any amount of Minimum Annual Rent or
Additional Rent when due in accordance with the provisions of this Lease;
(b) Failing or refusing to occupy and operate the Premises in accordance
with Sections 10.1 and 10.2 or conducting a going-out-of-business, liquidation,
clearance, or similar sale;
(c) Failing or refusing to perform fully and promptly any covenant or
condition of this Lease, other than those specified in subparagraphs (a) and (b)
above or (d) below; or
(d) Failing or refusing to comply with Section 9.5; maintaining,
committing, or permitting on the Premises waste or a nuisance in any twelve (12)
consecutive month period in which Tenant has previously received one (1) or more
notices of such violation; use of the Premises for an unlawful purpose; entering
into an Occupancy Transaction contrary to the provisions of Article 15; failing
to remain open for business as required by Section 10.2, on any occasion during
a given year of the Lease Term in which Tenant has received three (3) or more
notices of violations of said Section; and in the event the Permitted Use
involves the sale and/or preparation of food, Tenant's failure to maintain a
health department rating of "A" (or such other highest health department or
similar rating as is available) for the second (2nd) time in any twelve (12)
month period.
16.2 Notices. Following the occurrence of any of the defaults specified in
subparagraphs (a), (b) and (c) of Section 16.1, Landlord shall give Tenant a
written notice specifying the nature of the default and demanding that Tenant
fully cure each such default within the time period specified in the
correspondingly lettered subparagraphs below:
(a) For nonpayment of Minimum Annual Rent or Additional Rent, the first two
(2) such notices in each calendar year will be ten (10) day notices, thereafter
during such year five (5) days;
(b) For breach of Sections 10.1 or 10.2 or for conducting a
going-out-of-business, liquidation, clearance, or similar sale, three (3)
business ( i.e., Monday through Friday) days;
(c) With regard to those defaults specified in subparagraph (c) of Section
16.1, a reasonable period not to exceed thirty (30) days; provided, however,
that if such default cannot be cured within said time period, Tenant shall be
deemed to have cured such default if Tenant so notifies Landlord in writing,
commences cure of the default within said time period, thereafter diligently and
in good faith continues with said cure and actually completes said cure (and
upon request from Landlord, Tenant shall provide Landlord with written notice as
to the progress of Tenant's cure); and
(d) With regard to those defaults specified in subparagraph (d) of Section
16.1, Landlord shall give Tenant, and any subtenant, a written notice specifying
the nature of the default and the provisions of this Lease breached and Landlord
shall have the right to demand in said notice that Tenant quit the Premises
within five (5) days.
To the extent permitted by applicable state law, the time periods provided
in this Section 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;
provided, however, to the extent the foregoing is not permitted by applicable
law, any notice under this Section shall run concurrently with, and not in
addition to, any similar time periods prescribed by applicable law. Any notice
given pursuant to this Section is in lieu of any written notice required by
statute or law and Tenant waives (to the fullest extent permitted by law) the
giving of any notice other than that provided for in this Section.
16.3 Landlord's Rights and Remedies. Should Tenant fail to cure within the
time periods specified in Section 16.2 any default specified in subparagraph
(a), (b) or (c) of Section 16.1, or fail to quit the Premises in accordance with
subparagraph (d) of Section 16.2 with respect to any default specified in
subparagraph (d) of Section 16.1, 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:
(a) 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;
(b) 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
Rent which has become payable, or which may thereafter become payable; or
(c) The right of Landlord, even though it may have reentered the Premises,
in accordance with subparagraph (b) of this Section, to elect thereafter to
terminate this Lease and Tenant's right to possession of the Premises.
Should Landlord have reentered the Premises under the provisions of
subparagraph (b) of this Section, Landlord shall not be deemed to have
terminated this Lease or have accepted a surrender thereof by any such reentry,
unless Landlord shall have notified Tenant in writing that it has so elected to
terminate this Lease and Tenant's right to possession. Tenant further covenants
that the service by Landlord of any notice pursuant to the unlawful detainer or
eviction statutes of the state where the Shopping Center is located 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 written notice to Tenant) be
deemed to be a termination of this Lease. In the event of any reentry or taking
possession of the Premises as aforesaid, Landlord shall have the right, but not
the obligation, to remove therefrom all or any part of the merchandise,
Improvements or Personal Property located therein and to place the same in
storage at a public warehouse at the expense and risk of Tenant. The rights and
remedies given to Landlord in this Section shall be additional and supplemental
to all other rights or remedies which Landlord may have under laws in force when
the default occurs.
Landlord agrees that in the event Tenant defaults under this Lease and
thereafter vacates the Premises, Landlord shall use its reasonable efforts to
re-lease the Premises and mitigate monetary damages arising out of Tenant's
default or breach of this Lease. Nothing herein, however, shall prohibit
Landlord from leasing any other vacant premises before leasing the Premises
hereunder, or from using its business judgment respecting the leasing of the
Premises hereunder.
16.4 Landlord's Damages. Should Landlord terminate this Lease and Tenant's
right to possession of the Premises, pursuant to the provisions of subparagraphs
(a) or (c) of Section 16.3, Landlord may recover from Tenant as damages, all of
the following:
(a) The worth at the time of award of any unpaid Rent that had been earned
at the time of such termination;
(b) The worth at the time of award of the amount by which the unpaid Rent
that would have been earned after termination until the time of award exceeds
the amount of such Rent loss Tenant proves could have been reasonably avoided;
(c) The worth at the time of award of the amount by which the unpaid Rent
for the balance of the Lease Term after the time of award exceeds the amount of
such Rent loss that Tenant proves could be reasonably avoided;
(d) 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, without limitation, any costs or expense incurred by
Landlord in (i) retaking possession of the Premises, including reasonable
attorney fees therefor, (ii) maintaining or preserving the Premises after such
default, (iii) preparing the Premises for reletting to a new tenant, including
repairs or demolitions to the Premises for such reletting, (iv) leasing
commissions, and (v) any other costs necessary or appropriate to relet the
Premises;
(e) The unamortized cost of the Construction Allowance, if any, paid by
Landlord to Tenant in accordance with the provisions of Exhibit C-Addendum, if a
part of this Lease, and/or any rent credit given to Tenant, with a straight-line
amortization schedule and an amortization period equal to the Lease Term; and
(f) 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
where the Shopping Center is located.
As used in subparagraphs (a) and (b) of this Section, the "worth at the
time of award" is computed by allowing interest at the Interest Rate. As used in
subparagraph (c) of this Section, the "worth at the time of award" is computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).
All Additional Rent shall, for the purposes of calculating any amount due
under the provisions of subparagraph (c) of this Section, be computed on the
basis of the average monthly amount thereof accruing during the immediately
preceding thirty-six (36) month period, except that, if it becomes necessary to
compute such Additional Rent before such a thirty-six (36) month period has
occurred, then such Additional Rent shall be computed on the basis of the
average monthly amount thereof accruing during such shorter period.
16.5 Personal Property. In the event of Tenant's default, continuing during
the length of said default, Landlord shall have the right to take the exclusive
possession of any of Tenant's merchandise and/or Personal Property remaining on
the Premises and to use the same free of rent or charge until all defaults have
been cured or, at its option, to require Tenant to remove same forthwith. In the
event of any reentry or taking possession of the Premises as provided in this
Article, Landlord shall have the right, but not the obligation, to remove
therefrom all or any part of the merchandise or Personal Property located
therein and to place the same in storage at a public warehouse at the expense
and risk of Tenant.
Notwithstanding anything to the contrary contained herein, upon Tenant's
written request therefor, provided such request is in connection with the
remodel, alteration or merchandising of the Premises and provided Tenant is not
in default under this Lease (beyond the applicable notice and cure period as
provided in Article 16), Landlord shall subordinate its rights, on a form
prepared by Landlord, in such Personal Property of Tenant to the rights of any
fixture or equipment seller, lender or lessor (hereinafter "Lender") of Tenant,
but only so long as Tenant is indebted to such Lender, provided such Lender
agrees to (i) allow Landlord thirty (30) days to cure Tenant's default under the
agreement between Tenant and Lender, (ii) provide Landlord with no less than
five (5) days' written notice in the event of entry for repossession and shall
have said Personal Property removed within five (5) days from the date of entry
for repossession, (iii) remove the Personal Property promptly upon notification
from Landlord in the event of default by Tenant under this Lease, (iv) be
accompanied by a representative of center management during any such entry, and
only during reasonable business hours, (v) repair all damage occasioned by any
such repossession at Lender's sole expense, (vi) defend, indemnify and hold
Landlord harmless from any claims made as a result of the removal of the
Personal Property by Lender, (vii) dispose of or sell the property at some place
other than the Shopping Center, and (viii) advise Landlord in writing within
twenty (20) days after the expiration or earlier termination of the agreement
between Lender and Tenant as to said Personal Property. In no event shall
Landlord be under any obligation to assist in the repossession of such Personal
Property. Tenant further agrees to reimburse Landlord, in advance, for
Landlord's reasonable costs incurred in preparing the documentation referred to
herein (not to exceed $500 per occurrence)
16.6 Waiver of Rights of Redemption. Tenant expressly waives any and all
rights of redemption granted by or under any present or future laws if Tenant is
evicted or dispossessed for any cause, or if Landlord obtains possession of the
Premises by reason of the violation by Tenant of any of the terms, covenants,
and conditions of this Lease or otherwise.
ARTICLE 17
DEFAULTS BY LANDLORD; TENANT'S REMEDIES
17.1 Default by Landlord. If Landlord fails 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 written notice of default
from Tenant or, when more than thirty (30) days shall be required because of the
nature of the default, if Landlord shall fail to proceed diligently to cure such
default after written notice thereof from Tenant, said failure shall constitute
a default by Landlord under this Lease.
17.2 Notice to Mortgagees. If the Premises or any part thereof, or any
interest of Landlord in this Lease or the Rent due hereunder, are at any time
subject to any Mortgage (including but not limited to any Ground Lease) and if
Tenant is given notice of the name and address of the Mortgagee, then Tenant
shall give written notice of any Landlord's default to such Mortgagee,
specifying the default in reasonable detail. If Landlord fails to cure such
default within the applicable cure period, Tenant shall give written notice of
such failure to such Mortgagee affording such Mortgagee the same opportunity to
cure as provided Landlord in Section 17.1. If such Mortgagee does perform on
behalf of Landlord, such default shall be deemed cured.
17.3 Limitations on Remedies Against Landlord. In the event Tenant makes
any Claim or asserts any cause of action against Landlord as a result of
Landlord's default: (a) Tenant's sole and exclusive remedy shall be against the
current rents, issues, profits, and other income Landlord receives from its
operation of the Shopping Center, net of all current operating expenses,
liabilities, reserves, and debt service associated with said operation ("Net
Income" for purposes of this Section only), (b) no other real, personal or mixed
property of Landlord, wherever located, shall be subject to levy on any judgment
obtained against Landlord, (c) if such Net Income is insufficient to satisfy any
judgment, Tenant will not institute any further action, suit, Claim or demand,
in law or in equity, against Landlord for or on the account of such deficiency,
and (d) Landlord's default shall not constitute consent by Landlord for Tenant
to perform or observe such terms, covenants or conditions at Landlord's expense.
The limitations set forth in this Section shall be applicable to, and
enforceable by, Landlord and/or by any partner, trustee, officer, employee,
agent or property manager of Landlord.
