LEASE
BY AND BETWEEN
000 XXXXX XXXXXX LIMITED PARTNERSHIP,
a Maryland Limited Partnership
And
BAYOU PLACE PERFORMANCE HALL GENERAL PARTNERSHIP,
a Texas General Partnership
THIS LEASE (this "Lease") made this ______ day of June, 1997, by and
between 000 XXXXX XXXXXX LIMITED PARTNERSHIP, a Maryland limited partnership
("Landlord"), and BAYOU PLACE PERFORMANCE HALL GENERAL PARTNERSHIP, a Texas
corporation ("Tenant");
WITNESSETH THAT, in consideration of the rents, covenants and agreements
hereinafter set forth, such parties enter into the following agreement:
ARTICLE I
EXHIBITS AND DEFINITIONS
Section 1.1 Exhibits
The exhibits listed below and attached to this Lease are incorporated
herein by this reference:
EXHIBIT "A" Site plan depicting the project intended by Landlord to be
initially developed as an entertainment center on the
Property (such project, including the Property, are
hereinafter called the "Project", however, the parties
hereto recognize that the Project does not include the
parking garage that is commonly known as the "Civic Center
Garage" which is presently owned and operated by the City
and which is located below grade on the Property and
property adjacent to the Property).
EXHIBIT "B" Legal description of land underlying the Project (the
"Property")
EXHIBIT "C" Rules and Regulations applicable to Tenant
EXHIBIT "D" Forms of Non-Disturbance Agreement
Section 1.2 Definitions
For purposes of this Lease, the following terms shall have the following
meanings:
Arbitration Notice. As defined in Article XX hereof.
Additional Rent. All amounts required or provided to be paid by
Tenant under this Lease other than Minimum Annual Rent and Percentage Rent.
Affiliates. As defined for purposes of the Securities Act of 1933,
as amended.
And/or - means any one or more of the items joined by such
conjunction.
Applicable Law. Means any duly adopted and enforceable law, statute,
regulation, ordinance, resolution, code or order of any federal, state, county,
district, municipality, city or other governmental entity and any order of any
Court of competent jurisdiction that is applicable to the Project, the Premises,
Landlord and/or Tenant (as the context may require), including, without
limitation, the Xxxxxxx-Xxxxxxx Occupational Safety and Health Act and the
Americans with Disability Act. Whenever a provision of this Lease requires a
party hereto to comply with Applicable Law, such party shall have the right to
enjoy any grand-father or non-conforming use provisions that may apply to such
Applicable Law.
Breakpoint. As defined in Section 4.1 hereof.
Casualty. As defined in Section 16.1 hereof.
Control Area. The portions of the Common Areas adjacent to the
Premises and cross-hatched on Exhibit A hereto.
City. Means the City of Houston, Texas, acting in its capacity as
Landlord under the Ground Lease.
Commencement Date. As defined in Section 2.3 hereof.
Condemnation. As defined in Section 17.1 hereof.
Credit Card. As defined in Section 4.4 (a) hereof.
Default Interest Rate. Means the lesser of (a) the maximum rate of
interest payable by Tenant as permitted under Applicable Law and (b) an annual
rate equal to two percent (2%) over the then current prime rate as published in
the Wall Street Journal (or its successor).
Excluded Personal Property. Any inventory, trade fixtures,
machinery, equipment or other personal property, used or useful in Tenant's
business owned by Tenant or third parties including, without limitation, sound
and light equipment, acoustical wall coverings, seating, draperies, ticketing
equipment, computer systems, video equipment, interior and exterior signage,
cash registers and point-of-sale equipment and
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concession stand equipment. The Excluded Personal Property does not include
permanent improvements to the Premises, such as fixtures (as opposed to trade
fixtures such as stage lighting), air conditioning equipment, plumbing,
electrical wiring, curtain walls, storefronts, or other elements of the TALP
Improvements (as that term is defined in the Ground Lease). During the Lease
Term all permanent improvements made to the Premises by the Tenant shall remain
the property of Tenant in accordance with the provisions of Section 10.2 hereof
and, for purposes of determining the federal and/or state income tax liability
of Tenant, Landlord and Tenant shall each take the position that all permanent
improvements to the Premises made by Tenant are the property of Tenant (and,
therefore, Tenant shall have the right, subject to applicable tax law, to
depreciate same). Upon the termination of the Lease Term, the provisions of
Section 10.2 hereof shall control the disposition of such permanent improvements
to the Premises made by Tenant.
Extended Terms. As defined in Section 2.3 (b) hereof.
Fiscal Year. Tenant's fiscal year of operations, currently January
1, to December 31. Tenant shall have the right, from time to time, after notice
to Landlord, to select another consecutive twelve (12) month period as the
Fiscal Year. In the event of a change in the Fiscal Year, the parties hereto
shall make an equitable adjustment in the Breakpoint for any Fiscal Year that
contains less than, or more than, twelve (12) full calendar months.
Four-Wall-Deal. As defined in Section 4.4 (b) hereof.
GAAP. Generally accepted accounting principles, applied on a
consistent basis.
Gross Sales. As defined in Section 4.4 (a) hereof.
Ground Lease. Means that certain Lease and Development Agreement,
dated November 8, 1991, between the City and Landlord, as amended by that
certain First Amendment to Lease and Development Agreement, dated May 24, 1996,
between the City and Landlord and that certain Second Amendment to Lease and
Development Agreement and Angelika Parking Rights Agreement, dated April 28,
1997, by and among the City, Landlord and Xxxxxxxx Xxxxxxx, Inc. The term Ground
Lease, for purposes of this Lease, shall also include each amendment to the
Ground Lease entered into after the date hereof that does not materially
adversely affect any of the rights of Tenant hereunder (or if such amendment
contains provisions that materially adversely affect any of the rights of Tenant
hereunder, the term Ground Lease shall include those provisions of such
amendment that do
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not materially adversely affect the rights of Tenant hereunder). In addition, in
the event that an amendment to the Ground Lease entered into after the date
hereof materially adversely affects any of the rights of Tenant hereunder, such
amendment shall nevertheless be considered part of the Ground Lease for purposes
of this Lease if such amendment has been consented to and/or approved by Tenant
in writing (which consent Tenant shall not be obligated to provide). Landlord
shall promptly provide Tenant with a true and correct copy of each amendment to
the Ground Lease entered into after the date hereof.
Intended Use. Means the use of the Premises as a performance hall
for the presentation of live musical performances, live theatrical performances
and other entertainment events and the selling of food, beverages, and
merchandise typically sold at such facilities and, as an incidental use, the use
of the Premises as a catering facility and function room. The term "Intended
Use" also includes (A) all other forms of entertainment which make use of places
of public assembly, (other then cinema auditoriums), which uses may, but need
not necessarily, include the presentation of both live and pre-recorded
entertainment (other then motion pictures), broadcast entertainment, interactive
entertainment, lectures, meetings, conventions and educational presentations,
(B) the operation of a box office for the sale of admissions to events to be
held at other venues, and (C) the offering of entertainment related merchandise
such as books, periodicals, videos, audio recordings, computer software and such
products as may evolve from, augment or supersede such products.
Landlord's Work. As defined in Section 3.1 hereof.
Landlord's Mortgage. Any deed of trust, mortgage or other security
interest granted by Landlord that encumbers the leasehold estate created by the
Ground Lease and the other rights of Landlord under the Ground Lease.
Landlord's Mortgagee. The holder or beneficiary of any assignment,
lien, security interest or other security encumbrance encumbering, mortgaging
and assigning to such holder or beneficiary the leasehold estate created by the
Ground Lease and the other rights of Landlord under the Ground Lease and under
the easements and agreements executed by Landlord and the City in connection
with the Ground Lease.
Lease. This lease and all amendments hereof and supplements hereto.
Lease Term. As defined in Section 2.3 hereof.
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Lease Year. As defined in Section 2.4 hereof.
Minimum Annual Rent. As defined in Section 4.1 (a) hereof.
Percentage Rent. As defined in Section 4.1 (b) hereof.
Premises. Means that certain portion of the Project that contains
approximately Fifty-Nine Thousand Two Hundred Thirty-Three (59,233) square feet
of space distributed as follows: (i) approximately Thirty Thousand Nine Hundred
Twenty-Eight (30,928) square feet of contiguous first floor space, (ii)
approximately Nineteen Thousand Five Hundred Forty-Eight (19,548) square feet of
contiguous second floor space, which includes an intermediate floor of
approximately One Thousand Seven Forty (1,740) square feet of contiguous floor
space, and (iii) approximately Eight Thousand Seven Hundred Fifty-Seven (8,757)
square feet of storage space located below Xxxxx Street. The first and second
floor areas are adjacent to Xxxxx Street, and bound by Xxxxxxx Xxxxxx xxx Xxxxx
Xxxxxx, Xxxxxxx, Xxxxx. The Premises (with the exception of the intermediate
floor) is outlined in red on Exhibit A. The Premises includes the non-exclusive
mutual and reciprocal rights and easements to use the Common Areas from time to
time located on the Property as provided herein.
Project. As defined in Section 1.1 hereof.
Project Floor Area. As defined in Section 2.1 (b) (ii). In the event
the Project is modified, Landlord shall have the right to modify the Project
Floor Area (subject to the restrictions contained in this Lease) by providing
Tenant with a notice of such modification, which modification shall be
accompanied by a certification of such adjusted Project Floor Area that was
prepared by Gensler Architects, or such other architect selected by Landlord and
reasonably acceptable to Tenant, and that is addressed to Tenant.
Property. As defined in Section 1.1 hereof.
Rent. The term Rent shall include all monetary obligations payable
by Tenant hereunder, including without limitation Minimum Annual Rent,
Percentage Rent, Tenant's pro rata share of Taxes and Common Area Costs, and
Additional Rent.
Required Completion Date. As defined in Section 2.3 (a) hereof.
Restoration. As defined in Section 16.1 hereof.
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Tenant Mortgage. As defined in Section 15.1(a) hereof.
Tenant Mortgagee. The holder or beneficiary of any assignment, lien,
security interest or other security encumbrance encumbering, mortgaging and
assigning to such holder or beneficiary the leasehold estate created by this
Lease and the other rights of Tenant under this Lease and under the easements
and agreements executed by Tenant and Landlord in connection with this Lease
that has first priority (i.e., holds a first priority lien on Tenant's interests
in this Lease).
Tenant's Work. As defined in Section 3.2 hereof.
ARTICLE II
PREMISES AND TERM
Section 2.1 Premises/ Measurement of Floor Areas
(a) Landlord hereby leases to Tenant and Tenant hereby rents from Landlord
the Premises.
(b) Within sixty (60) days of the date hereof, Landlord shall deliver to
Tenant a certificate from Gensler Architects stating the Premises Floor Area,
and the Project Floor Area.
(i) For purposes of determining the Premises Floor Area, the number of
square feet contained in that portion of the interior of the Project
constituting the Premises (exclusive of that part of the Premises located
beneath Xxxxx Street) shall be measured (A) with respect to the front and
rear width thereof, from the exterior face of the adjacent exterior or
corridor wall or, if none, from the center of the demising partition, to
the opposite exterior face of the adjacent exterior or corridor wall or,
if none, to the center of the opposite demising partition, and (B) with
respect to the depth thereof, from the exterior face of the adjacent
exterior or corridor wall or, if none, from the center of the demising
partition to the exterior face of the rear exterior wall, or corridor
wall, or, if neither, to the center of the rear demising partition; and in
no case shall there be any deduction for columns or other structural
elements within any the Premises.
(ii) The Project Floor Area shall be measured and determined using the
same methodology utilized in the determination of Premises Floor Area,
except that the term "Premises" utilized in Section 2.1 (b) (i) shall be
deemed to mean the premises of each leaseable space in the Project, but
shall not include Common Areas. Project Floor Area shall not
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include any portion of the Project that is located below Xxxxx Street.
Section 2.2 Roof and Walls
Subject to Tenant's rights under Section 10.1 hereof concerning Tenant's
signage and the last sentence of this Section 2.2, Landlord shall have the
exclusive right to use all or part of the roof of the Premises and the exterior
side and rear walls of the Premises for purposes of carrying out its obligations
under this Lease, including, without limitation, erecting scaffolds and other
aids to the construction and installation of the same, and installing,
maintaining, using, repairing and replacing pipes, ducts, conduits and wires
leading through, to or from the Premises and serving other parts of the Project
in locations which, in Tenant's reasonable judgment, do not materially adversely
interfere with Tenant's use of the Premises. Tenant shall have no right
whatsoever in the exterior of exterior walls, including the roof or any
structural portions of the Premises, except as required in connection with the
completion of Tenant's Work (as hereinafter defined) in accordance with the
provisions of Article III hereof and except in accordance with Tenant's signage
rights. Landlord shall have the right to place signage on the exterior walls of
the Premises and the roof of the Premises (and grant signage rights to others in
connection with such areas), provided that Tenant`s signage rights hereunder are
not materially adversely affected.
Section 2.3 Lease Term
(a) The term of this Lease (hereinafter the "Lease Term") shall commence
upon the earlier of: (i) November 15, 1997 (the Required Completion Date), and
(ii) the day on which Tenant initially opens the Premises for business to the
public, the applicable date being hereinafter the "Commencement Date". The term
of this Lease shall end on the last day of the tenth (10th) Lease Year (as
hereinafter defined) after the Commencement Date unless sooner terminated as
herein provided or unless extended as provided in Section 2.3 (b) below.
(b) Landlord hereby grants Tenant one (1) option to extend the Lease Term
for one five (5) year period (the "Extended Term"); provided (i) at the date of
the exercise of such option and on the first day of the Extended Term this Lease
is in full force and effect, and (ii) an uncured Event of Default does not exist
on the first day of the Extended Term. Tenant shall exercise such option to
extend by giving Landlord notice of its intention to extend not less than twelve
(12) months prior to the expiration of the then current Lease Term. During the
Lease Term, as extended by the Extended Term, the terms, covenants, and
conditions of this Lease shall apply, except that Tenant shall
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only have one (1) option to extend the Term and if Tenant utilizes such option,
it will not have additional options. The Extended Term shall commence on the day
immediately succeeding the expiration date of the next preceding term and shall
end, unless sooner terminated, at midnight on the day immediately preceding the
fifth (5th) anniversary of the first day of such term. "Lease Term" shall
include the initial approximately ten (10) year term of this Lease and the
properly exercised Extended Term. Time shall be of the essence with respect to
this Section 2.3(b).
Section 2.4 Lease Year, Defined
"Lease Year," as used herein, means a period of twelve (12) consecutive
months during the Lease Term commencing each January 1 and ending each December
31; provided, however, the first Lease Year shall mean that portion of the Lease
Term in excess of a calendar year commencing on the Commencement Date and ending
on December 31, 1998.
ARTICLE III
LANDLORD'S AND TENANT'S WORK
Section 3.1 Landlord's Work
Landlord shall use its reasonable efforts to cause the Landlord's Work to
be substantially completed by the earlier of November 15, 1997, or provided
Tenant provides Landlord with reasonable advance notice of such date, the date
that Tenant anticipates initially opening its business in the Premises to the
public. The term Landlord's Work means the construction of the Control Area and
the exterior walls of the Premises that face Xxxxx, Xxxxxx, Xxxxxxx Xxxxxx and
Texas Avenue (exclusive of wall penetrations, storefronts, ticket windows, bus
parking areas, loading docks and doorways). Except as specifically set forth
below and in the other provisions of this Lease (including Landlord's repair and
maintenance obligations contained herein), Landlord shall have no further
obligations with respect to the condition of the Premises, and, with the
exception of the Landlord's Work described in this Section 3.1, Tenant
acknowledges that it is taking the Premises in "as-is" condition. Landlord
hereby represents and warrants that the Landlord's Work has been, or will be,
completed in compliance with all Applicable Laws and in accordance with the
plans and specifications for the Landlord's Work. Landlord shall install a
grease trap in the Project for the use, in common, of the tenants of the
Project, Tenant shall have the right to connect to such grease trap and utilize
up to 5,000 gallons of its capacity.
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Section 3.2 Tenant's Work
(a) All work with respect to the Premises that is not provided in Section
3.1 hereof to be done by Landlord shall be performed by Tenant (hereinafter
called "Tenant's Work") necessary to create a two level, first class, fully
functional, performance hall with a capacity of approximately 2,800 spectators
in a combination of portable and permanent seating (but not less than 2,500
spectators in a combination of portable and permanent seating). Tenant's Work
shall include construction of the following items to the extent, and in the
manner, provided for in the Tenant's Plans (as hereinafter defined): finished
floors and finished ceilings, utility service hook-ups and distribution,
construction of a performance stage, the installation of house lights and all
life safety equipment and systems, the installation of a sound and lighting
system that is appropriate for the use of the Premises as a first class live
performance hall, the installation of any acoustic features selected by Tenant,
the construction and installation of bathrooms, the construction of all doorways
and exits, the construction of a box office, the construction of all appropriate
"back of the house" facilities, such as a green room (or a space that is capable
of being utilized as a green room), dressing rooms (with bathroom and shower
facilities), bus parking areas, and loading docks and service areas, the
construction of all appropriate "front of the house" facilities, such as sound
board areas and lighting control boards, the construction of adequate storage
areas, HVAC installation and distribution, sprinkler system installation, the
construction of all interior partitions, finished walls, appropriate staircases
and vertical transportation sufficient to serve the Premises, the installation
of grease traps (at Tenant's election), service bar facilities and kitchen
facilities, the installation of all interior and exterior signage, including a
theater style marquee sign, the installation of all storefronts, fire exits and
fire stairways, the construction of the demising wall of the Premises that is
closest to Xxxxx Street (including the construction of both sides of such
demising wall, from the floor of the first floor of the Premises, to the
underside of the roof of the Premises), the construction of a permanent riser
system on the second floor of the Premises, the acquisition and installation of
a portable riser system on the first floor of the Premises (at Tenant's
election), the installation of a service elevator that connects the first and
second floors of the Premises to the storage area of the Premises located
beneath Xxxxx Street, and the acquisition and installation of the Excluded
Personal Property. Tenant shall do and perform at its expense all Tenant's Work
diligently and in accordance with the provisions herein.
(b) Tenant's Work shall be performed in accordance with Applicable Law, to
the end that the Premises is in material compliance with Applicable Law on the
Commencement Date. In
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connection with the Premises: (i) Tenant shall, in accordance with Applicable
Law, satisfy and comply with, in all material respects, the requirements of (x)
the Americans with Disabilities Act applicable to the Premises (including the
regulations issued thereunder) and (y) the Texas Architectural Barriers Act
applicable to the Premises (including the regulations issued thereunder), as
each may be amended from time to time (except to the extent that such laws,
regulations or amendments are not applicable to the Premises, or Tenant's
operations thereat); and (ii) TENANT HEREBY INDEMNIFIES THE CITY AND LANDLORD
FOR ANY AND ALL CLAIMS AND LIABILITIES ARISING OUT OF TENANT'S FAILURE TO
SATISFY THE ABOVE DESCRIBED REQUIREMENTS (i.e., AMERICANS WITH DISABILITIES ACT
AND TEXAS ARCHITECTURAL BARRIERS ACT).
Section 3.3 Tenant's Obligations Before Commencement Date
(a) Tenant has retained Gensler Architects (the "Tenant's Architect") to
prepare the Tenant's Schematic Plans and the Tenant Plans.
(b) Prior to the date hereof, Tenant has delivered to Landlord, for
informational purposes, a schematic layout of the Premises (the Tenant's
Schematic Plans).
(c) Within twelve (12) weeks after the date hereof, Tenant shall submit to
Landlord one (1) reproducible set (sepia) and two (2) copies of plans and
specifications, prepared by a registered architect or engineers, of all Tenant's
Work to be done within the Premises (hereinafter the "Tenant's Plans") which
shall substantially comply with Tenant's Schematic Plan. Landlord shall review
Tenant's Plans in a timely manner and shall notify Tenant of any failures of
Tenant's Plans to substantially comply with Tenant's Schematic Plan or to
otherwise meet with Landlord's approval (which notice, if containing an
objection, shall be reasonably detailed), which approval shall only be required
in connection with any proposed roof cuts, or any proposed changes in the
exterior facade, storefront, roof or structural portions of the Project and
which approval shall not be unreasonably withheld, delayed or conditioned. In
the event that Landlord does not object to the Tenant's Plans within ten (10)
days after the date Landlord actually receives same from Tenant, the Tenant
Plans shall be deemed approved by Landlord. Tenant shall within fifteen (15)
days after receipt of any such notice of objection cause Tenant's Plans to be
revised to the extent reasonably necessary to obtain Landlord's approval and
resubmitted for Landlord's approval, which approval shall not be unreasonably
withheld, delayed or conditioned. When Landlord has approved the original or
revised Tenant's Plans (or is deemed to have approved same), at Tenant's
request, Landlord shall initial and return one (1) set of approved Tenant's
Plans to Tenant. Approval (or deemed approval) of plans and specifications by
Landlord shall not constitute the assumption of any responsibility of Landlord
for their accuracy or sufficiency, or compliance with applicable
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codes and Tenant shall be solely responsible for such plans and specifications.
Tenant shall not commence any of Tenant's Work until Landlord has approved (or
is deemed to have approved) Tenant's Plans, unless prior approval by Landlord
has been obtained in writing.
(d) Tenant shall complete the Tenant's Work in substantial accordance with
Tenant's Plans therein no later than the Required Completion Date.
