Exhibit 10.102
LEASE
DATED AS OF MAY 23, 2005
BY AND BETWEEN:
METROFLAG SW, LLC, a Nevada limited liability company
AS LANDLORD
AND
S & W OF LAS VEGAS, L.L.C., a Delaware limited liability company
AS TENANT
FOR
RESTAURANT PREMISES
located at
0000 XXX XXXXX XXXXXXXXX XXXXX
XXX XXXXX, XXXXXX
THIS LEASE, dated as of the 23rd day of May, 2005 (this "Lease"),
between METROFLAG SW, LLC, a Nevada limited liability company having an address
at c/o Flag Luxury Properties, LLC, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000, as landlord (hereinafter referred to as "Landlord"), and S & W OF LAS
VEGAS, L.L.C., a Delaware limited liability company having an address at c/o
Smith & Wollensky Restaurant Group, 0000 Xxxxx Xxxxxx, Xxx Xxxx, XX, as tenant
(hereinafter referred to as "Tenant").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Tenant, as the ground lessee, and The Xxxxxxxx Limited
Partnership, a Nevada limited partnership ("Fee Owner"), as the ground lessor,
entered into that certain Lease With An Option To Purchase, dated February 9,
1998, as amended by that certain First Amendment to Lease Agreement, dated May
8, 1998, and as further amended by that certain Letter Agreement, dated February
6, 2003, and as further amended by that certain Second Amendment to Lease
Agreement, dated April 29, 2003 (as amended, the "Ground Lease") for that
certain parcel of real property located in the City of Las Vegas, Xxxxx County,
Nevada containing approximately 1.82 acres, measuring approximately 130 feet
along the west property line and 601 feet along the south property line;
commonly known as 0000 Xxx Xxxxx Xxxxxxxxx Xxxxx and Assessor's Parcel No.
162-21-301-014, the legal description of which is attached hereto as Exhibit "A"
("Land"), together with all improvements located on the Land, including
buildings, structures, and other facilities (collectively, the "Property");
WHEREAS, Tenant, as "Seller" and Landlord, as "Purchaser", entered into
that certain Contract for Sale dated as of March 23, 2005 ("Contract") which
requires Tenant, after certain conditions are satisfied, to exercise its option
to purchase ("Purchase Option") fee simple title to the Property from the Fee
Owner and subsequently assign to Landlord all of its rights, title and interest
in and to the Ground Lease, including but not limited to the right to close on
the Purchase Option as exercised ("Ground Lease Assignment");
WHEREAS, in accordance with the Contract and prior to the date of this
Lease, Tenant, as the ground lessee under the Ground Lease, exercised its
Purchase Option;
WHEREAS, contemporaneous with the execution and delivery of this Lease,
Tenant executed and delivered to Landlord the Ground Lease Assignment assigning
all of its rights, title and interest in and to the Ground Lease, but excluding
all of Tenant's rights, title and interest in and to all furniture, fixtures,
equipment, machinery, art, artifacts, paintings, sculptures, wall hangings,
china, glassware, and silverware and all other items of personal property
located on the Premises or used in the operation of the Restaurant located on
the Premises (collectively, the "Personal Property"), and all licenses, permits,
authorizations, approvals or general intangible rights in connection with the
use or operation of the Restaurant (collectively, the "Intangible Rights");
WHEREAS, contemporaneous with the execution and delivery of this Lease
and the Ground Lease Assignment, Landlord closed on the Purchase Option and
purchased fee simple title to the Property from Fee Owner in its "As Is"
condition, status and situation, including the physical, structural, legal, and
environmental condition, classification and status of the Property,
and Tenant has agreed to leaseback the Premises from Landlord in its "as is"
condition, status and situation, including the physical, structural, legal, and
environmental condition, classification and status; and
WHEREAS, pursuant to the Contract, Landlord, as "Purchaser", agreed to
leaseback to Tenant (after Landlord purchased the fee title to the Property from
Fee Owner) and Tenant, as "Seller", agreed to lease from Landlord that portion
of the Building as more particularly shown or identified in the floor plans
attached as Exhibit "B" hereto (the "Premises"), which lease shall be
accompanied by, to the extent reasonably necessary in connection with the
Restaurant operations, and only during the Term of this Lease, (i) an exclusive
license for the use and maintenance of the existing grease trap and trash
containers, and (ii) a non-exclusive license for the use and maintenance of the
utility lines, Parking Spaces (as herein defined), and access driveway and
appurtenances now existing or necessary in connection therewith. Pursuant to
this Lease, neither the Landlord's Direct Space (as herein defined) nor any
portion of the Property, other than the Premises, is hereby demised. Such
Premises were, immediately prior to the date of this Lease, occupied by Tenant
and operated by Tenant as a white tablecloth, first class, sit-down, fine dining
establishment primarily serving steak, with waiter and waitress service, and
consistent with currently existing "Xxxxx and Wollensky" standards
("Restaurant"); provided, however, that Tenant shall have the right, at any time
(and from time to time) during the Term, to change the type of foods being
served at the Premises, including, without limitation, the right to completely
eliminate steak from the menu.
NOW THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Landlord and Tenant for themselves, their heirs,
executors, administrators, legal representatives, successors and assigns, hereby
covenant as follows:
1. DEFINITIONS.
The following terms defined below shall for all purposes of this Lease
have the meaning specified unless the context requires otherwise:
(a) "ADA" shall mean The Americans With Disabilities Act, and
any other state or local laws of similar intent, as the
same may be in effect or amended from time to time.
(b) "Additional Rent" shall have the meaning ascribed to it in
Section 4.C.
(c) "Building" shall have the meaning ascribed to it in
Section 3.C.
(d) "Business Days" or "business days" shall be deemed to mean
all days other than Saturdays, Sundays and Holidays. The
term "Holidays" shall be deemed to mean all federal and
state holidays observed in the State.
(e) "Commencement Date" shall have the meaning ascribed to it
in Article 2.
(f) "Default Rate" shall have the meaning ascribed to it in
Article 37.
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(g) "Expiration Date" shall have the meaning ascribed to it in
Article 2.
(h) "Gross Receipts" shall have the meaning ascribed to it in
Section 4.A.ii.
(i) "Hazardous Substances" shall have the meaning ascribed to
it in Section 19.
(j) "Landlord's Direct Lease" shall initially be each of the
Subleases assumed by Landlord at the closing of the
Contract of Sale transaction, and any lease for any such
space made by Landlord thereafter.
(k) "Landlord's Direct Space" shall be the collective space
demised under the Subleases.
(l) "Landlord's Direct Tenant" shall initially be each of the
the space tenants under the Subleases or any tenant of any
such space thereafter.
(m) "Legal Requirements" shall have the meaning ascribed to it
in Section 5.
(n) "Minimum Rent" shall have the meaning ascribed to it in
Section 4.A.i.
(o) "Parking Spaces" shall have the meaning ascribed to it in
Section 30.
(p) "Premises" shall have the meaning ascribed to it in the
sixth whereas clause.
(q) "Related Parties" shall have the meaning ascribed to it in
Article 12.
(r) "Repairs" shall have the meaning ascribed to it in Section
5.A.
(s) "Restaurant" shall have the meaning ascribed to it in the
sixth whereas clause.
(t) "Shared Allocated Expenses" shall have the meaning
ascribed to it in Section 7.
(u) "State" shall mean the State of Nevada.
(v) "Subleases" shall have the meaning ascribed to it in the
Contract of Sale.
(w) "Tenant" shall have the meaning ascribed to it the
introductory paragraph of this Lease.
(x) "Tenant Affiliate" shall mean any person that controls or
is controlled by, or is under common control with, Tenant,
with the word "control" (and, correspondingly, "controlled
by" and "under common control with"), as used with respect
to any person, meaning the possession of the power to
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direct or cause the direction of the management and
policies of such person. The term "person" shall mean any
natural person or persons, a partnership, a corporation,
and any other form of business or legal association or
entity, unless expressly otherwise stated.
(y) "Tenant's Work" shall have the meaning ascribed to it in
Article 5.
2. TERM.
Landlord hereby leases to Tenant and Tenant hereby hires from Landlord
the Premises for the term ("Term") commencing as of the date hereof (the
"Commencement Date"), and ending on the last day of the four hundred and
eightieth (480th) full calendar month (the "Expiration Date") occurring after
the Commencement Date, subject to earlier termination in accordance with the
terms and conditions hereof, at an annual rental rate as provided for in Article
4 herein, which Tenant agrees to pay in lawful money of the United States, which
shall be legal tender in payment of all debts and dues, public and private, at
the time of payment, without any set off or deduction whatsoever, except as
provided in Section 34.A. of this Lease.
3. USE; AS-IS POSSESSION.
A. Use. Tenant shall use, occupy and operate, in such manner as required
by this Lease, the Premises for the operation of the Restaurant and for no other
purpose (subject, however, to the provisions of Article 24 below).
B. "As-Is". Tenant acknowledges that, prior to the date of this Lease,
Tenant was the tenant under the Ground Lease, which has been simultaneously
assigned to Landlord pursuant to the Ground Lease Assignment, and as the tenant
under such Ground Lease has had continuous possession of the Premises from the
date of the Ground Lease through and including the date of this Lease and has
inspected the Premises and the Property and that neither Landlord, nor any agent
of Landlord has made any representations with regard to the Premises or the
Property, including, without limitation, with respect to the physical condition
of the Building or the Land, conditions relating to Hazardous Substances, or
Additional Rent, expenses of operation, or any other matter or thing affecting
or related to the Premises of the Property, except as expressly set forth in
this Lease. Tenant represents and warrants to Landlord that Tenant is thoroughly
acquainted with the condition of the Premises, the Building and the Property,
and agrees to take the Premises "As-Is." Tenant acknowledges that Tenant shall
be responsible for all costs and expenses incurred in connection with the
operation, maintenance, repair and replacement of the Building, subject to
obligations and payments relating to the Shared Allocated Expenses.
Notwithstanding the foregoing, Landlord shall be entitled to receive and retain
all rents (excluding payments for Taxes, if any shall be required to be made
pursuant to Landlord's Direct Leases) from the Landlord's Direct Tenants who may
now or hereafter occupy Landlord's Direct Space.
C. The Building. There currently exists on the Property a 3-story
building constructed by Tenant and containing approximately thirty thousand
eight hundred (30,800) total square feet ("Building"), including all roof
coverings and exterior facades and any walkways,
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driveways, and all structural, mechanical, electrical, heating, ventilating, air
conditioning, sanitation, sewage treatment and disposal, plumbing and vertical
transportation elements of such building. Landlord's Direct Space constitutes
approximately 2,214 square feet and is currently leased pursuant to the
Subleases.
4. RENTAL.
Tenant shall pay the rent as hereinafter provided. The payments of rent
reserved under this Lease for the Term hereof shall be and consist of (A)
Minimum Rent (as hereinafter defined), and (B) all items of Additional Rent (as
hereinafter defined).
A. Minimum Rent.
(i) Minimum Rent, together with any and all sales tax (if any)
thereon, shall be payable by Tenant to Landlord in monthly installments in
advance on the first day of each month, at the office of Landlord set forth on
the first paragraph of this Lease or such other place within the continental
United States as Landlord may designate in writing. For purposes of this Lease,
"Minimum Rent" shall be at the rate of One Million Four Hundred Thousand Dollars
($1,400,000.00) per annum ($116,666.67 per month) for the period from the
Commencement Date through the day immediately preceding the fifth (5th)
anniversary of the Commencement Date. Annual Minimum Rent shall increase every
five (5) years commencing on the fifth (5th) anniversary of the Commencement
Date and through the Expiration Date to an amount equal to the greater of (a)
105% of the existing annual Minimum Rent at the end of the immediately prior
five-year rent period, or (b) 6% of annual Gross Receipts (as hereinafter
defined) measured at the end of the immediately prior five-year rent period
based on the Gross Receipts for the prior twelve (12) months. To the extent that
the increase has not been determined or agreed upon as of any rent adjustment
date as a result of dispute or otherwise, Tenant shall pay Minimum Rent computed
under the provisions of clause 4A(i)(a) above until such time as a definitive
determination has been reached, whereupon such rent adjustment shall be
retroactively made and Tenant shall then pay any additional Minimum Rent due as
computed in accordance with the determination. If such definitive determination
shall not have been made within ninety (90) days after the end of the
immediately prior five-year rent period solely because of a failure by Tenant to
provide the necessary and correct information within such 90-day period, then
Tenant shall also pay interest on the rent deficiency at the Default Rate from
the date the amount should have been paid had the determination been made timely
until the date of payment.
(ii) As used herein (but subject to the exclusions set forth
below), the term "Gross Receipts" is defined as the dollar aggregate of:
(a) the sales price of all food, beverages, goods, wares,
gift certificates as redeemed, and merchandise sold and the charges for all
services performed in any manner whatsoever from all business conducted on, in,
at or from the Premises, including, but not limited to, catering, private events
and banquet services, whether made for cash, by check, on credit or otherwise,
without reserve or deduction for inability or failure to collect same,
including, but not limited to, such sales and services (1) where the orders
therefor originate at and are accepted in any manner whatsoever in the Premises,
but delivery or performance thereof
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is made from, to or at any other place; (2) pursuant to mail, telephone, e-mail
or internet or other similar orders received, billed or shipped at or from the
Premises; (3) by means of mechanical or other vending devices, if any; (4) as a
result of transactions originating from whatever source and which the Tenant in
the normal and customary course of its operations would credit or attribute
solely to its business at the Premises;
(b) all cash payments for display fees, slotting allowances,
promotional considerations, merchandising or license fees or revenues and
rebates, for the right to stock, promote or advertise any event, product or
service at the Premises, but the same shall be included only if such payments
are received by Tenant from a particular vendor or other party with respect only
to the Premises (in contradistinction to any payments received by Tenant with
respect to the Premises where the particular vendor or other party is also
making payments of the same nature with respect to one or more other restaurants
at locations operated by Tenant and/or any Tenant Affiliate in addition to the
Premises);
(c) all deposits not refunded to customers of Tenant; and
(d) all monies received from any operations at the Premises
that are in the nature of payments for the foods and beverages served by Tenant
at or from the Premises or for the furnishing of food and beverage services
(e.g., banquets, parties or catering) at the Premises.
(iii) Expressly excluded from Gross Receipts shall be (i) the
proceeds from the sale of Tenant's trade fixtures and equipment; (ii) all sums
and credits received from insurance companies in settlement of claims for loss
or damage to merchandise or trade fixtures or equipment or otherwise (except
that, notwithstanding the foregoing, any portion of business interruption
insurance received by Tenant from insurance companies that is expressly
allocated to the sales or other revenues that would otherwise be included in the
definition of Gross Receipts shall also be included in Gross Receipts); (iii)
the amount of any sales, excise or equivalent tax levied upon sales and payable
over to the appropriate governmental authority (to the extent Tenant actually
pays such taxes or is entitled to a credit for same); (iv) coin telephone
receipts; (v) insurance proceeds from damage by fire or other casualty; (vi) the
amount of discounts afforded to employees of Tenant in accordance with Tenant's
then existing written employee policy, Tenant's preferred customers and in
connection with promotional or charitable activities at the Premises; (vii)
catering and off-premises banquet services which were neither (a) prepared,
served or supplied at, by or from the Premises, nor (b) ordered from the
Premises in any manner described in subsection (iii)(a) above; (viii) service
fees and charges, if any, payable to financial service companies in order for
Tenant's patrons to utilize such companies' credit cards or similar payment
arrangements at the Premises; (ix) tips and gratuities; (x) payments for display
fees, slotting allowances, promotional considerations, merchandising or license
fees or revenues, rebates, and other payments received in any manner whatsoever
for the right to stock, promote or advertise any event, product or service at
the Premises in any situation where the particular vendor or other party is also
making payments of the same nature with respect to one or more other restaurants
at locations operated by Tenant and/or any Tenant Affiliate in addition to the
Premises (except that the foregoing shall not be construed to exclude any
payments for the foods and beverages served by Tenant at or from the Premises,
or for any banquet or party
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services at the Premises); (xi) gaming (including, but not limited to, slot
machine) receipts; and (xii) any value attributable to goods and services
received and used by Tenant in barter for Tenant's food and beverages
(including, without limitation, in connection with Tenant's acceptance of
"barter cards").
(iv) As used in this Article 4, the term "Tenant" shall include
Tenant and all assignees, subtenants, licensees, concessionaires and any and all
other parties conducting business on, in, at, or from the Premises. Gross
Receipts shall not, however, include any exchange of goods or merchandise
between the restaurants of Tenant or its affiliates where such exchange of goods
or merchandise is made solely for the convenient operation of the business of
Tenant and not for the purpose of consummating a sale which has theretofore been
made on, at, in or from the Premises, or for the purpose of depriving Landlord
of the benefit of a sale which otherwise would be made on, at, in or from the
Premises, nor the amount of returns to shippers or manufacturers, nor the amount
of any cash or credit refund made upon any sale where the merchandise sold, or
some part thereof, is thereafter returned by the purchaser and accepted by
Tenant. No deduction shall be made from Gross Receipts for any franchise, income
or gross receipts taxes or for any other taxes based upon the income of Tenant
(unless, but only to the extent that, any of the foregoing shall be imposed on
Tenant in lieu of any sales, excise or equivalent tax).
(v) On or before the ninetieth (90th) day following the end of
each lease year, during the term hereof, Tenant shall furnish Landlord, at the
place then fixed for the payment of rent and, if different, also at the address
for notice to Landlord, a statement of Gross Receipts, reasonably satisfactory
to Landlord in form and substance, certified as correct by an officer of Tenant,
showing the amount of Gross Receipts for such lease year through the end of such
lease year.
(vi) With respect only to the last lease year of any five-year
rent period (excluding the last five-year rent period in the Term), if Tenant
shall default in furnishing Landlord with the annual statement of Gross Receipts
required under this Article 4 within the applicable time period referred to
herein, and if such default shall continue for at least ten (10) Business Days
after Landlord shall notify Tenant of such default, then (without limiting
Landlord's remedies in respect of such a default) Landlord shall have the right
to audit such books and records of Tenant as may be necessary to ascertain the
Gross Receipts for the period in question, and Tenant shall pay Landlord within
ten (10) days after receipt of written demand for the reasonable and actual cost
of said audit, plus any increase in the Minimum Rent found to be due as a result
thereof, plus interest on such increase in the Minimum Rent at the Default Rate
from the date when such increased Minimum Rent would have been due under this
Lease until paid.
(vii) Tenant shall prepare and keep, for not less than three (3)
years following Landlord's receipt of Tenant's certified annual statement of
Gross Receipts as aforesaid for the last lease year of any five-year rent
period, adequate books and records showing Gross Receipts for each month of the
last lease year of the most recent five-year rent period. Each sale shall be
registered at the time the same is made in a computerized point-of-sale system
database or in cash registers containing locked-in cumulative totals reasonably
satisfactory to Landlord.
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(viii) With respect only to the last lease year of any five-year
rent period (excluding the last five-year rent period in the Term), Landlord or
its authorized representatives shall have the right, upon not less than ten (10)
Business Days prior written notice, to audit at the Premises all statements of
Gross Receipts required to be furnished by Tenant hereunder and to inspect the
books and records (including sales tax records and sales tax returns) of Tenant
and all subtenants, assignees, licensees, concessionaires, and other occupants
of the Premises pertaining to Gross Receipts. Tenant's statements of Gross
Receipts shall be deemed conclusive unless Landlord shall deliver to Tenant
written objection thereto within one (1) year following the date that Tenant
shall have delivered such statement to Landlord. If Landlord's audit shall
disclose a deficiency in Gross Receipts, then, provided said deficiency has been
determined accurately and in accordance with the definition of Gross Receipts
set forth in the Lease, Tenant shall promptly pay Landlord any increase in
Minimum Rent due with regard to such deficiency, together with interest thereon
at the Default Rate from the date when such increased Minimum Rent would have
been timely due under the Lease until paid. If any audit shall reveal an
overpayment by Tenant of any increased Minimum Rent paid, then such overpayment
shall be promptly refunded to Tenant. If any audit shall reveal that Tenant's
actual Gross Receipts was greater than that reported by Tenant by at least five
(5%) percent for the last lease year of any five-year rent period, then the
Minimum Rent for the immediately following lease year shall be increased by one
hundred fifty (150%) percent of the difference between (x) the adjustment that
would have been made had Gross Receipts been correctly computed for the last
lease year of the most recent five-year rent period, and (y) the adjustment that
was proposed to be made based on Tenant's reported Gross Receipts for such last
lease year of the most recent five-year rent period.
(ix) The books and records which Tenant is required to maintain,
and Landlord has the right to audit under this Article 4, shall include, without
limitation, general ledgers, journals of receipts and disbursements, bank
statements, bank deposit slips and records, cash register records and tapes,
computerized point-of-sale system databases and other records, sales slips and
checks, and all federal, state and local sales tax returns, if and to the extent
that the foregoing items are utilized by Tenant in the conduct of Tenant's
business operations at the Premises. If any dispute arises over Gross Receipts
or any increase to Minimum Rent due hereunder, Tenant shall retain its books and
records pertaining to the period in question until said dispute is resolved by
agreement of the parties or by final judgment (beyond appeal) entered in
litigation over the matter, notwithstanding anything else in this Lease to the
contrary.
(x) Landlord acknowledges receipt of advice from Tenant to the
effect that Tenant, in the normal and customary course of Tenant's operations,
reports annual sales on either a 52-week basis or on a 53-week basis. It is the
intention of Landlord and Tenant that Gross Receipts be measured on a 52-week
basis. Accordingly, if the last year of a five-year rent period occurs when
Tenant has included a 53rd week in its fiscal year for sales reporting purposes,
then the annual Gross Receipts number to be used for establishing the Minimum
Rent for the next five-year rent period shall be determined by dividing the
total amount of Gross Receipts reported with respect to such last year of a
five-year rent period by 53, and multiplying the result by 52.
B. Security Deposit (Intentionally Omitted).
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C. Rental Payments. Throughout the term of this Lease, Tenant shall
pay to Landlord, without demand, deductions, set-offs or counterclaims, except
as provided in Section 34.A of this Lease, the rent, which is hereby defined as
the sum of the Minimum Rent and all Additional Rent, when and as the same shall
be due and payable hereunder. Tenant shall also pay to Landlord all applicable
sales or other taxes (but no income taxes of any kind) which may be imposed on
any item of rent at the same time as such item of rent is due and payable to
Landlord. Unless otherwise stated, all sums of money or charges of any kind or
nature, other than Minimum Rent, payable by Tenant to Landlord pursuant to this
Lease or the exhibits attached hereto are defined as "Additional Rent" and are
due thirty (30) days after the rendering of an invoice therefor, and failure to
pay such sums of money or charges shall carry the same consequences as Tenant's
failure to pay Minimum Rent. All Minimum Rent and Additional Rent shall be
payable in United States funds to Landlord (or such other name as Landlord shall
direct in writing) and sent to Landlord at the address set forth on the first
paragraph of this Lease, or as otherwise directed by Landlord (but only within
the continental United States). No payment by Tenant or receipt by Landlord of a
lesser amount than the correct rent shall be deemed to be other than a payment
on account and no endorsement or statement on any check or other communication
accompanying a check for payment of any amounts payable hereunder shall be
deemed an accord and satisfaction, and Landlord may accept such check in payment
without prejudice to Landlord's right to recover the balance of any sums owed by
Tenant hereunder or to pursue against Tenant any additional remedies available
under this Lease or provided at law or in equity. Without limitation of any
other obligations of Tenant which shall survive the expiration of the Term, the
obligations of Tenant to pay Minimum Rent and Additional Rent which have accrued
as of the date of expiration or sooner termination of the Term of this Lease
shall survive such expiration or earlier termination.