17.4 Landlord's Exemption From Liability. Landlord shall not be liable for
injury to Tenant's business or loss of income therefrom or for damage that may
be sustained by the person, merchandise or Personal Property of Tenant, its
employees, invitees, customers, agents or contractors or any other person in or
about the Premises, caused by or resulting from fire, steam, electricity, gas,
water or rain, which may leak or flow from or into any part of the Premises, or
from the breakage, leakage, obstruction or other defects of the Utility
Installations, Air Conditioning System or other components of the Premises or
Shopping Center, or as a result of the exercise by Landlord of its rights under
this Lease, except to the extent that such damage or loss is caused by
Landlord's sole, active negligence or willful misconduct. Landlord makes no
representations or warranties whatsoever with respect to any Air Conditioning
System or Utility Installations existing as of the date hereof or in the future
except as expressly provided in Section 2.1; provided, however, in no event is
the foregoing intended to diminish Landlord's obligation to perform Landlord's
Work subject to the specifications provided in Exhibit C. Landlord shall not be
liable in damages or otherwise for any discontinuance, failure or interruption
of service to the Premises of Utilities or the Air Conditioning System and
Tenant shall have no right to terminate this Lease or withhold rent because of
the same except as otherwise expressly provided for in this Section 17.4.
Landlord shall not be liable for any damages arising from any use, act or
failure to act of any other tenant or occupant, if any, of the Shopping Center.
Notwithstanding anything to the contrary contained in this Lease, if as a
result of Landlord's or Landlord's agent's negligence, any utility or Air
Conditioning System being furnished to Tenant is interrupted for more than
seventy-two (72) consecutive hours, then commencing with the first full business
day thereafter, there shall be an equitable abatement of Minimum Annual Rent and
Additional Rent (except Percentage Rent) reflecting the extent Tenant's ability
to conduct business in the Premises is impaired, continuing until such time as
the utility service to the Premises is restored. Such abatement shall not affect
any obligation of Tenant under this Lease to pay Percentage Rental.
ARTICLE 18
RECONSTRUCTION
18.1 Insured Casualty. Upon the occurrence of an Insured Casualty to the
Premises Landlord shall commence Reconstruction of Landlord's Work within ninety
(90) days after such occurrence (provided neither party has terminated as
provided in this Section) and prosecute the same diligently to completion, and
Tenant shall commence Reconstruction of Tenant's Work promptly upon completion
of Landlord's Work and shall diligently prosecute the same to completion. In the
event of a Major Destruction of the Premises as a result of an Insured Casualty
during the last two (2) years of the Lease Term, Landlord and Tenant shall each
have the option to terminate this Lease on written notice to the other of
exercise thereof within thirty (30) days after such occurrence.
18.2 Uninsured Casualty. Upon the occurrence of an Uninsured Casualty to
the Premises, Landlord shall have the election, and shall within ninety (90)
days following the date of such damage give Tenant written notice of Landlord's
election, either to commence Reconstruction of the Premises and prosecute the
same diligently to completion, in which event this Lease shall continue in full
force and effect, or not to perform such Reconstruction, in which event this
Lease shall cease and terminate not later than sixty (60) days after Landlord's
notice of its election to terminate. In the event of a Major Destruction of the
Premises as a result of an Uninsured Casualty during the last two (2) years of
the Lease Term, Tenant shall have the option to terminate this Lease on written
notice to Landlord of exercise thereof within thirty (30) days after such
occurrence.
18.3 Construction Provisions. Reconstruction shall substantially conform to
the provisions of Exhibit C and shall cover Landlord's Work and Tenant's Work.
Landlord shall reconstruct the Premises only to the extent of Landlord's Work;
Tenant, at its sole cost and expense, shall reconstruct Tenant's Work and shall
replace its merchandise, Improvements and Personal Property.
18.4 Release of Liability. In the event of termination under any of the
provisions of this Article, both Landlord and Tenant shall be released from any
liability or obligation under this Lease, except as otherwise provided for in
this Lease, arising after the date of termination. In the event of termination,
all proceeds from Tenant's insurance covering Tenant's Improvements, but
excluding proceeds for Tenant's merchandise, the unamortized net cost to Tenant
of its Improvements with a straight-line amortization schedule and an
amortization period equal to the Lease Term, and Personal Property, shall be
disbursed and paid to Landlord. In no event shall Tenant be entitled to share in
Landlord's insurance proceeds or to take any action which would result in a
reduction of Landlord's insurance proceeds.
18.5 Abatement of Rent. In the event of an Insured Casualty or an Uninsured
Casualty to the Premises, the recurrent Rent (except Percentage Rent) payable by
Tenant shall be abated proportionately with the degree to which Tenant's use of
the Premises is impaired, commencing from the date of destruction and continuing
during the period of Reconstruction or until the effective date of termination,
as the case may be. Tenant shall continue the operation of its business on the
Premises during any such period to the extent reasonably practicable from the
standpoint of prudent business management, and the obligation of Tenant to pay
Percentage Rent and non-recurrent Additional Rent shall remain in full force and
effect. Tenant shall not be entitled to any compensation or damages from
Landlord for loss of use of the whole or any part of the Premises, Tenant's
Personal Property, or any inconvenience or annoyance occasioned by such damage,
Reconstruction or replacement.
18.6 Major Destruction. Notwithstanding any of the foregoing provisions of
this Article, should there be a Major Destruction of the Shopping Center at any
time after the Effective Date, Landlord shall have the right to terminate this
Lease on written notice to Tenant within ninety (90) days after such
destruction. In no event shall Landlord terminate this Lease unless it
terminates the leases of all Shopping Center tenants similarly affected by the
casualty.
18.7 Waiver of Inconsistent Statutes. Landlord and Tenant hereby waive any
statutory rights of termination which may arise by reason of any partial or
total destruction of the Premises .
ARTICLE 19
EMINENT DOMAIN
19.1 Total Taking. If the entire Premises shall be appropriated or taken
under the power of eminent domain by any public or quasi-public authority or
under threat of and in lieu of condemnation (hereinafter, "taken" or "taking"),
this Lease shall terminate as of the date of such taking, and Landlord and
Tenant shall have no further liability or obligation, except as otherwise
provided for in this Lease, arising under this Lease after such date.
19.2 Partial Taking; Right to Terminate. If more than twenty-five percent
(25%) of the Floor Area of the Premises is taken, or if by reason of any taking,
regardless of the amount so taken, the remainder of the Premises is not one
undivided space or is rendered unusable for the Permitted Use, either Landlord
or Tenant shall have the right to terminate this Lease as of the date Tenant is
required to vacate the portion of the Premises taken, upon giving notice of such
election within thirty (30) days after receipt by Tenant from Landlord of
written notice that said Premises have been or will be so taken. In addition, if
(a) such a significant portion of the Shopping Center or Common Area is taken
that, in Landlord's reasonable opinion, substantial restoration is required on
the remaining portion, or (b) Landlord exercises its right to terminate its
participation in the REA because of the taking of portions of the Casino(s) or
the Shopping Center other than the Premises, the Landlord shall have the right
to terminate this Lease upon thirty (30) days' written notice to Tenant. In the
event of such termination, both Landlord and Tenant shall be released from any
liability or obligation under this Lease, except as otherwise provided for in
this Lease, arising after the date of termination. Landlord and Tenant shall,
immediately after learning of any taking, give notice thereof to each other.
19.3 Restoration. If this Lease does not terminate pursuant to Sections
19.1 or 19.2 above, then Tenant shall continue to occupy that portion of the
Premises not 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 remaining to a complete unit of like quality and character as existed
prior to such appropriation or taking, and (b) the Minimum Annual Rent provided
for in Article 1 shall be reduced on an equitable basis, taking into account the
relative values of the portion taken as compared to the portion remaining.
Tenant waives any statutory rights of termination that may arise because of any
partial taking of the Premises.
19.4 Award. Landlord shall be entitled to the entire condemnation award for
any taking of the Premises, the Shopping Center or any part thereof. Tenant's
right to receive any amounts separately awarded to Tenant directly from the
condemning authority for the taking of its merchandise, Personal Property,
relocation expenses and/or interests in other than the real property taken
and/or the leasehold interest shall not be affected in any manner by the
provisions of this Section, provided Tenant's award does not reduce or affect
Landlord's award.
ARTICLE 20
SUBORDINATION; ATTORNMENT; ESTOPPEL
20.1 Subordination to Mortgage. This Lease and all of Tenants' rights
hereunder are and shall be subject and subordinate to the first Mortgage and any
secondary Mortgage approved by the first Mortgagee. The foregoing shall be self
operative without the execution of additional documentation, however, within
twenty (20) days after the receipt of a request from Landlord or any Mortgagee,
Tenant shall confirm such subordination by executing a recordable subordination
agreement in form and content reasonably satisfactory to Landlord and Landlord's
Mortgagee. Tenant acknowledges that any Mortgagee has the right to subordinate
at any time its Mortgage to this Lease and the leasehold estate, without
Tenant's consent. Tenant shall, within twenty (20) days after written request
therefor, execute and deliver such documents as are reasonably requested by the
Mortgagee to confirm such subordination.
Concurrently with Tenant's execution of this Lease, Tenant shall execute
and deliver to Landlord the Notice of Assignment of Lease attached hereto as
Exhibit G.
Notwithstanding anything to the contrary contained herein, upon request
from Tenant, Landlord shall request from any party seeking such superior
position (with the exception of the existing Mortgagee) a non-disturbance
agreement and attornment agreement to the effect that so long as Tenant pays the
rentals due under this Lease and otherwise complies with the terms hereof,
Tenant's occupancy hereunder shall not be disturbed. In no event shall Tenant's
obligation to subordinate its rights hereunder be conditioned on the receipt of
such agreement. Tenant shall be responsible for payment of any costs incurred in
connection with obtaining the documentation requested hereunder.
20.2 Subordination to REA. Subject to Section 2.2, this Lease and all of
Tenant's rights hereunder are and shall be subject and subordinate to the REA
and any amendments or modifications thereof. If the REA is not of record as of
the date hereof, then this Lease shall automatically become subordinate to the
REA upon recordation of the REA, and within twenty (20) days after the receipt
of a request from Landlord or any Mortgagee, Tenant shall confirm such
subordination by executing a recordable subordination agreement in form and
content reasonably satisfactory to Landlord.
20.3 Subordination to Ground Lease. This Lease and all of Tenant's rights
hereunder are and shall be subject and subordinate to the Ground Lease and any
amendments or modifications thereof. If a Memorandum of Ground Lease is not of
record as of the date hereof, then this Lease shall automatically become
subordinate to the Ground Lease upon recordation of a Memorandum of Ground
Lease. Within twenty (20) days after the receipt of a request from Landlord or
any Mortgagee, Tenant shall confirm such subordination by executing a recordable
subordination agreement in form and content reasonably satisfactory to Landlord.
20.4 Attornment. If Landlord sells, transfers, or conveys its interest in
the Premises or this Lease, or if the same is foreclosed judicially or
nonjudicially, or otherwise acquired, by a Mortgagee (including, without
limitation, any Ground Lessor), upon the request and at the sole and absolute
election of Landlord's successor, Tenant shall attorn to said successor,
provided said successor accepts the Premises subject to this Lease. Tenant
shall, upon request of Landlord or any Mortgagee (including, without limitation,
any Ground Lessor), execute an attornment agreement confirming the same, in form
and substance reasonably acceptable to Landlord or Landlord's successor. Such
agreement shall provide, among other things, that said successor shall not be
bound by (a) any prepayment of more than one (1) month's Rent (except Security
Deposit but only to the extent received by said successor) or (b) any material
amendment of this Lease made after the later of the Execution Date, or the date
that such successor's lien or interest first arose, unless said successor shall
have consented to such amendment. This Section 20.4 shall in no way be deemed a
waiver by Tenant of any Claims for any predecessor's failure or bad faith
refusal to provide any Security Deposit to its successor or to notify its
successor of any amendment prior to the date that such successor's lien or
interest first arose.