(e) On or before the Required Completion Date, Tenant shall install all
merchandise and inventory in the Premises and shall open the Premises for
business to the general public.
(f) At the request of Landlord, Tenant (or its representative) shall
attend construction meetings with representatives of Landlord and the City in
connection with the undertaking and completion of the Tenant's Work. Tenant (or
its representative) shall not be obligated to attend more then one (1) such
meeting in any calendar month.
Section 3.4 Condition of Premises
Tenant's opening of the Premises for business to the public shall be
conclusive evidence of Tenant's acceptance thereof, including Landlord's Work,
in good order and satisfactory condition, and in compliance with Landlord's
obligations hereunder, except for (a) latent defects in any of the Landlord's
Work, (b) any patent defects in the Landlord's Work (exclusive of punch list
items of the Landlord's Work that are completed after the Required Completion
Date) of which Tenant notifies Landlord in writing no later than the ninetieth
(90th) day following the Required Completion Date, and (c) any patent defect in
any punch list item of the Landlord's Work that is completed after the Required
Completion Date of which Tenant notifies Landlord in writing no later than the
ninetieth (90th) day following the completion of such punch list item.
Section 3.5 Construction Rules
Tenant and Tenant's contractor, and their respective employees,
contractors and agents shall fully comply with all reasonable and
non-discriminatory rules and regulations of Landlord and/or Landlord's
contractor concerning construction, staging and/or safety in connection with the
undertaking and completion of the Tenant's Work that are provided to Tenant in
writing. With the exception of life safety rules and regulations, no such rules
and regulations shall be effective until five (5) business days after delivery
to Tenant of a written notice setting forth such rules and regulations.
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ARTICLE IV
RENT
Section 4.1 Minimum and Percentage Rent
Tenant covenants and agrees to pay to Landlord, commencing on the
Commencement Date, without notice, demand or set-off, at Landlord's address for
notice (Landlord's and Tenant's notice addresses being the addresses specified
in Section 25.7 hereof), as rent for the Premises, the following:
(a) A Minimum Annual Rent of One Hundred Thousand and 00/100 Dollars
($100,000.00) per annum, payable in equal monthly installments of
Eight Thousand Three Hundred Thirty-Three Dollars and 33/100 Dollars
($8,333.33) each, in advance upon the first day of each and every
month commencing upon the calendar month which includes the
Commencement Date and continuing thereafter through and including
the last calendar month of the fifth (5th) Lease Year (such monthly
installment being hereinafter called "Minimum Monthly Rent");
A Minimum Annual Rent of One Hundred Fifty Thousand and 00/100
Dollars ($150,000.00) per annum, payable in equal monthly
installments of Twelve Thousand Five Hundred Dollars and 00/100
Dollars ($12,500.00) each, in advance upon the first day of each and
every month commencing on the first day of the sixth Lease Year
thereafter through and including the last calendar month of the
tenth (10th) Lease Year (such monthly installment being hereinafter
called "Minimum Monthly Rental"); and
A Minimum Annual Rent of Two Hundred Thousand and 00/100 Dollars
($200,000.00) per annum, payable in equal monthly installments of
Sixteen Thousand Six Hundred Sixty-Six Dollars and 67/100 Dollars
($16,666.67) each, in advance upon the first day of the each and
every month commencing on the first day of the Extended Term and
continuing thereafter through and including the last day of the
Extended Term (such monthly installment being hereinafter called
"Minimum Monthly Rental").
(b) Commencing upon, the Commencement Date and continuing throughout the
Lease Term and any renewals thereof, seven and one/half percent
(7.5%) of Gross Sales in excess of the Breakpoint (the resulting
figure hereinafter called "Percentage Rent"). The Breakpoint shall
is equal to: $5,000,000.00 during each of Fiscal Years 1 through 10
of the Lease Term; and $6,000,000.00
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during each of Fiscal Years 11 through 15 of the Lease Term.
Section 4.2 Miscellaneous Rent Provisions
Any Rent or other amounts to be paid by Tenant which are not paid when due
shall bear interest at the Default Interest Rate. If the Commencement Date is
other than the first day of a month, Tenant shall pay on the Commencement Date a
prorated partial Minimum Monthly Rent for the period prior to the first day of
the next calendar month, and thereafter Minimum Monthly Rent payments shall be
made not later than the first day of each calendar month.
Section 4.3 Percentage Rent, Records and Reports, Etc.
(a) Percentage Rent. Percentage Rent shall be payable within ninety
(90) days after the expiration of each Fiscal Year. Percentage Rent for any
partial Fiscal Year during the Lease Term, along with the applicable Breakpoint,
shall be equitably pro-rated based upon the number of days elapsed in such
partial Fiscal Year.
(b) Tenant's Records.
(i) Tenant shall prepare and keep at its home office (currently
located in Houston, Texas) full, complete and proper books and source documents,
in accordance with "GAAP", of the Gross Sales. Tenant shall preserve such
records for at least three (3) years.
(ii) Tenant agrees that it will furnish to Landlord, within ninety
(90) days after the expiration of each Fiscal Year (or partial Fiscal Year), a
report showing in reasonable detail the amount of such Gross Sales made by
Tenant from the Premises during the preceding Fiscal Year (or partial Fiscal
Year, as the case may be), certified as true and complete by an officer of
Tenant, such as Tenant's chief financial officer.
(iii) Landlord shall have the right for a period of three (3) years
after the end of each calender year, upon at least ten (10) days prior notice to
Tenant, to audit the books and records of Tenant relating to the Premises for
such calender year in order to verify any statement issued pursuant to this
Subsection (b) with respect to such calender year. If such audit discloses that
Gross Sales, as previously reported for the period audited were understated
Tenant shall immediately pay to Landlord: (A) the additional Percentage Rent;
and (B) if such underpayment was in excess of the greater of Five Thousand and
00/100 Dollars and two percent (2%) of the actual Gross Sales as disclosed by
such audit, the cost of such audit. Landlord agrees that, absent a finding of a
material discrepancy between the Gross Sales as reflected in such books and
records and the Gross Sales reported by Tenant, Landlord shall not exercise this
right of audit more than once in any given
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three year period, and in no event more frequently than once for each Fiscal
Year.
(iv) Tenant shall not later than the thirtieth (30th) day after the
close of each calendar month, deliver to Landlord, for informational purposes, a
written statement certified by Tenant showing, on a preliminary basis, Gross
Sales made in such calendar month, and listing by category and amount all
exclusions from Gross Sales. (In the event of a conflict between such monthly
statements and the annual statement described in Section 4.3(b)(ii), such annual
statement shall control.)
Section 4.4 Gross Sales Defined
(a) Gross Sales. The term "Gross Sales" as used herein shall mean
the entire amount of the actual sales price, whether for cash or otherwise for
all sales of admissions to the Premises and/or sale of merchandise and/or
concessions from the Premises, the proceeds to Tenant (or any subtenant or
licensee of Tenant) of all coin or card operated devices, including telephones
and video games, less amounts paid to the owners or operators of such devices
and the proceeds to Tenant of all Four-Wall Deal income. Gross Sales shall be
reduced, however, by, (i) any sums collected and paid out by Tenant for any
sales, use, occupancy, excise or other tax imposed upon or collectable by Tenant
(other than income taxes), (ii) any returned, exchanged or "pass" admissions to
the Premises, (iii) monies and/or credits received by Tenant in the settlement
of claims for loss of or damage to Tenant's merchandise or returns to shippers
or manufacturers, (iv) sales to employees, (v) sales of fixtures, equipment, or
property which are not stock in trade, by the owners or operators of such
devices, (vi) tips collected by Tenant and paid to employees, and (vii) the
actual fees paid by Tenant to performers or acts that perform in the Premises,
and the costs of all services provided by Tenant to such performers or acts.
There shall be deducted from Gross Sales the amount of any cash or credit refund
from any sale made in or from the Premises, to the extent previously included in
"Gross Sales" hereunder, and all fees or changes paid or discounts or credits
given to any person issuing or servicing credit cards, debit cards or other
non-cash means for the settlement of bills (a Credit Card) as a consequence of
the completion of a sale transaction through the use, acceptance or debiting of
such Credit Card. In the event Tenant determines to contract to a concessionaire
or operator for the operation of any merchandise concession, food service or
beverage facility or service in the Premises, Gross Sales will be limited to the
proceeds received by Tenant from such concessionaire or operator.
(b) Four-Wall-Deal Exclusions. Notwithstanding anything to the
contrary set forth in this Lease, Gross Sales with respect to any Four-Wall-Deal
(defined below), will be the amounts actually received by Tenant for the use of
the Premises and not the gross
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receipts of any third party that is not an Affiliate of Tenant contracting for
the Premises on a Four-Wall-Deal basis. As used herein, the term
"Four-Wall-Deal" means any bona fide use of the Premises by a third party that
is not an Affiliate of Tenant for attractions, events or as a meeting, lecture
or convention hall for religious, civic, private, public or education purposes,
provided such party contracts for the use of the Premises and such contract for
use is for a limited duration). Tenant shall not use the Four-Wall Deal
Exclusions as a means to minimize Percentage Rent.
Section 4.5 Real Estate Taxes
(a) Definition. (i) Landlord shall pay or cause to be paid all Real Estate
Taxes (as hereinafter defined) assessed or imposed upon the Project which become
due or payable during the Lease Term. As used in this Section 4.5 the term "Real
Estate Taxes" shall mean and include all real estate taxes, public and
governmental charges and assessments, including all extraordinary or special
assessments, taxes imposed pursuant to Section 23.13 of the Texas Tax Code, as
amended, or any similar tax governing the taxation of leasehold interests, or
assessments against any of Landlord's personal property now or hereafter located
in and used with respect to the Project, all costs, expenses and reasonable
attorneys' fees incurred by Landlord in contesting or negotiating with public
authorities (Landlord having the sole authority to conduct such a contest or
enter into such negotiations) as to any of the same and all sewer and other
taxes and charges, but shall not include taxes on Tenant's business in the
Premises, machinery, equipment, inventory or other personal property or assets
of Tenant, Tenant agreeing to pay, before delinquency, all taxes upon or
attributable to such items without apportionment (provided, however, Tenant
shall have the right to delay payment of such taxes on such excluded items in
connection with any bona fide appeal concerning such taxes).
(b) Tenant's Share. Tenant shall pay to Landlord, as Additional Rent,
Tenant's pro rata share of Real Estate Taxes which become due or payable during
the Lease Term, such pro rata share to be prorated for periods at the beginning
and end of the Lease Term which do not constitute full calendar months or years.
Tenant's pro rata share of Real Estate Taxes shall be that portion of such Real
Estate Taxes which bears the same ratio to the total Real Estate Taxes as the
Premises Floor Area bears to the Project Floor Area.
(c) Payment by Tenant. Tenant's pro rata share of Real Estate Taxes shall
be paid annually within thirty (30) days after date Landlord provides Tenant
with a statement setting forth in reasonable detail the Tenant's pro rata share
of Real Estate Taxes together with copies of all tax bills received by the
Landlord for the Project and evidence of the payment of such bills. The amount
of any Taxes payable by the Tenant shall be calculated on the basis of all
discounts which would have been available to the Landlord
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for early payment thereof, regardless of whether Landlord actually received such
discount.
ARTICLE V
PARKING AND COMMON AREAS AND FACILITIES
Section 5.1 Parking Areas
(a) The Project does not include and, except as provided herein,
Landlord shall not be obligated to provide any parking spaces or areas in
connection with the use of the Premises.
(b) Pursuant to the provisions of Section 5.13 of the Ground Lease,
Landlord, Tenant and the other tenants of the Project are granted access on a
nonexclusive basis to parking within the Garage (as that term is defined in the
Ground Lease) on the same basis as such parking is available to the general
public at the then published rates.
(c) Pursuant to and subject to the provisions of Section 5.13 of the
Ground Lease, Landlord is entitled to certain discounted employee parking rates
for a certain number of parking spaces located in City owned parking facilities,
designated by the City, that are within three (3) blocks of the Project.
Landlord shall permit Tenant, at Tenant's expense, to utilize up to twenty-five
(25) of such employee parking spaces for use by Tenant's employees each day of
the Lease Term. If Tenant elects to use all or any portion of such twenty-five
(25) employee parking spaces for its employees, then Tenant will use its
reasonable efforts, with the assistance of Landlord, to arrange with the City to
have bills sent directly to Tenant for the expenses and fees related to the use
of such spaces by Tenant's employees, and Tenant shall pay all such expenses and
fees promptly when due. If such an arrangement cannot be made with the City, and
the City bills Landlord for the use of such spaces by Tenant's employees,
Landlord shall pay such xxxx and provide Tenant with a copy of such xxxx.
Tenant, as Additional Rent, shall, within twenty (20) days of receiving any such
xxxx, pay Landlord the amount of such xxxx. In the event that Tenant fails to
pay any such xxxx in the manner provided above, and such failure continues for
ten (10) days after the date that Landlord provides Tenant with written notice
of such failure, Landlord shall have the right, exercisable by notice to Tenant
by Landlord at any time prior to the date that Tenant cures such failure, to
terminate Tenant's rights under this Subsection 5.1 (c).
(d) Pursuant to and subject to the provisions of the Ground Lease,
Landlord has the right to utilize the Garage in connection with a valet parking
operation that benefits the Project and that is operated by or for Landlord. In
the event
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that Landlord elects to implement such a valet parking operation, the City is
obligated, pursuant to and subject to the provisions of the Ground Lease to
provide Landlord with a designated parking field in the Garage that contains up
to 400 parking spaces for use by such valet parking operation. At Landlord's
election, made from time to time, Landlord may implement a valet parking
operation for the benefit of the Project. In the event that, from time to time,
such a valet parking operation is not being operated for the benefit of the
Project, Tenant, with Landlord's consent, which consent shall not be
unreasonably withheld, shall have the right to operate, or cause others to
operate, a valet parking operation at the Project for customers of the Project
during the periods, or any portion of the periods, that such a valet parking
operation is not being operated by or for Landlord. The days and hours of any
such Tenant operated valet parking operation shall be approved by Landlord,
which approval shall not be unreasonably withheld or delayed; provided that
Landlord hereby recognizes and acknowledges that any such Tenant operated valet
parking operation will most likely be operated only on the days and during the
times that a performance or event is being presented in the Premises by Tenant.
Such Tenant operated valet parking operation shall be operated in a first class
manner in accordance with reasonable rules and regulations of Landlord and the
City at a location on the Property designated by Landlord and shall have the
right, subject to the provisions of the Ground Lease, to utilize the parking
field that the City is obligated to provide in the Garage. The operator of such
Tenant operated valet parking operation shall carry liability and property
insurance coverage that names the Landlord and the City as additional insureds.
The type and amount of such insurance coverage shall be subject to the
reasonable approval of Landlord. EXCEPT TO THE EXTENT OF ANY LIABILITY RESULTING
FROM THE NEGLIGENCE OR WILFUL MISCONDUCT OF LANDLORD OR ANY OTHER PERSON
INDEMNIFIED PURSUANT TO THE TERMS OF THIS SENTENCE, TENANT SHALL INDEMNIFY,
DEFEND AND HOLD HARMLESS LANDLORD AND THE CITY FROM AND AGAINST ANY AND ALL
LIABILITY THAT MAY ARISE IN CONNECTION WITH SUCH TENANT OPERATED VALET PARKING
OPERATION. When operating a valet parking operation at the Project, Tenant shall
be solely responsible for all costs and fees of such operation, including
parking fees due the City. Tenant shall, at Landlord's option, pay the City's
parking fees to Landlord or directly to the City.
(e) Under the Ground Lease, Landlord has the right to implement a
parking validation program for the benefit of the Project that utilizes the
Civic Center Garage as contemplated by Article XVI of the Ground Lease. In the
event Landlord elects to establish such a program, and Tenant elects to
participate in such program, Tenant shall fully cooperate with Landlord's
efforts to establish such program. In the event that a parking validation
program is established, Landlord shall use its reasonable efforts to cause the
City to agree to xxxx Tenant directly for validated parking fees incurred by
Tenant and/or its
17
customers for the use of the parking validation program set forth in the Ground
Lease. In the event that a parking validation program is established by Landlord
at the Project, until such time as the City shall agree to xxxx the Tenant
directly for validated parking fees for parking services utilized by Tenant and
its customers, Landlord agrees to accept bills therefor from the City and to pay
the same when due, and Tenant agrees to reimburse to Landlord any such amounts
paid to the City by Landlord within ten (10) business days of written demand
therefor from Landlord to Tenant (accompanied by a copy of the xxxx from the
City and evidence of payment of such xxxx by the Landlord) (it being agreed that
Landlord shall not be required to continue to make such payments to the City for
so long as Tenant shall be in default of its obligation to reimburse Landlord
for such payments and that if Tenant is in default of its payment obligations
hereunder, Landlord shall have the right to immediately terminate such
validation program).
Section 5.2 Common Areas
All access roads and facilities furnished, made available or maintained by
Landlord in the Project; to the extent provided by Landlord, truck ways,
driveways, loading docks and delivery areas (not included in the Premises or
other demised premises in the Project); the roof, walls and all structural
portions of the Project, package pickup stations, elevators, escalators,
pedestrian sidewalks, malls, courts and ramps, landscaped areas, retaining
walls, stairways, bus stops, first-aid and comfort stations, lighting
facilities, sanitary systems, and utility lines, water filtration and treatment
facilities; and other areas and improvements provided by Landlord for the
general use in common of tenants and their customers (all herein called "Common
Areas") shall at all times be subject to the exclusive control and management of
Landlord.
Subject to the provisions of the next paragraph, Landlord shall have
the right from time to time to: change or modify and add to or subtract from the
sizes, locations, shapes and arrangements of entrances, exits and other Common
Areas; add to or subtract from the buildings in the Project; and do and perform
such other acts in and to the Common Areas as Landlord in its sole discretion,
reasonably applied, deems advisable for the use thereof by tenants and their
customers. Landlord may at any time close temporarily any Common Areas to make
repairs or changes, prevent the acquisition of public rights therein, or for any
other reasonable purposes.
Landlord shall exercise Landlord's rights under this Section 5.2 in
a manner that does not unreasonably and materially interfere with Tenant's
business operations at the Premises. In addition, notwithstanding anything to
the contrary contained in this Lease, Landlord shall not make any changes with
respect to the Control Area, that materially and adversely affects
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pedestrian access to the Premises, or the visibility of the Premises or Tenant's
permanently installed exterior signage without the prior written consent of
Tenant, which may be withheld in Tenant's reasonable discretion. Alterations to
the rest of the Common Areas may be made by Landlord.
Section 5.3 Use of Common Areas
Landlord hereby grants to Tenant for Tenant's benefit and for the benefit
of Tenant's successors, assigns, mortgagees, Tenant Mortgagees, subtenants,
employees, agents, customers, licensees and invitees nonexclusive rights,
licenses and easements on, over and across and for the use (free of charge) of
the Common Areas (as same may be configured from time to time), including,
without limitation, pedestrian sidewalks, directional signs, landscaping,
lighting, storm drainage and common utility facilities, for the purposes for
which they are provided and as reasonably needed on a temporary basis for
construction of and repair to the Premises. Such grant shall be on a
nonexclusive bases, in common with Landlord and all others to whom Landlord has
granted or may hereafter grant such rights or similar rights. Tenant shall not
interfere with Landlord's or other tenants' rights to use any part of the Common
Areas. Landlord acknowledges and agrees that Tenant's queue lines for Tenant's
patrons may form within the Control Area from time to time.
Section 5.4 Loading Docks/Bus Docks
As part of the Tenant's Work, Tenant is constructing a loading dock area
and a bus parking area in the Common Areas along the Capital Street side of the
Premises, between Column Lines 26 and 30. Tenant shall maintain such areas in
first class condition during the term of the Lease. Tenant shall have the
exclusive right to use such areas; provided, when Tenant is not utilizing such
areas, Landlord and the other tenants of the Project shall have the right to
utilize such areas on a non-exclusive basis, provided that such use does not
interfere with Tenant's use of the Premises.
ARTICLE VI
COST AND MAINTENANCE OF COMMON AREAS
Section 6.1 Expense of Operating and Maintaining the Common Areas
(a) Provided that Tenant is not in default of any of its obligations
hereunder beyond any applicable notice and/or cure period contained in this
Lease, Landlord shall operate, manage, maintain and repair or cause to be
operated, managed, maintained or repaired, the Common Areas of the Project to
the end that the Common Areas are operated, maintained and repaired in good
19
condition and repair, in a safe and sound condition, and clean and free of
rubbish, debris, and other hazards to persons using the same in each case to the
same standard expected of a first-class urban entertainment center located in
the United States.