D. Late Charge. In the event any installment of Minimum Rent or
Additional Rent required hereunder to be paid is not received within ten (10)
days after the same are due, then, for each and every late payment, Tenant shall
immediately pay, as Additional Rent, interest thereon at the Default Rate, from
the due date until such installment of Annual Minimum Rent or Additional Rent is
fully paid, provided that Tenant shall not be required to pay interest the first
time in any calendar year that Tenant has not paid annual Minimum Rent or
Additional Rent within ten (10) days after such payment shall first become due,
unless Tenant shall not have paid such rent within ten (10) days after Landlord
shall have given Tenant notice that such rent is past due. The provisions herein
for late payment service charges shall not be construed to extend the date for
payment of any sums required to be paid by Tenant hereunder or to relieve Tenant
of its obligation to pay all such sums at the time or times herein stipulated.
Notwithstanding the imposition of such service charges pursuant to this Section
4.D., Tenant shall be in default under this Lease if any or all payments
required to be made by Tenant are not made on or before the time due and as
stipulated in this Lease, and neither the demand for, nor collection by,
Landlord of such late payment service charges shall be construed as a cure of
such default on the part of Tenant. The late charge shall be deemed Additional
Rent and the right to require it shall be in addition to all of Landlord's other
rights and remedies hereunder or at law and shall not be construed as liquidated
damages or as limiting Landlord's remedies in any manner. It is agreed that the
said service charge is a fair and reasonable charge under the circumstances and
shall not be construed as interest on a debt payment. In the event any charge
imposed hereunder or under
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any other section of this Lease is either stated to be or construed as interest,
then no such interest charge shall be calculated at a rate which is higher than
the maximum rate which is allowed under the usury laws of the State, which
maximum rate of interest shall be substituted for the rate in excess thereof, if
any, computed pursuant to this Lease.
5. ALTERATIONS, REPAIRS AND MAINTENANCE OF BUILDING.
A. As used in this Lease, the term "repairs" shall mean all structural
or non-structural, ordinary or extraordinary maintenance, repairs and, when
required, replacements necessary to maintain the Premises (as well as those
improvements outside of the Premises for which Tenant has an exclusive license
pursuant to the terms of this Lease; it being agreed, however, that any repairs
or replacements to such improvements that are necessitated by any act or
omission of Landlord, or by any of Landlord's agents, employees or contractors,
shall be repaired or replaced by Tenant at Landlord's reasonable cost) at all
times in a first-class condition. All repairs shall be performed by Tenant in a
good and workmanlike manner and in accordance with all applicable Legal
Requirements. Tenant shall use reasonable efforts to perform any repair work in
a manner so as to not materially or unreasonably interfere with or impair the
use of the Landlord's Direct Space by Landlord's Direct Tenants and the other
portions of the Property not covered by this Lease. Without limiting the
generality of the foregoing, Tenant, at its expense, shall maintain and promptly
make any and all necessary repairs to or replacements of: (i) those portions of
any pipes, lines, ducts, wires or conduits (whether contained within or outside
the Premises) which serve the Premises exclusively or serve the Premises and
Landlord's Direct Space jointly; (ii) the glass windows, plate glass doors,
storefronts and all fixtures or appurtenances composed of glass that are located
at the Premises; (iii) Tenant's signs; (iv) the roof, walls, foundation and
exterior portions of the Building; (v) the floor coverings, doors and door
frames, windows and window frames, walls, storefront including security gates,
grilles or enclosures, locks and closing devices, partitions and ceilings in the
Premises; and (vi) the heating, ventilating, air conditioning, electrical, ansul
and plumbing system(s), grease traps, equipment and fixtures which are installed
by Tenant or which exclusively serve the Premises or are jointly shared with the
Landlord's Direct Space. Should any modifications or alterations be required to
any of the foregoing by reason of applicable Legal Requirements, the same shall
be made by Tenant, at Tenant's cost and expense in a prompt manner. Landlord
shall afford Tenant reasonable access to areas of the Property outside of the
Premises (and shall cause Landlord's Direct Tenants to afford Tenant reasonable
access to areas of the Landlord's Direct Spaces) and otherwise reasonably
cooperate with Tenant, if and as needed in connection with such repairs. In
connection with any of the foregoing which are Tenant's responsibility and
whether required by reason of applicable Legal Requirements or otherwise, if
Landlord shall have an imminent risk of liability if the necessary repairs or
replacements are not made, or if Landlord's use and occupancy of other portions
of the Property (including, without limitation, any construction that Landlord
intends to perform thereon) shall be impaired thereby, and Tenant shall fail to
make such repairs or replacements, then Landlord shall have the right to make
such repairs or replacements in the event that such failure continues after
Landlord shall have given Tenant reasonable notice of Landlord's intent to do so
(except that, in an emergency, no prior notice shall be required), in which case
Tenant shall reimburse Landlord for the reasonable cost and expense Landlord has
incurred therefor. Notwithstanding
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the foregoing, the provisions of this Article shall not apply with respect to
the making of repairs in the case of fire or other casualty, in which case the
provisions of Article 14 hereof shall govern.
B. Tenant shall make no changes in or to the Building or the Premises of
a structural nature or which would (in more than a de minimis manner) adversely
affect utility services, telephone or telecommunications lines or facilities, or
plumbing or electrical lines or facilities (collectively, "Utility Service
Facilities") serving any portion of the Building which constitutes a Landlord's
Direct Space in a manner which would (in more than a de minimis manner)
adversely affect the Landlord's Direct Space or its use or potential use,
without first obtaining Landlord's approval thereto, which approval shall not be
unreasonably withheld, conditioned or delayed.
C. In connection with any repairs or other alterations performed by or
for, or required to be performed by, Tenant hereunder ("Tenant Work"), such work
shall be performed by Tenant subject to the following conditions:
(i) Tenant shall comply with all applicable laws, rules,
regulations, codes, ordinances, and governmental and administrative rulings,
orders, directions (hereinafter referred to as "Legal Requirements"), and the
requirements of the fire insurance rating organization having jurisdiction
thereof, and the local board of fire underwriters, and the reasonable
recommendation of Landlord's and Tenant's insurance company or any similar body,
and Tenant shall have procured and paid for, so far as the same may be required,
all governmental permits, approvals, certificates and authorizations. Upon the
request of Tenant, Landlord, at Tenant's cost and expense, shall promptly join
in any applications for any permits, approvals or certificates required to be
obtained by Tenant in connection with any Tenant Work (provided that the
provisions of the applicable Legal Requirement shall require that Landlord join
in such application) and shall otherwise cooperate with Tenant in connection
therewith, provided that Landlord shall not be obligated to incur any cost or
expense, or suffer any liability, in connection therewith. Tenant shall
indemnify and hold Landlord harmless from and against any claims or liability
resulting from any inaccuracy contained in such applications.
(ii) Prior to commencing any structural Tenant Work, all plans
and specifications therefor shall be submitted to Landlord for its prior written
approval, which approval shall not be unreasonably withheld, conditioned or
delayed. Landlord shall review Tenant's final plans and specifications for any
structural Tenant Work requiring Landlord's consent that Tenant desires to
perform in the Building within ten (10) Business Days after Tenant shall have
submitted to Landlord final plans and specifications therefor ("Tenant's
Plans"), and Landlord shall notify Tenant within said 10-Business Day period (a)
that Landlord approves Tenant's Plans, (b) that Landlord requires additional
information or details in order to evaluate Tenant's Plans, or (c) Landlord's
reason(s) for refusing to approve Tenant's Plans and/or required revision(s) to
Tenant's Plans. If Landlord shall fail to so notify Tenant within said
10-Business Day period, then, provided Tenant shall have given Landlord an
additional five (5) Business Days notice thereof and Landlord shall have failed
to respond to Tenant within such 5-Business Day period, Landlord shall be deemed
to have approved such Tenant's Plans. Prior to commencing any non-structural
Tenant Work, if Tenant shall have prepared plans and
11
specifications therefor, a copy of the same shall be submitted to Landlord for
informational purposes only.
(iii) Landlord reserves the right, from time to time, to inspect
the progress of all Tenant Work for the purpose of approving or disapproving its
conformity with approved plans, specifications and drawings, as may be
applicable. Landlord shall use reasonable commercial efforts to minimize
interference with Tenant's business operations and/or construction any time that
Landlord enters the Premises. Tenant shall coordinate its activities fairly with
respect to the orderly flow of work, utilization of on-site utilities, loading,
unloading, and non-interference with the Landlord's Direct Tenants.
(iv) Tenant shall obtain releases of liens complying with NRS
108.2457 from all of its contractors and subcontractors, materialmen and
laborers furnishing work and materials to the Tenant for Tenant's Work at the
Premises.
(v) All Tenant Work shall be done in such a manner so as not
impose any additional expense upon Landlord.
(vi) Upon completion of any Tenant Work, Tenant shall promptly
record a notice of completion as provided in NRS Section 108.228 and shall
furnish a copy of the same to Landlord, together with:
(a) a certificate from Tenant's architect that the subject
work was performed substantially in accordance with the filed plans and in
accordance with all applicable Legal Requirements, including, without
limitation, the Americans with Disabilities Act of 1990 and the rules and
regulations with respect thereto, as same are or may be modified, amended or
revised,
(b) all appropriate certifications from all governmental
authorities having jurisdiction to the effect that such work has been performed
and completed (i) substantially in accordance with filed plans and
specifications, (if required), and (ii) in accordance with all applicable Legal
Requirements;
(c) a complete set of "as built" plans within ninety (90)
days after the completion of the work if "as-built" plans and specifications are
required by applicable Legal Requirements or otherwise prepared by Tenant (and,
if Tenant shall not be obligated to deliver "as-built" plans and specifications
pursuant to the provisions thereof, then Tenant shall deliver to Landlord plans
and specifications stamped "final" by Tenant's architect and marked to reflect
field notes and incorporating all changes and revisions), which plans will be
annexed to this lease as Exhibits, and Landlord and Tenant shall, upon the
request of the other party, execute amendments to this lease incorporating such
plans as Exhibits; and
(d) lien waivers complying with NRS 108.2457 from all
contractors, subcontractors or any other entities or persons performing work or
supplying materials or services to the premises in connection with the work.
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(vii) Tenant hereby indemnifies and saves Landlord harmless from
and against any and all bills for labor performed and equipment, fixtures and
materials furnished to Tenant, and from and against any and all liens, bills or
claims therefor or levied against the Premises containing the same and from and
against all losses, damages, costs, expenses, suits and claims whatsoever in
connection with Tenant's Work.
(viii) Tenant shall provide written notice to Landlord prior to
commencement of any Tenant Work, regardless of whether or not Landlord's consent
or approval is required for such Tenant Work, so that Landlord will have an
opportunity to record a notice of non-completion pursuant to NRS 108.234.
Landlord hereby notifies Tenant that, pursuant to NRS 108.234(4), Tenant must
obtain and record a payment and completion bond as provided in NRS 108.234(4)
before causing a work of improvement to be constructed, altered or repaired upon
the Premises.
D. Notwithstanding anything contained in this Lease to the contrary and
subject to such use satisfying Legal Requirements and the other applicable
provisions of this Lease, Tenant shall be entitled, at its sole cost and
expense, to use the existing Building roof for an outdoor terrace or cafe, but
shall otherwise not be entitled to increase or enlarge the Building beyond its
existing building envelope without the consent of Landlord, which may be
withheld or denied in its sole and absolute discretion.
6. FIXTURES AND PERSONALTY.
All fixtures (other than Tenant's trade fixtures or other Personal
Property) installed in the Premises at any time, either by Tenant or by Landlord
on Tenant's behalf, shall, upon expiration of this Lease, become the property of
Landlord and shall remain upon and be surrendered with the Premises. Nothing in
this Article 6 shall be construed to give Landlord title to or to prevent
Tenant's removal of Tenant's trade fixtures or Personal Property. With respect
to any of such items which Tenant is permitted to remove prior to the expiration
of this Lease, upon removal thereof from the Premises, Tenant shall immediately
and at its expense, repair any damage to the Premises, the Building or the
Property due to such removal. All property permitted to be removed by Tenant at
the end of the term remaining in the Premises after Tenant's vacating of the
Premises shall be deemed abandoned and may, at the election of Landlord, either
be retained as Landlord's property or disposed of as Landlord sees fit.
Notwithstanding anything contained in this Lease to the contrary, Tenant shall
have the right to repair, alter, remove, replace or improve any Personal
Property owned or leased by Tenant or its employees and located in the Premises.
Tenant shall have the right to allow liens, mortgages and other encumbrances to
be placed upon any and all items of Personal Property.
7. OPERATION OF THE BUILDING.
A. Except as expressly provided elsewhere in this Lease, Tenant, at
Tenant's own cost and expense, shall keep the Building in good order and repair,
and shall maintain, repair and (if and to the extent necessary) replace all
interior and exterior components of the Building, including, without limitation,
the electrical, mechanical, plumbing, heating, ventilation and air-conditioning
systems of the Building, as well as the grease trap and trash containers located
13
outside of the Building and for which Tenant has been granted an exclusive
license pursuant to the terms of this Lease.
B. Except as set forth below with respect to areas of the Property
outside of the Building, Landlord shall not be required to furnish any services
or utilities to the Premises or the Building. Tenant shall make its own
arrangements for utility services (including, without limitation, all of
Tenant's electrical, water, gas, telephone requirements) directly with the
utility companies serving the Building.
C. On the date hereof, Landlord shall succeed to the interest of the
landlord under four Landlord's Direct Leases in effect with respect to,
respectively, the four units of space located on the first floor of the Building
that are not part of the Premises. Tenant shall provide to each Landlord's
Direct Tenant the building services that the landlord under such Landlord's
Direct Lease is required to provide to the Landlord's Direct Tenant thereunder
pursuant to the terms of the existing Sublease. In addition, unless otherwise
agreed to by such Landlord's Direct Tenant, such Landlord's Direct Tenant shall
continue to have the same exclusive provision of services arrangement with
Tenant as such Landlord's Direct Tenant has prior to the date hereof pursuant to
the terms of the relevant Sublease (e.g., the right to be the exclusive provider
of cigars to the Restaurant). The rents payable under the respective Landlord's
Direct Leases shall be paid to, and be the exclusive property of, Landlord, but
all payments that are required to be paid thereunder by the Landlord's Direct
Tenants for building services shall be paid to Tenant. Landlord shall use
commercially reasonable efforts (including, without limitation, the prosecution
of legal action) to enforce all such payment obligations of the Landlord's
Direct Tenants, or assign to Tenant all rights that Landlord has to enforce such
payment obligations.
D. Landlord, at Landlord's own cost and expense (except as set forth
below with respect to the Appurtenant Areas (as such term is defined below),
shall keep the areas of the Property adjacent to the Building in good order and
repair, and shall maintain, repair and (if and to the extent necessary) replace
all such areas, to the extent that they serve the Premises or Tenant's operation
of the Restaurant. With respect to the driveway and parking areas located
adjacent to the Building that serve the Premises or Tenant's operation of the
Restaurant (the "Appurtenant Areas"), Landlord and Tenant shall equitably share
the costs of such maintenance, repair and replacement in accordance with their
respective use (the "Shared Allocated Expenses"). Tenant shall reimburse
Landlord for Tenant's equitable share of such costs within thirty (30) days
after the date that Landlord's xxxx therefor is delivered to Tenant, which xxxx
shall be accompanied by detailed documentation to support such xxxx. If Landlord
and Tenant shall be unable to agree on how to share such costs, either Landlord
or Tenant shall have the right to submit the allocation question to binding
expedited expert determination in accordance with the provisions of Article
34.C. below (except that all costs of such expedited expert determination shall
be shared equally by Landlord and Tenant).
E. Landlord and Tenant shall allow the Landlord's Direct Tenants to use
the Appurtenant Areas and other areas (including bathroom facilities in the
Restaurant) without charge, but only if and to the extent that such Landlord's
Direct Tenant had the right to do so prior to the date hereof.
14
8. MECHANICS' LIENS.
Tenant shall not permit a mechanic's lien to be placed on any portion of
the Premises, the Building or the Property due to work performed or material
supplied on behalf of Tenant. Notwithstanding anything to the contrary contained
in this Lease, Tenant, its successors and assigns, warrant and guarantee to
Landlord, its successors and assigns, that if any mechanic's lien shall be filed
against all or any portion of the Property, for work claimed to have been done
for, or materials claimed to have been furnished to, Tenant, the same shall be
discharged by Tenant, by payment, by recording a surety bond as provided in NRS
108.2415, or otherwise, at the sole cost and expense of Tenant, within twenty
(20) days following Tenant's receipt of notice thereof from Landlord. In the
event such mechanic's lien is not discharged or bonded over timely, as
aforesaid, Landlord may discharge same for the account of and at the expense of
Tenant by recording a surety bond as provided in NRS 108.2415, and Tenant,
promptly following demand, shall reimburse Landlord, as Additional Rent, for all
costs, disbursements, fees and expenses, including without limitation,
reasonable attorneys' fees, incurred in connection with so discharging said
mechanic's lien, and including any reimbursement by Landlord to the surety
issuing such bond, and for any amounts paid to any claimant against the bond
pursuant to the terms thereof, together with interest at the Default Rate
thereon from the time or times of payment until reimbursement by Tenant.
9. UTILITIES.
A. Tenant's Responsibility to Furnish. To the extent that utilities,
including but not limited to electric, gas and/or water consumed or used with
respect to the Premises are currently separately metered or measured and billed
by the utility company supplying the foregoing directly to Tenant, neither
Landlord nor Tenant shall cause such arrangement to be altered and Tenant shall
pay such charges to such company. To the extent that the same are currently not
metered separately for Landlord's Direct Tenants, Tenant shall pay the bills for
such utilities until there is separate metering, and Tenant shall pay for the
cost of separately metering such items to the extent necessary. If, however,
separate metering is not possible, and in connection with any Landlord's Direct
Lease, Landlord's Direct Tenant needs to obtain such utilities from Tenant,
Tenant shall redistribute such utility to the Landlord's Direct Tenant. If, for
reasons beyond either party's control, one or more utilities serving Landlord's
Direct Tenants and the Premises which has already been separately metered shall
no longer be separately metered in the future, Tenant shall provide such utility
or utilities to the Landlord's Direct Tenant's premises, and Landlord (or
Landlord's Direct Tenant) shall pay for the same to Tenant on the basis of the
monthly costs for such utility or utilities during the last calendar year when
such utility or utilities were separately metered, provided, however, that such
costs shall be increased if and to the extent that there shall have been a rate
increase for such utility or utilities. Promptly following the date when such
utility or utilities shall no longer be separately metered, Landlord shall
furnish Tenant with a copy of the previous year's charges (on the same periodic
billing basis) for such utility or utilities, and Landlord shall thereafter pay
to Tenant the amount required hereunder on the respective due dates of such
periodic bills.
B. Interruption. Tenant acknowledges that it is arranging for and
supplying utility or other services to the Building and Landlord has no
obligation to furnish utilities or services to the
15
Premises. Any interruption, curtailment or change of any utility or service
shall not constitute a constructive or partial eviction, nor entitle Tenant to
any compensation or abatement of rent. Tenant shall use reasonable commercial
efforts to attempt to promptly correct any such interruption or curtailment, to
the extent such interruption or curtailment of any utility or service affects
any Landlord's Direct Tenant. To the extent such service interruption results
from the gross negligence or willful misconduct of Tenant, its agents, servants
or employees or from Tenant's failure to comply with its obligations under the
Lease, and if Landlord's Direct Tenant ceases conducting business in any portion
of the Premises due to such interruption or curtailment, Tenant shall be
responsible for reimbursing Landlord for any lost rent or additional rent it
otherwise would have received and for such additional losses as Landlord may
incur during such period until the earlier of such time as (i) Landlord's Direct
Tenant resumes business, or (ii) the interruption or curtailment ceases;
provided that, in no event shall Tenant have any greater liability to Landlord's
Direct Tenant under the foregoing provisions than Tenant would have under the
same circumstances as landlord under the existing subleases. The foregoing shall
constitute Landlord's sole remedy relating to the interruption and curtailment
of utility service to Landlord's Direct Tenants. Tenant hereby waives all
benefits of any applicable existing or future Legal Requirement permitting the
termination of this Lease due to any such interruption, curtailment or changes
as mentioned in this section. Notwithstanding anything to the contrary contained
in this Section 9B, Landlord shall not be released from any liability that
Landlord may have to Tenant under other provisions of this Lease if such
interruption, curtailment or adverse change of any utility or service shall have
been caused by Landlord, or by any of Landlord's agents, servants, employees or
contractors.
C. Energy Conservation Programs. Each party shall comply with energy
conservation programs or operational directives relating to reduced power
consumption at the Property required, from time to time, by governmental
authorities or local utility providers, which programs or directives may include
reduced operating hours or reduced utility consumption during certain hours
during the day. Tenant's obligation to comply with this Section 9.C. shall be
without set-off, abatement or reduction of Minimum Rent or liability to
Landlord, in any manner whatsoever.
10. REAL ESTATE TAXES.
A. (i) During the Term (but subject to the provisions of Section 10D
below), Tenant shall pay, on or before the last day when such amounts are
payable without interest or penalty, to the appropriate governmental
authorities, all real estate taxes, assessments and water and sewer rents and
all personal property taxes, business and occupancy taxes, sales taxes imposed
on leases or rents, license and permit fees, and any other charges whether or
not now customary or within the contemplation of the parties, whether similar or
dissimilar to anything heretofore enumerated, together with any interest and
penalties imposed thereon, assessed or levied against the Building or any
portion thereof (collectively, "Building Taxes"). If any Building Taxes may
legally be paid in installments (without interest or penalty charges accruing),
Tenant may pay such assessment in installments. Tenant shall be liable only for
Building Taxes (or installments thereof) that become due and payable with
respect to any tax or assessment period occurring in whole or in part during the
Term hereof; provided, however, that any such real estate taxes, assessments and
water and sewer rents or other Building Taxes
16
assessed against the Building for the fiscal or tax year in which the Term shall
expire shall be apportioned so that Tenant shall pay those portions thereof
which correspond with the portion of such year as are within the Term.
