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PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED BASED
ON A REQUEST FOR CONFIDENTIAL TREATMENT
Exhibit 10.23
LEASE
SILICON ENTERTAINMENT, INC.,
a California corporation
-------------------------------
TENANT
NASCAR SILICON MOTOR SPEEDWAY and/or
SILICON MOTOR SPEEDWAY
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TRADE NAME
N/A
-------------------------------
GUARANTOR
OPRY MILLS
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TABLE OF CONTENTS
Page
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ARTICLE I.............................................................. 4
GRANT AND TERM.................................................... 4
Section 1.1 Leased Premises................................. 4
Section 1.2 Term............................................ 7
Section 1.3 Opening......................................... 8
Section 1.4 Late Opening.................................... 8
ARTICLE II............................................................. 8
RENT AND DEPOSIT.................................................. 8
Section 2.1. Minimum Rent.................................... 8
Section 2.2. Percentage Rent................................. 9
Section 2.3. Payments By Tenant.............................. 12
Section 2.4. Security Deposit [Intentionally Deleted]........ 12
Section 2.5. Late Charge..................................... 12
ARTICLE III............................................................ 13
PREPARATION OF LEASED PREMISES.................................... 13
Section 3.1. Landlord's Work................................. 13
Section 3.2. Delivery of Possession.......................... 13
Section 3.3. Tenant's Work................................... 13
Section 3.4. Alterations by Tenant........................... 15
Section 3.5. Removal by Tenant............................... 16
ARTICLE IV............................................................. 16
CONDUCT OF BUSINESS............................................... 16
Section 4.1. Use and Trade Name.............................. 16
Section 4.2. Operation of Business........................... 17
Section 4.3. Sign............................................ 18
Section 4.5. Tenant's Warranties............................. 19
Section 4.5. Storage and Office Space........................ 19
Section 4.6. Care of Premises................................ 20
Section 4.7. Notice by Tenant................................ 20
Section 4.8. Radius.......................................... 20
ARTICLE V.............................................................. 20
COMMON AREA....................................................... 20
Section 5.1. Use of Common Area.............................. 20
Section 5.2. Common Area Maintenance Expenses................ 21
ARTICLE VI............................................................. 23
REPAIRS AND MAINTENANCE........................................... 23
Section 6.1. Repairs and Maintenance by Landlord............. 23
Section 6.2. Repairs and Maintenance by Tenant............... 24
ARTICLE VII............................................................ 25
TAXES............................................................. 25
Section 7.1. Tax Liability................................... 25
Section 7.2. Method of Payment............................... 26
ARTICLE VIII........................................................... 26
INSURANCE, INDEMNITY AND LIABILITY................................ 26
Section 8.1. Landlord's Insurance Obligations................ 26
Section 8.2. Tenant's Insurance Obligations.................. 27
Section 8.3. Mutual Covenant................................. 28
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Section 8.4. Covenant to Hold Harmless...........................28
Section 8.5. Loss and Damage.....................................29
ARTICLE IX...................................................................29
DESTRUCTION OF LEASED PREMISES..........................................29
Section 9.1. Continuance of Lease................................29
Section 9.2. Reconstruction......................................30
ARTICLE X....................................................................30
CONDEMNATION............................................................30
Section 10.1. Eminent Domain......................................30
Section 10.2. Rent Apportionment..................................31
Section 10.3. Temporary Taking....................................31
ARTICLE XI...................................................................31
ASSIGNMENT, SUBLETTING AND ENCUMBERING LEASE............................31
Section 11.1. No Assignment, Subletting or Encumbering of Lease...31
Section 11.2. Assignment or Sublet................................35
Section 11.3. Transfer of Landlord's Interest.....................35
ARTICLE XII..................................................................35
SUBORDINATION, ATTORNMENT, FINANCING AND ESTOPPEL CERTIFICATE...........35
Section 12.1. Subordination.......................................35
Section 12.2. Attornment..........................................36
Section 12.3. Financing...........................................36
Section 12.4. Estoppel Certificate................................36
Section 12.5. Remedies............................................37
ARTICLE XIII.................................................................37
ADVERTISING AND PROMOTION...............................................37
Section 13.1. Promotion Fund......................................37
Section 13.2. Promotion Fund Contribution.........................37
Section 13.3. Advertisements [Intentionally Deleted]..............38
Section 13.4. Network.............................................38
ARTICLE XIV..................................................................38
DEFAULT AND REMEDIES....................................................38
Section 14.1. Elements of Default.................................38
Section 14.2. Landlord's Remedies.................................39
Section 14.3. Bankruptcy..........................................41
Section 14.4. Additional Remedies and Waivers.....................42
Section 14.5. Landlord's Cure of Default..........................42
Section 14.6. Security Interest...................................42
ARTICLE XV...................................................................42
RIGHT OF ACCESS.........................................................42
ARTICLE XVI..................................................................43
DELAYS..................................................................43
ARTICLE XVII.................................................................43
END OF TERM.............................................................43
Section 17.1. Return of Leased Premises...........................43
Section 17.2. Holding Over........................................43
ARTICLE XVIII ...............................................................44
COVENANT OF QUIET ENJOYMENT.............................................44
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ARTICLE XIX ............................................... 44
UTILITIES ............................................ 44
Section 19.1 Utilities ......................... 44
Section 19.2 Electricity, Telephone and Gas .... 44
Section 19.3 Trash and Garbage Removal ......... 45
Section 19.4 Water and Sewer ................... 45
Section 19.5 Grease Interceptors ............... 45
ARTICLE XX ................................................ 45
MISCELLANEOUS ........................................ 45
Section 20.1 Entire Agreement .................. 45
Section 20.2 Notices ........................... 45
Section 20.3 Governing Law ..................... 46
Section 20.4 Successors ........................ 46
Section 20.5 Liability of Landlord ............. 46
Section 20.6 Brokers ........................... 46
Section 20.7 Transfer by Landlord .............. 46
Section 20.8 No Partnership .................... 46
Section 20.9 Waiver of Counterclaims............ 46
Section 20.10 Waiver of Jury Trial............... 47
Section 20.11 Severability ...................... 47
Section 20.12 No Waiver ......................... 47
Section 20.13 Consumer Price Index .............. 47
Section 20.14 Interest .......................... 47
Section 20.15 Excavation ........................ 47
Section 20.16 Rules and Regulations ............. 47
Section 20.17 Financial Statements .............. 48
Section 20.18 General Rules of Construction ..... 48
Section 20.19 Recording ......................... 48
Section 20.20 Effective Date .................... 48
Section 20.21 Headings .......................... 48
Section 20.22 Managing Agent .................... 48
ADDENDUM
EXHIBITS:
Exhibit A Site Plan
Exhibit B Measurement of Leased Premises
Exhibit C Landlord's Work
Exhibit D Tenant's Work
Exhibit E Sign Criteria
Exhibit F Commencement and Expiration Date Declaration
Exhibit H Agreement of Subordinate Non-Disturbance
and Attornment
Exhibit H-1 Tenant Estoppel Certificate
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THIS LEASE dated as of this 23rd day of August, 1999 (the "Lease") by and
between OPRY MILLS LIMITED PARTNERSHIP, a Delaware limited partnership, the
address of which is c/o The Mills Corporation, 1300 Wilson Boulevard, Suite 400,
Arlington, Virginia 22209 (hereinafter referred to as "Landlord") and SILICON
ENTERTAINMENT, INC., a Delaware corporation, the address of which is 210
Hacienda Avenue, Campbell, California 95008 (hereinafter referred to as
"Tenant").
RECITAL
Landlord hereby leases to Tenant and Tenant hereby hires and takes from
Landlord, the Leased Premises, for the Term commencing on the Commencement Date,
subject to the terms, covenants, conditions and provisions of this Lease.
Landlord shall have the right, at any time prior to the earlier of (i) the
Delivery of Possession Date of the Leased Premises or (ii) October 1, 1999, by
written notice to Tenant, to relocate the Leased Premises in either direction
(from side to side from the outside boundary of the Leased Premises) by not more
than forty (40) feet, provided that the configuration of the Leased Premises is
substantially the same in the relocated space, that there is not more than one
other tenant space between the shifted Leased Premises and the courtyard and
that the visibility of the Leased Premises from the enclosed mall is not
materially and adversely impacted ("Shift"), upon any such Shift, the size and
description of the Leased Premises shall be appropriately modified to reflect
any resulting proportional adjustment in the Rent based upon the change in size
of the Leased Premises. If the Landlord initiates a Shift pursuant to the
foregoing and after the receipt by Tenant of the initial Lease Outline Drawing
(as described in Exhibit D) then Landlord will pay for Tenant's actual costs
associated with the Shift, including without limitation, the costs associated
with a redesign of the Leased Premises and the Fixturing Period will be extended
one day for each day of delay created by the Shift.
If the Commencement Date is not the first day of a month, Minimum Rent for
the month in which the Commencement Date occurs shall be prorated to the end of
the month and paid as the second monthly installment of Minimum Rent on the
first day of the next month and, after the expiration of the number of years in
the Term, the Term shall expire on the last day of the same month in which the
Commencement Date of the Term occurred, it being the intention of the parties
that the Term expire on the last day of a month. When the Commencement Date has
been determined, Landlord and Tenant shall execute, acknowledge and deliver a
written statement in recordable form specifying the Commencement and Expiration
Dates of the Term and, if there shall have been any changes in the floor area of
the Leased Premises, such statement shall reflect such change or changes. Said
statement upon execution and delivery shall be deemed to be a part of this
Lease.
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DATA SHEET
The following references furnish data to be incorporated in the specified
Sections of this Lease and shall be construed to incorporate all of the terms
of the entire Section as stated in this Lease:
(1) SECTION 1.1: DESCRIPTION OF LEASED PREMISES:
Store number: 429, consisting of approximately 6,007 square feet of floor
area as shown on Exhibit A attached hereto and made a part hereof, with no
less than fifty (50') lineal feet of frontage measured from center of
demising wall to center of demising wall.
(2) SECTION 1.2: TERM:
COMMENCEMENT DATE:
The earlier of (i) the later of (a) the Grand Opening or (B) the date
following the expiration of a one hundred twenty (120) day fixturing period
("Fixturing Period") following the Delivery of Possession Date (as defined
in Section 3.2), or (ii) the date the Leased Premises is open for business
to the public. It is estimated that the Delivery of Possession Date will be
January 4, 2000.
ORIGINAL TERM: [***].
OPTION PERIOD: Subject to Section 1.2 of this Lease, [***] years.
(3) SECTION 2.1: MINIMUM RENT:
Original Term:
From the Commencement Date and continuing through the expiration of the
Original Term, the sum of [***] annually ([***] psf), payable in equal
consecutive monthly installments of [***] each.
Option Period:
Beginning with the [***] year of the Option Period and continuing
through the expiration of the Option Period, the sum of [***] annually
([***] psf), payable in equal consecutive monthly installments of [***]
each.
(4) SECTION 2.2: PERCENTAGE RENT:
Percentage Factor: [***]
Sales Break Point for the Original Term:
From the Commencement Date and continuing through the expiration of the
Original Term: [***].
Sales Break Point for the Option Period:
Beginning with the [***] year of the Option Period and continuing
through the expiration of the Option Period: [***].
(5) SECTION 2.4: SECURITY DEPOSIT: N/A
(6) SECTION 4.1: PERMITTED USE:
*** Confidential treatment requested.
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Tenant shall use the Leased Premises for the use set forth below and for no
other purpose:
Conducting an interactive entertainment center featuring among other
things, racing simulators and other related retail and entertainment uses.
Such uses may include but shall not be limited to the installation and
operation of simulators and the sale of auto racing, including NASCAR
Silicon Motor Speedway merchandise, NASCAR driver merchandise and other
entertainment merchandise related to NASCAR; and for the sale of snack food
items only and hot and cold non-alcoholic beverages (selections to be based
on Landlord's reasonable approval subject to existing exclusive uses) for
on-the-premises consumption, provided said snack food and beverage service
shall not be operated or licensed by a nationally-recognized fast-food
chain. Tenant shall have the right to conduct group sales events ("Events")
from the Leased Premises at which time a portion of the Leased Premises may
be closed to the general public. During Events Tenant may retain an outside
catering service (giving preference to restaurant operators within the
Retail Development) to provide food and beverage service (including
alcoholic beverage service if Tenant or the caterer obtains all necessary
permits)
TRADE NAME: NASCAR Silicon Motor Speedway and/or Silicon Motor Speedway
(7) SECTION 13.2: FUND CONTRIBUTION: [***] psf of floor area in the Leased
Premises
GRAND OPENING FEE (INITIAL CONTRIBUTION): Subject to the terms of Section
13.2 hereof, [***] psf of floor area in the Leased Premises
(8) GUARANTOR: N/A
(9) GRAND OPENING DATE: Spring, 2000
(10) TEMPORARY CHARGES: [***] psf of floor area in the Leased Premises
(11) CONSTRUCTION CHARGEBACKS: N/A
(12) CONSTRUCTION ALLOWANCE: [***] psf of floor area in the Leased Premises
*** Confidential treatment requested.
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ARTICLE I
GRANT AND TERM
Section 1.1 Leased Premises. (a) Landlord, in consideration of the Rent
(as defined in Section 2.3) to be paid and the covenants to be performed by
Tenant, does hereby lease and demise to Tenant, and Tenant hereby rents and
hires from Landlord for the Term herein set forth, the Leased Premises which
are described as set forth in the Data Sheet attached hereto, in the retail
development designated as Opry Mills or by such other name as Landlord may from
time to time hereafter designate (hereinafter "Retail Development"). The term
"State" as used herein shall mean the State or Commonwealth of Tennessee. For
all purposes in this Lease, a "Major Tenant" is any occupant of 20,000 square
feet or more of floor area in the Retail Development and a "Major Tenant Space"
is any space in the Retail Development containing 20,000 square feet or more.
It is agreed that, wherever the term "Shopping Center" is used herein, it shall
mean the Retail Development excluding the Major Tenant Spaces, except as
otherwise specifically stated herein. Exhibit A sets forth the general layout
of the Retail Development. Landlord does not warrant or represent that the
Retail Development or the Leased Premises will be constructed exactly as shown
thereon or that it will be completed by a specific date, but Landlord does
warrant that the Leased Premises and the Retail Development will have the
general configuration shown on Exhibit A. Notwithstanding anything contained in
this Lease to the contrary, Landlord shall have the right, at any time and from
time to time, without notice to or consent of Tenant, and without in any manner
diminishing Tenant's obligations under this Lease, to make alterations or
additions to, and build additional stories on the building in which the leased
Premises are located and to build adjoining the same, to construct other
buildings and improvements of any type in the Retail Development or the common
areas, or any part thereof, including the right to locate and/or erect thereon
permanent or temporary kiosks and structures, to enlarge the Retail
Development, and to make alterations therein or additions thereto (provided in
no event will any kiosk or other structure be located directly in front of the
registration desk within the Leased Premises), to build additional stories on
any building or buildings within the Retail Development, and to build adjoining
thereto, to construct decks or elevated parking facilities and free standing
buildings within the parking lot areas of the Retail Development, and to change
the size, location, elevation and nature of any of the stores in the Retail
Development other than the Leased Premises or the common areas, or any part
thereof. Landlord agrees not to construct kiosks or other similar structures
or displays, whether temporary or permanent (hereinafter "Kiosk"), within the
mall area in front of the Leased Premises created by extending parallel lines
from each of the side demising walls of the Leased Premises, ten feet (10') out
into the common areas then connecting each line at the point of its
termination. In exercising its options hereunder, Landlord agrees to use
reasonable efforts (in light of the then existing circumstances) not to
materially and unreasonably interfere with the visibility of and access to the
Leased Premises from the enclosed mall; it being understood that any structure
placed in the common areas shall not block Tenant's signage located on the
storefront signband. In the event Landlord elects to enlarge the Retail
Development, or any part thereof, any additional area may be included by
Landlord in the definition of the Retail Development for purposes of this
Lease. Landlord shall also have the general right from time to time to include
within and/or to exclude from the defined Shopping Center any existing or
future areas and the floor area of the Shopping Center shall be accordingly
adjusted. The premises leased to Tenant are herein referred to as the "Leased
Premises". The approximate location of the Leased Premises is cross-hatched on
the lease plan of the Retail Development attached hereto and made a part hereof
as Exhibit A. This Lease of the Leased Premises is subject to all applicable
building restrictions, planning and zoning ordinances, governmental rules and
regulations, existing underlying leases, and all other encumbrances, covenants,
restrictions, easements and agreements affecting the Retail Development and the
terms and provisions of certain master declaration, reciprocal easement and
operating agreements now or hereafter entered into by Landlord.
Landlord acknowledges that Tenant's customers shall be permitted to queue
in the common areas while waiting for access to the Leased Premises ("Waiting
Area"). The Waiting Area shall be in a location designated by Landlord and
reasonably approved by Tenant, provided said Waiting Area permits Tenant's
customers to queue in an orderly manner without obstructing pedestrian traffic
in the common areas and/or unreasonably disturbing the operation of other
tenants in the Retail Development.
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In addition to the Leased Premises. Landlord shall grant Tenant a
non-revocable license during the Term for a location in the common area of the
Shopping Center which shall be used by Tenant for the display of a full size
stockcar, including sign tripods ("Display Area"). The location of the Display
Area shall be selected by Landlord, but such location shall always be within the
area labeled on Exhibit A-1 as "Display Area". In no event shall Tenant be
obligated to pay additional Rent for use of the Display Area; provided, however,
that any utility costs associated with the illuminated display shall be the sole
responsibility of Tenant. Tenant shall, at its sole cost and expense, construct
the illuminated display in accordance with approved plans and specifications,
which plans and specifications shall be submitted to Landlord for approval
pursuant to the submittal requirements and process outlined in the Tenant
Handbook. During such times as Tenant is using the Display Area for the purpose
of displaying the stock car or for any other permitted use (as so approved by
Landlord), Tenant shall repair and maintain the Display Area in accordance with
Section 6.2 of this Lease; in addition, Tenant shall be required to carry
insurance for the Display Area providing for the coverage set forth in Section
8.2(a) of this Lease during such times as Tenant is using the Display Area as
set forth herein. Upon the Expiration Date (hereinafter defined) or the earlier
termination of this Lease. Tenant shall be responsible for the complete removal
of the display and shall make any necessary repairs to the Display Area in
accordance with Tenant's obligations set forth in Section 17.1 of this Lease.
Subject to the provisions of Section 5.1, Tenant shall enjoy a
non-exclusive easement, right and privilege for Tenant and its customers,
employees and invitees and the customers, employees and invitees of any
assignee, sublessee, concessionaire or licensee of Tenant, to use the common
areas of the Shopping Center, with Landlord and the other tenants and occupants
of floor area within the Shopping Center and their respective customers,
employees and invitees. Furthermore, Landlord agrees that any additions,
alterations or modifications to the Shopping Center by Landlord shall not
adversely affect access to, or visibility of the Leased Premises and, except as
otherwise provided for herein, Tenant shall retain substantially the same
relative position with respect to Major Tenants of the Shopping Center as of the
Commencement Date.
(b) After the Commencement Date (as defined in Section 3.2), Landlord
reserves the right to relocate Tenant only for the purpose of (i) the addition
or expansion of a Major Tenant or (ii) the redevelopment or expansion of the
Retail Development involving the addition of a minimum of 100,000 square feet of
GLA. Landlord shall provide Tenant with not less than sixty (60) days written
notice of such relocation (the "Relocation Period") during which Landlord shall
offer to Tenant such alternative location(s) (with approximately the same floor
area, configuration and at least fifty feet (50') of frontage) as may be
available within that area of the Retail Development labeled "Relocation Zone"
on Exhibit A. In the event the parties agree on a specific location, then this
Lease shall be amended by substituting the new location for the present location
and the square footage, Minimum Rent and Sales Break Point shall be
proportionately adjusted based upon the change in the size of the Leased
Premises and Landlord and Tenant shall agree upon a mutually acceptable
timeframe for the completion of work in the new premises and the relocation of
the Tenant to the new premises. Landlord shall, at Landlord's cost and expense,
complete the leasehold improvements to the new location in accordance with the
working drawings originally approved by Landlord with respect to Tenant's Work
in the original Leased Premises (including, without limitation finish work and
the installation of fixtures, simulators and other merchandise) and Tenant shall
relocate to the new location and, within sixty (60) days after delivery of the
new location to Tenant ("Relocation Fixturing Period"), open for business in the
new location ("Relocation Date"). Since Tenant will need to move its equipment,
including simulators from one space to the other, Tenant shall be permitted to
close for a period not to exceed ten (10) days for the purpose of moving the
equipment and installing it in the new leased premises ("Relocation Closure"),
and during such Relocation Closure Tenant's Rent shall abate. In the event that
Tenant is not able to operate in either the original or the relocated Leased
Premises during the Relocation Fixturing Period because of the removal and
installation of the simulators and other equipment. Rent shall abate until
Tenant reopens but in no event after the expiration of the Relocation Fixturing
Period. Notwithstanding the foregoing, Tenant may elect to have Landlord
construct the relocated space under a new prototype design, but Tenant shall
bear the additional costs required as a result of the election of the new
design. Landlord recognizes that the installation of simulators is a specialized
task for which Tenant's experts will be required and Landlord shall reimburse
Tenant for the reasonable internal costs of using Tenant's personnel for the
completion of such work. If a relocation of the Leased Premises occurs Landlord
shall reimburse Tenant for Tenant's reasonable and actual out-of-pocket costs of
moving
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Tenant's equipment and inventory from the original Leased Premises to the new
location within forty-five (45) days of Landlord's receipt of a statement from
Tenant setting forth such costs together with backup information as Landlord
may reasonably require.
In the event Landlord offers to Tenant at least one alternative location
within the Relocation Zone (or elsewhere at Tenant's sole discretion) with
approximately the same floor area, configuration and at least fifty feet (50')
of frontage and Landlord and Tenant are unable to agree on an alternative
location, then within thirty (30) days after the expiration of the sixty (60)
day period set forth above, Landlord shall either (A) terminate this lease by
providing Tenant ninety (90) days prior notice, which termination shall be
effective on the later of (i) ninety (90) days after notice from Landlord of
the termination or (ii) the date that Tenant actually vacates the Leased
Premises ("Termination Date") or (B) withdraw the request for relocation. In
the event of such termination, Landlord shall pay to Tenant, within thirty
(30) days following the later of (a) the Termination Date or (b) the date that
Tenant shall have vacated the Leased Premises, a sum equal to the then
unamortized cost of Tenant's leasehold improvements which have been paid for by
Tenant, such amortization to be on a straight line basis over the Original Term
less the value of all simulators equipment removed by Tenant for re-use plus
all reasonable costs associated with the moving and storage for up to three (3)
months of the simulators and other equipment in the Leased Premises, provided
Tenant shall furnish to Landlord such backup information as Landlord may
reasonably require. Tenant shall deliver possession of the Leased Premises to
Landlord on or before the Termination Date and/or the Relocation Date in "as
is" condition subject to the provisions of Sections 3.5 and 17.1. Tenant shall
pay all amounts which are due and owing under the Lease or which shall accrue
up to such Termination Date or Relocation Date (which amounts shall be paid to
Landlord within thirty (30) days of such Termination Date or Relocation Date)
and Tenant shall be released from any and all further obligations pursuant to
this Lease accruing after such Termination Date or Relocation Date with respect
to the vacated Leased Premises, except as otherwise provided in Articles V and
VII; however, in the event of relocation, Tenant shall remain liable for all
obligations accruing under this Lease after the Relocation Date.
(c) The square footage of the Leased Premises (sometimes herein referred
to as the gross leaseable floor area or GLA) shall be measured as defined in
Exhibit B. The actual square footage in the Leased Premises shall be determined
by Landlord's architect. If Tenant disagrees with the square footage so
determined, Tenant may advise Landlord in writing within ten (10) days that it
contests the same and retain an architect to remeasure the Leased Premises. If
Landlord's architect and Tenant's architect do not agree, then the two
architects shall retain a third architect whose decision shall be final and
binding. The agreed to square footage shall be binding upon both parties
hereto, and such determined square footage shall be used in all calculations
based on square footage throughout this Lease. If the floor area determined in
accordance with the preceding sentence varies from the square foot floor area
originally set forth in the Data Sheet, the Minimum Rent set forth in Section
2.1 hereof shall be adjusted by multiplying the Minimum Rent by a fraction, the
numerator of which is the square foot floor area determined by Landlord's
architect and the denominator of which is the square foot floor area originally
set forth in the Data Sheet, and Tenant shall be obligated to pay such Minimum
Rent, as adjusted, from the Commencement Date, subject to further adjustments
as provided in this Lease but in no event shall Tenant be obligated to pay
Minimum Rent on more than [***] additional square feet of GLA. Each monthly
installment provided for in Section 2.1 shall be recomputed and shall be that
dollar amount which results from dividing the adjusted Minimum Rent by twelve
(12). Any and all references in this Lease to Minimum Rent (or the monthly
installments thereof) shall be deemed to be references to the Minimum Rent as
computed by application of this Section 1.1, subject, however, to the
adjustments set forth elsewhere in this Lease. For purposes of this Lease, in
determining the gross leaseable floor area or the gross leased and occupied
floor area of the Shopping Center, there shall be excluded therefrom project
areas and offices, common areas and/or areas under Landlord's control (e.g.,
electrical/utility rooms, etc.). The exterior walls, roof, storefront and the
area beneath the Leased Premises are not demised hereunder, and the use thereof,
together with the right to install, maintain, use, repair and replace pipes,
ducts, conduits, wires, people counters, tunnels, sewers and structural elements
leading through the Leased Premises in locations which will not materially
interfere with Tenant's use thereof and serving other parts of the Retail
Development are hereby reserved to Landlord. Landlord reserves an easement above
Tenant's finished ceiling or light line to the roof for general access purposes
and in connection with the exercise of Landlord's other rights under this Lease.
Notwithstanding anything contained in this Lease to the contrary, if as a result
of Landlord's exercise of the foregoing rights Tenant is prevented from
operating its business within the
*** Confidential treatment requested.
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Leased Premises for three (3) or more consecutive days, Landlord shall after
written notice from Tenant to Landlord, abate Minimum Rent after such three (3)
days of disruption on a day-to-day basis until Tenant is able to operate its
business in the Leased Premises.
SECTION 1.2 TERM. The Term of this Lease shall be for a period commencing
on the Commencement Date, and expiring at 11:59 p.m. local time on the final day
of the month in which the Original Term or the Option Period, if exercised,
expires or other specified date as set forth in the Data Sheet, unless sooner
terminated in accordance with the provisions hereof (the "Expiration Date").
Unless otherwise specified in this Lease, the use of the word "Term" shall be
deemed to include both the Original Term and the Option Period, if exercised.
The term "full year" and "year" as used in this Lease shall mean consecutive
periods of twelve (12) months each following the Commencement Date. For all
purposes of this Lease, the term "Lease Year" shall have the following meaning:
the first Lease Year shall be a period beginning with the Commencement Date and
ending on the 31st day of December next following the Commencement Date, and
after the first Lease Year, the term Lease Year shall mean a fiscal period of
twelve (12) consecutive calendar months commencing on January 1 of each calendar
year, except that the last Lease Year shall terminate on the Expiration Date or
sooner termination of this Lease. Lease Years containing 365 days or more shall
be referred to as "full Lease Years." If the Leased Premises are not delivered
to Tenant on or before the expiration of twelve (12) months after the date of
Landlord's execution of this Lease then Tenant may cancel and terminate this
Lease upon sixty (60) days prior written notice to the Landlord, in which event
neither party shall have any further obligation or liability to the other. In
the event the Leased Premises are not delivered resulting in Termination of this
Lease by Tenant as a result of the Landlord's failure to use Commercially
reasonable efforts to complete construction, the Landlord shall reimburse Tenant
for its actual out-of-pocket costs associated with this Lease and Leased
Premises. Following the Commencement Date of this Lease, Landlord may submit to
Tenant a Commencement and Expiration Date Declaration in the form attached
hereto as Exhibit F, specifying the information called for in said form, and
Tenant shall execute such Declaration within thirty (30) days following
submission for purposes of certifying such information; provided, however, that
the Declaration shall not be rendered ineffective by Tenant's failure to execute
same.
Provided Tenant is not in default under this Lease (after expiration of any
cure or grace period provided herein) as of the date of exercise hereof. Tenant
shall have the option to extend the Term hereof (the "Option") for one (1)
additional period of five (5) years (the "Option Period"). The Option shall be
exercised, if at all, by written notice to Landlord ("Notice") at least one
hundred eighty (180) days prior to the expiration of the Original Term. All
terms and conditions of this Lease shall apply during the Option Period except
the Minimum Rent and Sales Break Points shall be as scheduled in Sections 2.1
and 2.2 hereof. In the event that Tenant does not exercise the Option by the
required date, then such Option shall become null and void and be of no further
force or effect. If the Leased Premises or any part thereof be sublet or
occupied by any person or entity other than Tenant, then such Option shall
become null and void and be of no further force or effect, unless the Lease has
been transferred with the prior written consent of Landlord or pursuant to a
transfer not requiring the approval or consent of Landlord.
If Tenant's Gross Sales during the twelve (12) month period ending two
hundred ten (210) days prior to the Expiration Date do not exceed [***] per
square foot of floor area in the Leased Premises, then any Notice by Tenant of
the Option shall be null and void and Tenant's Notice shall have no force or
effect. Tenant shall furnish to Landlord, concurrently with its Notice, a
statement certified by an authorized representative or financial officer of
Tenant setting forth the amount of Tenant's Gross Sales for the said twelve (12)
month period.
Notwithstanding the foregoing, in the event Tenant does not achieve Gross
Sales (as hereinafter defined) of as least [***] per square foot during the
third (3rd) year of the Term hereof, then Landlord and Tenant, for a period of
thirty (30) days following the end of the third (3rd) year, shall each have the
option, upon one hundred eighty (180) days prior written notice to the other
party, of terminating this Lease ("Termination Option") provided, however, that
Tenant shall not be entitled to terminate this Lease if Tenant is in default of
this Lease beyond the expiration of any applicable grace or cure period. In the
event Tenant fails to submit a certified report of annual Gross Sales within
twenty (20) days after written notice of its failure to submit such report
within the time period required pursuant to Section 2.2 of this Lease,
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then Landlord may use such information as Landlord shall have available to
permit Landlord to make a determination as to the amount of Gross Sales
achieved by Tenant during the period covered by Landlord's option to terminate,
and such information shall be the basis for Landlord exercising its Termination
Option and Tenant shall not be permitted to reinstate this Lease after
termination for any reason or cause whatsoever, including, but not limited to,
the submittal by Tenant of a subsequent sales report either certified or
uncertified. In the event that neither party exercises its Termination Option
within the required time period, then each such Termination Option shall, upon
expiration of the applicable period, become null and void and be of no further
force or effect. In the event either party exercises the foregoing Termination
Option within the required time period, this Lease shall terminate upon
expiration of the one hundred eighty (180) day period subject, however, to the
payment by Tenant to Landlord of all sums then due and owing or having accrued
to Landlord. In the event that Tenant exercises the Termination Option provided
for herein, Tenant shall pay to Landlord the unamortized portion of the
Construction Allowance (as hereinafter defined).
In the event that Tenant can prove that Tenant's Gross Sales are below
[***] per square foot as the result of an act or omission on the part of
Landlord, then Landlord shall not be permitted to exercise the Termination
Option provided in the immediately preceding paragraph.
SECTION 1.3 OPENING. Subject to delays as described in Article XVI, Tenant
covenants and agrees to complete its construction within the Leased Premises in
accordance with the provisions of this Lease, to satisfy the requirements for
issuance of a certificate of acceptance pursuant to Exhibit D attached hereto
and made a part hereof, and to open its store for business to the public not
later than the Commencement Date. Notwithstanding the foregoing, Landlord
hereby notifies Tenant that the anticipated date of the grand opening of the
Shopping Center (the "Grand Opening") is the date set forth on the Data Sheet.
Tenant shall be obligated to open its store for business to the public on or
before the later of (a) the expiration of the Fixturing Period or (B) the Grand
Opening. Tenant shall not be permitted to open for business to the public
prior to the Grand Opening without the prior written consent of Landlord which
consent shall be at Landlord's sole discretion.
SECTION 1.4 LATE OPENING. In the event Tenant shall fail to open its store
for business to the public upon the Commencement Date for reasons other than
Delays, as described in Article XVI, or delays created by Landlord, then in
order to compensate Landlord for its loss, Tenant shall pay to Landlord as
additional rent (as defined in Section 2.3) over and above the Minimum Rent and
all other charges to be paid by Tenant to Landlord pursuant to this Lease, a sum
in an amount equal to [***] per day for the Commencement Date and each day after
the Commencement Date that Tenant shall have failed to open its store for
business. This remedy shall be in addition to any and all other remedies
provided for in this Lease in the event of such failure to open. Such additional
late opening rent shall be deemed to be in lieu of any Percentage Rent that
might have been earned during the period of Tenant's failure to open.
ARTICLE II
RENT AND DEPOSIT
SECTION 2.1. MINIMUM RENT. During the entire Term of this Lease, Tenant
shall pay annual minimum rental ("Minimum Rent") for the Leased Premises from
the Commencement Date of this Lease in the amount set forth in the Data Sheet
attached hereto, which sum shall be payable by Tenant in equal consecutive
monthly installments in the sum set forth in the Data Sheet attached hereto, on
or before the first day of each month, in advance. The Minimum Rent and each of
the monthly installments called for hereunder shall be payable to Landlord,
without demand, deduction, set-off or counter-claim, except as otherwise
provided herein or permitted by applicable law. The first installment of
Minimum Rent shall be paid by Tenant on or before the Commencement Date. If the
Commencement Date occurs on other than the first day of a month, the second
installment of Minimum Rent shall be prorated at a daily rate on the basis of a
thirty (30) day month.
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On the Commencement Date, if either of the following conditions have not
been satisfied; (1) at least five (5) Major Tenants are open or ready to open
for business; or (2) the "Required Occupancy Level" (as hereinafter defined) has
been achieved, then Tenant's obligation for payment of Minimum Rent shall abate
and Tenant shall pay to Landlord, in lieu thereof, Interim Rent on the basis of
the lesser of (A) the scheduled Minimum Rent and (B) four percent (4%) of all of
Tenant's Gross Sales (as defined in Section 2.2 of this Lease) until both of the
conditions in (1) and (2) above have been initially satisfied; provided,
however, Tenant shall not be entitled to such abatement of Minimum Rent if
Tenant fails to open its store in the Leased Premises to the general public on
or before the Commencement Date of the Term hereof or if Tenant shall otherwise
be in default of this Lease beyond the expiration of any applicable grace or
cure period. Said Interim Rent shall be paid to Landlord within ten (10) days
following the end of each calendar month, at which time Tenant shall also be
required to submit an unaudited statement of Tenant's Gross Sales for such
calendar month and for the Lease Year to date. All other terms and conditions of
this Lease shall be applicable during such period. For purposes of this
paragraph, the term "Required Occupancy Level" shall mean occupants of at least
sixty-five percent (65%) of the gross leasable floor area of the Shopping Center
are open for business, or instead, at Landlord's sole option. "Required
Occupancy Level" shall mean sixty five percent (65%) of the total number of
stores shown on the then existing lease plan for the Shopping Center, are
occupied and are open for business.