(b) "Landlord's Common Area Costs" shall mean all reasonable and necessary
costs of operating and maintaining the Common Areas and the Project in a manner
deemed by Landlord appropriate for the best interests of the tenants of and
other occupants in the Project and, in any event, consistent with Landlord's
obligations under Section 6.1 (a) hereof. Included among the costs and expenses
which constitute Landlord's Common Area Costs, but not limited thereto, shall
be, at the option of Landlord, all costs and expenses of protecting, operating,
managing (including reasonable attorneys' fees and other professional fees),
repairing, replacing, decorating, renovating, repaving, lighting, cleaning,
painting, insuring (including but not limited to fire and extended coverage and
other insurance on the Common Areas and the Project, the costs of providing
security to the Project, pest control at the Project, insurance protecting
Landlord and the City against liability for personal injury, death and property
damage, liquor liability and workers' compensation insurance), removing of snow,
ice and debris, security and security patrol, fire protection, regulating
traffic, inspecting, repairing, replacing, and maintaining of machinery and
equipment used in the operation of the Common Areas, including heating,
ventilating and air conditioning machinery and equipment that serve the Common
Areas (but not costs associated with heating, ventilating and air conditioning
machinery and equipment that serve a leaseable space in the Premises), trash
storage and removal, including central trash compaction and removal equipment
and services, cost and expense of inspecting, maintaining, repairing and
replacing storm and sanitary drainage systems, sprinkler and other fire
protection systems, electrical, gas, water, telephone and irrigation systems,
cost and expense of maintaining, repairing and replacing the exterior of the
buildings in the Project, including, but not limited to floors, roofs,
skylights, escalators, elevators, walls, stairs and signs, cost and expense of
installing, maintaining, repairing and replacing burglar or fire alarm systems,
if installed, cost and expense of landscaping and shrubbery and expenses of
utilities. Notwithstanding anything to the contrary contained herein, Landlord's
Common Area Costs shall not include: (i) any rent payments made by Landlord to
the City under the provisions of the Ground Lease (other than additional rent
type payments, if any, made by Landlord to the City under the Ground Lease for
services or materials provided by the City to Landlord and/or the Project that
if provided directly by Landlord would constitute part of Landlord's Common Area
Costs); (ii) Landlord's administrative and overhead costs incurred in connection
with the Common Areas; and (iii) the depreciation of any part of the Common
Area; but may include the cost of repairs to the Common Areas. Notwithstanding
anything to the contrary
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contained herein, with regard to capital expenditures, for purposes of this
Lease: (i) Landlord shall not have the right to include any capital expenditures
incurred during the first five (5) Lease Years of the Lease Term in connection
with the Common Areas as part of the Landlord's Common Area Cost, and (ii)
Landlord shall have the right to include capital expenditures incurred after
the first five (5) Lease Years of the Lease Term in connection with the Common
Areas, subject to the following limiting provisions:
(A) each such capital expenditure must be amortized over the useful life
and only the amortized portion of such capital expenditure attributable to
a Lease Year shall be included in Landlord's Common Area Costs for such
Lease Year; and
(B) no capital expenditures may be included as a part of the Landlord's
Common Area Costs unless such capital expenditure provides a benefit to
the Premises and is reasonably necessary for the operation of the Project
or the maintenance of the Project as a first class urban entertainment
center.
Section 6.2 Tenant to Bear Pro Rata Share of Expenses
(a) Tenant shall pay Landlord, in addition to all other amounts in this
Lease provided, as Additional Rent, its proportionate share of Landlord's Common
Area Costs for each Lease Year during the Lease Term. Tenant's proportionate
share of any such Common Area Costs shall be that portion of such Common Area
Costs which bears the same ratio to the total Common Area Costs for the Project
as the Premises Floor Area bears to the Project Floor Area.
(b) Tenant's share of Landlord's Common Area Costs shall be paid in
monthly installments, in amounts reasonably estimated from time to time by
Landlord, one (1) such installment being due on the first day of each month of
each calendar year.
(c) Within ninety (90) days after the end of each calendar year (and
within ninety (90) days after the end of the Lease Term), Landlord shall provide
Tenant with a statement (the "CAM Statement") setting forth in reasonable detail
the total Landlord's Common Area Costs for such calendar year (or, at the
beginning or end of the Lease Term, such partial calendar year) and Tenant's pro
rata share thereof. If Tenant's pro rata share of Landlord's Common Area Costs
for any calendar year exceeds the sum of the monthly installments of such costs
paid by the Tenant during such calendar year, then Tenant shall pay the excess
to Landlord within thirty (30) days after the CAM Statement is received by
Tenant. If the sum of Tenant's monthly installments of such costs paid during
any calendar year exceeds Tenant's pro
21
rata share of Landlord's Common Area Costs for such calendar year, then Landlord
shall pay the excess to the Tenant at the time it delivers the CAM Statement to
Tenant.
(d) Landlord agrees to keep in its main administrative offices (which on
the date hereof are located at 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx) records of
Landlord's Common Area Costs. Such records shall be retained by the Landlord for
not less than three (3) years after the expiration of the calendar year to which
they relate. For purposes of permitting verification by the Tenant of the
Landlord's Common Area Costs reported by Landlord, Tenant shall have the right
for a period of three (3) years after the end of each calendar year, exercisable
not more frequently than once in any twelve (12) month period for such calendar
year, upon not less than ten (10) days' notice to Landlord, to audit and copy or
cause to have audited and copied, Landlord's books and records with respect to
Landlord's Common Area Costs. If such audit discloses that the CAM Statement has
overstated Tenant's pro rata share of Landlord's Common Area Costs during a
calendar year, then Landlord shall refund any overpayment made by Tenant for
such calendar year and, in addition, if such overstatement (and resulting
overpayment) for such calendar year is more than the greater of Five Thousand
and 00/100 Dollars and two percent (2%), Landlord shall pay the costs of the
Tenant's inspection or audit.
ARTICLE VII
UTILITIES AND SERVICES
Section 7.1 Utilities
Tenant shall not install any equipment which can exceed the capacity of
any utility facilities serving the Project and if any equipment installed by
Tenant after the Commencement Date requires additional utility facilities, the
same shall be installed at Tenant's expense in compliance with all code
requirements and plans and specifications which must be approved in writing by
Landlord, which approval shall not be unreasonably withheld, delayed or
conditioned. Tenant shall be solely responsible for and shall promptly pay
directly to the applicable utility companies all charges for use or consumption
of sewer, gas, electricity, water, telephone, cable television and all other
utility services with respect to the Premises. In the event that the electric
utility industry in the State of Texas is at any time deregulated, Tenant shall
have the right to purchase electric service from the provider of its choice
(however, Tenant (or Tenant's utility provider of choice) shall be solely
responsible for any costs associated with providing such electric service, such
as new transformers or meters, if any).
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Section 7.2 HVAC MAINTENANCE.
Throughout the Lease Term Tenant shall, at the sole cost and expense of
Tenant, maintain (and replace if necessary) the HVAC equipment located within or
exclusively serving the Premises to the end that same is always in good
condition and repair and in good operational condition. In order, to comply with
its obligation under this Section 7.2 hereof, Tenant and its contractors shall
have a right of access across the roof of the Premises; provided that Tenant
promptly repairs any damage to the roof caused by such access.
ARTICLE VIII
CONDUCT OF BUSINESS BY TENANT
Section 8.1 Use of Premises
(a) Subject to the provisions of Sections 8.1 (b) and 8.2, the Premises
shall be occupied and used by Tenant solely for the Intended Use. Tenant shall
use only such minor portions of the Premises for storage and office purposes as
are reasonably required in connection with the conduct by Tenant of the Intended
Use in the Premises. Tenant shall not use or permit or suffer the use of the
Premises for any other business or purpose.
(b) Subject to Applicable Law, Tenant shall have the right to offer for
sale alcoholic beverages to its customers for consumption on the Premises. At
Tenant's request, Landlord shall assist Tenant with any effort of Tenant to
obtain a liquor license for Tenant's business in the Premises.
Section 8.2 Prohibited Uses
(a) By Tenant. (i) Tenant shall not use or occupy the Premises, an
adjacent or adjoining easement, roadway, street, sidewalk or alley, the Common
Areas, or the Garage in a manner which would: (A) violate the terms of the
Ground Lease, (B) make use of the Premises for any purposes other than that
permitted in Section 8.1, (C) cause structural injury to the Premises, the
Project, the Garage (or any part of any such improvements) or property adjacent
to the Project, (D) violate any Applicable Law applicable to Tenant or to the
Property, the Premises or Tenant's use thereof, or (E) unreasonably interfere
(absent the receipt of appropriate governmental permits or authorizations) with
the right of the public to use the public sidewalks adjacent to the Project. In
addition, Tenant shall not utilize all or any part of the Premises for the sale
or exhibition of unlawful pornographic materials, film or books or operate any
sexually oriented business (such as a peep show, adult book store, or topless
bar) that is regulated by local law applicable to the City, at large.
23
(ii) Tenant shall not operate, or permit others to
operate all or part of the Premises for the exhibition of motion pictures in a
public auditorium setting as the exhibition of motion pictures in a public
auditorium setting in the United States may evolve after the date hereof.
(iii) Tenant shall not operate, or permit others to
operate, all or part of the Premises as a micro-brewery.
(iv) Tenant shall not operate, or permit others to
operate, all or part of the Premises as a billiard's hall or from locating in
the premises on a permanent basis more then one billiard's table for every 4,000
square feet of Premises Floor Area.
(b) By Others. Provided Tenant is not in default of any of its
obligations under this Lease beyond any applicable notice and/or cure period,
Landlord: (i) shall include in any lease executed by Landlord after the date
hereof for any part of the Project or any part of any project located on the
site of the West Hall of the former Xxxxxx Xxxxxx Convention Center a
prohibition that prevents the tenant thereunder from operating its premises in
the Project (or any project located on the site of the West Hall) as a
performance hall for Broadway style theatrical performances or as a performance
hall for live, amplified, popular music performances: (A) with an actual indoor
seating capacity of more than four hundred (400) customers; and (B) with reserve
seating or advance ticket sales (e.g, the ability of the general public to
purchase tickets at least one (1) day in advance of a scheduled show); and (ii)
shall not execute any amendment to any Lease for the Project or any project
located on the site of the West Hall that would permit the tenant thereunder
from operating its premises in the Project (or such project on the West Hall) as
a performance hall for Broadway style theatrical performances or live,
amplified, popular music performances: (A) with an actual indoor seating
capacity of more than four hundred (400) customers; and (B) with reserve seating
or advance ticket sales (e.g, the ability of the general public to purchase
tickets at least one (l) day in advance of a scheduled show). The above
prohibition, if inserted into another tenant's lease, shall not prohibit the
utilization by such tenant of its premises in the Project (or any project in the
West Hall) for the presentation of Broadway style theatrical performances or
live, amplified, popular music performances so long as such premises: (A) is not
primarily perceived or operated as a performance hall for Broadway style
theatrical performances or live popular music performances with reserve seating
or advance ticket sales (e.g, the ability of the general public to purchase
tickets at least one (1) day in advance of a scheduled show) and (B) has an
24
actual indoor seating capacity of less than four hundred and one (401)
customers.
The following examples are given for illustrative purposes to assist in
the interpretation of this Paragraph 8.2 (b):
(i) The above prohibition, if inserted into another tenant's lease,
shall not prevent a tenant of the Project (or any project on the site of
the "West Hall") that operates a restaurant, such as a bar-b-que
restaurant, from scheduling weekly live blues performances, even if such
restaurant has advanced ticket sales and reserve seating; provided that
the actual indoor seating capacity of such restaurant is less than four
hundred and one (401) customers.
(ii) The above prohibition, if inserted into another tenant's lease,
shall not prevent a tenant of the Project (or any project on the site of
the "West Hall") that operates a jazz nightclub or bar from hosting live
jazz music performances and other types of live music performances that
are appropriate for first class jazz music nightclub venues, even if such
club or nightclub has advanced ticket sales and reserve seating; provided
that the actual indoor seating capacity of such nightclub or bar is less
than four hundred and one (401) customers.
(iii) The above prohibition, if inserted into another tenant's
lease, shall not prevent a tenant of the Project (or any project on the
site of the "West Hall") that operates a nightclub or a bar in the Project
that may or may not charge a cover charge (but excluding any advanced
ticket sales), from having a house band perform at its premises or from
presenting, from time to time, free live music performances in its
premises.
(iv) The above prohibition, if inserted into another tenant's lease,
shall not prevent a tenant of the Project (or any project on the site of
the "West Hall") from operating its premises as a comedy based
improvisational style theater or as a comedy club, even if such theater or
club has advanced ticket sales and reserve seating; provided that the
actual indoor seating capacity of such nightclub or bar is less than four
hundred and one (401) customers.
Landlord shall use its reasonable efforts to enforce any such prohibition in any
such lease; provided, however, that Landlord may but shall not be obligated to
file suit to enforce any such prohibitions; and provided further, however, that
at the request of Tenant, and at the sole cost and expense of Tenant, Landlord
shall seek the imposition of a court ordered injunction against any
25
tenant of the Project whose lease contains such a prohibition and who violates
such prohibition. Landlord shall have the right to terminate such a lawsuit if
its costs are not paid promptly by Tenant. Tenant shall also have the right, at
its sole cost and expense, to seek the imposition of such a court ordered
injunction, and Tenant's activities in seeking such an injunction shall be
deemed to be included within the matters for which Tenant has agreed to save
harmless, indemnify and defend Landlord and the City pursuant to Section 11.5
hereof.
Section 8.3 Prompt Occupancy and Use
On the Commencement Date, Tenant shall open and operate its business in
the Premises in compliance with the provisions of Sections 8.1 and 8.4 hereof.
During the Lease Term, Tenant shall maintain a staff, shall continuously pursue
the booking of concerts, events and shows for presentation in the Premises, and
shall use its reasonable efforts to present at least seventy-five (75) concerts,
events and/or shows in the Premises during each Lease Year. Notwithstanding the
previous sentence, Landlord recognizes and agrees that Tenant shall have the
sole and exclusive right to determine the number of concerts, events and shows
presented in the Premises and that Tenant shall not be deemed to be in default
of any of its obligations under this Lease as a result of the failure of Tenant
to present at least seventy-five (75) concerts, events and shows in the Premises
during any Lease Year.
Section 8.4 Conduct of Business
Tenant's business at the Premises shall initially be conducted under the
trade name "The Theater at Bayou Place. At any time thereafter, Tenant shall
have the right to change such trade name to another trade name selected by
Tenant; provided Tenant provides Landlord with at least seven (7) days prior
notice of such new trade name. Tenant shall comply with Landlord's reasonable
directives concerning traffic and crowd control.
Section 8.5 Operation by Tenant
Tenant covenants and agrees that it will: not place or maintain any
merchandise, vending machines or other articles outside the Premises; store
garbage, trash, rubbish and other refuse in rat-proof and insect-proof
containers inside the Premises, and remove the same frequently and regularly
and, if directed by Landlord, by such means and methods and at such times and
intervals as are reasonably specified by Landlord, all at Tenant's expense; not
permit any sounds to escape from the Premises which would result in a material
and adverse interference with the business operations of the other tenants in
the Project or permit any advertising medium visible outside of the Premises
(except in compliance with the provisions of Section 10.1 hereof); keep all
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mechanical equipment reasonably free of vibration and noise and in good working
order and condition; not commit or permit waste or a nuisance upon the Premises;
not permit or cause odors to emanate or be dispelled from the Premises to the
extent same violates Applicable Law, becomes a nuisance, or materially adversely
interferes with the use and enjoyment of any other tenant of Landlord of such
tenant's premises in the Project; not permit the loading or unloading or the
parking or standing of delivery vehicles outside any area designated therefor,
nor permit any use of vehicles which will interfere with the use of any Common
Areas; not permit any noxious, toxic or corrosive fuel or gas, dust, dirt or fly
ash on the Premises; and not place a load on any floor in the Project which
exceeds the floor load per square foot which such floor was designed to carry.
Section 8.6 Painting, Decorating, Displays, Alterations
Tenant shall not make any exterior or structural alterations to the
Premises or roof cuts to the roof of the Premises without Landlord's prior
written consent, which consent shall not be unreasonably withheld, delayed or
conditioned; provided, such alterations or roof cuts do not materially adversely
impair the value of the Project, invalidate or void any applicable warranties,
or materially adversely affect the operations of any other occupants of the
Project. Tenant shall have the right, without Landlord's consent, to make or
cause to be made such interior alterations, additions or improvements to the
Premises as Tenant shall desire; provided same does not materially adversely
impair the value of the Premises (the reconfiguration of auditoriums, the
combination of auditoriums and the dividing of auditoriums shall not be deemed
to impair the value of the Premises) or materially adversely affect the
operations of any other occupants of the Project. All such alterations,
additions and improvements shall be completed in a good and workmanlike manner,
and shall be constructed in accordance with all Applicable Law, in a manner so
as not to structurally impair the Premises and the Project, and in compliance
with Section 10.3 hereof. Tenant shall cause its contractors to comply with the
insurance provisions of this Lease. Tenant shall provide Landlord with a
complete set of plans and specifications for any alterations or roof cuts that
require the Landlord's consent at least thirty (30) days prior to the date that
Tenant anticipates commencing such work. Landlord's receipt, review and possible
approval of such plans and specifications shall not be construed to constitute a
representation or warranty by Landlord as to compliance with Applicable Law, as
to the structural, engineering or other design depicted in such plans and
specifications or as to the quality or fitness of any materials used. In the
event that Tenant requires a staging area in order to undertake and complete any
alterations to the Premises that it is permitted to undertake hereunder, such
areas, and the rules for their use, shall be mutually acceptable to Landlord and
Tenant;
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provided that no such staging area shall unreasonably impede the use of the
Project or by any of the other occupants thereof. Tenant may remove, modify, or
alter walls dividing auditoriums within or otherwise dividing the internal areas
of the Premises without Landlord's consent.
Section 8.7 Emissions and Hazardous Materials
(a) Landlord hereby represents and warrants to Tenant that the City has
provided Landlord with a certification that the Property, and the improvements
constructed thereon, does not contain any Hazardous Materials (as that term is
defined below). Landlord represents and warrants to Tenant that, on the date of
this Lease, the Property, and the improvements constructed thereon, does not
contain any Hazardous Materials.
(b) Tenant shall not cause or permit, knowingly or unknowingly, any
Hazardous Material (as that term is hereinafter defined) to be brought or remain
upon, kept, used, discharged, leaked, or emitted in or about, or at the Premises
or the Project, provided however, that Tenant shall have the right, in
accordance with Applicable Law, to utilize products that may constitute
Hazardous Materials in connection with the ordinary operation of its business in
the Premises, such as cleaning solvents utilized in connection with Tenant's
regular maintenance operations at the Premises and lubricants utilized in
connection with the maintenance of Tenant's projection equipment utilized in the
Premises. As used in this Lease, "Hazardous Material(s)" shall mean any
hazardous, toxic or radioactive substance, material, matter of waste which is or
becomes regulated by any federal, state or local law, ordinance, order, rule,
regulation, code or any other governmental restriction or requirement, and shall
include asbestos, petroleum products and the terms "Hazardous Substance" and
"Hazardous Waste" as defined in the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), as amended, 42 U.S.C. ss. 9601 et
seq., and the Resource Conservation and Recovery Act ("RCRA"), as amended, 42
U.S.C. ss. 6901 et seq. Tenant shall obey and adhere to any and all federal,
state or local laws, ordinances, orders, rules, regulations, codes or any other
governmental restrictions or requirements (including but not limited to CERCLA
and RCRA which in any way regulate, govern or impact Tenant's possession, use,
storage or disposal of said Hazardous Material(s). In addition, Tenant
represents and warrants to Landlord that (1) Tenant shall apply for and remain
in compliance with any and all necessary federal, state or local permits in
regard to Hazardous Materials; (2) Tenant shall report to any and all applicable
governmental authorities any release of reportable quantities of any Hazardous
Material(s) as required by any and all federal, state or local laws, ordinances,
orders, rules, regulations, codes or any other governmental restrictions or
requirements; (3) Tenant, within five
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(5) days of receipt, shall send to Landlord a copy of any notice, order,
inspection report, or other document issued by any governmental authority
relevant to the Tenant's compliance status with environmental or health and
safety laws; and, (4) Tenant shall remove from the Premises all Hazardous
Materials at the termination of this Lease to the extent caused by Tenant or any
of its employees, contractors, licensees or invitees.
IN ADDITION TO, AND IN NO WAY LIMITING, TENANT'S DUTIES AND OBLIGATIONS AS
SET FORTH IN SECTION 11.5 OF THIS LEASE, SHOULD TENANT BREACH ANY OF ITS DUTIES
AND OBLIGATIONS AS SET FORTH IN THIS SECTION 8.7 OF THIS LEASE, OR IF TENANT OR
ANY CONTRACTOR, AGENT, EMPLOYEE OR SUBTENANT OF TENANT BRINGS ANY HAZARDOUS
MATERIAL(S) ONTO THE PREMISES THAT RESULTS IN CONTAMINATION OF THE PREMISES, THE
PROJECT, THE PROPERTY, ANY LAND OTHER THAN THE PROPERTY, THE ATMOSPHERE, OR ANY
WATER OR WATERWAY (INCLUDING GROUNDWATER), OR IF CONTAMINATION OF THE PREMISES
OR THE PROJECT BY ANY HAZARDOUS MATERIAL(S) OTHERWISE OCCURS AS A RESULT OF THE
ACTIONS OF TENANT AND/OR TENANT'S SUBTENANTS, AGENTS, EMPLOYEES OR CONTRACTORS,
TENANT SHALL INDEMNIFY, SAVE HARMLESS AND, AT LANDLORD'S OPTION AND WITH
ATTORNEYS APPROVED IN WRITING BY LANDLORD, WHICH APPROVAL SHALL NOT BE
UNREASONABLY WITHHELD, DELAYED OR CONDITIONED, DEFEND LANDLORD, AND ITS
CONTRACTORS, AGENTS, EMPLOYEES, PARTNERS, OFFICERS, DIRECTORS, THE CITY AND
LANDLORD'S MORTGAGEES, IF ANY, FROM ANY AND ALL CLAIMS, DEMANDS, DAMAGES,
EXPENSES, FEES, COSTS, FINES, PENALTIES, SUITS, PROCEEDINGS, ACTIONS, CAUSES OF
ACTION, AND LOSSES OF ANY AND EVERY KIND AND NATURE (INCLUDING, WITHOUT
LIMITATION, DIMINUTION IN VALUE OF THE PREMISES OR THE PROJECT, DAMAGES ARISING
FROM ANY ADVERSE IMPACT ON MARKETING SPACE IN THE PROJECT, AND REASONABLE SUMS
PAID IN SETTLEMENT OF CLAIMS AND FOR REASONABLE ATTORNEY'S, CONSULTANT'S, AND
EXPERT'S FEES (PROVIDED THAT TENANT SHALL NOT BE OBLIGED TO REIMBURSE SUCH FEES
TO THE EXTENT THAT TENANT IS PROVIDING A DEFENSE UNDER THIS LEASE), WHICH MAY
ARISE DURING OR AFTER THE LEASE TERM OR ANY EXTENSION THEREOF AS A RESULT OF
SUCH CONTAMINATION). THIS INCLUDES, WITHOUT LIMITATION, COSTS AND EXPENSES,
INCURRED IN CONNECTION WITH ANY INVESTIGATION OF SITE CONDITIONS OR ANY CLEANUP,
REMEDIAL, REMOVAL OR RESTORATION WORK REQUIRED BY ANY FEDERAL, STATE OR LOCAL
GOVERNMENTAL AGENCY OR POLITICAL SUBDIVISION BECAUSE OF THE PRESENCE OF
HAZARDOUS MATERIAL(S) ON OR ABOUT THE PREMISES OR THE PROJECT WHICH WAS PLACED
THERE BY TENANT AND/OR TENANT'S SUBTENANTS, AGENTS, CONTRACTORS OR EMPLOYEES.