(ii) If the Building and the footprint of Land upon which the
Buildings stands (collectively, the "Building Area") shall be designated as a
separate tax lot (i.e., a different tax lot than any other portion of the
Property), then, from and after the date that such designation shall be made,
all of the provisions set forth in Section 10A(i) above relating to Tenant's
obligation to pay Taxes with respect to the Building shall be deemed to apply to
the entire Building Area ("Building Area Taxes").
B. (i) Landlord shall pay, on or before the last day when such
amounts are payable without interest or penalty, to the appropriate governmental
authorities, all real estate taxes, assessments and water and sewer rents and
all personal property taxes, business and occupancy taxes, sales taxes imposed
on leases or rents, license and permit fees, and any other charges whether or
not now customary or within the contemplation of the parties, whether similar or
dissimilar to anything heretofore enumerated, together with any interest and
penalties imposed thereon, assessed or levied against the Property other than
the Building (collectively, "Property Taxes"). If any Property Taxes may legally
be paid in installments (without interest or penalty charges accruing), Landlord
may pay such assessment in installments.
(ii) If the Building Area shall be designated as a separate tax
lot, then, from and after the date that such designation shall be made, Property
Taxes shall be deemed to exclude Building Area Taxes.
C. During the Term, all of the Landlord's Direct Tenants (other than
tenants under the existing Landlord's Direct Leases) shall be obligated to pay
their proportionate shares of Building Area Taxes to Tenant. Landlord shall use
commercially reasonable efforts (including, without limitation, the prosecution
of legal action) to enforce all such payment obligations of the Landlord's
Direct Tenants, or assign to Tenant all rights that Landlord has to enforce such
payment obligations. With respect to the existing Landlord's Direct Leases,
Landlord shall pay (in accordance with the time schedule set forth in Section
10D below) the cumulative proportionate share attributable to all of the space
in the Building that is subject to the existing Landlord's Direct Leases (which
cumulative proportionate share shall be deemed to be 7.188%) of Building Area
Taxes to Tenant, or, alternatively, Tenant may offset the amount thereof against
any payments for Taxes that Tenant is required to make to Landlord pursuant to
the provisions of this Article 10.
D. Landlord and Tenant shall cooperate with each other for the purpose
of causing the Building Area to be designated as a separate tax lot. If and for
so long as the Building Area shall not be designated as a separate tax lot,
Landlord shall be responsible for the payment of both Property Taxes and
Building Area Taxes to the relevant taxing authority, and Landlord and Tenant
shall seek to determine the Building's equitable share, based on relative
values, of the combined amount of Property Taxes and Building Area Taxes. Tenant
shall pay to Landlord the amount that represents the Building's equitable share
of the combined amount of Property Taxes and Building Area Taxes on the later of
(i) five (5) days before the last day when the Property
17
Taxes are payable without interest or penalty, and (ii) the thirtieth (30th) day
after the date that Landlord's xxxx therefor is delivered to Tenant, which xxxx
shall be accompanied by a copy of the taxing authority's xxxx and the basis for
the allocation to the Building Area. If Landlord and Tenant shall be unable to
agree on the basis for such allocation, either Landlord or Tenant shall have the
right to submit the allocation question to binding expedited expert
determination in accordance with the provisions of Article 34.C. below (except
that all costs of such expedited expert determination shall be shared equally by
Landlord and Tenant). Until the initial allocation shall be determined by such
expedited expert determination, Tenant shall be responsible for seventy-five
(75%) percent of the combined amount of Property Taxes and Building Taxes, and
Landlord shall be responsible for twenty-five (25%) percent of the combined
amount of Property Taxes and Building Taxes. If the allocation made pursuant to
such expedited expert determination shall disclose that either party has
overpaid its equitable share of Taxes by more than five (5%) percent, then,
within ten (10) days following such determination, the recipient of the
overpayment shall refund such overpayment (without interest) to the party who
shall have made such overpayment. Following the initial allocation, each party
shall have the right, from time to time, to ask for a new allocation based on
new or changed circumstances.
E. During the Term, Tenant shall be obligated to pay to Landlord
Tenant's equitable share of the Property Taxes allocable to the Appurtenant
Areas, subject to the same payment and allocation procedures set forth in
Section 10.D. above.
F. If and for so long as the Building Area shall not have been
designated as a separate tax lot, Landlord agrees to consult with a real estate
tax consultant or advisor engaged by Landlord from time to time and, in the
exercise of reasonable and prudent ownership judgment, Landlord shall contest
any unreasonable tax assessment applicable to Building Area Taxes if and to the
extent such tax counsel advises Landlord that a reasonable basis exists
therefor. Tenant shall reimburse Landlord for an equitable share of the costs of
such contest (unless the same shall be deducted from any refund or credit, in
which case such costs, as well as such refund or credit, shall be allocated
equitably between Building Area Taxes and Property Taxes). Any dispute as to
what constitutes an equitable share shall be subject to the relevant procedures
set forth in Section 10D above.
11. INDEMNITY; INSURANCE.
A. Tenant's Indemnity. Except if and to the extent that the same shall
be caused by the negligence or willful misconduct of Landlord or any of
Landlord's principals, officers, agents, contractors, servants, employees,
licensees and invitees, Tenant covenants and agrees to indemnify and save
Landlord and its principals, partners, officers, members, affiliates and
employees, disclosed or undisclosed, harmless from and against any and all
claims, losses, damages (excluding consequential damages) or expenses
(including, without limitation, reasonable attorneys' fees and expenses) or
other liability arising during the term of this Lease resulting from (i) the
performance of any Tenant Work, or the possession, use, occupancy, management,
repair, maintenance or control of the Premises or any part thereof by Tenant or
any of its subtenants, concessionaires, licensees, subtenants, invitees,
visitors or assignees, or its or their employees, agents, visitors, invitees,
contractors or subcontractors of any tier; or (ii) any act or omission of Tenant
(alleged or otherwise), or of any of its subtenants, concessionaires,
18
licensees, subtenants, invitees, visitors or assignees, or its or their
employees, agents, visitors, invitees, contractors or subcontractors of any
tier; or (iii) any injury to person or property or loss of life sustained in or
about the Premises or any part thereof; or (iv) Tenant's failure to diligently
investigate and promptly notify Landlord with respect to any of the foregoing,
including, without limitation, any expenses incurred by Landlord in the event
that an insurance carrier disclaims coverage on the basis of "late notice" due
to Tenant's failure to comply with this Section 11A. Tenant shall, at its own
cost and expense and by counsel approved by Landlord, which approval shall not
be unreasonably withheld (and with counsel to Tenant's insurer being hereby
approved), defend any and all actions, suits and proceedings which may be
brought against Landlord with respect to or in connection with any of the
foregoing, and Tenant shall pay, satisfy and discharge any and all judgments,
orders and decrees which may be made or entered against, Landlord, or its
respective principals, disclosed or undisclosed, with respect to, or in
connection with, any of the foregoing. The commercial general liability coverage
maintained by Tenant pursuant to this Lease shall specifically insure the
contractual obligations of Tenant as set forth in this Article and/or as
provided in this Lease.
B. Tenant's Insurance Obligations.
(i) Tenant, at Tenant's sole cost and expense, shall obtain and
maintain in effect commencing on the Commencement Date and continuing throughout
the Term of this Lease, insurance policies providing for the following
coverages: (a) commercial general liability and property damage insurance
insuring against loss or liability for personal injury, death or property
damage, with minimum liability limits in the amount of Two Million
($2,000,000.00) Dollars based on year 2005 dollars for personal injury or death
of any one person, Five Million ($5,000,000.00) Dollars based on year 2005
dollars for two or more persons in any one occurrence and Two Million
($2,000,000.00) Dollars based on year 2005 dollars for damaged property
resulting from any one occurrence; (b) standard "all risk" property insurance
against fire, theft, vandalism, malicious mischief, sprinkler leakage, lighting,
earthquake (with commercially reasonable sublimits, currently $10 million),
windstorm, explosion, riot, riot attending a strike, civil commotion, damage
from aircraft and vehicles and smoke damage and such additional perils as now
are or hereafter may be included in a standard extended coverage endorsement
from time to time in general use in the State and as are customarily carried by
occupants of similar facilities, insuring (on a replacement value basis) the
Building, all equipment and improvements and all alterations, replacements,
changes and additions thereto, located on or appurtenant to the Premises, and
all merchandise, trade fixtures, furnishings and equipment of Tenant located in,
on or about the Premises (with any and all proceeds of such insurance, so long
as this Lease shall remain in effect, to be used only to repair or replace or
pay for the items so insured); (c) products liability insurance for merchandise
offered for sale or lease from the Premises, including liquor liability coverage
and coverage for liability arising out of the consumption of food and alcoholic
beverages on or obtained at the Premises, of not less than Two Million
($2,000,000) Dollars per occurrence for personal injury and death and property
damage; (d) workers' compensation coverage as required by law; (e) with respect
to Tenant's Work, alterations, improvements and the like required or permitted
to be made by Tenant hereunder, contingent liability and builder's risk
insurance in amounts satisfactory to Landlord in its reasonable judgment, and
(f) business interruption insurance, with Landlord designated as a
19
co-loss payee, as its interest may appear, and (in implementation thereof)
including direction that all payments to the extent of an amount equal to
Tenant's total Minimum Rent and Taxes obligation for twelve (12) full months
under this Lease, be made to Landlord.
(ii) All insurance policies herein to be procured by Tenant
shall: (a) be issued by insurance companies reasonably satisfactory to Landlord
and authorized to do business in the State (it being agreed that the insurance
companies being utilized by Tenant on the date hereof shall be deemed
satisfactory to Landlord); (b) be written as primary policy coverage and
non-contributing with respect to any coverage which Landlord may carry, and that
any coverage carried by Landlord therefor shall be excess insurance; and (c)
insure and name Landlord and any of its mortgagees and any parties in interest
designated by Landlord as additional insureds, as their respective interests may
appear (except with respect to workers' compensation insurance). Neither the
issuance of any insurance policy required hereunder, nor the minimum limits
specified herein with respect to Tenant's insurance coverage, shall be deemed to
limit or restrict in any way Tenant's liability arising under or out of this
Lease. With respect to each and every one of the insurance policies herein
required to be procured by Tenant, on or before the Commencement Date, and
before any such insurance policy shall expire, Tenant shall deliver to Landlord
upon Landlord's written request a duplicate original or certified copy of each
such policy or a certificate of the insurer, certifying that such policy has
been issued, providing the coverage required by this Lease and containing
provisions specified herein. Each and every insurance policy required to be
carried hereunder by or on behalf of Tenant shall provide (and any certificate
evidencing the existence of each such insurance policy shall certify) that, (x)
unless Landlord shall first have been given ten (10) days' prior written notice
thereof, the insurer will not cancel or terminate the coverage provided by such
insurance policy for reason of non-payment, and (y) unless Landlord shall first
have been given thirty (30) days' prior written notice thereof, the insurer will
not otherwise cancel or materially change the coverage provided by such
insurance policy. The term "insurance policy" as used in this Article 11 shall
be deemed to include any extensions or renewals of such insurance policy. In the
event that Tenant shall fail to promptly furnish any insurance coverage
hereunder required to be procured by Tenant, and if such failure shall continue
for a period of not less than ten (10) days following written notice thereof to
Tenant, Landlord, at its sole option, shall have the right to obtain the same
and pay the premium therefor for a period not exceeding one (1) year in each
instance, and the premium so paid by Landlord shall be immediately due and
payable by Tenant to Landlord as Additional Rent.
(iii) Any insurance required to be carried by Tenant pursuant to
the provisions of this Lease may be written as either a primary or umbrella
policy (or both) and may be carried under a blanket policy or policies covering
the Premises and other locations of Tenant and/or Tenant Affiliates, provided
that each such policy shall in all respects comply with the provisions of this
Section 11B and shall set forth the specific dollar amount of the coverage of
such policy that is applicable solely to the Premises, and such dollar amount
shall not be less than the amount required pursuant to this Section 11B.
C. Landlord's Indemnity. Except if and to the extent that the same shall
be caused by the negligence or willful misconduct of Tenant or any of Tenant's
principals, officers, agents, contractors, servants, employees, licensees and
invitees, Landlord covenants and agrees to
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indemnify and save Tenant and its principals, partners, officers, members,
affiliates and employees, disclosed or undisclosed, harmless from and against
any and all claims, losses, damages (excluding consequential damages) or
expenses (including, without limitation, reasonable attorneys' fees and
expenses) or other liability arising during the term of this Lease resulting
from (i) the performance of any construction on the Property, or the possession,
use, occupancy, management, repair, maintenance or control of the Property or
any part thereof by Landlord or any of its tenants, concessionaires, licensees,
subtenants, invitees, visitors or assignees, or its or their employees, agents,
visitors, invitees, contractors or subcontractors of any tier; or (ii) any act
or omission of Landlord (alleged or otherwise), or of any of its tenants,
concessionaires, licensees, subtenants, invitees, visitors or assignees, or its
or their employees, agents, visitors, invitees, contractors or subcontractors of
any tier; or (iii) any injury to person or property or loss of life sustained in
or about the Property (excluding the Building); or (iv) Landlord's failure to
diligently investigate and promptly notify Tenant with respect to any of the
foregoing, including, without limitation, any expenses incurred by Tenant in the
event that an insurance carrier disclaims coverage on the basis of "late notice"
due to Landlord's failure to comply with this Section 11C. Landlord shall, at
its own cost and expense and by counsel approved by Tenant, which approval shall
not be unreasonably withheld (and with counsel to Landlord's insurer being
hereby approved), defend any and all actions, suits and proceedings which may be
brought against Tenant with respect to or in connection with any of the
foregoing, and Landlord shall pay, satisfy and discharge any and all judgments,
orders and decrees which may be made or entered against, Tenant, or its
respective principals, disclosed or undisclosed, with respect to, or in
connection with, any of the foregoing. The commercial general liability coverage
maintained by Landlord pursuant to this Lease shall specifically insure the
contractual obligations of Landlord as set forth in this Article and/or as
provided in this Lease. Landlord's indemnity hereunder shall not be applicable
to the acts or omissions of any Landlord's Direct Tenants.
D. Landlord's Insurance Obligations. Landlord, at Landlord's expense,
shall maintain at all times during the Term, with a reputable insurance company
licensed to do business in the State and otherwise satisfactory to the holder of
any first mortgage on the Property, commercial general liability insurance
against all claims, demands or actions for injury to or death of person or
property having a limit of not less than $10,000,000 per occurrence and/or in
the aggregate, including products liability, contractual liability and
independent contractors' coverage, with broad form endorsement, arising from or
related to, or in any way connected with the conduct of Landlord, the operation
of Landlord's business in the Property (excluding the Premises) and/or caused by
the acts or omissions of Landlord, and/or Landlord's employees, agents, servants
and contractors. Said insurance policy shall (i) name Tenant as an additional
insured, as its interest may appear, and (ii) be written as primary policy
coverage and non-contributing with respect to any coverage that Tenant may
carry, and that any coverage carried by Tenant therefor shall be excess
insurance. Certificates of all such insurance and evidence of payment thereof,
or duly executed duplicates of the policy, shall be furnished by Landlord to
Tenant on or before the Commencement Date, and not less than 30 days prior to
the expiration of the term (and each renewal term) of such coverage. Neither the
issuance of any insurance policy required hereunder, nor the minimum limits
specified herein with respect to Landlord's insurance coverage, shall be deemed
to limit or restrict in any way Landlord's liability
21
arising under or out of this Lease. With respect to the insurance policy
required to be procured by Landlord, on or before the Commencement Date, and
before such insurance policy shall expire, Landlord shall deliver to Tenant upon
Tenant 's written request a duplicate original or certified copy of each such
policy or a certificate of the insurer, certifying that such policy has been
issued, providing the coverage required by this Lease and containing provisions
specified herein. The insurance policy required to be carried hereunder by
Landlord shall provide (and any certificate evidencing the existence of each
such insurance policy shall certify) that, unless Tenant shall first have been
given thirty (30) days' prior written notice thereof, the insurer will not
cancel, materially change or fail to renew the coverage provided by such
insurance policy.
12. WAIVER OF SUBROGATION.
Notwithstanding anything to the contrary in this Lease, each party
hereby releases the other party (which term as used in this Article includes the
employees, agents, partners, members, shareholders, officers and directors
(hereinafter, collectively, the "Related Parties") of the other party) from all
liability, whether for negligence or otherwise, in connection with loss to the
extent covered in whole or in part by any fire and/or extended coverage
insurance policies which the releasor is required by this Lease to carry or
carries with respect to the Property or the Building, or any interest or
property in or on the Property or the Building. Each party agrees that its
insurance policies aforesaid will include a waiver by insurer of all of its
rights of subrogation against Landlord, Tenant and their respective Related
Parties.
13. EXCULPATORY CLAUSE.
Notwithstanding anything contained in this Lease, at law or in equity to
the contrary, it is expressly understood, acknowledged and agreed by Tenant that
there shall at no time be or be construed as being any personal liability by or
on the part of Landlord under or in respect of this Lease or in any wise related
hereto or the Premises; it being further understood, acknowledged and agreed
that Tenant is accepting this Lease and the estate created hereby upon and
subject to the understanding that it shall not enforce or seek to enforce any
claim or judgment or any other matter, for money or otherwise, personally
against Landlord or any officer, director, stockholder, partner, member,
principal (disclosed or undisclosed), representative or agent of Landlord, but
shall look solely to the equity of Landlord in the Property, and not to any
other assets of Landlord, for the satisfaction of any and all remedies or claims
of Tenant in the event of any breach by Landlord of any of the terms, covenants
or agreements to be performed by Landlord under this Lease or otherwise; such
exculpation of any officer, director, stockholder, partner, member, principal
(disclosed or undisclosed), representative or agent of Landlord from personal
liability as set forth in this Article to be absolute, unconditional and without
exception of any kind.
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14. CASUALTY AND CONDEMNATION.
A. Casualty
1. Continuance of Lease. Subject to the provisions of Section
14.A.4. below, in the event of any damage to the Building by fire or other
casualty, this Lease shall not be terminated or otherwise affected.
2. Reconstruction. If the Building is damaged by fire or other
casualty, then (i) all fire and extended coverage insurance proceeds from
policies carried by Tenant with respect to the Building ("Insurance Proceeds")
shall be held in escrow by Tenant (subject to the provisions of Section 14.A.3
below) and be made available for payment of the cost of repairing and (if and to
the extent necessary) reconstructing the Building, (ii) the Building shall be
promptly repaired or (if and to the extent necessary) reconstructed, and (iii)
the Minimum Rent and other charges payable by Tenant to Landlord shall not be
abated. All permits required in connection with said repairs and reconstruction
shall be obtained by Tenant and shall be paid for from the Insurance Proceeds.
Any amount which must be expended by Tenant to repair and restore the Premises
in excess of the Insurance Proceeds shall be the sole obligation of Tenant.
Tenant shall be obligated to repair and/or reconstruct the Building at least
substantially to the condition that the Building was in prior to the occurrence
of such damage, and Tenant shall be required to pay for the costs in excess of
any insurance proceeds. In connection with any repair or restoration hereunder,
Tenant shall be required to satisfy the Tenant's Work provisions of Article 5.C.
above.
3. Mortgagee's Rights. Landlord's institutional mortgagee of the
Property shall have the right to require Tenant to deposit all Insurance
Proceeds with a bank or trust company selected by such mortgagee (which may be
such mortgagee) (the "Depository"), and whose reasonable fees shall by paid by
Tenant. The Depository shall hold all Insurance Proceeds and shall disburse the
same in accordance with then customary practices in the State relating to the
disbursement of insurance proceeds to a triple-net lessee obligated to
reconstruct a building. Unless Tenant shall exercise the termination right set
forth in Section 14.A.4 below, such mortgagee shall have no right to require the
Insurance Proceeds (or any portion thereof) to be applied for any purpose other
than the repair and/or reconstruction of the Building.
4. Tenant's Termination Right. If damage that occurs during the
last two (2) years of the Term is such that, in the reasonable judgment of
Tenant there is or will be substantial and material interference with the
conduct by Tenant of its business at the Premises, and the anticipated time for
completion of the repairs that will permit Tenant to resume normal business
operations exceeds one hundred eighty (180) days from the date of the damage,
then, provided that Tenant shall pay Landlord an amount sufficient to complete
the repair or restoration of such damage (whether from insurance proceeds or
otherwise), Tenant may on notice to Landlord ("Tenant's Termination Notice")
delivered within forty-five (45) days after the date of the damage, terminate
this Lease effective thirty (30) days after receipt of Tenant's Termination
Notice by Landlord. Any dispute regarding the sufficiency of proceeds or
otherwise under the provisions of this Section 14.A.4 shall be resolved by
arbitration in accordance with the provisions of Article 34.B. hereof.
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B. Condemnation. If all of the leaseable space in the Premises, or the
primary means of access to the Premises, shall be acquired or condemned by
eminent domain for any public or quasi public use or purpose, then and in that
event, the term of this Lease shall cease and terminate from the date of title
vesting in such proceeding, and all Minimum Rent and Additional Rent shall be
prorated to such date. If more than ten (10%) percent of the leaseable space in
the Premises shall be acquired or condemned by eminent domain for any public or
quasi public use or purpose, and if Tenant reasonably determines that it is no
longer economical to operate the Restaurant in the Premises, then and in that
event, Tenant shall have the right to terminate the Lease, in which case the
term of this Lease shall cease and terminate from the date of title vesting in
such proceeding, and all Minimum Rent and Additional Rent shall be prorated to
such date. In the event of any such termination, Tenant may claim, prove and
receive such awards as may be allowed for the value of Tenant's leasehold,
Tenant's moving expenses, personal property, fixtures, equipment and any other
property installed or paid for by Tenant in the Premises or other related or
compensable costs (collectively, a "Tenant Award"), except that, if separate
awards shall not be made for the Building and the remainder of the Property,
Landlord shall be entitled to receive the value of the Land (unencumbered and
not benefited by this leasehold) and the value of such Landlord Direct Leases as
shall then exist, out of the condemnation award prior to Tenant being entitled
to receive any Tenant Award. In the event of a temporary taking of the use of
the Premises or any part thereof, this Lease shall remain in full force and
effect, and there shall be no abatement of Minimum Rent or Additional Rent, but
Tenant shall be entitled to receive the entire award therefor (except as may be
paid for such Landlord Direct Leases as shall then exist) as may be paid for the
period of taking that occurs within the Term, and Landlord shall be entitled to
receive such portion of the award therefor as may be paid for the period of
taking that occurs after the expiration of the Term.