In addition, Landlord hereby represents and warrants to Tenant that it has
a fully executed lease for a Bass Pro facility, Rainforest Cafe and a multi-plex
theater at the Retail Development ("Key Stores"). In the event that a lease is
executed with Jillian's for a facility at Opry Mills, Jillian's will be added to
the list of Key Stores in place and stead of Rainforest Cafe. In the event that
less than two of the Key Stores have opened for business within six (6) months
after the Commencement Date then Tenant's obligation for payment of Minimum Rent
shall abate and Tenant shall pay to Landlord, in lieu thereof, Interim Rent on
the basis of the lesser of (A) the scheduled Minimum Rent and (B) four percent
(4%) of all of Tenant's Gross Sales (as defined in Section 2.2 of this Lease)
until at least two (2) of the Key Stores are initially open for business;
provided, however, Tenant shall not be entitled to such abatement of Minimum
Rent if Tenant shall otherwise be in default of this Lease beyond the expiration
of any applicable grace or cure period. Said Interim Rent shall be paid to
Landlord within ten (10) days following the end of each calendar month, at which
time Tenant shall also be required to submit an unaudited statement of Tenant's
Gross Sales for such calendar month and for the Lease Year to date. All other
terms and conditions of this Lease shall be applicable during such period. In
the event that at least two (2) of the Key Stores have not initially opened for
business within eighteen (18) months after the Commencement Date, then at the
end of such eighteen (18) month period, Tenant may elect to terminate this Lease
by providing Landlord within thirty (30) days of the end of such eighteen (18)
month period, written notice of its intention to so terminate the Lease ("Key
Store Termination Notice") or Tenant may elect to remain in the Leased Premises
but must commence paying the then applicable scheduled Minimum Rent as provided
for in the Data Sheet of this Lease. In the event that Tenant timely delivers
the Key Store Termination Notice, this Lease shall terminate one hundred and
eighty (180) days from the date of the Key Store Termination Notice or on such
earlier date as may be mutually agreed to between the parties and this Lease and
all of the unaccrued rights and obligations of the parties to it shall cease and
terminate, as fully and effectively as though the date agreed to were the
Expiration Date. In such event, Landlord and Tenant shall execute a Termination
Agreement setting forth the terms of such termination.
Section 2.2. Percentage Rent. (a) During and for each Lease Year, Tenant
shall pay annual percentage rent ("Percentage Rent") equal to the Percentage
Factor (see Data Sheet) multiplied by all "Gross Sales" resulting from business
conducted in, on or from the Leased Premises during such Lease Year in excess of
the applicable Sales Break Point set forth in the Data Sheet. In any Lease Year
where there is more than one applicable Sales Break Point, for purposes of
computing annual Percentage Rent the following calculation shall be used: each
Sales Break Point which was effective during any such Lease Year shall be
multiplied by a fraction, the numerator of which is the number of days in the
Lease Year that such Sales Break Point was effective and the denominator of
which is the actual number of days in such Lease Year (herein the "Adjusted
Break Point") and the sum of the Adjusted Break Points shall be the Sales Break
Point for such Lease Year. "Gross Sales" is defined to mean the total amount of
the actual sales price, whether for cash or otherwise, of all sales of
merchandise or services arising out of or payable on account of (and all other
receipts or amounts receivable whatsoever with respect to) all the business
conducted in, on, or from the Leased Premises by or on account of Tenant or any
sublessee, assignee or concessionaire of Tenant for cash or
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otherwise, including all orders for merchandise taken from or filled at or from
the Leased Premises, including all deposits not refunded to customers. A "sale"
shall be deemed to have been consummated for purposes of this Lease, and the
entire amount of the sale price shall be included in Gross Sales, at such time
as (i) the transaction is initially reflected in the books or records of Tenant,
or any sublease, assignee or concessionaire of Tenant, or (ii) Tenant or such
other entity receives all or any portion of the sales price, or (iii) the
applicable goods or services are delivered to the customer, whichever first
occurs. Tenant shall record at the time of each sale or transaction, in the
presence of the customer, all receipts from such sale or other transaction,
whether for cash, credit or otherwise, in a cash register or cash registers
having a cumulative total, which shall be sealed in a manner approved by
Landlord and which shall possess such other features as shall be required by
Landlord. There shall be no deduction allowed for direct or indirect discounts,
rebates, or other reductions on sales, unless generally offered to the public on
a uniform basis, except as otherwise provided below. Tenant may deduct from
Gross Sales discount sales to employees, bad debts written off the books of
Tenant and charges paid to credit card companies, as otherwise provided below.
Tenant may also exclude from Gross Sales any transfer of goods between Tenant's
other stores and returns to shippers or manufacturers. The term "Gross Sales"
shall exclude, however, proceeds from any sales tax, gross receipts tax or
similar tax, by whatever name called which are separately stated and in addition
to the purchase price, bona fide transfers of merchandise from the Leased
Premises to any other stores or warehouses of Tenant, refunds given to customers
for merchandise purchased at the Leased Premises and returned or exchanged,
monies received by Tenant but due and owing to the actual provider of the
service (e.g. special event catering fees), and sales of Tenant's fixtures and
equipment not in the ordinary course of Tenant's business. The term
"merchandise" as used in this Lease shall include food and beverages if Tenant
is permitted to sell such items pursuant to Section 4.1 hereof.
The term "Gross Sales" shall not include, however, the following: (i) the
sales price of all merchandise returned and accepted for full credit or the
amount of the cash refund or allowance made thereon; (ii) the sums and credits
received in settlement of claims for loss or damage to merchandise, (iii) the
consideration received in connection with a sale of inventory which occurs other
than in the ordinary course of Tenant's business, including, but not limited to,
a sale in bulk or to a jobber, liquidator or assignee; (iv) sales taxes,
so-called luxury taxes, excise taxes, gross receipt taxes, and other taxes now
or hereafter imposed upon the sale or value of merchandise or services, whether
added separately to the selling price of the merchandise or services and
collected from customers or included in the retail selling price; (v) receipts
from public telephones, vending machines, sales of money orders, and the
collection of public utility bills; (vi) bankcard discounts (e.g., Visa,
MasterCard, etc.), interest, carrying charges, or other finance charges in
respect of sales made on credit; (vii) sales of fixtures, trade fixtures, or
personal property that are not merchandise held for sale at retail; (viii) sales
to senior citizens at discount; (ix) revenue received from mailing, alterations,
delivery or other services performed on a non-profit basis for the benefit of
customers; (x) Tenant's accounts receivable, not to exceed [***] of Gross Sales,
which have been determined to be uncollectible for federal income tax purposes
during the applicable lease year, provided however, that if such accounts are
actually collected in a later lease year, the amount shall be included in the
Gross Sales for such later lease year; (xi) rents, subrents or other
consideration received in connection with a permitted assignment, sublease,
license, concession or other transfer of any portion of the store (however,
Gross Sales of any such transferee shall be included) and license fees otherwise
received by Tenant in connection with a third party license agreement; (xii)
amounts received for merchandise transferred to any other place of business of
Tenant (or its subtenants, concessionaires and/or licensees) or to any business
organization affiliated with Tenant, wherever located, provided such merchandise
is not used to fill a sale made in the store; (xiii) discounts given for
promotional coupons that are redeemed from time to time (xiv) amounts received
in connection with remote site promotional activities; (xv) promotional fees
earned by Tenant with respect to goods or services offered for sale; and (xvi)
amount required to be paid by Tenant under any agreement related to Tenant's use
of the NASCAR name, not to exceed [***] of Gross Sales.
(b) Tenant shall keep at the Leased Premises or at Tenant's executive
offices within the continental United States a full and accurate set of books
and records adequately showing the amount of Gross Sales in each Lease Year. The
books and records to be kept by Tenant shall include, without
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limitation, (i) cash register tapes, including tapes from temporary registers;
(ii) serially pre-numbered sales slips; (iii) detailed original records of any
exclusions of deductions from Gross Sales; (iv) sales tax records; and (v) such
other records, if any, which would normally be examined by an independent
accountant pursuant to accepted auditing standards in performing an audit of
Tenant's sales. Such books and records shall be kept in accordance with
generally accepted accounting principles and practices, may be saved in
microfiche or an electronic storage medium, and shall be retained by Tenant for
a period of not less than two (2) years following the end of the Lease Year to
which they have reference. When and as Landlord may reasonably require (but no
more than once per Lease Year following the first Lease Year unless required by
the city, county or State), Tenant shall also furnish to Landlord any and all
statements, information, and copies of sales tax reports and returns which
separately show financial data for the Leased Premises, and inventory records
and other data evidencing Gross Sales. Within twenty (20) days following the end
of each calendar month of the Term hereof Tenant shall submit to Landlord an
unaudited statement of Gross Sales for such calendar month. Within twenty (20)
days following the end of the month in which Tenant's Gross Sales for the Lease
Year to date exceed the Sales Break Point, and each month thereafter, Tenant
shall pay to Landlord Percentage Rent and shall submit to Landlord a statement
certified by Tenant setting forth the Gross Sales for each such period. Within
forty-five (45) days after the close of each Lease Year, Tenant shall furnish to
Landlord a statement certified by an authorized representative or financial
officer of Tenant setting forth the amount of Gross Sales during such Lease Year
and showing the amount of Percentage Rent required to be paid by Tenant for such
Lease Year. The full amount of the Percentage Rent due shall be paid to Landlord
no later than sixty (60) days after the end of each Lease Year and any excess
Percentage Rent paid shall be credited against Tenant's next due Rent payment,
except for the final Lease Year of the Term for which any excess shall be
refunded to Tenant. Landlord and/or Landlord's auditor shall have the right, at
any time after thirty (30) business days notice but no more than once per Lease
Year after the first Lease Year (if the first Lease Year is a partial Lease
Year), to inspect and/or audit the records of Tenant relating to Gross Sales. If
the Gross Sales exceed those reported, Tenant shall immediately pay any
deficiency in Percentage Rent owing to Landlord. If Gross Sales vary from those
reported by [***] of more, Tenant shall pay Landlords's cost of inspection and
audit. If Gross Sales vary from those reported by (i) [***] or more in any one
(1) Lease Year, or (ii) [***] or more for any two (2) Lease Years out of any
five (5) Lease Years, then Landlord shall have the right, at its sole option, to
terminate this Lease, with Tenant remaining liable for sums due and owing under
this Lease for the balance of the Term provided, however, that Landlord shall be
permitted to terminate this Lease only if Landlord can prove that such
misstatement was a deliberate act. Tenant agrees that in the event Tenant shall
fail to timely submit a Gross Sales statement as required by this Section
2.2(b), Tenant shall pay on demand a late fee of [***] per late statement, as
additional rent.
(c) In the event that Tenant shall fail to operate its business in the
Leased Premises in the manner and on each day as required pursuant to Section
4.2 hereof, then, for the purpose of computing the Percentage Rent for such
Lease Year affected by Tenant's failure to operate, the Sales Break Point for
such Lease Year shall be adjusted by multiplying the Sales Break Point otherwise
applicable for such Lease Year by a fraction, the numerator of which shall be
the actual number of days in such short Lease Year or the actual number of days
in such Lease Year during which Tenant was open for business and operating in
accordance with Section 4.2, and the denominator of which shall be "360".
In the event that the first Lease Year is less than twelve (12) months in
length, then the Percentage Rent covering such Lease Year shall be paid on
Gross Sales in excess of the Sales Break Point computed on a pro rated basis
for the period beginning on the Commencement Date of the Term and ending on
the succeeding December 31st.
(d)
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SECTION 2.3. PAYMENTS BY TENANT. Throughout the Term of this Lease, Tenant
shall pay to Landlord, without demands, deductions, set-offs or counterclaims
(except as otherwise provided for herein or permitted by applicable law), the
Rent, which is hereby defined as the sum of the Minimum Rent, Percentage Rent
and all additional rent, when and as the same shall be due and payable
hereunder. Unless otherwise stated, all sums of money or charges of any kind or
nature, in addition to Minimum Rent and Percentage Rent, payable by Tenant to
Landlord pursuant to this Lease or the Exhibits attached hereto are defined as
"additional rent" and are due thirty (30) days after the rendering of an invoice
therefor, without any deductions, set-offs or counterclaims (except as otherwise
provided for herein or permitted by applicable law), and failure to pay such
sums of money or charges shall carry the same consequences as Tenant's failure
to pay Rent. All payments and charges required to be made by Tenant to Landlord
hereunder shall be payable in United States funds, at the address indicated on
page 1 of this Lease, unless otherwise specified by written notice from Landlord
to Tenant. No payment by Tenant or receipt by Landlord of a lesser amount than
the correct Rent shall be deemed to be other than a payment on account and no
endorsement or statement on any check or other communication accompanying a
check for payment of any amounts payable hereunder shall be deemed an accord and
satisfaction, and Landlord may accept such check in payment without prejudice to
Landlord's right to recover the balance of any sums owed by Tenant hereunder or
to pursue any other remedy available in this Lease, or under law, against
Tenant.
SECTION 2.4. SECURITY DEPOSIT [INTENTIONALLY DELETED].
SECTION 2.5 LATE CHARGE. In the event any Rent or sums required hereunder
to be paid are not received on or before the fifth (5th) calendar day after the
same are due, then, for each and every late payment, Tenant shall immediately
pay, as additional rent, a late charge equal to the greater of (a) [***], (b)
[***] per day for each day after the date due that such payment has not been
received by Landlord or (c) [***] per month of the total receivable balance of
Tenant outstanding. In the event of Tenant's failure to pay the foregoing late
charge, Landlord may deduct said charge from the Security Deposit set forth in
Section 2.4 hereof. The provisions herein for late charges shall not be
construed to extend the date for payment of any sums required to be paid by
Tenant hereunder or to relieve Tenant of its obligation to pay all such sums at
the time or times herein stipulated. Notwithstanding the imposition of such late
charges pursuant to this Section 2.5, Tenant shall be in default under this
Lease if any or all payments required to be made by Tenant are not made on or
before the time due as stipulated in Article XIV, and neither the demand for,
nor collection by, Landlord of such late charges shall be construed as a cure of
such default on the part of Tenant. It is agreed that the said late charge is a
fair and reasonable charge under the circumstances and shall not be construed as
interest on a debt payment. In the event any charge imposed hereunder or under
any other section of this Lease is either stated to be or construed as interest,
then no such interest charge shall be calculated at a rate which is higher than
the maximum rate which is allowed under the usury laws of the State, which
maximum rate of interest shall be substituted for the rate in excess thereof, if
any, computed pursuant to this Lease.
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ARTICLE III
PREPARATION OF LEASED PREMISES
SECTION 3.1. LANDLORD'S WORK. Landlord shall construct the building
wherein the Leased Premises are to be located and perform the work described in
Exhibit C attached hereto and made a part hereof ("Landlord's Work") at
Landlord's cost and expense, except as otherwise provided in Exhibit C.
Landlord's work shall be completed in a good and workmanlike manner, free of
material defects and in compliance with applicable building codes, and zoning
and subdivision laws relating to general retail use. All work, in excess of the
work described in Exhibit C, done by Landlord at Tenant's written request shall
be paid for by Tenant within thirty (30) days after the presentation to Tenant
of a bill for such work. Any items of Landlord's Work which are not completed
as of delivery of possession shall be identified by Tenant on a punch list to
be submitted to Landlord within thirty (30) days after the date of possession
and Landlord shall thereafter complete the same. Any items of Landlord's Work
which are not timely identified on such a punch list shall be deemed completed,
other than latent defects as provided for in Section 6.1 hereof.
SECTION 3.2. DELIVERY OF POSSESSION. (a) Landlord, or Landlord's
supervising architect, shall give Tenant at least thirty (30) days' prior
written notice of the date on which Landlord's Work will be substantially
completed in accordance with Exhibit C and the Leased Premises will be
available for the performance of Tenant's Work (as defined in Section 3.3) to
the extent that Tenant shall be able to perform its work in the Leased Premises
without substantial interference resulting from the conduct of Landlord's Work
("Delivery of Possession Date"). Notwithstanding anything to the contrary
contained in this Lease, for purposes of calculating the Commencement Date,
the Fixturing Period shall not begin before January 1, 2000, unless otherwise
agreed to by each of Landlord and Tenant in its sole discretion. Tenant
covenants and agrees to take physical possession of the Leased Premises on the
Delivery of Possession Date provided that Landlord's Work is "substantially
complete." The term "substantially complete" shall mean that Landlord can give
Tenant beneficial occupancy of the Leased Premises so that Tenant can begin the
performance of Tenant's Work in safety. Landlord and Tenant acknowledge that
Landlord and Tenant will be working simultaneously to complete the Leased
Premises and that Landlord will be continuing the completion of Landlord's Work
during the thirty (30) day period after the Delivery of Possession Date.
Landlord and Tenant agree to cooperate so as to avoid interference with each
other so that Landlord's Work and Tenant's Work may be completed in a timely
manner. The Delivery of Possession Date shall be subsequently confirmed by
Landlord, or Landlord's supervising architect, by written notice to Tenant.
Failure of Landlord to deliver possession of the Leased Premises within the
time and in the condition provided for in this Lease will not give rise to any
claim for damages by Tenant against Landlord or permit Tenant to rescind or
terminate this Lease except as may be provided in Section 1.2 hereof or as
otherwise provided herein.
(b) Tenant may, provided Tenant shall not interfere with the conduct of
Landlord's Work, and subject to Landlord's reasonable rules and regulations,
enter the Leased Premises during normal working hours during the course of
Landlord's Work for the purpose of inspecting the Leased Premises and making
measurements. At such time prior to the Delivery of Possession Date that
Landlord's Work has progressed sufficiently to permit Tenant to perform its
work without interfering with Landlord's Work, Landlord may, but shall not be
required to, notify Tenant of the same, and Tenant may then enter the Leased
Premises in order to begin to install its store fixtures and perform such other
work as may be required under the provisions of this Lease in order to ready
the store for opening. Throughout the period of Tenant's Work, Tenant shall
schedule its work so as not to interfere with any work being performed by
Landlord or by any other tenant in the Shopping Center.
SECTION 3.3 TENANT'S WORK. (a) Tenant agrees, prior to the commencement of
the Term of this Lease, [***], to diligently perform all work of whatever nature
in
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accordance with Tenant's obligations set forth in Exhibit D ("Tenant's Work")
and all other related work necessary to prepare for the opening to the public of
Tenant's store in the Leased Premises in accordance with the provisions of this
Lease. Tenant agrees to furnish to Landlord the Store Design Drawings and
Working Drawings and Specifications with respect to the Leased Premises prepared
in the manner and within the time periods required in Exhibit D. If such Store
Design Drawings or Working Drawings and Specifications are not furnished by
Tenant to Landlord within the required time period(s) in form to permit approval
by Landlord, then the Fixturing Period (as described in the Data Sheet) shall be
reduced by one (1) day for each day of delay by Tenant in submitting said Store
Design Drawings or Working Drawings and Specifications. Landlord shall to
respond to such Store Design Drawings or Working Drawings and Specifications
submitted by Tenant pursuant to this Lease within seven (7) business days
following Landlord's receipt from Tenant. In the event of Landlord's failure to
respond within such seven (7) business day period or there are other delays
created by Landlord, the Fixturing Period as described in the Data Sheet shall
be extended by one (1) day for each day of additional delay by Landlord.
No material deviations from the final Store Design Drawings or Working Drawings
and Specifications, once approved by Landlord, shall be permitted unless
necessary to comply with applicable governmental requirements or unless
otherwise approved by Landlord. Landlord's approval of Tenant's Store Design
Drawings and Working Drawing and Specifications shall not constitute the
assumption of such items. Tenant's Work shall include the installation of
fixtures and equipment and the stocking of the Leased Premises with suitable
merchandise. Tenant covenants that all such fixtures and equipment visible to
customers shall be new (or like-new) and otherwise reasonably acceptable to
Landlord in appearance. In addition to conforming to the requirements specified
in Exhibit D, all work performed by Tenant shall comply with such rules and
regulations as Landlord and its representatives may make, provided that such
rules and regulations are uniformly applied to all similarly situated Shopping
Center tenants under construction. To the extent there is a conflict between the
terms of such rules and regulations and the terms of this Lease, this Lease
shall control. Unless Landlord otherwise directs in writing, Tenant shall not
open the Leased Premises for business until all construction has been completed
pursuant to the provisions of Exhibit D. It is further understood and agreed
that: (i) Landlord shall have no responsibility or liability whatsoever for any
loss of, or damage to, any fixtures, equipment, merchandise, or other property
belonging to Tenant, installed or left in the Leased Premises except to the
extent resulting from the negligence or intentional acts of Landlord, its agents
or employees; and (ii) Tenant's entry upon and occupancy of the Leased Premises
prior to the Commencement Date shall be governed by and subject to all the
provisions, covenants and conditions of this Lease. Tenant shall obtain at its
sole cost and immediately thereafter furnish to Landlord all certificates and
approvals with respect to work done and installations made by Tenant that may be
required for the issuance of a certificate of occupancy for the Leased Premises,
so that such certificate of occupancy shall be issued and the Leased Premises
shall be ready for the opening of Tenant's business on the Commencement Date.
Upon the issuance of the certificate of occupancy, a copy thereof shall be
immediately delivered to Landlord. Promptly upon the completion of its work,
Tenant, at Tenant's cost, shall repair, clean and restore all portions of the
Shopping Center affected by Tenant's Work to their prior condition.
To the extent approved by the proper governing authorities, Tenant shall
have the right to install atop the roof of Landlord's building in which the
Leased Premises are located one (1) antenna and/or one (1) satellite dish and
the equipment necessary for Tenant's communications and data transmission
network system. The satellite dish shall not be larger than five (5) feet in
diameter. The antenna or satellite dish on such roof shall be at a location
designated by Landlord and reasonably approved by Tenant. Tenant shall submit to
Landlord for its approval plans for the installation of such antenna or
satellite dish and necessary equipment, such approval not to be unreasonably
withheld, delayed, or conditioned. Tenant shall also provide Landlord with
copies of all permits required by the proper governmental authorities regarding
such installation, which shall be obtained by Tenant at its sole cost and
expense. Landlord's contractor shall cut the roof and patch it (if necessary) at
Tenant's expense, and Tenant's contractor shall be subject to Landlord's prior
approval, which approval shall not be unreasonably withheld, delayed, or
conditioned. Tenant shall be responsible for the cost of repairing any damage to
Landlord's building arising from such installation, except to the extent caused
by Landlord's contractors. Upon prior written notice to Landlord (except in case
of an emergency), Tenant shall have access to the antenna or satellite dish and
related equipment for the purpose of maintaining, repairing, replacing and
operating the antenna or satellite
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dish. Any utility costs related to the installation and operating of the
antenna or satellite dish shall be the sole responsibility of Tenant.
Provided Tenant is not in default of this Lease beyond the expiration of
any applicable grace or cure period. Landlord hereby agrees to contribute
towards the cost of Tenant's Work a Construction Allowance of [***] per square
foot of floor area in the Leased Premises. The aforesaid Construction Allowance
shall be paid as follows: [***] after [***] of Tenant's Work is completed; [***]
upon [***]; and [***] upon [***]. In the event that this Lease is terminated
prior to the expiration of the Term hereof as a result of a default on the part
of Tenant, Tenant shall repay said Construction Allowance to Landlord in cash
upon termination; provided, however, that Tenant's liability for said
Construction Allowance shall be reduced at the rate of [***] at the end of each
full calendar month during the Term hereof. If Landlord fails to pay Tenant all
or any portion of the Construction Allowance after thirty (30) days notice that
the same is past due, then, in addition to Tenant's other rights and remedies
hereunder, Tenant may withhold payment of Minimum Rent until Tenant has recouped
such amount in full together with interest thereon at the interest rate set
forth in Section 20.14 hereof.
(b) The interest of Landlord in the Leased Premises and the Retail
Development shall not be subject to liens for improvements made by or on behalf
of Tenant. Nothing contained in this Lease shall be construed as a consent on
the part of Landlord to subject Landlord's estate in the Leased Premises or the
Retail Development to any lien or liability under applicable law. In the event
that any mechanic's, materialman's or other lien or any notices of claim,
including without limitation, stop notices (herein "lien") is filed against the
Leased Premises or Retail Development as a result of any work, labor, services
or materials performed or furnished,or alleged to have been performed or
furnished to or for Tenant (excluding work performed by or on behalf of
Landlord) or to or for anyone holding the Leased Premises through or under
Tenant. Tenant, at its expense, shall cause the lien to be discharged or fully
bonded to the satisfaction of Landlord within thirty (30) days after notice of
the filing thereof. If Tenant fails to discharge or bond against said
mechanic's, materialman's or other lien, Landlord may, in addition to any other
remedies Landlord may have, but without obligation to do so, bond against or
pay the lien without inquiring into the validity or merits of such lien and all
sums so advanced, including reasonable attorney fees incurred by Landlord in
defending against such lien, procuring the bond or in the discharge of such
lien, shall be paid by Tenant on demand as additional rent. It shall be
Tenant's continuing obligation to keep and maintain the Leased Premises and all
other parts of the Retail Development free from any and all liens arising out
of any work performed, materials furnished or obligations incurred by or for
Tenant in connection with the Leased Premises. In addition, Tenant shall
replace any bonds posted by Landlord pursuant hereto with a suitable bond of
equivalent amount within twenty (20) days after Landlord's demand therefor.
(c) During the Term of this Lease, Tenant agrees to repair, refurbish or
replace the interior portions of the Leased Premises that are visibly worn or
damaged so as to maintain the condition of the Shopping Center as a first class
super-regional discount specialty retail mall.
SECTION 3.4. ALTERATIONS BY TENANT. Tenant shall not make or cause to be
made any alterations, repairs, additions or improvements in or to the Leased
Premises (for example, but without limiting the generality of the foregoing,
Tenant shall not install or cause to be installed any exterior signs or
interior signs visible from the exterior except as permitted by Section 4.3
hereof, floor covering, interior or exterior lighting, plumbing fixtures,
shades, canopies or awnings or make any changes to the storefront, mechanical,
electrical or sprinkler systems) without the prior written
*** Confidential treatment requested.
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consent thereto by Landlord. Tenant shall submit to Landlord plans and
specifications for such work at the time consent is sought, in accordance with
the criteria and procedures as provided in Exhibit D. In the event Landlord
grants such consent, such alterations, repairs, additions or improvements shall
be performed in good and workmanlike manner and in accordance with all
applicable legal and insurance requirements and all drawings or specifications
approved by Landlord, and in accordance with the provisions of this Lease,
including the provisions of Section 3.3 governing construction of the Leased
Premises. Any work performed by Tenant shall be subject to Landlord's
inspection and approval after completion to determine whether the same complies
with the requirements of this Lease. Prior to the commencement of any such work
by Tenant, Tenant shall obtain the insurance required in Section 8.2.
Tenant may from time to time make non-structural alterations to the Leased
Premises without Landlord's prior written approval, the aggregate total cost of
which shall not exceed [***] in any Lease Year; provided, however, that Tenant
shall not be permitted to alter the exterior storefront sign or the exterior of
the storefront (other than for repairs) without the prior written consent of
Landlord, and provided further that any such non-structural alterations shall
not change the overall appearance of the Leased Premises as originally approved
by Landlord.
SECTION 3.5. REMOVAL BY TENANT. All repairs, alterations, decorations,
additions and improvements made by Tenant shall be deemed to be attached to the
leasehold and to have become the property of Landlord upon such attachment,
and, upon the Expiration Date or sooner termination of this Lease, Tenant shall
not remove any of such alterations, decorations, additions and improvements;
provided that trade fixtures, simulators and other items noted as "To Be
Removed" on Tenant's Construction Documents and Specifications installed by
Tenant may be removed if all Rent due herein is paid in full and Tenant is not
otherwise in default hereunder; provided further, however, that Landlord may
designate by written notice to Tenant given at the time such improvements are
installed those alterations, decorations, additions and improvements which
shall be removed by Tenant at the Expiration Date or sooner termination of this
Lease and Tenant shall, at Tenant's cost, promptly remove the same and repair
any damage to the Leased Premises caused by such removal.
ARTICLE IV
CONDUCT OF BUSINESS
SECTION 4.1. USE AND TRADE NAME. Except as otherwise provided herein,
Tenant shall continuously use and occupy the Leased Premises during the Term
solely for the purpose of conducting the business specifically set forth in the
Data Sheet and for no other purpose or purposes. Throughout the Term hereof,
Tenant shall (a) operate its business in the Leased Premises under the Trade
Name specifically set forth in the Data Sheet and under no other so long as
such name shall not be held to be in violation of any applicable law, (b) not
change the advertised name or character of the business operated in the Leased
Premises, (c) refer to the Shopping Center by name in designating the location
of the Leased Premises in all newspaper and other advertising within the
Shopping Center market area and in all other references to the location of the
Leased Premises, and (d) during the period from the Delivery of Possession Date
through sixty (60) days following the Commencement Date, include in all
Tenant's newspaper advertising within the Shopping Center market area the
designation that Tenant is opening for business in the Shopping Center. If any
governmental license(s) or permit(s) shall be required for the proper and
lawful conduct of Tenant's business or other activity carried on in the Leased
Premises, or if a failure to procure such a license or permit might or would in
any way, adversely affect Landlord or the Shopping Center, then Tenant, at
Tenant's expense, shall duly procure and thereafter maintain such license(s) or
permit(s) and submit the same for inspection by Landlord. Tenant, at Tenant's
expense, shall at all times, comply with the requirements of such license(s) or
permit(s). Except as provided in Section 1.3, Tenant shall open
*** Confidential treatment requested.
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its store in the Leased Premises for business to the public on the Commencement
Date, and shall thereafter diligently conduct its regular business operations in
the Leased Premises as required by the terms of this Lease. No symbol, design,
name, mark or insignia adopted by Tenant shall be used without the prior written
approval of Tenant.
During the Term of this Lease, and provided Tenant shall not be in default
hereof beyond the expiration of any applicable grace or cure period, Landlord
agrees that Landlord will not lease space in the Retail Development (other than
with respect to spaces leased or to be leased to Major Tenants and presently
executed non-Major Tenant leases), to any tenant whose primary use is the
entertainment use of auto-racing simulators. In addition, with respect to any
non-Major Tenant lease. Landlord shall not be permitted to modify any such
lease, either through amendment or assignment, so as to permit the occupant of
the space leased thereby to have as its primary use the entertainment use of
auto-racing simulators.
Landlord hereby represents and warrants to Tenant that Tenant's use of the
Leased Premises as contemplated in the Data Sheet does not violate any
exclusivity clause or other agreement between Landlord and any other party,
including any other tenant of the Shopping Center, and Landlord shall indemnify,
defend, protect and hold harmless Tenant from any loss, liability, cost,
expense, judgement, action, or claim of any such party arising from the
inaccuracy of such representation and warranty.
If the trade name of all or substantially all other stores operating under
the same Trade Name as set forth in this Section 4.1 shall be changed, then
Tenant, with prior written notice to Landlord, may likewise change its Trade
Name herein set forth to such other name as adopted for all or substantially
all such other stores in first class regional malls or super-regional malls.
Notwithstanding the foregoing, in no event shall Tenant's Trade Name duplicate
any other trade name in the Retail Development.
SECTION 4.2. OPERATION OF BUSINESS. Tenant shall open for business in the
Leased Premises and remain open during the entire Term and continuously operate
its business in the entire area of the Leased Premises during the entire Term.
Tenant shall conduct its business at all times in a high class and reputable
manner, maintaining at all times a full staff of employees and a complete stock
of merchandise. Tenant shall install and maintain at all times a display of
merchandise in the display windows (if any) of the Leased Premises and shall
keep the Leased Premises well lighted during all hours that the Shopping Center
is open to the public and during such other hours as may be reasonably
designated by Landlord but in no event more than one (1) hour after the close of
business. In no event shall Tenant conduct or advertise any auction, fire sale,
going out of business sale, or bankruptcy sale in or about the Leased Premises
without Landlord's prior written consent in each instance, which consent may be
withheld by Landlord in its sole and absolute discretion. Tenant shall conduct
its business in the Leased Premises in a lawful manner and in good faith during
all days and hours specified by Landlord from time to time as the published
operating hours for the Shopping Center, Tenant shall not use or allow the
Leased Premises to be used for any improper, immoral or objectionable purposes,
as determined by Landlord, and Tenant shall not do any act tending to injure the
reputation of the Shopping Center as determined by Landlord. Tenant may (but
shall not be required), from time to time, upon written notice to Landlord,
remain open for business beyond the normal operating hours of the Shopping
Center on a daily basis, but such hours of operation shall not extend beyond the
time permitted by applicable law or regulations, and in no event beyond the time
that is one hour after the release of the last movie from the Theater or 1:00
a.m. whichever is later. In addition, in the event that there is an exterior
entrance serving only the Leased Premises, which provides ingress and egress to
the general public and such ingress and egress has been approved by the local
jurisdiction for non-emergency use, then Tenant shall be permitted to remain
open after the Theater is open for business. Tenant agrees to reimburse Landlord
for its pro-rata share of all reasonable costs directly relating to all
additional hours of operation beyond the normal operating hours of the Theater,
which costs include, without limitation, electricity for parking lot lighting
and salaries for security personnel.
Notwithstanding any provision hereof to the contrary, Tenant shall not be
obligated to continuously operate from the Leased Premises during periods in
which (i) Tenant is carrying on remodeling activities (but in no event for more
than thirty (30) days in any lease year and no more than twice in any five (5)
year period), (ii) Tenant is closed for the taking of inventory (but in no event
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for more than two (2) days in any lease year), (iii) Tenant is unable or
reasonably unwilling to operate as a result of casualty or natural disaster,
condemnation, interruption of utilities or services, extremely inclement
weather, civil unrest, operation of the business would expose Tenant's
employees, agents or invitees to an unreasonably risk of physical injury or
property damage, or other force majeure events, (iv) Tenant's use and occupancy
of the Leased Premises is prohibited by any law, ordinance, order or other act
of any judicial governmental or quasi-governmental authority, (v) there exists
a substantial and material hardship to Tenant or its employees, provided
Tenant's failure to continuously occupy under this clause (v) for any such
occurrence shall be excused only for a period of forty-eight (48) hours, (vi)
Thanksgiving and Christmas, and (vii) during periods in which the Leased
Premises are temporarily closed in connection with group sales activities
being conducted and the Leased Premises are temporarily closed to the public
(as permitted pursuant to Section 4.1 of the Data Sheet).
Landlord hereby consents to Tenant's use of hydraulic oil in connection with
the operation of the simulators and cleaning and office products customarily
used in retail or office premises so long as such materials are used, handled
and disposed of in accordance with applicable laws, Landlord hereby
acknowledges that such materials are approved.
