Common use of Recapture Space Clause in Contracts

Recapture Space. In addition to and separate from any potential Nonprofitable Property, Tenant acknowledges and agrees that as of the date hereof each Demised Premises contains space within each Store as presently constituted which is, and/or may become, excess for the efficient operation of each Store and that may be recaptured by Landlord in its sole discretion. To optimize the utilization of any excess space, thereby increasing its rental value to Landlord, such space may be severed from this Master Lease on the terms and conditions herein. For the avoidance of doubt, for the purpose of this Section 1.7 the term “Store” shall expressly exclude all Additional Recapture Space. Accordingly, Landlord and Tenant further agree as follows: (a) With respect to each Demised Premises, subject to the further provisions of this Section 1.7, it is the understanding and intention of the parties that at the election of Landlord the space in each Store may be physically separated into two (2) separate premises consisting of, (i) the space in which the Tenant presently intends to continue to occupy and maintain retail business operations as a Store with a reduced footprint (the aggregate amount thereof, “Tenant Retained Space”), and (ii) the remainder of the space (the “Recapture Space”) which is currently occupied by the respective Store (and which is not subject to any Lease as of the date hereof) and which may be recaptured by Landlord. Subject to the further provisions hereof, the aggregate Recapture Space shall consist generally of approximately fifty percent (50%) of the total Gross Leasable Square Footage of each Store (excluding from this calculation all Additional Recapture Space and all space which is subject to a Lease as of the date hereof), all or a portion of which shall be available for recapture by Landlord over time for its sole and exclusive use and benefit as hereinafter set forth; provided, however, that in no event shall the Tenant Retained Space at any particular Demised Premises comprise less than an aggregate of forty thousand (40,000) square feet of Gross Leasable Square Footage; provided further, however, the Gross Leasable Square Footage of any interior SAC must either be recaptured in its entirety by Landlord, or shall be excluded from the computation of 40,000 square foot minimum; provided, further, however, that with respect to Lands’ End Space which is in excess of approximately twelve thousand (12,000) Gross Leasable Square Footage in any one (1) Demised Premises, such Gross Leasable Square Footage will be included in the calculation of (and may potentially reduce) the amount of the Recapture Space. By way of example only: (i) if Tenant is presently operating in eighty percent (80%) of the space in a Sears Store (excluding any Additional Recapture Space) and twenty percent (20%) of the space is subject to a Lease as of the date hereof, the aggregate amount of Recapture Space shall consist of approximately forty percent (40%) of the space in the Sears Store (subject to the forty thousand (40,000) square-foot minimum for the Tenant Retained Space); and (ii) if a Sears Store contains one hundred thousand (100,000) Gross Leasable Square Footage and there is a Lands’ End Space of twenty thousand (20,000) Xxxxx Xxxxxxxx Xxxxxx Xxxxxxx, Xxxxxxxx can recapture up to forty thousand (40,000) Gross Leasable Square Footage (50% of 80,000 Gross Leasable Square Footage). (b) It is the understanding and intention of the parties that the following general principles shall govern such separation and recapture: taking into account all separations and divisions previously made in connection with all Leases as of the date of this Master Lease, the separation and division of any Store shall be accomplished such that the Tenant Retained Space as constituted from time to time, shall (i) be reasonably functional for continued use by the Kmart Tenant or Sears Tenant, as applicable, for retail operations as such operations were constituted immediately prior to the separation and recapture (excluding any occupancy or operations under any Subleases in the Tenant Retained Space); (ii) substantially comparable in size, location and utility, including exterior or mall access, windows, frontage and loading docks, and not materially disadvantaged, in comparison with the Recapture Space (for the avoidance of doubt, if Landlord recaptures portions of the Recapture Space in a series of multiple recaptures, each recapture shall result in the Tenant Retained Space from time to time having the foregoing attributes); (iii) contain or have access to certain Exclusive Store Areas which shall be designated as Common Areas on the Final Recapture Plans, which (A) are reasonably necessary or useful for the commercially viable use, operation and occupancy of the Recapture Space and the Tenant Retained Space, and (B) will not materially interfere with Tenant’s continued use and operation of the Tenant Retained Space; (iv) comply with all Legal Requirements; including those of the ADA (other than preexisting conditions or by reason of Tenant’s Acts) as hereinafter defined); (v) reasonably accommodate Tenant’s needs with respect to the preparations for and implementation of Tenant’s relocation