WITHOUT LIMITING THE FOREGOING, IF THE PRESENCE OF ANY HAZARDOUS MATERIAL(S) ON
OR ABOUT THE PREMISES OR THE PROJECT CAUSED OR PERMITTED BY TENANT RESULTS IN
ANY CONTAMINATION OF THE PREMISES OR THE PROJECT, TENANT SHALL, AT ITS SOLE
EXPENSE, PROMPTLY TAKE ALL ACTIONS AND EXPENSE AS ARE NECESSARY TO RETURN THE
PREMISES AND/OR THE PROJECT TO THE CONDITION EXISTING PRIOR TO THE INTRODUCTION
OF ANY SUCH HAZARDOUS MATERIAL(S) TO THE PREMISES OR THE PROJECT; PROVIDED,
HOWEVER, THAT LANDLORD'S APPROVAL OF SUCH ACTIONS WITH RESPECT TO ANY PORTION OF
THE PROJECT OTHER THAN THE PREMISES SHALL FIRST BE OBTAINED IN
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WRITING, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, DELAYED OR
CONDITIONED.
(c) IF LANDLORD OR ANY CONTRACTOR, AGENT, OTHER TENANT, OR EMPLOYEE OF
LANDLORD BRINGS ANY HAZARDOUS MATERIAL(S) ONTO THE PREMISES THAT RESULTS IN
CONTAMINATION OF THE PREMISES, THE PROJECT, THE PROPERTY, ANY LAND OTHER THAN
THE PROPERTY, THE ATMOSPHERE, OR ANY WATER OR WATERWAY (INCLUDING GROUNDWATER),
OR IF CONTAMINATION OF THE PREMISES OR THE PROJECT BY ANY HAZARDOUS MATERIAL(S)
OTHERWISE OCCURS AS A RESULT OF THE ACTIONS OF LANDLORD AND/OR LANDLORD'S
AGENTS, EMPLOYEES, OTHER TENANTS, OR CONTRACTORS, LANDLORD SHALL INDEMNIFY, SAVE
HARMLESS AND, AT TENANT'S OPTION AND WITH ATTORNEYS APPROVED IN WRITING BY
TENANT, WHICH APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, DELAYED OR
CONDITIONED, DEFEND TENANT, AND ITS CONTRACTORS, AGENTS, EMPLOYEES, PARTNERS,
OFFICERS, DIRECTORS, AND TENANT MORTGAGEE, IF ANY, FROM ANY AND ALL CLAIMS,
DEMANDS, DAMAGES, EXPENSES, FEES, COSTS, FINES, PENALTIES, SUITS, PROCEEDINGS,
ACTIONS, CAUSES OF ACTION, AND LOSSES OF ANY AND EVERY KIND AND NATURE
(INCLUDING, WITHOUT LIMITATION, DIMINUTION IN VALUE OF THE PREMISES, AND
REASONABLE SUMS PAID IN SETTLEMENT OF CLAIMS AND FOR REASONABLE ATTORNEY'S,
CONSULTANT'S, AND EXPERT'S FEES (PROVIDED THAT LANDLORD SHALL NOT BE OBLIGATED
TO REIMBURSE SUCH FEES TO THE EXTENT THAT LANDLORD IS PROVIDING A DEFENSE UNDER
THIS LEASE), WHICH MAY ARISE DURING OR AFTER THE LEASE TERM OR ANY EXTENSION
THEREOF AS A RESULT OF SUCH CONTAMINATION). THIS INCLUDES, WITHOUT LIMITATION;
COSTS AND EXPENSES, INCURRED IN CONNECTION WITH ANY INVESTIGATION OF SITE
CONDITIONS OR ANY CLEANUP, REMEDIAL, REMOVAL OR RESTORATION WORK REQUIRED BY ANY
FEDERAL, STATE OR LOCAL GOVERNMENTAL AGENCY OR POLITICAL SUBDIVISION BECAUSE OF
THE PRESENCE OF HAZARDOUS MATERIAL(S) ON OR ABOUT THE PREMISES OR THE PROJECT
THAT WERE BROUGHT ONTO THE PREMISES BY LANDLORD AND/OR LANDLORD'S CONTRACTORS,
AGENTS OR EMPLOYEES. WITHOUT LIMITING THE FOREGOING, IF THE PRESENCE OF ANY
HAZARDOUS MATERIAL(S) ON OR ABOUT THE PREMISES OR THE PROJECT CAUSED OR
PERMITTED BY LANDLORD RESULTS IN ANY CONTAMINATION OF THE PREMISES OR THE
PROJECT, LANDLORD SHALL, AT ITS SOLE EXPENSE, PROMPTLY TAKE ALL ACTIONS AND
EXPENSE AS ARE NECESSARY TO RETURN THE PREMISES AND/OR THE PROJECT TO THE
CONDITION EXISTING PRIOR TO THE INTRODUCTION OF ANY SUCH HAZARDOUS MATERIAL(S)
TO THE PREMISES OR THE PROJECT; PROVIDED, HOWEVER, THAT TENANT'S APPROVAL OF
SUCH ACTIONS WITHIN THE PREMISES SHALL FIRST BE OBTAINED IN WRITING, WHICH
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD, DELAYED, OR CONDITIONED.
Section 8.8 Public Policy
Tenant acknowledges that it is aware of and familiar with the City's
significant support of the Project and of the legitimate public policies
necessitating Tenant's adherence to the requirements of Tenant contained in this
Lease, particularly as to the first class use and maintenance of a first class
appearance of
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the Premises. In acknowledgment of the fact that Tenant is leasing a significant
portion of the Project, Tenant agrees to meet with the Landlord and the City as
may be reasonably requested from time to time by Landlord and to reasonably
discuss proposed resolutions of any issues that may be raised by the City.
Section 8.9 Dumpster/Trash
Tenant shall install (as part of the Tenant's Work) and thereafter
maintain throughout the Lease Term adequate trash disposal facilities for the
Premises at a location designated by Landlord on the Property. Such trash
disposal facilities shall, as part of Tenant's Work, be screened and landscaped
in a first class manner. Landlord shall have the right, at Landlord's sole
expense, with Tenant's consent, which consent shall not be unreasonably
withheld, delayed or conditioned, to relocate such trash disposal facilities.
Landlord shall have the right to implement a trash collection service for the
Project and Tenant shall participate in such service. The cost of such service
shall be deemed to be part of the Landlord's Common Area Cost.
Section 8.10 Rule & Regulations
Tenant shall comply with the Rules and Regulations attached hereto
as Exhibit C. Landlord reserves the right at all times during the Lease Term to
add to, change, amend and/or modify the Rules and Regulations, provided such
additions, changes, amendments and/or modifications are reasonable and are not
discriminatory nor materially adversely affect Tenant's operation or enjoyment
of the Premises (to the extent same is in compliance with the express provisions
of this Lease). No such addition, change, amendment and/or modification shall
apply to Tenant until ten (10) days after the date Landlord provides Tenant with
a notice of such addition, change, amendment and/or modification.
ARTICLE IX
MAINTENANCE OF LEASED PREMISES
Section 9.1 Maintenance by Landlord
Landlord shall keep or cause to be kept the foundations, roof and
structural portions of the walls of the Premises in good order, repair and
condition except for damage thereto due to the negligence or wilful misconduct
of Tenant, its agents, employees, licensees (other than customers) or
contractors. Landlord shall commence required repairs as soon as reasonably
practicable after receiving notice from Tenant thereof. This Section 9.1 shall
not apply in case of damage or destruction by fire or other casualty or
condemnation or eminent domain, in which events the obligations of Landlord
shall be controlled by Articles XVI and
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XVII hereof. Except as provided in this Section 9.l and Section 8.7 hereof,
Landlord shall not be obligated to make repairs, replacements or improvements of
any kind upon the Premises, or to any equipment, merchandise, stock in trade,
facilities or fixtures therein, all of which shall be Tenant's responsibility,
but Tenant shall give Landlord prompt notice of any serious accident, casualty,
damage or other similar occurrence in or to the Premises or the Common Areas of
which Tenant has knowledge.
Section 9.2 Maintenance by Tenant
Tenant shall at all times keep the Premises (including all entrances and
vestibules) and all partitions, window and window frames and moldings, glass,
store fronts, doors, door openers, fixtures, equipment and appurtenances thereof
(including lighting, heating, electrical, plumbing, ventilating and air
conditioning fixtures and systems and other mechanical equipment and
appurtenances) and all other parts of the Premises not required herein to be
maintained by Landlord, in a good, clean, safe and operable condition and repair
and in compliance with Applicable Law and in a condition comparable to other
first class urban entertainment centers, damage by casualty excepted. If
replacement of equipment, fixtures and appurtenances thereto is necessary,
Tenant shall replace the same with new or completely reconditioned equipment,
fixtures and appurtenances, and repair all damages done in or by such
replacement. Notwithstanding the foregoing, Landlord reserves the right to
provide or contract for alternative or additional pest control measures (and the
cost thereof shall be part of the Landlords Common Area Costs).
Section 9.3 Surrender of Premises
At the expiration or earlier termination of the Lease Term, with the
exception of the Excluded Personal Property, Tenant shall surrender the Premises
in the same condition as they were required to be in on the Commencement Date
(as same may have been modified by Tenant in accordance with the terms and
provisions of this Lease), reasonable wear and tear and damage by casualty
excepted, and deliver all keys for, and all combinations on locks, safes and
vaults in, the Premises to Landlord at Landlord's notice address as specified in
Section 25.7 or, at Landlord's option, to the office of the Project's general
manager, if any. Tenant may, at Tenant's option, remove from the Premises within
ninety (90) days after such expiration (or after a termination not due to
Tenant's default) all of the Excluded Personal Property then situated thereon.
Excluded Personal Property not so removed shall become the property of Landlord,
and Landlord may cause such all Property to be removed from the Premises and
disposed of.
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ARTICLE X
SIGNS, AWNINGS, CANOPIES, ALTERATIONS
Section 10.1 Installation
Tenant may, at its cost and expense, install signs, awnings and canopies
at, on or from the Premises (included the exterior of the Premises) that
advertise Tenant's business in the Premises, provided Tenant submits to Landlord
Tenant's plans showing such sign, awning or canopy, and Landlord's written
approval is first obtained, which approval shall not be unreasonably withheld,
delayed or conditioned. Landlord will cooperate with Tenant with respect to
Tenant's sign applications to applicable governmental entities. All signs,
awnings and canopies shall comply with Applicable Law.
Section 10.2 Ownership of Tenant's Improvements/Removal and Restoration by
Tenant
All alterations, changes and additions and all improvements, including
leasehold improvements made by Tenant to the Premises, whether part of Tenant's
Work or not and whether or not paid for wholly or in part by Landlord, shall
remain Tenant's property for the Lease Term. With the exception of Excluded
Personal Property, any alterations, changes, additions and improvements shall
immediately upon the termination or expiration of this Lease become Landlord's
property, be considered part of the Premises, and not be removed at or prior to
the end of the Lease Term without Landlord's written consent. Tenant shall not
be entitled during the Lease Term, or after termination of same, to remove
permanent improvements, fixtures or any air conditioning equipment, plumbing,
electrical wiring, curtain walls, storefronts, or other elements of the TALP
Improvements (as that term is defined in the Ground Lease), but, at the end of
the Lease Term, Tenant shall have the right to remove all Removable Improvements
(as that term is defined in the Ground Lease) such as the Excluded Personal
Property.
Section 10.3 Tenant's Liens
Tenant shall not suffer any mechanics' or materialmen's lien to be filed
against the Premises or the Project by reason of work, labor, services or
materials performed or furnished to Tenant or anyone holding any part of the
Premises under Tenant. If any such lien shall at any time be filed as aforesaid,
Tenant may contest the same in good faith, but, notwithstanding such contest,
Tenant shall, within thirty (30) days after the filing thereof, cause such lien
to be bonded or released of record by payment, or order of a court of competent
jurisdiction. In the
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event of Tenant's failure to bond or release of record any such lien within the
aforesaid period, Landlord, any Affiliate of Landlord or any party who delivered
a guaranty with respect to any financing of the Project or the Premises may
remove said lien by paying the full amount thereof or by bonding or in any other
manner that such person deems appropriate, without investigating the validity
thereof, and irrespective of the fact that Tenant may contest the propriety or
the amount thereof, and Tenant, upon demand, shall pay Landlord the amount so
paid out by Landlord in connection with the discharge of said lien, together
with interest thereon at the Default Interest Rate and reasonable expenses
incurred in connection therewith, including reasonable attorneys' fees, which
amounts are due and payable in full to Landlord as Additional Rent on the first
day of the next following month. Nothing contained in this Lease shall be
construed as a consent on the part of Landlord to subject Landlord's estate in
the Premises to any lien or liability under the lien laws of the State of Texas.
Tenant's obligation to observe and perform any of the provisions of this Section
10.3 shall survive the expiration of the Lease Term or the earlier termination
of this Lease.
ARTICLE XI
INSURANCE
Section 11.1 By Tenant
(a) Tenant shall carry the following insurance on the Premises during the
Lease Term, which amounts may be increased at any time during the Lease Term
after sixty (60) days prior notice to Tenant, if and to the extent Applicable
Law requires such increases:
(i) Worker's Compensation and Employer's Liability Insurance
("Worker's Insurance") in compliance with Applicable Law.
(ii) Commercial general liability insurance (including contractual
liability coverage) against claims for bodily injury, death or property damage
by Tenant with respect to the Premises ("Liability Insurance"), such insurance
to afford minimum protection of not less than (x) $3,000,000 in respect of
bodily injury or death in respect of any one occurrence, and (y) $500,000 for
property damage for any one occurrence. In the event that alcoholic beverages
are served at the Premises, the commercial general liability insurance shall
include Liquor Liability or a Separate Liquor Liability Policy (the "Liquor
Liability Policy") - Bodily injury and property damage $1,000,000.00 for each
occurrence and $1,000,000 aggregate. At
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the election of Tenant, the Liquor Liability Policy may be provided by Tenant's
food and beverage concessionaire instead of directly by Tenant, provided that
all of the other provisions of this Lease concerning such Liquor Liability
Policy are complied with.
(iii) Property insurance against loss or damage by fire and such
other risks covered under a standard "All-Risk" policy of property insurance to
include the Tenant's Work (and all replacements and/or modifications thereto)
and Tenant's property located in the Premises (with commercially reasonable
deductibles) for the full replacement value of such improvements and property,
without any deduction being made for depreciation, or such greater amount as
shall be necessary so as to preclude Tenant from being treated as a co-insurer
with respect to any covered loss (Casualty Insurance).
(b) During any period of construction (commencing with the performance of
Tenant's Work) Tenant shall, at its own cost and expense, maintain, or cause to
be maintained, in full force and effect, until completion of construction, a
policies of builders' risk insurance insuring (on a non reporting and completed
value basis) the improvements, as the same are constructed (Construction Period
Insurance).
Section 11.2 Mutual Waiver of Subrogation Rights
(a) Landlord and Tenant, and all parties claiming through or under them,
mutually release and discharge each other and the City from all claims and
liabilities arising from or caused by any casualty or hazard covered or required
under this Lease to be covered in whole or in part by insurance on the Premises
or the Project, and waive any right of subrogation which might otherwise exist
in or accrue to any person on account thereof and agree to evidence such waiver
by endorsement to such required insurance policies; provided that such release
and discharge and such waiver of subrogation will only be effective to the
extent that such claim is, or would be, covered by a policy required by this
Lease and shall not release any party from liability for failure to obtain any
insurance required by this Lease, and; provided further that such release and
discharge and such waiver of subrogation shall not operate in any case where the
effect is to invalidate or increase the cost of such insurance coverage
(provided, that in the case of increased cost, the other party shall have the
option of (i) paying such increased cost, thereby keeping such release and
waiver in full force and effect), or (ii) surrendering its right to demand such
release and discharge and such a waiver of subrogation.
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(b) Notwithstanding anything to the contrary contained in this Lease,
Tenant shall cause each insurance policy carried or to be carried by Tenant
hereunder to be written in a manner so as to provide that the insurance company
waives all right of recovery by way of subrogation against the City, in
connection with any loss or damage that may occur to the Premises or to the
trade fixtures, signs, video display equipment, supplies, personal property,
valuables, files and movable equipment utilized or owned by Tenant (including
all desks, typewriters, computers, communication systems, file boxes, film
equipment, video equipment and office equipment) and covered by any such
policies.
Section 11.3 Waiver
Except to the extent (i) of the proceeds of any policy of insurance
required to be maintained by Landlord under this Lease, (ii) of any negligence
or wilful misconduct of Landlord, or (iii) a breach of any of the provisions of
this Lease by Landlord that results in a claim for damages by Tenant, Landlord
shall not be liable for, and Tenant waives with respect to Landlord all claims
for, damage, including but not limited to consequential damages, to person,
property or otherwise, sustained by Tenant or any person claiming through Tenant
resulting from any accident or occurrence in or upon any part of the Project
including, but not limited to, claims for damage resulting from: (a) any
equipment or appurtenances becoming out of repair; (b) Landlord's failure to
keep any part of the Project in repair; (c) injury done or caused by wind,
water, or other natural element; (d) any defect in or failure of plumbing,
heating or air conditioning equipment, electric wiring or installation thereof,
gas, water, and steam pipes, stairs, porches, railings or walks; (e) broken
glass; (f) the backing up of any sewer pipe or down spout; (g) the bursting,
leaking or running of any tank, tub, washstand, water closet, waste pipe, drain
or any other pipe or tank in, upon or about the Premises; (h) the escape of
steam or hot water; (i) water, snow or ice upon the Premises; (j) the falling of
any fixture, plaster or stucco; (k) damage to or loss by theft or otherwise of
property of Tenant or others; (l) acts or omissions of persons in the Premises,
other tenants in the Project, occupants of nearby properties, or any other
persons; and (m) any act or omission of owners of adjacent or contiguous
property, or of Landlord, its agents or employees.
Section 11.4 Insurance - Tenant's Operation
Tenant will not do or suffer to be done anything which will contravene
Landlord's insurance policies or prevent Landlord from procuring the policies of
insurance which Landlord is required to obtain under the terms of this Lease. If
anything done, omitted to be done or suffered to be done by Tenant in, upon or
about the
36
Premises shall cause the rates of any insurance effected or carried by Landlord
on the Premises in accordance with the provisions of this Lease to be increased
beyond the regular rate from time to time applicable to the Premises for use for
the purpose permitted under this Lease, Tenant will pay the amount of such
increase promptly upon Landlord's demand. In the event that this Lease so
permits and Tenant engages in the preparation of food or packaged foods or
engages in the use, sale or storage of inflammable or combustible material,
Tenant shall install chemical extinguishing devices (such as ansul) approved by
Underwriters Laboratories and Factory Mutual Insurance Company and the
installation thereof must be approved by the appropriate local authority. Tenant
shall keep such devices under service as required by such organizations. If gas
is used in the Premises, Tenant shall install gas cut-off devices (manual and
automatic).