Landlord recognizes that Tenant's prototype incorporates an open storefront
design. Tenant shall be permitted to incorporate the open storefront element
into the design of the Leased Premises provided that Tenant, at Tenant's
expense shall construct Tenant Work in a manner that does not cause the ambient
noise level in adjacent tenant spaces and common areas to exceed 65 db(A).
Similarly, Tenant installed equipment within the Leased Premises shall be
isolated in a manner that eliminates the transfer of any and all vibrations to
adjacent tenant spaces and common areas. Landlord shall be given the
opportunity to review and approve Tenant's intended construction methods to
isolate such noise and vibrations, which will be included in Tenant's Store
Design Drawings submission (as provided for in Exhibit D). Landlord's review
and approval of Tenant's Store Design Drawings shall not relieve Tenant of its
obligation to limit the ambient noise level and eliminate the transfer of
vibrations as required herein.
Section 4.3. Sign. Tenant shall install and maintain one (1) sign affixed to
the front of the Leased Premises, subject to the prior written approval of
Landlord as to design and location and conforming to all applicable legal and
insurance requirements. Tenant's sign shall conform to the specifications and
requirements contained in Exhibit E attached hereto. Tenant shall keep its
approved storefront sign lighted during all hours that the Shopping Center is
open to the public and during such other hours as may be reasonably designated
by Landlord but in no event more than one (1) hour after the close of business.
Tenant shall pay for all costs in connection with such sign and shall be
responsible for the cost of proper installation and removal thereof and any
damage caused to the Leased Premises thereby. In the event Landlord deems it
necessary to remove such sign, then Landlord shall have the right to do so,
provided, however, that if the sign has received Landlord's prior written
approval and is consistent with the specifications and requirements of Exhibit
E, Landlord shall replace said sign as soon as practicable. Except as mentioned
above, Tenant shall not place or cause to be placed, erected or maintained on
any exterior door, wall or window of the Leased Premises, or the glass of any
window or door of the Leased Premises, or on any sidewalk or within any display
window space in the Leased Premises, or within five (5) feet of the front of
the storefront lease line or opening, or within any entrance to the Leased
Premises, any sign (flashing, moving, hanging, handwritten or otherwise),
decal, placard, flashing, moving or hanging lights, lettering or any other
advertising matter of any kind or description. No symbol, design, name, mark or
insignia adopted by Landlord for the Retail Development shall be used without
the prior written approval of Landlord. Any interior signs must be in good
taste and prepared professionally (not hand-lettered) so as not to detract from
the appearance of the Leased Premises or the Shopping Center. Any sign or
display visible from the exterior of the Leased Premises which does not meet
the above criteria may be removed at any time by Landlord without Landlord
incurring any liability therefor, and without such removal constituting a
breach of this Lease or entitling Tenant to claim damages on account thereof.
Tenant shall be permitted to install a video wall within the Leased Premises
(but not within five (5) feet of the storefront leaseline), which video wall
may be visible from outside the Leased Premises.
Landlord and Tenant agree to use commercially reasonable good faith efforts to
cooperate in the development of a storefront design to permit the incorporation
of a stock car replica above the
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storefront so long as the installation complies with applicable codes and is
reasonably in keeping with the design criteria for entertainment uses in the
Retail Development.
SECTION 4.4. TENANT'S WARRANTIES. Tenant warrants, represents, covenants
and agrees that, in the operation of its business within the Leased Premises,
Tenant shall: (a) pay before delinquency any and all taxes, assessments and
public charges levied, assessed or imposed upon Tenant's business, or upon
Tenant's fixtures, furnishings or equipment in the Leased Premises, or upon any
leasehold interest or personal property of any kind, owned by or placed in or
about the Leased Premises by Tenant or by anyone claiming by, through or under
Tenant, including, without limitation, any transfer taxes, and pay when and as
due all license fees, permit fees and charges of a similar nature required for
the conduct by Tenant or any subtenant or concessionaire of any business or
undertaking authorized hereunder to be conducted in or from the Leased
Premises; (b) observe all reasonable requirements promulgated by Landlord at any
time and from time to time relating to delivery vehicles, the delivery of
merchandise, and the storage and removal of trash and garbage; (c) not use any
space outside the Leased Premises for sale, storage or any other undertaking
except as provided herein; (d) not use the plumbing facilities in the Leased
Premises for any purpose other than that for which they were constructed, nor
dispose of any foreign substances therein; (e) except as set forth in Section
4.2., not use any advertising medium or sound devices inside or adjacent to the
Leased Premises which produce or transmit sounds which are intended to be
audible beyond the interior of the Leased Premises it being expressly
understood that Tenant shall be required to soundproof the Leased Premises so
as to minimize the impact of the noise created by the Permitted Use on other
tenants and patrons of the Retail Development; (f) not permit any odor to
emanate from the Leased Premises which is objected to by Landlord or by any
tenant or occupant of the Retail Development (and, upon written notice from
Landlord, Tenant shall immediately cease and desist from causing such odor, and
Landlord may deem the failure by Tenant to do so, a material breach of this
Lease); (g) keep the Leased Premises and any platform, loading dock or service
area used by Tenant in a neat, clean, safe and sanitary condition; (h) promptly
comply with all present and future laws, ordinances, orders, rules, regulations
and requirements of all governmental authorities having jurisdiction, and
observe and comply with all covenants and restrictions of record and all
reasonable notices from Landlord's mortgagee, affecting or applicable to the
Retail Development or affecting or applicable to the Leased Premises or the
cleanliness, safety, occupancy and use of the same, provided such notices from
Landlord's mortgagee do not increase Tenant's obligations or decrease Tenant's
rights under the Lease, whether or not any such law, ordinance, order, rule,
regulation, covenant, restriction, or other requirement is substantial, or
foreseen or unforeseen, or ordinary or extraordinary, or shall necessitate
structural changes or improvements (provided, however, that Tenant shall not
be required to make any structural changes or improvements required pursuant to
this Section 4.4(h) with respect to the structural portions of the Leased
Premises originally constructed by Landlord, unless such change shall be
required by virtue of Tenant's use of the Leased Premises), shall interfere
with the use or enjoyment of the Leased Premises, or shall be directed to or
imposed upon Tenant or Landlord, and Tenant shall hold Landlord harmless from
any and all cost or expense on account thereof (as used in this Lease, the term
"legal requirements" shall include the requirements set forth in this
subparagraph); (i) not use the parking areas or sidewalks, common areas or any
space on or about the Retail Development (outside the Leased Premises) for
display, sale, handbilling, advertising, solicitation, or any other similar
undertaking; (j) maintain and operate the heating, ventilating and air
conditioning system and equipment servicing the Leased Premises so as to
adequately heat and cool the same and to maintain at all times, whether or not
Tenant is open for business, temperatures in the Leased Premises which will not
drain heat or ventilation or air conditioning from the enclosed mall or other
interior areas into the Leased Premises and shall not discharge heat,
ventilation or air conditioning from the Leased Premises into the enclosed mall
or other interior areas; and (k) be authorized to do business in the State,
evidence of which must be delivered to Landlord on or before the earlier of (I)
the Commencement Date or (II) the date that Tenant opens for business in the
Leased Premises.
SECTION 4.5 STORAGE AND OFFICE SPACE. Tenant shall store or stock in the
Leased Premises only such goods, wares and merchandise as Tenant intends to
offer for sale at, in, from, or upon the Leased Premises or as are required to
repair and maintain the improvements and simulators in the Leased Premises.
This shall not preclude occasional emergency transfers of merchandise to the
other stores of Tenant, if any, not located in the Shopping Center. Tenant
shall use for office, clerical or other non-selling purposes only such space in
the Leased Premises as is from time to time reasonably
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required for Tenant's business therein, and Tenant shall not perform any office
or clerical function in the Leased Premises for any store located elsewhere.
SECTION 4.6. CARE OF PREMISES. Tenant shall keep the Leased Premises
(including the exterior and interior portions of all windows, doors and all
other glass and signs) orderly, neat, safe and clean and free from rubbish or
dirt at all times and shall store all trash and garbage only in the areas
reasonably designated by Landlord for such storage and accumulation. Tenant
shall not move any safe, heavy machinery, heavy equipment, or fixtures into or
out of the Leased Premises without Landlord's prior written consent, except
that, during hours when the Shopping Center is not open to the public. Tenant
shall be permitted to move equipment associated with its Permitted Use provided
that Tenant uses its best efforts to protect the common area improvements from
damage and agrees to assume responsibility for any damage resulting from the
same. Tenant agrees that it will not place a load on any floor exceeding the
floor load per square foot which such floor was designed to carry, and will not
install, operate or maintain in the Leased Premises any heavy equipment except
in such manner as to achieve a proper distribution of weight. Landlord and
Tenant shall cooperate in their efforts to insure that the Leased Premises are
designed to accommodate the Permitted Use.
SECTION 4.7. NOTICE BY TENANT. Tenant shall give immediate notice to
Landlord in case of fire or accidents in the Leased Premises, or in the
building of which the Leased Premises are a part of, or of defects therein or
in any fixtures or equipment.
SECTION 4.8. RADIUS. Tenant acknowledges that the Retail Development draws
it customers from a large geographic area, relying in part on regional and
international tourism, and that the success of the Retail Development and
income of the Landlord therefrom are dependent upon maximum customer traffic
within the Retail Development. In addition, Tenant acknowledges that Landlord
is relying on the generation of Percentage Rent from Tenant's Gross Sales at
the Leased Premises. During the Term, in the event Tenant, or any person, firm
or corporation who or which controls or is controlled by Tenant (an
"Affiliate") shall directly or indirectly, either individually or as a partner
or stockholder or otherwise, own, operate, or obtain a controlling interest
(i.e. own more than fifty percent (50%) of the shares or interest) in any
business which is the same as or substantially similar to and in competition
with the business of Tenant described in Article IV ("competing business"),
which business is conducted within the Area (as said term is herein defined),
then the Gross Sales (as said term is defined in this Lease) of any such
competing business within said Area shall be included in Tenant's Gross Sales
made from the Leased Premises and the Percentage Rent hereunder shall be
computed upon the aggregate of Tenant's Gross Sales made from the Leased
Premises and made from each such competing business then conducted within said
Area. Tenant shall be obligated to provide Landlord with full and complete
Gross Sales information and reports with respect to any competing business
within the Area in accordance with the requirements of Article II of this Lease
and Tenant shall be obligated to include the applicable portion of the Gross
Sales of such competing business with the Gross Sales of the Leased Premises
and to pay Percentage Rent thereon in accordance with the terms of this Lease.
The "Area" shall be defined as the area falling within a radius of ten (10)
miles measured from the outside boundary of the Retail Development. This
Section 4.8 shall not apply to any competing business which is open and is
being operated by Tenant within said Area on the Effective Date.
ARTICLE V
COMMON AREA
SECTION 5.1. USE OF COMMON AREA. Landlord agrees to cause to be operated,
managed and maintained during the Term all of the common areas of the Shopping
Center. The term "common areas", as used in this Lease, shall mean the parking
areas, pedestrian sidewalks and bridges, truckways, loading docks, delivery
areas, park areas, pedestrian malls and courts, elevators and escalators, if
any, and stairs not contained in leased areas, public restrooms and comfort
stations, if any, service areas, fire, service and exit corridors, passageways,
landscaped areas, berms and all other areas or improvements which may be
provided for the convenience and use of the occupants and tenants of the Retail
Development and their respective agents, employees, customers, invitees, and
the licensees and invitees of Landlord. The use and occupancy by Tenant of the
Leased Premises
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shall include the non-exclusive use, in common with all others to whom Landlord
has or may hereafter grant rights to use the same (including, but not limited
to, the owners, tenants and occupants of the Shopping Center), of the common
areas and of such other facilities as may be designated by Landlord from time
to time; subject, however, to rules and regulations for the use thereof which
will be uniformly applicable to all Shopping Center tenants as prescribed from
time to time by Landlord; provided, however, to the extent there is a conflict
between such rules and regulations and the terms of this Lease, the terms of
the Lease shall control. In particular, Tenant and its employees shall park
their cars only in the areas specifically designated from time to time by
Landlord for that purpose. Tenant covenants that it will enforce the parking by
its employees in such designated areas. Automobile license numbers of
employees' cars shall be furnished by Tenant to Landlord within five (5) days
after Landlord's request. In the event any vehicle is parked by an employee of
Tenant in a non-employee parking area, Landlord shall have the right to cause
the vehicle to be towed to a location designated by Landlord and Tenant shall
be obligated to reimburse Landlord for all towing charges. Landlord may at any
time close temporarily any common area to make repairs or changes, to prevent
the acquisition of public rights in such areas and to discourage non-customer
use, provided the same shall not materially adversely affect access to or
visibility of the Leased Premises. In addition, Landlord may modify, from time
to time, the traffic flow pattern and layout of parking spaces and the
entrances-exits to adjoining public streets or walkways, utilize portions of
the common areas for entertainment, displays and charitable activities and may
do such other acts in and to the common areas as in its judgment may be
desirable to improve the convenience or attraction thereof.
Landlord agrees to maintain all common areas of the Shopping Center in
good order, condition and repair and in a safe, clean, sightly and sanitary
condition in accordance with good and accepted shopping center practices. The
maintenance obligations of Landlord shall include, without limitation, the
re-striping of parking areas when required, repairing of common areas and
adequate lighting of all exterior common areas during all hours of darkness
during which Tenant shall be open for business and for one (1) hour thereafter:
SECTION 5.2. COMMON AREA MAINTENANCE EXPENSES. (a) Tenant agrees to pay
to Landlord each Lease Year, in the manner hereinafter provided, Tenant's
proportionate share of all costs and expenses (the "Common Area Maintenance
Expenses") of every kind and nature paid or incurred by Landlord, or for which
Landlord is obligated, during each Lease Year, for operating, equipping,
policing and protecting, heating, air conditioning, providing sanitation and
sewer and other services, lighting, insuring, repairing, replacing and
maintaining (i) the common areas, and (ii) all buildings and roofs within the
Retail Development, and (iii) all other areas, facilities and buildings used in
connection with the maintenance and/or operation of, and whether located within
or outside of, the Retail Development, including without limitation, all roads
and driveways serving the Retail Development which are maintained or repaired
by Landlord or at Landlord's expense. The Common Area Maintenance Expenses
shall include, but are not limited to, costs and expenses of: water, gas,
sewage, electricity, refuse disposal, air conditioning, heating and other
utilities (without limitation), including all usage, service, hook-up,
connection, availability and/or standby fees or charges pertaining to same, and
the utility costs; illumination and maintenance of signs, whether located on or
off the Retail Development property; salaries of all management personnel;
maintenance, repair and replacement of directories, electronic or otherwise,
cleaning, lighting, snow removal and landscaping; security control and fire
protection; uniforms for maintenance, administrative and security personnel for
the Retail Development; management fees; maintenance for wooded areas,
retention ponds, wetlands, rivers and riverbank areas; premiums for insurance
to the extent maintained by Landlord, for liability, casualty and property
damage, including, without limitation, insurance against vandalism, plate
glass breakage, fire and extended coverage insurance and such other coverage as
determined by Landlord, and liability for defamation and claims of false arrest
occurring in and about such areas; personal property taxes; maintaining and
replacing the equipment, if any, supplying music to such areas; the reasonable
depreciation of equipment used in the operation and maintenance of such areas;
total compensation and benefits (including premiums for workers' compensation
and other insurance) paid to or on behalf of persons involved in the
performance or administration/technical support of the work specified in this
Section 5.2; repair, maintenance and cleaning of such areas; operation, repair,
maintenance and reasonable depreciation of all temporary and permanent utility
systems for the Retail Development, including, without limitation, heating,
ventilating and air conditioning systems (HVAC systems), gas system(s),
plumbing system(s),
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electrical equipment and irrigational pumping system(s); operation, repair,
maintenance and reasonable depreciation of emergency water and sprinkler main
system(s) and security alarm system(s); operation maintenance, repair and
replacement of mechanical equipment including any automatic door openers,
elevators, escalators, lighting fixtures (including replacement of poles, tubes
and bulbs) and all other items of equipment used in connection with such areas;
paper supplies in restrooms located in or about such areas, cleaning, lighting,
striping and landscaping, curbs, gutters, sidewalks, drainage and irrigation
ditches, conduits, pipes and canals serving the Retail Development; and there
shall also be added to the foregoing costs and expenses an amount equal to
[***] of the total of all of the ongoing costs and expenses as Landlord's
administrative fee. As stated throughout this Lease, whenever Tenant is
obligated to pay its "proportionate share" of a cost, expense or Taxes (as
hereinafter defined) such share shall be based on gross leased and occupied
floor area in the Shopping Center, and Tenant's proportionate share shall be
that fraction, the numerator of which is the total square footage of floor area
in the Leased Premises, and the denominator of which is the total square footage
of gross leased and occupied floor area (including the Leased Premises) in the
Shopping Center. As used throughout this Lease, the "gross leased and occupied
floor area" in effect for the whole of any Lease Year shall be the average of
the gross leased and occupied floor area in effect on the first day of each
calendar month in such Lease Year.
Prior to the proration of such Common Area Maintenance Expenses to Tenant,
there shall be deducted from the total of such Common Area Maintenance Expenses
any amounts specifically contributed by the Major Tenants toward such Common
Area Maintenance Expenses. It is further agreed that in no event shall Tenant be
obligated for the capital costs of initially constructing the Retail Development
or the capital costs of subsequent expansion construction for the Retail
Development (i.e., adding new Major Tenants to the development or expanding the
Shopping Center or the common areas). Notwithstanding anything contained in this
Lease to the contrary, the following shall be excluded from Common Area
Maintenance Expenses in calculating Tenant's proportionate share; (i) the
capital costs of initially constructing the Retail Development or the capital
costs of subsequent expansion construction for the Retail Development; (ii)
executive salaries (employees senior to management personnel); (iii) leasing
commissions and the expense of preparing leases; (iv) debt service and
amortization under any mortgage encumbering the Shopping Center and charges and
fees incurred by Landlord in connection with the procurement and recording of
such mortgages or rental under any ground lease or other underlying lease; (v)
the costs of Landlord's Work in connection with preparing any tenant's space
(vi) any costs for which Landlord is reimbursed by insurance proceeds or
condemnation awards; (vii) costs for which Landlord is reimbursed by individual
tenants of the Shopping Center (viii) to the extent that any employee of
Landlord performs work or services other than for the Retail Development, the
portion of his salary allocable to work not performed in connection with the
Retail Development; (ix) the costs of correcting defects in or inadequacies of
the initial design or construction of the Shopping Center, or repair and/or
replacement of any of the original materials or equipment required as a result
of such defects or inadequacies; (x) any expense resulting from the negligence
of Landlord, its agents, servants or employees, or any expense incurred as a
direct result of Landlord's failure to use reasonable efforts to minimize
expenses to the extent possible without detracting from the standards of a first
class Shopping Center; (xi) the cost of any repair to remedy damage caused by or
resulting from the negligence of any other tenant(s) in the Shopping Center,
including their agents, servants or employees; (xii) repairs or other work
occasioned by casualty or the exercise of the right of eminent domain; (xiii)
expenses incurred in build out, renovation or other improvement or decoration,
painting or redecoration of any leasable area; (xiv) costs incurred due to the
violation by Landlord or any tenant or occupant of any term or condition of any
lease or rental arrangement covering space in the Shopping Center; (xv) any
interest or penalties incurred as a result of Landlord's failure to pay any bill
as the same shall become due; (xvi) any and all costs associated with the
operation of the business of the entity which constitutes Landlord, intending by
this exclusion to distinguish the costs of operation of the common areas
(excluded items shall specifically include but shall not be limited to formation
of the entity, internal accounting and legal matters, including, but not limited
to preparation of tax returns and financial statements and gathering of data
therefor, costs of defending any lawsuits, except as the actions of Tenant may
be an issue, costs of selling, syndication, financing mortgaging or
hypothecating any of Landlord's interest in the Shopping Center, and costs of
any disputes between Landlord and its employees); (xvii) advertising and
promotional expenditures or customer services, (xviii) costs, fines, or fees
incurred by Landlord due to violations of any federal, state or local law,
statute or ordinance, or any rules, regulations, judgment or decree of any
governmental rule or authority; (xix) the cost of any work or services performed
for any facility other than the Shopping Center. Replacements of
*** Confidential treatment requested.
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existing improvements, facilities, and equipment (including, by way of example,
parking lot repairs, structural repairs, replacement of HVAC or mechanical
equipment) otherwise chargeable as Common Area Maintenance Expenses having a
useful life of more than one year shall be amortized over the useful life of
the replacement, and only the reasonably amortized portion thereof shall be
included in Common Area Maintenance Expenses.
Tenant's proportionate share of Common Area Maintenance Expenses from the
Commencement Date through December 31, 2000 shall not exceed [***] per square
foot of floor area in the Leased Premises per Lease Year (proportionately
reduced for a partial Lease Year). From [***] through [***], Tenant's
proportionate share of Common Area Maintenance Expenses shall not exceed [***]
per square foot of floor area in the Leased Premises per Lease Year
(proportionately reduced for a partial Lease Year). Beginning [***] and
continuing through the expiration of the Original Term and Option Period, if
any, Tenant's proportionate share of Common Area Maintenance Expenses shall not
be increased by more than [***] per Lease Year over the prior Lease Year's
charge.
It is hereby agreed that at such times as there are tenants occupying less
than eighty-five percent (85%) of the gross leaseable floor area of the
Shopping Center, Tenant's proportionate share of the foregoing Common Area
Maintenance Expenses shall be computed as if the Shopping Center were
eighty-five percent (85%) leased and occupied.
(b) Tenant's proportionate share of such Common Area Maintenance Expenses
for each Lease Year shall be paid in advance, in equal monthly installments, in
the same manner and at the same time as the monthly installments of Minimum
Rent are payable hereunder without deduction, offset or diminution of any kind,
based on an amount estimated in advance from time to time by Landlord to be
Tenant's obligation under this Section 5.2. Notwithstanding the above, in the
event Landlord at any time determines that the amount of Common Area
Maintenance Expenses actually being paid or incurred by Landlord exceeds the
estimate upon which Tenant's proportionate share of Common Area Maintenance
Expenses was computed, then Tenant, following a request from Landlord, shall
commence to pay with the next monthly installment of Minimum Rent due an amount
sufficient to result in Tenant's paying its full proportionate share of Common
Area Maintenance Expenses as computed on the basis of Landlord's revised
estimate of Common Area Maintenance Expenses. Subsequent to the end of each
Lease Year, Landlord shall furnish Tenant with a statement of the actual amount
of Tenant's proportionate share of such Common Area Maintenance Expenses for
such period which statement shall be in reasonable detail, provided, however,
Landlord shall be permitted to describe areas of expenditure by category and
shall not be obligated to enumerate each specific expenditure. Upon Tenant's
written request therefore, but no more frequently than once per Lease Year,
Landlord shall provide Tenant written evidence substantiating up to three (3)
particular items included in Tenant's share of Common Area Maintenance
Expenses. Landlord shall make reasonable food faith efforts to answer or
resolve Tenant's legitimate questions about the Common Area Maintenance
Expenses.
If the total amount paid by Tenant under this Section 5.2 for any Lease
Year shall be less than the actual amount due from Tenant for such Lease Year as
shown on such statement, Tenant shall pay Landlord the difference between the
amount paid by Tenant and the actual amount due, such deficiency to be paid
within thirty (30) days after the furnishing of each such statement, and if the
total amount paid by Tenant hereunder for any such Lease Year shall exceed the
actual amount due from Tenant for such Lease Year, such excess shall be credited
against the next installment due from Tenant to Landlord under this Section 5.2.
ARTICLE VI
REPAIRS AND MAINTENANCE
SECTION 6.1. REPAIRS AND MAINTENANCE BY LANDLORD. Landlord agrees to keep
in good order, condition and repair the roof (including keeping the roof
watertight), foundations, exterior (including exterior painting and finish),
all structural portions of the Leased Premises (and of the
*** Confidential treatment requested.
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building in which the Leased Premises are located) and all plumbing and utility
lines not exclusively serving the Leased Premises. Should any repairs,
modifications or alterations be required by reason of applicable law, the same
shall be made by Landlord at Landlord's cost and expense unless the need for
such repairs, modifications or alterations shall result from Tenant's failure to
perform its obligations under this Lease or from Tenant's use of the Leased
Premises for other than general merchandising purposes. In addition, for the
first twelve (12) months only following the Delivery of Possession Date,
Landlord shall, upon written notice from Tenant of the necessity therefor,
correct any defects in Landlord's Work within the Leased Premises. All costs and
expenses incurred by Landlord under this Section 6.1 shall be included in Common
Area Maintenance Expenses, other than costs and expenses for Landlord's
correction of defects in Landlord's Work or other amount that may be excluded as
Common Area Maintenance Expenses pursuant to a specific exclusion contained in
Section 5.2 hereof.
SECTION 6.2. REPAIRS AND MAINTENANCE BY TENANT. (a) Except for the repairs
and maintenance that Landlord is specifically obligated to make or perform
pursuant to Section 6.1 above, throughout the entire Term of this Lease, Tenant,
at its expense, shall promptly make all repairs and replacements and perform
maintenance in and to the Leased Premises and all equipment and fixtures therein
or appurtenant thereto, that are necessary or desirable in order to keep the
Leased Premises in good order, condition and repair and in safe, dry and
tenantable condition. Without limiting the generality of the foregoing, Tenant,
at its expense, shall maintain and promptly make any and all necessary repairs
to or replacements of: (i) that portion of any pipes, lines, ducts, wires or
conduits that exclusively serve the Leased Premises; (ii) the glass windows,
plate glass doors, and all fixtures or appurtenances composed of glass that are
located in or about the Leased Premises; (iii) Tenant's signs; (iv) the floors
and floor coverings, doors and door frames, windows and window frames, walls,
storefront including security gates, grilles or enclosures, locks and closing
devices, partitions and ceilings in the Leased Premises; (v) heating,
ventilating, air conditioning, electrical and plumbing system(s) equipment and
fixtures (whether contained within or outside the Leased Premises) which are
installed by Tenant or which exclusively serve the Leased Premises; and (vi) the
Leased Premises or any part of the Shopping Center when repairs thereto are
necessitated by any act or omission (negligent or otherwise) of Tenant or any of
Tenant's agents, employees or invitees, or by the failure of Tenant to perform
any of its obligations under this Lease. Notwithstanding the foregoing, Landlord
shall be responsible for repairs and maintenance necessitated by the negligence
or intentional acts of Landlord, its agents or employees. Notwithstanding any
contrary provision of this Article VI, Tenant, at its expense, shall make any
and all repairs to the Leased Premises as may be necessitated by any break-in,
forcible entry or other trespass into or upon the Leased Premises, regardless of
whether or not such entry and damage is caused by the negligence or fault of
Tenant or occurs during or after business hours. Tenant, at its expense, shall
change all air conditioning filters at least five (5) times per year and shall
have the air conditioning system professionally inspected and generally serviced
at least twice per year.
(b) Tenant shall keep and maintain the Leased Premises in a clean, sanitary
and safe condition in accordance with the laws of the State and in accordance
with all directions, rules and regulations of the health officer, building
inspector, the National Fire Protection association and any other officials of
the governmental agencies having jurisdiction, at the sole cost and expense of
Tenant, and Tenant shall comply with all requirements of laws, ordinances,
rules, regulations and orders of any lawful authority having jurisdiction
affecting the Leased Premises or Tenant's use thereof. Tenant, at its expense,
shall install and maintain fire extinguishers and other fire protection devices
as may be required by reason of the conduct of Tenant's business, from time to
time by any agency having jurisdiction or the underwriters insuring the building
in which the Leased Premises are located. If any bureau, department or official
of the Federal or State government requires or recommends the installation of
any changes, modifications or alterations in the sprinkler system or additional
sprinkler heads or other equipment (hereinafter in this subsection (b)
collectively "changes") by reason of Tenant's business, or the location of
partitions, trade fixtures, or other contents of the Leased Premises, or for any
other reason, or if any such changes become necessary to prevent the imposition
of a penalty or charge against the full allowance for a sprinkler system in the
fire insurance rates set by any fire insurance company. Tenant, at Tenant's
expense, shall promptly make such changes as required.
(c) Provided that Landlord completes Landlord's Work as described in
Exhibit C. Tenant agrees that Tenant's use of electrical current will at no time
exceed the capacity of the electric
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distribution system and that Tenant will not make any alteration or addition to
Tenant's electrical system without Landlord's prior written consent. If Tenant
installs any electrical equipment that overloads the electrical lines in the
Leased Premises or the Retail Development, Tenant shall, at Tenant's sole cost
and expense, be required to make whatever changes to such electrical equipment
and in the electric wiring in the Leased Premises (but only after obtaining
Landlord's written approval) as may be necessary in order to remedy such
overloading and be in compliance with all insurance and legal requirements. All
changes required to be made hereby shall result in the continued conformance
with the provisions of Exhibit D and this Lease.
(d) If Tenant refuses or neglects to properly maintain the Leased
Premises, or to commence or to complete repairs promptly and adequately, or if
Landlord finds it necessary to make any repairs or replacements otherwise
required to be made by Tenant, then Landlord may, after ten (10) days prior
written notice to Tenant (except in the event of an emergency in which event no
notice shall be required) with Tenant having the opportunity to cure or to
commence to cure during such ten (10) day period (in which event Landlord
shall not take action so long as Tenant is diligently pursuing such cure to
completion), in addition to all other remedies, but without obligation to do so,
enter the Leased Premises and proceed forthwith to have such maintenance,
repairs or replacements made and Tenant shall pay to Landlord, on demand, the
reasonable, out-of-pocket costs and expenses therefor plus a charge of fifteen
percent (15%) of such costs and expenses.
ARTICLE VII
TAXES
SECTION 7.1. TAX LIABILITY. Tenant agrees to pay to Landlord Tenant's
proportionate share of all taxes and assessments and service payments in lieu
of taxes of every nature and kind which may be levied or assessed by, or
payable to, any lawful authority during or with respect to each fiscal tax year
falling in whole or in part during the Term of this Lease against all or any
part of the land, buildings and improvements comprising the Retail Development
and any other taxes which Landlord becomes obligated to pay with respect to the
Retail Development, whether or not the same are assessed as real or personal
property or are payable in advance or in arrears (the "Taxes"). If due to a
future change in the method of taxation, any tax, excise or assessment shall
be levied or assessed against Landlord, directly or indirectly, in lieu of, in
substitution for or as a supplement to any present Taxes or future (real estate
or personal property) tax, in whole or in part, including any new tax, excise
or assessment upon rentals payable to Landlord by occupants of the Retail
Development or upon gross receipts or other income of Landlord derived by
Landlord from or upon the interest in the Retail Development of Landlord (or
any individuals or entities comprising Landlord), such tax, excise or
assessment shall constitute a tax respecting which Tenant is obligated to pay
its proportionate share to Landlord as provided herein. If any Taxes or
assessed valuation(s) are contested by Landlord, then Tenant's proportionate
share of Taxes shall also include Tenant's proportionate share of the cost and
expense of consultation services incurred in evaluating and contesting such
Taxes or assessed valuation(s).
The term "Taxes" shall also include any form of assessment, special
assessment, license fee, license tax, business license fee, business license
tax, commercial rental tax, levy, charge, tax or similar imposition, imposed by
any authority having the direct power to tax, including without limitation any
city, county, State or Federal government, or any school, agricultural,
lighting, drainage or other improvement or special assessment district or any
other agency or other public body, whether or not consented to or joined in by
Landlord and whether or not retroactive, payable by Landlord thereof as against
the land and improvements comprising, or any legal or equitable interest of the
Landlord in, the Retail Development. Notwithstanding anything to the contrary
contained in this Section 7.1, Tenant shall not be obligated, pursuant to this
Section 7.2, to pay Landlord its proportionate share of any inheritance,
estate, succession, transfer, gift or franchise tax, levy assessment or
surcharge that may be imposed on Landlord or the individuals or entities which
constitute the partners of the partnership which is Landlord, unless the same
is imposed by way of substitution for all or any part of the "Taxes" otherwise
required to be paid in whole or in part by Tenant pursuant to this Lease; the
foregoing shall not exempt or exclude from the Taxes to be
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prorated among Shopping Center tenants (including Tenant) levies, taxes,
assessments or surcharges based on the rentals or other revenues or gross
income of Landlord derived from the Shopping Center (as opposed to Landlord's
net income) or other charges payable to Landlord by Tenant or other tenants in
or occupants of the Shopping Center.
It is hereby agreed that at such times as there are tenants occupying
less than eighty percent (80%) of the gross leasable floor area of the Shopping
Center, Tenant's proportionate share of the foregoing Taxes shall be computed
as if the Shopping Center were eighty percent (80%) leased and occupied.
SECTION 7.2. METHOD OF PAYMENT. Tenant's proportionate share of Taxes
shall be paid, in advance, in monthly installments on or before the first day
of each calendar month, in the same manner and at the same time as the monthly
installments of Minimum Rent are payable hereunder without deduction, offset or
diminution of any kind, based on an amount estimated by Landlord. Following
receipt of all bills for Taxes attributable to any calendar or fiscal year
during the Term hereof, Landlord shall furnish Tenant with a written statement
of the actual amount of Tenant's proportionate share of Taxes for such year. If
any bill for any such Taxes is not available, Landlord will estimate the amount
of such tax. If the total amount paid by Tenant hereunder for any calendar or
fiscal year during the Term of this Lease shall be less than the actual amount
due from Tenant for such year, as shown on such statement, Tenant shall pay to
Landlord the difference between the amount paid by Tenant and the actual amount
due, such deficiency to be paid within thirty (30) days after demand therefor
by Landlord; and if the total amount paid by Tenant hereunder for any such
calendar or fiscal year shall exceed such actual amount due from Tenant for
such year, such excess shall be credited against the next installment of Taxes
due from Tenant to Landlord hereunder. For the calendar or fiscal years in
which this Lease commences and terminates, Tenant's liability for its
proportionate share of any Taxes for such years shall be subject to a pro rata
adjustment based on the number of days of said calendar or fiscal years during
which the Term of this Lease is in effect. A copy of any such bill for Taxes
shall at all times be sufficient evidence of the amount of Taxes assessed or
levied against the property to which such bill relates. Prior to or at the
commencement of the Term of this Lease and from time to time thereafter
throughout the Term hereof, Landlord shall notify Tenant in writing of
Landlord's estimate of Tenant's monthly installments due hereunder. Tenant's
obligations under this Article VII shall survive the Expiration Date or sooner
termination of this Lease.