15. FINANCING REQUIREMENTS.
If, in connection with obtaining financing or refinancing for the
Property of which the Premises forms a part, a bank, insurance company or other
institutional lender shall request reasonable modifications to this Lease as a
condition to such financing or refinancing, Tenant will not unreasonably
withhold, delay or defer its consent thereto, including, without limitation, to
the extent that Tenant may be reasonably required to give notices of any
defaults by Landlord to such lender and/or permit the curing of such defaults by
such lender together with the granting of such additional time for such curing
as may be reasonably required for such lender to obtain possession of the
Property, provided such lender timely notifies Tenant of its intention to cure
such default and thereafter diligently prosecutes such cure until completed,
provided, however, that such modifications do not increase the obligations or
decrease the rights of Tenant hereunder or adversely affect the leasehold
interest hereby created or interfere with or otherwise impair Tenant's ability
to operate the Restaurant in Tenant's accustomed method of operation (in each of
the foregoing cases, other than in a de minimis manner), or increase any of
Tenant's monetary obligations under the Lease.
16. SPRINKLERS.
If after the Commencement Date, based upon a change in applicable law or
regulations, if any bureau, department or official of the federal, state or
local government requires any changes,
24
modifications, alterations, or additional sprinkler heads or other equipment be
made or supplied in or to the existing sprinkler or alarm system in the Premises
by reason of Tenant's business, or the location of partitions, trade fixtures,
or other contents of the Premises, Tenant shall, at Tenant's expense, promptly
make such system changes, modifications, alterations, and supply additional
heads or other equipment as required whether the work involved shall be
structural or non-structural in nature.
17. COMPLIANCE WITH LAWS.
Tenant covenants and agrees to comply promptly, at Tenant's sole cost
and expense, with all present and future Legal Requirements and with the
directives of all federal, state and local governments, departments, commissions
and boards which shall impose any violation, order or duty with respect to the
Premises upon Landlord or Tenant arising out of Tenant's use or manner of use
thereof, including, but not limited to, all Legal Requirements pertaining to
ADA, fire protection, smoke protection and security requirements.
18. PERMITS AND FEES.
If any governmental license or permit shall be required for the proper
and lawful conduct of Tenant's business in the Premises, or any part thereof,
Tenant, at its expense, shall duly procure and thereafter maintain such license
or permit and upon request submit a copy of the same for inspection by Landlord.
Tenant shall, at all times, comply with the terms and conditions of each such
license or permit. Tenant shall neither do nor omit to be done on the Premises
anything as a result of which any liquor license or other license may expire or
be forfeited, suspended or imperiled. Tenant shall conduct the business carried
on in the Premises in a lawful, proper and orderly manner with such staff as
shall be necessary to supervise the conduct of all persons in or about the
Premises from time to time and establish and preserve the good character of the
Premises with the licensing authorities and the public. Tenant shall do all
things necessary to maintain and from time to time renew its liquor license and
not do or permit or suffer to be done anything which will prejudice the future
grant or renewal of such license and comply with all requirements and
recommendations from time to time of the licensing authority (including any
general conditions contained in any rules of management issued by any local
authority). Tenant shall not agree to any exclusive arrangement or tie with any
liquor supplier in respect of the Premises that will extend past the expiration
or termination of the term of this Lease.
19. HAZARDOUS SUBSTANCES.
A. Tenant covenants and agrees that no activities undertaken by Tenant,
its employees, contractors, representatives and agents, on or about the Property
shall violate any Legal Requirement (whether now existing or hereafter enacted
or promulgated) or any judicial or administrative interpretations thereof,
including any judicial or administrative orders or judgments, governing the use,
storage, transportation and disposal of any hazardous substances, including
petroleum, petroleum products and other petrochemicals, asbestos,
polychlorinated biphenyls, or any other hazardous or toxic materials or waste
(hereinafter collectively referred to as "Hazardous Substances"). Tenant further
covenants and agrees to indemnify, protect and save
25
Landlord and any mortgagee harmless from and against any and all damages,
losses, liabilities, obligations, penalties, claims, litigation, demands,
defenses, judgments, suits, proceedings, costs, disbursements and expenses of
any kind or of any nature whatsoever (including, without limitation, legal and
experts' fees and disbursements) which may at any time be imposed upon, incurred
by, asserted, claimed or awarded against Landlord and any mortgagee and arising
from or out of any Hazardous Substances on, in, under or affecting (x) all or
any portion of the Property (including the Building) introduced during the term
of this Lease, or (y) all or any portion of the Building and the footprint of
Land upon which the Buildings stands introduced prior to the term of this Lease,
in each case by, or on behalf of, Tenant, any subtenant, assignee or licensee of
the Premises, which indemnity shall include, without limitation, (i) the costs
of handling, storage and disposal of any and all such Hazardous Substances from
all or any portion of the Property or the Premises, (ii) additional costs
required to take necessary precautions to protect against the release of such
Hazardous Substances on, in, under or affecting the Property or the Premises,
into the air, any body of water, any other public domain or any surrounding
areas and (iii) any costs incurred to comply, in connection with all or any
portion of the Property or the Premises, with all applicable Legal Requirements
with respect to such Hazardous Substances. Tenant represents and warrants to
Landlord that Tenant has investigated the Premises to its full satisfaction with
respect to Hazardous Substances and, in addition, to and not by way of
limitation of, the provisions of Section 2.A. above, Tenant has accepted the
Premises in its "as is" condition. The provisions of this Article 19 shall
survive the expiration or sooner termination of this Lease.
B. Landlord covenants and agrees that no activities undertaken by
Landlord, its employees, contractors, representatives and agents, on or about
the Property shall violate any Legal Requirement (whether now existing or
hereafter enacted or promulgated) or any judicial or administrative
interpretations thereof, including any judicial or administrative orders or
judgments, governing the use, storage, transportation and disposal of any
Hazardous Substances. Landlord further covenants and agrees to indemnify,
protect and save Tenant harmless from and against any and all damages, losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
judgments, suits, proceedings, costs, disbursements and expenses of any kind or
of any nature whatsoever (including, without limitation, legal and experts' fees
and disbursements) which may at any time be imposed upon, incurred by, asserted,
claimed or awarded against Tenant and arising from or out of any Hazardous
Substances on, in, under or affecting all or any portion of the Property or the
Premises introduced during the term of this Lease by, or on behalf of Landlord
or any Landlord Direct Tenant, or any subtenant, assignee or licensee of any
Landlord Direct Space, including, without limitation (i) the costs of handling,
storage and disposal of any and all such Hazardous Substances from all or any
portion of the Property or the Landlord Direct Space, (ii) additional costs
required to take necessary precautions to protect against the release of such
Hazardous Substances on, in, under or affecting the Property or the Landlord
Direct Space, into the air, any body of water, any other public domain or any
surrounding areas and (iii) any costs incurred to comply, in connection with all
or any portion of the Property or the Landlord Direct Space, with all applicable
Legal Requirements with respect to such Hazardous Substances. Tenant represents
and warrants to Landlord that Tenant has been the sole occupant of the Premises
and the Building (except for the Landlord's Direct Tenants' space) under the
Ground Lease.
26
20. TENANT'S BUSINESS OPERATION.
Tenant acknowledges that the Restaurant has been developed and is
maintained as part of a world-class, unique and original restaurant franchise
known as "Xxxxx & Wollensky". Tenant hereby agrees that:
A. Tenant's Operations. The Restaurant to be operated by Tenant in the
Premises and the kind and quality of Tenant's food, beverages and services will
be first class and reputable in every respect, and will be of levels of quality,
service, appearance and operation consistent therewith and as provided in the
sixth whereas clause. Landlord and Tenant agree that the name to be used with
respect to the Restaurant to be operated at the Premises shall be "Xxxxx and
Wollensky" unless Tenant shall elect to change the name of the Restaurant or
unless this Lease shall be assigned or sublet in accordance with the provisions
of this Lease, provided, however, that, in all such cases, the new name of the
Restaurant shall be commensurate with the renown and quality of Xxxxx &
Wollensky, and the operations thereunder shall meet the standards set forth for
the Restaurant pursuant to this Lease. Landlord shall not have the right to
utilize the Restaurant name in advertisements or promotional materials related
to the Property, or with respect to any other purpose, without the consent of
Tenant, which consent may be granted or withheld in Tenant's sole and absolute
discretion.
B. Service. Restaurant service in the Premises shall be by waiters and
waitresses only, at tables with chairs or banquettes. There shall be no counter
service, cafeteria style service or self service whatsoever, but the foregoing
is not intended to prohibit Tenant from serving food at the liquor bar or any
other type of food bar in the Premises, so long as it satisfies the standards
set forth in this Lease for the Restaurant.
C. Tenant's Employees. Tenant shall have the sole right and obligation
to hire, dismiss, supervise and set the pay rates for all employees involved in
the operation of the Premises. Tenant agrees and acknowledges that the conduct,
appearance and performance of its employees will have a substantial effect on
the operation, success and reputation of the Premises, and accordingly, Tenant
agrees to require its employees to conduct themselves in a manner that is
substantially commensurate with a first class tablecloth, high quality
restaurant and otherwise with the manner in which Tenant's employees conduct
themselves as of the date hereof.
D. Noise and Odors. Tenant covenants and agrees that throughout the term
of this Lease, it shall not suffer, allow or permit any obnoxious odors, undue
vibrations or other undesirable effects or incidents of its business to emanate
from the Premises. Notwithstanding the foregoing, Landlord acknowledges that the
operation of the Restaurant produces strong cooking fumes, smoke and odors, and
agrees that Tenant shall not be required to take any action or incur any expense
to reduce or otherwise mitigate such cooking fumes, smoke or odors. If Landlord
shall desire to install odor reducing equipment in the Premises, Landlord shall
have the right to do so, provided that: (i) Tenant shall have the right to
reasonably determine the location of such equipment, (ii) such equipment shall
not, in Tenant's reasonable determination, interfere with the operation of the
Restaurant or mar the appearance of either the interior or the exterior of the
Restaurant, (iii) such equipment shall be installed by Landlord at Landlord's
own cost and expense, and only during the month of July or August, on not less
than sixty (60) days prior
27
notice to Tenant, which installation shall be performed in coordination with
Tenant's reasonable requirements so as to minimize interference with Tenant's
business operations, (iv) Tenant, at Landlord's cost and expense, shall be
responsible for the maintenance, repair and replacement of such equipment, and
all components thereof, and Landlord shall reimburse Tenant, within twenty (20)
days after rendition of a reasonably itemized xxxx therefor, for all reasonable
costs thereof, and (v) Landlord shall reimburse Tenant, within twenty (20) days
after rendition of a reasonably itemized xxxx therefor, for all additional costs
(e.g., electricity costs) of operating the Restaurant or the Premises resulting
from the presence and/or operation of such equipment.
E. Additional Covenants. Throughout the term of this Lease, Tenant
shall:
(i) maintain all chemical extinguishing devices in the Premises under
service as required by the relevant authorities, insurers and Legal
Requirements.
(ii) not perform any act or carry on any practice which shall damage
or deface the Premises or any other part of the Building.
(iii) not operate on the Premises or in any part of the Property any
coin or token-operated vending machine or similar device (including, without
limitation, pay lockers, pay toilets, scales, and machines for the sale of
beverages, foods, candy, cigarettes or other merchandise and/or commodities),
except that Tenant may have pay telephones and slot machines and other gambling
devices in the Premises.
(iv) not use or occupy the Premises for any purpose which will injure
the reputation of said Premises.
(v) not suffer, allow or permit the erection or display in, on or
from the Premises so that the same may be visible to persons outside of the
Premises, any exhibits, banners, decorations, flags, xxxxxxx or any other
similar or dissimilar kind or form of description or display (collectively
"Signage"), except for the Existing Sign (as hereinafter defined) and other
signage that is substantially similar to the signage that is currently featured
in the Restaurant.
(vi) not permit any business to be operated in or from the Premises
or the Property by any concessionaire or licensee that would otherwise violate
Tenant's operating covenants in this Article 20 or elsewhere in this Lease
without the prior written consent of Landlord in each instance which shall be
subject to the Landlord's sole and absolute discretion.
F. Hours of Operation. Subject to any and all applicable Legal
Requirements, including, but not limited to, any restrictions on hours of
operation imposed by local ordinance or the applicable liquor license, the
Premises shall be open as Tenant shall determine in Tenant's reasonable
discretion, provided that the hours of operation shall be substantially
commensurate with Tenant's hours of operation as of the date hereof.
Notwithstanding the foregoing, Tenant shall have the right, at any time and from
time to time, to discontinue serving lunch.
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G. Outside Cafe. Landlord acknowledges that Tenant has advised Landlord
that Tenant operates an outdoor dining area (the "Outside Cafe") consisting of
thirty-six (36) seats and comprising approximately 600 square feet, and Landlord
agrees that, for all purposes hereunder (but only to the extent permitted by the
Legal Requirements), the Outside Cafe may continue to be operated as part of the
Premises. In addition, to the extent that Tenant leases additional space in the
Building, and there is adjacent to that space sidewalk area that would be
suitable for an extension of the Outdoor Cafe, Tenant shall have the right,
subject to compliance with Legal Requirements, to expand its Outdoor Cafe
accordingly and operate it as part of the Premises. Tenant shall have the right,
at any time and from time to time, to cease operating the Outdoor Cafe.
H. Dispute Resolution. Any dispute regarding the rights of Landlord or
Tenant under the provisions of this Article 20 or of Article 22 below shall be
resolved by binding expedited expert arbitration in accordance with the
provisions of Article 34.C. below.
21. SIGNAGE.
A. Except as specifically set forth herein, Landlord hereby agrees that
Tenant shall be entitled to place on the exterior of the Building such signage
as Tenant may choose for the purpose of identifying the Restaurant, so long as
such signage satisfies the quality and standards required in respect of the
Restaurant. Tenant agrees that Tenant is solely responsible for the obligation
to maintain Tenant's signage, and Tenant covenants and agrees to indemnify and
hold Landlord harmless from and against any and all damages and liability in
connection with any sign or signs Tenant may erect.
B. Landlord shall have the right to have Landlord's Direct Tenants place
signage on the Building in accordance and in a manner consistent with the
signage size, location, style and quality currently existing, and any changes
reasonably required in connection therewith, so long as such signage is prepared
in a manner consistent with the rules and regulations of the Landlord's Direct
Leases and the Building as set forth in Landlord's Direct Leases and shall be in
a manner consistent with the signage size, location, style and quality currently
existing. All necessary permits relating thereto shall be obtained by Landlord
at its sole cost and expense. Tenant shall have no obligation whatsoever with
respect to any signage of Landlord's Direct Tenants.
22. FOOD OPERATION PROVISIONS.
A. Systems Maintenance. In addition to, and not by way of limitation of,
the terms and conditions of Article 7 of this Lease, Tenant, at its sole cost
and expense and throughout the term of this Lease, shall maintain and keep in
good order and condition:
(i) the duct work, ventilating and ozonating systems and equipment in
or servicing the Premises, including all additions and replacements thereto, in
good and efficient condition and in proper state of repair.
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(ii) all flues, ducts, exhaust fans (including a rooftop exhaust fan)
or other similar exhaust devices, and Tenant shall cause all flues, ducts and
exhaust fans which service the Premises to be repaired, maintained, and cleaned
by a licensed maintenance contractor, and kept reasonably clear of all dirt,
dust and grease at least once every calendar quarter, and more frequently if
necessary. Tenant shall, at its sole cost and expense, make all necessary
repairs, changes and replacements in and to the said flues, exhaust fan and
ventilating system, and keep and maintain the same in good order and condition
and in compliance with (a) applicable Legal Requirements and (b) all directions
of any public officer or officers pursuant to such Legal Requirement.
(iii) the "ansul system" or equal fire protection system in the
Premises, as may be required by applicable Legal Requirements. Tenant shall, at
its sole cost and expense, make all necessary repairs, changes and replacements
in and to the said ansul system and keep and maintain the same in good order and
condition and in compliance with (a) all applicable Legal Requirements and (b)
all directions of any public officer or officers pursuant to any Legal
Requirement.
B. Extermination Services. Tenant shall keep the Premises free from
infestation from vermin and other pests, and shall conduct its operations in a
manner conducive to such result, and Tenant shall, at its sole cost and expense,
cause the Premises to be exterminated, on a frequent and regular basis and as
often as necessary but in no event less than twice during each calendar month.
In furtherance of the foregoing, Tenant, at its sole cost and expense, shall
maintain an extermination contract with an exterminator approved by Landlord,
which approval shall not be unreasonably withheld, in full force and effect (a
copy of which contract shall be delivered to Landlord). Tenant's failure to
promptly remedy and cure any unclean or unsanitary condition after notice from
Landlord shall constitute a breach of a material obligation by Tenant of this
Lease, and Landlord shall have the right, but not the obligation, upon notice to
Tenant to perform at the expense of Tenant whatever extermination or other work
it deems necessary in order to cure or remedy such condition.
C. Drains and Grease Trap. Tenant shall maintain any sanitary and sewer
lines in the Premises which exclusively serve the Premises, if any, and shall
not misuse plumbing facilities or dispose of any foreign substances therein.
Tenant shall take reasonable steps to not permit any food, waste, chemical,
chemical waste, chemical by-product or other such material or other foreign
substances to be disposed of, thrown or drawn into the pipes. Tenant will be
responsible for all expenses, losses and damages incurred by Landlord by reason
of Tenant's misuse of, or negligent or careless operations which result in the
obstruction of drains, waste and sewer pipes and mains in or servicing the
Premises, or any part thereof. Tenant shall maintain, at its own cost and
expense, grease traps in all waste lines of the Premises including the drains
and sinks for the purposes of preventing an accumulation of grease in all waste
lines.
D. Cleaning. The entire Premises, including, without limitation, any
doors, interior and exterior portions of any windows and all other glass
constituting a portion of the Premises, are to be kept clean by Tenant, at its
sole cost and expense, in a manner substantially commensurate with the manner in
which such cleaning is performed as of the date hereof.
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E. Removal of Garbage. Tenant, at its sole cost and expense, is
responsible for the storage and removal of Tenant's garbage. Tenant further
agrees not to permit the accumulation (unless in concealed metal or plastic
containers) of any rubbish or garbage in, on or about any part of the Premises.
Tenant shall arrange for the daily removal of any accumulated rubbish or garbage
either at the time that such garbage or rubbish is currently collected or
disposed of, or, if the xxxxxx that Tenant uses requires a different time
period, then such other time period. Tenant shall not encumber or obstruct, or
permit to be encumbered or obstructed, the street and sidewalk adjacent to or
abutting upon the Premises or any other portion of the Building. The handling of
any refuse, rubbish, garbage or waste by Tenant, its agents, employees and
contractors, shall be done in a manner that is substantially commensurate with
the manner in which such handling is done as of the date hereof.
F. Sorting and Separation of Refuse and Trash. Tenant shall, at its sole
cost and expense, comply with all present and future Legal Requirements
regarding the collection, sorting, separation and recycling of waste products,
garbage, refuse and trash. Tenant shall sort and separate such waste products,
garbage, refuse and trash into such categories as provided by Legal
Requirements. If and to the extent required by the applicable Legal
Requirements, each separately sorted category of waste products, garbage and
trash shall be placed in separate receptacles. Tenant shall pay all costs,
expenses, fines, penalties or damages which may be imposed on Landlord or Tenant
by reason of Tenant's failure to comply with any of the provisions of this
Section 22.F. and, Tenant, at Tenant's sole cost and expense, shall indemnify,
defend and hold Landlord harmless (including reasonable attorneys' fees and
expenses) from and against any actions, claims and suits arising from such
non-compliance.
G. Deliveries. All deliveries to the Premises shall be made only through
the loading dock area of the Building. No deliveries may be made through the
front of the Building.
23. OPENING AND CONTINUOUS OPERATION.
Tenant agrees that Tenant shall open the Premises to the public for
business beginning with the Commencement Date and thereafter conduct business at
the Premises for the use and in the manner required in Article 2, seven days a
week, fifty-two weeks a year, but subject to Tenant's right to temporarily
discontinue operations when, in Tenant's reasonable business judgment, it is
appropriate to do so.
24. ASSIGNMENT AND SUBLETTING.
A. Limitations on Tenant's Rights. Subject to the further provisions of
this Article 24, Tenant covenants and agrees that neither this Lease nor the
interest of Tenant in this Lease shall be sold, assigned, transferred,
mortgaged, pledged, hypothecated or otherwise disposed of, whether by operation
of law or otherwise, nor shall the Premises or any part thereof be sublet, or be
made subject to any license or concession, nor shall Tenant permit the Premises
or any portion thereof to be used by others, without the prior written consent
of Landlord in each instance, which shall, in each instance, not be unreasonably
withheld, conditioned or delayed. Subject to the further provisions of this
Article 24, in no event shall any permitted sublessee assign or encumber its
sublease or further sublet all or any portion of the Premises without
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Landlord's prior written consent in each instance, which shall, in each
instance, not be unreasonably withheld, conditioned or delayed. Subject to the
further provisions of this Article 24, the sale or transfer of shares
constituting any controlling interest in Tenant (and if Tenant is a partnership
or limited liability company, the sale or transfer of interest of any
controlling partner or controlling member) shall be deemed an assignment of this
Lease and shall require Landlord's prior written consent, which shall, in each
instance, not be unreasonably withheld, conditioned or delayed. For the purposes
hereof, but subject to the further provisions of this Article 24, the entering
into of any management agreement or any similar agreement which transfers
control of the business operations of Tenant in the Premises shall be treated as
an assignment of this Lease, and shall require Landlord's prior written consent,
which shall, in each instance, not be unreasonably withheld, conditioned or
delayed. Any attempted transfer, assignment, subletting, license, concession,
hypothecation or other transfer herein without Landlord's prior written consent
that is prohibited without Landlord's prior written consent shall be void and
confer no rights upon any third party. In no event shall the Premises be sublet
or sublicensed in part or occupied in part pursuant to any concession agreement,
except as set forth herein. In no event shall Landlord be required to consent to
any sublet, sublicense or license agreement for less than all of the Premises
(but the foregoing shall not be construed to in any way reduce Tenant's rights
set forth in the last sentence of Section 24.D below).
B. No Waiver. The consent by Landlord to any assignment or subletting
shall not be a waiver or constitute a diminution of Landlord's right to withhold
its consent to any other assignment or subletting and shall not be construed to
relieve Tenant from obtaining Landlord's express written consent to any other or
further assignment or subletting in accordance with the terms and conditions of
this Article 24.
C. Collection of Rents. If this Lease or any interest in Tenant or any
interest in or to the Premises, including the right to use, occupy or operate
same, is assigned, sublet, licensed or sublicensed, or the Premises are
otherwise occupied or operated by anybody other than Tenant, whether or not in
violation of the provisions of this Lease, Landlord may and hereby is empowered
(but only following the occurrence of an Event of Default) to collect rent
and/or fees from the assignee, licensee, sublicensee, subtenant or occupant. In
such event, Landlord may apply the net amount received by it to the Minimum
Rent, Additional Rent and other payments herein reserved or provided for, and no
such collection, assignment, underletting, licensing, sublicensing, occupancy or
operation shall be deemed a waiver of the covenant herein against any
assignment, mortgage, encumbrance, pledge or subletting, or an acceptance of the
assignee as a tenant under this Lease, or a release of Tenant from the further
performance of the covenants herein contained on the part of Tenant.