20.5 Estoppel Certificate. Within twenty (20) days after request from
Landlord or Mortgagee, Tenant shall execute and deliver to Landlord or
Mortgagee, if applicable, an Estoppel Certificate with appropriate facts
concerning the status of this Lease and Tenant's occupancy completed by
Landlord, and with any exceptions thereto noted in writing by Tenant. Tenant's
failure to execute and deliver the Estoppel Certificate within said twenty-day
period shall be deemed to make conclusive and binding upon Tenant in favor of
Landlord, any Ground Lessor, and any potential Mortgagee or transferee the
statements contained in such Estoppel Certificate without exception.
Landlord shall upon request from Tenant (in connection with a proposed
Occupancy Transaction under Article 15), but not more than twice per any
calendar year, execute a statement certifying that (i) this Lease represents the
entire agreement between Landlord and Tenant, and is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect) and the
dates to which rental and other charges are paid in advance, if any, (ii)
certifying the commencement and termination dates of the Lease Term, and (iii)
acknowledging that there are not, to Landlord's knowledge, any uncured defaults
on the part of Tenant hereunder or specifying such defaults if any are claimed.
ARTICLE 21
QUIET ENJOYMENT
Landlord agrees that Tenant, upon paying the rent 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 and until
the end of the Lease Term, subject, however, to those matters to which this
Lease is or shall become subordinate.
ARTICLE 22
CONSENTS
Wherever in this Lease consent, approval or permission (collectively
referred to in this Article as "consent") is required, such consent shall be
given in writing and shall not be unreasonably withheld or delayed, unless
otherwise expressly provided. Landlord shall not be deemed to have withheld its
consent unreasonably where Landlord's right to give its consent is conditioned
on Landlord obtaining the consent of any other person, entity, agency or
Governmental Authority and such other person, entity, agency or Governmental
Authority does withhold its consent. If Landlord fails to give any consent that
a court later holds Landlord was required to give under the terms of this Lease,
Tenant shall be entitled solely to specific performance and such other remedies
as may be specifically reserved to Tenant under this Lease, but in no event
shall Landlord be responsible for monetary damages (including incidental and
consequential damages) for such failure to give consent unless said consent is
withheld maliciously or in bad faith. The failure by Landlord to respond to any
request for consent shall in no event be deemed either approval or refusal by
Landlord.
ARTICLE 23
NOTICES
Wherever in this Lease it shall be required or permitted that any notice,
request, report, communication or demand (collectively, "notice") be given,
served or transmitted by either party to this Lease to or on the other, such
notice shall be in writing and shall be personally delivered or forwarded by
certified mail, return receipt requested, or by nationally recognized courier
service providing written confirmation of delivery, to the addresses of the
parties specified in Section 1.12. Notice shall be deemed to have been given or
served on the delivery date indicated by the United States Postal Service or
courier service on the return receipt or on the date such delivery is refused or
marked "undeliverable," unless Landlord or Tenant, as the case may be, is served
personally, in which event the date of personal delivery shall be deemed the
effective date of notice. Either party may change its address by providing
written notice as specified herein; provided, however, that all addresses
provided must be the actual street address of a residence or business
establishment. The foregoing method of service shall be exclusive, and Landlord
and Tenant waive, to the fullest extent permitted under law, the right to any
other method of service required by any statute or law now or hereafter in
force. Whenever multiple notices are sent or multiple methods of transmitting
any notice are utilized, any time period that commences upon the giving or
deemed giving of such notice shall commence upon the earliest date such delivery
is effectuated, and such time shall not be extended by operation of law or
otherwise because of any later delivery of the same notice.
ARTICLE 24
ATTORNEY FEES
If either Landlord or Tenant institutes any action or proceeding against
the other relating to the provisions of this Lease or any default hereunder, the
nonprevailing party in such action or proceeding shall reimburse the prevailing
party for the reasonable expenses of attorney fees and all costs and
disbursements incurred therein by the prevailing party, including, without
limitation, any such fees, costs or disbursements incurred on any appeal from
such action or proceeding. The prevailing party shall recover all such fees,
costs or disbursements as costs taxable by the court in the action or proceeding
itself without the necessity for a cross-action by the prevailing party. In
addition to the foregoing award of attorneys' fees, costs and disbursements to
the prevailing party, the prevailing party shall be entitled to its attorneys'
fees, costs and disbursements in any post judgment proceedings to collect or
enforce the judgment. This provision is separate and several and shall survive
the termination of this Lease.
ARTICLE 25
GENERAL PROVISIONS
25.1 Binding Effect. 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.
25.2 Right to Lease. Landlord shall have the absolute right to lease or
permit the use or occupancy of space in the Shopping Center as Landlord shall
determine in its sole and absolute judgment. Tenant does not rely on the fact,
nor does Landlord represent, that there shall be any specific occupants or
minimum occupancy level of space in the Shopping Center at any time (including,
without limitation, the occupancy and/or on-going operation of Major Tenants).
25.3 Shopping Center Configuration. Tenant acknowledges that Exhibit A is
for the purposes of convenience only and that, subject to Section 7.5, Landlord
reserves the right at any time during initial construction or thereafter to
expand, reduce, remove, demolish, change, renovate or construct any existing or
new improvements at the Shopping Center.
25.4 Claims by Brokers. Tenant warrants that all negotiations with respect
to this Lease (including, without limitation, preliminary consideration of the
Premises, relevant economics and final Lease provisions) were accomplished
without the aid, intervention or employment of any broker or finder, of any kind
(with the exception of BDH Associates). Tenant shall indemnify, protect, defend,
and hold Landlord (and its partners, joint venturers, affiliates, shareholders,
and property managers, and their respective officers, directors, employees, and
agents) harmless from and against any and all Claims arising out of or in
connection with any Claims made by any person claiming to be a broker or finder
representing Tenant with regard to this Lease including, without limitation,
Claims for commissions and all costs of enforcing this indemnity against Tenant.
25.5 Exhibits. All exhibits attached hereto are incorporated herein and
made a part of this Lease by reference as if fully set forth herein.
25.6 Entire Agreement; Amendments to Lease. There are no oral or written
agreements or representations between the parties hereto affecting this Lease
not contained herein. This Lease supersedes and cancels any and all previous
negotiations, arrangements, representations, brochures, displays, projections,
estimates, agreements, and understandings, if any, made by, to, or between
Landlord and Tenant and their respective agents and employees with respect to
the subject matter thereof, and none shall be used to interpret, construe,
supplement or contradict this Lease. This Lease, and all amendments thereto,
shall be considered to be the only agreement between the parties hereto and
their representatives and agents. To be effective and binding on Landlord and
Tenant, any amendment to the provisions of this Lease must be in writing and
executed by both parties in the same manner as this Lease itself. Any amendment
to this Lease shall be prepared by Landlord. Tenant shall reimburse Landlord on
demand for Landlord's reasonable costs, including attorney fees, incurred in the
preparation and handling of any amendment to this Lease requested by Tenant.
25.7 Force Majeure. The occurrence of any of the following events shall
excuse such obligations of Landlord or Tenant as are thereby rendered impossible
or reasonably impracticable for so long as such obligation remains impossible or
reasonably impracticable to perform: strikes, 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 (a) the occurrence of such events shall not excuse
Tenant's obligations to pay Rent or excuse such obligations as this Lease may
otherwise impose on the party to obey, remedy or avoid such event, provided,
however, that delays in opening for business resulting from reasons set forth
herein shall ▇▇▇▇▇ Tenant's obligation to initially open for business and
commence payment of Rent for a period equal to the length of such delay and (b),
should the work performed by Tenant or Tenant's contractor result in a strike,
lockout and/or labor dispute, such strike, lockout and/or labor dispute shall
not excuse Tenant's performance or obligation to pay Rent, and (c) computer or
other reporting system failures resulting from the conversion to the year 2000
shall not excuse Tenant's performance or obligation to pay Rent.
25.8 Venue. The laws of the state where the Shopping Center is located
shall govern the validity, performance, and enforcement of this Lease. Landlord
and Tenant consent to personal jurisdiction and venue in the state and judicial
district in which the Shopping Center is located.
25.9 Labor Disputes. Tenant shall construct, or cause Tenant's contractor
to construct, all Improvements in such a manner as to avoid any labor dispute
that causes or is likely to cause stoppage or impairment of work, deliveries or
any other services in the Shopping Center. 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, without limitation, (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.
25.10 Bankruptcy. Federal bankruptcy code shall govern with respect to this
Lease and in no event shall any provision of this Lease be deemed to be a waiver
by either party of its rights under such code.
25.11 No Presumption. Although the provisions of this Lease were drafted
primarily by Landlord, the parties hereto agree that such fact shall not create
any presumption, construction or implication favoring the position of either
Landlord or Tenant. The parties agree that any deletion of language from this
Lease prior to its execution by Landlord and Tenant shall not be construed to
have any particular meaning or to raise any presumption, construction or
implication, including, without
limitation, any implication that the parties intended thereby to state the
opposite of the deleted language. The captions of the Articles and Sections of
this Lease are for convenience only, are not operative parts of this Lease and
do not in any way limit or amplify the terms and provisions of this Lease.
25.12 No Waiver. The waiver by Landlord or Tenant of any breach of any
term, covenant or condition contained in this Lease shall not be deemed a waiver
of such term, covenant or condition of any subsequent breach thereof, or of any
other term, covenant or condition contained in this Lease. The consent to or
approval by Landlord or Tenant of any act by the other party requiring such
consent or approval shall not be deemed to waive or render unnecessary
Landlord's or Tenant's consent to or approval of any subsequent similar act by
the other party. Landlord's subsequent acceptance of partial Rent 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 this Lease by reason of such
breach, regardless of Landlord's knowledge of such preceding breach at the time
of Landlord's acceptance. 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 executed by such party.
25.13 Nondiscrimination. Landlord and Tenant covenant for themselves, their
heirs, executors, administrators, successors, and assigns and all persons
claiming under or through them, that there shall be no discrimination against or
segregation of any person or group of persons on account of race, color,
religion, creed, sex, marital status, sexual orientation, national origin,
ancestry, age, physical handicap or medical condition, in the leasing,
subleasing, transferring, use, occupancy, tenure or enjoyment of the Premises
herein leased, and Tenant and any person claiming under or through Tenant shall
not establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, subtenants, licensees, vendees or customers in the Premises.
25.14 Parties. If two (2) or more persons or corporations execute this
Lease as Tenant, the word "Tenant" as used in this Lease shall refer to all such
persons or corporations, and the liability of such persons or corporations for
compliance with and performance of all the terms, covenants, and conditions of
this Lease shall be joint and several. The masculine pronoun used herein shall
include the feminine or the neuter, as the case may be, and the use of the
singular shall include the plural.
25.15 Real Estate Investment Trust. During the Lease Term or any extension
thereof, should a real estate investment trust become Landlord hereunder, all
provisions of this Lease shall remain in full force and effect except as
modified by this Section. If Landlord in good faith determines that its status
as a real estate investment trust under the provisions of the Internal Revenue
Code of 1986, as heretofore or hereafter amended, will be jeopardized because of
any provision of this Lease, Landlord may request reasonable amendments to this
Lease, and Tenant will not unreasonably withhold, delay or defer its consent
thereto, provided that such amendments do not (a) increase the monetary
obligations, decrease the rights, or materially increase any other obligations,
of Tenant pursuant to this Lease or (b) in any other manner adversely affect
Tenant's interest in the Premises.
25.16 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, without limitation, Tenant) or as causing Landlord to be
responsible in any way for the debts or obligations of such other person or
entity.
25.17 Sale or Mortgage by Landlord. If Landlord, at any time, sells,
conveys, transfers or otherwise divests itself or is divested of its interest
("transfer") in the Premises, other than a transfer for security purposes only,
Landlord shall be relieved of all obligations and liabilities accruing hereunder
after the effective date of said transfer, provided that any Security Deposit or
other funds of Tenant then being held by Landlord are delivered to Landlord's
successor. The obligations to be performed by Landlord hereunder shall be
binding on Landlord's successors and assigns only during their respective
periods of ownership.