ARTICLE VIII
INSURANCE, INDEMNITY AND LIABILITY
SECTION 8.1. LANDLORD'S INSURANCE OBLIGATIONS. Landlord agrees to obtain
and maintain during the Term hereof, to the extent the same is available, fire
and extended coverage insurance, in amounts and coverages and with such special
endorsements as Landlord shall determine from time to time, insuring the
building in which the Leased Premises are located and the improvements to the
Leased Premises provided by Tenant pursuant to this Lease (exclusive of
Tenant's merchandise, trade fixtures, furnishings, equipment, plate glass, signs
and personal property of Tenant). Landlord shall also carry rental interruption
insurance in amounts at least equal to Tenant's total rental obligation for
twelve (12) full months under this Lease including the total of the estimated
costs to Tenant of Taxes and Common Area Maintenance Expenses (including
insurance) for such twelve (12) month period. Landlord will maintain during the
Term of this Lease, commercial general liability insurance, insuring against
any and all claims for personal injury, bodily injury, death, or property
damage, accruing in, on or about the common areas and other portions of the
Shopping Center not leased to tenants, with limits of not less than $[***]
with respect to bodily injury and death and $[***] with respect to property
damage. Further Landlord shall maintain fire and extended coverage insurance
insuring the improvements located within the Shopping Center (except for
Tenant's trade fixtures, furnishings, operating equipment and personal property)
for [***] of the full replacement cost thereof. Tenant acknowledges that such
coverage may be provided pursuant to a blanket policy for centers managed by
Managing Agent (as defined in Section 20.22 hereof). Tenant shall reimburse
Landlord for its proportionate share of the insurance costs incurred by Landlord
under this Section 8.1 as part of Tenant's Common Area Maintenance Expenses as
provided in Section 5.2 hereof.
*** Confidential treatment requested.
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SECTION 8.2. TENANT'S INSURANCE OBLIGATIONS. (a) Provided Tenant is the
Tenant named on the Page 1 and a wholly-owned subsidiary of the Guarantor, if
any, and Tenant's and Guarantor's, if any, combined net worths are or Tenant's
net worth is at least equal to [***], Tenant shall have the right to self-insure
for any loss or damage of the type covered by standard fire and extended
coverage insurance with respect to personal property located on or within the
Leased Premises including alterations and improvements made by Tenant to the
extent the same are not covered by Landlord's fire and extended coverage
insurance. Tenant and Guarantor shall at their sole expenses, without regard to
fault on the part of any person, make and perform any repairs or restorations
which are required as a result of a casualty which would be covered by insurance
of the type described in this Section 8.2(a). Tenant, at Tenant's sole cost and
expense, shall obtain and maintain in effect commencing with the Delivery of
Possession Date and continuing throughout the Term of this Lease, insurance
policies providing for the following coverage: (i) all risk property insurance
against fire, theft, vandalism, malicious mischief, sprinkler leakage and such
additional perils as now are or hereafter may be included in a standard extended
coverage endorsement from time to time in general use in the State, insuring
Tenant's merchandise, trade fixtures, furnishings, equipment and all items of
personal property of Tenant and of anyone claiming by, through or under Tenant
located on or in the Leased Premises, and the amount of such insurance will be
set forth in an "agreed value endorsement" to the policy of such insurance, not
less than [***] of the full replacement value thereof without deduction for
depreciation, and with a deductible amount of not more than [***], provided,
however, any and all proceeds of such insurance, so long as this Lease shall
remain in effect, shall be used only to repair or replace or pay for the items
so insured; (ii) a commercial general liability policy, including insurance
protecting against any and all claims for injury to persons or property
occurring in or about the Leased Premises and protecting against assumed or
contractual liability under this Lease with respect to the Leased Premises and
the operations of Tenant and any subtenant of Tenant in, on or about the Leased
Premises, with such policy to be in the minimum amount of [***] single limit
coverage; (iii) products liability insurance for merchandise offered for sale or
lease from the Leased Premises, including (if this Lease covers leased premises
in which food and/or beverages are sold and/or consumed) liquor liability
coverage (if applicable to Tenant's business) and coverage for liability arising
out of the consumption of food and/or alcoholic beverages on or obtained at the
Leased Premises, of not less than [***] per occurrence for personal injury and
death and property damage; (iv) workers' compensation coverage as required by
law; (v) with respect to alterations, improvements and the like required or
permitted to be made by Tenant hereunder, contingent liability and builders risk
insurance in amounts satisfactory to Landlord; and (vi) the insurance required
under Exhibit D.
(b) All insurance policies herein to be procured by Tenant shall: (i) be
issued by insurance companies reasonably satisfactory to Landlord and
authorized to do business in the State; (ii) be written as primary policy
coverage and non-contributing with respect to any coverage which Landlord may
carry and that any coverage carried by Landlord shall be excess insurance;
(iii) insure and name Landlord, Landlord's managing agent, any mortgagee of the
Shopping Center and any parties in interest designated by Landlord as
additional insured, as their respective interests may appear (except with
respect to workers' compensation insurance); and (iv) contain any express waiver
of any right of subrogation by the insurance company against Landlord,
Landlord's managing agent and their respective agents, employees and
representatives which arises or might arise by reason of any payment under such
policy or by reason of any act or omission of Landlord, its agents, employees
or representatives. Neither the issuance of any insurance policy required
hereunder, nor the minimum limits specified herein with respect to Tenant's
insurance coverage, shall be deemed to limit or restrict in any way Tenant's
liability arising under or out of this Lease. With respect to each and every
one of the insurance policies herein required to be procured by Tenant, on or
before the Commencement Date and at least thirty (30) days before any such
insurance policy shall expire, Tenant shall deliver to Landlord upon Landlord's
written request a duplicate original or certified copy of each such policy or a
certificate of the insurer, certifying that such policy has been issued,
providing the coverage required by this Section 8.2 and containing provisions
specified herein, together with evidence of payment of all applicable
premiums. Any insurance required to be carried hereunder may be carried under a
blanket policy covering the Leased Premises and other locations of Tenant. Each
and every insurance policy required to be carried hereunder by or on behalf of
Tenant shall provide (and any certificate evidencing the existence of each such
insurance policy shall certify) that, unless Landlord shall first have been
given thirty (30) days' prior written notice thereof, the insurer will not
cancel,
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materially change or fail to renew the coverage provided by such insurance
policy. The term "insurance policy" as used herein shall be deemed to include
any extensions or renewals of such insurance policy. In the event that Tenant
shall fail to promptly furnish any insurance coverage hereunder required to be
procured by Tenant, Landlord, at its sole option, shall have the right after ten
(10) days prior written notice to Tenant to obtain the same and pay the premium
therefor for a period not exceeding one (1) year in each instance, and the
premium so paid by Landlord shall be immediately due and payable by Tenant to
Landlord as additional rent.
(c) Tenant shall not do or permit to be done any act or thing upon the
Leased Premises that will invalidate or be in conflict with fire insurance
policies covering the building containing the Leased Premises or any part
thereof, including all common areas, or fixtures and property therein, or any
other insurance policies or coverage referred to above in this Article VIII; and
Tenant shall promptly comply with all rules, orders, regulations, or
requirements relating to such insurance policies, and shall not do, or permit
anything to be done, in or upon the Leased Premises, or bring or keep anything
therein, which shall increase the rate of fire insurance on the building in
which the Leased Premises are located or on any property, including all common
areas, located therein, or increase the rate or rates of any other insurance
referred to hereinabove. If any act or omission of Tenant, its agents, employees
or contractors shall result in any increase in the premium rates applicable to
any such insurance policies carried by Landlord, or other increased costs to
Landlord in connection therewith, then Tenant shall reimburse Landlord on demand
as additional rent for the amount of any such increased rates or costs. In
particular, if Tenant uses the Leased Premises for the preparation of food,
Tenant shall reimburse Landlord on demand, for any part of the premium for
insurance coverage under Section 8.1 hereof required to be paid on account of
such use of the Leased Premises.
Section 8.3. Mutual Covenant. Notwithstanding any provision of this Lease
to the contrary, Landlord and Tenant each hereby releases the other, its
officers, directors, employees, and agents from any and all liability or
responsibility for any loss, damage or injury caused by fire or other casualty
for which insurance containing a waiver of subrogation is carried by the injured
party at the time of such loss, damage or injury regardless of the extent of any
recovery by the injured party under such insurance. Both parties agree to carry
casualty insurance containing such waiver of subrogation.
Additionally, during any time when Tenant is self-insuring its insurance
obligations hereunder, Tenant hereby releases the Landlord, its officers,
directors, employees and agents from any and all liability or responsibility for
any loss, damage or injury caused by fire or other casualty, even if such loss,
damage or casualty is caused in whole or in part by Landlord or by any party for
whom Landlord may be responsible.
Section 8.4. Covenant to Hold Harmless. Except with respect to the gross
negligence or wilful misconduct of Landlord, its agents or employees (unless
covered or required to be covered by Tenant's insurance). Tenant hereby
indemnifies and agrees to hold harmless Landlord, its officers, directors,
partners, employees and agents and any mortgagee or master lessor of the
Shopping Center, from and against any and all claims, actions, damages,
liabilities, costs and expenses, including attorneys' fees, that (i) arise from
or are in connection with the possession, use, occupancy, management, repair,
maintenance or control of the Leased Premises, or any portion thereof, or (ii)
arise from or are in connection with any negligent or wrongful act or omission
of Tenant or Tenant's agents, employees, contractors, licensees or invitees, or
(iii) result from any default, breach, violation or nonperformance of this Lease
or any provision hereof by Tenant, or (iv) result from injury to person or
property or loss of life sustained in the Leased Premises or outside of the
Leased Premises resulting from acts or omissions within the Leased Premises.
Tenant shall, at its own cost and expense, defend any and all actions, suits and
proceedings which may be brought against Landlord or any mortgagee or master
lessor of the Shopping Center with respect to the foregoing. Tenant shall pay,
satisfy and discharge any and all judgments, orders and decrees which may be
received against Landlord or any such mortgagee or master lessor in connection
with the foregoing. In the event Landlord or any other party so indemnified,
shall, without fault, be made a party to any litigation commenced by or against
Tenant, or if Landlord or any such party shall, in its sole discretion,
intervene in such litigation to protect its interest hereunder, then Tenant
shall protect and hold them harmless and shall pay all costs, expenses and
attorneys' fees incurred or paid by such party(ies) in connection with such
litigation.
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Landlord hereby indemnifies and agrees to save harmless Tenant, its
officers, directors, partners, employees and agents from and against any and
all claims, actions, damages, liabilities, costs and expenses including
attorneys' fees, in connection with loss of life, personal injury and/or damage
to property arising from or out of any occurrence in the common areas of the
Shopping Center unless caused by the negligence or default of Tenant, its
agents, contractors, employees, officers, directors, partners, subtenants or
concessionaires.
SECTION 8.5. LOSS AND DAMAGE. All Tenant's property of every kind and
description which may at any time be in the Leased Premises shall be kept at
Tenant's sole risk, and Landlord shall not be liable except to the extent
resulting from the negligence or intentional acts of Landlord, its agents or
employees to Tenant, its agents, employees or customers, for any damage, loss,
compensation, accident, or claims whatsoever resulting to Tenant or its
property from the necessity of repairing any portion of the Shopping Center;
any interruption in the use of the Leased Premises; the use or operation (by
Landlord, Tenant, or any other person or persons whatsoever) of any elevators,
heating, cooling, electrical or plumbing equipment or apparatus; the
termination of this Lease by reason of the destruction of the Leased Premises;
any fire, robbery, theft, or any other casualty; any leakage in any part or
portion of the Leased Premises or the Shopping Center; any water, wind, rain or
snow that may leak into, or flow from part of the Leased Premises or the
Shopping Center; any acts or omissions of any occupant of any space adjacent to
or adjoining all or any part of the Leased Premises or any part of the building
of which the Leased Premises are a part; any explosion, casualty, utility
failure or malfunction, or falling plaster; the bursting, stoppage or leakage
of any pipes, sewer pipes, drains, conduits, appliance or plumbing works; or
any other cause whatsoever.
ARTICLE IX
DESTRUCTION OF LEASED PREMISES
SECTION 9.1. CONTINUANCE OF LEASE. In the event of any damage to the
Leased Premises by fire or other casualty, this Lease shall not be terminated
or otherwise affected; except that, (a) if more than twenty-five percent (25%)
of the square footage of the Leased Premises shall be damaged by any such fire
or other casualty during the last three (3) years of the Term of this Lease
(not including any Option Periods) or during any renewal or extension of the
Term hereof and the cost of repair or restoration exceeds One Million and
00/100ths Dollars ($1,000,000.00) as estimated by Landlord, or (b) if Landlord
is unable to rebuild any portion of the building in which the Leased Premises
are located or of the Shopping Center due to any inability (after Landlord uses
commercially reasonable efforts) to obtain any required governmental approval
in connection therewith, or (c) if more than thirty-five percent (35%) of the
floor area of the building in which the Leased Premises are located or of the
Shopping Center shall be damaged or destroyed by fire or other casualty, or (d)
if twenty-five percent (25%) or more of the building in which the Leased
Premises are located or if twenty-five percent (25%) or more of the Shopping
Center or the Leased Premises shall be damaged or destroyed at any time by the
occurrence of any risk not insured under the insurance required to be carried
under Article VIII hereof, then Landlord shall have the option to terminate
this Lease within seventy-five (75) days following the occurrence of such fire
or other casualty by giving written notice to Tenant during such period,
provided Landlord elects to terminate the leases of all or substantially all
other Shopping Center tenants which are similarly affected by the casualty and
are located in the same section of the mall as the Leased Premises. In the
event Landlord exercises any of the foregoing options to terminate, this Lease
shall immediately terminate upon Landlord's written notice to Tenant and (i)
the entire proceeds of the insurance provided for in Section 8.1 hereof shall
be paid by the insurance company or companies directly to Landlord and shall
belong to, and be the sole property of Landlord, (ii) the portion of the
proceeds of the insurance provided for in Section 8.2 which is allocable to
equipment, fixtures and other items, which, by the terms of this Lease,
rightfully belong to Landlord upon the termination of this Lease by whatever
cause, shall be paid by the insurance company or companies directly to
Landlord, and shall belong to, and be the sole property of, Landlord, and (iii)
Landlord and Tenant shall be relieved from any and all further liability or
obligation accruing under this Lease from and after the date of such
termination.
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Further, if Landlord cancels this Lease by virtue of the fact that it is
during the last three years of the Lease term, Tenant may nullify Landlord's
cancellation within thirty (30) days after receipt thereof by giving notice to
Landlord that Tenant elects to extend the term of the Lease pursuant to any such
right contained in this Lease, in which event the parties shall proceed to
restore in accordance with Section 9.2.
SECTION 9.2. RECONSTRUCTION. If the Leased Premises are damaged by fire or
other casualty and this Lease is not terminated in accordance with Section 9.1
hereof, then all fire and extended coverage insurance proceeds from policies
carried pursuant to Section 8.1 hereof, however recovered, shall be held in
escrow and made available for payment of the cost of repairing, replacing and
rebuilding the Leased Premises. Within seventy (75) days after the casualty
Landlord shall provide Tenant with a good faith estimate of the date on which
the reconstruction of the Leased Premises will be completed. The Minimum Rent
and other charges payable by Tenant to Landlord shall be abated in proportion to
the floor area of the Leased Premises rendered untenantable, and the Sales Break
Point shall likewise be proportionately reduced. Payment of Minimum Rent and all
other charges so abated shall commence and Tenant shall be obligated to reopen
for business ninety (90) days following the date that Landlord advises Tenant
that the Leased Premises are tenantable and Landlord has substantially completed
Landlord's Reconstruction Work, unless Tenant opens at an earlier time in the
damaged area or remains open in such area following destruction or damage, in
which event there shall be no abatement or any such abatement shall terminate as
of the date of Tenant's earlier reopening. Landlord shall be obligated to
commence Landlord's Reconstruction Work and shall diligently pursue the
completion of Landlord's Reconstruction Work and shall cause the same to be
completed as soon thereafter as possible under the attendant circumstances, but
in any event all such Landlord's Reconstruction Work shall be completed and the
Leased Premises reopened for business within one hundred eighty (180) days
following such fire or casualty. After Landlord has completed Landlord's
Reconstruction Work, Tenant shall commence Tenant's Reconstruction Work, at its
expense. Tenant shall comply with all laws, ordinances and governmental rules or
regulations, and shall perform all work or cause such work to be performed with
due diligence and in a first-class manner. All permits required in connection
with said repairs, restoration and reconstruction shall be obtained by Tenant at
Tenant's sole cost and expense. Any amount expended by Tenant in excess of any
insurance proceeds received by Tenant shall be the sole obligation of Tenant.
Landlord shall reconstruct such Leased Premises in accordance with the working
drawings originally approved by Landlord or with (at Landlord's sole election)
new drawings prepared by Tenant and acceptable to Landlord and Tenant
("Landlord's Reconstruction Work"). In no event shall Landlord be required to
repair or replace Tenant's merchandise, trade fixtures, furnishings or
equipment. If Landlord repairs or rebuilds, Tenant, at Tenant's sole cost, shall
repair or replace Tenant's merchandise, trade fixtures, furnishings and
equipment in a manner and to at least a condition equal to that prior to the
damage or destruction thereof ("Tenant's Reconstruction Work"). Except as may be
specifically set forth in this Article IX, Landlord shall not be liable or
obligated to Tenant to any extent whatsoever by reason of any fire or other
casualty damage to the Leased Premises, or any damages suffered by Tenant by
reason thereof, or the deprivation of Tenant's possession of all or any part of
the Leased Premises.
In the event Landlord has not commenced restoration or rebuilding of the
Leased Premises within ninety (90) days of the date of such fire or casualty
loss, or if the Leased Premises are not restored/rebuilt to its former condition
prior to such fire or casualty loss within one hundred eighty (180) days of the
date of such fire or casualty loss, Tenant will have the right, in either case,
to terminate this Lease by providing Landlord notice of such election and Tenant
will vacate and surrender the Leased Premises pursuant to Section 17.1.
ARTICLE X
CONDEMNATION
SECTION 10.1. EMINENT DOMAIN. If fifty percent (50%) or more of the floor
area of the Leased Premises shall be taken or condemned by any governmental
authority (including, for purposes of this
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Article X, any purchase by such governmental authority in lieu of a taking),
then either party may elect to terminate this Lease by giving notice to the
other party not more than ninety (90) days after the date on which such title
shall vest in the authority. If the parking facilities are reduced below the
minimum parking requirements imposed by the applicable authorities, Landlord may
elect to terminate this Lease by giving Tenant notice within one hundred eighty
(180) days after such taking. In addition, if two or more Major Tenants in the
northern half of the Retail Development (which begins at the southern lease
line of Space D shall terminate their leases with Landlord, pursuant to a
taking of its store and Landlord cannot replace such Major Tenants because of
the taking, Landlord may terminate this Lease by written notice to Tenant
within ninety (90) days after Landlord receives notice from such Major Tenants
that they are terminating their leases. In the case of any taking or
condemnation, whether or not the Term of this Lease shall cease and terminate,
the entire award shall be the property of Landlord; provided, however, Tenant
shall be entitled to any award as may be made for trade fixtures and other
equipment (not including any Tenant's Work required or permitted under this
Lease) which under the terms of this Lease would not have become the property
of Landlord; further provided, that any such award to Tenant shall not be in
diminution of any award otherwise to be made to Landlord in the absence of such
award to Tenant.
SECTION 10.2. RENT APPORTIONMENT. In the event of any taking or
condemnation, the then current Minimum Rent, Sales Break Point and the square
foot floor area in the Leased Premises as determined pursuant to Section 1.1
shall be apportioned as of the date when possession of the Leased Premises is
required to be delivered to the condemning authority or termination of this
Lease, as the case may be, and, if the Term of this Lease shall not have ceased
and have been terminated as of said date, Tenant shall be entitled to a pro
rata reduction in the Minimum Rent payable and Sales Break Point hereunder, or,
if Tenant has prepaid Minimum Rent, Tenant shall be entitled to a pro rata
credit for the Minimum Rent paid hereunder, based on the proportion which the
floor area taken from the Leased Premises bears to the entire floor area of the
Leased Premises immediately prior to such taking.
SECTION 10.3. TEMPORARY TAKING. Notwithstanding anything to the contrary
in this Article X, the requisitioning of the Leased Premises or any part hereof
by military or other public authority for purposes arising out of a temporary
emergency or other temporary situation or circumstances shall constitute a
taking of the Leased Premises by eminent domain when the use or occupancy by
the requisitioning authority is expressly provided to continue, or shall in
fact have continued, for a period of one hundred eighty (180) days or more, and
if this Lease is not thereafter terminated under the foregoing provisions of
this Article X, then for the duration of any period of use and occupancy of the
Leased Premises by the requisitioning authority, all the terms and provisions
of this Lease and obligations of Tenant hereunder shall remain in full force
and effect, except that the Minimum Rent and Sales Break Point shall be reduced
in the same proportion that the floor area of the Leased Premises so
requisitioned bears to the total floor area of the Leased Premises, and
Landlord shall be entitled to whatever compensation may be payable from the
requisitioning authority for the use and occupation of the Leased Premises for
the period involved.
ARTICLE XI
ASSIGNMENT, SUBLETTING AND ENCUMBERING LEASE
SECTION 11.1. NO ASSIGNMENT, SUBLETTING OR ENCUMBERING OF LEASE. (a) Except
as otherwise provided in this Article XI and notwithstanding any references to
assignees, subtenants, concessionaires or other similar entities in this Lease,
Tenant shall not (i) assign or otherwise transfer, or mortgage or otherwise
encumber, this Lease, in whole or in part, or any of its rights hereunder, (ii)
sublet the Leased Premises or any part thereof, or permit the use of the Leased
Premises or any part thereof by any persons other than Tenant or its agents.
Any such attempted or purported transfer, assignment, mortgaging or encumbering
of this Lease or any of Tenant's interest hereunder and any attempted or
purported subletting or grant of a right to use or occupy all or a portion of
the Leased Premises in violation of the foregoing sentence, whether voluntary
or involuntary or by operation of law or otherwise, shall be null and void and
shall not confer any rights upon any purported transferee, assignee, mortgagee,
or occupant, and shall, at Landlord's option, result in a "default" under this
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Lease. Nothing contained elsewhere in this Lease shall authorize Tenant to enter
into any franchise, concession, license, permit, subtenancy, departmental
operation arrangements or the like, except pursuant to the provisions of this
Article XI.
Notwithstanding anything to the contrary set forth in this Article XI, the
following shall govern with respect to certain types of transfers, it being
understood that Tenant shall have the right to assign, sublease or otherwise
transfer its rights under this Lease provided that the conditions and
requirements applicable to the particular assignment, sublease or other transfer
that are specified in subparagraphs (A), (B), (C), OR (D) below are satisfied:
(A) INTRA-ORGANIZATIONAL TRANSFER: Tenant shall have the right, without
Landlord's consent but with prior written notice to Landlord, to assign this
Lease or sublet the Leased Premises to its parent corporation or any of its
wholly-owned subsidiaries, or any affiliate or subsidiary of Tenant's parent
corporation provided that Tenant shall at all times remain primarily obligated
for the performance of the terms, covenants and conditions of this Lease.
(B) ASSIGNMENT AS PART OF A TRANSFER OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS
OF TENANT (Same Use): Subject to Section 11.1(a)(A) above, Landlord's consent
shall not be unreasonably withheld or delayed to an assignment of this Lease (by
merger, consolidation or otherwise) or a sublease for all or any portion of the
Leased Premises to another entity (the "Transferee") to which Tenant shall
simultaneously be transferring all or substantially all of its stock or all or
substantially all of its assets, provided that the following criteria are met:
(1) Tenant shall not at the time of such transfer be in default under any of the
terms, covenants and conditions of this Lease beyond any applicable grace
period, (2) such Transferee shall agree in writing to perform all of the
unperformed terms, covenants and conditions of this Lease, (3) Tenant shall at
all times remain primarily obligated for the performance of the terms, covenants
and conditions of this Lease and (4) the number of stores being transferred must
consist of at least three (3) stores.
(C) ASSIGNMENT AS PART OF A TRANSFER OF LESS THAN ALL OR SUBSTANTIALLY ALL OF
TENANT'S ASSETS (Same Use): Landlord shall not unreasonably withhold it consent
to an assignment, sublease or other transfer ("Transfer") of this Lease to an
entity to whom Tenant is transferring less than substantially all of Tenant's
assets ("Transferee") provided that the following requirements and conditions
shall be satisfied prior to any such Transfer: (i) at the time of such proposed
Transfer, Tenant is not in default of any of the terms, covenants or conditions
of this Lease beyond any applicable grace or cure period and shall at such time
be operating the Leased Premises pursuant to Article IV of this Lease; (ii) the
proposed Transferee shall agree in writing to assume all of the terms, covenants
and conditions to be performed by Tenant hereunder, including, but not limited
to, the obligation to continue to operate the Leased Premises in accordance with
Article IV of this Lease; (iii) effective as of the date of such Transfer, the
applicable Minimum Rent as provided for in Section 2.1 shall be increased to the
sum of the applicable [***] for the time period prior to such Transfer as
required to be paid by Tenant pursuant to Section 2.2 hereof and from and after
the date of the Transfer the Sales Break Point shall be adjusted also to the
quotient of the increased Minimum Rent divided by [***]; (iv) at the time of
such Transfer, the proposed Transferee shall have a net worth equal to or
greater than [***] [in 1999 Dollars] as shown in current certified financial
statements; and (v) the proposed Transferee has proven expertise and experience
in operating and managing an entertainment use in a shopping center environment.
If the Transfer described in this Section 11.1(a)(C) involves less than
four (4) of Tenant's stores, then, in addition to Landlord's right to deny
Tenant's proposed Transfer on the grounds that the items enumerated in (i)
through (v) of Section 11.1(a)(C) have not been met, Landlord may elect to
terminate this Lease and recapture the Leased Premises by written notice
delivered to Tenant within fifteen (15) days after Landlord's receipt of notice
from Tenant of its intention to complete the Transfer as provided for in this
Section 11.1(a)(C) (hereinafter called the "Same Use Recapture Notice"), in
which event this Lease shall automatically terminate on the ninetieth (90th) day
(hereinafter called the "Same Use Recapture Date") following Tenant's receipt of
the Recapture Notice with the same force and effect as if said Same Use
Recapture Date had been designated as the expiration date of this Lease, and
Landlord and Tenant shall upon such Same Use Recapture Date be
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released from any and all liabilities thereafter accruing hereunder, provided,
however that Landlord shall be obligated to repay to Tenant the unamortized
portion of the actual cost of Tenant's Work (less the Tenant Allowance) plus the
sum of [***] on or before the Same Use Recapture Date. All Minimum Rent,
Percentage Rent and additional rent payable by Tenant hereunder shall be
apportioned as of the Same Use Recapture Date and Tenant shall promptly pay to
Landlord any amounts so determined to be due and owing by Tenant to Landlord,
and conversely Landlord shall promptly reimburse Tenant for any amounts prepaid
by Tenant for periods subsequent to the Same Use Recapture Date. Notwithstanding
any Same Use Recapture Notice given to Tenant by Landlord within the aforesaid
fifteen (15) day period, Tenant shall have the right within fifteen (15) days
after its receipt of the Same Use Recapture Notice to give Landlord notice
(hereinafter called the "Same Use Recision Notice") of its recision of its
intention to assign, transfer or sublease, and upon Landlord's receipt of the
Same Use Recision Notice the Same Use Recapture Notice previously given by
Landlord shall be deemed null and void; in such event, Tenant shall not assign
this Lease or sublet the Leased Premises as proposed in the notice of its
intention to assign or transfer the Lease or sublet the Leased Premises.
(D) ASSIGNMENT WITH PROPOSED CHANGE IN USE: Landlord's consent to an
assignment, transfer or sublease which results in a change in use shall not be
unreasonably withheld provided that the following criteria are met:
(i) the net worth of the assignee, transferee or sublessee shall be equal
to or greater than [***] [in 1999 Dollars] as shown in current certified
financial statements;
(ii) the proposed assignee, transferee or sublessee has proven experience
in the retail business to be conducted in the Leased Premises;
(iii) the proposed assignment, transfer or sublease applies to the entire
Leased Premises; and
(iv) the business to be conducted in the Leased Premises shall (A) not
violate an existing exclusive or restriction granted for the benefit of
another tenant in the Retail Development or (B) complement the
merchandising mix and program for the Retail Development being promoted at
the time of the proposed assignment (i, ii, iii and iv being collectively
referred to as the "Criteria").
In the event Tenant proposes to assign its interest in this Lease or
sublet the whole of the Leased Premises pursuant to the terms of this Section
11.1(a)(D), it shall, notwithstanding Section 11.1(c) to the contrary, first
give thirty (30) days prior written notice thereof (hereinafter called the
"Assignment/Subletting Notice") to Landlord together with all other information
required pursuant to Section 11.1(c) hereof. In the event the proposed assignee
is unacceptable to Landlord, because in Landlord's reasonable belief the
Criteria have not been met, Landlord shall be permitted during the thirty (30)
day period to reject the proposed assignment and Tenant shall remain as the
tenant in possession of the Leased Premises under the Lease.
In addition, within thirty (30) days after Landlord's receipt of an
Assignment/Subletting Notice and such required and/or requested information
from Tenant as provided in this Section 11.1(a)(D), Landlord may elect by
notice (hereinafter called the "Recapture Notice") in writing to Tenant to
terminate this Lease and recapture the Leased Premises, in which event this
Lease shall automatically terminate on the ninetieth (90th) day (hereinafter
called the "Recapture Date") following Tenant's receipt of the Recapture Notice
with the same force and effect as if said Recapture Date had been designated as
the expiration date of this Lease, and Landlord and Tenant shall upon such
Recapture Date be released from any and all liabilities thereafter accruing
hereunder, provided, however that Tenant shall be obligated to repay to
Landlord the unamortized portion of the Tenant Allowance as provided for in
Section 3.3 hereof on or before the Recapture Date. All Minimum Rent,
Percentage Rent and additional rent payable by Tenant hereunder shall be
apportioned as of the Recapture Date and Tenant shall promptly pay to Landlord
any amounts so determined to be due and owing by Tenant to Landlord, and
conversely Landlord shall promptly reimburse Tenant for any amounts prepaid by
Tenant for periods subsequent to the Recapture Date. Notwithstanding any
Recapture Notice given to Tenant by Landlord within the aforesaid thirty (30)
day period, Tenant shall have the right within fifteen (15) days after its
receipt of the Recapture Notice to give Landlord notice (hereinafter called the
"Recision Notice") of its recision of the Assignment/Subletting Notice, and
upon Landlord's receipt of the Recision Notice the Recapture Notice previously
given by Landlord shall be deemed
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null and void; in such event, Tenant shall not assign this Lease or sublet the
Leased Premises as proposed in its Assignment/Subletting Notice.
(b) Except as otherwise provided herein, if Tenant is a corporation, the
sale, issuance or transfer of any voting capital stock of Tenant or of any
corporate entity which directly or indirectly controls Tenant (unless Tenant is
a corporation whose stock is publicly traded) which shall result in a change in
the voting control of Tenant or the corporation entity which controls Tenant
shall be deemed to be a prohibited assignment of this Lease within the meaning
of this Article XI. If Tenant is a partnership or an unincorporated
association, then the sale, issuance or transfer of a majority interest
therein, or the transfer of a majority interest in or a change in the voting
control of any partnership or unincorporated association or corporation which
directly or indirectly controls Tenant, or the transfer of any portion or all
of any general partnership or managing partnership interest, shall be deemed to
be a prohibited assignment of this Lease within the meaning of this Article XI.
Except as otherwise provided herein, the consent by Landlord to any assignment,
transfer, or subletting to any party shall not be construed as a waiver or
release of Tenant under the terms of any covenant or obligation under this
Lease or as a waiver or release of the non-assignability covenants in their
future application, nor shall the collection or acceptance of Rent from any
such assignee, transferee, subtenant or occupant constitute a waiver or release
of Tenant of any covenant or obligation contained in this Lease.
(i) Notwithstanding anything herein contained to the contrary, a sale
or transfer of any voting capital stock of Tenant when caused by death (e.g.,
testamentary transfer) or for estate planning purposes (e.g. inter vivos trust)
will not be deemed a prohibited assignment of this Lease.
(ii) The provisions of this Section 11.1(b) shall not be deemed to
prohibit transfer of limited partnership interests among existing limited or
general partners; however, if either general partner ceases to remain a general
partner of Tenant such occurrence shall be deemed a prohibited assignment of
this Lease under the meaning of this Article XI.
(iii) In addition, Tenant may, without violating the provisions of
this Article XI, and without consent of or notice to Landlord (i) sell or offer
for sale its capital stock to the public in accordance with the qualifications
or registration requirements of the state where Tenant is incorporated and the
Securities Act of 1933, as amended or (ii) issue or transfer shares of Tenant's
capital stock (whether or not such issuance or transfer results in a change in
the persons comprising majority shareholders of Tenant) as part of a so-called
"private placement".
(c) Without conferring any rights upon Tenant not otherwise provided in
this Article XI, should Tenant desire to enter into an assignment, sublease
or transfer of this Lease or Tenant's rights hereunder, Tenant shall
request in writing Landlord's consent to the assignment or, where consent
is not required, provide Landlord prior written notice of the same at least
fifteen (15) days before the proposed effective date of the assignment (or
within such other timeframe as may be provided for herein for a specific
type of assignment), providing the following: (i) the full particulars of
the proposed assignment, sublease or transfer of this Lease or Tenant's
rights hereunder, including its nature (i.e. whether it is an assignment,
sublease or transfer) and effective date, terms and conditions; (ii) a
description of the identity, net worth and previous business experience of
the proposed transferee, including, without limitation, copies of the
proposed transferee's latest income, balance sheet and changes in financial
position statements (with accompanying notes and disclosures of all
material changes thereto) in audited form, if available, and certified as
accurate by the proposed transferee; and (iii) any further information
reasonably relevant to the proposed assignment and reasonably available to
Tenant which Landlord shall request after receipt of Tenant's request for
consent. Tenant shall, concurrently with any request for Landlord's
consent, pay to Landlord a fee in the sum of [***] for Landlord's review
and processing of such request and Landlord shall not be obligated to
review such request prior to Landlord's receipt of such fee. All requests
for assignment, sublease or transfer shall be forwarded to Landlord at the
address provided above and to the on-site mall management office. To the
extent Landlord's consent is required, Landlord shall be required to
respond within the prescribed period (being a minimum of 15 days) and if
Landlord's response is a denial of the proposed transfer, Landlord shall
give specific reasons for the denial. If Landlord fails to respond within
five (5) business days written notice from Tenant (provided both to
Landlord at the
*** Confidential treatment requested.
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notice address and to the Mall Manager), which notice must specify that Landlord
has failed to respond to the initial request and that failure to respond within
five (5) days of the date on the second notice will result in approval, then
Landlord shall be deemed to have approved the requested transfer.