D. Permitted Transfers. Notwithstanding anything contained in this
Section or this Lease to the contrary, the following transactions shall not
require Landlord's consent: (i) an assignment of the Lease or a sublet of the
Premises to any Tenant Affiliate; (ii) assignments or transfers of interests in
Tenant or the an entity that controls Tenant in connection with an Offering (as
such term is hereinafter defined) of interests in Tenant or such controlling
entity of Tenant or an entity that is controlled by or under common control with
Tenant; (iii) transfers of stock or ownership interests, for value or otherwise,
to spouses, heirs upon death, family members or trusts established for the
benefit of family members of stockholders or owners of
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Tenant; and (iv) transfers of stock or ownership interests among existing
stockholders or owners of Tenant; provided that (x) after any of the occurrences
of any of the foregoing events described in clauses (i), (iii) and (iv) above,
The Xxxxx and Wollensky Restaurant Group, Inc. (or any successor thereto)
maintains a beneficial and managerial control over, or direct the business
decisions of, Tenant, and (y) after any of the occurrences of any of the
foregoing events described in clauses (i) through (iv) above, no such
transaction shall serve to modify, amend or relieve Tenant of the obligations
set forth in Section 20.A. of this Lease. As used herein, the term "Offering"
shall mean a public offering of equity securities, private equity offering,
joint venture, syndication or other third party investment. Tenant shall provide
Landlord with written notice of any such permitted transfer concurrently with
the effectiveness thereof. In addition, Tenant shall have the right, without
being obligated to obtain Landlord's consent, to enter into license and
concession arrangements with any third party in connection with the operation of
Tenant's business at the Premises for services or goods incidental to the
operation of the Restaurant as long as the business and operations thereof
satisfies the standards relating to the Restaurant set forth herein and does not
occupy more than twenty (20%) percent of the Premises.
E. Landlord's Recapture Rights. (i) If Tenant shall at any time or times
during the term of this Lease desire to assign this Lease or sublet the Premises
(other than as set forth in Section 24.D. above), Tenant shall first give notice
thereof to Landlord, which notice shall be accompanied by a statement from
Tenant setting forth in reasonable detail the material economic terms upon which
Tenant desires to sublet the Premises or assign the Lease, the effective or
commencement date of which shall not be less than thirty (30) days nor more than
ninety (90) days after the giving of such notice, and the proposed use of the
Premises (the "Statement"). Such notice shall be deemed an offer from Tenant to
Landlord whereby Landlord (or Landlord's designee) may, at its option, terminate
this Lease, provided that Landlord shall ensure that Tenant receives the same
net economic benefit (which is the profit after taking into account payment of
all rents hereunder and other expenses incurred in connection with such
occupancy had such transaction not have been entered into) in connection with
such termination that Tenant reasonably anticipates that Tenant would have
received had the proposed sublease or assignment been consummated. Said option
(the "Recapture Option") may be exercised by Landlord only by notice given to
Tenant at any time within thirty (30) days after such notice has been given by
Tenant to Landlord; and during such thirty (30) day period Tenant shall not
assign this Lease or sublet the Premises to any person (other than a permitted
transfer as set forth in Section 24.D above).
(ii) If Landlord timely exercises the Recapture Option, then this
Lease shall end and expire on the date that such assignment or sublet was to be
effective or commence, as the case may be, and the Minimum Rent and Additional
Rent shall be paid by Tenant to Landlord and apportioned to such date, and
Landlord shall pay to Tenant an amount (the "Recapture Reimbursement Amount")
equal to the net economic benefit Tenant reasonably anticipates that Tenant
would have received in respect of the assignment or the sublease (including, in
both cases and without limitation, all amounts that Tenant reasonably
anticipates that Tenant would have received in connection with the sale of
Tenant's business operations at the Premises), and including an adjustment for,
in the case of a sublease, the difference between (x) the rents to be paid by
the subtenant to Tenant pursuant to the sublease and (y) the rent
33
payable by Tenant to Landlord for the same period of time as the term of such
sublease (assuming that the increases in Minimum Rent shall be based only on the
fixed increases, without reference to Gross Receipts), which payment shall be
paid by Landlord when the payment(s) by such assignee or subtenant, as the case
may be, would have been payable to Tenant pursuant to the terms described in the
Statement.
(iii) Landlord expressly agrees that neither the exercise of the
Recapture Option nor the payment to Tenant of the Recapture Reimbursement Amount
shall give Landlord or any designee of Landlord the right to use the Xxxxx &
Wollensky name or any right to own or operate a Xxxxx & Wollensky restaurant.
Nothing contained herein shall preclude Tenant from opening, owning and/or
operating a Xxxxx & Wollensky restaurant anywhere in Las Vegas (including,
without limitation, in close proximity to the Premises).
(iv) If Landlord shall have advised Tenant that Landlord does not
desire to exercise the Recapture Option (or if Landlord shall have failed to
timely exercise the Recapture Option), and Tenant shall thereafter (a) request
Landlord's consent to an Additional Permitted Transfer (as such term is defined
in Section 24.G below), or (b) notify Landlord of an As-of-Right Transaction (as
such term is defined in Section 24.F below), and, in either case, if such
proposed transaction shall include (x) in the case of an assignment of this
Lease, a reduction of more than five (5%) percent of the consideration (if any)
to be paid to Tenant by the assignee as set forth in the in the Statement, or
(y) in the case of a subletting, a reduction in the economic terms of more than
five (5%) percent from what was set forth in the Statement, then Landlord shall
once again have a right to exercise the Recapture Option with respect thereto.
(v) If Landlord shall have advised Tenant that Landlord does not
desire to exercise the Recapture Option (or if Landlord shall have failed to
timely exercise the Recapture Option), and Tenant shall not have either notified
Landlord of an As-of-Right Transaction or requested Landlord's consent to an
Additional Permitted Transfer within one hundred eighty (180) days thereafter,
then Tenant shall be required to again deliver a Statement and otherwise comply
with the foregoing provisions of this Section 24.E, and Landlord may exercise
the Recapture Option with respect to a proposed assignment of this Lease or a
subletting of the Premises that does not come within the scope of Section 24.D
above.
(vi) If Landlord shall have advised Tenant that Landlord does not
desire to exercise the Recapture Option (or if Landlord shall have failed to
timely exercise the Recapture Option), then Tenant shall have the right to
assign this Lease or sublease the Premises in accordance with the provisions of
Section 24.F and Section 24.G below, subject, however, to the provisions of the
immediately preceding subdivisions (iv) and (v).
F. As-of-Right Transactions. (i) Provided that Tenant has first
satisfied the provisions of Section 24.E above and Tenant is not in default
(after notice and expiration of the applicable cure period) in any of its
obligations under this Lease, Landlord's consent shall not be required for any
assignment of this Lease and/or sublease of the Premises, provided that: (a) the
assignee and/or subtenant (or affiliated entities controlled by the principal(s)
of the assignee and/or subtenant) shall operate at least five (5) other
first-class, "white tablecloth" restaurants; (b) the assignee and/or subtenant
shall, upon the effective date of such assignment or sublease,
34
have a net worth at least equal to $25 million; (c) the principal(s) or
operations manager of the assignee and/or subtenant shall have at least five (5)
years experience in the operation of restaurants comparable in size and quality
to the Restaurant currently in the Premises; (d) the Premises shall continue to
be used a first-class, "white tablecloth" restaurant of at least the same
quality as the Restaurant currently in the Premises (but not necessarily as a
"Xxxxx & Wollensky" restaurant); and (e) Tenant shall have notified Landlord of
the effectiveness of such assignment or subletting and delivered a copy of the
documents executed in connection therewith. Any assignment of this Lease and/or
sublease of the Premises that satisfies all of the foregoing criteria is
referred to herein as an "As-of-Right Transaction".
(ii) Notwithstanding anything to the contrary contained herein or
under applicable law, in the case of any assignment of this Lease that qualifies
as an As-of-Right Transaction, the assignor Tenant shall be released from all of
Tenant's obligations under this Lease accruing from and after the effective date
of such assignment.
G. Additional Permitted Transfers. (i) Provided that Tenant has first
satisfied the provisions of Section 24.E above and that Tenant is not in default
(after notice and the expiration of the applicable cure period) of any of its
obligations under this Lease, Tenant shall have the right to assign this Lease
or sublease the Premises (or both, if, in lieu of an immediately effective
assignment of this Lease, Tenant shall elect to place the instrument of
assignment in escrow and enter into a sublease for the entire Premises with the
proposed assignee), subject to the consent of Landlord, which consent shall not
be unreasonably withheld, delayed or conditioned, provided and upon condition
that:
(a) If the proposed use of the Premises shall be as a
Restaurant, but the transaction does not satisfy all of the criteria of an
As-of-Right Transaction, then such proposed assignee or subtenant is a reputable
person of good character, with expertise in the operation of a first-class,
"white tablecloth" restaurant, and with reasonable financial creditworthiness
(taking into consideration the monetary obligations that the proposed assignee
or subtenant will have under the assignment or sublease);
(b) If the proposed use of the Premises shall no longer be
as a Restaurant, then the proposed use of the Premises shall be a first-class
use appropriate for the Building (taking into consideration the use of the
remainder of the Property) that will not violate any negative covenants as to
use contained in any other lease of space in the Building, and the proposed
assignee or subtenant shall be a reputable person of good character, with
expertise in the proposed use of the Premises and with reasonable financial
creditworthiness (taking into consideration the monetary obligations that the
proposed assignee or subtenant will have under the assignment or sublease), in
which case Landlord shall also consent to such change in use;
(c) The proposed form of sublease shall be reasonably
satisfactory to Landlord and shall be made subject to all of the covenants,
agreements, terms, provisions and conditions contained in this Lease;
(d) No such proposed subletting shall be for a term ending
later than one (1) day prior to the expiration date of this Lease;
35
(e) There shall not be more than one entity occupying the
Premises at any time (subject, however, to the licenses and concessions
permitted pursuant to Section 24.D above);
(f) The sublease shall not be valid, and no subtenant
shall take possession of the Premises or any part thereof, until an executed
counterpart of such sublease has been delivered to Landlord; and
(g) Each and every sublease made hereunder shall provide
that it is subject and subordinate to this Lease and to the matters to which
this Lease is or shall be subordinate, and that in the event of termination,
re-entry or dispossess by Landlord under this Lease, Landlord may, at its
option, take over all of the right, title and interest of Tenant, as sublessor,
under such sublease, and such subtenant shall, at Landlord's option, attorn to
Landlord pursuant to the then executory provisions of such sublease, except that
Landlord shall not (x) be liable for any previous act or omission of Tenant
under such sublease, (y) be subject to any offset, not expressly provided in
such sublease, which theretofore accrued to such subtenant against Tenant, or
(z) be bound to any previous modification of such sublease or by any previous
prepayment of more than one month's rent.
(ii) Any assignment of this Lease and/or sublease of the Premises
that satisfies all of the criteria of this Section 24.G is referred to herein as
an "Additional Permitted Transfer". Notwithstanding any such subletting by
Tenant or any such subletting to any other subtenant and/or acceptance of rent
or additional rent by Landlord from any subtenant, Tenant shall and will remain
fully liable for the payment of the Minimum Rent and Additional Rent due and to
become due hereunder and for the performance of all the covenants, agreements,
terms, provisions and conditions contained in this Lease on the part of Tenant
to be performed and all acts and omissions of any licensee or subtenant or
anyone claiming under or through any subtenant which shall be in violation of
any of the obligations of this Lease, and any such violation shall be deemed to
be a violation by Tenant. If Landlord shall decline to give its consent to any
proposed assignment or sublease, or if Landlord shall exercise the Recapture
Option, Tenant shall indemnify, defend and hold harmless Landlord against and
from any and all loss, liability damages, costs and expenses (including
reasonable counsel fees) resulting from any claims that may be made against
Landlord by the proposed assignee or sublessee or by any brokers or other
persons claiming a commission or similar compensation in connection with the
proposed assignment or sublease (unless Landlord shall, following the exercise
the Recapture Option, enter into a transaction with the person(s) introduced to
the Premises by such broker or other person claiming a commission or similar
compensation).
(iii) In connection with any Additional Permitted Transfer
effected pursuant to Section 24G(i)(b) above, Landlord and Tenant each agree not
to unreasonably withhold consent to making modifications to this Lease that
reflect the circumstances resulting from the particular change in use (which
modifications shall be made simultaneously with Landlord's consent to such
Additional Permitted Transfer). By way of example only: (a) although the new
occupant shall not be permitted to alter the exterior of the Building without
Landlord's consent, Landlord shall not unreasonably withhold consent to
appropriate modifications of the exterior (as well as interior structural
modifications) of the Building, provided that all such modifications will be
36
compatible with Landlord's actual (or proposed, if not yet completed) use of the
remainder of the Property, and will not in any way impair the image thereof; (b)
although the new occupant shall not be permitted to alter the exterior signage
of the Building without Landlord's consent, Landlord shall not unreasonably
withhold consent to different signage for the exterior of the Building, provided
that all such signage will be compatible with Landlord's actual (or proposed, if
not yet completed) use of the remainder of the Property, and will not in any way
impair the image thereof; (c) Tenant shall not unreasonably withhold consent to
different trash removal arrangements proposed by Landlord with respect to the
new occupant's use of the Premises; (d) Tenant shall not unreasonably withhold
consent to a proposed removal of the grease trap if no longer needed by the new
occupant; (e) Tenant shall not unreasonably withhold consent to modifying the
provisions of this Lease relating to the protection of Tenant's business
operations in connection with Landlord's construction on the remainder of the
Property to reflect the new occupant's use of the Premises; (f) neither party
shall unreasonably withhold consent to modifying the operating covenants of this
Lease so as to reflect the new occupant's use of the Premises; (g) Tenant shall
not unreasonably withhold consent to modifying the provisions of this Lease
relating to the Tenant's use of the Appurtenant Areas, unless the new occupant
shall reasonably object to such proposed modification; and (h) the definition of
"Gross Receipts" shall be modified to reflect the nature of the new use (or
deleted altogether if such new use shall customarily not have rent based on a
percentage of revenue, e.g. a bank). Tenant agrees that, in connection with any
Additional Permitted Transfer effected pursuant to Section 24G(i)(b) above, the
cantilevering over the Building prohibition set forth in Article 33 below shall
be deemed deleted. In addition, Tenant agrees that Tenant shall not have the
right to effect any Additional Permitted Transfer pursuant to Section 24G(i)(b)
above until the tenth (10th) anniversary of the Commencement Date, unless annual
Gross Receipts for the year immediately preceding the year in which Tenant shall
propose such an Additional Permitted Transfer shall be less than the 2004 annual
Gross Receipts (in each case and if applicable, as adjusted pursuant to the
provisions of Section 4A(x) above) by more than ten (10%) percent.
H. Any assignment or transfer, whether made with Landlord's consent
pursuant to Section G or without Landlord's consent pursuant to Sections D and
F, shall be made only if, and shall not be effective until, the assignee shall
execute, acknowledge and deliver to Landlord an agreement in form and substance
reasonably satisfactory to Landlord whereby the assignee shall assume the
obligations of this Lease on the part of Tenant to be performed or observed and
whereby the assignee shall agree that the provisions in this Article 24 shall,
notwithstanding such assignment or transfer, continue to be binding upon it in
respect of all future assignments and transfers. (The provisions of the
foregoing sentence shall not apply to assignments by operation of law or any
other deemed assignment contemplated pursuant to Section 24.D above.) The
original named Tenant covenants that, notwithstanding any assignment or transfer
(other than in the case of an As-of-Right Transaction), whether or not in
violation of the provisions of this Lease, and notwithstanding the acceptance of
Minimum Rent and/or Additional Rent by Landlord from an assignee, transferee, or
other party, the original named Tenant shall remain fully liable for the payment
of the Minimum Rent and Additional Rent and for the other obligations of this
Lease on the part of Tenant to be performed or observed.
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I. The joint and several liability of Tenant and any immediate or remote
successor in interest of Tenant and the due performance of the obligations of
this Lease on Tenant's part to be performed or observed shall not be discharged,
released or impaired in any respect by any agreement or stipulation made by
Landlord extending the time of, or modifying any of the obligations of, this
Lease, or by any waiver or failure of Landlord to enforce any of the obligations
of this Lease; provided, however, that in the case of a modification or waiver
made after the date of an assignment of this Lease, if and to the extent that
such modification or waiver increases the obligations of Tenant under this
Lease, no assignor Tenant shall be liable with respect to such increase. (The
provisions of the foregoing sentence shall not apply in the case of any
As-of-Right Transaction.)
J. For purposes of this Lease, "Eligible Sublease" shall mean a sublease
approved by Landlord pursuant to the provisions of this Article 24 (where such
approval is required pursuant to the provisions of this Article 24) to a
subtenant who is not a person or entity set forth in Section 24D above to whom
the Lease may be assigned without Landlord's consent, for a term expiring on the
Expiration Date of this Lease less one (1) day, provided that the subtenant
thereunder (hereinafter referred to as an "Eligible Subtenant"), whether
pursuant to the terms of either the sublease or the non-disturbance agreement to
be provided by Landlord pursuant to Section 24K below, agrees that, upon a
termination of this Lease, (i) the subtenant will be required to pay annual
Minimum Rent and Additional Rent to Landlord at the higher of (x) the fixed
annual rent and additional rent due under such Eligible Sublease and (y) the
Minimum Rent and Additional Rent payable by Tenant pursuant to this Lease, and
(ii) the Eligible Sublease shall be deemed modified so as to be a direct lease
between Eligible Subtenant and Landlord with respect to the Premises upon all of
the terms and conditions of such Eligible Sublease except (x) as set forth in
clause (i) of this Section 24.J, and (y) the following additional changes: (a)
if any terms and conditions of this Lease are more favorable to Landlord, in
Landlord's reasonable judgment, than a corresponding provision of such Eligible
Sublease, or (b) if a provision of this Lease that Landlord reasonably deems
favorable to Landlord is omitted from such Eligible Sublease, or (c) if any
provision of the Eligible Sublease increases Landlord's obligations or decreases
Landlord's rights or increases Tenant's rights beyond what is set forth in this
Lease, then such more favorable provision shall be substituted for such Eligible
Sublease provision with respect to clause (a), or added to such Eligible
Sublease with respect to clause (b), as if this Lease had not been terminated
with respect to such provisions, or, with respect to clause (c), such less
favorable provision shall be deleted from such Eligible Sublease.
K. Landlord shall, within thirty (30) days after Tenant's request
therefor (provided the Eligible Subtenant and Tenant shall execute and deliver
same), provide to each Eligible Subtenant under an Eligible Sublease a
non-disturbance agreement providing in substance that Landlord will not name or
join such Eligible Subtenant as a party defendant or otherwise in any suit,
action or proceeding to terminate this Lease by reason of Tenant's default
thereunder (except if and to the extent required to maintain any such action or
proceeding), and to the further effect that if this Lease shall terminate by
reason of the default by Tenant thereunder, then Landlord will recognize such
Eligible Subtenant as the direct tenant of Landlord on the terms and conditions
of the Eligible Sublease in question except as set forth in Section 24J above,
provided, however, that Landlord's obligations thereunder shall not be greater
than the
38
obligations of Landlord under this Lease and Landlord's rights thereunder shall
not be less than the rights Landlord has under this Lease, and further provided
that Landlord shall not be (i) liable for any credits, offsets, defenses or
claims which such Eligible Subtenant might have against Tenant; (ii) bound by
any fixed rent or additional rent which such Eligible Subtenant might have paid
for more than the current month to Tenant (other than Taxes); (iii) liable for
any act or omission of Tenant; (iv) bound by any covenant or agreement to
undertake or complete any improvement to the Premises or the Building; (v) be
required to account for any security deposit other than any security deposit
actually delivered to Landlord; (vi) liable for any payment to such Eligible
Subtenant of any sums, or the granting to subtenant of any credit, in the nature
of a contribution towards the cost of preparing, furnishing or moving into the
Premises; (vii) liable for any brokerage commissions payable in connection with
such Eligible Sublease or any renewal thereof, (viii) bound by any material
amendment or modification of such Eligible Sublease made without Landlord's
prior written consent; (ix) liable for any claim for damages of any kind
whatsoever as the result of any breach by Tenant under the Eligible Sublease
that occurred before the date of attornment; or (x) bound by any obligation to
restore the Building, such Eligible Subtenant's premises or property located
therein in the event of a casualty or condemnation of the Building or the
Premises or any portion thereof except as expressly required by this Lease.
L. If Landlord shall fail to respond to a request for consent (whether
by the grant or denial of consent, or by a request for further information)
within fifteen (15) days after Landlord's receipt thereof, then, provided Tenant
shall have given Landlord an additional five (5) days notice thereof and
Landlord shall have failed to respond to Tenant within such five (5) day period,
then Landlord shall be deemed to have consented to the proposed assignment or
subletting, as the case may be. Any denial of consent shall be accompanied by
Landlord's reason(s) therefor.
M. Any dispute with respect to any aspect of this Article 24 may be
submitted by either party to binding expedited arbitration pursuant to the
provisions of Article 34.B below.
25. DEFAULT AND REMEDIES.
A. Elements of Default. If any one or more of the following events
occur, said event or events shall hereby constitute a default: (a) if Tenant
abandons the Premises; (b) the failure of Tenant to pay Minimum Rent or
Additional Rent, if such failure continues for a period of ten (10) days after
written notice; (c) the failure of Tenant to perform or observe any other term
or condition of this Lease, and such failure shall continue for thirty (30) days
after written notice (except in connection with a failure that cannot be
remedied or cured within said thirty (30) day period, in which event the time of
Tenant within which to cure such failure shall be extended for such time as
shall be necessary to cure the same, but only if Tenant, within such thirty (30)
day period, shall notify Landlord thereof and shall promptly commence and
thereafter proceed diligently and continuously to cure such failure); (d)
[intentionally omitted]; (e) if any writ of execution, levy, attachment or other
legal process of law shall occur upon Tenant's assets, merchandise, fixtures or
Tenant's estate or interest in the Premises; (f) the commencement of levy,
execution, or attachment proceedings against Tenant or a substantial portion of
Tenant's assets; the commencement of levy, execution, attachment or other
process of law upon, on or
39
against the estate created in Tenant hereby; the application for or the
appointment of a liquidator, receiver, custodian, sequestrator, conservator,
trustee, or other similar judicial officer for Tenant or for all or any
substantial part of the property of Tenant (and such appointment continues for a
period of ninety (90) days); the insolvency of Tenant or Tenant in bankruptcy or
equity sense; any assignment by Tenant for the benefit of creditors; and (g)
subject to Section C below, the commencement of a case by or against Tenant,
under any insolvency, bankruptcy, creditor adjustment or debtor rehabilitation
laws, state or federal; or the determination by the Tenant to request relief
under any insolvency proceeding, including any insolvency, bankruptcy, creditor
adjustment or debtor rehabilitation laws, state or federal, and in no event
shall the Premises or Tenant's interest in this Lease become an asset in any
such proceedings.