25.18 Severability. 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 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 that renders it
valid.
25.19 Time of Essence. Time is of the essence in the performance of all
covenants and conditions of this Lease.
25.20 Waiver of Trial by Jury. Landlord and Tenant hereby waive any and all
rights to a trial by jury in any action, proceeding or counterclaim (including
any claim for injury or damage and any emergency and other statutory remedy in
respect thereof) brought by either against the other on any matter arising out
of or in any way connected with this Lease, the relationship of Landlord and
Tenant, and/or Tenant's use or occupancy of the Premises.
25.21 Warranty of Authority. Tenant represents, covenants, and warrants to
Landlord as of the Effective Date that the signatories signing on behalf of
Tenant have the requisite authority to bind Tenant. Further, if the Tenant is a
corporation, Tenant represents, covenants, and warrants to Landlord that: (a) as
of the Effective Date, Tenant is a duly constituted corporation in good standing
and qualified to do business in the state where the Shopping Center is located,
(b) Tenant has paid all applicable franchise and corporate taxes, and (c) Tenant
will file when due all forms, reports, fees, and other documents necessary to
comply with applicable laws.
25.22 Tenant's Financial Statements. On a quarterly basis, Tenant shall
submit copies of Tenant's Form 10-QB quarterly report to Landlord, in care of
the Chief Financial Officer of TrizecHahn Development (or any other individual
Landlord notifies Tenant of in writing at a later date), at the address
specified in Section 1.12 within sixty (60) days of filing said report with the
Securities and Exchange Commission pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934. Failing or refusing to comply with this Section
25.22 within ten (10) days of Landlord's written request, shall constitute a
default by Tenant and a breach of this Lease.
ALADDIN BAZAAR, LLC,
a Delaware limited liability company
By: TH Bazaar Centers Inc.,
a Delaware corporation,
as managing member
By:
Name:
Title:
By:
Name:
Title:
LANDLORD
TOYS INTERNATIONAL,
a California corporation
By:
Name:
Title:
By:
Name:
Title:
TENANT
EXHIBIT B
DEFINED TERMS
Unless otherwise indicated, all references to Articles and Sections shall
be deemed to refer to Articles and Sections of this Lease.
"Additional Rent" means all sums of money required to be paid by Tenant
under this Lease with the exception of Minimum Annual Rent.
"Administrative Fee" means an amount equal to fifteen percent (15%) of the
amount of expenses or other amounts with respect to which the Administrative Fee
is payable as set forth in particular Articles and Sections of this Lease.
"Air Conditioning Charge" is defined in Section 6.6.
"Air Conditioning System" means the air conditioning system serving the
Premises either exclusively or in common with other tenants of the Shopping
Center, including all pipes, ducts, machinery, fans, coolers, chillers,
condensers, and other equipment used in connection therewith.
"Amortization of Capital Items" shall mean the amortization of any capital
item costing Twenty-Five Thousand Dollars ($25,000) or more with a useful life
(as determined in accordance with generally accepted accounting principles) in
excess of five (5) years. Amortization shall be, in lieu of the full cost of
such item, over said useful life and shall include an interest factor based on
the Interest Rate.
"Breakpoint" for any specific period means the amount obtained by dividing
the Minimum Annual Rent payable during such period by the percentage set forth
in Section 1.10 for the calculation of Percentage Rent.
"CFM" means cubic feet of air per minute.
"CPI Adjustment Procedures" shall mean the method by which adjustments
shall be made to a sum of money Tenant must pay Landlord ("Base Amount") in
accordance with percentage increases, if any, in the Department of Labor, Bureau
of Labor Statistics, Consumer Price Index for All Urban Consumers, U.S. City
Average, Subgroup "All Items" (1982-84 = 100), referred to herein as the
"Index." The procedure for making such adjustments shall be to increase the Base
Amount by a percentage equal to the percentage increase, if any, in the Index
for the Month of Adjustment as compared to the Index for the Base Month. In no
event shall the CPI Adjustment Procedures result in a decrease of any sum of
money. The terms "Month of Adjustment" and "Base Month," as used herein, are
defined in the applicable Articles of this Lease. If at any time there is no
Index, Landlord 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.
"Casino(s)" means the hotel/casino operation(s) located adjacent to the
Shopping Center.
"Change of Control" means the transfer by sale, assignment, death,
incompetency, mortgage, deed of trust, trust, operation of law, or otherwise of
any shares, voting rights or ownership interests which will result in a change
in the identity of the person or persons exercising, or who may exercise,
effective control of Tenant, unless such change results from the trading of
shares listed on a recognized public stock exchange. If Tenant is a private
corporation whose stock becomes publicly held, the transfers of such stock from
private to public ownership shall not be deemed a Change of Control.
Notwithstanding the foregoing to the contrary, any transfer of stock in Tenant's
corporation between present stockholders, to family members of present
stockholders, or for bona fide estate planning purposes shall not be deemed a
Change of Control so long as the Tenant entity does not change as a result of
such transfer.
"Claims" means any claim, demand, investigation, proceeding, action, suit,
judgment, award, fine, lien, loss, damage, expense, charge or cost of any kind
or character and liability (including reasonable attorney fees and court costs).
"Commencement Date" means the earlier to occur of (i) the date Landlord
tenders possession of the Premises to Tenant or Tenant's agent or (ii) the date
Tenant or Tenant's agent occupies the Premises for any purpose.
"Common Area" means all improved and unimproved areas within the boundaries
of the Shopping Center (including additional land acquired by Landlord) which
are made available from time to time for the general use, convenience, and
benefit of Landlord, other persons entitled to occupy any portion of the
Shopping Center and/or their customers, patrons, employees, and invitees,
including, without limitation, all automobile parking areas and structures,
floors, ceilings, roofs, skylights, windows, driveways, open or enclosed malls,
food court seating areas, sidewalks, curbs, and landscaped areas, and such
public transportation facilities and landscaped areas as are contiguous with and
benefit the Shopping Center. In addition "Common Area" shall include areas
outside the boundaries of the Shopping Center that are included in the term
"Common Area" as defined in the REA.
"Common Area Expenses" is defined in Section 7.3.
"Construction Allowance" means that amount, if any, payable by Landlord in
accordance with Exhibit C-Addendum.
"Effective Date" means the earlier of (i) the Execution Date or (ii) the
Commencement Date.
"Encumbrance" means any conditional, contingent or deferred assignment,
sublease or conveyance voluntarily made by Tenant of some or all of Tenant's
interest, rights or duties in this Lease or the Premises, including Tenant's
right to use, occupy or possess the Premises, in whole or in part, including,
without limitation, any mortgage, deed of trust, pledge, hypothecation, lien,
franchise, license, concession or other security arrangement.
"Engineered Value" means the total CFM, or the total GPM, which Tenant has
calculated under Exhibit F as necessary for supply to the Premises, or which
have been calculated as necessary for supply to other leasable premises in the
Shopping Center.
"Estoppel Certificate" means a document stipulation substantially in the
form of Exhibit E.
"Execution Date" means that date set forth in the first paragraph of this
Lease upon which this Lease is fully executed by Landlord and Tenant.
"Exhibit C Charge" means the charge payable by Tenant for Landlord's Work
and is more specifically set forth in Section 1.15.
"Expiration Date" means that date set forth in Section 1.7.
"Floor Area" means the square footage of the Premises described in Article
1 (or, where applicable, of other premises located in a building or buildings of
the Shopping Center) without deduction for the width of or space occupied by air
conditioning units that exclusively serve and are located within the Premises
and/or by columns, sprinkler risers, roof drains, structural braces, expansion
joints and/or shear walls, measured from the exterior surface of building walls
(and extensions thereof, in the case of openings), from the exterior surface of
Perimeter Demising Partitions, from the center line of Interior Demising
Partitions or vertical neutral strips and from any Lease Line, all of which form
the perimeter of the Premises.
"Food Court" means that area, if any, of the Shopping Center for which
specific Common Area is designated by Landlord, in its sole and absolute
discretion, for the purpose of providing facilities to accommodate the
consumption of food and beverages by customers of food use tenants in the
Shopping Center.
"Food Court Expenses" means Common Area Expenses which are attributable
solely to the operation and use of the Food Court.
"GPM" means gallons of water or fluid per minute.
"Gaming Activities" means any use, operation, business or other activity
(including without limitation the operation of Gaming Devices) which requires a
license or a determination of suitability, approval or permit from any Gaming
Authority.
"Gaming Authority" means the Nevada Gaming Commission, and/or the Nevada
State Gaming Control Board, and/or the ▇▇▇▇▇ County Liquor and Gaming Board,
and/or any other state or local agency or authority regulating the business of
gambling and/or liquor licenses.
"Gaming Devices" means slot machines or other gaming devices, cashless
wagering systems and associated equipment (as those terms are defined in Nevada
Revised Statues Chapter 463), or any other equipment or supplies utilized to
perform Gaming Activities.
"Gaming Licenses" means any licenses, permits, authorizations, approvals,
registrations, waivers and/or findings of suitability issued by any Gaming
Authority.
"Governmental Authority" means any federal, state, county, city or local
governmental board, body or agency having jurisdiction over the Premises or the
Shopping Center or any part thereof.
"Gross Sales" means the proceeds of all sales and/or other revenue derived
or made from the Premises adjusted to exclude or deduct, as applicable, Gross
Sales Adjustments. Gross Sales shall include, without limitation, merchandise,
goods and/or services sold, leased, licensed or otherwise transferred in or from
the Premises by Tenant, its subtenants, licensees, and concessionaires, whether
for cash or on credit and whether made by store personnel or by approved vending
or gaming machines. Gross Sales shall not include (i) any government imposed
taxes upon the sale of merchandise or services which are collected separately
from the selling price and paid directly to the taxing authority, or (ii) sums
and credits received in the settlement of Claims for loss of or damage to
merchandise; or (iii) sales of fixtures, equipment or property which are not
stock in trade. All sales and/or revenue originating at the Premises shall be
considered Gross Sales, even though bookkeeping and payment of the account may
be transferred to another place for collection and even though actual filling
and/or delivery of the merchandise may be made from a place other than the
Premises. Gift Certificates shall be included in Gross Sales upon the redemption
of same at the Premises. Each sale upon installments or credit shall be treated
as a sale for the full sale price at the time of sale.
"Gross Sales Adjustments" means the following items but same shall be
deducted (as opposed to excluded) from Gross Sales only to the extent previously
reported as Gross Sales: interest, service or sales carrying charges collected
separately from the selling price and paid by customers to Tenant for extension
of credit; the selling price of all merchandise returned by customers and
accepted for full refund, credit or the amount of discounts made thereon; the
price allowed on merchandise traded in by customers for credit or the amount of
credit for discounts and allowances made in lieu of acceptance thereof;
alteration workroom charges and delivery charges at Tenant's cost and collected
separately from the selling price; receipts from vending machines installed
solely for Tenant's employees; and transfers of merchandise between Tenant's
stores. In addition, the following may be included as a Gross Sales Adjustment
(but shall be deducted (as opposed to excluded) from Gross Sales only to the
extent previously reported as Gross Sales); provided that (i) through (iii)
below shall not exceed a total of two percent (2%) of Tenant's Gross Sales in
any single calendar year:
(i) Bad checks and/or debts, provided that if subsequently collected, said
checks and/or debts shall be included within Gross Sales in the calendar year in
which subsequently collected;
(ii) The discount permitted on sales to employees actually employed at the
Premises; and
(iii) Fees paid by Tenant to credit card companies and/or banking
institutions in accordance with credit card purchase plans.
"Ground Lease" means the agreement(s), if any, whereby Landlord holds a
leasehold interest in the land (or any part thereof) on which the Shopping
Center is located.
"Ground Lessor" means the lessor under the Ground Lease.