Section 11.5 Indemnification
(a) EXCEPT TO THE EXTENT OF ANY LIABILITY RESULTING FROM THE NEGLIGENCE OR
WILFUL MISCONDUCT OF LANDLORD OR ANY OTHER PERSON INDEMNIFIED PURSUANT TO THE
TERMS OF THIS SECTION 11.5 OR A BREACH BY LANDLORD OF THE PROVISIONS OF THIS
LEASE, TENANT SHALL SAVE HARMLESS, INDEMNIFY, AND AT LANDLORD'S AND THE CITY'S
RESPECTIVE OPTIONS, DEFEND LANDLORD AND THE CITY, AND THEIR RESPECTIVE AGENTS
AND EMPLOYEES, AND MORTGAGEES, IF ANY, FROM AND AGAINST ANY AND ALL LIABILITY,
LIENS, CLAIMS, DEMANDS, DAMAGES, EXPENSES, FEES (INCLUDING REASONABLE ATTORNEYS'
FEES), COSTS, FINES, PENALTIES, SUITS, PROCEEDINGS, ACTIONS AND CAUSES OF ACTION
OF ANY AND EVERY KIND AND NATURE PROXIMATELY CAUSED BY (i) TENANT'S USE,
OCCUPANCY, MANAGEMENT OR CONTROL OF THE PREMISES OR TENANT'S OPERATIONS, CONDUCT
OR ACTIVITIES IN THE PROJECT; (ii) TENANT'S VIOLATION OF APPLICABLE LAW; AND
(iii) TENANT'S CONTEST OF TAXES AND ASSESSMENTS; PROVIDED THAT THIS PROVISION IS
NOT INTENDED (A) TO INDEMNIFY LANDLORD OR THE CITY, AS THE CASE MAY BE, WITH
RESPECT TO ANY OBLIGATIONS THEY MAY SEPARATELY OR COLLECTIVELY HAVE UNDER THIS
LEASE OR ANY OTHER AGREEMENT WITH TENANT, (B) TO INDEMNITY LANDLORD WITH RESPECT
TO LIABILITIES COVERED BY POLICIES OF INSURANCE WHICH LANDLORD IS REQUIRED TO
MAINTAIN UNDER THE TERMS OF THIS LEASE, OR (C) TO INDEMNIFY LANDLORD WITH
RESPECT TO INJURY OR DAMAGE SUSTAINED BY PERSONS MAKING USE OF THOSE PORTIONS OF
THE PREMISES OTHER THAN THE PREMISES (EXCEPT TO THE EXTENT SUCH INJURY OR DAMAGE
WAS SUSTAINED DUE TO THE NEGLIGENCE OR WILFUL MISCONDUCT OF TENANT).
(b) EXCEPT TO THE EXTENT OF ANY NEGLIGENCE OR WILFUL MISCONDUCT OF TENANT,
LANDLORD SHALL SAVE HARMLESS, INDEMNIFY, AND AT TENANTS OPTION, DEFEND TENANT,
AND ITS AGENTS AND EMPLOYEES, FROM AND AGAINST ANY AND ALL LIABILITY, LIENS,
CLAIMS, DEMANDS, DAMAGES, EXPENSES, FEES (INCLUDING REASONABLE ATTORNEYS FEES),
COSTS, FINES, PENALTIES, SUITS, PROCEEDINGS, ACTIONS AND CAUSES OF ACTION OF ANY
AND EVERY KIND AND NATURE ARISING OR
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GROWING OUT OF OR IN ANY WAY CONNECTED WITH LANDLORD'S USE, OCCUPANCY,
MANAGEMENT OR CONTROL OF THE COMMON AREA OR LANDLORD'S OPERATIONS, CONDUCT OR
ACTIVITIES IN THE COMMON AREA OR THE ACTIVITIES OF OTHER TENANTS IN THE PROJECT.
(c) In the event that the City becomes the Landlord hereunder by reason of
an exercise of any remedy under the Ground Lease following a default or breach
by Landlord under the Ground Lease, or by reason of a voluntary or involuntary
termination of the Ground Lease as a result of a default or breach by Landlord
under the Ground Lease, the provisions of Section 11.5 (b) shall not apply to
the City.
Section 11.6 Policies Requirements
All insurance policies procured by Tenant pursuant to Section 11.1 hereof
shall be issued by a company or companies authorized and licensed to do business
in the State of Texas. Tenant's policies of Liability Insurance and Construction
Period Insurance will name Landlord and the City and any Landlord's Mortgagee as
additional insureds and will provide that Landlord, Tenant and the City shall be
given a minimum of thirty (30) days notice by the insurance company prior to
cancellation, termination or change in such insurance. Tenant shall provide
Landlord and the City with certificates or, at Landlord's or the City's request,
copies of the policies, evidencing that such insurance is in full force and
effect and stating the terms thereof and Tenant shall, no later than five (5)
days prior to the expiration of the existing policies, provide Landlord and the
City with certificates or copies of the policies evidencing the renewals of such
policies. THE MINIMUM LIMITS OF THE COMMERCIAL GENERAL LIABILITY POLICY OF
INSURANCE SHALL IN NO WAY LIMIT OR DIMINISH TENANT'S LIABILITY UNDER SECTION
11.5 HEREOF. At Landlord's request, the amounts of insurance provided for in
Section 11.1 hereof shall be re-evaluated and reasonably adjusted at least once
every five (5) years so as to keep abreast of inflation and in order to conform
to current practice in the State of Texas for first class retail, restaurant and
entertainment projects.
Section 11.7 Landlord's Insurance/Insurance - Landlord's Operations
(a) Landlord shall comply with the insurance provisions of the Ground
Lease. Landlord's property insurance shall cover the roof and exterior walls of
the Premises.
(b) All insurance policies procured by Landlord pursuant to this Section
11.7 shall be issued by a company or companies authorized and licensed to do
business in the State of Texas,
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name Tenant, and at the request of Tenant, the constituent partners of Tenant,
as an additional insured, and shall provide that such insurance will not be
canceled or subject to reduction of coverage or other modification except after
thirty (30) days' notice to, among others, Tenant. Landlord shall provide Tenant
with certificates or, at Tenant's request, copies of the policies, evidencing
that such insurance is in full force and effect and stating the terms thereof
and Landlord shall, no later than five (5) days prior to the expiration of the
existing policies, provide Tenant with certificates or copies of the policies
evidencing the renewals of such policies.
(c) Landlord will not do or suffer to be done anything which will
contravene Tenant's insurance policies or prevent Tenant from procuring the
policies of insurance which Tenant is required to obtain under the terms of this
Lease.
(d) In the event that the City becomes the Landlord hereunder by reason of
an exercise of any remedy under the Ground Lease following a default or breach
by Landlord under the Ground Lease, or by reason of a voluntary or involuntary
termination of the Ground Lease as a result of a default or breach by Landlord
under the Ground Lease, this Section 11.7 shall be deemed null and void.
ARTICLE XII
ESTOPPEL CERTIFICATES, ATTORNMENT, SUBORDINATION
Section 12.1 Estoppel Certificates
Within ten (10) days after either party's written request, the other party
shall deliver, executed in recordable form, a declaration to any person
designated by the requesting party (a) stating whether this Lease is in full
force and effect; (b) stating the commencement and termination dates; and (c)
certifying (i) that this Lease has not been assigned, modified, supplemented or
amended (except as stated), (ii) that, to the best of such party's knowledge,
all conditions under this Lease to be performed by the requesting party have
been satisfied (stating exceptions, if any), (iii) that, to the best of such
party's knowledge, no defenses or offsets against the enforcement of this Lease
by the requesting party exist (or stating those claimed); (iv) as to advance
rent, if any, paid by Tenant, (v) the date to which -Rent has been paid, (vi) as
to the amount of security deposited with Landlord, if any, and such other
information as the requesting party reasonably requires. Persons receiving such
statements shall be entitled to rely upon them.
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Section 12.2 Attornment
Tenant shall, in the event of a sale or assignment of Landlord's interest
in the Premises or the Project or this Lease or the Property, or if the
Premises, the Project or the Property comes into the hands of a Landlord
Mortgagee, ground lessor or any other person whether because of a mortgage
foreclosure, exercise of a power of sale under a mortgage, termination of the
Ground Lease, or otherwise, attorn to the purchaser or such Landlord Mortgagee
or other person and recognize the same as Landlord hereunder. Tenant shall
execute, at Landlord's request, an attornment agreement in such form as Landlord
may reasonably request; provided that (i) such document does not require that
Tenant actually attorn at any one time to more than one person or entity and
(ii) the party to whom Tenant is being required to attorn also agrees to
recognize Tenant's rights hereunder.
Section 12.3 Subordination
(a) This Lease shall be automatically subordinate, secondary, junior and
inferior at all times to the lien of any Landlord's Mortgage now or hereafter
existing against all or a part of the Property, including, without limitation,
the leasehold interest of Landlord therein, and to all renewals, modifications,
replacements, consolidations and extensions thereof; provided that Tenant's
subordination to any future mortgagee is conditioned upon receipt of a
recognition agreement from such future mortgagee. Notwithstanding such
subordination, all such Landlord's Mortgagees shall honor this Lease and not
disturb Tenant's occupancy of the Premises pursuant to the terms of this Lease,
as long as Tenant is not in default of any of the terms and provisions of this
Lease beyond any applicable notice and cure period contained herein. Tenant
shall execute and deliver all documents reasonably requested by Landlord to
effect such subordination and non-disturbance; provided that (i) such document
does not adversely effect Tenant's rights under this Lease, (ii) such document
does not require Tenant to attorn at any time to more than one person or entity,
and (iii) such document includes a recognition agreement from the party to whom
Tenant is subordinanting. Landlord hereby represents and warrants to Tenant
that, on the date hereof, the Project is not encumbered by a mortgage.
(b) This Lease is further subject and subordinate to any other matters of
record, such as any reciprocal easement agreement, now affecting the Property.
Tenant shall execute such instruments as Landlord reasonably requests to
evidence subordination to any future reciprocal easement agreements affecting
the Property and shall deliver same to Landlord; provided that such document
does not adversely affect Tenant's
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rights under this Lease or require Tenant to attorn at any time to more than one
person or entity.
(c) This Lease is further subject and subordinate to the Ground Lease.
Landlord shall use its good faith best efforts to obtain within ninety (90) days
of the date of this Lease a Non-Disturbance Agreement from the City that
benefits Tenant and deliver same to Tenant. Upon receipt of same from Landlord,
Tenant shall execute such Non-Disturbance Agreement and deliver same to
Landlord. The form of such Non-Disturbance Agreement shall be substantially in
the form of the Consent to Sublease and Subordination, Non-disturbance and
Attornment Agreement attached hereto as Exhibit "D". In addition, Landlord shall
request the City to add the following sentences to the end of Section 3 (b) of
the Non-Disturbance Agreement:
In addition, The City hereby acknowledges and finds that the Sublease is
the lease of the tenant of a live theater fronting on Xxxxx Street, that
the premises leased to Tenant under the Sublease can be operated
separately, independently and physically separated from the balance of the
Premises, and that there is an entrance from such premises from a public
street; and, therefore, the Sublease is subject to the protections of the
penultimate paragraph of Section 8.1 (c) of the Ground Lease.
The parties acknowledge that the City may require certain modifications be made
to the Non-Disturbance Agreement as a condition to the execution and delivery
thereof by the City, and agree to work together to reasonably accommodate the
needs of the City while at the same time reasonably preserving the rights of
Landlord and Tenant under this Lease. Tenant acknowledges that the City may not
agree in such Non-Disturbance Agreement: (i) to perform the Landlord's Work;
(ii) to comply with and honor any use restrictions and/or exclusive use
provisions contained in this Lease; (iii) to waive the City's right to a trial
by jury; (iv) to pay Tenant's legal fees; (v) to arbitrate any dispute that may
arise hereunder between Tenant and the City; (vi) to indemnify Tenant or to
waive any claims that the City may have against Tenant; or (vii) to provide
insurance coverage (and Tenant agrees that it shall be reasonable for the City
to modify Exhibit D accordingly).
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ARTICLE XIII
ASSIGNMENT, SUBLETTING AND CONCESSIONS
Section 13.1 Consent Required
(a) Except as permitted in Section 13.1 (b) hereof, Tenant shall not sell,
assign, mortgage, pledge or in any manner transfer this Lease or any interest
therein, nor sublet all or any part of the Premises, nor lease departments
therein without Landlord's prior written consent in each instance, which consent
shall not be unreasonably withheld, conditioned or delayed. This prohibition
shall include a prohibition against any subletting or assignment by operation of
law.
(b) Notwithstanding anything to the contrary contained in Sections 13.1
(a) or 13.2 hereof, provided that Tenant is not in default of any of the
provisions of this Lease beyond any applicable notice and/or cure periods
contained herein, Tenant shall have the right:
(i) Without the need to request or obtain Landlord's consent thereto, to
assign this Lease or sublet the Premises to a wholly-owned subsidiary or
the parent of Tenant, (an Approved Transferee), a corporation in which
Tenant or an Approved Transferee owns a controlling interest of the voting
stock, a general or limited partnership in which Tenant or an Approved
Transferee is the managing general partner, or a trust in which Tenant or
an Approved Transferee is a primary beneficiary;
(ii) Without the need to request or obtain Landlord's consent, to assign
this Lease or sublet the entire Premises to an entity that has significant
and successful experience in owning and operating performance halls that
are similar to the Premises and has sufficient net worth to own and
operate the business in the Premises; and
(iii) Without the need to request or obtain Landlord's consent thereto, to
sublease or license the food and beverage and merchandise concession
operations within the Premises and to rent the Premises to third-party
promoters for the purposes of presenting events on a limited-engagement
basis.
(c) Consent by Landlord to any assignment or subletting shall not waive
the necessity for consent to any subsequent assignment or subletting (if such
consent is required by the provisions of this Section 13.1). If this Lease is
assigned or the Premises or any part sublet or occupied by anybody other than
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Tenant, Landlord may collect Rent from the assignee, subtenant or occupant and
apply the same to the Rent herein reserved, but no such assignment, subletting,
occupancy or collection of Rent shall be deemed a waiver of any restrictive
covenant contained in this Section 13.1 or the acceptance of the assignee,
subtenant or occupant as tenant, or a release of Tenant from the performance by
Tenant of any covenants on the part of Tenant herein contained. Any assignment
(a) as to which Landlord has consented or to which its consent is not required;
or (b) which is required by reason of a final non-appealable order of a court of
competent jurisdiction; or (c) which is made by reason of and in accordance with
the provisions of any law or statute, including, without limitation, the laws
governing bankruptcy, insolvency or receivership shall be subject to all terms
and conditions of this Lease.
Section 13.2 Change in Ownership
(a) If Tenant is a corporation, the stock of which is not traded on any
national securities exchange (as defined in the Securities Exchange Act of 1934,
as amended), then the following shall constitute an assignment of this Lease for
all purposes of this Article XIII: (i) the merger, consolidation or
reorganization of such corporation; and/or (ii) the sale, issuance, or transfer,
cumulatively or in one transaction, of any voting stock, by Tenant or the
stockholders of record of Tenant as of the date of this Lease, which results in
a change in the voting control of Tenant. If Tenant is a joint venture,
partnership or other association, then for all purposes of this Article XIII, a
change in the managing general partner of Tenant or the termination of any joint
venture, partnership or other association, shall constitute an assignment.
(b) Provided that Tenant is not in default of any of its obligations
under this Lease beyond any applicable notice and/or cure period,
notwithstanding anything to the contrary contained in Section 13.1 hereof and in
Subsection 13.2 (a) above, in the event that Tenant is a corporation, the
provisions of Section 13.1 hereof and of this Section 13.2 are not intended to
prevent a public offering of stock of Tenant and Tenant shall have the right to
make (or cause others to make) a public offering of stock of Tenant, provided
that upon the completion of such public offering the stock of Tenant is traded
on a national securities exchange (as defined in the Securities Exchange Act of
1934, as amended), such as the New York Stock Exchange, the American Stock
Exchange, the Pacific Stock Exchange, the Philadelphia Stock Exchange or the
NASDAQ/NMS. To the extent permitted by Applicable Law, Tenant (or its
underwriter) shall provide Landlord with a notice of such transaction prior to
the completion of such transaction which notice shall include a copy of the
preliminary offering prospective and, promptly after the
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completion of such transaction, shall provide Landlord with a copy of the final
offering prospective for such transaction.
ARTICLE XIV
ADVERTISING
Section 14.1 Media Events and City Meetings
Tenant or its representative shall attend and cooperate with any
recommencement of construction ceremony for the Project, shall participate in
similar media events, and shall attend and cooperate with the ceremonies for the
grand opening of the Project. In addition, from time to time during the Lease
Term, at the request of Landlord, Tenant or its representative shall attend
meetings with representatives of Landlord and the City in connection with the
operation of the Project.
Section 14.2 Annual Marketing
Through-out the Lease Term Tenant shall market the business in the
Premises in a commercially reasonable manner.
Section 14.3 Tenant's Trade Name
Landlord shall have the right to use Tenant's trade name, trade xxxx and
logo in order to identify Tenant as a tenant of the Project in connection with
Landlord's advertising and marketing of the Project. This use shall not be
deemed to be the grant of any license or the conveyance of any interest in such
marks.
ARTICLE XV
TENANT MORTGAGES
Section 15.1 Right to Mortgage
Tenant shall have the unrestricted right, at any time and from time to
time, to mortgage its leasehold interest under this Lease to a Tenant Mortgagee;
subject, however, to the limitations hereinafter set forth in this Article XV.
Any such mortgage shall be subject and subordinate to the rights of Landlord
hereunder and to the terms and provisions of the Ground Lease, however the
Tenant Mortgagee shall have the right to rely on any non-disturbance agreements
provided to Tenant. A mortgage of Tenant's leasehold interest under this Lease
is herein referred to as a "Tenant Mortgage".
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Section 15.2 Notice to Landlord
The Tenant Mortgagee shall not be entitled to enjoy the rights or benefits
contained in this Article XV, nor shall the provisions of this Lease pertaining
to Tenant Mortgages be binding upon Landlord, unless Landlord shall have been
given notice of the name and address of the Tenant Mortgagee. Landlord shall
have the right to rely on information provided to it by Tenant that identifies
the Tenant Mortgagee.
Section 15.3 Conditions
So long as the Tenant Mortgage of the Tenant Mortgagee shall remain in
effect, the following provisions shall apply:
(a) Landlord shall serve a copy of any notice, including a notice of
default, required to be served on Tenant under this Lease upon the Tenant
Mortgagee at the address provided in the notice referred to in Section 15.2
hereof, and no notice by Landlord to Tenant hereunder shall be deemed to have
been duly given unless and until a copy thereof has been served on the Tenant
Mortgagee.
(b) In the event of a default by Tenant hereunder, the Tenant Mortgagee
shall, following notice and within the period allowed Tenant to cure such
default and otherwise as herein provided, have the right to cure such default,
or cause the same to be cured, and Landlord shall accept such performance by or
on behalf of the Tenant Mortgagee as if the same had been made by Tenant. If
Tenant fails to cure any default asserted in said notice within the time
provided in Section 18.1 hereof, Landlord shall notify the Tenant Mortgagee in
writing of such failure to cure, and the Tenant Mortgagee shall have the right
but not the obligation, within thirty (30) days after receipt of such second
notice, to cure such default before Landlord, subject to the provisions of
Section 15.3 (c) hereof, may take any action by reason of such default.
(c) For the purposes of this subsection, no Event of Default shall be
deemed to exist under Section 18.1 hereof if steps shall have been commenced by
the Tenant Mortgagee in good faith within the time permitted therefor to cure
the same and shall be diligently prosecuted to completion.
(d) Notwithstanding the provisions of this Section 15.3, upon the
occurrence of an Event of Default, other than an Event of Default due to a
default in the payment of money, Landlord shall take no action to terminate this
Lease without first giving to the Tenant Mortgagee notice thereof and a
reasonable time thereafter (which time shall not exceed one hundred eighty (180)
days) within which either (i) to obtain possession of the Premises (including
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possession by a receiver), or (ii) to institute, prosecute and complete
foreclosure proceedings or otherwise acquire Tenant's interest under this Lease.
The Tenant Mortgagee, upon obtaining possession or acquiring Tenant's interest
under this Lease, shall be required promptly to cure all defaults reasonably
susceptible of being cured by such Tenant Mortgagee; provided, however, that:
(A) the Tenant Mortgagee shall not be obligated to continue such possession or
to continue such foreclosure proceedings after such defaults shall have been
cured; (B) nothing herein contained shall preclude Landlord, subject to the
provisions of this Section, from exercising any rights or remedies under this
Lease with respect to any other default by Tenant; and (C) the Tenant Mortgagee
shall agree with Landlord in writing to comply during the period of such
forbearance with such of the terms, conditions and covenants of this Lease as
are reasonably susceptible of being complied with by the Tenant Mortgagee,
including without limitation the payment of Rent. Any default by Tenant not
reasonably susceptible of being cured by the Tenant Mortgagee or the occurrence
of any of the events specified in Sections 18.1 (v) or (vi) shall be deemed to
have been waived by Landlord upon completion of such foreclosure proceedings or
upon such acquisition of Tenant's interest under this Lease, except that any of
such Events of Default which are reasonably susceptible of being cured after
such completion and acquisition shall then be cured with reasonable diligence.
The Tenant Mortgagee or other purchaser in foreclosure proceedings may become
the legal owner and holder of Tenant's interest under this Lease by foreclosure
or assignment in lieu of foreclosure.
Section 15.4 New Lease
In the event of termination of this Lease prior to the expiration of the
Lease Term, except by reason of Condemnation or Casualty as provided herein,
Landlord shall serve upon the Tenant Mortgagee notice that the Lease has been
terminated together with a statement of any and all sums which would at that
time be due under this Lease but for such termination, and of all other
defaults, if any, under this Lease then known to Landlord. The Tenant Mortgagee
shall thereupon have the option, for a period of thirty (30) days after the
receipt of such notice by the Landlord Mortgagee (time being of the essence), to
obtain a new lease in accordance with and upon the following terms and
conditions:
Upon the written request of the Tenant Mortgagee (which must be
received by Landlord within said thirty (30) day period (time being of the
essence)), Landlord shall promptly enter into a new lease of the Premises
with the Tenant Mortgagee, or its designee, as follows:
Such new lease shall be effective on the date of termination
of this Lease and shall be for the remainder of the Lease Term, at
the Rent and upon
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all the agreements, terms, covenants and conditions hereof,
including any applicable rights of renewal or extension. Such new
lease shall require the Tenant to perform all unfulfilled
obligations of Tenant under this Lease which are reasonably
susceptible of being performed by such tenant. Upon the execution of
such new lease, the tenant named therein shall pay all sums which
would at the time of the execution thereof be due under this Lease
but for such termination and shall pay the reasonable expenses
incurred by Landlord in connection with such defaults and
termination, the recovery of possession of the Premises and the
preparation, execution and delivery of such new lease.