(d) Except for a permitted assignment or subletting as specified in Section
11.1(a) and (b) and without conferring any rights upon Tenant not otherwise
provided in this Article XI, in the event of an assignment or transfer of
Tenant's interest in this Lease, or a sublease of all or a portion of the Leased
Premises, to a third party, any monthly rent or other payment accruing to Tenant
as the result of any such assignment, transfer, or sublease, including any lump
sum or periodic payment in any manner relating to such assignment, transfer or
sublease, which is in excess of the Rent then payable by Tenant under this Lease
less any amounts paid by Tenant in commissions, tenant improvements, unamortized
tenant improvements funded by Tenant, and attorneys' fees shall be paid
one-half(1/2) of such excess by Tenant to Landlord monthly as additional rent.
Landlord may require a certificate from Tenant specifying the full amount of any
such payment of whatsoever nature.
(e) Notwithstanding any assignment, subletting or transfer of this Lease or
Tenant's rights hereunder, Tenant shall remain fully liable on this Lease and
for the performance of all terms, covenants and provisions of this Lease;
provided, however, if the transferee, or assignee has a net worth equal to or in
excess of [***] [in 1999 Dollars] as shown in current certified financial
statements on the date of the transfer then Tenant shall be released from its
obligations with respect to the Lease from and after the date of the assignment
or transfer.
SECTION 11.2. ASSIGNMENT OR SUBLET. If this Lease is transferred or
assigned, in whole or in part in violation of the terms of this Lease, or if the
Leased Premises or any part thereof be sublet or occupied by any person or
entity other than Tenant in violation of the terms of this Lease, whether as a
result of any act or omission by Tenant, or operation of law, or otherwise, then
Landlord, whether before or after default by Tenant, may, in addition to, and
not in diminution of or substitution for, any other rights and remedies under
this Lease or pursuant to law to which Landlord may be entitled as a result
thereof, collect rent from the transferee, assignee, subtenant or occupant and
apply the net amount collected to the Rent herein reserved, but no such
transfer, assignment, subletting, occupancy or collection shall be deemed a
waiver of the covenants contained herein or the acceptance of the transferee,
assignee, subtenant, or occupant as Tenant, or a release of Tenant from the
further performance by Tenant of covenants on the part of Tenant set forth in
this Lease unless Tenant has been otherwise released, including without
limitation pursuant to Section 11.1(e).
SECTION 11.3. TRANSFER OF LANDLORD'S INTEREST. In the event of any
transfer of Landlord's interest in the Leased Premises, including a sale or
lease, the transferor shall be automatically relieved of any and all obligations
on the part of Landlord accruing from and after (but not before) the date of
such transfer, provided that (a) the interest of the transferor, as Landlord, in
any funds then in the hands of Landlord in which Tenant has an interest shall be
turned over, subject to such interest, to the then transferee; and (b) notice of
such sale, transfer or lease shall be delivered to Tenant as required by law.
ARTICLE XII
SUBORDINATION, ATTORNMENT, FINANCING AND ESTOPPEL CERTIFICATE
SECTION 12.1. SUBORDINATION. Tenant agrees that this Lease shall, at the
request of Landlord, be subordinate to any mortgages or deeds of trust that may
hereafter be, placed upon the Leased Premises and to any and all advances to be
made thereunder, and to the interest thereon, and all renewals, replacements and
extensions thereof, provided, as an express condition to such subordination,
that the mortgagees or beneficiaries named in said mortgages or deeds of trust
shall
[***] Confidential treatment requested.
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agree to substantially concurrently with such subordination execute a
non-disturbance agreement whereby such mortgagee or beneficiary agrees to
recognize the interests of Tenant under this Lease in the event of foreclosure,
if Tenant is not then in material default of this Lease beyond the applicable
cure period, which non-disturbance agreement shall be evidenced by a document on
such mortgagee's or beneficiary's standard form (which must be commercially
reasonable, it being understood that the form attached hereto as Exhibit H is
acceptable to Landlord and Tenant) and may (at the cost of the party recording
the same) be recorded among the land records of the jurisdiction in which the
Retail Development lies. Landlord hereby represents to Tenant that as of the
date hereof, there are no underlying mortgages, deeds of trust, ground leases or
other liens on or affecting the Leased Premises or the Shopping Center except
for the Ground Lease referenced in Section 20.24 of the Addendum hereto ("Ground
Lease") and Landlord further represents that Tenant is not currently subordinate
to any mortgage, deed of trust or other lien or ground lease (except the Ground
Lease). Tenant also agrees that any mortgagee or beneficiary may elect to have
this Lease constitute a prior lien to its mortgage or deed of trust, and in the
event of such election and upon notification by such mortgagee or beneficiary to
Tenant to that effect, this Lease shall be deemed prior in lien to such mortgage
or deed of trust, whether this Lease is dated prior to or subsequent to the date
of said mortgage or deed of trust. Tenant agrees that upon the request of
Landlord, or any mortgagee or beneficiary, Tenant shall execute whatever
reasonable instruments may be required to carry out the intent of this Section
12.1 and Section 12.2; provided that no such instrument may contain any matters
which increase any of Tenant's obligations under this Lease or decrease any of
Tenant's rights under this Lease and such instrument will grant a covenant of
non-disturbance to Tenant.
SECTION 12.2. ATTORNMENT. In the event any proceedings are brought for the
foreclosure of, or in the event of the conveyance by deed in lieu of foreclosure
of, or in the event of exercise of the power of sale under, any mortgage and/or
deed of trust made by Landlord covering the Leased Premises, or in the event
Landlord sells, conveys or otherwise transfers its interest in the Shopping
Center or any portion thereof containing the Leased Premises, this Lease shall
remain in full force and effect and Tenant hereby attorns to, and covenants and
agrees to execute an instrument in writing reasonably satisfactory to the new
owner whereby Tenant attorns to such successor in interest and recognizes such
successor as Landlord under this Lease; provided, however, that Tenant's
attornment shall (except with respect to a mortgagee of the Shopping Center
succeeding to Landlord's interest as a result of foreclosure or an agreement in
lieu of foreclosure, or a workout arrangement) be subject to the successor
assuming, in writing, all of the terms, covenants and conditions of this Lease
arising after the date of transfer to such successor. Payment by or performance
of this Lease by any person, firm or corporation claiming an interest in this
Lease or the Leased Premises by, through or under Tenant without Landlord's
consent in writing shall not constitute an attornment or create any interest in
this Lease or the Leased Premises.
SECTION 12.3. FINANCING. [INTENTIONALLY DELETED]
SECTION 12.4. ESTOPPEL CERTIFICATE. Tenant shall, without charge therefor,
at any time and from time to time, within thirty (30) days after request
therefor by Landlord, execute, acknowledge and deliver to Landlord a written
estoppel certificate, in reasonable form, certifying to Landlord, any mortgagee,
or any purchaser of the Shopping Center or any other person designated by
Landlord, as of the date of such estoppel certificate; (i) that Tenant is in
possession of the Leased Premises and has accepted the same; (ii) that this
Lease is unmodified and in full force and effect (or if there has been
modification, that the same is in full force and effect as modified and setting
forth such modifications); (iii) whether or not there are then existing any
set-offs or defenses against the enforcement of any right or remedy of Landlord,
or any duty or obligation of Tenant, hereunder (and, if so, specifying the same
in detail); (iv) that Rent is paid currently without any offset or defense
thereto, (v) the dates, if any, to which any Rent has been paid in advance; (vi)
whether or not there is then existing any claim of Landlord's default under this
Lease and if so, specifying the same in detail; (vii) that Tenant has no
knowledge of any event having occurred that authorized the termination of this
Lease by Tenant (or if Tenant has such knowledge, specifying the same in
detail); and (viii) any other matters relating to the status of this Lease that
Landlord or its mortgagee may request be confirmed, provided that such facts are
accurate and ascertainable.
Landlord shall, within thirty (30) days after written request from Tenant,
no more often than once in any Lease Year and provided Tenant is not then in
default hereunder beyond any applicable cure period, deliver to Tenant or such
persons as Tenant may designate, a statement in writing
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certifying to the extent true that: (i) Tenant is in possession of the Leased
Premises; (ii) this Lease is in full force and effect (as later modified, if
such be the case); (iii) the Rent due hereunder is current; and (iv) that to the
best of Landlord's knowledge, information and belief, Tenant is not in default
hereunder.
SECTION 12.5. REMEDIES. Any failure by Tenant to execute any certificate,
statement or instrument in accordance with the foregoing provisions of this
Article XII or any financing statement in accordance with the provisions of
Section 14.2(a), within the time period provided or if no time period is
specified, then within thirty (30) days after written request, shall constitute
a "default" under this Lease.
ARTICLE XIII
ADVERTISING AND PROMOTION
SECTION 13.1. PROMOTION FUND. Landlord shall establish an advertising and
promotion fund (the "Fund"). The object of the Fund shall be to advertise the
Retail Development in the local metropolitan statistical area and to provide a
program of events, all of which shall, in Landlord's judgment, serve to enhance
and promote the Retail Development and its occupants. Such program of events may
include the promotion of coach traffic to the Retail Development and the
development of a mall video network within the Retail Development offering a
program of information, entertainment and advertisements. The Fund shall be
administered by Landlord and the costs and expenses of such administration shall
be charged to the Fund. Landlord shall expend all amounts paid to the Fund by
the tenants in the Retail Development for the purposes herein set forth.
SECTION 13.2. PROMOTION FUND CONTRIBUTION. Tenant's annual contribution to
the Fund shall be the Fund Contribution (reduced proportionately for a partial
Lease Year) as defined in the Data Sheet. Upon the Grand Opening, Tenant shall
also pay Tenant's one-time initial contribution or Grand Opening Fee which is
defined in the Data Sheet. The Fund Contribution payable by Tenant for each
Lease Year shall be increased commencing with the second Lease Year of the term
of this Lease, and each Lease Year thereafter, by a percentage equal to the
percentage increase from the "base period" of the Consumer Price Index ("Index")
to the "current period" of the Index of the Lease Year for which the adjustment
is being made, provided, however, in no event shall such increase exceed [***]
per Lease Year; provided, however, if the first Lease Year is less than six (6)
months, the first adjustment to the Fund Contribution shall be after the first
full Lease Year. Except as herein expressly provided, the term "base period"
shall initially refer to the Index published for the month of October
immediately preceding the Commencement Date. Following the initial increase in
the Fund Contribution hereunder, the term "base period" shall refer to the Index
published for the month of October immediately preceding the Lease Year for
which the Fund Contribution was last adjusted hereunder. The "current period" of
the Index shall refer to the Index published for the month of October
immediately preceding the Lease Year for which an adjustment is being made. In
the event the Index shall not be published for any of the above-described
months, then the Index published for the month closest, but prior, to the
described month shall be used in its place. The annual Fund Contribution shall
be payable by Tenant to Landlord, or as Landlord may direct, in twelve (12)
equal monthly installments, commencing on the Commencement Date, at the same
time and in the same manner as the monthly installments of Minimum Rent are
payable.
Notwithstanding the foregoing, in lieu of Tenant's payment of the Grand
Opening Fee, during the period from the Delivery of Possession Date through and
including the Grand Opening date ("Advertising Period"), Tenant shall place
advertisements (including, without limitation, billboards; signs; newspapers,
radio, television ads; and direct mail) at a cost equal to the amount of the
Grand Opening Fee that Tenant would have otherwise been obligated to pay
("Eligible Advertising") which shall specifically identify the Leased Premises,
including the name and location of the Shopping Center. At or prior to the time
the Eligible Advertising is placed, Tenant shall submit to Landlord copies of
the actual Eligible Advertising or other written third-party evidence reasonably
satisfactory
*** Confidential treatment requested.
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to Landlord evidencing the Eligible Advertising, together with all receipts,
canceled checks or other third-party evidence reasonably satisfactory to
Landlord establishing Tenant's payment for the Eligible Advertising. In the
event that the cost of the Eligible Advertising does not meet or exceed the
Grand Opening Fee by the end of the Advertising Period, Tenant shall pay the
balance to Landlord within thirty (30) days of receipt of a bill from Landlord.
SECTION 13.3. ADVERTISEMENTS [INTENTIONALLY DELETED].
SECTION 13.4. NETWORK. Landlord may cause to be developed a mall video
network within the Retail Development (the "Network"). The object of the
Network shall be to provide a program of information, entertainment and
advertisements, which shall, in Landlord's judgment, serve to enhance or
promote the Retail Development and its occupants. The Network shall have the
right to sell available time and access on the Network for advertisements or
other uses. The Network shall be under the sole and exclusive direction of
Landlord and shall be administered by Landlord. The costs and expenses paid or
incurred by Landlord for administering, operating, equipping, staffing,
protecting, insuring, repairing, replacing and maintaining the Network shall be
charged to the Fund. Any production by Landlord of advertising messages for
Tenant and any air time on or access to the Network is subject to availability,
as determined solely by Landlord, and shall be at the then applicable rates and
fees set by Landlord. Landlord shall have the right to reject, remove or
discontinue showing any video taped advertising message of the business
conducted, or to be conducted, in the Leased Premises (herein "Tenant Video")
or advertising message on the Network the content of which is, in the opinion
of Landlord, unethical, misleading, in bad taste, or shall tend to injure the
reputation of the Retail Development or its occupants, or shall be deemed to be
detrimental to the Retail Development or is in violation of any applicable
rule, law or existing agreement with occupant(s) of the Retail Development.
Tenant acknowledges that Tenant shall be solely responsible for the content of
its Tenant Video and except with respect to the gross negligence of Landlord
and the Network, Tenant agrees to save harmless Landlord, its officers,
directors, partners, employees and agents from and against any and all claims,
actions, damages, liability, cost or expense, including attorneys' fees that
arise from or with respect to the content of such advertising message,
including without limitation any claims for infringement of the intellectual
property rights of others or actions for unfair competition. Landlord reserves
the right at any time to dissolve the Network and cease providing its
promotional services as well as Tenant Videos and in lieu thereof, to provide,
or cause to be provided, a program of advertising and promotional events which
in Landlord's sole judgment, will serve to promote the Retail Development and
its occupants.
ARTICLE XIV
DEFAULT AND REMEDIES
SECTION 14.1. ELEMENTS OF DEFAULT. If any one or more of the following
events occur, said event or events shall hereby be classified as a "default" as
that term is used throughout this Lease: (a)(i) the failure of Tenant to take
possession of the Leased Premises within thirty (30) days after the Delivery of
Possession Date, or (ii) the failure of Tenant to open its doors for business
within thirty (30) days after the date specified in Section 1.3 hereof, or
(iii) if Tenant vacates or abandons the Leased Premises and permits the same to
remain unoccupied and unattended for three (3) days after written or telephone
notice, or (iv) if Tenant fails to maintain normal inventory levels and
employee staff for the conduct of its normal business activities in the Leased
Premises for three (3) days after written or telephone notice, or (v) the
failure of Tenant to operate its business in compliance with Section 4.2 for the
purposes specified in Section 4.1 and Tenant fails to cure the same within ten
(10) days after written notice, or (vi) in the event of the sale or removal of
a substantial portion of Tenant's property located in the Leased Premises in a
manner which is outside the ordinary course of Tenant's business; (b) the
failure of Tenant to pay any Rent or other charges required to be paid by
Tenant when same shall become due and payable hereunder and such failure
continues for ten (10) days after written notice; (c) the failure of Tenant to
perform or observe any term or condition of this Lease and such failure shall
continue for thirty (30) days after written notice; provided, however, such
period shall be extended for an additional reasonable period if Tenant has
diligently commenced the curing of such default within the thirty (30) days
period and is diligently pursuing the same to completion, but in no event shall
either the thirty (30) days period or any extension thereof apply to Tenant's
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covenant to operate pursuant to Article IV of this Lease, unless the same is
excused pursuant to Article IX or Article X of this Lease; (d) if Tenant shall
be given three (3) notices of the same default under subparagraphs (b) or (c)
within any period of eighteen (18) months, notwithstanding any subsequent cure
of the failure to perform or observe the terms or conditions of this Lease as
identified in such notices; (e) if any writ of execution, levy, attachment or
other legal process of law shall occur upon a substantial and material part of
Tenant's assets, merchandise, fixtures, or Tenant's estate or interest in the
Leased Premises; (f) Tenant shall be liquidated or dissolved or shall begin
proceedings toward such liquidation or dissolution, or shall in any manner
permit the divestiture of all, or any substantial part of Tenant's assets.
SECTION 14.2. LANDLORD'S REMEDIES. In the event of any such default or
breach by Tenant, Landlord may at any time thereafter, with or without further
notice or demand and without limiting Landlord in the exercise of any right or
remedy which Landlord may have by reason of such default or breach;
(a) Perform, on behalf and at the expense of Tenant, any obligation of
Tenant under this Lease which Tenant has failed to perform and of which Landlord
shall have given at least three (3) days' notice (except in the case of
emergency, in which event no such notice shall be required), the cost of which
performance by Landlord, together with interest therein at the interest rate (as
specified in Section 20.14 hereof) from the date of such expenditure, shall be
deemed additional rent and shall be payable by Tenant to Landlord upon demand.
(b) Without further notice, re-enter and repossess the Leased Premises, by
summary proceedings or otherwise, and remove Tenant and all other persons and
property from the Leased Premises, and store such property in a public warehouse
or elsewhere at the cost of and for the account of Tenant without resort to
legal process and without Landlord being deemed guilty of trespass or conversion
or becoming liable for any loss or damage occasioned thereby. In connection
herewith, Landlord shall have, in addition to any other remedies, any and all
self-help remedies, including but not limited to a forcible entry into the
Leased Premises or a "lock-out" accomplished by changing the locks on the Leased
Premises. No re-entry of the Leased Premises shall be construed as an election
by Landlord to accept Tenant's surrender of the Leased Premises or to terminate
this Lease unless a written notice of such intention is given by Landlord to
Tenant. In the event that Landlord exercises any of the remedies provided for
herein which allow it to gain access to the Leased Premises Landlord shall be
prohibited from using or permitting the use of Tenant's equipment for operating
within the Leased Premises.
(c) Declare the entire balance of the Rent, and all other amounts to be
paid by Tenant hereunder for the remainder of the Term to be due and payable
immediately, and collect such balance in any manner not inconsistent with
applicable law. The amount of additional rent and Percentage Rent payable with
respect to each Lease Year remaining in the Term after such default (including
the Lease Year during which such default occurred) shall be conclusively
presumed to be equal to the average additional rent and Percentage Rent payable
with respect to each completed Lease Year preceding such default; provided,
however, that if such default occurs before the expiration of two (2) Lease
Years, then the amount of additional rent and Percentage Rent payable with
respect to each Lease Year remaining in the Term after such default (including
the Lease Year or partial Lease Year during which such default occurred) shall
be conclusively presumed to be equal to twelve (12) times the average monthly
additional rent and Percentage Rent payable prior to such default.
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Notwithstanding anything to the contrary contained in this Lease, Landlord
herby agrees to use reasonable efforts to mitigate damages; provided, however,
that Landlord, in attempting to lease the Leased Premises shall not be obligated
to give preference to the Leased Premises over any other available space in the
Shopping Center. In consideration of the preceding sentence, Tenant hereby
acknowledges that the Leased Premises are located within a super-regional
discount specialty retail shopping center and that the quality and record of
experience of a prospective tenant and the type of prospective tenant (compared
with the then current tenant mix in the Shopping Center) are principal
considerations which Landlord shall employ in determining whether to lease the
Leased Premises.
(d) Terminate this Lease by giving written notice of such termination to
Tenant, which termination shall be effective as of the date of such notice or
any later date therefor specified by Landlord in such notice (provided, that
without limiting the generality of the foregoing provisions, Landlord shall not
be deemed to have accepted any abandonment or surrender by Tenant of any or all
of the Leased Premises or Tenant's leasehold estate under this Lease unless
Landlord has so advised Tenant expressly and in writing, regardless of whether
Landlord has re-entered or relet any or all of the Leased Premises or exercised
any or all of Landlord's other rights under this Lease or applicable law).
(e) In Landlord's own name or otherwise, relet any or all of the Leased
Premises with or without any additional premises, for any or all of the
remainder of the Term (or, if this Lease has then been terminated, for any or
all of the period which would, but for such termination, have constituted the
remainder of the Term) or for a period exceeding such remainder, on such terms
and subject to such conditions as are acceptable to Landlord (including, by way
of example rather than of limitation, the alteration of any or all of the Leased
Premises in any manner which, in Landlord's judgment, is necessary or desirable
in connection with such reletting, and the allowance of one or more concessions
or "free-rent" or reduced-rent periods), and collect and receive the rents
thereof. Tenant shall pay to Landlord, at the times and in the manner specified
by the provisions of this Lease (unless Landlord has elected to accelerate Rent
as provided above in subparagraph(d), in which event Tenant shall be obligated
to pay such accelerated amount as provided in such subparagraph), (i) the
installments of the Minimum Rent, additional rent and Percentage Rent accruing
during such remainder (or, if this Lease has then been terminated, damages
equalling the respective amounts of such installments (determined as provided in
subparagraph 14.2(c) which would have accrued during such remainder, had this
Lease not been terminated)), plus (ii) the cost to Landlord of any such
reletting (including, by way of example rather of limitation, any attorney's
fees, leasing or brokerage commissions, repair or improvement expenses and the
expense of any other actions taken in connection with such reletting) less any
monies received by Landlord with respect to such remainder from such reletting
of any or all of the Leased Premises.
(f) Recover from Tenant, an amount equal to (i) all items of accrued and
unpaid Rent, including, without limitation, the then unamortized amount of the
Construction Allowance; (ii) all reasonable expenses (including, by way of
example rather than of limitation, all repossession costs, management expenses,
operating expenses, legal expenses and attorney's fees) incurred by Landlord in
curing or seeking to cure any default or in exercising or seeking to exercise
any of Landlord's rights and remedies under the provisions of this Lease or at
law or in equity on account of any default, plus (iii) interest on all such
expenses, at the rate provided in Section 20.14, all of which expenses and
interest shall be payable by Tenant immediately on demand therefor by Landlord.
(g) Without terminating this Lease, maintain Tenant's right to possession,
in which case this Lease shall continue in effect whether or not Tenant shall
have vacated the Leased Premises. In such event, Landlord shall be entitled to
enforce all of Landlord's rights and remedies under this Lease, including the
right to recover Rent as it becomes due hereunder.
(h) Any damage or loss of Rent sustained by Landlord may be recovered by
Landlord, at Landlord's option, at the time of the reletting or termination, in
a single action or in separate actions, from time to time, as said loss of Rent
or damages shall accrue, or in a single proceeding deferred by Landlord or with
jurisdiction reserved by the court, until the expiration of the Term of this
Lease (in which event Tenant hereby agrees that, at Landlord's option, the cause
of action shall not be deemed to have accrued until the date of expiration of
said Term).
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(i) Nothing contained herein shall prevent the enforcement of any
claim Landlord may have against Tenant for anticipatory breach of this Lease.
In the event of any anticipatory breach by Tenant of any of the covenants or
provisions hereof or in the event of Tenant's default, Landlord shall have the
right of injunction and the right to invoke any remedy allowed at law or in
equity as if re-entry, summary proceedings and other remedies were not provided
for herein. Mention in this Lease of any particular remedy shall not preclude
Landlord from any other remedy under this Lease or, at law or in equity. Tenant
hereby expressly waives for itself and all persons claiming by or through
Tenant, any and all rights to redeem, reinstate or restore, or obtain relief
from forfeiture of this Lease granted by or under any present or future law in
the event of Tenant being evicted or dispossessed for any cause, or in the
event of Landlord obtaining possession of the Leased Premises by reason of the
violation by Tenant of any of the covenants and conditions of this Lease.
(j) In case suit shall be brought for recovery of the Leased
Premises, for the recovery of Rent or any other amount due under the provisions
of this Lease, or because of the breach of any other covenant herein contained
on the part of Tenant to be kept and performed, and a breach shall be
established, Tenant shall pay to Landlord all costs and expenses incurred
therefor, including Landlord's attorney's reasonable fees and expenses.
(k) Nothing herein contained shall limit or prejudice Landlord's
right to prove and obtain as damages, by reason of any default by Tenant, an
amount equal to the maximum allowed by statue or rule of law in effect at the
time when, and governing the proceedings in which, such damages are to be
proved. No expiration or termination of this Lease, abandonment, re-entry by
Landlord or vacancy, shall relieve Tenant of any of its liabilities and
obligations under this Lease (whether or not any or all of the Leased Premises
are relet), and Tenant shall remain liable to Landlord for all damages
resulting from any default by Tenant, including any damage resulting from the
breach by Tenant of any of its obligations to pay Minimum Rent, Percentage
Rent, additional rent and any other sums which Tenant is obligated to pay
hereunder.
(l) The rights and remedies of Landlord under this Lease shall be
deemed to be cumulative, and no one of such rights or remedies shall be
exclusive at law or in equity of the other rights and remedies of Landlord on
account of a default by Tenant, and the exercise of any one such right or
remedy by Landlord shall not impair Landlord's standing, right or power to
exercise any other right or remedy.
SECTION 14.3. BANKRUPTCY. (a) Neither Tenant's interest in this Lease,
nor any estate hereby created in Tenant nor any interest herein or therein,
shall pass to any trustee or receiver or assignee for the benefit of creditors
or otherwise by operation of law, except as may specifically be provided
pursuant to the Bankruptcy Code (11 USC Section 101 et seq.), as the same may
be amended from time to time.
(b) It is understood and agreed that this Lease is a lease of real
property in a shopping center as such lease is described in Section 365 of the
Bankruptcy Code, as the same may be amended from time to time. Upon the filing
of a petition by or against Tenant under the Bankruptcy Code, Tenant, as debtor
and as debtor-in-possession, and any trustee who may be appointed with respect
to the assets of or estate in bankruptcy of Tenant, agree to pay monthly in
advance on the first day of each month, as reasonable compensation for the use
and occupancy of the Leased Premises, an amount equal to all Minimum Rent,
additional rent and other charges otherwise due pursuant to this Lease, and to
pay Percentage Rent monthly, at the percentage factor set forth in this Lease
for the Lease Year in which such month falls, on all of the Gross Sales during
such month in excess of [***] of the Sales Break Point for such Lease Year;
payment of all such Percentage Rent to be made by the [***] day of the
succeeding month. Included within and in addition to any other conditions or
obligations imposed upon Tenant or its successor in the event of the assumption
and/or assignment of this Lease are the following: (i) the cure of any monetary
defaults and reimbursement of pecuniary loss within not more than thirty (30)
days of assumption and/or assignment; (ii) the deposit of an additional sum
equal to not less than three (3) months' Minimum Rent and additional rent to be
held pursuant to the terms of Section 2.4 of this Lease, which sum shall be
determined by Landlord, in its sole discretion, to be a necessary deposit to
secure the future performance under this Lease by Tenant or its assignee; (iii)
the use of the Leased Premises as set forth in Section 4.1 of this Lease and the
quality, quantity and/or lines of merchandise, goods or services required to be
offered for sale are
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unchanged; and (iv) the prior written consent of any mortgagee to which this
Lease has been assigned as collateral security.
SECTION 14.4. ADDITIONAL REMEDIES AND WAIVERS. Notwithstanding any other
provision contained in this Lease to the contrary, all rights and remedies of
Landlord set forth herein (including but not limited to Landlord's rights
respecting lockout, re-entry, self-help, repossession, security interests and
lien rights and foreclosure) shall be in addition to (and not in substitution
of) any and all other rights and remedies now or hereafter provided by law,
including but not limited to rights and remedies provided by the statutes,
rules, regulations, laws and judicial decisions of the State, and all such
rights and remedies shall be cumulative; and none of such rights and remedies so
provided by law shall be conditioned or limited by any conditions or limitations
on the remedies granted to Landlord under the terms of this Lease, nor upon any
notice and/or passage of time that may be required hereunder in order for an
event or condition to constitute a default or an event of default as that term
is defined in this Lease.
SECTION 14.5. LANDLORD'S CURE OF DEFAULT. If Tenant shall be in default
hereunder, Landlord shall have the option, but not the obligation, upon three
(3) days written notice to Tenant (except in the event of an emergency, in which
event no notice shall be required), to cure the act or failure constituting said
default for the account of and at the expense of Tenant. Landlord's cure or
attempt to cure any act or failure constituting the default by Tenant shall not
result in a waiver or release of Tenant. Tenant agrees to pay the costs incurred
by Landlord pursuant to this Section 14.5 plus interest, in accordance with
Section 20.14 hereof, on all sums expended by Landlord pursuant to this Section
14.5 from the date of such expenditure plus a charge of [***] of such costs, to
Landlord upon demand, as additional rent.
SECTION 14.6. SECURITY INTEREST. Notwithstanding anything to the contrary
contained in this Lease, Tenant may grant a security interest, encumber or
pledge its equipment, personal property, inventory and moveable trade fixtures
located on or about the Leased Premises, with respect to financing which
benefits this store location and Landlord shall agree to subordinate its lien,
if any, on such equipment to such financing. In no event, however, shall Tenant
be permitted to mortgage, hypothecate, encumber or pledge the leasehold interest
in the Leased Premises.
SECTION 14.7 TENANT'S REMEDIES. In the event Landlord shall fail to
perform any obligation specified in this Lease, which default materially and
adversely affects Tenant's operations, then Tenant may, after the continuance of
any such default for thirty (30) days after written notice thereof by Tenant to
Landlord (except in the event of an emergency when only reasonable notice shall
be required to be given to Landlord under the circumstances), cure such default
all on behalf of and at the expense of Landlord and do all necessary work and
make all necessary payments in connection therewith and Landlord shall, on
demand, pay Tenant forthwith, the amount so paid by Tenant together with
interest thereon at the rate specified in Section 20.14 hereof from the date of
payment until re-payment.
ARTICLE XV
RIGHT OF ACCESS
Landlord may, at any reasonable time or times, upon three (3) days' prior
written notice to Tenant (except in the event of an emergency, or if Tenant is
in default under this Lease beyond the expiration of any applicable cure period,
in which event no notice shall be required), before and after the Commencement
Date, enter upon the Leased Premises, any portion thereof and any appurtenance
thereto (with men and materials, if required) for the purpose of: (a) inspecting
the same; (b) making such repairs, replacements or alterations which Landlord
may be required to perform as herein provided or which it may deem desirable for
the Leased Premises; and (c) showing the Leased Premises to prospective
purchasers, lenders or lessees. Landlord hereby expressly reserves the right,
exercisable at any time and from time to time, to erect, use, maintain and
repair pipes, conduits, plumbing, vents, ducts and wires in, to, under and
through the Leased Premises as and to the extent that Landlord may now or
hereafter deem to be necessary or appropriate for the proper operation and
maintenance of the Shopping Center. Any redecorating or repair necessitated by
reason of location
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of same within the Leased Premises shall be the responsibility of Landlord.
Landlord agrees to hold Tenant harmless from any damage or injury to person or
property to the extent resulting from Landlord exercising its rights under this
Article XV. Notwithstanding anything contained in this Lease to the contrary, if
such work prevents Tenant from operating its business within the Leased Premises
for three (3) or more consecutive days, Landlord shall after written notice from
Tenant to Landlord, abate Minimum Rent after such three (3) days of disruption
on a day-to-day basis until Tenant is able to operate its business in the Leased
Premises.
In the exercise of its rights under this Article XV, Landlord shall use
reasonable efforts to avoid material interference with the operation of Tenant's
business within the Leased Premises, including, without limitation, performing
repairs during hours in which Tenant is not open for business or, if the same is
not reasonably possible, during Tenant's "off-peak" hours. Landlord agrees that
except in the event of an emergency, and provided Tenant shall make an employee
of Tenant available to accompany Landlord following Landlord's notice to Tenant
of the necessity therefor, Landlord shall not enter the Leased Premises during
the Term of this Lease without an employee of Tenant accompanying Landlord's
representative.
ARTICLE XVI
DELAYS
If Landlord or Tenant is delayed or prevented from performing any of their
respective obligations during the Term of this Lease because of strikes,
lockouts, labor troubles, inability to procure materials, failure of power,
governmental restrictions, a delay created by the other party, or reasons of a
like nature not the fault of the party delayed in performing such obligation
(collectively "Delays"), then the period of such delays shall be deemed added to
the time herein provided for the performance of any such obligation and the
defaulting party shall not be liable for losses or damages caused by such
delays; provided, however, that, subsequent to the Commencement Date, this
Article XVI shall not apply to the payment of any sums of money required to be
paid by Tenant hereunder or any obligation of Landlord or Tenant that can be
satisfied by the payment of money, and shall not excuse Tenant from its
obligation to continuously operate its business within the Leased Premises in
accordance with the provisions of Sections 4.1 and 4.2 hereof.
ARTICLE XVII
END OF TERM
SECTION 17.1. RETURN OF LEASED PREMISES. Upon the Expiration Date or
earlier termination of this Lease, Tenant shall quit and surrender to Landlord
the Leased Premises, broom-clean, in good order and condition, ordinary wear and
tear excepted, and shall surrender to Landlord all keys to or for the Leased
Premises and inform Landlord of all combinations of locks, safes and vaults, if
any, in the Leased Premises. Subject to the provisions of Section 3.5 hereof,
Tenant, at its expense, shall promptly remove all personal property of Tenant,
and repair all damage to the Leased Premises caused by such removal. Any
personal property of Tenant not removed within ten (10) days following the
Expiration Date or earlier termination of this Lease shall be deemed to have
been abandoned by Tenant and to have become the property of Landlord, and may be
retained or disposed of by Landlord, as Landlord shall desire. Tenant's
obligation to observe or perform the covenants set forth in this Section 17.1
shall survive the Expiration Date or earlier termination of this Lease.
SECTION 17.2. HOLDING OVER. If Tenant shall hold possession of the Leased
Premises after the Expiration Date or earlier termination of this Lease at
Landlord's option (a) Tenant shall be deemed to be occupying the Leased Premises
as a tenant from month-to-month, at one and one-half times the Minimum Rent and
other charges in effect during the last Lease Year immediately preceding such
holdover and otherwise subject to all of the terms and conditions of this Lease,
or (b)
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Landlord may exercise any other remedies it has under this Lease or at law or in
equity including an action for wrongfully holding over.
Notwithstanding the foregoing, if Tenant is negotiating in good faith with
Landlord to renew or extend the Term of this Lease for the Leased Premises (or a
relocation within the Shopping Center), then Tenant may occupy the Leased
Premises on a month-to-month tenancy at one-twelfth (1/12) of the annual Minimum
Rent for the last year of the Term of the Lease.
ARTICLE XVIII
COVENANT OF QUIET ENJOYMENT
Landlord covenants that if and so long as Tenant pays the Rent and all
other charges provided for herein, and performs all of its obligations provided
for herein, Tenant shall at all times during the Term hereof peaceably have,
hold and enjoy the Leased Premises and a license to use the Display Area as
permitted under this Lease, without any interruption or disturbance from
Landlord, or anyone lawfully or equitably claiming through or under Landlord,
subject to the terms hereof and any mortgage or deed of trust to which this
Lease shall be subordinate.
ARTICLE XIX
UTILITIES
SECTION 19.1. UTILITIES. Tenant agrees to connect to and use the utilities
(including electricity, water, gas, cooling and/or heating system, telephone and
any other utility) supplied to the Leased Premises in accordance with the
criteria set forth in the Exhibits attached to this Lease, Landlord's schedule
of mechanical and electrical design criteria, Landlord's rules and regulations,
and the rules and regulations of the utility companies supplying the service.