B. Landlord's Remedies. In the event of any such default by Tenant
(after notice and expiration of the applicable cure period), Landlord may at any
time thereafter, with or without notice or demand and without limiting Landlord
in the exercise of any right or remedy which Landlord may have by reason of such
default or breach:
(i) [intentionally omitted]
(ii) Perform, on behalf and at the expense of Tenant, any obligation
of Tenant under this Lease which Tenant has failed to perform and of which
Landlord shall have given at least three (3) days notice (except in the case of
emergency, in which event no such notice shall be required), the cost of which
performance by Landlord, together with interest therein at the Default Rate from
the date of such expenditure, shall be deemed additional rent and shall be
payable by Tenant to Landlord upon demand.
(iii) Re-enter and repossess the Premises, by summary proceedings or
otherwise, and remove Tenant and all other persons and property from the
Premises, and store such property in a public warehouse or elsewhere at the cost
of for the account of Tenant without resort to legal process and without
Landlord being deemed guilty of trespass or conversion or becoming liable for
any loss or damage occasioned thereby. In connection herewith, Landlord shall
have, in addition to any other remedies, any and all self-help remedies,
including, but not limited to, a lock-out accomplished by changing the locks on
the Premises.
(iv) Collect a sum which, at the time of such termination of this
Lease or at the time of any such re-entry by Landlord, as the case may be,
represents the then value of the excess, if any, of (a) the aggregate of the
installments of Minimum Rent and the Additional Rent that would have been
payable hereunder by Tenant, had this Lease not so terminated, for the period
commencing with such earlier termination of this Lease or the date of any such
re-entry, as the case may be, and ending with the earlier of (x) the fifteenth
(15th) year following such termination or re-entry and (y) the Expiration Date,
over (b) the aggregate rental value of the Premises for the same period (with
the amounts of each of clauses (a) and (b) being first discounted to present
value at an annual rate equal to the then prevailing discount rate announced by
the Federal Reserve Bank plus two (2) percentage points). The amount of
Additional Rent payable with respect to each lease year remaining in the Term
after such default (including the lease year during which such default occurred)
shall be conclusively presumed to be equal to the average Additional Rent
payable with respect to each completed lease year preceding such
40
default; provided, however, that if such default occurs before the expiration of
two (2) lease years, then the amount of Additional Rent payable with respect to
each lease year remaining in the Term after such default (including the lease
year or partial lease year during which such default occurred) shall be
conclusively presumed to be equal to twelve (12) times the average monthly
Additional Rent payable prior to such default.
(v) Terminate this Lease by giving notice of such termination to
Tenant, which termination shall be effective as of the date of such notice or
any later date thereof specified by Landlord in such notice; provided, that,
without limiting the generality of the foregoing provisions, Landlord shall not
be deemed to have accepted any abandonment or surrender by Tenant of any or all
of the Premises or Tenant's leasehold estate under this Lease unless Landlord
has so advised Tenant expressly and in writing, regardless of whether Landlord
has re-entered or relet any or all of the leased Premises or exercised any or
all of Landlord's other rights under this Lease or applicable law.
(vi) In Landlord's own name, or otherwise, relet any and all of the
Premises with or without any additional premises, for any or all of the
remainder of the Term for, if this Lease has then been terminated, for any or
all of the period which would, but for such termination, have constituted the
remainder of the Term) or for a period exceeding such remainder, on such terms
and subject to such conditions as are acceptable to Landlord (including, by way
of example rather than of limitation, the alteration of any or all of the
Premises in any manner which, in Landlord's judgment, is necessary or desirable
in connection with such reletting, and the allowance of one or more concessions
or free-rent or reduced-rent periods), and collect and receive the rents
thereof. Tenant shall pay to Landlord, at the times and in the manner specified
by the provision of this Lease (unless Landlord has elected to accelerate rent
as provided above in subparagraph (iv), in which event Tenant shall be obligated
to pay such accelerated amount as provided in such subparagraph): (i) the
installments of the Minimum Rent, and Additional Rent accruing during such
remainder of the Term, plus (ii) the cost to Landlord of any such reletting
(including, by way of example rather of limitation, any attorneys' fees, leasing
or brokerage commissions, repair or improvement expenses and the expense of any
other actions taken in connection with such reletting) less any monies received
by Landlord with respect to such remainder from such reletting of any and all of
the Premises.
(vii) Recover from Tenant, an amount equal to (i) all items of
accrued and unpaid rent, (ii) all reasonable expenses (including, by way of
example rather than of limitation, all repossession costs, management expenses,
operating expenses, legal expenses and attorneys' fees) incurred by Landlord in
curing or seeking to cure any default or in exercising or seeking to exercise
any of Landlord's rights any remedies under the provisions of this Lease or at
law or in equity on account of any default, plus (iii) interest on all such
expenses, at the Default Rate, all of which expenses and interest shall be
payable by Tenant immediately on demand therefor by Landlord.
(viii) Without terminating this Lease, maintain Tenant's rights to
possession, in which case this Lease shall continue to be in full force and
effect whether or not Tenant shall have vacated the Leased Premises. In such
event, Landlord shall be entitled to enforce all of
41
Landlord's rights and remedies under this Lease, including the right to recover
Rent as it becomes due hereunder.
(ix) Any damage or loss of rent sustained by Landlord may be
recovered by Landlord, at Landlord's option, at the time of the reletting or
termination, in a single action or in separate actions, from time to time, as
said loss of rent or damages shall accrue, or in a single proceeding deferred by
Landlord or with jurisdiction reserved by the court, until expiration of the
Term (in which event Tenant hereby agrees that, at Landlord's option, the cause
of action shall not be deemed to have accrued until the date of expiration of
said Term).
(x) Nothing contained herein shall prevent the enforcement of any
claim Landlord may have against Tenant for a breach of this Lease. In the event
of any breach by Tenant of any of the covenants or provisions hereof or in the
event of Tenant's default, Landlord shall have the right of injunction and the
right to invoke any remedy allowed at law or in equity as if re-entry, summary
proceedings and other remedies were not provided for herein. Mention in this
Lease of any particular remedy shall not preclude Landlord from any other remedy
under this Lease or at law or in equity. Tenant hereby expressly waives for
itself and all persons claiming by or through Tenant, any and all rights to
redeem, reinstate or restore, or obtain relief from forfeiture of this Lease
granted by or under any present or future law in the event of Tenant being
evicted or dispossessed for any cause, or in the event of Landlord obtaining
possession of the Premises by reason of the violation by Tenant of any of the
covenants and conditions of this Lease.
(xi) In case suit shall be brought for recovery of the Premises, for
the recovery of rent or any other amount due under the provisions of this Lease,
or because of the breach of any other covenant herein contained on the part of
Tenant to be kept and performed, and a breach shall be established, Tenant shall
pay to Landlord all costs and expenses incurred therefor, including Landlord's
attorneys' reasonable fees and expenses.
(xii) Nothing herein contained shall limit or prejudice Landlord's
right to prove and obtain as damages (excluding consequential damages), by
reason of any default by Tenant, an amount equal to the maximum allowed by
statute or rule of law in effect at the time when, and governing the proceedings
in which, such damages are to be proved. No expiration or termination of this
Lease, abandonment, re-entry by Landlord or vacancy, shall relieve Tenant of any
of its liabilities and obligations under this Lease (whether or not any or all
of the leased Premises are relet), and Tenant shall remain liable to Landlord
for all damages (excluding consequential damages) resulting from any default by
Tenant, including any damage resulting from the breach by Tenant of any of its
obligations to pay Minimum Rent, Additional Rent, and any other sums which
Tenant is obligated to pay hereunder.
Notwithstanding anything to the contrary contained herein, from and after the
date that Landlord shall re-enter the Premises (whether following a termination
of this Lease or otherwise) and obtain vacant possession of the Premises, Tenant
shall be relieved of all of Tenant's non-monetary obligations under this Lease
(including, without limitation, any obligation to maintain, insure or repair the
Premises, or any indemnity obligation hereunder) first arising after the date of
such re-entry, but the same shall not be construed to relieve Tenant of the
obligations set forth
42
herein with respect to the costs and/or expenses incurred by Landlord in
connection with a re-entry, to which Landlord shall be entitled as part of
Landlord's damages hereunder, nor shall the foregoing release Tenant of any
indemnification obligations in respect of any matter that occurred prior to the
date of such re-entry. Furthermore, and notwithstanding anything to the contrary
contained in any of the foregoing provisions of this Section 25B, in any case
where, pursuant to an express provision of this Lease, a particular remedy of
Landlord is stated to be Landlord's sole remedy (or words to that effect), such
remedy shall be Landlord's sole remedy with respect thereto.
C. Bankruptcy.
(i) Neither Tenant's interest in this Lease, any estate hereby
created in Tenant nor any interest herein or therein, shall pass to any trustee
or receiver or assignee for the benefit of creditors or otherwise by operation
of law, except as may specifically be provided pursuant to the Bankruptcy Code
(11 USC Section 101 et. seq.), as the same may be amended from time to time.
(ii) (a) It is understood and agreed that this Lease is a lease of
real property as such lease is described in Section 365 of the Bankruptcy Code,
as the same may be amended from time to time. (b) Upon the filing of a petition
by or against Tenant under the Bankruptcy Code, Tenant, as debtor and as
debtor-in-possession, and any trustee who may be appointed with respect to the
assets of or estate in bankruptcy of Tenant, agree to pay monthly in advance on
the first day of each month, as reasonable compensation for the use and
occupancy of the Premises, an amount equal to all Minimum Rent, Additional Rent
and other charges otherwise due pursuant to this Lease. (c) Included within and
in addition to any other conditions or obligations imposed upon Tenant or its
successor in the event of the assumption and/or assignment of this Lease are the
following: (1) the cure of any monetary defaults and reimbursement of pecuniary
loss within not more than thirty (30) days of assumption and/or assignment; (2)
the deposit of an additional sum equal to three (3) months' Minimum Rent and
Additional Rent, to be a necessary deposit to secure the future performance
under this Lease of Tenant or its assignee; (3) the use of the Premises as set
forth in Section 20.A. of this Lease and the quality, quantity and/or lines of
merchandise, goods or services required to be offered for sale are unchanged;
and (4) the prior written consent of any mortgagee to which this Lease has been
assigned as collateral security.
D. Additional Remedies and Waivers. The rights and remedies of Landlord
set forth herein shall be in addition to any other right and remedy now or
hereinafter provided by law or in equity, and all such rights and remedies shall
be cumulative. No action or inaction by Landlord shall constitute a waiver of a
default or termination and no waiver of default or termination shall be
effective unless it is in writing, signed by Landlord. No waiver by Landlord of
any violation or breach of any of the terms, provisions or covenants herein
contained shall be deemed or construed to constitute a waiver of any other or
later violation or breach of the same or any other of the terms, provisions and
covenants herein contained.
26. HOLDING OVER.
If Tenant shall default in surrendering the Premises upon the expiration
or termination of the term, Tenant's occupancy subsequent to such expiration or
termination, whether or not with
43
the consent or acquiescence of Landlord, shall be deemed to be that of a tenancy
at will and in no event from month-to-month or from year-to-year, and it shall
be subject to all the terms, covenants and conditions of this Lease applicable
thereto, except the Minimum Rent shall be Two Hundred (200%) Percent of the
amount payable in the last year of the term, and no extension or renewal of this
Lease shall be deemed to have occurred by such holding over.
27. RETURN OF THE PREMISES.
Upon the expiration or sooner termination of the term of this Lease,
Tenant shall quit and surrender to Landlord the Premises in accordance with the
terms of this Lease and in a free-of-debris but otherwise "as is" condition, and
shall surrender to Landlord all keys to or for the Premises and inform Landlord
of all combinations of locks, safes and vaults, if any, in the Premises. Tenant,
at its expense, shall promptly remove all personal property of Tenant and repair
all damage to the Premises caused by such removal. Any Personal Property of
Tenant not removed within ten (10) days following the expiration or earlier
termination of this Lease shall be deemed to have been abandoned by Tenant and
shall, at Landlord's option, become the property of Landlord, and may be
retained or disposed of by Landlord, as Landlord shall desire. Tenant's
obligation to observe or perform the covenants set forth in this Section shall
survive the termination of this Lease.
28. LANDLORD CONSENT, APPROVAL AND DISCRETION.
Whenever and wherever this Lease contains any provision containing the
words "in Landlord's judgment," "in Landlord's discretion," "subject to
Landlord's approval," "subject to Landlord's consent," or words of similar
import, same shall be deemed to be subject to Landlord's reasonable discretion.
29. REMEDIES REGARDING CONSENTS.
With respect to any provision of this Lease which provides,
specifically, in effect, that a party shall not unreasonably withhold or
unreasonably delay any consent or any approval or exercise its discretion
reasonably, the requesting party, in no event, shall be entitled to make, nor
shall the requesting party make, any claim, and the requesting party hereby
waives any claim, for money damages; nor shall the requesting party claim any
money damages by way of setoff, counterclaim or defense, based upon any claim or
assertion by the requesting party that the other party has unreasonably withheld
or unreasonably delayed any consent or approval or exercised its discretion
unreasonably; but (subject to the expedited arbitration procedures set forth in
Article 34 below) the requesting party's sole remedy shall be an action or
proceeding to enforce any such provision, or for specific performance,
injunction or declaratory judgment.
30. PARKING AND ACCESS ROAD.
A. Landlord shall provide not less than seventy-five (75) parking spaces
(the "Parking Spaces") immediately adjacent to the Building for Tenant's
operations of the Premises as a Restaurant, and Tenant shall have primary use of
the access road currently existing from Las Vegas Boulevard to the Parking
Spaces ("Tenant's Access Road"). Landlord shall have the right
44
to establish reasonable and non-discriminatory parking regulations in all of the
parking areas of the Property other than the Parking Spaces, and Landlord may
make provision for the involuntary removal of any violating vehicle in an area
that is not part of the Parking Spaces. Landlord shall not (i) reduce the number
of parking spaces exclusively for the Restaurant's patrons immediately adjacent
to the Building below 75 spaces (it being agreed, however, that Landlord may
reconfigure the layout of the aforesaid 75 parking spaces that are immediately
adjacent to the Building, but only to the extent necessary to construct one or
more support columns for any structure that Landlord may elect to construct
above the Parking Spaces in accordance with the provisions of Article 33 below,
and provided that the resulting reconfiguration shall not interfere (other than
to a de minimus extent) with access to, or the retrievability of, the cars
parked in such spaces), or (ii) reduce the total number of parking spaces in the
vicinity of the Building that are available to the Restaurant's patrons or
employees below the minimum amount required by applicable Legal Requirements,
provided, however, that in the event that due to applicable Legal Requirements
more than 75 parking spaces are necessary for the Building, Landlord shall have
the right to locate those additional parking spaces on the Property or elsewhere
that is reasonably proximate to the Premises and will not cause either Tenant or
the Premises to be in violation of such Legal Requirements, and such additional
parking spaces need not be adjacent to the 75 Parking Spaces. Any such
reconfiguration shall (x) not impair (other than in a de minimus manner) the
ability of 18-wheel trailers to enter, have room to operate within the 75-space
parking area, and exit the Property for the purpose of making deliveries to the
Premises, (y) not impair (other than in a de minimus manner) Tenant's trash
collections or refuse removal contractor's ability to service the Premises, or
(z) restrict, reduce or otherwise impair the existing drop-off/pick-up driveway
area alongside of the Building, or any other method of ingress/egress from the
Restaurant for its patrons or employees (including any service entrances/exits).
If, as a result of any such reconfiguration, the costs of operating the
Restaurant shall increase, Landlord shall reimburse Tenant, within twenty (20)
days after rendition of a reasonably itemized xxxx therefor, for all additional
costs of operating the Restaurant resulting from such reconfiguration; provided,
however, that Tenant shall use commercially reasonable efforts to resolve any
operational difficulties resulting from such reconfiguration in a manner that
will minimize the amount of any such increase.
B. If, in connection with any such reconfiguration, Landlord shall
desire to move Tenant's trash compactor or grease trap to a different location
in the rear of the Building, Landlord shall have the right to do so, provided
that: (i) Tenant shall have the right to reasonably determine the new location
thereof, (ii) such relocation shall not, in Tenant's reasonable determination,
interfere with the operation of the Restaurant (other than in a de minimus
manner), (iii) such relocation shall be performed by Landlord at Landlord's own
cost and expense, on not less than sixty (60) days prior notice to Tenant, which
relocation shall be performed in coordination with Tenant's reasonable
requirements so as to minimize interference with Tenant's business operations,
and (iv) Landlord shall reimburse Tenant, within twenty (20) days after
rendition of a reasonably itemized xxxx therefor, for all additional costs of
operating the Restaurant resulting from such relocation; provided, however, that
Tenant shall use commercially reasonable efforts to resolve any operational
difficulties resulting from such relocation in a manner that will minimize the
amount of any such increase. Landlord agrees not to reduce the size of the trash
storage/disposal area in the rear of the Building.
45
C. Landlord shall have the right to use the Property (including other
spaces in the parking area that is not part of the Parking Spaces, except if and
to the extent that such use by Landlord shall cause either Tenant or the
Premises to be in violation of applicable Legal Requirements relating to the
availability of parking for the Restaurant), other than the Building and the
Appurtenant Areas at any time, subject, however, to the provisions of Article 33
below during the period when Landlord is conducting construction activities.
Landlord shall also have the right to use Tenant's Access Road, but only as a
secondary means of access to portions of the Property other than the Building
and the Appurtenant Areas, and not in a manner that would interfere with
Tenant's use of Tenant's Access Road (other than to a de minimus extent).
Notwithstanding the restriction set forth in the immediately preceding sentence
to the effect that Landlord shall have the right to use Tenant's Access Road
only as a secondary means of access, Tenant acknowledges and agrees that, until
a road shall be built that connects the Property to any public thoroughfare
(other than Las Vegas Boulevard), Tenant's Access Road will be the only means of
access to the Property available to Landlord.
D. Landlord shall have the right to request zoning and other variances
relating to the existing Building and the parking space requirements and to use
any and all unused air rights or development rights with respect to the Building
at any time, provided that none of the foregoing shall in any way interfere with
Tenant's operation of the Restaurant. Upon the request of Landlord, Tenant, to
the extent necessary for Landlord to pursue the process, shall, at Landlord's
cost and expense, cooperate with and execute such documents as Landlord may
reasonably require, provided that Tenant shall not be obligated to incur any
cost or expense, or suffer any liability, in connection therewith. Landlord
shall indemnify and hold Tenant harmless from and against any claims or
liability resulting from any inaccuracy contained in such documents.
E. If Landlord shall, for any reason whatsoever, elect (without,
however, any obligation to do so) to construct or extend a road to the Parking
Spaces from any public thoroughfare (other than Las Vegas Boulevard), Tenant and
Tenant's patrons shall be permitted to use the same as a secondary means of
access, and not in a manner that would interfere with Landlord's use of such
road.
F. In the event of any breach by Landlord of any of the covenants or
provisions set forth in this Article 30, or of any of the covenants or
provisions set forth in Articles 31-33 below, Tenant shall have the right of
injunction and the right to invoke any remedy allowed at law or in equity. If
Tenant elects not to obtain an injunction under such circumstances, or if there
shall otherwise exist any dispute with respect to any aspect of Articles 30-33
of this Lease, either party may submit the issue in question to binding
expedited expert arbitration pursuant to the provisions of Article 34.C below.
31. ACCESS TO PREMISES.
Landlord shall have the right (but shall not be obligated) to enter the
Premises in any emergency (hereinafter deemed to be any situation where, in
Landlord's good faith judgment, there is imminent danger of loss of property
and/or injury to one or more persons, and Tenant shall not be taking appropriate
action in connection therewith) at any time, and, at other reasonable times
after prior notice to Tenant, and in a manner so as not to interfere (other than
to
46
a de minimus extent) with Tenant's use of the Premises, to examine the same.
Landlord may, during the progress of any work in the Premises which Landlord
shall be expressly permitted to perform pursuant to the provisions of this
Lease, take all necessary materials and equipment into the Premises without the
same constituting an eviction, nor shall the Tenant be entitled to any abatement
of rent while such work is in progress nor to any damages by reason of loss or
interruption of business or otherwise, provided that Landlord shall use all
commercially reasonable efforts to minimize interference with or disruption to
Tenant's business operation at the Premises.
32. ADJACENT EXCAVATION.
Provided that in connection with any construction carried on in
accordance and upon compliance with the provisions of Section 33 hereof, it
shall be necessary or appropriate for there to be an excavation made on land
proximate to the Building, Tenant shall afford Landlord license to enter the
Premises for the purpose of doing work reasonably necessary to preserve the
Building from injury or damage and to support same, provided that Landlord shall
use all commercially reasonable efforts to minimize interference with or
disruption to Tenant's business operation at the Premises and that Landlord
shall otherwise comply with the provisions of said Section 33 in connection
therewith.
33. RIGHT OF LANDLORD TO BUILD ON PROPERTY.
A. At any time during the term of this Lease, Landlord shall be entitled
(but shall not be obligated) to (x) construct certain improvements on, over or
under the rear portion of the Property, which as of the date hereof is used for
the Parking Spaces, and (y) construct certain improvements on, over, or under
other portions of the Property; provided that such construction or improvements
shall be performed in such a manner as to: (i) not touch the Building, not be
within the footprint of Land upon which the Building stands, and not be
cantilevered over the Building, (ii) be located on, over or under any portion of
the Property other than the Building, including, adjacent to the rear of the
Building, (iii) not reduce the access area alongside the Building, (iv) not
reduce the existing outdoor dining area, (v) not reduce (other than to a de
minimus extent) the trash storage/disposal area in the rear of the Building (it
being agreed, however, that Landlord may relocate the same within the parking
area in accordance with the provisions of Article 30 above), and (vi) not
otherwise violate the provisions of Article 30 above, except that, during the
period when Landlord is conducting construction activities, Landlord shall be
allowed, at Landlord's own cost and expense, to relocate the Parking Spaces and
additional parking required by applicable Legal Requirements to another area
close to the Building, provided, however, that Landlord shall provide, at
Landlord's own cost and expense, (a) valet parking to customers of Tenant, with
a maximum wait time of three (3) minutes, and (b) self-parking capability to
Tenant's employees, vendors and other visitors, with a reasonable and safe means
of access from the temporary parking lot to the Premises.
B. Landlord acknowledges that the operation of the Restaurant produces
strong odors, and agrees that, notwithstanding any construction that Landlord
may perform on the Property or on adjacent land, Tenant shall not be required to
take any action or incur any expense to reduce or otherwise mitigate such odors.