"Hazardous Materials" means any chemical, compound, material, substance or
other matter that: (a) is defined as a hazardous substance, hazardous material
or waste, or toxic substance under any Hazardous Materials Law, (b) is
regulated, controlled or governed by any Hazardous Materials Law or other Legal
Requirement, (c) is petroleum or a petroleum product, or (d) is asbestos,
formaldehyde, radioactive material, drug, bacteria, virus, or other injurious or
potentially injurious material (by itself or in combination with other
materials).
"Hazardous Materials Laws" means any and all federal, state or local laws,
ordinances, rules, decrees, orders, regulations or court decisions relating to
hazardous substances, hazardous materials, hazardous waste, toxic substances,
environmental conditions on, under or about the Premises or the Shopping Center,
or soil and ground water conditions, including, but not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Resource Conservation and Recovery Act, the Hazardous Materials
Transportation Act, the California Hazardous Waste Control Act, the
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇▇ Hazardous Substances Account Act, the ▇▇▇▇▇▇-Cologne
Water Quality Control Act, Nevada Revised Statues ("NRS") ▇▇. ▇▇▇, ▇▇▇ Sections
618.750-618.850 inclusive, NRS Section 477.045, any other Legal Requirement
concerning hazardous or toxic substances, and any amendments to the foregoing.
"Improvements" means all permanent and nonstructural fixtures,
installations, alterations, replacements, additions, changes and/or improvements
to the Premises.
"Initial Assessment" means the sum payable by Tenant as set forth in
Section 1.16 and provided for in Section 8.4.
"Insured Casualty" means damage or destruction the repair of which is
covered to the extent of at least fifty percent (50%) of the replacement cost
thereof (with deductibles, self-insurance and co-insurance being deemed to be
"covered") by insurance proceeds received by or made available to Landlord
pursuant to any insurance policy actually carried or required to be carried by
Landlord under the terms of this Lease.
"Interest Rate" means the lesser of (i) the maximum lawful rate permitted
by usury or similar law in the State in which the Shopping Center is located to
be charged by Landlord to Tenant, or (ii) two percent (2%) above the annualized
rate of interest publicly announced from time to time by Bank of America NT&SA
in San Francisco, California, as its "prime rate" or "reference rate," and such
interest shall be computed on the basis of monthly compounding with actual days
elapsed compared to a 360-day year.
"Interior Demising Partitions" means partitions separating the Premises
from adjacent space occupied or intended to be occupied by another tenant.
"Interior Mall" means that portion of the Common Area, if any, which is
located in the interior facing portion of the Shopping Center.
"Interior Mall Expenses" shall mean Common Area Expenses which are
attributable solely to the operation and use of the Interior Mall.
"Landlord" is defined in Article 1.
"Landlord's Work" is defined in Exhibit C.
"Lease Line" means any imaginary or defined line which separates the
Premises from all areas of the Shopping Center other than the premises of
adjacent tenants and which is shown in the Tenant Package.
"Lease Term" is defined in Section 3.1.
"Legal Requirement" means, to the extent applicable, (i) any law, statute,
ordinance, regulation, code, rule, requirement, order, court decision or
procedural requirement of any Governmental Authority, and/or (ii) the rules and
regulations of the applicable governmental insurance authority or any similar
body, and/or (iii) the requirements of the REA. References herein to "law" or
"lawful" include Legal Requirements or the full and strict compliance with Legal
Requirements, as applicable.
"Licensees" means occupants of Floor Area pursuant to occupancy agreements
with terms of less than one (1) year.
"Licensees' Contribution" means the contribution that Landlord has agreed
to make in an amount equal to five percent (5%) of the license fee income
received by Landlord from Licensees during a calendar year.
"Licensees' Floor Area" means the Floor Area occupied by Licensees.
"Major Destruction" means destruction (whether or not an Insured Casualty)
to an extent of more than twenty-five percent (25%) of the full replacement cost
of the Premises, or Shopping Center, as the case may be, as of the date of
destruction, or destruction to the Shopping Center that results in the
termination of the leases of tenants therein representing more than twenty-five
percent (25%) of the Floor Area thereof.
"Major Tenants" means collectively (i) any premises (or the occupants
thereof) at the Shopping Center used primarily for events, meetings, and
operations conducted on a nonprofit basis for the benefit of the community, (ii)
premises (or the occupants thereof) that contain at least ten thousand (10,000)
square feet of contiguous (i.e., not separated by Interior Demising Partitions)
Floor Area, and (iii) any premises (or the occupants thereof) located in
buildings that are not a part of the primary Shopping Center structure (e.g.,
pad locations or peripheral property), the Restaurant Tenants, and (v) premises,
if any, used for the purpose of performing marriage ceremonies.
"Major Tenants' Floor Area" means the Floor Area of the Major Tenants.
"Mall Tenants" means those tenants occupying premises in the Shopping
Center that front onto the Interior Mall.
"Marketing Assessment" means the sum payable by Tenant as set forth in
Section 1.11 and provided for in Article 8.
"Marketing Fund" is defined in Section 8.1.
"Merchants' Association" is defined in Section 8.1.
"Minimum Annual Rent" means the rental payable by Tenant for the use and
occupancy of the Premises and is more specifically set forth in Section 1.9.
"Mortgage" means any mortgage, deed of trust, assignment, security
agreement, conditional sale contract or other encumbrance or hypothecation of
any of Landlord's interest in the real and personal property comprising the
Shopping Center (including all subsequent amendments, modifications, and
advances thereto), including an assignment or encumbrance of Landlord's interest
in this Lease and the rents and profits derived therefrom. "Mortgage" shall also
include the Ground Lease or similar instrument whereby Landlord holds a
leasehold interest in the Shopping Center or any part thereof.
"Mortgagee" means the holder, beneficiary (or trustee acting on behalf of
the beneficiary), or assignee of any Mortgage, or any lessor under the Ground
Lease or similar instrument.
"Occupancy Transaction" means any Transfer, Encumbrance, Change of Control,
or other arrangement whereby the identity of the person or persons using,
occupying or possessing the Premises changes or may change, whether such change
be of an immediate, deferred, conditional, exclusive, nonexclusive, permanent or
temporary nature.
"Percentage Rent" means the rental payable by Tenant as set forth in
Section 1.10 and pursuant to Section 4.3.
"Perimeter Demising Partitions" means partitions separating the Premises
from the Common Area.
"Permitted Use" means the permitted use of the Premises as set forth in
Section 1.13.
"Personal Property" means trade fixtures, furniture, furnishings, signs,
and other personal property not permanently affixed to the Premises.
"Premises" means the commercial space described in Section 1.4 from the top
of the floor to the underside of the structure above and exclusive of such
conduits, facilities, and structures as may be located in the Premises for the
use and benefit of Landlord and/or other tenants.
"REA" means that certain document entitled "Construction, Operation and
Reciprocal Easement Agreement" (or such other similar title) respecting the
certain rights and obligations of Landlord, the owner or owners of the
Casino(s), and/or the owner or owners of the real property comprising all or a
portion of the Shopping Center and/or the Casino(s), which has been or will be
recorded against such real property and as amended, supplemented and/or restated
from time to time.
"Reconstruction" means demolition, stabilization, repair, reconstruction,
and restoration of the Premises, Building or Shopping Center, as the case may
be, resulting from an Insured Casualty or Uninsured Casualty.
"Rent" means all amounts of Minimum Annual Rent and Additional Rent
required to be paid by Tenant under this Lease.
"Rent Commencement Date" means that date determined as set forth in Section
1.8.
"Responsible Officer" of Tenant shall mean all individuals doing business
as Tenant, an individual general partner if Tenant is a partnership, a
responsible officer of Tenant if Tenant is a corporation, or a responsible
officer of any corporate general partner of Tenant if Tenant is a partnership
with one or more corporate partners.
"Restaurant Tenants" means those tenants whose primary use of their
premises in the Shopping Center is the operation of a restaurant (exclusive of
tenants located within the Food Court).
"Security Deposit" means the amount, if any, specifically set forth in
Section 1.14.
"Shopping Center" means that commercial property named in Section 1.4 of
this Lease, as the same may from time to time be expanded, reduced, altered,
reconstructed or otherwise changed.
"Substantial Completion" means the date Landlord notifies Tenant that
Landlord's Work has been completed to the point where Tenant may commence
construction of Tenant's Work, it being understood that Landlord will not
complete all items of Landlord's Work (e.g., sprinkler and Air Conditioning
System) until Tenant has completed portions of Tenant's Work to the point where
Landlord may reenter the Premises and complete Landlord's Work.
"Target Delivery Date" means that date set forth in Section 1.6.
"Tenant Package" means (i) the tenant design manual/package and (ii)
technical handbook setting forth specific criteria for Tenant's Work, as either
may be amended from time to time. The Tenant Package shall provide for
architectural, construction, mechanical, and Utilities standards, specifications
and criteria established by Landlord, from time to time, for the Shopping
Center, including, without limitation, standards, specifications, and criteria
for storefronts, interior improvements, and signs.
"Tenant's Agents" is defined in Section 9.5(c).
"Tenant's Work" is defined in Exhibit C and the Tenant Package.
"Tenant's Plans" means calculations, specifications, designs, and drawings
which pertain to Tenant's Work and/or other Improvements and which are described
in Exhibit C, Description of Tenant's Work.
"Trade Name" means the name set forth in Section 1.3.
"Transfer" means any voluntary, unconditional, and present (i) assignment
of some or all of Tenant's interest, rights, and duties in this Lease and 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.
"Transferee" means the proposed assignee, sublessee, mortgagee,
beneficiary, pledgee or other recipient of Tenant's interest, rights or duties
in this Lease or the Premises in an Occupancy Transaction.
"Uninsured Casualty" means damage or destruction that is not an Insured
Casualty.
"Utilities" means the services of sewage treatment and removal, treatment
and delivery of water, (including chilled or hot water), electricity, natural
gas (if permitted by Landlord), telephone service and other services such as
satellite data transmission, cable systems, and security systems.
"Utilities Charge" is defined in Section 6.3.
"Utility Installations" means any and all systems, machinery, facilities,
installations, supply lines, transformers, pipes, conduits, ducts, penetrations,
components, appurtenances, and equipment used in or in connection with the
Shopping Center for the generation or supply of Utilities.
EXHIBIT C
PROVISIONS RELATING TO THE DESIGN AND CONSTRUCTION OF TENANT'S STORE
I. General Requirements
A. Tenant Package. Landlord will provide Tenant with the Tenant Package (as
defined in Exhibit B) which outlines specific requirements to be adhered to for
the purpose of the initial construction of the Premises.
B. Tenant's Plans.
1. Prior to Tenant preparing Tenant's Plans, Tenant, Tenant's architect and
engineer(s) shall thoroughly familiarize themselves with all local building
codes, this Exhibit C and the Tenant Package, as well as verify by physical
inspection, the accuracy and completeness of the existing site conditions.
Tenant's Plans and construction shall be prepared and performed with full
knowledge of and in compliance with the Tenant Package (including, without
limitation, the use of required lien waiver forms provided therein), this
Exhibit C and Legal Requirements including, but not limited to all energy
conservation, Hazardous Materials Laws, and handicap access requirements.
Tenant's Plans shall be prepared and/or stamped by architect(s) and engineer(s)
fully qualified and licensed in the state of Nevada.
2. Within ninety (90) days after receipt of the Tenant Package, Tenant
shall submit to Landlord, for Landlord's preliminary review, fully detailed and
dimensioned 1/2" scale preliminary design drawings for Tenant's Premises. This
preliminary submittal shall include the following: (a) three (3) sets of prints
and one (1) sepia showing storefront elevations, floorplan, reflected ceiling
plan, fixture plans, and sections through the storefront and storefront signage,
(b) one (1) material sample and color board, and (c) if requested by Landlord,
one (1) completely colored rendering of Tenant's storefront design and/or
photographs of Tenant's existing prototype.