Tenant shall be solely responsible for and promptly pay all costs and charges,
including installation thereof where applicable, for all water, gas, cooling,
heat, electricity, sewer and other utilities provided or used in or at the
Leased Premises, commencing with the Delivery of Possession Date and continuing
throughout the Term of this Lease. Landlord, either directly or through an agent
or designee, may elect to supply any of the utilities used upon or furnished to
the Leased Premises. If Landlord, either directly or through its designee, shall
elect to supply any of the utilities used upon or furnished to the Leased
Premises, Tenant agrees to pay as additional rent a per square foot charge based
on Tenant's estimated usage, as reflected on a monthly invoice to be provided by
Landlord or its designee; provided, however, in no event shall Tenant's total
charges for utilities provided by Landlord exceed what Tenant would be charged
by the local utility company if it were billed directly by such utility as a
direct retail customer. Landlord and its designee shall not be liable to Tenant
for any loss, damage or expense which Tenant may sustain if the utilities, or
the quality or character of utilities used upon or furnished to the Leased
Premises are no longer available or suitable for Tenant's requirements, or if
the supply of any such utility ceases or is interrupted as a result of any cause
(except as otherwise provided for herein) and no such change, interruption or
cessation of service shall constitute an eviction of Tenant. Any furnishing by
Landlord or its designee of light, cooling and/or heat or power shall be
conditioned upon the availability of adequate energy sources. Landlord or its
designee shall have the right to reduce heat, lighting and air conditioning
within the Shopping Center, including, without limitation, the Leased Premises
and the common areas, as required by any mandatory or voluntary fuel or energy
saving allocation, or any similar statute, regulation, order or program.
Notwithstanding the foregoing, in the event that any foregoing utility service
is interrupted for three (3) consecutive working days solely as a result of any
of Landlord's or any of Landlord's agents' wilful acts of misconduct or
negligence, and Tenant is unable to operate its business within the Leased
Premises as a result thereof, then Landlord shall, after written notice from
Tenant to Landlord concerning such interruption, abate Minimum Rent on a
day-to-day basis if and until such time as said utility services are restored.
SECTION 19.2. ELECTRICITY, TELEPHONE AND GAS. All telephone, electric and
gas (with gas being available only to food service tenants) utility required by
Tenant for the Leased Premises shall
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(if available) be obtained by Tenant in accordance with Exhibit D and shall be
installed by the appropriate company or utility. All charges for such utility
service (including the installation thereof) shall be paid by Tenant directly to
the company or utility providing any such service, as and when they become due
and payable.
SECTION 19.3. TRASH AND GARBAGE REMOVAL. Tenant shall be solely responsible
for trash and garbage removal from the Leased Premises including the placing of
all trash and garbage in containers provided by Landlord or Landlord's
contractor for such purpose. In the event Landlord, either directly or through
an agent or designee, elects to furnish such service to the tenants in the
Shopping Center, Tenant agrees to use only the service provided by Landlord or
its designee and to pay for such service (including both the cost of leasing
containers and the cost of removal) monthly, as additional rent, in accordance
with the uniform schedule of charges to be established by Landlord. In no event
shall Tenant be obligated to pay Landlord or its designee more for such trash
and garbage removal service than the prevailing competitive rates of reputable
independent trash removal contractors for service similar to that provided by
Landlord.
SECTION 19.4. WATER AND SEWER. The cost of water and sanitary sewer for
usage in the Shopping Center shall be included in Common Area Maintenance
Expenses, except for food service tenants which may be billed directly by
Landlord or by the supplier of water and sanitary service and any other tenants
which are billed directly by Landlord or such supplier. Landlord reserves the
right to install a water meter in the Leased Premises at any time or from time
to time to measure Tenant's consumption of water therein and bill Tenant
directly for the cost of such consumption. Tenant shall pay, as additional rent,
the amount of each bill within fifteen (15) days after such bill is rendered.
SECTION 19.5 GREASE INTERCEPTORS. Landlord, in its commercially reasonable
judgment, will arrange for regular periodic service and cleaning of all grease
interceptors at Tenant's expense. Cost of service and cleaning of grease
interceptors will be allocated among grease interceptors serving food court(s)
and grease interceptors serving individual tenants in proportion to grease trap
size. Tenants served by individual grease traps will pay their pro rata share of
the cost for their grease trap. The share of grease trap service and cleaning
cost apportioned to food court grease traps will be paid by food court tenants
as part of the food court common facilities expenses.
ARTICLE XX
MISCELLANEOUS
SECTION 20.1. ENTIRE AGREEMENT. This Lease together with the Addendum and
the Exhibits, attached hereto and incorporated herein contains the entire
agreement between the parties hereto and there are no promises, agreements,
conditions, undertakings, or warranties, or representations, oral or written,
express or implied, between them other than as herein set forth. No change or
modification of this Lease or of any of the provisions hereof shall be valid or
effective unless the same is in writing and signed by the parties hereto. No
alleged or contended waiver of any of the provisions of this Lease shall be
valid or effective unless in writing signed by the party against whom it is
sought to be enforced.
SECTION 20.2. NOTICES. No notice or other communication given under this
Lease shall be effective unless the same is in writing and is delivered in
person or mailed by registered or certified mail, return receipt requested,
first class, postage prepaid, or delivered by Federal Express or a comparably
reliable national air courier service (i.e. one which delivers service in at
least 48 states) provided that any such courier service provides written
evidence of delivery. Any such notice or communication shall be addressed:
(a) If to Landlord, at 1300 Wilson Boulevard, Suite 400, Arlington,
Virginia 22209, Attention: General Counsel, or to such other address as Landlord
shall designate by giving notice thereof to Tenant, with a copy for
informational purposes only to the Mall Manager of the Retail Development.
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(b) If to Tenant, at the address set forth for Tenant on page 1 of this
Lease or at the Leased Premises, or such other address as Tenant shall
designate by giving notice thereof to Landlord, with a courtesy copy but not
required for effective notice to: Paul, Hastings, Janofsky & Walker LLP, 555
South Flower Street, 23rd Floor, Los Angeles, California 90071, Attn: Rick S.
Kirkbride, Esquire.
The date of service of any notice or other communication given by mail shall be
three (3) days after the date on which such notice is deposited in the U.S.
mails. The date of service of any notice given by courier service (as described
above) shall be one (1) day after deposit with such courier service.
SECTION 20.3. GOVERNING LAW. It is the intent of the parties hereto that
all questions with respect to the construction of this Lease and the rights and
the liabilities of the parties hereto shall be determined in accordance with
the laws of the jurisdiction in which the Leased Premises is located and that
all disputes arising hereunder shall be heard and decided in the local
jurisdiction where the Leased Premises is located.
SECTION 20.4. SUCCESSORS. All rights and liabilities herein given to, or
imposed upon, the respective parties hereto shall extend to and bind the
several respective heirs, executors, administrators, successors, and assigns of
the said parties; and if there shall be more than one Tenant, or more than one
person or entity acting collectively as Tenant, they shall all be bound jointly
and severally by the terms, covenants and agreements herein. Any restriction on
or requirement imposed upon Tenant hereunder shall be deemed to extend to
Tenant's Guarantor, Tenant's sublessees, Tenant's assignees and Tenant's
invitees, and it shall be Tenant's obligation to cause the foregoing persons to
comply with such restrictions or requirements. No rights, however, shall inure
to the benefit of any assignee or other transferee of Tenant, and no rights or
benefits shall be conferred upon any such assignee or transferee by reason of
this Section 20.4, unless such rights or benefits shall be expressly otherwise
set forth in this Lease.
SECTION 20.5. LIABILITY OF LANDLORD. Neither Landlord, Landlord's
beneficiaries, any persons or entities comprising Landlord, nor any successor
in interest to Landlord (or to such persons or entities) shall have any
personal liability for any failure by Landlord to perform any term, covenant or
condition of this Lease. If Landlord shall fail to perform any covenant, term
or condition of this Lease upon Landlord's part to be performed, and if as a
consequence of such default Tenant shall recover a money judgment against
Landlord, such judgment shall be satisfied only out of the proceeds of sale
received upon execution of such judgment and levied thereon against the right,
title and interest of Landlord in the Shopping Center and out of rents or other
income from such property receivable by Landlord, or out of the consideration
received by Landlord from the sale or other disposition of all or any part of
Landlord's right, title and interest in the Shopping Center, subject,
nevertheless, to the rights of Landlord's mortgagee, and neither Landlord nor
any of the co-partners comprising the partnership which is Landlord herein
shall be liable for any deficiency. The foregoing limitation of liability shall
be noted in any judgment secured against Landlord and in the judgment index.
SECTION 20.6. BROKERS. Tenant warrants and represents that there was no
broker or agent other than Blatteis Realty Company, instrumental in
consummating this Lease. Tenant agrees to indemnify and hold Landlord harmless
against any claims for brokerage or other commissions arising by reason of a
breach by Tenant of this representation and warranty. Landlord warrants and
represents that there was no broker or agent, acting on its behalf,
instrumental in consummating this Lease. Landlord agrees to indemnify and hold
Tenant harmless against any claims for brokerage or other commissions arising
by reason of a breach by Landlord of this representation and warranty.
SECTION 20.7. TRANSFER BY LANDLORD. Landlord hereunder shall have the
right to freely assign this Lease without notice to or the consent of Tenant.
SECTION 20.8. NO PARTNERSHIP. Notwithstanding the fact that a portion of
the Rent reserved hereunder may be a percentage of Tenant's Gross Sales, and
notwithstanding anything else to the contrary, Landlord shall not be deemed to
be a partner of Tenant or a joint venturer with Tenant.
SECTION 20.9. WAIVER OF COUNTERCLAIMS. Tenant shall not impose any
counterclaim or counterclaims (other than compulsory counterclaims) in a
summary proceeding or other action based
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on termination or holdover, it being the intent of the parties hereto that
Tenant be strictly limited in such instance to bringing a separate action in the
court of appropriate jurisdiction. The foregoing waiver is a material inducement
to Landlord making, executing and delivering this Lease and Tenant's waiver of
its right to counterclaim in any summary proceeding or other action based on
termination or holdover is done so knowingly, intelligently and voluntarily.
SECTION 20.10. WAIVER OF JURY TRIAL. [INTENTIONALLY DELETED].
SECTION 20.11. SEVERABILITY. If any provision of this Lease or the
application thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and be enforced to the fullest extent permitted by
law.
SECTION 20.12. NO WAIVER. No failure by Landlord to insist upon the strict
performance of any term, covenant, agreement, provision, condition or limitation
of this Lease to be kept, observed or performed by Tenant, and no failure by
Landlord to exercise any right or remedy available upon a breach of any such
term, covenant, agreement, provision, condition or limitation of this Lease,
shall constitute a waiver of any such breach or of any such term, covenant,
agreement, provision, condition or limitation.
SECTION 20.13. CONSUMER PRICE INDEX. As used herein, "Consumer Price Index"
or "Index" shall mean the Consumer Price Index for All Urban Consumers (1982-84
= 100), U.S. City Average, All Items, published by the United States Department
of Labor, Bureau of Labor Statistics (or such comparable index as may be
utilized in substitution for or as the successor to the stated Index). If such
Index is not published by the Bureau of Labor Statistics or by another similar
governmental agency at any time during the Term of this Lease, then the most
closely comparable statistics on the purchasing power of the consumer dollar as
published by a responsible financial authority and selected by Landlord shall be
utilized in lieu of such Index.
SECTION 20.14. INTEREST. Any amount due from Tenant to Landlord herein
which is not paid when due shall bear interest at a rate per annum equal to the
Federal Reserve Bank discount rate as published in the [***] day of the month
preceding the date upon which the obligation is incurred (or the next business
day thereafter if the [***] is not a weekday) plus [***] unless otherwise
specifically provided herein, but the payment of such interest shall not excuse
or cure any default by Tenant under this Lease. In no event shall any interest
calculated hereunder be at a rate which is higher than the maximum rate which is
allowed under the usury laws of the State, which maximum rate of interest shall
be substituted for the rate in excess thereof, if any, computed pursuant to this
Section 20.14.
SECTION 20.15. EXCAVATION. If an excavation shall be made upon land
adjacent to the Leased Premises, or shall be authorized to be made, Tenant shall
afford to the person causing or authorized to cause such excavation, license to
enter upon the Leased Premises for the purpose of doing such work as said person
shall deem necessary to preserve the wall or the building of which the Leased
Premises form a part from injury or damage and to support the same by proper
foundation, without any claim for damages or indemnity from Landlord, or
diminution or abatement of Rent.
Notwithstanding anything contained in this Lease to the contrary, if such
excavation work prevents Tenant from operating its business within the Leased
Premises for three (3) or more consecutive days, Landlord shall after three (3)
days' written notice from Tenant to Landlord, abate Minimum Rent after such
three (3) days of disruption on a day-to-day basis until Tenant is able to
operate its business in the Leased Premises.
SECTION 20.16. RULES AND REGULATIONS. Tenant agrees to comply with and
observe all reasonable rules and regulations established by Landlord for the
Shopping Center from time to time. Tenant's failure to keep and observe such
rules and regulations shall constitute a default pursuant to the terms of this
Lease in the manner as if the same were contained herein as covenants, which
shall carry with it the same consequences under Article XIV hereof as Tenant's
failure to pay rent.
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SECTION 20.17. FINANCIAL STATEMENTS. Upon Landlord's written request from
time to time, but not more than once per Lease Year, Tenant shall, within thirty
(30) days after Landlord's request therefor, furnish Landlord financial
statements outlining Tenant's then current financial condition and shall furnish
financial statements outlining the current financial condition of any Guarantor
of this Lease. Landlord shall maintain all financial information provided in a
confidential manner; provided, however, that Landlord may disclose such
financial statements to Landlord's mortgagees or prospective mortgagees or
purchasers.
SECTION 20.18. GENERAL RULES OF CONSTRUCTION. (a) This Lease may be
executed in several counterparts and the counterparts shall constitute one and
the same instrument. (b) Landlord may act under this Lease by its attorney or
agent. (c) Wherever a requirement is imposed on Tenant hereunder, Tenant shall
be required to perform such requirement at its sole cost and expense unless it
is specifically otherwise provided herein. (d)(i) Wherever appropriate herein,
the singular includes the plural and the plural includes the singular; (ii)
whenever the word "including" is used herein, it shall be deemed to mean
"including, but not limited to"; and (iii) the words "re-enter" and "re-entry"
as used herein shall not be restricted to their technical legal meaning. (e)
Anything in this Lease to the contrary notwithstanding: (i) any provision hereof
which permits or requires a party to take any particular action shall be deemed
to permit or require, as the case may be, such party to cause such action to be
taken; and (ii) any provision hereof which requires any party not to take any
particular action shall be deemed to require such party to prevent such action
to be taken by any person or by operation of law.
SECTION 20.19. RECORDING. Neither this Lease nor any memorandum hereof may
be recorded without the express written consent of Landlord.
SECTION 20.20. EFFECTIVE DATE. For all purposes hereof, the "Effective
Date" of this Lease shall be the date upon which this Lease shall have been
executed by both parties and physically delivered by Landlord to Tenant or its
attorney. Prior to the Effective Date, neither this Lease nor anything hereunder
contained shall be legally binding on either Landlord or Tenant, and the
submission of this Lease by Landlord to Tenant prior to such Effective Date for
examination or consideration by Tenant or discussion between Landlord and Tenant
shall not constitute a reservation of or option for the Leased Premises or
create any legal obligation or liability whatsoever on Landlord.
SECTION 20.21. HEADINGS. The captions, section numbers, article numbers and
index appearing in this Lease are inserted only as a matter of convenience and
in no way define, limit, construe, or describe the scope of intent of such
sections or articles of this Lease nor in any way affect this Lease.
SECTION 20.22. MANAGING AGENT. Landlord has advised Tenant that it has
appointed MillsServices Corp., a Delaware corporation as managing agent of the
Retail Development (said managing agent and any successor or substitute managing
agent is hereinafter referred to as "Managing Agent"). Tenant shall, until
otherwise notified by Landlord, make all payments of Rent required to be made
pursuant to this Lease to the Managing Agent payable to Landlord and direct all
notices, inquires or other communications to the Managing Agent, 1300 Wilson
Boulevard, Suite 400, Arlington, Virginia 22209.
[signatures appear on next page]
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IN WITNESS WHEREOF, Landlord and Tenant have signed this Lease as of the day
and year first above written.
WITNESS: LANDLORD:
OPRY MILLS LIMITED PARTNERSHIP, a
Delaware limited partnership
By: Opry Mills, L.L.C., a Delaware
limited liability company
Its: General Partner
By: The Mills Limited Partnership, a
Delaware limited partnership
Its: Manager
By: The Mills Corporation, a Delaware
corporation
Its: General Partner
By: /s/ [ILLEGIBLE] 8/23/99 By: /s/ Judith Berson
--------------------------------- ---------------------------------
By: /s/ [ILLEGIBLE] Judith Berson
--------------------------------- Executive Vice President
WITNESS/ATTEST: TENANT:
SILICON ENTERTAINMENT, a California
corporation
By: By: /s/ Christopher U. Morse
--------------------------------- ---------------------------------
By: Name: Christopher U. Morse
--------------------------------- ---------------------------------
Its: V.P.
By: By: /s/ David S. Morse
--------------------------------- ---------------------------------
By: Name: David S. Morse
--------------------------------- ---------------------------------
Its: CEO
Tenant's Corporate Seal:
49
54
ACKNOWLEDGMENT OF LANDLORD
COMMONWEALTH OF VIRGINIA )
) ss.
COUNTY OF ARLINGTON )
On this 23rd day of August, 1999, before me personally appeared Judith
Berson, to me known to be the person who executed the foregoing Lease and
acknowledged before me that she was duly authorized and did execute same on
behalf of OPRY MILLS LIMITED PARTNERSHIP, a Delaware limited partnership.
ELAINE SHIRVY CHIN /s/ Elaine Shirvy Chin
Notary Public, Commonwealth of Virginia -------------------------------
Arlington County Notary Public
My Commission Expires My Commission Expires
November 30, 2003 November 30, 2003
[Notarial Seal]
ACKNOWLEDGMENT OF CORPORATE TENANT
STATE OF CALIFORNIA )
) ss.
CITY/COUNTY OF SANTA CLARA )
On June 30, 1999, before me Laurie H. Shermer a Notary Public in and for
said state aforesaid, personally appeared Chris Morse, as V. President and David
Morse, as CEO of SILICON ENTERTAINMENT, INC., a California corporation,
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.
/s/ Laurie H. Shermer
------------------------------------
Notary Public, Santa Clara County,
My Commission expires: 9/19/2001
[Notarial Seal]
LAURIE H. SHERMER
Commission #1155999
Notary Public - California
Santa Clara County
My Comm. Expires Sep 19, 2001
55
ADDENDUM, ATTACHED TO AND MADE A PART OF LEASE DATED AUGUST 23, 1999, BY AND
BETWEEN OPRY MILLS LIMITED PARTNERSHIP, A DELAWARE LIMITED PARTNERSHIP, AS
"LANDLORD," AND SILICON ENTERTAINMENT, INC., A CALIFORNIA CORPORATION, AS
"TENANT."
- -----------------------------------------------------------------------------
The Lease is hereby modified and supplemented as set forth herein. Any
conflict between a term, condition or provision contained in this Addendum with
any term, condition or provision contained in the printed Lease shall be
resolved in favor of this Addendum.
Add as a new Section 20.23:
"SECTION 20.23. LEASE CONTINGENCIES. This Lease is contingent and conditioned
upon the securing by Landlord of financing for the Retail Development on terms
and conditions, and at a rate of interest and in a loan amount, satisfactory to
Landlord in its sole and absolute discretion (said condition being referred to
as the "Lease Contingency"). In the event the foregoing Lease Contingency has
not been satisfied on or before October 31, 1999, then Landlord shall thereafter
have the right to terminate and cancel this Lease upon thirty (30) days prior
written notice to Tenant. If the Lease Contingency shall be satisfied prior to
the expiration of the aforesaid thirty (30) day notice period, then the notice
to terminate and cancel shall be voided and this Lease shall remain in full
force and effect. In the event of termination of this Lease as herein provided,
this Lease shall cease and come to an end, Landlord shall reimburse Tenant for
any advance Rent paid and Landlord shall be obligated to pay Tenant its actual
and reasonable costs associated with the Leased Premises, including legal fees
associated with lease negotiations and design and construction costs incurred
prior to the date of notice from Landlord of its intention to terminate this
Lease, and there shall thereupon be no further liability or obligations upon
either party under or with respect to this Lease. Each party will, at the
other's request, execute an instrument in recordable form containing a release
and surrender of all right, title and interest in and to this Lease."
Add as a new Section 20.24:
"SECTION 20.24. GROUND LEASE. Notwithstanding anything else contained in this
Lease, Tenant acknowledges that Landlord's interest in the land upon which the
Shopping Center is to be or has been constructed will be that of a ground
lessee under a ground lease to be entered into between Landlord and the
owner(s) of such land (the "Ground Lease"). Tenant agrees that (i) this Lease
is and shall be subordinate to the Ground Lease, as the same may from time to
time be modified, extended, restated or replaced, (ii) upon any termination of
the Ground Lease, Tenant shall attorn to the ground lessor and recognize said
ground lessor as its lessor under this Lease, and (iii) said ground lessor
shall be named as an additional insured under Tenant's liability insurance
described in Section 8.2 above (provided Tenant has been furnished with the
name of such ground lessor). Landlord represents and warrants that the Ground
Lease will contain (and any restatement or replacement thereof will contain)
provisions pursuant to which the ground lessor irrevocably agrees to recognize
this Lease and Tenant's interest hereunder in the event of any termination of
the Ground Lease (unless such termination is caused by a casualty or
condemnation that also results in a termination of this Lease), so long as
Tenant is not then in default under this Lease beyond any applicable cure
period; provided that, upon such recognition, the ground lessor shall not (i)
have any obligation to Tenant with respect to any portion of the term of this
Lease extending beyond the scheduled expiration date of the Ground Lease (which
shall be no earlier than October 31, 2048); (ii) be liable for the acts or
defaults of any prior landlord (including Landlord); (iii) have any liability
to complete any initial construction of the Leased Premises or to fund any
allowance granted by any prior landlord (including Landlord) with respect
thereto; (iv) be bound by any payments of rent made by Tenant more than thirty
(30) days in advance; or (v) be liable for the return of any security deposit
not actually received by the ground lessor. None of the foregoing shall be
deemed to release the existing Landlord from any liability accruing prior to
the date hereof, nor shall this provision be deemed to extend the existing
Landlord's liability. Landlord shall obtain from the Ground Lessor a
non-disturbance agreement on a commercially reasonable and recordable form in
favor of Tenant on or before the date that is thirty (30) days after the
Effective Date."
56
IN WITNESS WHEREOF, Landlord and Tenant have signed and sealed this Addendum as
of the day and year first above written.
WITNESS: LANDLORD:
OPRY MILLS LIMITED PARTNERSHIP, a
Delaware limited partnership
By: Opry Mills, L.L.C., a Delaware
limited liability company
Its: General Partner
By: The Mills Limited Partnership, a
Delaware limited partnership
Its: Manager
By: The Mills Corporation, a Delaware
corporation
Its: General Partner
8/23/99
By: /s/ [ILLEGIBLE] /s/ Judith Berson
--------------------------------- ---------------------------------
By: /s/ [ILLEGIBLE] By: Judith Berson
--------------------------------- Its: Executive Vice President
WITNESS/ATTEST: TENANT:
SILICON ENTERTAINMENT, INC., a
California corporation
By: By: /s/ Christopher U. Morse
--------------------------------- ---------------------------------
By: Name: Christopher U. Morse
--------------------------------- ---------------------------------
Its: V.P.
---------------------------------
By: By: /s/ David S. Morse
--------------------------------- ---------------------------------
By: Name: David S. Morse
--------------------------------- ---------------------------------
Its: CEO
57
ACKNOWLEDGMENT OF LANDLORD
COMMONWEALTH OF VIRGINIA )
) ss.
COUNTY OF ARLINGTON )
On this 23rd day of August, 1999, before me personally appeared Judith
Berson, to me known to be the person who executed the foregoing Addendum and
acknowledged before me that she was duly authorized and did execute same on
behalf of OPRY MILLS LIMITED PARTNERSHIP, A Delaware limited partnership.
ELAINE SHIRVY CHIN /s/ Elaine Shirvy Chin
Notary Public, Commonwealth of Virginia -------------------------------
Arlington County Notary Public, Commonwealth of
My Commission Expires Virginia
November 30, 2003 My Commission expires:
November 30, 2003
ACKNOWLEDGEMENT OF CORPORATE TENANT
STATE OF CALIFORNIA )
) ss.
CITY/COUNTY OF SANTA CLARA )
On June 30, 1999, before me Laurie H. Shermer a Notary Public in and for
the state aforesaid, personally appeared Chris Morse, as Vice President and
David Morse, as C.E.O. of SILICON ENTERTAINMENT, INC., a California corporation,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person whose name is subscribed to the within instrument and
acknowledged to me that he/she executed the same in his/her authorized capacity,
and that by his/her signature on the instrument, the person, or the entity upon
behalf of which the person acted, executed the instrument.
/s/ Laurie H. Shermer
------------------------------------
Notary Public, Santa Clara County,
My Commission expires: 9/19/2001
[Notarial Seal]
LAURIE H. SHERMER
Commission #1155999
Notary Public - California
Santa Clara County
My Comm. Expires Sep 19, 2001
58
[RELOCATION ZONE MAP]
RELOCATION ZONE
Project: Opry Mills
Exhibit: A
Reference: Opry Mills Lease Plan LP15 dated 5/19/99.
Prepared By: Craig Bennett Assoc./Architects, PC
Tenant: SILICON ENTERTAINMENT, INC., a California corporation
Date: June 9, 1999
TRADE NAME: NASCAR SILICON MOTOR SPEEDWAY
and\or SILICON MOTOR SPEEDWAY
STORE: #429 6,007 SF
File: [ILLEGIBLE]
59
[DISPLAY AREA MAP]
DISPLAY AREA
Project: Opry Mills
Exhibit: A-1
Reference: Opry Mills Lease Plan LP15 dated 5/19/99.
Prepared By: Craig Bennett Assoc./Architects, PC
Tenant: SILICON ENTERTAINMENT, INC., a California corporation
Date: June 9, 1999
TRADE NAME: NASCAR SILICON MOTOR SPEEDWAY
and/or NASCAR MOTOR SPEEDWAY
STORE: #429 6,007 SF
File: [ILLEGIBLE]
60
[DIAGRAM OF LEASABLE AREA]
CALCULATION OF GROSS LEASABLE AREA
EXHIBIT B
8/23/94
61
SPECIALTY TENANT LEASE EXHIBIT
EXHIBIT C
LANDLORD'S WORK -- ROUGH SHELL
Preface
Work to be performed by Landlord in constructing the Leased Premises shall be
limited to those items expressly set forth below as Landlord's Work in this
Exhibit C ("Landlord's Work") and, except as otherwise provided in Exhibit C or
Exhibit D, such work shall be performed at Landlord's sole cost and expense.
All Landlord's Work shall be performed by Landlord in a first class and
workmanlike manner using only new and first class materials in accordance with
all applicable laws, rules, regulations, codes and ordinances. All other items
of work, including the purchase and installation of all materials and equipment
necessary for Tenant's use of the Leased Premises shall be provided by Tenant
at Tenant's sole expense and shall include but shall not be limited to, those
items set forth in Exhibit D, Tenant's Work.
The building in which the Leased Premises are a part shall be designed by the
architect and engineer retained by the Landlord to design and oversee
construction of the Retail Development (herein sometimes referred to as "The
Project"). Construction shall meet the requirements for a fully sprinklered
building in accordance with the fire protection and building code program of
the local jurisdictional authority as well as the Development Agreement and
Master Declaration, if applicable.
Landlord shall provide Tenant with a Tenant with a Tenant Handbook (Tenant
Design Criteria) hereinafter referred to as "Tenant Handbook".
Except as otherwise provided below, Landlord shall initially construct the
following:
A. BUILDING SHELL WORK WITHIN AND AROUND THE LEASED PREMISES
1. Shell. Landlord shall construct the building shell (building structure,
insulated roof and exterior walls) in which the Leased Premises are to be
located. It is expressly agreed and understood that the Leased Premises shall
constitute a portion of a covered mall building.
2. Exterior Appurtenances. Public entrance features, canopies and screen
walls at the exterior of the building structure shall be provided by Landlord
in locations and of a design and in materials deemed appropriate by Landlord.
3. Outside Walls. If Lease Premises abuts an exterior wall, such wall
shall be unfinished on the interior.
4. Demising Partitions. Landlord shall install metal wall studs, 16" on
center, between all leased premises. Where rated walls are required between
Leased Premises and service/exit corridors Landlord shall install 5/8" fire
code gypsum board to the roof deck on both Landlord and Tenant sides, along
demising partitions separating Tenant from service/exit corridors.
5. Demising Strip. Where Landlord desires, a vertical demising strip may
be located at the storefront line between stores. The center line and/or back
side of said strip may or may not precisely coincide with the lease line
defining the Leased Premises.
6. Exterior Service/Exit Door. Where Leased Premises abuts an outside
wall, Landlord shall install one (1) 3'0 X 7'0" x 1-3/4" (prime coated only on
inside face) hollow
Exhibit C, Rough Shell 5/1/98
Page 1
62
metal door and frame (with 1-1/2 pair butts and temporary lockset) as
required by code or Landlord's insurance carrier. The outside face of door
will be finished by Landlord to match adjacent construction and may not be
modified by Tenant. The location of such door (if any) will be indicated
on the Lease Outline Drawing. Tenant's store name and space number will
be applied adjacent to the door by Landlord per Landlord's Architect's
specifications in accordance with Exhibit D.
7. Interior Service/Exit Door. Where the Leased Premises abuts an interior
exit/service corridor, Landlord shall install one (1) 3'0" x 7'0" x 1-3/4"
hollow metal door and frame (with 1-1/2 pair butts and temporary lockset),
as required by code or Landlord's insurance carrier. The hollow metal door
and frame will be finish painted on the corridor side with a color
selected by Landlord. Tenant's store name and space number will be applied
adjacent to the door by Landlord, per Landlord's Architect's
specifications in accordance with Exhibit D.
8. Floor Slab. Landlord shall furnish a 4" thick slab on-grade with smooth
trowelled concrete surface. The floor elevation may be 3/4" below finished
floor elevation in the mall areas adjacent to the Leased Premises. The
slab will be designed to support a load of not less than 125 pounds per
square foot.
9. Storefronts and Sign Bands. The configuration of the storefront lease
line, as established by Landlord, shall be the line beyond which no
element of the storefront may extend and may not necessarily follow the
line of construction. The storefront furnished by Tenant shall include one
entry complete with security closure.
The width of the security closure will be as follows:
Storefront width up to 25' - 8' wide
Storefront width up to 26' - 35' - 10' wide
Storefront width 36' and up -12' wide
B. FINISH WORK OUTSIDE THE LEASED PREMISES
1. Exterior Areas. Landlord shall provide parking areas, access roads,
delivery areas, drainage systems, walks, ramps, lighting, landscaping and
planting, striping, signage, and other facilities and improvements as
determined by Landlord in the exterior common area.
2. Interior Areas. Landlord shall provide enclosed air conditioned and
lighted malls, courts and entry-ways, lighted delivery areas, service and
exit corridors, ramps, public restrooms, meter and valve rooms and all
other areas, facilities, and buildings used in the maintenance and
operation of The Project as determined by Landlord.
C. BUILDING UTILITY SYSTEMS SERVING THE LEASED PREMISES
1. HVAC System. Landlord will provide either 1) a central condenser water
distribution system to provide cooling water for air conditioning unit(s)
provided by Tenant in the Leased Premises in accordance with the Tenant
Handbook referenced in Exhibit D. Landlord's portion of the condenser
water system shall terminate at valved and capped outlets within the
Leased Premises as indicated on the Lease Outline Drawing or 2) a roof-top
package unit system, providing at least 35 tons of air conditioning. In
this case Landlord to install roof opening and curb at Tenant's expense
for roof-top air conditioning equipment to be furnished and installed by
Tenant in accordance with Tenant Handbook from Landlord's HVAC inventory.
2. Electrical System. Landlord shall bring primary electrical service to the
Retail Development. An empty secondary electrical distribution conduit
only shall be extended by Landlord from the electric room to a point
within the Leased Premises
Exhibit C, Rough Shell 5/1/98
Page 2
63
as indicated on the Lease Outline Drawing. Electrical service
furnished by Landlord shall consist of 277/480 volt 3 phase four wire
service 400 amp service. Tenant to complete electrical system in
accordance with Exhibit D and the Tenant Handbook.
3. Plumbing System. If required by code, Landlord shall provide 3/4"
valved and capped domestic cold water line, a 1" condensate drain
line, if applicable, and a 4" sanitary sewer line at the rear of the
Leased Premises, as indicated on the Lease Outline Drawing. Tenant
shall connect to Landlord's plumbing system and extend service within
the Leased Premises according to Tenant's approved plans and in
accordance with requirements of Exhibit D and the Tenant Handbook.
4. Sprinkler System. Landlord shall install a wet sprinkler fire
protection system in the common areas and within the Leased Premises
including, but not limited to, risers, bulk mains, cross mains, branch
lines and upturned sprinkler heads at the bar joists. Within the
Leased Premises the sprinkler system provided by Landlord shall have
one (1) head per 100 square feet. The quantity of heads provided by
Landlord will be the minimum required by code or other governing
agencies. The mains and cross mains will be designed to accept
additional heads up to a maximum coverage of one (1) head per 80
square feet of Leased Premises. Additional or relocated heads shall be
installed or relocated by Landlord's designated sprinkler contractor
as required by Tenant's layout and as described in Exhibit D and the
Tenant Handbook. Tenant shall pay Landlord for the cost thereof in
accordance with Exhibit D.
5. Telephone System. Landlord shall at Tenant's expense arrange for
telephone intrabuilding cable to be brought to a point within or
adjacent to the Leased Premises as indicated on the Lease Outline
Drawing.
6. Mechanical Smoke Venting. Landlord's building has been designed to
provide smoke venting via mechanical fans, open ceilings and no
separation above 12'-0" between Tenant premises. Any Tenant required
by Code or the authority having jurisdiction to provide separate
smoke venting, or whose tenant space design interferes with normal
functioning of Landlord's smoke venting system, must install a
complete smoke venting system to meet code in accordance with Exhibit
D and the Tenant Handbook.
D. GENERAL PROVISIONS
1. Minor changes in any plans or specifications covering Landlord's Work
which may be necessary during design and construction of The Project
or affecting the Leased Premises shall not in any way invalidate the
terms of the Lease or this Exhibit C nor shall it require the Landlord
to provide any work not described herein. Notwithstanding the
foregoing, any changes which would materially impact Tenant's Store
Design and Working Drawings must be made at least sixty (60) days
prior to the Delivery of Possession date.