However, at any time during the term of this Lease,
47
regardless of whether Landlord constructs improvements as provided in Section
33A above, but subject to the provisions of Section 20D above, Landlord, at its
expense, may create a method of mitigating such odors, including, without
limitation, the installation of ventilation and exhaust systems (such as
"Roto-Clone") and other equipment and systems as Landlord reasonably deems
necessary, and Tenant shall cooperate with Landlord in the implementation of
such efforts. The foregoing provisions shall not, however, abrogate or modify
Tenant's obligation pursuant to other provisions of this Lease to satisfy any
Legal Requirements relating to the operation of the Restaurant, including
without limitation those relating to odors.
C. To the extent that, as a result of any such construction on the
Property, certain common areas of the Property will be required to be shared by
the Premises and the remainder of the Property (including, without limitation,
the ground area which services the Premises for parking, deliveries, access,
grease traps, utilities, trash removal or the like), then Landlord shall have
the right, without the consent or approval of Tenant (except as set forth in
this Lease), to make alterations, additions or improvements, structural and
non-structural, interior and exterior, ordinary and extraordinary, in, to, upon
and under the Property, excluding the Premises, provided such alterations,
additions or improvements are performed in such a manner as to minimize
interference with Tenant's operation of the Premises, and do not violate any of
the restrictions set forth in Section 33A above. Landlord shall give Tenant not
less than thirty (30) days notice prior to the performance of any such work,
and, to the extent feasible, shall use reasonable efforts in scheduling its
construction program so as to cause the elements of such work as are likely to
interfere in any way with Tenant's operation of the Restaurant (other than to a
de minimus extent) to be performed during the months of July and August. During
the course of all such work, Landlord (i) shall safeguard the Building, (ii)
shall not bring any work materials into the Premises, (iii) shall not allow any
construction workers to use any of the Building's facilities, (iv) shall use all
commercially reasonable efforts to minimize noise and vibration in, or other
disruption to, the Restaurant resulting from such construction during the hours
from 12:00 p.m. to 2:00 a.m., and shall not perform activities that customarily
produce a high noise or vibration level (e.g., core drilling) within 20 feet of
the Building during the hours from 4:30 p.m. to 3:00 a.m., (v) shall use all
commercially reasonable efforts to prevent damage to the contents of the
Building by vibration or otherwise, and (vi) shall carry (or cause Landlord's
general contractor or construction manager to carry) such insurance coverage as
may be reasonably required by Tenant and shall be in such amounts as reasonably
necessary to protect Tenant against any damage, destruction or other loss
relating to the Premises, the Restaurant and the personalty therein, which
insurance shall name Tenant as an additional insured and which insurance shall
by issued by an insurance company acceptable to any institutional lender to
Landlord. A copy of the relevant insurance certificate(s) shall be delivered by
Landlord to Tenant prior to the commencement of any such work. If, as part of
such work, it shall become necessary to temporarily shut off or limit the gas or
telephone service to the Restaurant, the same may be shut off or limited only at
times that are not Key Hours. For the purposes of this Article 33, the term "Key
Hours" shall mean the 12-hour period from 3:00 p.m. to 3:00 a.m., seven days a
week, for gas, and shall mean the 19-hour period from 8:00 a.m. to 3:00 a.m.,
seven days a week, for telephone service. For purposes of this Article 33, water
service may not be shut off or limited at any time, and electricity may not be
shut off or limited at any time unless Landlord shall arrange, at Landlord's own
cost and expense, to furnish electricity required in connection with the
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operation of the Restaurant by means of a generator. Landlord acknowledges that
Tenant's ability to receive deliveries during the 8-hour period from 7:00 a.m.
to 3:00 p.m., seven days a week, and to have garbage removed during the 2-hour
period between 5:00 a.m. and 7:00 a.m., seven days a week, is critical to
Tenant's operation of the Restaurant, and Landlord agrees to use commercially
reasonable efforts to minimize interference with the same during the course of
construction, provided, however, that during the construction period, upon
reasonable notice, Tenant agrees to use commercially reasonable efforts to
organize and coordinate its deliveries and trash collection to be during a more
limited time period while active construction is underway to enable Landlord to
expedite its construction. Landlord shall not place (or cause to be placed) any
scaffolding, or any other obstruction that would obstruct the visibility of
Tenant's signage existing at the time the scaffolding is erected on or in front
of the Las Vegas Boulevard frontage or Tenant's entryway frontage, except as
described in the next sentence. If any scaffolding shall be required pursuant to
applicable Legal Requirements to be placed in front of any portion of the
Building during the course of construction, then such scaffolding shall be
double height scaffolding, and none of the scaffolding that is located in front
of any portion of the Premises shall bear any advertising or any other signage
(other than postings, if any, required by applicable Legal Requirements), except
that Tenant shall have the right to place identifying signage on the areas of
the scaffolding that are located in front of any portion of the Premises,
subject to applicable Legal Requirements. Landlord shall indemnify and hold
Tenant harmless from and against any liability or damage (excluding
consequential damages) to the Premises and the contents of the Building caused
by Landlord's alterations, additions or improvements in and around the Property
and expenses arising therefrom. The foregoing indemnity shall include, without
limitation, any and all costs and expenses in the nature of reasonable legal
fees and disbursements incurred by Tenant in connection with the matters
indemnified against, and shall survive the expiration or sooner termination of
this Lease, but shall exclude consequential damages, to which Tenant hereby
waives any claims. Any improvements and/or alterations made by Landlord shall
use only prime quality materials, be constructed in a first-class manner, and
shall comply with all Legal Requirements.
34. EXPEDITED ARBITRATION AND EXPERT DETERMINATION.
A. If Tenant shall believe that (i) Landlord is in default or breach
with respect to any obligations of Landlord under this Lease, and (ii) such
default or breach interferes with Tenant's operation of business at the Premises
or is causing Tenant to incur costs that Tenant would not otherwise occur, and
if such default or breach shall continue for three (3) Business Days after
Tenant shall have given notice to Landlord thereof, then Tenant shall have the
right to commence an expedited expert arbitration in accordance with the
provisions of Section 34.C below to determine whether Tenant's claim of an
alleged Landlord default is valid and, if so, the actual damages (exclusive of
consequential damages) sustained by Tenant as a result thereof. If Tenant shall
prevail in such arbitration proceeding, Tenant shall have the right, by notice
given to Landlord not later than five (5) days prior to the first day of the
next calendar month(s) in which Minimum Rent shall be payable by Tenant to
Landlord, to offset against Minimum Rent an amount equal to the damages (if any,
but in all events exclusive of consequential damages) awarded to Tenant in such
expedited expert arbitration, with interest thereon at the Default Rate. The
Arbitration Costs shall be calculated and apportioned in accordance with the
provisions for
49
allocation of Arbitration Costs set forth in Article 34.B below. Notwithstanding
the foregoing, interest shall not run on the award (but, if Tenant shall have
made expenditures by reason of a Landlord default or breach, and the arbitrator
finds that there was, in fact, a Landlord default or breach, interest will run
with respect to the expenditure from the date of such expenditure until paid),
and Tenant shall not have the right of offset, during the first ten (10) days
following the rendering of the arbitrator's decision, and such offset right
shall only be available to Tenant if Landlord shall not have made the payment to
Tenant prior to the expiration of said ten (10) day period.
B. Notwithstanding the provisions of Article 29 above, either party
shall have the right to submit any dispute relating to the reasonableness of a
refusal to grant a consent or approval, or the reasonableness of a particular
determination, or any other dispute where this Lease provides that expedited
arbitration may (or shall) be used to resolve such dispute, to binding
arbitration in Xxxxx County, Nevada, under the Expedited Procedures provisions
(Rules E-1 through E-10, in the current edition) of the Arbitration Rules for
the Real Estate Industry of the American Arbitration Association ("AAA") or any
successor thereto provided, however, that with respect to any such arbitration:
(i) the list of arbitrators referred to in Rule E-5 shall be returned within
five (5) business days from the date of mailing, (ii) the parties shall notify
the AAA, by telephone, within four (4) business days of any objections to the
arbitrator appointed and will have no right to object if the arbitrator so
appointed was on the list submitted by the AAA and was not objected to in
accordance with Rule E-5, (iii) the Notice of Hearing referred to in Rule E-8
shall be four (4) business days in advance of the hearing, and (iv) the hearing
shall be held within seven (7) business days after the appointment of the
arbitrator. The sole issue to be submitted to the arbitrator, which shall be
included as part of his oath, shall be the reasonableness of the particular
determination under the provisions of this Lease or such other specific matter
as may be presented to the arbitrator pursuant to the terms of this Lease. The
decision of the arbitrator shall be final and conclusive, and the arbitrator
shall not have any right or power to consider, determine or resolve any other
issue or dispute between the parties, or to alter, modify or amend any of the
provisions of this Lease (even if, without limitation, the direct cost or
resulting cost of compliance with a specific provision of this Lease shall be
substantially greater than what the parties have anticipated or been able to
foresee). The party subject to an adverse arbitrator's determination shall be
responsible for all reasonable costs and fees of such arbitration and any
reasonable legal fees and disbursements incurred by the successful party in
connection with such arbitration. The arbitrator shall determine the extent to
which each party is successful in such arbitration proceeding, in addition to
rendering a decision on the dispute submitted. If the arbitrator determines that
one party is entirely unsuccessful, then such party shall pay all of the fees
and expenses or such arbitration and all of the reasonable legal fees and
disbursements incurred by the successful party in connection therewith
(collectively, the "Arbitration Costs"). If the arbitrator determines that both
parties are partially successful, then each party shall be responsible for the
Arbitration Costs only to the extent such party is unsuccessful (e.g., if
Landlord is eighty (80%) percent successful and Tenant is twenty (20%) percent
successful, then Landlord shall be responsible for twenty (20%) percent of the
Arbitration Costs and Tenant shall be responsible for eighty (80%) percent of
the Arbitration Costs.
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C. Any dispute between the parties arising with respect to a situation
where this Lease provides that expert expedited arbitration may (or shall) be
used to resolve such dispute, shall be resolved as follows. If the parties are
in disagreement, either party may declare an impasse by notice (the "Impasse
Notice") to the other party, which notice should describe, in reasonable detail,
the dispute and the sending party's proposed solution. If the receiving party
does not agree to the proposed solution (or the parties otherwise resolve the
impasse to their mutual satisfaction) within fifteen (15) days of the receipt of
the Impasse Notice, the dispute shall be submitted to resolution by an Expert.
Tenant shall promptly thereafter propose to Landlord the names of three (3)
proposed experts who are capable and willing to serve as the Expert hereunder,
accompanied by information on each of said experts. Landlord shall select one of
the three candidates, who shall serve as the Expert for purposes of the dispute
in question. The Expert shall establish in his or her sole discretion the
procedure for resolving the dispute, including but not limited to what evidence
to consider, whether to allow written submissions, whether to meet with the
parties, and whether to hold a hearing. The Expert shall not have any right or
power to alter, modify or amend any of the provisions of this Lease. The Expert
shall also not have any right or power to take into consideration the direct
cost or resulting cost of compliance with a specific provision of this Lease for
the purpose of concluding that requiring a party to comply with such provision
is not reasonable, or that compliance therewith shall not be required. The
decisions of the Expert shall be final and binding on the parties, and shall not
be capable of challenge, whether by arbitration, in court or otherwise. The
terms of engagement of an Expert shall include an obligation on the part of the
Expert to (a) notify the parties in writing of his or her decision within thirty
(30) days from the date on which the Expert has been selected (or such other
period as the parties may agree); and (b) establish a timetable for the making
of submissions and replies, if applicable. The decision of the Expert shall be
final and binding on both parties, and, unless the relevant provision of this
Lease provides otherwise, the parties shall bear the Expert fees and costs the
same basis as with respect to Arbitration Costs. "Expert" shall mean an
independent, recognized firm or individual that (i) has at least ten (10) years
recent professional experience in the field related to the subject matter in
question, and (ii) has not been employed by either party (or an affiliate of
either party), either directly or as a consultant, at any time during the three
(3) years immediately preceding the date of appointment hereunder.
35. RESTRICTIONS ON RENTS.
If at the commencement of, or at any time or times during the term of
this Lease, the Minimum Rent or Additional Rents reserved in this Lease shall
not be fully collectible by reason of any federal, state or local law,
proclamation, order or regulation, or direction of any public officer or body
pursuant to law, Tenant shall enter into such agreement(s) and take such other
steps as Landlord may reasonably request and as may be legally permissible to
permit Landlord to collect the maximum rents which may, from time to time during
the continuance of such legal rental restriction, be legally permissible (and
not in excess of the amounts reserved therefor under this Lease). Upon the
termination of such legal rent restriction prior to the expiration of the term
of this Lease: (a) the rents shall become and thereafter be payable hereunder in
accordance with the amounts reserved in this Lease for the periods following
such termination, and (b) Tenant shall pay, without interest, to Landlord, if
legally permissible, an amount equal to the rents which would have been paid
pursuant to this Lease but for such legal rent restriction,
51
less the rents paid by Tenant to Landlord during the period(s) the legal rent
restriction was in effect.
36. NON-WAIVER AND SURVIVAL OF ADDITIONAL RENT OBLIGATIONS.
Landlord's failure during the Lease term to prepare and deliver any of
the tax bills, statements, notices or bills set forth in this Lease, or
Landlord's failure to make a demand, shall not in any way cause Landlord to
forfeit or surrender its rights to collect any of the foregoing items of
Additional Rent which may become due during the term of this Lease, except that,
if, within one (1) year after the date that any request or demand for an item of
Additional Rent first became timely, Landlord shall have failed to make any
request or demand for payment of such item of Additional Rent, then Landlord
shall be deemed to have waived the right to collect such item of Additional
Rent. Tenant's liability for the amounts due under this Lease shall survive for
one year after the expiration or sooner termination of the Lease term.
37. INTEREST.
Whenever this Lease refers to "Default Rate", same shall be computed at
an annual rate equal to the prime rate of Citibank, N.A. in New York, New York
or such other clearing bank as Landlord shall stipulate from time to time, plus
three (3%) percent, except where otherwise in this Lease a different rate is
specifically set forth. If, however, payment of interest at any such rate by
Tenant (or by the tenant then in possession having succeeded to the Tenant's
interest in accordance with the terms of this Lease) should be unlawful, i.e.,
violative of the usury statutes or otherwise, then "interest" shall, as against
such party, be computed at the maximum lawful rate payable by such party.
38. NOTICES.
Except as otherwise in this Lease provided, a notice or other
communication which Landlord or Tenant may desire or be required to give to the
other shall be deemed sufficiently given or rendered if, in writing, and (a)
sent by registered or certified mail, or (b) sent by Federal Express or any
similar recognized overnight delivery service, or (c) with respect to the
service of legal process only, as permitted by law. The time of the giving of
such notice shall be deemed to be the time when the same is delivered to such
party or served as herein provided.
Rent or bills and statements for Minimum Rent and Additional Rent may be
given to Tenant in any manner set forth above as well as by regular mail to such
address as is specified by Tenant.
TENANT'S address for notices shall be:
S & W of Las Vegas, L.L.C.
c/o The Xxxxx & Wollensky Restaurant Group
0000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxx
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With a copy to:
Stroock & Stroock & Xxxxx LLP
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxx Xxxx, Esq.
LANDLORD'S address for notices shall be:
Metroflag SW, LLC
c/o Flag Luxury Properties, LLC
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx
With a copy to:
Xxxxxxxxx Traurig, P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Notices sent by Landlord's legal representatives on behalf of Landlord
or by Tenant's legal representatives on behalf of Tenant shall be deemed to be
given by Landlord or Tenant provided that the manner in which the notices are
sent are in accordance with the terms of this Article 38. Landlord and Tenant
shall have the right from time to time, by notice given pursuant to this Article
38, to change their addresses for notices and to change the persons and
addresses to which copies of notices are to be sent.
39. FORCE MAJEURE.
Neither Landlord nor Tenant shall be deemed in default in the
performance of any obligation or undertaking provided herein (except for the
payment of Minimum Rent or Additional Rent, or sums due from Landlord to Tenant
pursuant to this Lease) in the event and/or so long as the performance of any
such obligation is prevented or delayed, retarded or hindered by act of God,
fire, earthquake, floods, explosion, action of the elements, war, hostilities,
invasion, insurrection, riot, mob violence, sabotage, strikes, lockouts, action
of labor unions, condemnation, requisition, laws, orders of government or civil
or military or naval authorities, act or failure to act of the performing party
which causes the other party to be delayed in the performance of any such
obligation or undertaking.
40. SUBORDINATION AND NON-DISTURBANCE.
A. Subordination and Non-Disturbance. Tenant agrees that this Lease
shall be subordinate to any ground lease, mortgages or deeds of trust that are
now, or may hereafter be,
53
placed upon the Premises or any portion thereof or interest therein and to any
and all advances to be made thereunder, and to the interest thereon, and all
renewals, replacements and extensions thereof, provided that the ground lessor,
mortgagees or beneficiaries named in said ground leases, mortgages or trust
deeds shall agree to recognize the interest of Tenant under this Lease in the
event of foreclosure, if Tenant is not then in default (after notice and
expiration of the applicable cure period) under this Lease at such time,
pursuant to a non-disturbance agreement reasonably satisfactory to the new
ground lessor, mortgagee or beneficiary and in a form reasonably similar to that
attached hereto as Exhibit "C" and made a part hereof, and with such changes
therefrom as may be reasonably required by any such ground lessor, mortgagee or
beneficiary, and which changes shall not increase any of Tenant's monetary
obligations under this Lease, not increase (except to a de minimis extent) any
of Tenant's non-monetary obligations under this Lease, and/or not decrease
(except to a de minimis extent) any of Tenant's rights under this Lease. Tenant
also agrees that any mortgagee or beneficiary may elect to have this Lease
constitute a prior lien to its mortgage or deed of trust, and in the event of
such election and upon notification by such mortgagee or beneficiary to Tenant
to that effect, this Lease shall be deemed prior in lien to such mortgage or
deed of trust, whether this Lease is dated prior to or subsequent to the date of
said mortgage or deed of trust.
B. Attornment. In the event any proceedings are brought for the
foreclosure of, or in the event of the conveyance by deed in lieu of foreclosure
of, or in the event of exercise of the power of sale under, any mortgage and/or
deed of trust or other security instrument made by Landlord affecting the
Premises or any portion thereof, or in the event Landlord sells, conveys or
otherwise transfers its interest in the Premises or any portion thereof, this
Lease shall remain in full force and effect and Tenant hereby attorns to, and
covenants and agrees to execute an instrument in writing reasonably satisfactory
to the new owner whereby Tenant attorns to, such successor-in-interest and
recognizes such successor-in-interest as the Landlord under this Lease (provided
that, in each such instance, such successor-in-interest shall recognize Tenant
on the then executory terms of this Lease and in accordance with the relevant
provisions of the non-disturbance agreement referred to in Section 40A above).
Payment by or performance of the obligations of Tenant under this Lease by any
person, firm or corporation claiming an interest in this Lease or the Premises
by, through or under Tenant without Landlord's consent in writing (where such
consent is required pursuant to the terms of this Lease) shall not constitute an
attornment or create any interest in this Lease or the Premises.
C. Financial Information. Tenant shall provide such financial
information relating to financial operating results of the Restaurant as
Landlord's lender(s) shall reasonably require. Landlord shall use reasonable,
diligent efforts to have such lender(s) undertake to use commercially reasonable
efforts to limit access to such information to those parties needing to know
such information pursuant to the loan structure.
41. SAVING PROVISION.
If any provision of this Lease, or its application to any situation,
shall be invalid or unenforceable to any extent, the remainder of this Lease, or
the application thereof to situations other than that as to which it is invalid
or unenforceable, shall not be affected thereby, and every provision of this
Lease shall be valid and enforceable to the fullest extent permitted by law.
54
42. ENTIRE AGREEMENT.
No earlier statement by Landlord or Tenant or any of their respective
agents or employees regarding this Lease or the Premises or prior written matter
regarding this Lease or the Premises shall have any force or effect. Landlord
and Tenant agree that they are not relying on any representations or agreements
other than those contained in this Lease. This Lease shall not be modified or
cancelled except by writing subscribed by all parties.
43. ESTOPPEL CERTIFICATES.
A. Tenant shall, without charge at any time and from time to time,
within fifteen (15) days after request by Landlord, certify by written
instrument, duly executed, acknowledged and delivered, to any mortgagee,
assignee of any mortgagee or purchaser, or any proposed mortgagee, assignee of
any mortgagee or purchaser, or any other person, firm or corporation specified
by the requesting party:
(i) that this Lease is unmodified and in full force and effect (or,
if there has been modification, that the same is in full force and effect as
modified and stating the modifications);
(ii) whether or not, to the best of Tenant's knowledge, there are
then existing any setoffs or defenses against the enforcement of any of the
agreements, terms, covenants or conditions hereof upon its part to be performed
or complied with (and, if so, specifying the same);
(iii) the dates, if any, to which Minimum Rent and Additional Rent
hereunder have been paid in advance;
(iv) whether or not, to the best of Tenant's knowledge, there are
then existing any uncured defaults by Landlord, and, if so, specifying such
default; and
(v) any other information pertaining to this Lease confirming factual
information as Landlord may reasonably request.
B. Landlord shall, without charge at any time and from time to time,
within fifteen (15) days after request by Tenant, certify by written instrument,
duly executed, acknowledged and delivered, to any assignee or subtenant of
Tenant or proposed assignee or subtenant, or any other person, firm or
corporation specified by the requesting party:
(i) that this Lease is unmodified and in full force and effect (or,
if there has been modification, that the same is in full force and effect as
modified and stating the modifications);
(ii) whether or not, to the best of Landlord's knowledge, there are
then existing any setoffs or defenses against the enforcement of any of the
agreements, terms, covenants or conditions hereof upon its part to be performed
or complied with (and, if so, specifying the same);
55
(iii) the dates, if any, to which Minimum Rent and Additional Rent
hereunder have been paid in advance;
(iv) whether or not, to the best of Landlord's knowledge, there are
then existing any uncured defaults by Tenant, and, if so, specifying such
default; and
(v) any other information pertaining to this Lease confirming factual
information as Tenant may reasonably request.
44. NO WAIVER.
The failure of either party to seek redress for violation of, or to
insist upon the strict performance of any covenant or condition of this Lease,
shall not prevent a subsequent act which would have originally constituted a
violation from having all the force and effect of an original violation. The
receipt by Landlord or the payment by Tenant of Minimum Rent and/or Additional
Rent with knowledge of the breach of any covenant of this Lease shall not be
deemed a waiver of such breach, and no provision of this Lease shall be deemed
to have been waived unless such waiver be in writing signed by the party against
whom the waiver is to be enforced. No payment by Tenant or receipt by Landlord
of a lesser amount than the monthly Minimum Rent herein stipulated shall be
deemed to be other than on account of the earliest stipulated rent, or shall any
endorsement or statement of any check or any letter accompanying any check or
payment as rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such rent or pursue any other xxxxx in this Lease provided. No act or
thing done by Landlord or Landlord's agents during the term hereby demised shall
be deemed in acceptance of a surrender of the Premises and no agreement to
accept such surrender shall be valid unless in writing signed by Landlord. No
employee of Landlord or Landlord's agent shall have any power to accept the keys
of the Premises prior to the termination of the Lease and the delivery of keys
to any such agent or employee shall not operate as a termination of the Lease or
a surrender of the Premises.