Section 15.5 Assignment of Subleases
Effective upon the commencement of the term of any new lease executed
pursuant to Section 15.4, (a) all subleases shall be assigned and transferred
without recourse by Landlord to the tenant under such new lease, and (b) all
monies on deposit with Landlord which Tenant would have been entitled to use but
for the termination or expiration of this Lease may be used by the tenant under
such new lease for the purposes of and in accordance with the provisions of such
new lease.
Section 15.6 Miscellaneous
(a) This Lease may not be modified or canceled (other than pursuant to the
terms hereof) by the mutual agreement of Tenant and Landlord or surrendered
without the express written consent of the Tenant Mortgagee.
(b) If Landlord or Tenant shall acquire the interest of the other
hereunder, this Lease shall remain outstanding and no merger of the leasehold
into the fee interest shall be deemed to have occurred.
(c) If the Tenant Mortgagee shall acquire title to Tenant's interest under
this Lease by foreclosure, assignment in lieu of foreclosure or otherwise, or
under a new lease pursuant to Section 15.4 hereof, the Tenant Mortgagee may
assign such interest under this Lease or in such new lease and shall thereupon
be released from all liability for the performance or observance of the
covenants and conditions in this Lease or in such lease contained on Tenant's or
new tenant's part to be performed and observed from and after the date of such
assignment; provided, however, that the assignee from the Tenant Mortgagee shall
have expressly assumed this Lease or such new lease and written evidence thereof
shall have been submitted to Landlord.
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ARTICLE XVI
DAMAGE AND DESTRUCTION
Section 16.1 Casualty; Obligation to Restore/Exceptions
(a) Obligation to Restore. If any portion of the Premises or the Control
Area is damaged or destroyed by fire or other casualty ("Casualty"), this Lease
shall remain in full force and effect (except as provided in Sections 16.1 (b)
and/or 16.1 (c) hereof and except as otherwise provided herein), and Landlord
shall, at its sole expense, promptly repair, restore and rebuild the Landlord's
Work (a Restoration) to facilities of like quality, nature and condition, with
the same layout as that which existed immediately prior to the occurrence of
such Casualty. (Landlord shall not be obligated to restore items that were
initially Tenant's Work or replacements to Tenant's Work, the Excluded Personal
Property, and Tenant's stock in trade, fixtures, furniture, furnishings,
carpeting, floor covering, wall covering, drapes, ceiling and equipment). If any
portions of the Common Area (other than the Control Area) are damaged or
destroyed by a Casualty, this Lease shall likewise remain in full force and
effect (except as provided in Sections 16.1 (b) and/or 16.1 (c) and except as
otherwise provided herein) and Landlord shall as its sole expense repair,
restore and rebuild the same to facilities with a similar layout as that which
existed immediately prior to the occurrence of such casualty to the extent that
same will not materially adversely affect Tenant's business in the Premises.
Anytime that Landlord repairs or restores the Premises to the extent required
above after damage or destruction, then Tenant shall promptly repair or replace
the Tenant's Work, or any replacements thereto, the Excluded Personal Property,
and its stock in trade, fixtures, furnishings, furniture, carpeting, wall
covering, floor covering, drapes, ceiling and equipment to the same condition as
they were in immediately prior to the casualty, and if Tenant has closed its
business, Tenant shall promptly reopen for business upon the completion of such
repairs. Landlord shall utilize its best efforts (without having to pay
overtime) to substantially complete all Restorations as promptly as possible
under the circumstances, and, in any event, shall utilize its best efforts
(without having to pay overtime) to substantially complete all Restorations
within one (1) year of the Casualty.
(b) Exception; Last Twenty-Four Months. If the Premises are damaged to the
extent of more than twenty-five percent (25%) of the Replacement Cost thereof
within the last twenty-four (24) months of the initial Lease Term or the last
twenty-four months of the Extended Terms, Landlord or Tenant shall have the
option, exercisable by written notice within sixty (60) days after the
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date of the occurrence of such damage, to terminate this Lease, provided that
(i) in the case of any such termination by Tenant, Tenant shall release to
Landlord all of Tenant's claim or interest in and to that portion of any
insurance proceeds otherwise allowable in connection with such damage or
destruction for the repair and restoration of said improvements for which
Landlord would otherwise be responsible; and (ii) in the case of any such
termination by Landlord, Tenant may nullify Landlord's notice of termination by
electing to exercise Tenant's rights pursuant to Section 2.3 hereof to extend
the Lease Term; provided, however, that Landlord and Tenant shall immediately
undertake the repair, restoration and rebuilding of the Premises in accordance
with Section 16.1 (a) above.
(c) "Replacement Cost" Defined. As used in this Lease, the term
"Replacement Cost" means the reasonably estimated total cost of fully repairing,
replacing and restoring the building(s) and other improvements in question,
assuming a total destruction thereof, as nearly as practicable to the condition
existing immediately prior to the damage or destruction.
Section 16.2 Abatement of Rent
Tenant's obligation to pay Rent (including, without limitation, Minimum
Annual Rent, Percentage Rent, Additional Rent, Tenant's pro rata share of Common
Area Costs, and Tenant's pro rata share of Real Estate Taxes):
(a) Will not be abated if the Premises was not damaged by the Casualty;
and
(b) Will be abated during the period following a Casualty to the
Premises that prevents Tenant from operating its business in the
Premises (such abatement will cease when such areas have been
restored (or should have been restored had Tenant timely fulfilled
its obligations hereunder)).
ARTICLE XVII
EMINENT DOMAIN
Section 17.1 Condemnation of Project, Premises, or Common Areas
(a) In the event there shall be a taking, requisition or sale by or on
account of any actual or threatened eminent domain proceeding (herein called a
"Condemnation") of all of the Premises, this Lease shall terminate as of the
date Tenant shall be deprived thereof.
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(b) In the event that there shall be a Condemnation of (i) some portion
greater than ten percent (10%) but less than the whole of the Premises, as, in
the reasonable discretion of the Tenant, will interfere with the operation of
the Premises as a first class Performance Hall with a capacity of not less than
two thousand (2,000) spectators together with reasonable concession,
merchandising and support facilities or (ii) such portion of the Project as, in
the reasonable discretion of the Tenant, will interfere with the operation of
the Premises as a first class Performance Hall with a capacity of not less than
two thousand (2,000) spectators together with reasonable concession,
merchandising and support facilities, Tenant shall have the option to terminate
this Lease as of the date Tenant shall be dispossession from the part so
expropriated by giving notice to Landlord of such election so to terminate
within one hundred twenty (120) days after such disposition becomes effective;
provided, however, that if such Condemnation occurs within the last twenty four
(24) months of the Lease Term, and Tenant does not desire to exercise its option
to extend the Lease Term for the Extended Term, then Landlord may terminate this
Lease.
(c) In the event of a Condemnation of any portion of the Premises and if
this Lease shall not be terminated as hereinabove provided, it shall continue as
to that portion of the Premises which shall not have been expropriated or taken,
in which event Landlord shall, at Landlord's sole cost and expense, promptly and
with due diligence (and in any event, within twelve (12) months after such
disposition becomes effective) restore the Landlord's Work and Tenant shall
restore the Tenant's Work as nearly as practicable to what existed just prior to
such Condemnation.
(d) Without limiting the foregoing, in the event of a Condemnation of the
Control Area, and/or of Tenant's rights therein, Landlord shall promptly and in
any event within one hundred eighty (180) days substitute equivalent and similar
Common Areas contiguous to and properly integrated with the remainder of the
Common Areas and shall restore the remaining Common Areas as nearly as
practicable to the condition prior to the Condemnation to the extent that same
will not materially adversely affect Tenant's business in the Premises.
If (i) Landlord shall be unable within such time period to substitute such
Common Areas, or (ii) such substitution shall not be reasonably acceptable to
Tenant, or (iii) Tenant shall be deprived of the use of any Control Area,
whether or not such deprivation shall result from a Condemnation of such Common
Areas (and such Control Area are not replaced within such time period with a
substantially equivalent ingress and egress facilities reasonably acceptable to
Tenant), then, in such event, Tenant shall have the option to terminate this
Lease as of the date of such deprivation by giving notice to Landlord within one
hundred twenty
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(120) days after such deprivation becomes effective. Tenant's obligation to pay
Rent (including Minimum Annual Rent, Percentage Rent, Tenant's pro rata share of
Common Area Costs and Real Estate Taxes and Additional Rent), shall be abated
during the period of time required to complete any such restoration or
substitution. In the event of any Condemnation of any signage of Tenant, such
signage will be promptly replaced by Tenant at Tenant's expense (and Landlord
shall fully cooperate with Tenant's efforts to replace such signage) with
substantially equivalent signage.
(e) In the event this Lease shall be terminated pursuant to this Section,
any Rent paid in advance shall be refunded to Tenant. Nothing herein contained
shall be construed as preventing Tenant from being entitled to any separate
award made to Tenant for the taking of any Excluded Personal Property,
beneficial leasehold interest or good will, or from claiming its award directly
against the condemner.
Section 17.2 Condemnation Award-Lease Not Terminated
In the event of a Condemnation of any portion of the Premises, and the
Lease is not terminated, the award paid by the condemning authority (after
payment of expenses incurred in connection with collecting the same) shall be
allocated as follows:
(i) First, to Tenant a sum attributable to replacing
Tenant's improvements or alterations made to the Premises in
accordance with the terms of this Lease by Tenant at Tenant's
expense; and
(ii) Second, to Landlord, shall receive the balance of
the award.
In the event of a partial Condemnation of any portion of the
Premises and if this Lease shall not have been terminated, the Minimum Annual
Rent payable hereunder shall be abated in proportion to the number of square
feet of the Premises taken as related to the number of square feet of the
Premises prior to the Condemnation.
Section 17.3 Condemnation Award-Lease Terminated
In the event of a Condemnation and this Lease is terminated as herein
provided, the award paid by the condemning authority (after payment of expenses
incurred in connection with collecting the same) shall be allocated as follows:
(i) First, to Tenant a sum attributable to Tenant's
improvements or alterations made to the Premises per the terms of
this Lease by Tenant at Tenant's expense (except as to items Tenant
is
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entitled to and does remove from the Premises upon such Lease
termination) and a sum equal to Tenant's actual moving costs;
(ii) Second, to Tenant the value of the value of
Tenant's interest in the Lease; and
(iv) Third, to Landlord the balance of the award.
Section 17.4 Temporary Requisition
In the event of a Condemnation for temporary use (herein called a
"Temporary Requisition") of all or any part of the Premises or the Common Areas
or Tenant's rights therein for a period including any of the Lease Term, Tenant
shall be entitled to the portion of the net award attributable to the Temporary
Requisition of the Premises, Tenant's rights with respect to such Common Area
and Tenant's moving expenses and/or loss of business. If, however, such
Temporary Requisition shall include a period beyond the Lease Term, Landlord
shall be entitled to receive such portion of the award as shall be attributable
to the period after the Lease Term. During such time as Tenant shall be out of
possession by reason of a Temporary Requisition, this Lease shall not be subject
to forfeiture for failure to observe and perform its covenants hereunder. If the
condemning authority shall fail to keep the Premises in the state of repair or
to perform any other covenants required hereunder, Tenant shall have two hundred
and forty (240) days after restoration of possession to it within which to carry
out its obligations under such covenants.
Section 17.5 Notices; Compensable Interests
(a) In the event Landlord or Tenant receives any notice of any kind
specified below, Landlord or Tenant shall promptly give the other party a
photocopy of the notice received:
(i) Notice of intended taking;
(ii) Service of any legal process relating to condemnation of any
portion of the Premises or the Project or any improvement located
thereon, or of any easement appurtenant thereto;
(iii) Notice in connection with any proceedings or negotiations with
respect to such a condemnation; or
(iv) Notice of intent or willingness to make or negotiate a private
purchase, sale or transfer in lieu of condemnation.
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(b) Landlord, Tenant and all persons and entities holding under Tenant
shall have the right to represent his, her or its respective interest in each
proceeding or negotiation with respect to a taking or intended taking and to
make full proof of his or its claims. No agreement, settlement, sale or transfer
to or with the condemning authority shall be made without the written consent of
Landlord and Tenant. Landlord and Tenant each agree to execute and deliver to
the other any instruments that may be necessary or appropriate to effectuate or
facilitate the provisions of this Lease relating to condemnation.
ARTICLE XVIII
DEFAULT BY TENANT
Section 18.1 Events of Default
The following shall be considered for all purposes to be defaults under
and breaches of this Lease (and are each hereinafter sometimes referred to
herein as an Event of Default): (i) Tenant shall, except as otherwise permitted
under this Lease, fail to pay any Minimum Monthly Rent and such failure shall
continue for ten (10) business days after notice to Tenant of such failure; (ii)
Tenant shall, except as otherwise, permitted under this Lease, fail to pay any
Rent (other than Minimum Monthly Rent) and such failure shall continue for
fifteen (15) business days after notice to Tenant of such failure; (iii) Except
as otherwise provided herein, Tenant shall fail to observe or perform any other
provision hereof within thirty (30) days after receipt of notice from Landlord
to Tenant specifying such default and demanding that the same be cured provided
that, if such default cannot with due diligence be wholly cured within such
thirty (30) day period, Tenant shall have such longer period as may be
reasonably necessary to cure the default, so long as Tenant proceeds promptly to
commence the cure of same within such thirty (30) day period and diligently
prosecutes the cure to completion (provided, however, that in the case of any
such default that, in Landlord's reasonable judgment, results in or is likely to
result in a default by Landlord of any of its obligations under the Ground
Lease, the time within which such default may be cured shall expire one hundred
eighty days (180) days after the date that Landlord gives notice to Tenant of
its concern that such default results in or is likely to result in a default by
Landlord of any of its obligations under the Ground Lease); (iv) subject to the
provisions of Section 25.5 hereof, Tenant fails to substantially complete the
Tenant's Work and cause the Premises to be initially open for business to the
public in accordance with the provisions of this Lease on or before the Required
Completion Date and such failure shall continue for thirty (30) business days
after notice to Tenant of
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such failure; (v) Tenant shall file a petition in bankruptcy or for
reorganization or for an arrangement pursuant to any federal or state bankruptcy
law or any similar federal or state law, or shall be adjudicated a bankrupt or
become insolvent or shall make an assignment for the benefit of creditors or
shall admit in writing its inability to pay its debts generally as they become
due, or a petition or answer proposing the adjudication of Tenant as a bankrupt
or reorganization pursuant to any federal or state bankruptcy law or any similar
federal or state law shall be filed in any court and Tenant shall consent to or
acquiesce in the filing thereof or such petition or answer shall not be
discharged or denied within ninety (90) days after the filing thereof; (vi) a
receiver, trustee or liquidator of Tenant or of all or substantially all of the
assets of Tenant, or of the Premises or Tenant's estate therein shall be
appointed in any proceeding brought by Tenant, or any such receiver, trustee or
liquidator shall be appointed in any proceeding brought against Tenant and shall
not be discharged within ninety (90) days after such appointment, or Tenant
shall consent to or acquiesce in such appointment; (vii) if Tenant abandons the
Premises; or (vii) Tenant's failure to execute in accordance with its
obligations under this Lease instruments or certificates provided for in Article
XII hereof within fifteen (15) business days after the receipt by Tenant of a
written request therefor.
Section 18.2 Self Help
Landlord may perform, on behalf and at the expense of Tenant, any
obligation of the Tenant under this Lease which Tenant has failed to perform
within thirty (30) after the date that notice is given of such failure to
perform, provided that if the default cannot with due diligence be cured within
such thirty (30) day period, Tenant shall have such longer period as may be
reasonably necessary to cure the default, so long as Tenant proceeds promptly to
commence to cure the same within such thirty (30) day period and diligently
prosecutes the cure to completion, and the expense reasonably incurred by
Landlord in so performing such obligation, together with interest thereon at the
Default Interest Rate from the date of such expenditure, shall be deemed
Additional Rent and shall be payable by Tenant to Landlord upon demand.
Notwithstanding the provisions of this Section 18.2 and regardless of whether an
Event of Default shall have occurred, Landlord may exercise the remedy described
in this Section 18.2 without any notice to Tenant, if, in Landlord's good faith
judgment, it would be materially injured by failure to take rapid action, such
as a termination of the Ground Lease, or if the unperformed obligation
constitutes an emergency that endangers life and/or safety; provided that
Landlord shall exercise reasonable efforts to minimize any disruption to
Tenant's business in the Premises (to the extent same is permitted by the
provisions of this Lease).
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Section 18.3 Right to Re-Enter
Upon the occurrence of an Event of Default, and without any further grace
period, demand or notice, Landlord, in addition to all other rights or remedies
it may have hereunder or at law, shall have the right thereupon or at any time
thereafter to terminate this Lease by giving notice to Tenant stating the date
upon which such termination shall be effective, instituting an eviction action
or other action in a court of competent jurisdiction and obtaining a writ of
possession or other legal writ or process (except in the event where Tenant has
vacated or abandoned the Premises, in which case Landlord shall have the right
to regain possession of the Premises without initiating such an eviction action)
shall, have the right, after any such termination, to re-enter and take
possession of the Premises, without being deemed guilty of trespass or
constructive eviction or becoming liable for any loss or damage occasioned
thereby. Tenant hereby further waives the benefit of state law requiring that
Tenant be given three (3) days notice to vacate the Premises upon termination of
this Lease or Tenant's right to possession of the Premises, Tenant hereby
agreeing that Landlord may institute an eviction proceeding at any time after an
Event of Default and without any notice to vacate or other demand for the
Premises.
Section 18.4 Right to Re-let
If Landlord re-enters the Premises as provided in Section 18.3 hereof, or
if it takes possession pursuant to legal proceedings, arbitration or otherwise,
it may either terminate this Lease or it may, from time to time, without
terminating this Lease, make such alterations and repairs as it deems advisable
to re-let the Premises, and re-let the Premises or any part thereof for such
term or terms (which may extend beyond the Lease Term) and at such rentals and
upon such other terms and conditions as shall be commercially reasonable
(Landlord hereby agreeing to use commercially reasonable efforts to re-let the
Premises); upon each such re-letting all rentals received by Landlord therefrom
shall be applied, first, to any indebtedness other than Rent due hereunder from
Tenant to Landlord; second, to pay any reasonable costs and expenses of
re-letting, including without limitation, reasonable brokers and attorneys' fees
and reasonable costs of advertising, alterations and repairs; third, to Rent due
hereunder, and the residue, if any, shall be held by Landlord and applied in
payment of future Rent as it becomes due hereunder. If rentals received from
such re-letting during any month are less than that to be paid during that month
by Tenant hereunder, Tenant shall immediately pay any such deficiency to
Landlord. No re-entry or taking possession of the Premises by Landlord shall be
construed as an election to terminate this Lease, unless a notice of such
termination is given by Landlord.
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Section 18.5 Damages
Landlord may, at any time after an Event of Default, terminate this Lease.
If Landlord terminates this Lease, in addition to any other remedies it may
have, it may accelerate all Rent hereunder, and recover from Tenant, as damages,
the sum of all Rent and other indebtedness accrued to the date of such
termination, plus, an amount equal to the present value (computed as of the date
of any such termination using a discount factor equal to the Default Interest
Rate, less two (2%) percent) of the difference between the amount stated in (a)
below and the amount stated in (b) below: (a) the total Rent (Minimum Annual
Rent (computed in accordance with the last sentence of this Section 18.5) and
Percentage Rent (computed in accordance with the last sentence of this Section
18.5) plus Tenant's pro rata share of Real Estate Taxes and Common Area Costs
(using the sums due for each such item of Additional Rent during the year of
termination as the basis for determining the amount thereof which would have
been due each year thereafter for the remaining portion of the Lease Term had it
not been terminated)) that would have been due for the remaining portion of the
Lease Term (had such Lease Term not been terminated prior to the date of
expiration set forth in Section 2.3); and (b) the then fair market rental value
of the premises for such period. In determining the Rent payable by Tenant
hereunder subsequent to an Event of Default: (i) the Minimum Annual Rent for
each Lease Year of the unexpired portion of the Lease Term shall equal the
Minimum Annual Rent that Tenant was obligated hereunder to pay during such Lease
Year, and (ii) for each Lease Year, Percentage Rent shall equal the average
Percentage Rents which Tenant was obligated to pay from the commencement of the
Lease Term to the time of default, or during the preceding three (3) full
calendar years, which ever period is shorter.
Section 18.6 No Offset
The covenants to pay Rent and other amounts hereunder are independent
covenants and Tenant shall have no right to hold back, offset or fail to pay any
such amounts for default by Landlord or any other reason whatsoever, it being
understood and acknowledged by Tenant that Tenant's only recourse is to seek an
independent action against Landlord.