in the Tenant Retained Space; including without limitation minimization to the extent commercially reasonably practicable of disruption to Tenant’s retail operations (including with respect to multiple recaptures by Landlord of portions of the Recapture Space); and (vi) are physically separate and secure from Landlord’s or any third-party tenant’s operations, other than shared Exclusive Store Areas (“Division Principles”). Consistent with the Division Principles and subject to the further provisions of this Section 1.7, the Parties agree to work together cooperatively and in good faith to minimize to the extent commercially reasonable the costs of the Recapture Separation Work, including the cost of relocating Tenant, Lands’ End, Sears Hometown and Tenant’s occupants under the Subleases in a commercially reasonable manner. (c) The parties have attached as Schedule 1.7(c) to the Side Letter a set of initial, incomplete, preliminary conceptual and schematic plans (“Preliminary Recapture Plans”) for each of the Stores (except for the 100% Recapture Property) which roughly outline the Recapture Space and the Tenant Retained Space, which shall be completed and further developed and refined by the Parties in accordance with the Division Principles within ninety (90) days after the Commencement Date; provided, however, that due to the particular circumstances and requirements of the individual spaces as generally shown thereon, including configurations with respect to common areas and adjacent malls, it is understood and agreed that

Recapture Space. In addition to and separate from any potential Nonprofitable Terminated Property, Tenant acknowledges and agrees that as of the date hereof each Demised Premises (other than the Tenant 100% Occupancy Properties) contains space within each Store as presently constituted which is, and/or may become, excess for the efficient operation of each Store and that may be recaptured by Landlord in its sole discretion. To optimize the utilization of any excess space, thereby increasing its rental value to Landlord, such space may be severed from this Master Lease on the terms and conditions herein. For the avoidance of doubt, for the purpose of this Section 1.7 the term “Store” shall expressly exclude all Additional Recapture Space. Accordingly, Landlord and Tenant further agree as follows: (a) With respect to each Demised PremisesPremises other than the Tenant 100% Occupancy Properties, subject to the further provisions of this Section 1.7, it is the understanding and intention of the parties that at the election of Landlord the space in each Store may be physically separated into two (2) separate premises consisting of, (i) the space in which the Tenant presently intends to continue to occupy and maintain retail business operations as a Store with a reduced footprint (the aggregate amount thereof, “Tenant Retained Space”), and (ii) the remainder of the space (the “Recapture Space”) which is currently occupied by the respective Store (and which is not subject to any Lease as of the date hereof) and which may be recaptured by Landlord. Subject to the further provisions hereof, the aggregate Recapture Space shall consist generally of approximately fifty percent (50%) of the total Gross Leasable Square Footage of each Store (excluding from this calculation all Additional Recapture Space and all space which is subject to a Lease as of the date hereof), all or a portion of which shall be available for recapture by Landlord over time for its sole and exclusive use and benefit as hereinafter set forth; provided, however, that in no event shall the Tenant Retained Space at any particular Demised Premises comprise less than an aggregate of forty thousand (40,000) square feet of Gross Leasable Square Footage; provided further, however, the Gross Leasable Square Footage of any interior SAC must either be recaptured in its entirety by Landlord, or shall be excluded from the computation of 40,000 square foot minimum; provided, further, however, that with respect to Lands’ End Space which is in excess of approximately twelve thousand (12,000) Gross Leasable Square Footage in any one (1) Demised Premises, such Gross Leasable Square Footage will be included in the calculation of (and may potentially reduce) the amount of the Recapture Space. By way of example only: (i) if Tenant is presently operating in eighty percent (80%) of the space in a Sears Store (excluding any Additional Recapture Space) and twenty percent (20%) of the space is subject to a Lease as of the date hereof, the aggregate amount of Recapture Space shall consist of approximately forty percent (40%) of the space in the Sears Store (subject to the forty thousand (40,000) square-foot square‑foot minimum for the Tenant Retained Space); and (ii) if a Sears Store contains one hundred thousand (100,000) Gross Leasable Square Footage and there is a Lands’ End Space of twenty thousand (20,000) Xxxxx Xxxxxxxx Xxxxxx Xxxxxxx, Xxxxxxxx can recapture up to forty thousand (40,000) Gross Leasable Square Footage (50% of 80,000 Gross Leasable Square Footage). (b) It is the understanding and intention of the parties that the following general principles shall govern such separation and recapture: taking into account all separations and