2. Landlord shall have the right to specify or change the location,
either before or after construction, of all utility lines, condenser
water lines, condensate drain lines, drains, sprinkler mains and
valves, and such other facilities within the Leased Premises as are
necessary by engineering design and/or Code requirements. These items
as described above shall be located so as not to materially interfere
with Tenant's use of the Leased Premises. Landlord shall have the
right to relocate and specify the location of mechanical and other
equipment on the roof over the Leased Premises. To the extent that
such utility lines, condenser water lines, condensate drain lines,
drains, sprinkler mains and valves and other facilities within the
Leased Premises are relocated, Landlord shall be responsible for
paying for any changes in either Tenant's plans or connecting Tenant
installed improvements to such relocated facilities.
Exhibit C, Rough Shell 5/1/98
Page 3
64
3.
4. Landlord shall have the right to perform, at Tenant's expense, any of
Tenant's work which Landlord determines in its sole discretion be
performed: (a) immediately and/or on an emergency basis for the best
interest of The Project, (b) to the extent required for Landlord's
compliance with all applicable building codes, or, (c) to the extent
necessary to obtain any Certificate of Occupancy required by the
Landlord or any other tenant in The Project. Except in the event of an
emergency, Landlord shall give Tenant forty-eight (48) hours notice of
its intention to undertake such work and Landlord shall refrain from
undertaking such work if Tenant commences to cure during such
forty-eight (48) hour period.
Exhibit C, Rough Shell 5/1/98
Page 4
65
SPECIALTY TENANT LEASE EXHIBIT
EXHIBIT D
TENANT'S WORK -- ROUGH SHELL
PREFACE
This Exhibit "D" is intended to describe the obligation of the Tenant in the
design and construction of the Leased Premises. Landlord's Work will be limited
to the work described in Exhibit C. Any part of Tenant's Work which is
accomplished by Landlord for Tenant pursuant to the terms of this Exhibit D will
be accomplished by Landlord at Tenant's expense. The work of Tenant described in
Exhibit D is intended to complete the Leased Premises in accordance with
Tenant's drawings as approved in writing by Landlord to a finished condition
ready for the conduct of business therein. All finished installations will be
deemed incomplete until approved by Landlord. Tenant's Work shall conform to the
procedures, schedules and reimbursement requirements set forth in Sections 2
and 3 of this Exhibit. Exhibit D shall govern over any inconsistencies with
Exhibit C.
Landlord and Tenant have a common interest in opening the Leased Premises on the
Grand Opening Date. To this end, Landlord will coordinate its work with
Tenant's work insofar as the schedule for such Grand Opening Date and prudent
construction practice allows and will assign one or more tenant coordinators to
function as liaison between tenants and Landlord. Further to this end, Tenant
and Tenant's contractors agree to abide by Landlord's Construction Rules and
Regulations which may be issued from time to time. In order to ensure that the
Tenant's store interior and signage design are orderly and aesthetically
coordinated with Landlord's building, and to ensure that Landlord's storefront
and signage requirements are understood by Tenant, its designers, engineers,
contractors, and other representatives, Landlord has drafted and Tenant shall
follow the architectural and signage criteria established in the Tenant Handbook
(Tenant Design Criteria) hereinafter referred to as "Tenant Handbook". In order
to ensure that the Tenant's HVAC, plumbing and electrical systems are compatible
and coordinated with the Landlord's building, and to ensure that the Landlord's
HVAC, plumbing and electrical requirements are understood by Tenant, its
designers, engineers, contractors, and other representatives, Landlord has
drafted and Tenant shall follow the mechanical and electrical criteria
established in the Tenant Handbook.
All Tenant construction shall be in accordance with the requirements of all
applicable codes, ordinances, rules and regulations of all authorities having
jurisdiction over the work including all requirements of the Landlord's
insurance carrier.
Construction shall conform to the requirements for a fully sprinklered building
in accordance with the fire protection and building code program of the local
jurisdictional authority as well as the Development Agreement and the Master
Declaration if applicable. Tenant shall secure all necessary permits including,
but not limited to, occupancy and health department permits from the
jurisdictional authorities in sufficient time to allow Tenant to open the Leased
Premises on the Grand Opening Date. Tenant shall furnish to Landlord upon
receipt, copies of all building permit applications, statements, amendments and
the like, and all permits, inspection reports, certificates, and other documents
as required by authorities having jurisdiction of The Project.
Tenant, at its sole cost and expense, shall perform all work other than work to
be performed by Landlord as set forth in Exhibit C, required to complete the
Leased Premises to a finished condition ready for the conduct of business
therein.
All of Tenant's work within the Leased Premises performed pursuant to this
Section 1 shall, for the purpose of this Lease to which this Exhibit is
attached, be deemed to be improvements made to the Leased Premises by Tenant at
Tenant's expense.
Exhibit D, Rough Shell 5/1/98
Page 1
66
SECTION 1-TENANT CONSTRUCTION WORK WITHIN THE PREMISES
A. GENERAL CRITERIA
The criteria and outline specifications set forth herein represent minimum
standards for the design, construction, and finish of the Leased Premises by
Tenant.
1. JURISDICTIONS AND CODES. The Project is being developed in and under the
jurisdictions of the State, County and City in which The Project is
located. All design and construction work shall comply with all
applicable statutes, ordinances, regulations, laws and codes and the
requirements pertaining to service and utilities furnished by utility
companies, all applicable state, county, and local statutes and
ordinances, and OSHA regulations.
2. PERMITS AND APPROVAL. Prior to the commencement of construction, all
building and other permits shall be obtained and posted in a prominent
place within the Leased Premises. Landlord's written approval shall be
obtained by Tenant prior to the undertaking of any construction work
which deviates materially from Tenant's approved Store Working Drawings
and Specifications, or which modifies whatsoever Landlord's building
shell or utilities, or any work not explicitly shown on said Store
Working Drawings and Specifications. Landlord's approval of the
foregoing shall not constitute the assumption of any responsibility by
Landlord for the accuracy or sufficiency thereof, and Tenant shall be
solely responsible. To the extent and material changes, changes which
modify the building shell or utility or new work are required, Landlord
shall not unreasonably withhold its approval of the same.
3. FLOOR LOADS. The slab on-grade has been designed to carry a total load
(dead and live) of 125 pounds per square foot. Any loading imposed by
any of Tenant's Work, either on a temporary or permanent basis, shall
not exceed 125 lbs./SF ("Allowable Load").
4. STANDARD PROJECT DETAILS. Standard Project Details, as issued by
Landlord's Architect from time and time and as they pertain to Tenant's
Work, shall govern with respect to Tenant's Work. Such details shall be
incorporated into the Tenant's Store Working Drawings and Specifications
for the Leased Premises.
5. MATERIALS. Only new, first-class materials shall be used in the
construction of the Leased Premises. Used, first-class materials for
interior architectural facades and fixtures may be used provided such
materials are noted on the Tenant's plans and approved by Landlord
through field inspection.
6. FIELD CONDITIONS. From time to time, the Tenant is obligated to verify
conditions pertaining to the Leased Premises prior to and after
commencement of construction of its Leased Premises. Tenant shall
coordinate its work with the work of Landlord, other tenants, and with
existing conditions above, below and adjacent to the Leased Premises.
Tenant shall make changes as required to accommodate such work or
conditions.
7. TENANT HANDBOOK. Landlord shall provide Tenant with a Tenant Handbook
("Tenant Handbook"), and Tenant shall comply with all design criteria,
procedures for drawings, specifications, and construction, and other
rules, regulations and provisions therein. To the extent, if at all,
that the Tenant Handbook may conflict with the provisions of the Exhibit
D, the provisions of the Tenant Handbook shall govern.
Exhibit D, Rough Shell 5/1/98
Page 2
67
B. ARCHITECTURAL FINISHES
1. FLOORS. Tenant finish floor covering materials must be selected and
adapted in thickness to correspond in elevation exactly with the level of the
finished mall floor, which may be approximately 3/4" above the concrete floor of
the Leased Premises at the Lease Line. Quality floor materials, such as
carpeting, glazed or unglazed tile, wood parquet, or marble shall be used in the
sales area of the Leased Premises. All flooring finish materials are subject to
Landlord's approval.
2. STOREFRONT. Tenant's storefront shall be designed and constructed by
Landlord as provided in Exhibit C and as described in the Tenant Handbook.
3. INTERIOR PARTITIONS. All interior partitions by Tenant within the
Leased Premises shall be metal stud construction and shall have 5/8" gypsum
board finish on all sides with taped and spackled joints. Any combustible
materials applied to partitions shall meet all flamespread and smoke generation
requirements of jurisdictional authorities and receive a U.L. labeled fire
retardant coating if required by Code. Walls dividing the Leased Premises from
service and exit corridors, or other rated enclosures, shall receive, on
Tenant's side, sufficient layers of drywall to complete the necessary rating.
Landlord shall install service and exit corridor drywall at Tenant's expense.
Any Tenant penetrations of rated partitions shall be specifically approved in
writing by Landlord and governing authorities as a portion of the permitting
process.
4. DEMISING PARTITIONS. Demising partitions are not load bearing and
Tenant may not hang fixtures from them. Should Tenant require structure and/or
backing to accommodate the loading of Tenant's wall hung fixtures, said request
shall be in writing to Landlord for approval. Additional structure and backing
shall be furnished and installed by Tenant at Tenant's expense. Tenant shall
install drywall, taped and spackled on demising partitions between tenants. No
drywall shall be placed on demising partitions above 12'-0" without Landlord's
specific approval. Above 12'-0" the Tenant may, subject to Landlord's prior
written approval, continue with wire mesh for security purposes if so indicated
on Tenant's construction drawings. The Tenant, upon Landlord's approval, may
also install drywall to a higher level if openings of sufficient size are
provided to assure that the smoke venting system provided by the Landlord
functions as designed -- see Tenant Handbook for specific requirements.
5. EXTERIOR WALLS. Tenant shall install all finishes on the inside
face of exterior walls within Leased Premises.
6. SERVICE AND EXIT CORRIDOR PARTITIONS. Any Tenant penetrations of rated
partitions, and relocations and/or additions to Landlord furnished exit doors,
shall be specifically approved in writing by Landlord and governing authorities
as a portion of the permitting process. Any framing, cutting, patching of the
corridor wall surfaces including the building of vestibules to provide for the
nonimpingement of the door into the corridor traffic way, and other work related
construction shall be coordinated and consistent with Landlord's work, including
but not limited to the provision of 4'-0" high 1/4" masonite board and metal
cornerguards. Walls dividing the Leased Premises from service and exit
corridors, or other related enclosures, shall receive, on Tenant's side,
sufficient layers of drywall to complete the necessary rating. All materials
used in corridor construction shall be fire rated. Any Tenant penetrations of
rated partitions shall be specifically approved in writing by Landlord and
governing authorities as a portion of the permitting process.
7. INTERIOR SERVICE/EXIT CORRIDOR DOORS. If Tenant desires additional
service access to Leased Premises other than what is provided by Landlord in
Exhibit C then Tenant
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shall provide and install a 3'-0" X 7'-0" X 1-3/4" 18 gauge interior hollow
metal door, labeled as required, with a hollow metal 16 gauge frame, and
all hardware, in accordance with governing Codes. Any framing, cutting, and
patching of the corridor wall surfaces including the building of vestibules
to provide for the non-impingement of the door into the corridor traffic
way, and other work related thereto shall be the responsibility of the
Tenant. Hollow metal door and frame are to be finished painted on the
corridor side with a color selected by Landlord. Tenant's store name will
be applied adjacent to the door by Landlord, at Tenant's expense, per
Landlord's Architect's specifications.
8. Door Relocation. The relocation of any exterior Tenant door shall be
performed by Landlord at Tenant's sole expense and must be coordinated with
the structure of Landlord's building.
9. Door Hardware. Tenant shall furnish and install all door locks and exit
devices on all interior service doors, exterior doors, exit corridor doors,
and storefront, using hardware recommended by Landlord in the Tenant
Handbook.
10. Ceiling. Exposed and open grid systems are encouraged. All work related to
ceiling and ceiling treatments, if any, shall be the responsibility of
Tenant. All ceilings and ceiling treatments shall be of non-combustible
material approved by Landlord and shall maintain the degree of openness
required to preserve the operation of the smoke venting system and
sprinkler system in The Project as established by jurisdictional authority
and/or as described in the Tenant Handbook. Tenant's ceiling and ceiling
treatment shall be limited to a ceiling height not less than the code
required minimum nor higher than the maximum heights indicated in the
Tenant Handbook. The structure of Landlord's Building has been designed to
accept a super-imposed loading of three (3) pounds per square foot for the
installation of Tenant's suspended ceiling and equipment. Access (such as
access panels) and other openings shall be provided by Tenant where
Landlord deems necessary.
Tenants providing ceilings with less than the required degree of openness
shall provide smoke venting at Tenant's sole expense, both as required by
jurisdictional authorities and as described in the Tenant Handbook. If
Tenant's interior partitions and ceiling configuration cause the
requirement of additional sprinkler heads, such additional heads shall be
installed by Landlord's designated contractor at Tenant's expense both as
required by jurisdictional authority and Landlord's insurance carrier.
11. Interior Finishes. All finished interior surfaces must be materials
approved by Landlord for appearance. All Tenant fixtures, furniture,
carpeting (including underlayment), upholstery materials, drapery and other
furnishing must comply with flammability of materials and smoke generation
requirements for furniture and furnishings of local jurisdictional
authorities. All wood shall be fire retardant in accordance with code
requirements. All wood in contact with the floor shall be termite
retardant.
12. Finish Hardware. Commercial grade finish hardware, labeled where required,
shall be used throughout. All doors shall have at least one and one-half
(1-1/2) pair butts, wall or floor stops, kick plates, lock sets and
push-pull plates as required. All exit doors shall have hardware as
required by Code.
13. Toilet Room. Tenant shall construct restroom facilities, fixtures, toilet
partitions, and building specialty items such as toilet room mirrors,
dispensers, paper holders and amenities to fully meet the ADA Guidelines
and local codes.
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14. Mezzanines. Mezzanines will not be permitted (other than the
approximately 10' x 4' elevated stand which is part of Tenant's
prototype store design which must be supported from the floor).
15. Layout and Painting of Exposed Mechanical and Electrical Systems. All
Tenant installed ductwork, conduits, pipes and any other mechanical or
electrical equipment exposed to public view from outside the Leased
Premises, shall be laid out and installed in a neat and orderly
configuration. Tenant shall paint the above Tenant improvements with
either a black or a mutually agreed to color and finish if Tenant's
improvements can be seen from Mainstreet (i.e. those portions of the
common area made up of the pedestrian walkways outside of the Leased
Premises) above Tenant's storefront elevation or below the top of the
storefront but visible from Mainstreet.
C. STRUCTURAL
1. Modifications. Any alterations, additions, and/or reinforcements to
the structure of Landlord's building required to accommodate Tenant's
Work, must be designed by a registered structural engineer at Tenant's
expense. Tenant shall leave the structure of Landlord's building as
strong or stronger than original design and with finishes unimpaired.
Tenant's architect shall calculate or have calculated the structural
loads caused by Tenant's improvements and submit those calculations
for written approval by Landlord and Landlord's Architect prior to
Tenant's construction.
2. Loading. All loads individually hung from the structure in excess of
100 pounds shall be specifically approved by Landlord's structural
Engineer for location and method of support. All loads less than 100
pounds that are individually hung from the structure shall be hung in
accordance with the guidelines in the Tenant Handbook.
D. HEATING, VENTILATING AND AIR CONDITIONING
1. Connection to Condenser Water System (if applicable). Not applicable.
2. HVAC System. A complete air conditioning system to suit Tenant's
requirements shall be designed, furnished, installed and maintained by
Tenant in accordance with the requirements of the Tenant Handbook.
Tenant's portion of the HVAC system shall include an air conditioning
unit(s), ducts, insulation, fire dampers, outlets, grilles and
controls to maintain temperatures per Tenant Handbook. If roof-top
units are required, Landlord shall install roof-top curb at Tenant's
expense. All Tenant ductwork shall be internally insulated and Tenant
shall make all connections to Landlord installed systems in a manner
fully satisfactory to Landlord.
3. Toilet Exhaust System. Tenant installed toilet facilities within the
Leased Premises shall include a complete toilet exhaust system
according to Code and the requirements of the Tenant Handbook.
4. Outside Air Connection. Landlord, at Tenant's expense, will provide a
roofjack for Tenant's connection to provide outside air to Tenant's
HVAC system. Tenant shall provide outside air ventilation as required
by Code and the Tenant Handbook. No openings for fans, vents, louvers,
grilles, or other devices shall be installed in any demising
partition, exterior wall, or roof without Landlord's prior written
approval. All roof and/or wall penetrations required for Tenant's
plumbing, mechanical,
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electrical work and any other Landlord approved Tenant work shall be
made by Landlord's designated contractor at Tenant's expense.
5. Smoke Venting. If the authority having jurisdiction requires
individual smoke venting from the Leased Premises, Tenant, at Tenant's
expense, shall provide the complete required smoke system, discharging
vertically through a roof vent at sufficient velocity to carry the
discharge away from any intakes on the roof. Roof vents will be
installed by Landlord's designated contractor at Tenant's expense and
in accordance With the Tenant Handbook.
6. Refrigeration. Tenants may not connect refrigeration equipment to
Landlord's condenser water system. Landlord's condenser water system
will not operate during unoccupied hours. Refer to the Tenant Handbook
for requirements regarding Tenant's refrigeration equipment.
7. Exhaust/Negative Pressure. All exhaust and make up air systems shall
be by Tenant in accordance with Exhibit D and the Tenant Handbook. As
determined by Landlord, all tenants producing odors within their
premises shall be required to install full height partitions and
provide supplemental exhaust to the exterior of the building to keep
the premises at a negative pressure relative to Mainstreet and all
adjacent areas.
E. ELECTRICAL
1. System. Tenant shall design, furnish, install and maintain a complete
electrical distribution system, including but not limited to
conductors to electrical room connected to load side of meter socket,
transformer, distribution panels, circuits, conductors, fixtures and
devices, within the Leased Premises in accordance with the
requirements of the Tenant Handbook. No appurtenances, including but
not limited to light fixtures, antennas, signs, etc., will be affixed
to the exterior walls or roof of Landlord's Building without
Landlord's express written permission.
2. Electrical Construction.
a. Material - All electrical materials shall meet National Electrical
Code Standard, unless a better grade is required by local Code. All
materials shall be new and shall bear evidence of approval by
Underwriter's Laboratory (UL). All conductors shall be copper.
Aluminum conductors will not be allowed.
b. Lighting Fixtures - Recessed fixtures installed in furred spaces shall
be connected by means of flexible conduit and approved fixture wire,
connected to a branch circuit outlet box which is independent of the
fixture.
c. Fluorescent Fixtures - All fixtures shall be provided and installed by
Tenant with switch legs and local switches rated 20 amps at 277 volts.
All fluorescent fixtures shall have internal protection devices.
Fluorescent ballasts shall be high power factor type with individual
non-resetting overload protection. Ballast harmonics may not exceed
that Total Harmonic Current Distortion allowable by the electric
utility. All lamps subject to public view shall have warm white deluxe
or better color rendition. Cool white may be used only in storage
areas not exposed to public view.
d. Electric Meter - Where Landlord does not provide electricity from a
master meter and redistribute to Tenants, Tenant shall make direct
arrangements with the local electric utility company to furnish and
install electric meter to measure Tenant's use of electricity.
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e. Panel Boards -- Panel boards shall be furnished and installed by
Tenant, 120/208 volt panels and 277/480 volt panels shall both be
equipped with single or multiple pole bolted thermal magnetic
breakers.
f. Short Circuit Ratings -- Tenant's electrical distribution system
shall be designed to withstand and safely interrupt an available
short circuit current indicated in the Tenant Handbook.
g. Transformer -- All necessary transformers shall be furnished and
installed by Tenant. All ceiling hung transformers over 100
pounds shall be approved by Landlord's Structural Engineer for
location and method of support. All ceiling hung transformers
less than 10 pounds shall be hung in accordance with the
requirements in the Tenant Handbook.
h. Nameplates -- The following equipment shall be identified with
engraved Bakelite nameplates; distribution panels, motor
starters, lighting panels and push-button stations.
F. PLUMBING
1. System. Tenant shall connect to Landlord's plumbing system as
described in Exhibit C and the Tenant Handbook. Tenant shall provide a
complete plumbing system within the Leased Premises, including but not
limited to, fixtures and toilet accessories as required by Code.
Tenant shall provide accessible clean outs in toilet areas. Plumbing
work must be installed according to all appropriate Codes and
requirements of the Tenant Handbook. Landlord's approval of Tenant's
plans is not a statement that the plans are in compliance with Code or
other local requirements. Tenant shall be required to provide vent
connections and a toilet room exhaust connection, if necessary,
through the roof as required by Code and the Tenant Handbook. All such
penetrations shall be by Landlord's designated contractor at Tenant's
sole expense.
2. Water Heaters. Electric water heaters shall be automatic and a maximum
capacity of 2 k.w. All units shall be UL approved and conform to the
requirements of the local Energy Code. Water heaters must have
temperature/pressure relief valves with discharge piping according to
Code.
3. Water Meters. All restaurants, food court tenants, salons, pet stores
and any other high volume users of water (as determined by Landlord)
shall furnish and install water meters at Tenant's expense in
accordance with the Tenant Handbook.
4. Condensate Drains. Tenant shall extend and connect condensate drain
line(s) from Tenant's air conditioning unit(s) in accordance with the
Tenant Handbook.
5. Connection. If Tenant's restroom location, on Tenant's Store Working
Drawings does not coincide with Landlord's utility location, Tenant,
at Tenant's expense, shall move utility to coincide with Tenant's
Store Working Drawings with Landlord's prior approval. All cutting and
placing of concrete is by Tenant.
G. FIRE PROTECTION SYSTEM
All revisions to the fire protection system required by Tenant's layout
shall be performed by Landlord's designated sprinkler contractor at
Tenant's sole expense. Landlord's sprinkler contractor shall design system
revisions in accordance with Tenant's Store Working Drawings. Such designs
may involve additional heads, relocated heads, heads in refrigeration
boxes, toilet rooms, kitchen exhaust ducts, and/or at Tenant's request,
heads
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located to conform with Tenant's ceiling pattern and layout. All design and
construction shall be governed by Code and the requirements of Landlord's
insurance carrier.
Tenants are required by local code to provide fire extinguishers, at least
one to be installed within 25 feet of the Tenant's entry off Mainstreet.
H. TELEPHONE
Tenant shall arrange directly with the local Telephone Company for
telephone service. Tenant shall furnish, install and maintain telephone
wiring and equipment within the Leased Premises to suit Tenant's
requirements at Tenant's expense.
I. SIGNAGE
Guidelines. All signs shall be designed, constructed and located in
accordance with Landlord's sign Criteria, Exhibit E, the Tenant Handbook,
and as approved by Landlord.
J. FIXTURES AND FURNISHINGS
Tenant shall furnish and install in the Leased Premises all fixtures,
furnishings, equipment, shelving, trade fixtures, leasehold improvements,
interior decorations, graphics, signs, mirrors, cornices, covers and
decorative light fixtures, portable fire extinguishers as required by Code
and the Tenant Handbook, and other special effects, all as approved by
Landlord.
All Tenant improvements, other than mechanical equipment, ceilings, and
lighting fixtures, shall be floor-mounted unless written approval is
obtained from Landlord.
K. MISCELLANEOUS REQUIREMENTS
1. Tenant's Contractor. Work undertaken by Tenant at Tenant's expense (a)
shall not be awarded to Landlord's contractor without Landlord's
written consent, except that an approved list of contractors is
attached hereto as Exhibit D-1 and (b) may only be awarded to a
reputable and bondable contractor or contractors licensed to do
business in the State, County and City in which The Project is
located.
Tenant's contractor shall adhere to Landlord's policy of a drug and
alcohol free workplace.
2. Equipment Screening. Tenants requiring mechanical or electrical
equipment, antennas, and the like shall not have the same placed on
the roof or the exterior of the building without the prior written
approval of Landlord. All such equipment, if allowed, shall be
screened from the view of the public from any point within the project
site. All screening materials, construction details, and construction
techniques shall be approved by Landlord in writing, prior to any such
work by Tenant.
3. Clean-Up. Tenant shall cause its contractors to maintain the Leased
Premises in a clean and orderly condition during construction. All
unusable shipping containers, packaging, and other debris shall be
broken down and contained within the Leased Premises until removed by
Tenant's contractor to containers provided by Landlord outside
Landlord's Building. Flammable waste must be confined to covered metal
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containers until removed by Tenant. All usable construction material,
equipment, fixtures, merchandise, etc. must always be contained within the
Leased Premises, Malls, courts, arcades, public corridors, service/exit
corridors and the exterior of Landlord's Building shall be kept clean at
all times. If Tenant fails to clean up, Tenant hereby authorizes Landlord
to clean up for Tenant at Tenant's expense.
4. Full Payment. Tenant shall satisfy Landlord that adequate arrangements have
been made to ensure that all Tenant's contractors shall be paid in full for
work ordered by Tenant. Tenant is advised to familiarize itself with the
mechanic's lien laws in the State in which The Project is located and shall
hold the Landlord harmless for any liens filed against the property of the
Landlord for the work of the Tenant.
5. Character of Employees. Tenant will not employ any unfit person or anyone
not skilled in the work he is performing, or any workman that is
incompatible with the balance of the work force or who will cause, or whose
presence will cause, labor disputes or work stoppages. In the event any
employee(s) of Tenant or Tenant's contractor(s) causes a labor dispute or
work stoppage, Tenant expressly agrees to have such employee(s)
immediately removed from the Project upon Landlord's request, and that
Tenant's failure to do so shall constitute an event of Default under the
Tenant's Lease of which this Exhibit is a part.
SECTION 2: PROCEDURE AND SCHEDULES FOR THE COMPLETION OF TENANT'S PLANS AND
SPECIFICATIONS
Unless otherwise notified by Landlord, all prints, specifications, and other
material to be furnished by Tenant as herein required shall be sent to: Tenant
Coordinator (Address to be furnished when available).
Tenant shall engage an architect ("Tenant's Architect") registered in the State
and licensed to do business in the County and the City in which The Project is
located to prepare the Working Drawings and Specifications to be submitted for
Landlord's approval. The fees for Tenant's Architect shall be paid by the
Tenant.
A. LEASE OUTLINE DRAWINGS
Following execution of the Lease of which this Exhibit is a part, Landlord
shall furnish Tenant with two (2) prints of the Lease Outline Drawings
(LOD) giving technical and design information relative to the Leased
Premises along with other drawings that may be helpful to Tenant in the
design of its store.
B. STORE DESIGN DRAWINGS
1. Within forty-five (45) days of whichever of the following shall be the
later to occur: (a) receipt of Lease Outline Drawings from Landlord or
(b) the execution
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of the Lease; the Tenant shall submit to Landlord one (1) set of sepia
reproducible prints and three (3) sets of blueline prints of Store
Design Drawings, showing the intended design, character, and finishes
of the Leased Premises. The Store Design Drawings shall comply with
the design criteria of The Project as described in this Exhibit D and
in the Tenant Handbook and shall set forth the requirements of Tenant
within the Leased Premises. Said Drawings shall include, but not be
limited to the following:
a. Architectural design of the space, including an elevation of
Landlord's storefront showing Tenant's signage, floor plans,
elevations, sections, and renderings indicating material and
color selections and finishes, and layout including location of
fixtures both permanent and movable. Provide the weights of all
items to be suspended above from the structure in excess of 100
pounds each.
b. Mechanical System: Basic equipment to be used and its location,
duct distribution system, diffuser locations, and any louvers or
vents to be provided for Tenant by Landlord at Tenant's expense.
Provide projected mechanical loads on forms provided by Landlord
in the Tenant Handbook.
c. Electrical System: Reflected ceiling plans indicating type
of lighting fixtures, and floor plans showing outlets and other
electrical equipment contemplated with location of panel and
switchboard. Provide projected electrical loads on forms provided
by Landlord in the Tenant Handbook.
d. Plumbing System: Floor plans showing the location, layout, and
type of fixtures to be furnished, including riser diagrams.
e. Fire Protection System: Location of any specialty heads Tenant's
architect may require.
f. Tenant shall identify in writing all intended exceptions to the
design criteria contained in the Tenant Handbook and/or this
Exhibit D.
2. After receipt of Store Design drawings, Landlord shall, within seven
(7) business days, return to Tenant One (1) set of Store Design
Drawings with modifications and/or approval. If, upon receipt of
approved Store Design Drawings bearing Landlord's comments, Tenant
wishes to take exception thereto, Tenant may do so in writing within
seven (7) days from date of receipt of said drawings, by certified or
registered mail addressed to Landlord, at the above address, and the
notice address in the Lease. Unless such action is taken, it will be
deemed that all comments made by Landlord on Store Design Drawings are
acceptable to and adopted by Tenant.
3. If Store Design Drawings are returned to Tenant with comments, but not
bearing approval of Landlord, said Store Design Drawings shall
immediately be revised by Tenant and resubmitted to Landlord for
approval within seven (7) days of their receipt by Tenant.
C. STORE WORKING DRAWINGS AND SPECIFICATIONS
1. Store Working Drawings and Specifications shall be prepared in strict
compliance with the design criteria and requirements as set forth in
this Exhibit D and the Tenant Handbook and shall adhere to the Store
Design Drawings as approved by Landlord. Store Working Drawings to
minimum scales as called for below, and Specifications shall include,
but not be limited to, the following:
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a. Key plan showing location of the Leased Premises relative to
the entire mall.
b. Floor plan at a minimum scale of 1/4"=1'0".
c. Overall sections at 1/4"=1'0".
d. Reflected ceiling plan at a minimum scale of 1/4"=1'0".
e. Plans, elevations, and section of storefront (if to be construed by
Tenant) at 1/2"=1'0", with finish materials board including
manufacturers, model numbers, color numbers, and all other identifying
information. Details of storefront at 1-1/2"=1'0".
f. Interior elevations at 1/4"=1'0".
g. Full sections of types of partitions used at 1/2"=1'0".
h. Details of special conditions encountered at 1-1/2"=1'0".
i. Door schedule with jamb details at 1-1/2"=1'0".
j. Finish and color schedules with samples.
k. Plumbing, heating, ventilating, and cooling plans, at 1/4"=1'0".
l. Mechanical details at 1-1/2"=1'0".
m. Electrical plans at 1/4"=1'0".
n. Electrical details, fixture schedules, and one-line electrical riser
diagram.
o. Mechanical and electrical load tabulations on forms provided by
Landlord in the Tenant Handbook.
p. Structural load tabulations.
q. Specifications covering all of Tenant's Work, including, but not
limited to, architectural, electrical, plumbing, heating, ventilating,
and air conditioning.
r. Layout of fixture location, both permanent and movable.
s. Any and all other plans and specifications as may be required by the
local fire and building authorities and other governing bodies.
2. All Store Working Drawings and Specifications prepared by Tenant's
Architect shall be submitted by Tenant, in the form of one (1) set of
reproducible sepia prints, specifications and three (3) sets of blueline
prints to Landlord for approval within 21 days from receipt by Tenant of
Landlord's written approval of Store Design Drawings.
3. As soon as practicable after receipt of Store Working Drawings and
Specifications, Landlord shall return to Tenant one (1) set of prints of
Store Working Drawings and Specifications with its suggested modifications
and/or approval. If, upon receipt of approved Store Working Drawings and
Specifications bearing Landlord's comments, Tenant wishes to take exception
thereto, Tenant may do so in writing, by certified or registered mail
addressed to Landlord at the above address and at the notice address in the
Lease, within seven (7) days from the date of receipt of Store Working
Drawings and Specifications. Unless such action is taken, it will be deemed
that all comments made by Landlord on Store Working Drawings and
Specifications are acceptable to and adopted by Tenant.
4. If Store Working Drawings and Specifications are returned to Tenant with
comments, but not bearing approval of Landlord, said Store Working Drawings
and Specifications shall immediately be revised by Tenant and resubmitted
to Landlord for approval within seven (7) days of their receipt by Tenant.
5. "For Construction" Store Working Drawings and Specifications prepared by
Tenant's Architect shall be submitted by Tenant in the form of one (1) set
of mylar reproducible prints and specifications and three (3) sets of
blueline prints. "For Construction" shall be marked clearly on each copy in
red. Such drawings and specifications shall reflect correction of all
Landlord's comments to the Store Working Drawings and specifications
returned by Landlord.
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6. Store Working Drawings shall be submitted to the local Authorities
having jurisdiction for building permit after such drawings have been
approved by Landlord in the submittal process as outlined above.
7. Landlord and Landlord's architect shall, from time to time, be
entitled to monitor Tenant's Work and shall have the right to require
all work which does not comply with Tenant's approved Store Working
Drawings and Specifications to be corrected within thirty (30) days of
notification to Tenant.
SECTION 3: PROCEDURE AND SCHEDULES FOR THE CONSTRUCTION OF THE LEASED PREMISES
BY TENANT
A. COMMENCEMENT OF CONSTRUCTION
Tenant shall start construction of its Leased Premises not later than ten
(10) days from either of the following dates, whichever shall be the later
to occur: (1) The date of receipt by Tenant of written notice from Landlord
that Landlord has substantially completed the work to be performed by
Landlord under Exhibit C, and payment therefore as required by Exhibit C is
due (other than such work which cannot be performed by Landlord until
Tenant makes the Leased Premises ready for the performance thereof) and
that the Leased Premises are ready for Tenant's work; or (2) the date on
which Landlord approves the Tenant's Store Working Drawings and
Specifications for the Leased Premises. Tenant shall carry such
construction to completion with all due diligence.
B. GENERAL REQUIREMENTS
1. Tenant shall submit to Landlord, via certified or registered mail, at
least five (5) days prior to the commencement of construction the
following information:
(a) Copy of building and all other permits needed to perform Tenant's
Work within the Leased Premises.
(b) The names and addresses of the general, mechanical, plumbing and
electrical contractors Tenant intends to engage in the
construction of the Leased Premises.
(c) The actual commencement of construction date and the estimated
date of completion of construction work, fixturing work, and date
of projected opening.
(d) Itemized statement of estimated construction costs including
architectural, engineering, and contracting fees.
(e) Evidence of insurance with a company or companies authorized to
transact business in which The Project is located as required
below.
2. Tenant shall secure, pay for, maintain, and cause its contractors and
subcontractors to secure, pay for, and maintain, during the
continuance of construction and fixturing work within the Lease
Premises, all of the insurance policies required in the amounts as set
forth herein, together with such insurance as may from time to time be
required
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77
by City, County, State or Federal laws, Codes, regulations or authorities.
Tenant's Work may not commence, nor may Tenant permit its contractors and
subcontractors to commence any work, until all required insurance has been
obtained and certificates of such insurance have been delivered to Landlord.