Section 18.7 Waiver of Rights of Redemption
To the extent permitted by law, Tenant waives any and all rights of
redemption granted by or under any present or future laws if Tenant is evicted
or dispossessed for any cause, or if Landlord obtains possession of the Premises
due to Tenant's default hereunder or otherwise.
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Section 18.8 Bankruptcy
(a) Assumption of Lease. In the event Tenant shall become a Debtor under
Chapter 7 of the Bankruptcy Code ("Code") or a petition for reorganization or
adjustment of debts is filed concerning Tenant under Chapters 11 or 13 of the
Code, or a proceeding is filed under Chapter 7 and is transferred to Chapters 11
or 13, the Trustee or Tenant, as Debtor and as Debtor-in-Possession, may not
elect to assume this Lease unless, at the time of such assumption, the Trustee
or Tenant has:
1. Cured or provided Landlord "Adequate Assurance" (as defined below)
that:
(i) Within thirty (30) days from the date of such assumption the
Trustee or Tenant will cure all monetary defaults under this
Lease and compensate Landlord for any actual pecuniary loss
resulting from any existing default, including without
limitation, Landlord's reasonable costs, expenses, accrued
interest as set forth in Section 4.2 of the Lease, and
attorneys' fees incurred as a result of the default;
(ii) Within sixty (60) days from the date of such assumption the
Trustee or Tenant will cure all non-monetary defaults under
this Lease; provided, however, if any such default cannot with
due diligence be wholly cured within such sixty (60) day
period, the Trustee or Tenant shall have such longer period as
may be reasonably necessary to cure the default, so long as
the Trustee or Tenant proceeds promptly to commence the cure
of same within such sixty (60) day period and diligently
prosecutes the cure to completion (provided, however, that in
the case of any such default that, in Landlord's reasonable
judgment, results in or is likely to result in a default by
Landlord of any of its obligations under the Ground Lease, the
time within which such default may be cured shall expire one
hundred eighty days (180) days after the date that Landlord
notifies Tenant and the Trustee (if any) of its concern that
such default results in or is likely to result in a default by
Landlord of any of its obligations under the Ground Lease);
and
(iii) The assumption will be subject to all of the provisions of
this Lease.
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2. For purposes of this Section 18.8, Landlord and Tenant acknowledge
that, in the context of a bankruptcy proceeding of Tenant, at a
minimum "Adequate Assurance" shall mean:
(i) The Trustee or Tenant has and will continue to have sufficient
unencumbered assets after the payment of all secured
obligations and administrative expenses to assure Landlord
that Trustee or Tenant will have sufficient funds to fulfill
the obligations of Tenant under this Lease, and to keep the
Premises stocked with merchandise and properly staffed with
sufficient employees to conduct a fully operational, actively
promoted business in the Premises; and
(ii) The Bankruptcy Court shall have entered an Order segregating
sufficient cash payable to Landlord and/or the Trustee or
Tenant shall have granted a valid and perfected first lien and
security interest and/or mortgage in property of Trustee or
Tenant acceptable as to value and kind to Landlord, to secure
to Landlord the obligation of the Trustee or Tenant to cure
the monetary and/or non-monetary defaults under this Lease
within the time period set forth above; and
(iii) The Trustee or Tenant at the very least shall deposit a sum,
in addition to the Security Deposit, equal to one (1) month's
Rent to be held by Landlord (without any allowance for
interest thereon) to secure Tenant's future performance under
the Lease.
(b) Assignment of Lease. If the Trustee or Tenant has assumed the Lease
pursuant to the provisions of this Section 18.8 for the purpose of assigning
Tenant's interest hereunder to any other person or entity, such interest may be
assigned only after the Trustee, Tenant or the proposed assignee has complied
with all of the terms, covenants and conditions of Section 13.1 herein,
including, without limitation, those with respect to Additional Rent and the use
of the Premises only as permitted in Article VIII herein; Landlord and Tenant
acknowledging that such terms, covenants and conditions are commercially
reasonable in the context of a bankruptcy proceeding of Tenant. Any person or
entity to which this Lease is assigned pursuant to the provisions of the Code
shall be deemed without further act or deed to have assumed all of the
obligations arising under this Lease on and after the date of such assignment.
Any such assignee shall upon request execute and deliver to Landlord an
instrument confirming such assignment.
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(c) Adequate Protection. Upon the filing of a petition by or against
Tenant under the Code, Tenant, as Debtor-in-possession, and any Trustee who may
be appointed agree to adequately protect Landlord as follows:
(1) To perform each and every obligation of Tenant under this Lease
until such time as this Lease is either rejected or assumed by Order
of the Bankruptcy Court; and
(2) To pay all monetary obligations required under this Lease, including
without limitation, the payment of Minimum Monthly Rent, and such
other Additional Rent charges payable hereunder which is considered
reasonable compensation for the use and occupancy of the Premises;
and
(3) Provide Landlord a minimum thirty (30) days prior notice, unless a
shorter period is agreed to in writing by the parties, of any
proceeding relating to any assumption of this Lease or any intent to
abandon the Premises, which abandonment shall be deemed a rejection
of this Lease; and
(4) To perform to the benefit of Landlord otherwise required under the
Code.
The failure of Tenant to comply with the above shall result in an
automatic rejection of this Lease.
(d) Stipulation. For purposes of this Section 18.8, Landlord and Tenant
hereby stipulate and agree that the Project is a shopping center as such term is
used in Section 365(b)(3) of the Code.
(c) Accumulative Rights. The rights, remedies and liabilities of Landlord
and Tenant set forth in this Section 18.8 shall be in addition to those which
may now or hereafter be accorded, or imposed upon, Landlord and Tenant by the
Code.
ARTICLE XIX
LANDLORD'S DEFAULT
Section 19.1 Landlord's Default, Defined Notice
(a) Any of the following occurrences, conditions or acts by Landlord shall
constitute a "Landlord Default": (i) Landlord's failure to make any payments of
money due Tenant under the express provisions of this Lease within ten (10) days
after the
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receipt of written notice from Tenant that same is overdue (in which event the
delinquent amount shall accrue interest at the Default Rate); or (ii) Landlord's
failure to perform any other obligation of Landlord under Section 9.1 hereof
within thirty (30) days after receipt of written notice from Tenant to Landlord
specifying such default and demanding that the same be cured; provided that, if
such default cannot with due diligence be wholly cured within such thirty (30)
day period, Landlord shall have such longer period as may be reasonably
necessary to cure the default, so long as Landlord proceeds promptly to commence
the cure of same within such thirty (30) day period and diligently prosecutes
the cure to completion.
(b) Notwithstanding the above, in the event that a default by Landlord
under the provisions of Sections 9.1 results in the occurrence of a bona fide
emergency, such as a roof leak that is of such a serious nature that if not
repaired immediately Tenant will have to close all or a significant part of the
Premises for business to the public, Tenant, without the need of serving the
above described default notice, may cure such default; provided Tenant promptly
provides Landlord with notice of such default and the actions taken by Tenant to
cure same.
Section 19.2 Notice to First Mortgagee
If any Landlord's Mortgagee shall have given written notice to Tenant of
the address to which notices to such parties are to be sent, Tenant shall give
such parties written notice simultaneously with any notice given to Landlord of
any default of Landlord, and if Landlord fails to cure any default asserted in
said notice within the time provided above, Tenant shall notify such parties in
writing of the failure to cure, and said parties shall have the right but not
the obligation, within thirty (30) days after receipt of such second notice, to
cure such default before Tenant may take any action by reason of such default. A
Landlord's Default shall not be deemed to have occurred until after Tenant has
complied with the provisions of this Section 19.2 and the additional notice
period contained herein has expired prior to the curing of the alleged default.
Notwithstanding the above, in the event of a bona fide emergency, such as a roof
leak that is of such a serious nature that if not repaired immediately Tenant
will have to close the Premises for business to the public, Tenant, without the
need of serving the above described default notices, may cure such default;
provided Tenant promptly provides Landlord and Landlord's all Landlord's
Mortgagees with notice of such default and the actions taken by Tenant to cure
same.
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ARTICLE XX
ARBITRATION
In the event that any dispute shall arise between the parties hereto with
respect to this Lease, including, without limitation, a dispute concerning: (a)
the amount of Gross Sales generated in any Fiscal Year, (b) Tenant's pro rata
share of Real Estate Taxes, (c) Tenant s pro rata share of Landlord s Common
Area Costs, (d) the occurrence of an Event of Default, or (e) the occurrence of
a Landlord's Default, and such dispute is not resolved to the satisfaction of
both parties hereto within twenty (20) days after either of the parties shall
notify the other in writing of its desire to arbitrate the dispute (the
"Arbitration Notice"), then the dispute shall be resolved in accordance with the
Commercial Arbitration Rules of the American Arbitration Association then
pertaining. The decision of the arbitrators shall be binding, final and
conclusive on the parties, except that errors of law shall be subject to appeal.
Unless the parties otherwise agree, such arbitration proceedings shall be
conducted in Houston, Texas.
Within twenty-five (25) days after the service of the Arbitration Notice,
each party shall appoint an impartial person as an arbitrator who shall have had
at least ten (10) years' recent experience in the Greater Metropolitan Houston
area in a calling connected with the subject matter of the dispute. Such
appointment shall be signed in writing by each party to the other, and the
arbitrators so appointed, in the event of their failure to agree within thirty
(30) days after the appointment of the second arbitrator upon the matter so
submitted, shall appoint a third arbitrator. If either party shall fail to
appoint an arbitrator as aforesaid for a period of twenty-five (25) days after
service of the Arbitration Notice, then the arbitrator appointed by the party
having made such appointment shall appoint a second arbitrator and the two so
appointed shall, in the event of their failure to agree upon any decision within
thirty (30) days thereafter, appoint a third arbitrator. If such arbitrators
fail to agree upon a third arbitrator within forty-five (45) days after
appointment of the second arbitrator, then such third arbitrator shall be
appointed by the American Arbitration Association from its qualified panel of
arbitrators, and shall be a person having at least ten (10) years' recent
experience in the State of Texas in a calling connected with the subject matter
of the dispute. The fees of all arbitrators and the expenses incident to the
proceedings shall be borne by the losing party. The reasonable fees of
respective counsel engaged by the parties, and the fees of expert witnesses and
other witnesses called for the parties, shall also be paid by the losing party.
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The decision of the arbitrators shall be rendered within thirty (30) days
after appointment of the third arbitrator, and such decision shall be in writing
and in duplicate, one counterpart thereof to be delivered to each of the
parties. A judgment of a court of competent jurisdiction may be entered upon the
award of the arbitrators in accordance with the rules and statutes applicable
thereto then obtaining.
If a dispute shall be submitted to arbitration, notice of appointment of
the arbitrators shall be given to the Tenant Mortgagee who prior thereto shall
have given Landlord a notice specifying the name and address of the Tenant
Mortgagee who shall then have the right to participate in the arbitration
proceedings; provided, however, that in the case of the Tenant Mortgagee such
participation shall be in association with Tenant and shall neither be deemed to
entitle the Tenant Mortgagee to participate in the appointment of Tenant's
arbitrator nor to appoint an additional arbitrator nor to enlarge Tenant's
rights in such arbitration proceeding.
If a dispute shall be submitted to arbitration, notice of appointment of
the arbitrators shall be given to the Landlord s Mortgagee who prior thereto
shall have given Tenant a notice specifying the name and address of the Landlord
s Mortgagee who shall then have the right to participate in the arbitration
proceedings; provided, however, that in the case of the Landlord s Mortgagee
such participation shall be in association with Landlord and shall neither be
deemed to entitle the Landlord's Mortgagee to participate in the appointment of
Landlord's arbitrator nor to appoint an additional arbitrator nor to enlarge
Landlord's rights in such arbitration proceeding.
In the event that the City becomes the Landlord hereunder by reason of an
exercise of any remedy under the Ground Lease following a default or breach by
Landlord under the Ground Lease, or by reason of a voluntary or involuntary
termination of the Ground Lease as a result of a default or breach by Landlord
under the Ground Lease, the provisions of this Article XX shall not apply to any
dispute that may arise under this Lease between the City, as landlord hereunder,
and Tenant. In such event, all disputes to be resolved by arbitration will,
instead, unless Tenant and the City otherwise mutually agree, be resolved by
appropriate judicial proceedings, and any reference in this Lease to a decision
or determination by arbitration or pursuant to this Article XX, will be
thereafter deemed to be a reference to a final and non-appealable judgment by a
court of final jurisdiction with respect to the matter.
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ARTICLE XXI
TENANT'S PROPERTY
Section 21.1 Taxes on Leasehold
Tenant shall be responsible for and shall pay before delinquent all
municipal, county, federal or state taxes whether enacted now or in the future
coming due during or after the Lease Term against Tenant's interest in this
Lease or against personal property of any kind owned or placed in, upon or about
the Premises by Tenant.
Section 21.2 Excluded Personal Property
Landlord hereby waives any Landlord's lien, express or implied, statutory
or contractual, that it may have on the Excluded Personal Property.
ARTICLE XXII
ACCESS BY LANDLORD
Tenant shall permit the City, Landlord and the authorized representatives
of each to inspect the Premises during usual business hours after giving
reasonable prior notice as long as such inspection shall not interfere with any
business being conducted on the Premises. Except in the case of an emergency,
forty-eight (48) hours will be deemed to be reasonable notice. Subject to the
provisions of the two previous sentences, Landlord, its agents and employees
shall have the right to enter the Premises from time to time at reasonable times
to examine the same, show them to prospective purchasers and other persons, and
make such repairs to the Premises and/or the Project as Landlord is required to
make hereunder and the City, its agents and employees shall have the right,
after reasonable advance notice, to enter the Premises to the extent necessary
for maintenance, repair, or utility purposes related to the Garage (as that term
is defined in the Ground Lease) or surrounding City properties. When doing any
work in the Premises, Landlord (and the City) shall do so in a manner that does
not disrupt Tenant's business in the Premises. In connection with any entry by
Landlord, Landlord shall reimburse Tenant for all actual costs incurred by
Tenant in connection with repairing any damage to the Premises caused by such
entry. Nothing herein contained, however, shall be deemed to impose upon
Landlord any obligation, responsibility or liability whatsoever, for any care,
maintenance or repair except as otherwise expressly provided in this Lease.
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ARTICLE XXIII
HOLDING OVER, SUCCESSORS
Section 23.1 Holding Over
If Tenant holds over or occupies the Premises beyond the Lease Term (it
being agreed there shall be no such holding over or occupancy without Landlord's
written consent), Tenant shall pay Landlord for each day of such holding over a
sum equal to the greater of (a) one hundred and fifty percent (150%) of the
Minimum Monthly Rent divided by thirty (30), or (b) Minimum Annual Rent plus
Percentage Rent prorated divided by three hundred sixty five (365), plus,
whichever of (a) or (b) is applicable, a pro rata portion of all other amounts
which Tenant would have been required to pay hereunder had this Lease been in
effect. If Tenant holds over with or without Landlord's written consent, Tenant
shall occupy the Premises on a tenancy at sufferance but all other terms and
provisions of this Lease shall be applicable to such period.
Section 23.2 Successors
All rights and liabilities herein given to or imposed upon the respective
parties hereto shall bind and inure to the several respective heirs, successors,
administrators, executors and assigns of the parties and if Tenant is more than
one (1) person, they shall be bound jointly and severally by this Lease except
that no rights shall inure to the benefit of any assignee or subtenant of Tenant
except as provided in Section 13.1 hereof. Landlord, at any time and from time
to time, may make an assignment of all of its interest in this Lease, in the
event of such assignment, Landlord and its successors and assigns (other than
the assignee of Landlord's interest in this Lease) shall be released from any
and all liability thereafter accruing hereunder. Nothing set forth in this
Section 23.2 shall be deemed to alter the provisions contained elsewhere in this
Lease limiting the right of Tenant to assign or sublet.
ARTICLE XXIV
QUIET ENJOYMENT AND OTHER COVENANTS OF LANDLORD
Section 24.1 Quiet Enjoyment.
If Tenant pays the rents and other amounts herein provided, observes and
performs all the covenants, terms and conditions hereof, Tenant shall peaceably
and quietly hold and enjoy the Premises for the Lease Term without interruption
by any person, subject, nevertheless, to the terms and conditions of this Lease.
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Section 24.2 Title and Condition.
Landlord covenants and warrants that (i) Landlord is the holder of the
"tenant's" interest in the Ground Lease, with (ii) the right to execute this
Lease and to perform its obligations under this Lease and lease the Premises to
Tenant, subject only to (a) existing encumbrances of record and (b) such zoning
rules, restrictions, regulations, resolutions, ordinances, and building
restrictions and governmental regulations (zoning and building regulations) now
or hereafter in effect with respect to the Premises. No existing encumbrance of
record or currently applicable zoning or building regulations or, to the best of
Landlord's knowledge, any currently proposed zoning or building regulations,
when effective, restrict: (i) Landlord's right to execute and to perform its
obligations under this Lease; or (ii) Tenant's Intended Use of the Premises.
ARTICLE XXV
MISCELLANEOUS
Section 25.1 Waiver
No waiver by Landlord or Tenant of any breach of any term, covenant or
condition hereof shall be deemed a waiver of the same or any subsequent breach
of the same or any other term, covenant or condition. The acceptance of Rent by
Landlord shall not be deemed a waiver of any earlier breach by Tenant of any
term, covenant or condition hereof, regardless of Landlord's knowledge of such
breach when such Rent is accepted. No covenant, term or condition of this Lease
shall be deemed waiver by Landlord or Tenant unless waived in writing.
Section 25.2 Accord and Satisfaction
Landlord is entitled to accept, receive and cash or deposit any payment
made by Tenant for any reason or purpose or in any amount whatsoever, and apply
the same at Landlord's option to any obligation of Tenant and the same shall not
constitute payment of any amount owed except that to which Landlord has applied
the same. No endorsement or statement on any check or letter of Tenant shall be
deemed an accord and satisfaction or otherwise recognized for any purpose
whatsoever. The acceptance of any such check or payment shall be without
prejudice to Landlord's right to recover any and all amounts owed by Tenant
hereunder and Landlord's right to pursue any other available remedy.
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Section 25.3 Entire Agreement
This Lease (and its exhibits) supercedes all prior discussions,
negotiations, representations, covenants, warranties, promises, agreements,
conditions or undertakings, oral or written, between Landlord and Tenant. Except
as herein otherwise provided, no subsequent alteration, amendment, change or
addition to this Lease shall be binding upon Landlord or Tenant unless in
writing, signed by them.
Section 25.4 No Partnership
Landlord does not, in any way or for any purpose, become a partner,
employer, principal master, agent or joint venturer of or with Tenant.
Section 25.5 Force Majeure
(a) If either party hereto shall be delayed or hindered in or prevented
from the performance of any act required hereunder by reason of strikes,
lockouts, labor troubles, inability to procure material, failure of power,
restrictive governmental laws or regulations, riots, insurrection, war or other
reason of a like nature not the fault of the party delayed in performing work or
doing acts required under this Lease (collectively a Force Majeure), the period
for the performance of any such act shall be extended for a period equivalent to
the period of such delay (and if as a result of such delay (provided such delay
was not caused by the other party), the other party hereto is delayed or
hindered in or prevented from the performance of any act required hereunder, the
period for the performance of any such act shall be extended for a period
equivalent to the period of such additional delay). Notwithstanding the
foregoing, the provisions of this Section 25.5 shall at no time operate to
excuse Tenant from any obligations for payment of Minimum Annual Rent,
Percentage Rent, Additional Rent or any other payments required by the terms of
this Lease when the same are due, and all such amounts shall be paid when due,
provided, however, that an event of force majeure may have the effect of
delaying the Required Completion Date and thereby delaying the date on which the
obligation to pay Rent begins and/or extending a period during which Tenant is
entitled to an abatement of Rent.
(b) Notwithstanding the above, in order to claim that a Force Majeure has
caused a delay that would excuse performance hereunder, the party claiming such
Force Majeure shall give the other party notice of the occurrence of such Force
Majeure within twenty (20) days of the date the party claiming a delay as a
result of a Force Majeure first becomes aware of, or should have become aware
of, the occurrence of such Force Majeure.
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Section 25.6 Modification of Project
(a) Subject to the limitations contained in Section 5.1 hereof, Landlord
or its designee reserves the right to change or modify and add to or subtract
from the size and dimensions of the Project or any part thereof (but not the
Premises), the number, location and dimensions of buildings, the size and
configuration of the parking areas, entrances, exits and parking aisle
alignments, dimensions of hallways, malls and corridors, the number of floors in
any building, the location, size and number of tenants' spaces and kiosks which
may be erected in or fronting on any building or otherwise, the identity, type
and location of other businesses and tenants, and the size, shape, location and
arrangement of the Common Areas, and to design and decorate any portion of the
Property as it desires, provided that the location and size of the Premises
shall not be changed.
(b) Tenant recognizes that the structure located above Xxxxx Street that
is adjacent to the Premises may be removed during the Lease Term and that such
removal may be disruptive to Tenant's normal operations in the Premises. Tenant
consents to such removal and shall cooperate with the City and Landlord in
connection with such removal. Landlord shall use its best efforts to minimize
any unreasonable disruption to Tenant's normal operations in the Premises during
such removal and shall, indemnify and defend Tenant from any loss that Tenant
may actually suffer as a result of any material disruption to Tenant's normal
operations in the Premises. (Tenant recognizes and agrees that in the event that
the City were to become Landlord hereunder as a result of a termination of the
Ground Lease, the indemnity provision contained in this Subsection 25.6 (b)
shall not apply to the City.)