divisions previously made in connection with all Leases as of the date of this Master Lease, the separation and division of any Store shall be accomplished such that the Tenant Retained Space as constituted from time to time, shall (i) be reasonably functional for continued use by the Kmart Tenant or Sears Tenant, as applicable, for retail operations as such operations were constituted immediately prior to the separation and recapture (excluding any occupancy or operations under any Subleases in the Tenant Retained Space); (ii) substantially comparable in size, location and utility, including exterior or mall access, windows, frontage and loading docks, and not materially disadvantaged, in comparison with the Recapture Space (for the avoidance of doubt, if Landlord recaptures portions of the Recapture Space in a series of multiple recaptures, each recapture shall result in the Tenant Retained Space from time to time having the foregoing attributes); (iii) contain or have access to certain Exclusive Store Areas which shall be designated as Common Areas on the Final Recapture Plans, which (A) are reasonably necessary or useful for the commercially viable use, operation and occupancy of the Recapture Space and the Tenant Retained Space, and (B) will not materially interfere with Tenant’s continued use and operation of the Tenant Retained Space; (iv) comply with all Legal Requirements; including those of the ADA (other than preexisting conditions or by reason of Tenant’s Acts) as hereinafter defined); (v) reasonably accommodate Tenant’s needs with respect to the preparations for and implementation of Tenant’s relocation in the Tenant Retained Space; including without limitation minimization to the extent commercially reasonably practicable of disruption to Tenant’s retail operations (including with respect to multiple recaptures by Landlord of portions of the Recapture Space); and (vi) are physically separate and secure from Landlord’s or any third-party third‑party tenant’s operations, other than shared Exclusive Store Areas (“Division Principles”). Consistent with the Division Principles and subject to the further provisions of this Section 1.7, the Parties agree to work together cooperatively and in good faith to minimize to the extent commercially reasonable the costs of the Recapture Separation Work, including the cost of relocating Tenant, Lands’ End, Sears Hometown and Tenant’s occupants under the Subleases in a commercially reasonable manner. (c) The parties have attached as Schedule 1.7(c) to the Side Letter a set of initial, incomplete, preliminary conceptual and schematic plans (“Preliminary Recapture Plans”) for each of the Stores (except for the 100% Recapture Property) which roughly outline the Recapture Space and the Tenant Retained Space, which shall be completed and further developed and refined by the Parties in accordance with the Division Principles within ninety (90) days after the Commencement Date; provided, however, that due to the particular circumstances and requirements of the individual spaces as generally shown thereon, including configurations with respect to common areas and adjacent malls, it is understood and agreed thatthat the Preliminary Recapture Plans will require further notes, annotations and changes, including without limitation those which solve for particular issues of sharing window space/frontage, access, loading docks and the like in which there may be slight variations from the approximate fifty percent (50%) recapture concept as provided above. The Parties intend that the Preliminary Recapture Plans shall be subject to written changes from time to time as shall be negotiated reasonably and in good faith by the Parties, including such additional notes, annotations and changes and identification of additional Common Areas which shall be available for the shared use by the Tenant Retained Space (and all third‑party Lease improvements), and the Recapture Space, and generally identifying and describing the Recapture Separation Work and promptly upon the execution of this Master Lease the Parties shall continue to work together expeditiously, continuously and in good faith to further develop and refine the Preliminary Recapture Plans and prepare and implement final plans for such physical separations in accordance with such Division Principles with respect to all Stores (such final plans as mutually agreed to in writing by the Parties, the “Final Recapture Plans”). If and to the extent the Parties determine after the Commencement Date that Preliminary Recapture Plans and Final Recapture Plans are necessary for any or all of the 100% Recapture Property, the Parties shall agree on the same in good faith in accordance with the Division Principles. Each Recapture Notice shall contain Landlord’s proposal for further refinements of the Preliminary Recapture Plans (including designation of Exclusive Store Areas as Common Areas), and the configuration, separation and division of the subject Recapture Space and the Tenant Retained Space, and Landlord and Tenant shall meet and confer from time to time as necessary or desirable to discuss Landlord’s proposal (which shall reflect the Parties’ prior discussions to the extent reasonably practicable) and the Parties shall use all good