3. Within twenty-five (25) days after Landlord's approval of Tenant's
preliminary plans, Tenant agrees to submit to Landlord, for Landlord's final
review, six (6) sets of prints and one (1) sepia of fully detailed and
dimensioned 1/4" scale final construction drawings for Tenant's Premises, which
shall include the following : (a) architectural drawings including plan views of
the storefront, floor areas, and reflected ceiling; elevations of the storefront
and interiors; sections through the storefront, partitions, and along the
longitudinal axis; door, finish, and color schedules; and final design drawings
for storefront signs in accordance with the Tenant Package, (b) electrical
drawings including circuitry plans, panel schedules, riser diagrams, load
calculations, and all calculations and forms required by applicable Legal
Requirements, (c) all mechanical drawings, including but not limited to heating,
ventilating, and air conditioning design calculations, an equipment schedule and
specifications, the design for the air distribution duct work system, smoke
exhaust system, exhaust fan(s), plumbing fixtures and piping specifications, and
(d) structural drawings indicating any Tenant design elements, alterations,
additions and/or reinforcements to Landlord's structure required to accommodate
Tenant's Work, and all calculations and completed forms required by Legal
Requirements.
C. Approval of Tenant's Plans.
1. Tenant's Plans and the design and quality of Tenant's Work shall be
subject to the approval of Landlord.
2. If said plans are not approved because they do not conform to the Tenant
Package, Landlord will state the reasons for nonconformance and Tenant will be
given twenty (20) days to resubmit another set of plans taking into account
Landlord's suggested changes. If these subsequent drawings are not approved,
within ninety (90) days after full execution and delivery of this Lease by both
parties, Landlord shall have no further obligation to approve said plans and
Landlord shall have the right to terminate this Lease.
3. Landlord's approval of Tenant's Plans shall not create any
responsibility or liability on the part of Landlord for their completeness,
sufficiency, design, workability or compliance with Legal Requirements, and
shall not relieve Tenant of any of Tenant's responsibility or liability
hereunder.
4. Any changes to the approved Tenant's Plans requested by Tenant shall be
subject to Landlord's approval. Any additional expenses incurred by Landlord for
the review of any changes to the approved Tenant's Plans shall be at Tenant's
expense and reimbursed by Tenant upon Tenant's receipt of an invoice from
Landlord.
D. Requirements for Tenant's Improvements.
1. Tenant's Work and all other Improvements shall be constructed under the
supervision of an on-site superintendent at all times, and in accordance with
the approved Tenant's Plans, this Exhibit C and the Tenant Package.
2. At Tenant's sole cost, Landlord shall have the right, but not the
obligation, to perform any work that Tenant shall have failed to construct in
accordance with the approved Tenant's Plans, after ten (10) days' notice from
Landlord.
3. Tenant, at its sole cost and expense, shall be responsible for obtaining
all necessary permits including, but not limited to, building and health
department permits for the performance of such work and for the payment of any
impact, capacity, usage, and/or similar fee in connection with such work.
4. Tenant shall not be permitted to open for business until the Premises
fully and strictly comply with Legal Requirements and the approved Tenant's
Plans.
5. Prior to Tenant opening for business, Tenant shall provide Landlord with
a copy of the Certificate of Occupancy.
6. Tenant shall complete all Landlord punchlist items to Landlord's
commercially reasonable satisfaction within thirty (30) days following receipt
of Landlord's punchlist.
7. Within sixty (60) days, after completion of Tenant's Work, Tenant shall
deliver to Landlord: (i) a copy of the final signed-off building inspection
card, permit or report with respect thereto, (ii) original forms of all lien
waivers from all parties supplying labor and/or materials for Tenant's Work
which are notarized and unconditional using only the appropriate forms set forth
in the Tenant Package, and a copy of Tenant's recorded valid Notice of
Completion, and (iii) a certification from the architect of record that the work
is substantially complete and the Premises have been constructed in accordance
with the approved Tenant's Plans and this Exhibit C.
8. All work shall be performed and completed strictly in accordance with
Legal Requirements in a good and workmanlike manner, and shall be diligently
prosecuted to completion.
9. During the performance of Tenant's Work, Tenant shall be responsible for
the removal from the Shopping Center on a daily basis of all trash, construction
debris and surplus construction materials, or at Landlord's option, the
placement on a daily basis of such trash, debris and/or materials in Landlord
designated receptacles located on site.
In the event Landlord opts, in its sole and absolute discretion, to provide
trash receptacles for Tenant's use during Tenant's construction, Landlord shall
cause such receptacles to be emptied and trash removed, and Tenant shall pay a
one time charge equal to $.60 per square foot of Floor Area of the Premises to
Landlord for the non-exclusive use of such receptacles. This charge shall be
reimbursed by Tenant upon Tenant's receipt of an invoice from Landlord.
II. Description Of Tenant's Work.
A. General. "Tenant's Work" shall mean the purchase and/or installation of
all of the Improvements described in this Section II and any other Improvements
or work necessary to construct and complete construction of Tenant's store. All
costs of Tenant's Work shall be paid for by Tenant regardless of whether or not
Tenant actually performed the work. In the event Landlord performs work at
Tenant's expense as provided in this Exhibit C, Tenant shall reimburse Landlord
for the cost thereof immediately upon Landlord's request therefor; provided,
however, that any such costs shall be competitive with the costs of commensurate
contractors serving the same trade area.
B. Performance of Work by Landlord. The cost incurred by Landlord in
performing any work or modification on behalf of Tenant above and beyond that
described under Section V of this Exhibit C, "Description of Landlord's Work",
or which is required as a result of Tenant's Work and/or other Improvements,
shall be reimbursed by Tenant upon Tenant's receipt of an invoice from Landlord;
provided, however, that any such costs shall be competitive with the costs of
commensurate contractors serving the same trade area.
C. Storefront.
1. Tenant will be required to complete the storefront, infill unfinished
storefront openings such as display windows, entry areas, and any other
unfinished openings (as set forth in the Tenant Package), and install the
storefront signage.
2. Landlord will construct a portion of Tenant's storefront and the scope
of such work is set forth on Exhibit I attached hereto. As consideration for
such work, Tenant shall pay Landlord the "Storefront Charge" (as defined herein)
upon Tenant's receipt of an invoice therefor. The Storefront Charge shall be an
amount equal to Fifty Thousand Dollars ($50,000.00).
D. Ceilings. Tenant shall furnish and install all ceilings.
E. Partitions.
1. Tenant shall furnish and install all partitions within the Premises as
required by Legal Requirements and as shown in Tenant's approved Plans.
2. Tenant shall plaster or drywall and firetape the interior side of all
Interior Demising Partitions and Perimeter Demising Partitions over their entire
area, except for necessary openings as designated by Legal Requirements or the
Tenant Package.
F. Floor. Tenant shall furnish and install all floor coverings within the
Premises.
G. Rear Exit/Service Door(s). Landlord, at Tenant's expense, shall furnish
and install rear exit/service door(s), frames and hardware as required by Legal
Requirements, which cost shall be reimbursed by Tenant upon Tenant's receipt of
an invoice from Landlord provided, however, that any such costs shall be
competitive with the costs of commensurate contractors serving the same trade
area and shall not exceed $1,100 per door.
H. Plumbing.
1. Tenant shall furnish and install all plumbing fixtures and rough-in
plumbing. Tenant's plumbing contractor shall provide approved receptors and
piping for air conditioning condensate drains and water heater overflow as
specified in the Tenant Package.
2. Grease traps will be required for all food preparation areas having pot
sinks or any grease-producing appliances that discharge into the waste system.
3. Tenant shall not be permitted to use natural gas in the Premises.
I. Sprinklers. At Tenant's expense (which cost shall be reimbursed by
Tenant upon Tenant's receipt of an invoice from Landlord), Landlord's contractor
shall make such additions, modifications, or relocations to the sprinkler system
installed by Landlord required by the design and/or construction of Tenant's
Improvements, or to bring the same into compliance with the requirements of
Landlord's insurance underwriters and Legal Requirements; provided, however,
that any such costs shall be competitive with the costs of commensurate
contractors serving the same trade area.
J. Air Conditioning/Heating.
1. All air conditioning and heating work required by Tenant shall be at
Tenant's sole cost and expense. All such air conditioning and heating work shall
be designed and installed by Tenant (except as provided in Item 2. of this
Section J). This work shall include, without limitation, additional air
conditioning, if any, connection to supply and return lines, duct work, any
associated distribution devices, and any controls or circuitry required. Tenant
shall provide heating to the Premises in accordance with, and if required
pursuant to, the Tenant Package. Notwithstanding anything to the contrary
contained in this Lease and Exhibits, if Tenant's business produces odor, fume
and/or grease or involves food preparation, at Landlord's option, Tenant shall,
at its sole cost and expense, design and install an independent Air Conditioning
System designed to resolve the problems caused by such operations. The Air
Conditioning System serving the Premises shall be designed to cool air
automatically. Tenant, at a minimum, shall maintain conditions inside the
Premises as follows: 75(degree) Fahrenheit dry bulb and 50% relative humidity
with outside conditions of 108(degree) Fahrenheit dry bulb and 71(degree)
Fahrenheit wet bulb.
2. Landlord, at Tenant's expense, shall furnish and install an air terminal
box connected to Landlord's main supply line and provide Tenant with a
thermostat, which costs shall be reimbursed by Tenant upon Tenant's receipt of
an invoice from Landlord; provided, however, that any such costs shall be
competitive with the costs of commensurate contractors serving the same trade
area and shall not exceed $5,000.
K. Electrical. Tenant shall install all electrical and telephone work
required within the Premises, including, without limitation, the following:
1. Feeders and other work from the central distribution point, light
fixtures, transformers, electrical panels, electrical fuses, a main service
disconnect switch at Tenant's distribution point, distribution within the
Premises and additional conduit(s) from the central distribution point, as
required.
2. Temporary power for Tenant's construction.
3. It shall be Tenant's sole obligation, at its expense, to diligently
arrange for electrical and telephone service and installation of an electrical
meter by the electrical provider, to be designated by Landlord, in sufficient
time to establish such service prior to the date Tenant initially opens for
business.
4. Landlord shall furnish and install the following, at Landlord's main
distribution point, and the cost of such work shall be reimbursed by Tenant upon
Tenant's receipt of an invoice from Landlord: (i) a main electrical switch and
(ii) electrical fuses provided, however, that any such costs shall be
competitive with the costs of commensurate contractors serving the same trade
area and shall not exceed $7,600.00.
L. Miscellaneous. At Tenant's expense, Tenant shall provide and/or furnish
and install the following (except as otherwise expressly provided herein):
1. Life safety systems, as may be required by Legal Requirements, shall be
installed by Landlord at Tenant's expense (provided, however, that any such
costs shall be competitive with the costs of commensurate contractors serving
the same trade area).
2. Elevators, dumbwaiters, chutes, conveyors, duct shafts, pneumatic tubes
and their shafts, doors, and other components, including electrical hook-up and
service, if any, from the electrical panel to said equipment.
3. After Tenant's initial opening for business, Tenant shall be required to
install sound insulation of the walls and ceilings, and/or such other sound
insulation measures as required by Landlord in its commercially reasonable
discretion, in the event Tenant's business operations create sounds or noises
that disturb Landlord, other tenants, patrons of other tenants, or the occupant
of any space in the Shopping Center.
III. DESIGN CRITERIA.
A. Structural.
Tenant must receive Landlord's prior written approval, which approval may
be given or withheld in Landlord's sole and absolute discretion, for any
alteration(s), addition(s), reinforcement(s), or penetration(s) which shall
affect any space (including, but not limited to, any portion of the Casino)
located adjacent to, above, or beneath Tenant's Premises. All work shall be
performed by Tenant, at Tenant's expense (or at Landlord's option, by Landlord,
at Tenant's expense). Any commercially reasonable costs associated with
Landlord's review and approval of Tenant's proposed alteration(s), addition(s),
reinforcement(s), or penetration(s) as provided herein shall be reimbursed by
Tenant upon Tenant's receipt of an invoice from Landlord.