(c) When exercising its rights hereunder, Landlord shall do so in a manner
that does not materially adversely affect: (i) pedestrian access to the
Premises; or (ii) Tenant's signage rights hereunder.
Section 25.7 Notices
All notices from Tenant to Landlord required or permitted by any provision
of this agreement shall be directed to Landlord as follows:
000 Xxxxx Xxxxxx Limited Partnership
c/o The Cordish Company
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
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All notices from Landlord to Tenant required or permitted hereunder shall
be directed as follows, namely:
Bayou Place Performance Hall General Partnership
c/o Pace Bayou Place, Inc.
000 Xxxx Xxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx
With a copy to:
Xxxxxxx X. Xxxxxx, Esquire
Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P.
Three Xxxxx Center
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
All notices to be given hereunder by either party shall be written and
sent by registered or certified mail, return receipt requested, postage pre-paid
or by an express mail delivery service, addressed to the party intended to be
notified at the address set forth above. Either party may, at any time, or from
time to time, notify the other in writing of a substitute address for that above
set forth, and thereafter notices shall be directed to such substitute address.
Notice given as aforesaid shall be sufficient service thereof and shall be
deemed given as of the date received, as evidenced by the return receipt of the
registered or certified mail or the express mail delivery receipt, as the case
may be. A duplicate copy of all notices from Tenant shall be sent to any
Landlord's Mortgagee as provided for in Section 19.3.
Section 25.8 Captions and Section Numbers
This Lease shall be construed without reference to titles of Articles and
Sections, which are inserted only for convenience of reference.
Section 25.9 Landlord's Liability
In no event shall Landlord, including any successor or assignee of all or
any portion of Landlord's interest in the Project, be personally liable or
accountable with respect to any provision of this Lease. If Landlord shall be in
breach or default with respect to any obligation hereunder or otherwise, Tenant
agrees to look for satisfaction solely to the equity of Landlord in the Project.
The liability of Landlord hereunder shall in no event exceed the amount of such
equity and no other assets of Landlord (or any partners, stockholders or
officers of Landlord) shall be subject to levy, execution or other procedures
for the satisfaction of Tenant's remedies. In the event Landlord
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transfers this Lease, other than as security for a mortgage, deed or trust or
loan, upon such transfer and acceptance by the transferee, Landlord (and, in
case of any subsequent transfers or conveyances, the then grantor) shall be
relieved from all liability and obligations hereunder arising after such
transfer (however the transferor shall not be relieved from all liability
hereunder to Tenant that arose before such transfer).
Section 25.10 Interpretation
This Lease shall be interpreted in such a manner that is consistent with
the Ground Lease.
Section 25.11 Third Party Beneficiary
With the exception of express rights granted to the City herein, nothing
contained in this Lease shall be construed to confer upon any other party the
rights of a third party beneficiary.
Section 25.12 Compliance with Laws
Notwithstanding anything to the contrary contained in this Lease, no
provision of this Lease shall be construed to require a party hereto to comply
with any Applicable Law during the period that such party may be pursing a bona
fide challenge of the applicability, lawfulness and/or enforceability of such
Applicable Law. If such party's challenge is successful, such party shall not be
required by the provisions of this Lease to comply with such Applicable Law.
Section 25.13 Trial by Jury
Landlord and Tenant do hereby waive trial by jury in any action, suit,
proceeding, and/or counterclaim brought by either of the parties hereto against
the other on any matters whatsoever arising out of or in any way connected with
this Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy
of the Premises, any claim of injury or damage, and/or statutory remedy.
Section 25.14 Attorney's Fees.
If either Landlord or Tenant brings suit or other legal proceedings to
enforce the provisions of this Lease against the other, then the party
prevailing in such suit shall be reimbursed by the other for all reasonable
attorneys' fees and litigation costs incurred by the prevailing party in
connection with such suit or proceeding.
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Section 25.15 No Broker
Tenant and Landlord each covenants, represents and represents to the other
that it has dealt with any broker or agent in connection with this Lease. Each
party hereby indemnifies and saves the other harmless against and from all
costs, expenses, damages and liabilities, including, without limitation,
reasonable attorneys' fees and expenses, arising from any claims for brokerage
commissions, finder's fees or other compensation arising by reason of any breach
of the foregoing covenant, warranty and representation.
Section 25.16 Tenant Election in Event of Termination by City.
In the event that the City has the right to terminate this Lease pursuant to
Section 8.1 (c) of the Ground Lease and this Lease is subsequently terminated by
the City pursuant to Section 8.1 (c) of the Ground Lease, Tenant hereby elects
to receive as damages the appraised value of the leasehold interest of Tenant in
the Premises.
IN WITNESS WHEREOF, Landlord and Tenant have signed and sealed this Lease
as of the day and year first above written.
WITNESS/ATTEST: 000 XXXXX XXXXXX LIMITED PARTNERSHIP, a
Maryland Limited Partnership
By: THE CORDISH COMPANY, its General Partner
/s/ [Illegible] By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
------------------------- ----------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
BAYOU PLACE PERFORMANCE HALL GENERAL
PARTNERSHIP, a Texas general partnership,
By: Pace Bayou Place, Inc., a Texas
corporation, its managing general partner,
/s/ [Illegible] By: /s/ Xxxxxx Xxxxxxxx (SEAL)
------------------------- ----------------------------------------
Secretary Name: Xxxxxx Xxxxxxxx
Title: President
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EXHIBIT "A"
Site Plan
[GRAPHIC OMITTED]
EXHIBIT "A" PAGE 1 0F 3 - 1ST FLOOR
CONTROL AREA
[GRAPHIC OMITTED]
EXHIBIT "A" PAGE 2 OF 3
2ND FLOOR
[GRAPHIC OMITTED]
EXHIBIT "A" PAGE 3 OF 3
STORAGE AREA
EXHIBIT "B"
LEGAL DESCRIPTION
[ILLEGIBLE] Houston, Texas, and [ILLEGIBLE] all of City Block 64, [ILLEGIBLE]
described in deed and recorded in the Official Public Records of Real Property,
of Xxxxxx County under County Clerk's File No. B440365, Film Code No.
###-##-####, and a portion of City Block 63, as described in deeds and recorded
under County Clerk's File No. B653159, Film Code No. 000-00-0000, County clerk's
File No. B567589, Film Code No. 000-00-0000, County Clerk's File No. B455966,
Film Code No. 000-00-0000, County Clerk's File No. B589150, Film Code No.
###-##-####, and Volume 4105, Page 139, of the Xxxxxx County Deed Records, and a
portion of Brazos and Capitol Streets, based on a width of 80.00 feet; said
3.306 acre tract being more particularly described by metes and bounds as
follows:
Commencing at a 3/4-inch iron rod, being City of Houston Reference Monument
No. 242 in the intersection of Xxxxx Street, width varies, and Capitol Street,
based on a width of 80.00 feet, from which City of Houston Reference Monument
No. 15 bears S 17(degrees) 08' 11" E, a distance of 990.31 feet;
THENCE, S 68(degrees) 14' 18" E, a distance of 70.15 feet to a point in the
easterly right-of-way line of Xxxxx Street and being the POINT OF BEGINNING of
the herein described tract;
THENCE, N 32(degrees) 51' 32" E, along the easterly right-of-way line of Xxxxx
Street, at a distance of 26.49 feet passing the southwesterly line of City Block
63, and continuing a total distance of 278.20 feet to a point for the
intersection with the southerly right-of-way line of Texas Avenue, based on a
width of 100.00 feet;
THENCE, S 57(degrees) 08' 11" E, along the southerly right-of-way line of Texas
Avenue, a distance of 551.43 feet to a point for the intersection with the
westerly right-of-way line of Xxxxx Street, based on a width of 80 feet, and
being the northeast corner of City Block 64;
THENCE, S 32(degrees) 52' 15" W, along the westerly right-of-way line of Xxxxx
Street, a distance of 251.71 feet to a point for the intersection with the
northerly right-of-way line of Capitol Street, and being the southeast corner of
City Block 64;
EXHIBIT "C"
RULES AND REGULATIONS
1. All deliveries are to be made to designated service or receiving areas.
Landlord shall have the right, from time to time, for a bona fide reason,
to prohibit deliveries during certain hours of each day and Tenant shall
endeavor to abide by such restrictions.
2. Tractor trailers or other vehicle, shall not have the right to park on the
Property. Tractor trailers are to be removed from the loading areas after
unloading. No parking or storing of such trailers will be permitted in the
Project.
3. Except for small parcel packages, no deliveries will be permitted through
the public common areas of the Project, unless Tenant does not have a rear
service door. In such event, prior arrangements must be made with the
Project's general manager for delivery. Merchandise being received shall
immediately be moved into Tenant's Premises and not be left in the service
or receiving areas.
4. Tenant is responsible for storage and removal of its trash, refuse and
garbage. When removing such trash, refuse and garbage, Tenant shall not
stain or soil any part of the Project. Tenant shall use reasonable efforts
to prevent the disposal of the following items in drains, sinks or
commodes: plastic products (plastic bags, straws, boxes); sanitary
napkins; tea bags; cooking fats; cooking oils; any meat scraps or cutting
residue; petroleum products (gasoline, naphtha, kerosene, lubricating
oils); paint products (thinner, brushes); or any other item which the same
are not designated to receive. All portions of the Premises, including
vestibules, entrances and returns, doors, fixtures, windows and plate
glass, shall be maintained in a safe, neat and clean condition. Landlord
may set the hours during which trash, refuse and garbage may be removed
from the Premises.
6. Tenant shall not permit or suffer merchandise of any kind at any time to
be placed, exhibited or displayed outside its Premises, nor, except as
expressly permitted hereunder, shall Tenant use the exterior sidewalks or
exterior walkways of its Premises to display, store or place any
merchandise. No sale of merchandise by tent sale, truck load sale or the
like, shall be permitted on the common areas.
7. Tenant shall not permit or suffer any portion of the Premises to be used
for lodging purposes.
EXHIBIT "D"
FORM OF NON-DISTURBANCE AGREEMENT
RECORDING REQUESTED BY AND
WHEN RECORDED PLEASE RETURN TO:
XXXXXXX X. XXXXXX, ESQUIRE
GARDERE XXXXX XXXXXX & XXXXX, L.L.P.
000 XXXX XXXXXX, XXXXX 000
XXXXXXX, XXXXX 00000-0000
CONSENT TO SUBLEASE AND SUBORDINATION
NON-DISTURBANCE, AND ATTORNMENT AGREEMENT
THIS CONSENT TO SUBLEASE AND SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT (this "Agreement"), is entered into as of the __ day of June, 1997, by
and among the CITY OF HOUSTON, TEXAS, a Texas municipal corporation and Home
Rule City, as landlord ("City"), 000 XXXXX XXXXXX LIMITED PARTNERSHIP, a
Maryland limited partnership, as sub-landlord ("Landlord") or ("TALP"), having
an office at c/o The Cordish Company, 000 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx
00000, corporation, and BAYOU PLACE PERFORMANCE HALL GENERAL PARTNERSHIP, a
Texas general partnership, as subtenant ("Subtenant") or ("BPPHGP"), having an
office at 000 Xxxx Xxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000.
WITNESSETH:
WHEREAS, pursuant to a Lease and Development Agreement, dated as of
November 8, 1991, between the City, as landlord, and Landlord, as tenant, as
amended by a First Amendment to Lease and Development Agreement, dated May 24,
1996 and a Second Amendment to Lease and Development Agreement and Angelika
Parking Rights Agreement, dated April 28, 1997 such Lease and Development
Agreement, as so amended, is hereinafter referred to as the Ground Lease), the
City demised to Landlord, and Landlord leased from the City, the real property
described on Exhibit A hereto (the "Land"), the improvements located thereon and
certain other interests, as specified therein, (the Land and such improvements
and interests being herein referred to collectively as the "Premises");
WHEREAS, Landlord and Tenant have entered into a Lease, dated June __,
1997 of a portion of the Premises, a copy of which the City acknowledged having
received (the "Sublease"); and
WHEREAS, pursuant to Section 12.3 (c) of the Sublease, Landlord is
obligated to use its good faith efforts to obtain this Agreement from the City,
and thereby provide to Tenant the protections and other benefits set forth
herein;
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and of other good and valuable considerations, the parties agree as follows:
1. REPRESENTATIONS
TALP and BPPHGP hereby warrant and represent unto the City that each of
the following statements is true, correct and complete:
(a) TALP and BPPHGP have delivered to the City a true, correct and
complete copy of the Sublease and all exhibits and schedules thereto, all as
executed by the parties thereto; and
(b) The Sublease is in full force and effect and has not been modified or
amended.
2. SUBORDINATION
Landlord and Tenant hereby confirm that the Sublease is subordinate to the
Ground Lease.
3. NON-DISTURBANCE AND ATTORNMENT
(a) The City agrees that the City, as the landlord under the Ground Lease,
shall not disturb the Tenant's possession of the Premises for any reason other
than one which would entitle the Landlord to terminate the Sublease under the
terms of the Sublease. If for any reason the City shall become the Landlord
under the Sublease by reason of the termination of the Ground Lease or
otherwise, Tenant, as tenant, shall be bound to the City under all of the terms,
covenants and conditions of the Sublease and Section 8.1 (c) of the Ground Lease
for the balance of the term thereof remaining with the same force and effect as
if City were the Landlord under the Sublease, and Tenant does hereby covenant to
pay rent and attorn to City as its Landlord, said agreement to pay rent and
attornment to be effective and self-operative without the execution of any
further instruments on the part of any of the parties hereto immediately upon
City becoming the Landlord under the Sublease by reason of the Ground Lease
being terminated or otherwise.
(b) Landlord hereby irrevocably designates the Sublease as a "TALP Tenant
Lease" pursuant to the terms of Section 8.1(c) of the Ground Lease and the City
hereby acknowledges such designation. Landlord and the City represent and
warrant that as a consequence of the designation of the Sublease as a "TALP
Tenant Lease", the Sublease is subject to the protections of Section 8.1 (c) of
the Ground Lease and that the Sublease is not subject to termination under
Section 8.1 (b) of the Ground Lease in the event the Ground Lease is terminated
and the City determines not to operate the Premises. Further, the City
acknowledges that Section 25.16 of the
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Sublease contains the election required of Tenant pursuant to Section 8.1 (c) of
the Ground Lease.
(c) In the event that the City becomes the "Landlord" under the Sublease
by reason of an exercise of any remedy under the Ground Lease following a
default or breach by Landlord under the Ground Lease, or by reason of a
voluntary or involuntary termination of the Ground Lease as a result of a
default or breach by Landlord under the Ground Lease, the City shall not be
bound by (i) any rent, prepaid charges, or other sums which Tenant might have
paid for more than the then current month to any prior Landlord under the
Sublease, (ii) any waiver of forbearance on the part of any prior Landlord under
the Sublease, or (iii) any modification of the Sublease; unless, in each
circumstance, any such matters have been previously approved in writing by the
City; nor shall the City be liable for any previous act or omission of any prior
Landlord under the Sublease, be subject to any offset, defenses or counterclaims
which have accrued to Tenant against said prior Landlord, or be bound by any
guaranty of work performed by or for the prior Landlord in construction of
Landlord's Work or any express or implied warranty of workmanship, materials, or
habitability.
(d) Subject to all the terms and conditions of this Agreement, the City
hereby grants its approval of the Sublease.
4. DERIVATIVE RIGHTS
The parties acknowledge and agree that this Agreement in no respect amends
or modifies the Ground Lease or waives the City's rights thereunder; that the
rights of Tenant under the Sublease are derivative of the rights of TALP under
the Ground Lease; and that in no event can the rights of Tenant be greater than
the rights of TALP under the Ground Lease as so derived through TALP. In this
regard, and without limitation, the property that is the subject of the Sublease
is intended to be a portion of the Premises as defined in the Ground Lease.
Tenant's quiet enjoyment is thereby subject to the terms of the Sublease, the
Ground Lease and this Agreement. To the extent of any discrepancy in the
description of characterization used in the Sublease with regard to the portion
of the Premises covered by the Sublease, the rights of Tenant in the Garage or
other matters covered by the Ground Lease, it is agreed that, subject to this
Agreement, the Ground Lease shall control. If the Ground lease is terminated,
the Sublease shall continue, subject to its terms and the terms of this
Agreement.
5. CITY AS LANDLORD
So long as the City has not become the Landlord under the Sublease, it
shall have no obligations under the Sublease nor any of the obligations of the
Landlord, as same is defined in the Sublease. If the City becomes the "Landlord"
under the Sublease by reason of an exercise of any remedy under the Ground Lease
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following a default or breach by Landlord under the Ground Lease, or by reason
of a voluntary or involuntary termination of the Ground Lease as a result of a
default or breach by Landlord under the Ground Lease, as to the Sublease, the
parties agree that so long as the City continues as the Landlord:
(a) The City shall have no obligation to perform, but at its sole election
may elect to perform, any of the Landlord's Work as described in Section 3.1 of
the Sublease.
(b) The City shall have no obligation to correct any defects in Landlord's
Work.
(c) The City shall have no obligation to honor the provisions of Section
5.1 of the Sublease, but at its sole election may elect to do so.
(d) The City shall have no obligation to expend any sums pursuant to
Section 6.1 of the Sublease, but at its sole election may elect to do so.
(e) Notwithstanding the provisions of Subsection 8.1 (c) of the Sublease,
the City shall have no obligation to assist Tenant with any effort of Tenant to
obtain a liquor license for Tenant's business in the Premises.
(f) The City shall have no obligation to comply with or honor the use
restrictions contained in Section 8.2 of the Sublease.
(g) The City shall have no obligation to repair, restore, or rebuild all
or any part of the Project (as that term is defined in the Lease) in the event
of a casualty or condemnation, but at its sole election, the City may elect to
do so.
(h) The City shall have no obligation to expend any sums pursuant to
Section 9.1 of the Sublease, but at its sole election may elect to do so.
(i) Notwithstanding the provisions of Section 11.2 of the Sublease, the
City shall not be deemed to release and discharge any other party from all
claims and liabilities and does not waive any right to subrogation against any
party.
(j) The City shall not be obligated to comply with the provisions of
Section 11.7 of the Sublease, but at its sole election may elect to do so.
(k) The City shall have no obligation to expend any sums pursuant to the
Sublease, unless expressly authorized by City Council to do so.
(l) The City shall not be obligated to honor any of the indemnity
obligations of Landlord contained in the Sublease.
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(m) The City shall not be obligated to honor the provisions of Sections
25.13 and 25.14 of the Sublease.
(n) The City shall not be obligated to arbitrate any disputes that may
arise under or in connection with the Sublease, but at its sole election may
elect to do so.
6. SUBLEASES
Subject to the provisions of Section 3 (c) hereof, pursuant to Article XII
of the Sublease, if the City becomes the landlord under any sublease, the City
shall not be bound by (i) any rent, which any tenant might have paid for more
than the then current month to any prior landlord under any sublease; (ii) any
security deposit, cleaning deposit or other prepaid charge which any tenant
might have paid in advance to any prior landlord under any sublease, (iii) any
waiver or forbearance on the part of any prior landlord under any sublease; nor
shall the City be liable for any previous act or omission of any prior landlord
under any sublease, be subject to any offset, defenses or counterclaims which
have accrued to any tenant against said prior landlord, or be bound by any
guaranty of work performed by or for the prior landlord in construction of
tenant improvements or any express or implied warranty of workmanship,
materials, or habitability. Tenant acknowledges and agrees to the terms of this
Section 6 and Tenant agrees to include the terms of this Section 6 in each of
its subleases.
7. ENTERTAINMENT SCHEDULE
Tenant hereby agrees to provide a copy of its entertainment schedule to
the City as such schedule becomes known to Tenant. Tenant agrees that the City
may circulate Tenant's entertainment schedule and publicize the schedule in such
manner as the City deems appropriate.
8. NOTICES
TALP hereby agrees to orally notify the City of any material defaults of
Tenant under the Sublease and agrees that the City may review, at TALP's
offices, any notices of such material defaults sent by TALP to Tenant.
9. MISCELLANEOUS
(a) Any notice, demand, consent, approval, direction, agreement or other
communication (any "Notice") required or permitted hereunder shall be given in
the manner required under the Ground Lease and shall be addressed to the parties
hereto at their respective addresses as set forth in the Ground Lease or the
Sublease.
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(b) This Agreement shall be binding upon and inure to the benefit of all
of the parties hereto and their respective successors and assigns.
(c) The captions are inserted only as a matter of convenience and for
reference and in no way define, limit or describe the scope or intent of this
Agreement, nor in any way affect this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
ATTEST/SEAL: Landlord:
000 XXXXX XXXXXX LIMITED
PARTNERSHIP, a Maryland
limited partnership,
By: The Cordish Company, a
Maryland corporation, its
general partner,
___________________________ By: _________________________________
Name:
Title:
Tenant:
BAYOU PLACE PERFORMANCE HALL
GENERAL PARTNERSHIP, a Texas
general partnership,
By: Pace Bayou Place, Inc., a
Texas corporation, its managing
general partner,
___________________________ By: _____________________________________
Name:
Title:
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City:
THE CITY OF HOUSTON, TEXAS,
___________________________ By: _____________________________________
City Secretary Director, Convention and
Entertainment Facilities
Department
APPROVED AS TO FORM:
_________________________________________
Sr. Assistant City Attorney
X.X. File No.
DATE OF COUNTERSIGNATURE:
_________________________________________
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