faith efforts to agree on the Final Recapture Plans for such configuration, separation and division as soon as reasonably practicable after the date hereof. Without limiting the foregoing, the work to be performed by Landlord to effectuate the separation and recapture of any Demised Premises pursuant to this Section 1.7 shall include the following: ● Construct the demising wall separating the Recapture Space and the Tenant Retained Space; ● Separate the HVAC and utilities so that the Tenant Retained Space operates on existing stand‑alone facilities after the separation of such Demised Premises (including separate meters); ● Construct an exterior entrance for the Tenant Retained Space if, and only if, the Tenant Retained Space is left without an exterior entrance as a result of the layout/design of the separation, subject to full compliance with ADA and all other Legal Requirements, or as required by Subleases existing as of the Prior Commencement Date; ● Construct new vertical transportation for the Tenant Retained Space if, and only if, the Tenant Retained Space is located on two (2) floors and is left without any vertical transportation as a result of the layout/design of the separation, subject to full compliance with ADA and all other Legal Requirements; ● Construct new restrooms for the Tenant Retained Space if, and only if, the Tenant Retained Space is left without any restrooms (or insufficient restrooms to satisfy municipal code requirements) as a result of the layout/design of the Recapture Separation Work, subject to full compliance with ADA and all other Legal Requirements; and ● Perform asbestos and other environmental remediation directly caused by the Recapture Separation Work, except to the extent expressly provided on Schedule 20.3 to the Side Letter. Notwithstanding the foregoing, Landlord shall have no obligation to “modernize” or otherwise to do any work in connection with the Tenant Retained Space to a higher standard than the standard of the improvements and finish work in the interior of the Tenant Retained Space existing as of the Prior Commencement Date (including with respect to HVAC and utilities), subject to any Upgrades requested by Tenant as provided below at Tenant’s sole cost and expense; provided, however, that all entrances, exits and exterior facades, treatments, signage and windows for the Tenant Retained Space and Recapture Space shall be harmonious in style, and consistent in general treatment and overall aesthetics. (d) Landlord shall have the right in its sole discretion, at any time and from time to time upon not less than one hundred eighty (180) days’ Notice to Tenant (the “Recapture Notice,” a form of which is attached hereto as Schedule 1.7(d), which shall include a copy of the title report referred to below), subject to the further provisions of Section 1.7(j)(vi) to terminate this Master Lease with respect to the whole of the Recapture Space with respect to a particular Demised Premises (other than the Tenant 100% Occupancy Properties) or any portion thereof, on a Property by Property basis as identified in the Recapture Notice, on the earlier of (i) the date (“Proposed Recapture Date”) set forth in the Recapture Notice and (ii) the date (“Tenant Recapture Termination Date”) set forth in a Notice from Tenant after receipt of the Recapture Notice given not later than sixty (60) days after receipt of the Recapture Notice, which Tenant Recapture Termination Date shall be not less than ninety (90) days after receipt of the Recapture Notice. The date for the conveyance of the Recapture Space and the termination of the Master Lease with respect thereto shall occur on the earlier of (A) the Proposed Recapture Date, and (B) any Tenant Recapture Termination Date, and is referred to as the “Actual Recapture Date.” On or before the Actual Recapture Date, Tenant shall have substantially complied with the provisions of Sections 28.1(a), (b) and (d). Tenant shall remain liable to Landlord for the performance of all unperformed obligations set forth in Article XXVIII, which shall be performed as expeditiously as possible following the Actual Recapture Date, but in no event later than one hundred eighty (180) days following the Actual Recapture Date (subject to reasonable extensions according to the nature of the work to be performed, further subject to additional reasonable extensions for delays due to customary acts or occurrences of force majeure). Landlord agrees to provide access to the Recapture Space as reasonably necessary for Tenant to satisfy the obligations set forth in the immediately preceding sentence provided that Landlord has approved the duration and scope of Tenant’s work and Tenant has provided such other information as Landlord may reasonably request. Tenant shall avoid any interference with the Recapture Separation Work when accessing the Recapture Space following the Actual Recapture Date in accordance with this subsection (d). Landlord shall, at its sole cost and expense, provide removable, temporary partitions or screens between the Tenant Retained Space and the Recapture Space during the performance of the Recapture Separation Work. In no event shall Landlord remove any Alterations which are required pursuant to Legal Requirements or Insurance Requirements.