B. Roof.
1. There shall be no installation of radio , television and/or satellite
dishes and/or antennas. Further, any other roof-top equipment shall be subject
to the prior written approval of Landlord and all appropriate Governmental
Authorities. All roof penetrations (which shall include, without limitation,
equipment platforms, curbs, and multiple pipe enclosures) and equipment
locations required by Tenant and approved by Landlord and said Governmental
Authorities shall be at Tenant's expense and subject to the conditions of said
approval. At Landlord's option, all such work shall be engineered and installed
by Landlord's contractor in accordance with standard project details as provided
by Landlord's architect. Any roof screens or screening devices required by
Landlord and/or said Governmental Authorities shall be designed and installed by
Landlord, at Tenant's expense, or at Landlord's option, designed and installed
by Tenant, at Tenant's expense; provided, however, that any such costs shall be
competitive with the costs of commensurate contractors serving the same trade
area.
2. All flashing, counter-flashing, roof penetrations and roofing repairs
shall conform to the project roofing specifications. All such work shall be paid
for by Tenant but shall be performed by Landlord's roofing contractor; provided,
however, that any such costs shall be competitive with the costs of commensurate
contractors serving the same trade area.
C. Storefront.
1. Tenant shall strictly comply with the storefront theming and
construction criteria that pertain to Tenant's Premises as set forth in the
Tenant Package.
2. No storefront, part thereof, or swinging door shall project beyond the
Premises or into any Common Area, except as may be otherwise set forth in the
Tenant Package. Tenant shall comply with the door types as specified in the
Tenant Package.
3. All storefront work, including entry doors, shall be supported at its
head sections by a welded structural steel framework that shall be securely
attached, suspended and braced to the existing building structure.
4. Tenant shall pay the cost incurred by Landlord in repairing any damage
done to Landlord's Work by the installation, construction, attachment or support
of any part of Tenant's Work.
5. All storefront materials shall be durable materials that express and
maintain the theming for the area of the Shopping Center in which the Premises
is located. Such materials are outlined in the Tenant Package and must be
submitted to Landlord, for Landlord's approval, prior to application.
6. All storefront construction and materials shall be resistant to wear,
fading, discoloration, and decay.
D. Floors. Tenant shall furnish and install hard durable flooring materials
within the sales Floor Area of the Premises such as marble, slate, stone,
natural hardwood, mosaic tile or similar materials approved by Landlord.
Tenant's storefront entry area shall have hard durable flooring material
identical in quality, color and pattern to the mall flooring material, or, at
Landlord's option, such other durable materials as may be approved by Landlord.
E. Ceiling.
1. Ceilings shall be drywall or plaster construction within the sales Floor
Area of the Premises. Other ceiling material finishes may be used subject to
written approval by Landlord. Acoustical T-bar ceiling with standard 24" x 48"
modules will only be permitted in storage and nonpublic areas.
2. Tenant shall strictly comply with specifications of the maximum ceiling
height of the Premises set forth in the Tenant Package; it is understood that
such maximum ceiling heights will vary for different areas of the Shopping
Center but will be no less than twelve feet (12'). Higher ceilings may be
allowed upon written approval from Landlord . Any relocation of or modification
to structure, piping, conduit and/or duct work necessitated by Tenant's
installation of a ceiling in excess of the height limitation shall be at
Tenant's expense. Any access panels and/or catwalks above the ceilings required
to serve Tenant's Work shall be installed at Tenant's expense.
F. Electrical. All lighting fixtures in Tenant's public areas, other than
decorative fixtures, shall be recessed. Fluorescent fixtures shall have
parabolic lenses or diffusers; no acrylic lenses shall be permitted in public
areas. Bare lamp fluorescent or incandescent fixtures may be used only in
concealed areas and/or stock rooms.
G. Signs. All signs shall be designed strictly in accordance with the
Tenant Package. Tenant acknowledges that the sign criteria have been established
for the mutual benefit of all tenants in the Shopping Center. Any nonconforming
or unapproved signs shall be removed or brought into conformance at the expense
of Tenant.
IV. Tenant's Use of a Contractor.
A. Contractor Selection. Tenant must use only union labor contractor(s) and
subcontractor(s) for the construction of Tenant's Work and Improvements Tenant
further agrees that it will require any general contractor and any
subcontractors it retains for the construction of Tenant's Work and Improvements
to execute the Letter of Assent as described herein. The "Letter of Assent" is
an agreement required by the local union and a copy of the Letter of Assent is
contained in the Tenant Package. Such contractor shall be bondable and shall
meet all licensing and insurance requirements established by Landlord and
Governmental Authorities. Tenant shall provide Landlord with a copy of the
contract with its contractor prior to commencement of any Improvements. and
Landlord shall have the right to disapprove such contractor or the contract on
reasonable grounds. Tenant's contractor shall do (or cause to be done) all of
Tenant's Work except where this Exhibit C or this Lease provides for Landlord's
contractor to do the same.
B. Special Conditions. Tenant shall incorporate into the contract with its
contractor the following items as "Special Conditions":
1. Prior to commencement of Tenant's Improvements, Tenant's contractor
shall provide Landlord with a construction schedule indicating the completion
dates of all phases of Tenant's Improvements.
2. Tenant's contractor shall diligently perform said work in a manner and
at times that do not impede or delay Landlord in the completion of the Premises
or any other portion of the Shopping Center. Any delays in the completion of the
Premises caused by Tenant's contractor shall not relieve Tenant of any
obligation under this Lease.
3. Tenant and 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 Shopping Center.
4. Tenant's contractor shall provide written notice to Landlord or
Landlord's Shopping Center manager of any work to be done on weekends or other
than normal job hours, and Tenant agrees to pay all costs associated therewith.
5. Tenant and Tenant's contractor shall comply with Legal Requirements and
all reasonable and equitable rules and regulations established by Landlord in
the performance of Tenant's Improvements .
6. Prior to commencement of construction, Tenant shall submit to Landlord
evidence of insurance for its contractor in accordance with the requirements set
forth in this Lease.
7. Within thirty (30) days of the scheduled grand opening of the Shopping
Center, Landlord shall determine whether a barricade will be necessary to
segregate the Premises from the remainder of the Shopping Center; provided,
however, a barricade will only be required if Tenant is not scheduled or does
not appear to be able (based on the status of Tenant's construction and as
determined in Landlord's commercially reasonable judgement) to open the Premises
for business on the initial grand opening date of the Shopping Center. At
Landlord's option, Landlord may erect said barricade or direct Tenant to erect
said barricade using the same material and with the same appearance as used by
Landlord in the closure of the other tenants' premises. In the event Landlord
erects the barricade, Tenant shall pay to Landlord an amount equal to Six and
No/100 Dollars ($6) per square foot of the area required to be covered (i.e.,
the lineal width times the lineal height of the opening).
8. Tenant's contractor or subcontractors shall not post signs on any part
of the Shopping Center or the Premises.
9. Prior to the commencement of Tenant's Improvements, Tenant shall provide
Landlord with a "labor and materials payment bond" in an amount equal to one
hundred percent (100%) of the aggregate price of all contracts for such work,
conditioned on Tenant's payment in full of all claims of mechanics' lien
claimants for such labor, services and/or materials supplied in the prosecution
of such work. Said payment bond shall name Landlord as a primary obligee, shall
be given by a sufficient surety that is satisfactory to Landlord, and shall be
in such form as Landlord shall approve in its sole and absolute discretion. In
addition, Tenant shall obtain, or cause its contractor to obtain, a "performance
bond" covering the faithful performance of the contract for the construction of
Tenant's Improvements. The performance bond shall be in an amount equal to one
hundred percent (100%) of the full amount of the contract price, conditioned on
the contractor's faithful performance of the contract. Said performance bond
shall name Landlord and Tenant as co-obligees, shall be given by a sufficient
surety that is satisfactory to Landlord, and shall be in such form as Landlord
shall approve in its sole and absolute discretion.
V. Description Of Landlord's Work.
A. General. "Landlord's Work" shall be limited to the performance of the
improvements described in this Section V.
B. Structure. Landlord's architect shall design the building in which the
Premises are located. Said building shall be constructed and sprinklered in
accordance with the building code in effect in the jurisdiction where the
Shopping Center is located as of the time of the initial construction of the
Shopping Center. Construction of the building in which the Premises are located
shall not be less than Type 1 (one). Exterior walls shall be masonry, metal
stud, and plaster or such other material or materials as Landlord shall select.
C. Partitions. Landlord will provide Interior Demising Partitions and
Perimeter Demising Partitions. At Landlord's option, the demising partitions
shall be of unfinished (i) masonry, or (ii) concrete, or (iii) metal or wood
studs sixteen inches (16") on center, to the underside of the structure above.
Where such partitions fall on structural column lines, at structural braces or
structural expansion joints, projections may occur. Where desirable in
Landlord's opinion, a vertical neutral strip will be located at the storefront
area between stores.
D. Floor. Concrete floor slabs within the interior of the Premises shall
have a smooth finish. Such floor shall be on a single plane without depressions
or raised areas, but may, at Landlord's option, be sloped. Notwithstanding the
foregoing to the contrary, it is agreed and understood that the floor slab in
some premises shall have changes in elevation.
E. Plumbing. Water service and sewer laterals shall be sized by Landlord
and brought to a point above or directly beneath the Premises, as specified in
the Tenant Package.
F. Sprinklers. An automatic sprinkler system as described in the Tenant
Package shall be installed in accordance with Landlord's standard grid pattern
and height that shall include one (1) sprinkler head per one hundred (100)
square feet of Floor Area of the Premises.
G. Electrical. Pursuant to Landlord's criteria, Landlord shall provide the
following: (i) facilities for the delivery of 277/480 volt power to a central
distribution point, (ii) an electrical meter socket at the distribution point
and (iii) an empty conduit(s) from the central distribution point to the
Premises for electrical and telephone lines. Tenant's facilities shall be sized
and located by Landlord, as specified in the Tenant Package.
H. Air Conditioning. Landlord shall design and install an Air Conditioning
System to serve the Premises with chilled air or water or other refrigerant, at
Landlord's sole discretion. The Air Conditioning System may consist of
equipment, meters, and facilities that serve the Premises either exclusively or
in common with other premises in the Shopping Center as a centralized system.
The Air Conditioning System shall be designed to cool air automatically and to
handle a maximum of 3.85 ▇▇▇▇▇ per square foot of Floor Area attributable to
combined loads. The Tenant Package shall detail the type, design, and
specifications of the Air Conditioning System provided by Landlord. In the event
Tenant requires in excess of 3.85 ▇▇▇▇▇ per square foot of Floor Area and if
such additional capacity is available, Landlord may, in its sole and absolute
discretion, provide the additional capacity to Tenant and Tenant shall reimburse
Landlord for the cost thereof upon Tenant's receipt of an invoice from Landlord.
EXHIBIT D
RULES AND REGULATIONS
Tenant will deposit its trash only in the Shopping Center trash receptacles
and shall participate in and comply with any reasonable procedures established
by Landlord or any procedures established by (or in compliance with) a
Governmental Authority for the collection, sorting, separation, and recycling of
waste products, garbage, refuse, and trash.
Tenant shall use 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 attempt to prevent any delivery trucks or other
vehicles servicing 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.
Tenant shall not display, paint or place, or cause to be displayed, painted
or placed, any handbills, bumper stickers or other advertising devices on any
vehicle parked in the parking area of the Shopping Center, whether belonging to
Tenant, or to Tenant's agent, or to any other person, nor shall Tenant
distribute, or cause to be distributed, in the Shopping Center, any handbills or
other advertising devices.