45. NO PRESUMPTION AGAINST DRAFTSMAN.
Both parties acknowledge and agree that this Lease has been freely
negotiated by both parties and that, in any dispute over the meaning,
interpretation, validity, or enforceability of this Lease, or any of its terms
or conditions, there shall be no presumption whatsoever against either party by
virtue of that party having drafted this Lease or any portion thereof.
46. RECORDATION.
This Lease may not be recorded. At the request of either party, the
other party will execute a short form lease memorandum for recording purposes
containing references to such provisions of this Lease as the parties shall
reasonably approve, which either party may then record at its own cost and
expense.
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47. LEASE NOT BINDING UNLESS EXECUTED.
Submission by either party of the within Lease for execution by the
other party shall confer no rights nor impose any obligations on either party
unless and until both Landlord and Tenant shall have executed this Lease and
duplicate originals thereof shall have been delivered to the respective parties.
48. BROKER.
Landlord and Tenant each represent and warrant to the other that, there
was no broker instrumental in consummating this Lease, and no conversations or
negotiations were had with any broker concerning the renting of the Premises.
49. WAIVER OF TRIAL BY JURY.
IT IS MUTUALLY AGREED BY AND BETWEEN LANDLORD AND TENANT THAT THE
RESPECTIVE PARTIES HERETO SHALL AND THEY HEREBY DO WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO
AGAINST THE OTHER (EXCEPT FOR PERSONAL INJURY OR PROPERTY DAMAGE) ON ANY MATTERS
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OF OR OCCUPANCY OF THE
PREMISES, AND ANY EMERGENCY STATUTORY OR ANY OTHER STATUTORY REMEDY. IT IS
FURTHER MUTUALLY AGREED THAT IN THE EVENT LANDLORD COMMENCES ANY PROCEEDING OR
ACTION FOR POSSESSION INCLUDING A SUMMARY PROCEEDING FOR POSSESSION OF THE
PREMISES, TENANT WILL NOT INTERPOSE ANY COUNTERCLAIM OF WHATEVER NATURE OR
DESCRIPTION IN ANY SUCH PROCEEDING, EXCEPT FOR STATUTORY MANDATORY COUNTERCLAIMS
OR COMPULSORY COUNTERCLAIMS.
50. QUIET ENJOYMENT.
Landlord covenants and agrees with Tenant that, for so long as this
Lease shall be in full force and effect, Tenant may peaceably and quietly enjoy
the Premises hereby demised free from any claims through or under Landlord's
interest, subject, nevertheless, to the terms and conditions of this Lease.
51. RIGHT OF FIRST OFFER
A. Provided that Tenant is not in default (after notice and the
expiration of the applicable cure period) of any of its obligations under this
Lease, then, subject to the provisions of this Article 51, Tenant shall have a
right of first offer (the "Right of First Offer") to lease from Landlord any of
the units of space that are currently subject to a Landlord's Direct Lease
whenever such Landlord's Direct Lease (or any subsequent Landlord's Direct Lease
entered into by Landlord, if Tenant shall not have accepted an Offer for the
relevant Offer Space) shall expire or be sooner terminated (with each such unit
of space being referred to herein as an "Offer Space"), on such terms and
conditions as Landlord shall desire to lease the Offer Space generally (the
"Offer") at any time during the Term, except that: (i) the effective or
commencement date of
57
such lease shall not be less than thirty (30) days nor more than ninety (90)
days after the giving of such notice, and (ii) at the election of Tenant, the
expiration of the term for the Offer Space shall either be co-terminus with the
Term, or shall be as Landlord intends to lease such Offer Space generally. (If
Tenant elects to accept the Offer, but also elects to modify the same so that
the term thereof shall be co-terminus with the Term, then the rent and other
economic terms for the portion of such co-terminus term that is in excess of the
term set forth in the Offer shall be the fair market value thereof, and any
dispute as to such fair market value shall be determined in accordance with the
provisions of Section 51F below.) Prior to offering any Offer Space for lease to
a third party, Landlord shall notify Tenant of the terms and conditions on which
Landlord desires to lease the Offer Space (the "Offer Notice").
B. Tenant shall have the right to accept the Offer (and to designate an
election pursuant to clause (ii) of Section 51A above) only by giving Landlord
notice of such acceptance (the "Offer Acceptance") within thirty (30) days after
Tenant shall have received the Offer Notice from Landlord. In the event that
Tenant timely accepts the Offer, Landlord and Tenant shall promptly thereafter
enter into an amendment to this Lease to incorporate such Offer Space and to
make necessary adjustments to the Rental and other applicable provisions of this
Lease. In the event that Tenant shall decline to accept the Offer, or shall fail
to deliver notice thereof within the time period stipulated above, this Right of
First Offer shall lapse and be of no further force and effect as to the
particular Offer Space in question. Except as may be otherwise expressly set
forth in the Offer Notice, Tenant shall accept the Offer Space in its then "as
is" and "where is" condition, and, except as may be expressly set forth in the
Offer Notice, Landlord shall have no obligation whatsoever to perform any work
to prepare the Offer Space for Tenant's occupancy, or to make any repairs,
improvements or alterations in or to the Offer Space.
C. If Tenant shall have advised Landlord that Tenant does not desire to
accept a particular Offer (or if Tenant shall have failed to timely accept such
Offer), and Landlord shall thereafter propose to lease such Offer Space to a
third party at a net effective rent that is less, by five (5%) percent or more,
than the net effective rent set forth in the Offer Notice, then Tenant shall
once again have a right to exercise the Right of First Offer with respect
thereto. For the purposes hereof, net effective rent shall be calculated by
taking into account the monetary values (on a present value basis using the
prime rate referred to in Article 37 above) of all of the concessions,
incentives and payments set forth in the Offer Notice.
D. If Tenant shall have advised Landlord that Tenant does not desire to
accept a particular Offer (or if Tenant shall have failed to timely accept such
Offer), and Landlord shall not have entered into a lease of such Offer Space
with a third party within one hundred eighty (180) days thereafter, then Tenant
shall once again have a right to exercise the Right of First Offer with respect
thereto.
E. Any dispute with respect to any aspect of this Article 51 (other than
a dispute as to the fair market value rent and other economic terms to be
changed in an Offer if Tenant elects to accept the Offer for a term other than
as proposed by Landlord, which shall be determined in accordance with the
provisions of Section 51F below) may be submitted by either party to binding
expedited arbitration pursuant to the provisions of Article 34B above.
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F. (i) The term "Market Value Rent" shall mean the annual fair market
rental value of the relevant Offer Space for the remainder of the Term, taking
into consideration all relevant factors that would customarily be considered in
making such determination with respect to a third party lease thereof
(including, without limitation, all of the other economic terms in the relevant
Offer).
(ii) The initial determination of Market Value Rent shall be made by
Landlord. Landlord shall give notice (the "MVR Notice") to Tenant of Landlord's
initial determination of the Market Value Rent within thirty (30) days after
Tenant shall have notified Landlord that Tenant elects to accept the Offer for a
term other than as proposed by Landlord. Such initial determination of Market
Value Rent shall be final and binding in fixing the Market Value Rent, unless,
within fifteen (15) days after Landlord shall have given MVR Notice to Tenant,
Landlord shall receive a notice from Tenant (the "MVR Objection Notice"): (a)
advising Landlord that Tenant disagrees with the initial determination of Market
Value Rent set forth in the MVR Notice, and (b) proposing a specific alternative
Market Value Rent. If Landlord and Tenant shall fail to agree upon the Market
Value Rent within fifteen (15) days after Landlord shall have received the MVR
Objection Notice, then Landlord and Tenant shall mutually designate an
arbitrator whose determination of Market Value Rent (which shall be either the
Market Value Rent proposed by Landlord in the MVR Notice or the Market Value
Rent proposed by Tenant in the MVR Objection Notice, but no other amount) shall
be final and binding upon Landlord and Tenant. If Landlord and Tenant shall be
unable to agree upon the choice of such arbitrator within thirty (30) days after
either party requests that such an arbitrator be chosen, then either party may
apply to the American Arbitration Association or any successor thereto having
jurisdiction for the designation of such arbitrator. The arbitrator shall be a
real estate broker or consultant who is MAI certified and who shall have had at
least fifteen (15) years continuous experience in the business of appraising or
managing real estate or acting as a real estate agent or broker in Las Vegas.
The arbitrator shall conduct such hearings and investigations as he may deem
appropriate and shall, within thirty (30) days after his designation, determine
which of the two (2) proposals shall be the Market Value Rent, and that choice
by the arbitrator shall be binding upon Landlord and Tenant, provided that the
arbitrator shall not have the power to add to, modify or change any of the
provisions of this Lease. Each party shall pay its own counsel fees and
expenses, if any, in connection with any arbitration under this Section 51F, and
the parties shall share equally all other expenses and fees of any such
arbitration.
52. LEGAL EXPENSES.
In the event that Landlord should retain counsel and/or institute any
suit against Tenant for violation of or to enforce any of the covenants or
conditions of this Lease, or should Tenant retain counsel and/or institute any
action against Landlord for violation of or to enforce any of the covenants or
conditions of this Lease, or should either party institute a suit against the
other for a declaration of rights hereunder to enforce or protect its interests
or rights hereunder, the prevailing party in any such suit shall be entitled to
all its costs, expenses and reasonable fees to its attorney(s) in connection
therewith.
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53. SUCCESSORS AND ASSIGNS.
The covenants, conditions and agreements contained in this Lease shall
bind and inure to the benefit of Landlord and Tenant and their respective heirs,
distributees, executors, administrators, successors, and except as otherwise
provided in this Lease, their assigns.
54. DUPLICATE ORIGINALS; COUNTERPARTS.
This Lease may be executed in any number of duplicate originals and each
duplicate original shall be deemed to be an original. This Lease may be executed
in several counterparts, each of which counterparts shall be deemed an original
instrument and all of which together shall constitute a single agreement.
55. APPLICABLE LAW.
This Lease shall be construed under the laws of the State of Nevada.
56. LEASEHOLD FINANCING.
A. Tenant shall have the right (subject to the provisions of Section 56H
below) to mortgage its interest in this Lease to an "Institutional Lender" who,
for purposes of this Lease, shall mean (i) a bank, savings bank, private banker,
trust company, credit union, savings and loan association or any other banking
organization (as defined in the banking laws of the State of Nevada), (ii) a
national bank or trust company or other federally-chartered or
federally-regulated credit union, savings and loan association or other banking
institution, (iii) a foreign chartered bank or other financial institution
qualified to make loans in the State of Nevada, (iv) an employee profit-sharing
or pension fund not related to Tenant, (v) a federal, State or local
governmental or quasi-governmental agency, (vi) an insurance company duly
organized or licensed to do business in the State of Nevada under the insurance
laws of the State of Nevada, (vii) a real estate investment trust, (viii) a real
estate mortgage investment conduit, (ix) an investment bank, or (x) a subsidiary
or affiliate of any of the foregoing engaged in the practice of lending money,
provided that each of the entities described in (iv), (vi), (vii), (viii) and
(ix) must be publicly traded or have assets in excess of $500,000,000. For
purposes of this Lease, an Institutional Lender to whom Tenant shall mortgaged
its interest in this Lease shall be referred to as a "Leasehold Mortgagee" and
the mortgage held by such Leasehold Mortgagee shall be referred to as a
"Leasehold Mortgage". There shall be no more than one (1) Leasehold Mortgage
existing at any time during the term of this Lease.
B. If Tenant shall mortgage Tenant's interest in this Lease to a
Leasehold Mortgagee, Tenant (or such Leasehold Mortgagee) shall give Landlord
prompt notice of such Leasehold Mortgage and furnish Landlord with a complete
and correct copy of such Leasehold Mortgage, certified as such by Tenant or such
Leasehold Mortgagee, together with the name and address of such Leasehold
Mortgagee. After receipt of the foregoing, (i) Landlord shall not accept a
voluntary surrender of this Lease without such Leasehold Mortgagee's consent,
and (ii) Landlord shall give to such Leasehold Mortgagee, at the address of such
Leasehold Mortgagee set forth in such notice, and otherwise in the manner
provided by Article 38 above, a copy of
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each notice of default (hereinafter referred to as a "Default Notice")
concurrently with the giving of any such Default Notice thereafter given by
Landlord to Tenant. Such Leasehold Mortgagee (x) shall thereupon have a period
of ten (10) days longer than that given to Tenant in each instance in the case
of a default in the payment of Minimum Rent or Additional Rent and thirty (30)
days longer than that given to Tenant in each instance in the case of any other
default, for remedying the default, or causing the same to be remedied, and (y)
shall, within such periods and otherwise as herein provided, have the right to
remedy such default or cause the same to be remedied, and during such period
Landlord shall not terminate this Lease nor shall Landlord resort to any of its
remedies on account of such default. Landlord shall accept performance by such
Leasehold Mortgagee of any covenant, condition or agreement on Tenant's part to
be performed hereunder with the same force and effect as though performed by
Tenant.
C. Notwithstanding the provisions of Section 56B above, if a
non-monetary default cannot reasonably be cured by such Leasehold Mortgagee
within the thirty (30)-day period set forth in said Section 56B, such Leasehold
Mortgagee shall have as long as is reasonably required in order to cure such
default, provided that within such thirty (30)-day period such Leasehold
Mortgagee shall have delivered to Landlord its written agreement to take the
action described in clause (i) or (ii) below and to hire, as a full time manager
of the operation of the Premises, a person having at least five (5) years
experience in the operations of restaurants comparable in size and quality to
the Restaurant currently operated in the Premises (hereinafter referred to as a
"Qualified Manager") and thereafter, in good faith, shall have commenced
promptly either (i) to cure the default and to prosecute the same with diligence
and continuity to completion, or (ii) if possession of the Premises is required
in order to cure the default, to institute foreclosure proceedings and obtain
possession directly or through a receiver, and to prosecute such proceedings
with diligence and continuity and, upon obtaining such possession, commence
promptly to cure the default and to prosecute the same to completion with
diligence and continuity, and shall have hired and shall, during the term of
this Lease, cause the Premises to be operated by, a Qualified Manager, provided
that during the period in which such action as set forth in clauses (i) or (ii)
of this Section 56C is being taken (and any foreclosure proceedings are
pending), all of the other obligations of Tenant under this Lease, to the extent
they are reasonably susceptible to being performed by such Leasehold Mortgagee,
are being performed and during such period Landlord shall not terminate this
Lease nor shall Landlord resort to any of its remedies on account of such
default. However, at any time after the delivery of the aforementioned
agreement, such Leasehold Mortgagee may notify Landlord, in writing, that
Leasehold Mortgagee has relinquished possession of the Premises or that
Leasehold Mortgagee will not institute foreclosure proceedings or, if such
proceedings have been commenced, that Leasehold Mortgagee has discontinued them
and, in such event, such Leasehold Mortgagee shall have no further liability
under such agreement from and after the date Leasehold Mortgagee delivers such
notice to Landlord (except for any obligations accruing prior to the date
Leasehold Mortgagee delivers such notice), and, thereupon, Landlord shall have
the unrestricted right to terminate this Lease and to take any other action
Landlord deems appropriate by reason of any default, and upon any such
termination the provisions of Section 56E below shall apply. Notwithstanding
anything herein contained to the contrary, provided such Leasehold Mortgagee
shall have otherwise complied with the provisions of this Article 56, such
Leasehold Mortgagee
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shall have no obligation to cure any defaults which are not susceptible to being
cured by such Leasehold Mortgagee.
D. Except as provided in Section 56C above, no Leasehold Mortgagee shall
become liable under the provisions of this Lease unless and until such time as
such Leasehold Mortgagee becomes, and then only for as long as it remains, the
owner of the leasehold estate created hereby. In the event that a Leasehold
Mortgagee shall become the owner of such leasehold estate, such Leasehold
Mortgagee shall not be bound by any modification or amendment of this Lease made
subsequent to the date of the Leasehold Mortgage and delivery to Landlord of the
notice provided in Section 56A above and prior to such Leasehold Mortgagee's
acquisition of such interest, unless such Leasehold Mortgagee shall have
consented to such modification or amendment.
E. In the case of termination of this Lease by reason of any default by
Tenant which is not cured after any required notice and the expiration of any
applicable cure period, Landlord shall give prompt notice thereof to the
Leasehold Mortgagee whose name and address Landlord has received pursuant to
notice made in compliance with the provisions of Section 56A above, at the
address of such Leasehold Mortgagee set forth in such notice, and otherwise in
the manner provided by Article 38 above. Landlord, on written request of such
Leasehold Mortgagee made any time within thirty (30) days after the giving of
such notice by Landlord, shall promptly execute and deliver a new lease of the
Premises to such Leasehold Mortgagee, or any designee or nominee of such
Leasehold Mortgagee, for the remainder of the Term upon all the covenants,
conditions, limitations and agreements herein contained, provided that such
Leasehold Mortgagee (i) shall pay to Landlord, simultaneously with the delivery
of such new lease, all unpaid Minimum Rent and Additional Rent due and payable
under this Lease up to and including the date of the commencement of the term of
such new lease and all reasonable expenses, including, without limitation,
reasonable attorneys' fees and disbursements and court costs, incurred by
Landlord in connection with the default by Tenant, the termination of this Lease
and the preparation of the new lease, and (ii) shall cure (within the time
periods set forth with respect to such defaults in Sections 56A and 56B above)
all defaults existing under this Lease which are susceptible to being cured by
such Leasehold Mortgagee, and (iii) shall hire, and cause the Premises to be
operated during the term of the new lease by, a Qualified Manager.
Notwithstanding the foregoing, provided that Landlord shall simultaneously
therewith pay to such Leasehold Mortgagee the full amount of indebtedness
secured the relevant Leasehold Mortgage, together with all other amounts as
shall then be due from Tenant to such Leasehold Mortgagee in connection
therewith, Landlord shall have the right not to deliver a new lease of the
Premises to such Leasehold Mortgagee and to acquire by assignment all of such
Leasehold Mortgagee's rights in connection therewith.
F. Any such new lease and the leasehold estate thereby created shall,
subject to the same conditions contained in this Lease, continue to maintain the
same priority as this Lease with regard to any mortgage, including any fee
mortgage, on the Premises or any part thereof or any other lien, charge or
encumbrance thereon, whether or not the same shall then be in existence.
Concurrently with the execution and delivery of such new lease, Landlord shall
assign to the tenant named therein all of its right, title and interest in and
to moneys (including
62
insurance and condemnation proceeds), if any, then held by or payable to
Landlord which Tenant would have been entitled to receive but for termination of
this Lease.
G. Any Leasehold Mortgage shall be subject and subordinate to any ground
lease, mortgages or deeds of trust to which this Lease is subject and
subordinate pursuant to the provisions of Article 40 thereof.
H. Notwithstanding anything to the contrary contained herein, Tenant
shall not have the right to mortgage its interest in this Lease until the tenth
(10th) anniversary of the Commencement Date.
56. RESTRICTIONS ON LANDLORD'S DIRECT LEASES.
A. If Landlord and Tenant shall not have entered into a Lease for any
Offer Space that shall have become available for lease, then, in connection with
any lease, license and/or other form of occupancy thereof entered into or
allowed by Landlord, Landlord agrees that (i) no products and/or services being
offered from any portion of the Building shall compete with the products and/or
services offered by the Restaurant (i.e., no food or beverages of any kind may
be sold or served to the public from any portion of the Building other than the
Premises), (ii) all products and/or services being offered from any portion of
the Building other than the Premises shall be compatible with the first-class
nature of the Restaurant, and (iii) without limiting the generality of the
foregoing, no use that customarily (in Las Vegas) involves the utilization of
barkers on the sidewalk shall be permitted.
B. Landlord shall use commercially reasonable efforts (including,
without limitation, the prosecution of legal action) to enforce all such
obligations of the Landlord's Direct Tenants under the respective Landlord's
Direct Leases, if the failure of a Landlord's Direct Tenant to comply with the
relevant obligation will adversely affect Tenant.
57. TENANT'S REMEDIES.
A. Nothing contained in this Lease shall prevent the enforcement of any
claim Tenant may have against Landlord for a breach of this Lease, except as
otherwise expressly provided in Article 29 above. In the event of any breach by
Landlord of any of the covenants or provisions hereof or in the event of
Landlord's default, Tenant shall have the right of injunction and the right to
invoke any remedy allowed at law or in equity, except as otherwise expressly
provided in Article 29 above. Mention in this Lease of any particular remedy
shall not preclude Tenant from any other remedy under this Lease or at law or in
equity, except as otherwise expressly provided in Article 29 above.
B. The rights and remedies of Tenant under this Lease shall be deemed to
be cumulative, and no one of such rights or remedies shall be exclusive at law
or in equity of the other rights and remedies of Tenant on account of a default
by Landlord, and the exercise of any one such right or remedy by Tenant shall
not impair Tenant's standing, right or power to exercise any other right or
remedy, except as otherwise expressly provided in Article 29 above.
Notwithstanding the foregoing, in any case where, pursuant to an express
provision of this Lease,
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a particular remedy of Tenant is stated to be Tenant's sole remedy (or words to
that effect), such remedy shall be Tenant's sole remedy with respect thereto.
C. Notwithstanding anything to the contrary contained in this Lease,
neither Landlord nor Tenant shall have any liability to the other for
consequential damages.
SIGNATURES ON FOLLOWING PAGE
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IN WITNESS WHEREOF, the undersigned have executed this Lease as of the
day and date first set forth above.
OWNER:
METROFLAG SW, LLC, a Nevada
limited liability company
/s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx
---------------------------- ----------------------------------------
Witness Name: Xxxx X. Xxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxx Title: President of Flag Luxury SW, LLC Member
---------------------------- ----------------------------------------
Witness
TENANT:
S & W OF LAS VEGAS, L.L.C., a Delaware
limited liability company
/s/ Xxxx Xxxxxxxxx By: /s/ Xxxx X. Xxxxxx
---------------------------- ----------------------------------------
Witness Name: Xxxx X. Xxxxxx
----------------------------------------
Xxxx Xxxxxxxxx Title: Secretary
---------------------------- ----------------------------------------
Witness
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LIST OF EXHIBITS
EXHIBIT A LEGAL DESCRIPTION OF LAND
EXHIBIT B SKETCH/FLOOR PLAN OF LEASED PREMISES
EXHIBIT C FORM OF SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
66
EXHIBIT A
---------
LEGAL DESCRIPTION OF LAND
(See attached)
A-1
EXHIBIT B
---------
DESCRIPTION OF LEASED PREMISES
All space in the Building, except for approximately eighteen hundred
(1,800) square feet leased under the Subleases as set forth in the Contract of
Sale to which this Lease is an Exhibit.
[Diagram to be furnished].
B-1
EXHIBIT C
---------
FORM OF SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT
(See attached)
C-1