Insurance policies shall name the Landlord and assignees, Landlord's Architect
and General Contractor for the project as additional insureds. Certificates of
insurance coverage shall provide that no change or cancellation of such
insurance coverage shall be undertaken without thirty (30) days written notice
to Landlord. Landlord shall have the right to require Tenant, and Tenant shall
have the duty, to stop work in the Leased Premises immediately if any of the
coverage required herein lapses during the course of the work, in which event
Tenant's Work may not be resumed until the required insurance is obtained and
satisfactory evidence of same is provided to the Landlord.
a. Tenant's General Contractor's Required Minimum Coverages and Limits of
Liability.
(1) Worker's Compensation Insurance, as required by State law, and
Employers's Liability Insurance with a limit of not less than [***]
(or more if required by the law of the State) and any insurance
required by any Employee Benefit Act or similar statute applicable
where the work is to be performed as will protect the contractor and
subcontractors from any and all liability under the aforementioned
act(s) or similar statute.
(2) Comprehensive General Liability Insurance (including Contractor's
Protective Liability) in an amount not less than [***] per occurrence
whether involving personal injury liability (or death resulting
therefrom) or property damage liability or a combination thereof
(combined single limit coverage) with a minimum aggregate limit of
[***]. Such insurance shall include explosion, collapse and
underground (X, C and U) coverage and contractual liability coverage
for personal injury, death and damage to the property of other arising
from construction at the Leased Premises, whether performed by
Tenant's contractors, subcontractors, or sub-subcontractors, or by
anyone directly or indirectly employed by any of them.
(3) Comprehensive Automotive Liability Insurance, for the ownership,
maintenance, or operation of any automotive equipment, whether owned,
leased or otherwise held, including employer's non-ownership and hired
car liability endorsements, in an amount not less than [***] per
occurrence and [***] aggregate, combined single limit bodily injury
and property damage liability.
Such insurance policies shall insure the Tenant's general contractor
and all subcontractors against any and all claims for bodily injury,
including death resulting therefrom and damage to the property of
others arising from its operations at the Leased Premises or in
connection with construction of the Leased Premises, whether performed
by the Tenant's general contractor, subcontractors, or sub-
subcontractors, or by anyone directly or indirectly employed by any of
them.
b. Tenant's Insurance Requirements
(1) Tenant shall obtain Owner's Protective Liability Insurance as will
insure Tenant against any and all liability for damage from bodily
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*** Confidential Treatment Requested
78
injury, including death resulting therefrom, or property
damage or a combination thereof which may arise from work
in connection with the Leased Premises, and any other
liability for damages which Tenant's general contractor
and/or subcontractors are required to insure against under
any provisions herein. Landlord and Landlord's Architect
and General Contractor shall be named as additional
insureds. Said insurance shall be provided in minimum
amounts of [***] aggregate, combined single limit bodily
injury and property damage liability.
(2) Tenant's Work Insurance: Tenant shall insure [***] of
the value of the work in the Leased Premises as it relates
to the building within which the Leased Premises is
located, with an "all risk" perils property insurance
policy or a completed value "all risk" perils Builder's
Risk policy, naming the interest of the Landlord and the
Tenant's general contractor and all subcontractors, as
their respective interests may appear.
3. All contractors engaged by Tenant shall be licensed contractors
in the State in which The Project is located possessing good
labor relations, capable of performing quality workmanship and
working in harmony with Landlord's General Contractor and other
contractors on the job. All work shall be coordinated with the
general project work.
4. Tenant's contractors and construction shall comply in all
respects with applicable federal, state and local statutes,
ordinances, regulations, laws and codes. All required building
and other permits in connection with the construction and
completion of the Leased Premises shall be obtained and paid for
the Tenant.
5. Tenant shall complete all work within the Leased Premises as
expeditiously as possible, but in no event later than in time to
open for business on the Grand Opening Date. Should Tenant fail
to complete its work within this schedule, Landlord may, at
Landlord's option, install temporary storefront or barricade at
the Leased Premises at Tenant's expense. Temporary storefront
and other work performed by Landlord which was made necessary
due to the Tenant's failure to complete its work in time for the
Grand Opening Date, shall be payable to the Landlord.
6. Landlord shall have the right to perform, on behalf of and for
the account of Tenant any of Tenant's work which Landlord deems
necessary to be done on an emergency basis or which pertains to
structural components, the general utility systems for The
Project, roof and exterior wall penetrations, or the erection of
temporary barricades and temporary signs, during construction
for the period following the Opening of The Project for
business. Landlord will provide such work at Tenant's expense.
7. Tenant's Work shall be subject to the inspection and approval of
Landlord and Landlord's Architect as to compliance with Tenant's
approved plans and standards of merchantability, provided that
Landlord and Landlord's Architect shall use its commercially
reasonable efforts to insure that its work does not interfere
with Tenant's Work.
8. Tenant shall pay or reimburse Landlord for all costs incurred by
Landlord (including deposits) for all utility meters for the
Leased Premises.
9. Upon the completion of the Tenant's Work, all facilities shall
be in full use without defects.
Exhibit D, Rough Shell 5/1/98
Page 14
*** Confidential Treatment Requested
79
10. All work performed by Tenant shall be performed so as to cause no
interference with other Tenants and the construction and operation of
The Project. Tenant will take all precautionary steps to protect its
facilities and the facilities of others affected by Tenant's Work and
properly police same. Construction equipment and materials are to be
located within the Leased Premises and truck traffic is to be routed
in and from the site, all as directed by Landlord and so as not burden
the construction and operation of The Project.
11. Upon and from the completion of Tenant's Work in the Leased Premises
and acceptance by Landlord's Architect, a minimum one-year warranty of
all work, materials, and equipment shall be provided to Landlord by
Tenant, to the extent the same are received by Tenant from its
contractors and/or suppliers.
12. Landlord shall have the right to stop Tenant's Work whenever necessary
to obtain compliance with applicable building and safety codes or the
approved Store Working Drawings and Specifications.
13. Tenant and its contractors shall comply with the guidelines for Tenant
work procedures and temporary construction facilities set forth in the
Tenant Handbook, and Landlord's Construction Rules and Regulations
which may be issued from time to time.
14. Landlord shall have the right to order any Tenant or Tenant's
contractor who willfully violates any of the above requirements to
cease work, and to remove himself and his equipment and employees from
The Project.
C. TEMPORARY SERVICES AND FACILITIES DURING CONSTRUCTION
1. Utility costs or charges for any service to the Leased Premises shall
be the responsibility of Tenant from the date Tenant commences work or
is obligated to commence work, whichever is earlier.
2. If necessary, Tenant will provide temporary heat for the Leased
Premises during construction. No open burners are permitted and only
electricity must be used for temporary heat.
3. Temporary Electrical Services. If electrical service is not available
in the Leased Premises during construction, Landlord shall provide
electrical service in an area designated by the Landlord. Tenant shall
request, in writing, permission to connect temporary lines to the
power source for service to the Leased Premises. Tenant shall
reimburse Landlord for the Temporary Electric Service's.
4. Temporary Trash Removal. During initial construction, fixturing and
stocking, Landlord shall provide trash removal service from the
service areas. It shall be Tenant's responsibility to break boxes down
and place trash daily in the containers provided. Trash accumulation
will not be permitted overnight in the Leased Premises, mall or
service/exit corridors. Tenant shall not allow trash to accumulate
within the Leased Premises nor shall Tenant place any trash in the
service/exit corridor or mall areas adjacent to the Leased Premises.
Tenant shall reimburse Landlord for the Temporary Trash Removal.
The period shall start with the date the Tenant starts construction in
its premises and ends with the date the Tenant opens for business.
In addition, Tenant shall pay any costs incurred by Landlord in
removing trash from areas in and around the Leased Premises.
Landlord's decision as to which Tenant is
Exhibit D, Rough Shell 5/1/98
Page 15
80
responsible for trash left outside the Leased Premises will be
reasonable and equitable, and Landlord's decision will be final.
5. PLANS REVIEW/TENANT COORDINATION. Landlord or its architect and/or
engineer shall review Tenant's plans and specifications for compliance
with the provisions of this Exhibit D and the Tenant Handbook. In
addition, Landlord shall assign a Tenant Coordinator(s) to work with
Tenant and Tenant's Architect, Engineer and contractor for the design
and construction of the Leased Premises. Tenant shall reimburse
Landlord for such plan review and tenant coordination as part of the
Temporary Charges provided for in C.9.
6. TEMPORARY STOREFRONT. If Tenant is not open for business in the Leased
Premises and Landlord's Retail Development is open, or if, in
Landlord's sole judgment, Landlord determines that a temporary
storefront is necessary so as not to disrupt the construction, opening
or operation of any portion of The Project, then Landlord shall
install, at Tenant's expense, for Tenant's use during construction a
full height temporary barricade on the storefront lease line. Tenant
shall reimburse Landlord for the temporary storefront. Upon completion
of Tenant's construction and fixturing in the Leased Premises, Tenant
shall remove, disassemble and dispose of such temporary storefront.
7. COMING SOON SIGN. If during Tenant's initial construction, fixturing
and merchandise stocking, The Project is open (or shall open) for
business, Landlord will provide and install, following the earlier to
occur of (a) erection of the initial construction barricade, or (b)
completion of the storefront for the Leased Premises, a "coming soon"
sign on the front (barricade or storefront, as the case may be) of the
Leased Premises. Tenant shall reimburse Landlord for providing such
sign.
8. SUITE NUMBER AND TENANT-TRADE NAME. Landlord shall furnish and install
suite number and Tenant trade name sign adjacent to Tenant's exterior
and/or interior rear exit door(s) in accordance with Landlord's
standard. Landlord shall also install suite number on Mall storefront.
Tenant shall reimburse Landlord for this service.
9. The Charges for Temporary Services and Facilities as described in this
subsection C shall be:
Landlord's Charge
[***] psf
10. The charges identified in C.9 above shall be due and payable within
thirty (30) days after billing by Landlord. Landlord may decline at
Landlord's sole judgement to proceed with work at Tenant's expense
until Landlord's receipt of payment thereof.
D. COST PLUS ADMINISTRATION FEE WORK BY LANDLORD IN PREMISES AT TENANT EXPENSE
The following work in Tenant's premises shall only be accomplished by
Landlord in Landlord's building. The Tenant shall contract with the
Landlord to furnish the following work items if required by Tenant's store
design at Landlord's actual costs plus ten percent [***] for
administration, and the cost of any such item of work shall be payable to
Landlord in full within [***] days after receipt of invoice therefore.
1. Openings in rated demising partitions and exterior wall, provided such
opening/penetrations have been approved in advance by Landlord in
writing.
Exhibit D, Rough Shell 5/1/98
Page 16
*** Confidential Treatment Requested
81
2. Roof Openings. With Landlord's prior written permission, roof openings
for any purpose shall include supporting structures, curbs, roof
patching and flashing. Tenant shall be responsible for installation of
ducts, pipes, equipment and counter flashing. Landlord reserves the
right to refuse to permit the furnishing of any openings which exceed
the capability of the structural system or which in Landlord's opinion
would have an appearance detrimental to Landlord's Building.
3. Plumbing Service. With Landlord's written permission, additional
sanitary sewer or relocation of sanitary sewer.
4. Electric Service. With Landlord's written permission, additional
electric service or relocation of electrical service.
5. Storefront. With Landlord's prior written permission, changes to
Landlord furnished interior and exterior storefront including but not
limited to additional doors and relocation of doors.
6. Landlord's Labor (including overtime, demurrage and waiting time) and
equipment used in any work Landlord performs for Tenant.
7. Architectural and/or Engineering fees incurred Landlord as a result of
Tenant requesting any services in excess of the standard review
services described in Section
8. Building Department Expeditor Fees incurred by landlord in expediting
Tenant Building Permit, Controlled Inspection and other requirements
for temporary and permanent Certificates of Occupancy on the building
and the Tenant Premises.
9. Building Permits, Microfilming and Documentation Fees paid by Landlord
on behalf of the Tenant in expediting the approval of Building Permits
and other approvals of Agencies having jurisdiction.
E. CERTIFICATE OF ACCEPTANCE
Upon the completion of Tenant's construction and fixturing work within its
Leased Premises Tenant shall so notify Landlord in writing. Landlord, upon
receipt of such notice from Tenant, shall issue a Certificate of Acceptance
of said premises provided, however, that the issuing of such a Certificate
shall be contingent upon all of the following:
1. The satisfactory completion by Tenant of the work to be performed by
Tenant under this Exhibit D, in accordance with good workmanship and the
approved Construction Documents and Specifications therefor and receipt of a
certificate of occupancy from the local jurisdiction.
2. Receipt by Landlord from Landlord's Architect of a premises
acceptance letter. This letter can be issued only upon Tenant's correction of
the deficiencies noted by Landlord or Landlord's Architect upon any inspection
of Leased Premises.
3. Tenant shall have furnished Landlord with waivers of liens and sworn
statements, or satisfactory substitutes for same, in such form as may be
required by Landlord, and releases of notices of commencement (if any) from all
contractors, subcontractors and other person performing labor and/or supplying
materials in connection with such work showing that all of said persons have
been compensated in full.
4. Submission by Tenant to Landlord of a detailed breakdown of Tenant's
final and total construction costs together with receipted invoices showing
payment thereof.
Exhibit D, Rough Shell 5/1/98
Page 17
82
5.
Exhibit D, Rough Shell 5/1/98
Page 18
83
SPECIALTY TENANT LEASE EXHIBIT
EXHIBIT E
SIGN CRITERIA
1. Tenant is required to identify the Leased Premises by a sign on the
storefront. The general criteria for the design of Tenant's signage ("sign
criteria") is set forth below. More specific sign criteria for The Project
as a whole and certain tenants in certain designated locations such as in
food courts and mall courts is set forth in the Tenant Handbook, (Tenant
Design Criteria) hereinafter referred to as "Tenant Handbook".
2. Costs incurred in design, construction and installation, as well as
maintenance shall be the responsibility of Tenant. The Tenant must obtain
permits to erect and connect the sign from local community officials
before the sign is installed.
3. It is intended that the signage be developed in an imaginative and varied
manner so as to enhance the architectural treatment of the facade in
general and be harmonious with the overall architecture and thematic
consideration of the mall in particular. Although current signage
practices of the Tenant shall be considered, they will not govern the
signs to be installed.
4. Approval of signs shall be solely the right of the Landlord, and Tenant
must submit all candidates for signage to the Landlord for approval in the
form of working drawings before manufacturing or further assembly begins.
Submission shall be to Landlord, in the form of shop drawings with all
pertinent details necessary for construction and installation included.
Submission shall be a minimum of ninety (90) days before proposed
installation date, and Tenant is expected to have sign manufactured and
ready for installation within forty-five (45) days of approval by Landlord
or Landlord's agent before installation, at project site. Landlord
reserves the right to reject signs not conforming to approved drawings
regardless of stage of completion or installation.
5. The Tenant's storefront sign shall occupy an area of the storefront facade
designated in the Tenant Handbook and/or the Lease Outline Drawing, and/or
by the Project Architect. The area shall total no more than eight (8)
square feet for up to a thirty foot (30') storefront; and twelve (12)
square feet for up to a forty foot (40') storefront; sixteen (16) square
feet for up to a fifty foot (50') storefront. The design of the storefront
is to be considered by Tenant in the development of signage. In general,
signs will be installed in the designated sign area above the entry door.
Variation of this criteria shall be subject to Landlord's prior written
approval, which shall be solely at the discretion of Landlord. No sign
shall be installed closer than three feet (3'-0") from the end of the
Tenant storefront on both sides.
6. Signage shall be limited to the name of the store. Additional elements will
be considered as long as they enlarge, expand, or otherwise clarify the
name of the store.
7. Signs which are comprised of unaltered sans serif typefaces are, in
general, unacceptable, as will be signs or type faces which are difficult
to read.
8. The use of corporate identifications or logos will be considered, but prior
use or identification with a particular sign or logo will not govern
Landlord's approval for Tenant use. Tenant agrees that Landlord's rejection
of particular logo or sign shall not constitute a violation of Lease by
Landlord. In the case of conflict between the sign criteria and other
provisions of the Lease, Tenant agrees that the sign criteria and
Landlord's discretion shall prevail. Tenant shall not hold Landlord liable
for damage or injury as a result of the sign criteria or the implementation
of the sign criteria by agreement of both parties.
Exhibit E, Sign Criteria 5/1/98
Page 1
84
9. A variety of fabrication materials shall be considered, however
construction shall be guaranteed for a period of at least five (5) years
against peeling, cracking, crazing, blistering, or any other degradation of
surface or materials. Tenant shall obtain, from manufacturer of the sign, a
five (5) year warranty covering the condition of finished surfaces,
construction and operation of sign.
10. All electrical signs shall carry approval of Underwriters Laboratories
(U.L.) on all component parts and on the complete display. Maximum
brightness of lit signs shall be fifty foot (50') Lamberts measured one
foot (1') from the source of light. No blinking, moving or flashing lights
shall be allowed. Surface lighting may be reduced in order to accentuate
lit signage. There will be no special advantage in terms of visibility of
internally lit over externally lit signs.
11. No exposed raceways, ballast boxes or electrical transformers will be
permitted except as required to be exposed by local building codes.
12. Landlord shall not be responsible for signs improperly installed or
manufactured, and those signs not meeting code requirements shall, at
Tenant's expense, be removed and built to code specifications before
reinstallation. Signs meeting Landlord's sign criteria, but not meeting
local code requirements, shall be the responsibility of Tenant, and Tenant
agrees not to hold Landlord liable for costs due to conflict between these
sign criteria and code, should such conflict exist under present code or
due to future changes in code. Tenant must make required structural
modifications at Tenant's expense to Landlord's structure. Also, Landlord's
engineer to approve structural modifications.
13. Notwithstanding anything herein contained to the contrary, Tenant shall
have the right to replace any existing sign(s) of said Tenant as long as
such replacement meets the sign criteria listed within this document, the
Tenant Handbook, and is accompanied by Landlord's prior written approval
prior to installation.
14. No other signs of any type or purpose, permanent or temporary, shall be
permitted to be displayed upon the facade, windows or within the dimension
prescribed in Section 4.03 of the Lease, behind an unobstructed window
unless and until such sign has been submitted to Landlord and has received
Landlord's prior written approval. Landlord shall be the sole judge of what
constitutes an unobstructed window. Removal of signage of any type
installed without Landlord approval shall be mandatory before said sign
shall be considered by Landlord for installation.
15. Landlord shall not be required to approve signage for any reason other than
conformance with the sign criteria in this Exhibit E and the Tenant
Handbook. Scheduled opening dates and other time constraints shall not be
reason to approve signage which Landlord otherwise would consider
unsuitable for manufacture or installation. Tenant agrees not to hold
Landlord liable for any damage caused to Tenant due to signage or lack of
signage as a result of Landlord's insistence upon conformance with the sign
criteria or the Landlord's withholding of approval of submitted signage.
16. In the event that Tenant is unable to supply satisfactory signage design by
the fixturing period of Tenant's store, Landlord shall have the option of
providing such design. In such a case, Tenant agrees to pay prior to store
opening all expenses involved in the design, manufacture, and installation
of said signage plus [***] cost of administration, and Tenant agrees to
waive rights to reject said signage and agrees not to oppose installation
of said signage.
17. Signage indicated on drawings and mechanicals submitted for reasons other
than signage evaluation (as described in this Exhibit E and the Tenant
Handbook) shall not constitute a signage submittal. No approval of such
drawings and mechanicals shall constitute approval of signage.
Exhibit E, Sign Criteria 5/1/98
Page 2
*** Confidential Treatment Requested
85
18. Food Court Tenants shall be permitted to install one menu board within the
Leased Premises subject to Landlord's prior design review and written
approval. Refer to the Tenant Handbook for type, size and location allowed.
19. Procedure for Submittal and Approval of Sign Drawings:
a. Approval of store design drawings or working drawings and
specifications for Tenant's Leased Premises does not constitute
approval of any sign work. Approval of signs shall be solely the right
of Landlord, and Tenant must submit all candidates for signage to the
Landlord for approval in the form of sign designer's working drawings
and/or manufacturer's shop drawings before manufacturing or assembly
begins. Drawings by Tenant, is architect or anyone not qualified to
produce signage drawings are not acceptable. At the same time as
Tenant's initial submission of store working drawings and
specifications to Landlord, Tenant shall submit one (1) set of
reproducible prints and specifications and three (3) sets of
blueprints, along with samples of all material and colors, for all its
proposed sign work. The drawings shall clearly show location of sign
on storefront elevation drawing, size and stroke dimensions, graphics,
color, construction, and attachment details. Full information
regarding electrical load requirements and brightness in footcandles
shall also be included. Landlord reserves the right to reject signs
not conforming to approved drawings regardless of state of completion
or installation.
b. As soon as practical after receipt of the sign drawings, Landlord
shall return to Tenant one (1) set of such sign drawings with the
suggested modifications and/or approval. If, upon receipt of approved
sign drawings bearing Landlord's comments, Tenant wishes to take
exception thereto, Tenant may do so in writing, by certified or
registered mail addressed to Landlord within seven (7) days from the
date of Tenant's receipt of such sign drawings. Unless such action is
taken, it will be deemed that all comments made by Landlord on the
sign drawings are acceptable to and approved by Tenant.
c. If sign drawings and specifications are returned to Tenant with
comments, but not bearing approval of Landlord; said drawings and
specifications shall be revised immediately by Tenant and resubmitted
to Landlord for approval within seven (7) days of their receipt by
Tenant.
Exhibit E, Sign Criteria 5/1/98
Page 3
86
EXHIBIT F
COMMENCEMENT AND EXPIRATION DATE DECLARATION
LANDLORD:
___________________________________________________________________
TENANT:
___________________________________________________________________
LEASE DATE:
_________________________________________________________________
STORE NUMBER:
_______________________________________________________________
Landlord and Tenant acknowledge and agree that the Commencement Date of
the above referenced Lease is ________________________ and the Expiration Date
of the Lease is _________________________________.
LANDLORD: TENANT:
By: ___________________________ By: ___________________________
Its: __________________________ Its: __________________________
Date: _________________________ Date: _________________________
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EXHIBIT H
AGREEMENT OF SUBORDINATION
NON-DISTURBANCE AND ATTORNMENT
THIS AGREEMENT is made this ________ day of ___________, 199_, by and among OPRY
MILLS LIMITED PARTNERSHIP, a Delaware limited partnership having an office c/o
The Mills Corporation, 1300 Wilson Boulevard, Suite 400, Arlington, VA 22209
("Lessor"), SILICON ENTERTAINMENT, INC., a California corporation, having an
office at 210 Hacienda Avenue, Campbell, California 95008 ("Lessee") and
______________ having offices at _________________ ("Agent"), as agent for, and
as co-lender with such other lenders (collectively, the "Lenders") under the
credit facility secured by the hereinafter described Deed of Trust, their
successors and assigns or affiliate.
WITNESSETH:
WHEREAS, Lenders have provided financing for OPRY MILLS shopping center in
Nashville, Tennessee (the "Property");
WHEREAS, under a certain lease (the "Lease") Lessor did lease, let, and
demise a portion of the Property (such portion of the Property is hereinafter
called the "Premises") to Lessee:
WHEREAS, Lenders have or will become the owners of indebtedness secured by,
among other things, a deed of trust, granted by Lessor to _______, trustee, for
the benefit of Agent, on behalf of the Lenders, as beneficiary (the "Deed of
Trust");
NOW, THEREFORE, in consideration of the covenants, terms, conditions and
agreements herein contained, and in consideration of other good and valuable
consideration, the sufficiency and receipt of which are hereby acknowledged, the
parties hereto agree as follows:
1. The Lease and all rights and liens created thereby shall be subject and
subordinate in all respects to the Deed of Trust and the lien created thereby,
to any advancements made thereunder, and to any increases, extensions,
modifications or renewals thereof.
2. So long as Lessee is not in material default under the Lease beyond any
applicable grace or cure period, Agent, on behalf of the Lenders, hereby
covenants to Lessee that in the event Lenders obtain title to the Premises,
either by foreclosure or by deed in lieu of foreclosure, and thereafter obtains
the right of possession of the Premises, that the Lease will continue in full
force and effect, and Lenders shall recognize the Lease and Lessee's rights
thereunder, subject to the provisions of this Agreement.
3. Lessee agrees that from and after the date hereof in the event of any
act or omission by Lessor under the Lease which would give Lessee the right,
either immediately or after the lapse of a period of time, to terminate the
Lease, or to claim a partial or total eviction, Lessee will not exercise any
such right (a) until it has given written notice of such act or omission to
Agent by certified mail, return receipt requested, and (b) until and unless
Lenders fail to remedy such act or omission within thirty (30) days for any act
or omission which can be cured by the payment of money, or in the case of any
other act or omission, as long as necessary to remedy such act or omission,
provided (i) Lenders cause such remedy to be commenced within thirty days, and
(ii) Lenders cause completion of such remedy to be pursued with due diligence
following such giving of notice and following the time when Lenders shall have
become entitled under the Deed of Trust to remedy the same. It is specifically
agreed that Lessee shall not, as to Lenders, be entitled to require cure of any
such default which is personal to Lessor, and therefore not susceptible of cure
by Lenders, and that no such uncured default shall entitle Lessee to exercise
any rights under the Lease with respect to Lenders.
4. That in the event the interests of Lessor under the Lease shall be
transferred to Lenders or Agent or any nominee, designee, assignee of Lenders or
any purchaser at foreclosure sale (Lenders, Agent or such other party referred
to as a "Lender Party") by reason of foreclosure, deed in lieu of foreclosure,
or similar transaction, Lessee hereby covenants and agrees to make, for the
benefit and reliance of Lenders, full and complete attornment to the Lender
Party as substitute lessor upon the same terms, covenants and conditions as
provided in the Lease, except to the extent otherwise set forth herein.
5. The provisions of this Agreement are real property covenants running
with the Property, and shall be binding upon and inure to the benefit of the
respective parties hereto and their respective heirs, executors, administrators,
beneficiaries, successors and assigns, including without limitation any Lender
Party.
88
6. Notwithstanding anything contained herein to the contrary, or anything
to the contrary in the Lease, Lenders and any Lender Party shall not be:
(a) Liable for any act, omission or the breach of any warranty of
Lessor, including without limitation, any delay in opening the Project or
the Premises for occupancy and any failure to complete the construction of
the Premises or the Project or any improvements therein;
(b) Subject to any offsets, claims of defenses which Lessee might have
as Lessor except for Tenant's offset and deduction rights as provided in
Section 3.3 of the Lease;
(c) Required or obligated to credit Lessee with any rent for any
period beyond the then current rental period which Lessee might have paid
Lessor;
(d) Bound by any amendments or modifications or voluntary termination
of the Lease made without Lender's prior written consent, other than
exercise of rights, options or elections contained in the Lease; or
(e) Bound to be liable for refund of any security deposit except to
the extent actually received by Lenders or a Lender Party.
7. Lessee shall not, without the express written consent of Lenders:
(a) Cancel, terminate or surrender the Lease, except as provided
therein or in any modification or amendment specified herein or hereafter
consented to by Lenders;
(b) After the date hereof, enter into any agreement with Lessor or its
successors or assigns, which grants any concession with respect to the
Lease or which materially compromises, discounts or otherwise reduced the
rent called for thereunder; or
(c) After the date hereof, prepay rent more than one (1) month in
advance.
8. Lessor and Lessee hereby jointly and severally agree for the benefit
and reliance of Lenders, that neither this Agreement, nor any assignment of
the Lease for collateral purposes, nor anything to the contrary in the
aforesaid Lease or in any modifications or amendment thereto shall, prior to
Lenders' acquisition of Lessor's interest in and possession of the Property
(and thereafter, only to the extent of the Property and not personally),
operate to give rise or create any responsibility or liability upon Agent or
Lenders for the control, care, management or repair of the Property by any
party whatsoever or for any dangerous or defective condition of the Property;
or impose responsibility for the carrying out by Agent or Lenders of any of the
covenants, terms and conditions of the Lease or any modification or amendment
whether or not hereafter consented to by Lenders, or for any negligence in the
management, upkeep, repair or control of said Property resulting in loss,
injury or death to any lessee, licensee, invitee, guest, employee, agent or
stranger. Notwithstanding anything to the contrary in the Lease, Lenders, their
successors and assigns (and any Lender Party, as appropriate), shall be
responsible for performance of only those covenants and obligations of the
Lease accruing after the Lenders', their successors' and assigns' (or Lender
Party's, as appropriate), acquisition of Lessor's interests in and possession of
the Property; and in the event that Lenders or any Lender Party shall acquire
title to the Premises or the Property, Lenders or any Lender Party shall have
no obligation, nor incur any liability, beyond Lenders' or any Lender Party's
then equity interest, if any, in the Property or the Premises.
9. Lessee covenants and agrees to make rental payments according to the
terms of such Assignment of Leases upon written demand by Agent in the event of
any default (as described therein). Lessor consents to payments being so made.
10. Lessee agrees that this Agreement satisfies any condition or
requirement in the Lease relating to the granting of a non-disturbance
agreement.
11. Lessee agrees to execute and deliver from time to time, upon the
request of Lessor or of any holder(s) of any of the indebtedness or other
obligations secured by the Deed of Trust, a certificate regarding the status of
the Lease in the form set forth in Schedule A attached hereto and incorporated
herein by reference for all purposes.
12. THIS AGREEMENT AND ITS VALIDITY, ENFORCEMENT AND INTERPRETATION SHALL
BE GOVERNED BY THE LAWS OF THE STATE OF TENNESSEE AND APPLICABLE UNITED STATES
FEDERAL LAW.
89
13. If any bankruptcy proceedings shall hereafter commence with respect to
Lessor, and if the Lease is rejected by the trustee pursuant to Section 365 of
the United States Bankruptcy Code, Lessee agrees with Lenders (i) not to treat
such lease as terminated or to execute a new lease with Lenders or any Lender
Party on the same terms as the Lease, and (ii) to remain in possession of the
Premises.
14. Any notices hereunder shall be effective upon mailing by certified
mail, return receipt requested, or delivery by Federal Express addressed to the
recipient at its address set forth in the preambles hereof or as to each party,
to such other address as the party may designate by a notice given in accordance
with the requirements contained herein.
15. This Agreement contains the entire agreement between the parties
hereto. This instrument may be executed in multiple counterparts, all of which
shall be deemed originals and with the same document. Signature and
acknowledgment pages may be detached from the counterparts and attached to a
single copy of this document to physically form one document.
EXECUTED as of the date first above written.
LESSOR: OPRY MILLS LIMITED PARTNERSHIP, a Delaware limited
partnership
By: OPRY MILLS, L.L.C., a Delaware limited liability
company, its general partner
By: THE MILLS LIMITED PARTNERSHIP, a Delaware limited
partnership, its manager
By: THE MILLS CORPORATION, a Delaware corporation, its
general partner
By: __________________________________________________
Judith Berson
Its: Executive Vice President
LENDER: ________________________________, as Agent
By: __________________________________________________
Authorized Signatory
LESSEE: SILICON ENTERTAINMENT, INC., a California corporation
By: __________________________________________________
Its: __________________________________________________
90
ACKNOWLEDGMENT OF LANDLORD
COMMONWEALTH OF VIRGINIA )
) ss.
COUNTY OF ARLINGTON )
On this ____ day of ______, 19__, before me personally appeared JUDITH
BERSON, to me known to be the person who executed the foregoing Agreement of
Subordination, Non-Disturbance and Attornment and acknowledged before me that
she was duly authorized and did execute same on behalf of OPRY MILLS LIMITED
PARTNERSHIP, a Delaware limited partnership.
_______________________________
Notary Public
My Commission expires: ________
ACKNOWLEDGMENT OF CORPORATE TENANT
STATE OF ___________________ )
) ss.
CITY/COUNTY OF _____________ )
On ________________, 19__, before me ________________, a Notary Public in
and for said state aforesaid, personally appeared ________________, as
________________ and ________________, as ________________ of SILICON
ENTERTAINMENT, INC., a California corporation, 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.
_______________________________
Notary Public, county,
My Commission expires: ________
[Notarial Seal]
ACKNOWLEDGMENT OF LENDER
STATE OF ___________________ )
) ss.
CITY/COUNTY OF _____________ )
On this __ day of _______________, 19__, before me ________________, notary
public, personally appeared ________________, the ________________ of
________________, proved to me on the basis of satisfactory evidence to be the
person whose name is subscribed to the within instrument and acknowledged to me
that he/she executed the same in his/her authorized capacity and that by his/her
signature on the instrument the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal
_________________________________
Notary Public
My Commission expires: _________
91
EXHIBIT H-1
TENANT ESTOPPEL CERTIFICATE
TO: _________________, its successors and assigns or an affiliate (referred to
herein as "LENDER"), for itself and as agent for one or more co-lenders:
1. The undersigned is the Lessee under that certain Lease together with all
amendments, modifications and supplements thereto (the "Lease") by and
between OPRY MILLS LIMITED PARTNERSHIP, a Delaware limited partnership, as
Lessor and SILICON ENTERTAINMENT, INC., a California corporation, having an
office at 210 Hacienda Avenue, Campbell, California 95008, as Lessee,
covering those certain premises described therein and located at Opry
Mills, Nashville, Tennessee ("Premises").
2. Capitalized terms not otherwise defined herein shall have the meanings set
forth in the Lease.
3. Except for any amendments, modifications and supplements described in
Schedule A, the Lease has not been modified, changed, altered or amended in
any respect and is the only Lease or agreement between the Lessee and
Lessor or its agents affecting the Premises.
4. Lessee has made no agreements with Lessor or its agents or employees
concerning free rent, partial rent, rebate of rental payments or any other
type of rental concession except as set forth in the Lease.
5. No rent has been prepaid for more than one (1) month.
6. The Lease is in full force and effect and Lessee has no right to terminate
the Lease (other than by reason of default by Lessor). As of the date
hereof, Lessee is entitled to no credit, no free rent and no offset or
deduction in rent, except as set forth in the Lease.
7. The Lessee and Lessor are not in default under the Lease and, to the best
of Lessee's knowledge, there is no event which with notice or passage of
time would constitute a default by Lessee or Lessor under the Lease.
8. Lessor has and is under no obligation to Lessee with respect to payment of
the cost of tenant improvement work to the Premises, except as specifically
set forth in the Lease.
9. The Lease does not contain and the Lessee does not have any outstanding
options or rights of first refusal to purchase the Premises or any part
thereof or the real property of which the Premises are a part.
10. No actions, whether voluntary or otherwise, are pending against the Lessee
under the bankruptcy laws of the United States or any state thereof.
11. Any notices sent to Lender or its affiliates shall be sent certified mail,
return receipt requested and addressed to ____________, at its offices at
______________________________.
12. This certification is made knowing that Lender relies upon the truth of
this certification in making certain fundings.
Dated as of this ______ day of ____________________, 199_.
SILICON ENTERTAINMENT, INC., a California corporation
By: _________________________________________________
Its: ________________________________________________