Employees of Tenant shall not park their automobiles in those automobile
parking areas of the Common Area which Landlord may from time to time designate
for use by patrons of the Shopping Center.
Tenant and its employees shall park their cars only in those parking areas
designated by Landlord for employee parking. Tenant shall furnish Landlord with
the automobile license numbers of Tenant and Tenant's employees within fifteen
(15) days after taking possession of the Premises and shall thereafter notify
Landlord of any changes thereto within five (5) days after such change occurs.
If Tenant or its employees fail to park their cars in the designated parking
areas, Landlord may charge Tenant Ten Dollars ($10.00) per car per day for each
day or partial day that any car is parked in any area other than those
designated; provided, however, Landlord agrees to give Tenant written notice of
the first violation of this provision for each vehicle. Tenant shall have two
(2) days thereafter within which to correct the violation; if said violation is
not corrected within said two-day period, then the aforesaid fine shall be
levied and Tenant shall pay the same within ten (10) days of Landlord's request
therefor. After notice of such first violation, no prior notice of any
subsequent violation by the same vehicle shall be required.
Tenant shall not display or sell merchandise, or place carts, portable
signs, devices or any other objects in the Common Area and Tenant shall not
solicit or distribute materials in any manner in the Common Area.
Tenant shall utilize no medium which can be heard or experienced outside of
the Premises.
Tenant shall not erect an aerial or antenna on the roof or exterior walls
of the Premises.
Tenant's employees shall not be permitted to enter those areas of the
Casino(s) which are designated "Employees Only."
Tenant shall not permit its employees to perform their employment tasks in
any portion of the Casino(s) without the express written approval of an
authorized agent on behalf of the owner of the Casino. Further, any such
employees shall be bonded in such amount as may be reasonably required by such
Casino owner.
EXHIBIT E
TENANT'S ESTOPPEL CERTIFICATE
Date: , 19
Address:
To whom it may concern:
The undersigned, as Tenant, has entered into that certain Lease, dated 19 ,
with , as Landlord, for the leasing of certain Premises at the Shopping Center
commonly known as .
Tenant understands that you have offered or committed to enter into a
transaction with Landlord with respect to an interest in Landlord and/or this
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 Shopping Center
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.
In accordance with the terms of the Lease, Tenant ratifies the Lease and
certifies that:
(1) The undersigned has accepted the Premises and entered into occupancy
(i.e. accepted possession) of the Premises described in said Lease on , 19 ;
(2) The undersigned is presently open and conducting business with the
public in the Premises;
(3) The current Minimum Annual Rent in the annual amount of $ per square
foot of Floor Area of the Premises was payable from , 19 ___;
(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, to Tenant's knowledge, neither party thereto is in default thereunder;
(5) The Lease represents the entire agreement between the parties as to the
terms, covenants and conditions respecting the leasing of the Premises;;
(6) The Lease Term expires on , 19 ;
(7) All conditions under said Lease to be performed by Landlord have been
satisfied, including, without limitation, all co-tenancy requirements thereunder
except: ;
(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 that the undersigned has against the enforcement of
said Lease by Landlord except: ;
(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; and
(11) The Minimum Annual Rent through , 19 , has been paid.
(12) The operation and use of the Premises does not involve the generation,
treatment, transportation, storage, disposal or release of Hazardous Material(s)
or solid waste into the environment and that the Premises are being operated in
accordance with all applicable environmental laws, zoning ordinances and
building codes.
Very truly yours,
(Tenant) By: , Title:
EXHIBIT F
MECHANICAL/ELECTRICAL SCHEDULE
1. Tenant Name Space No.
2. Tenant Drawing Nos. Mechanical Electrical
3. Floor Area (Sq. Ft.)
4. Electrical Load Breakdown
a. Lighting ▇▇▇▇▇
b. Sign(s) ▇▇▇▇▇
c. Appliances ▇▇▇▇▇
d. Receptacles ▇▇▇▇▇
e. Equipment ▇▇▇▇▇
f. Electric Water Heater ▇▇▇▇▇
g. Electric Heater ▇▇▇▇▇
h. Miscellaneous ▇▇▇▇▇
5. Total Connected Electrical Load ▇▇▇▇▇: ▇▇▇▇▇/Sq.Ft. of Floor
6. Tenant Calculated Design Heating Load BTUH
7. Tenant Calculated Design Cooling Load BTUH
8. Tenant Calculated Design Air Supply CFM (per Tenant plans)
9. Landlord Allotted Air Supply CFM
10. Additional Air Supply Required CFM
11. Variable Volume Air Terminal Units
a. Air CFM ▇▇▇
▇. Inlet/Outlet Sizes
12. Chilled Water Air Handler Units
a. Max GPM
13. Toilet Exhaust CFM
14. Special Exhaust/Make-up System(s) Data
(Use, CFM, HP, Method of Operation, Etc.)
15. Air Conditioning Unit Data (if Tenant is installing its own system.)
a. Make b. Model # c. CFM
EXHIBIT G
Notice-of-Assignment of Lease
_________________, 199__
TOYS INTERNATIONAL, a California corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Lease Dated: __________________________________
Mortgagee: Fleet National Bank
Address of Mortgagee: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇ BO F11C
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (or her successor)
Mortgage Dated: __________________________________
Dear Sir/Madam:
The undersigned has assigned by a mortgage or deed of trust (the
"Mortgage") dated as shown above to the Mortgagee identified above, as
administrative agent for the "Lenders" under a Building Loan Agreement of even
date with the Mortgage, all the undersigned's estate, right, title and interest
in, to and under the Lease between you and the undersigned dated as set forth
above, as said Lease may have been heretofore modified or amended (the "Lease"),
together with all right, title and interest of the undersigned as lessor
thereunder, including, without limitation, the right upon the occurrence of an
Event of Default (as defined in the Mortgage) to collect and receive all
earnings, revenues, rents, issues, profits and income of the property subject to
the Mortgage.
Said assignment does not impair or diminish any of our obligations to you
under the provisions of the Lease, nor are any such obligations imposed upon
Mortgagee, its successors or assigns.
Pursuant to said assignment you are hereby notified that in the event of a
demand on you by Mortgagee or its successors and assign (provided Mortgagee
shall have notified you of the identity of Mortgagee's successor or assignee)
for the payment to it of the rents due under the Lease, you may, and are hereby
authorized and directed to, pay said rent to Mortgagee (or such successor or
assignee) and we hereby agree that the receipt by you of such a demand shall be
conclusive evidence of Mortgagee's (or such successor's or assignee's) right to
the receipt thereof and that the payment of the rents by you to Mortgagee (or
such successor or assignee) pursuant to such demand shall constitute performance
in full of your obligation under the Lease for the payment of rent to the
undersigned.
Kindly indicate your receipt of this letter and your agreement to the
effect set forth below by signing the enclosed copy thereof and mailing it to
Mortgagee at its address identified above to the attention of its Real Estate
Finance Office.
ALADDIN BAZAAR, LLC,
a Delaware limited liability company
By: TH Bazaar Centers Inc.,
a Delaware corporation,
as managing member
By:
Name:
Title:
By:
Name:
Title:
LANDLORD
The undersigned acknowledges receipt of the original of this letter and
agrees for the benefit of Mortgagee that it shall notify Mortgagee of any
default on the part of the landlord under the Lease which would entitle the
undersigned to cancel the Lease or to ▇▇▇▇▇ the rent payable thereunder, and
further agrees that, notwithstanding any provision of the Lease, no notice of
cancellation thereof, nor of any abatement, shall be effective unless Mortgagee
has received the notice aforesaid and has failed within 30 days of the date
thereof to cure, or if the default cannot be cured within 30 days has failed to
commence and diligently prosecute the cure, of landlord's default which gave
rise to the right to cancel or ▇▇▇▇▇.
TOYS INTERNATIONAL,
a California corporation
By:
Name:
(Type or Print Name)
Title:
By:
Name:
(Type or Print Name)
Title:
TENANT
EXHIBIT H
GUARANTY OF LEASE
WHEREAS, a certain Lease, more fully described below, has been or will be
executed:
a. Name of Shopping Center: DESERT PASSAGE AT ALADDIN
b. Landlord: ALADDIN BAZAAR, LLC,
a Delaware limited liability company
c. Tenant: TOYS INTERNATIONAL,
a California corporation
d. Premises Address: Space No. 1-H-095
WHEREAS, the Landlord under said Lease requires as a condition to its
execution of said Lease that the undersigned (herein referred to as "Guarantor")
guarantee the full performance of the obligations of Tenant under said Lease.
WHEREAS, the undersigned is desirous that Landlord enter into said Lease
with Tenant.
NOW, THEREFORE, in consideration of the execution of said Lease by
Landlord, Guarantor hereby unconditionally guarantees the complete and timely
performance of each and all of the terms, covenants and conditions of said Lease
to be kept and performed by said Tenant, including the payment of all rentals
and other charges to accrue thereunder. Guarantor further agrees as follows:
1. That this Guaranty shall continue in favor of Landlord notwithstanding
any extension, modification, or alteration of said Lease entered into by and
between the parties thereto, or their successors or assigns, notwithstanding any
assignment of said Lease, with or without the consent of Landlord, and no
extension, modification, alteration or assignment of the above-referred to Lease
shall in any manner release or discharge Guarantor and it does hereby consent
thereto;
2. This Guaranty will continue unchanged by any bankruptcy, reorganization
or insolvency of Tenant or any successor or assignee thereof or by any
disaffirmance or abandonment by a trustee to Tenant;
3. Landlord may, without notice, assign this Guaranty in whole or in part
and no assignment or transfer of the Lease shall operate to extinguish or
diminish the liability of Guarantor hereunder;
4. The liability of Guarantor under this Guaranty shall be primary and, in
any right of action which shall accrue to Landlord under the Lease, Landlord
may, at its option, proceed against the undersigned without having commenced any
action or obtained any judgment against Tenant;
5. Guarantor shall pay Landlord's reasonable attorney fees and all costs
and other expenses incurred in any negotiations, action or proceeding commenced
to enforce this Guaranty;
6. Guarantor hereby waives notice of any demand by Landlord as well as of
any notice of Tenant's default in the payment of rent or any other amounts
contained or reserved in the Lease;
7. Guarantor hereby consents to personal jurisdiction and venue in the
state and judicial district in which the Shopping Center is located; and
8. The person or persons executing this Guaranty of Lease on behalf of
Guarantor represent, covenant, and warrant to Landlord as of the Effective Date
that the signatories signing on behalf of Guarantor have the requisite authority
to bind Guarantor. Further, if the Guarantor is a corporation, Guarantor
represents, covenants, and warrants to Landlord that: (a) as of the Effective
Date, Guarantor is a duly constituted corporation in good standing and qualified
to do business in the state where the Shopping Center is located, (b) Guarantor
has paid all applicable franchise and corporate taxes, and (c) Guarantor will
file when due all forms, reports, fees, and other documents necessary to comply
with applicable laws.
The use of the singular herein shall include the plural. The obligation of
two (2) or more parties shall be joint and several. The terms and provisions of
this Guaranty shall be binding upon and inure to the benefit of the respective
heirs, legal representatives, successors and assigns of the parties herein
named.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty of Lease to be
executed as of the Effective Date of the above-mentioned Lease.
PLAY CO. TOYS & ENTERTAINMENT CORP.,
a Delaware corporation
By:
Name:
(Type or Print Name)
Title:
By:
Name:
(Type or Print Name)
Title:
GUARANTOR
ADDRESS: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(PLEASE NOTARIZE DOCUMENT BY COMPLETING THE ATTACHED ACKNOWLEDGMENT)
ACKNOWLEDGMENT
State of )ss.
County of )
On , before me (here insert name and title of the officer), personally
appeared , personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signature(s)
on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
