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Exhibit 10.25
LEASE
FOR
RESTAURANT SPACE
By and Between
MANDALAY CORP.,
AS LANDLORD
And
BORDER GRILL LAS VEGAS, LLC, A NEVADA LIMITED LIABILITY COMPANY
AS TENANT
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TABLE OF CONTENTS
Page
ARTICLE 1 .................................................................. 1
DEFINITIONS ............................................................ 1
1.1 Affiliate ......................................................... 1
1.2 Commencement Date ................................................. 1
1.3 Floor Area ........................................................ 1
1.4 Gross Sales ....................................................... 1
1.5 Lease Year ........................................................ 2
1.6 Permitted Closure Period .......................................... 3
1.7 Person ............................................................ 3
1.8 Project ........................................................... 3
1.9 Rent Commencement Date ............................................ 3
1.10 Rules and Regulations ............................................. 3
1.11 Tenant Improvements ............................................... 3
1.12 TI Costs .......................................................... 3
1.13 TI Cost Statement ................................................. 3
ARTICLE 2 .................................................................. 4
LEASE OF PREMISES AND CONSTRUCTION ..................................... 4
2.1 Lease .............................................................. 4
2.2 Construction of Premises ........................................... 4
2.3 Relocation ......................................................... 4
2.4 Remodeling ......................................................... 5
2.5 Amortization of Tenant Improvements ................................ 6
ARTICLE 3 .................................................................. 7
TERM ................................................................... 7
3.1 Duration ........................................................... 7
3.2 Options to Extend Term ............................................. 7
3.3 Landlord's Right to Terminate ...................................... 7
ARTICLE 4 .................................................................. 8
MINIMUM RENT ........................................................... 8
4.1 Minimum Rent ....................................................... 8
ARTICLE 5 .................................................................. 9
PERCENTAGE RENT ........................................................ 9
5.1 Percentage Rent .................................................... 9
5.2 Adjustment to Annual Percentage Rental Rate ........................ 9
5.3 Annual Adjustment .................................................. 9
(i)
3
5.4 Tenant Reports ..................................................... 9
5.5 Tenant Records ..................................................... 10
5.6 Audit .............................................................. 10
ARTICLE 6 .................................................................. 11
ADDITIONAL RENT ........................................................ 11
6.1 Additional Rent .................................................... 11
6.2 Payments by Landlord ............................................... 11
ARTICLE 7 .................................................................. 11
USE AND OPERATION ...................................................... 11
7.1 Designated Use .................................................... 11
7.2 Insurance Requirements: Governmental Regulations .................. 11
7.3 Restrictions on Use ............................................... 12
7.4 Business Operations ............................................... 12
7.5 Tradename ......................................................... 13
7.6 Employees ......................................................... 14
7.7 Security .......................................................... 15
7.8 Regulatory Authorities ............................................ 15
7.9 Restrictive Covenant .............................................. 15
7.10 Landlord Comps .................................................... 16
7.11 Room Charges ...................................................... 17
7.12 Beverage Providers ................................................ 17
7.13 Complimentary Rooms ............................................... 17
ARTICLE 8 .................................................................. 17
INSURANCE .............................................................. 17
8.1 Tenant's Insurance ................................................. 17
8.2 Landlord's Insurance ............................................... 19
8.3 Waiver of Subrogation .............................................. 19
ARTICLE 9 .................................................................. 19
TAXES .................................................................. 19
9.1 Additional Taxes ................................................... 19
9.2 Sales Tax .......................................................... 20
9.3 CET ................................................................ 20
ARTICLE 10 ................................................................. 20
SERVICES ............................................................... 20
10.1 Services Provided ................................................. 20
10.2 Service Charges ................................................... 21
10.3 Service Interruption .............................................. 21
(ii)
4
ARTICLE 11 ................................................................. 22
REPAIRS AND MAINTENANCE ................................................ 22
11.1 Repairs and Maintenance by Landlord ............................... 22
11.2 Repairs and Maintenance by Tenant ................................. 22
ARTICLE 12 ................................................................. 23
ALTERATIONS AND IMPROVEMENTS ........................................... 23
12.1 Alterations and Improvements ...................................... 23
12.2 Trade Fixtures .................................................... 23
12.3 Liens ............................................................. 24
ARTICLE 13 ................................................................. 24
ADVERTISING ............................................................ 24
13.1 Advertising ....................................................... 24
ARTICLE 14 ................................................................. 25
RULES AND REGULATIONS .................................................. 25
14.1 Rules and Regulations ............................................. 25
ARTICLE 15 ................................................................. 25
ASSIGNMENT AND SUBLETTING .............................................. 25
15.1 Assignment and Subletting ......................................... 25
15.2 Certain Excluded Transactions ..................................... 26
15.3 Transfers Not Requiring the Consent of Lessor ..................... 26
15.4 Landlord's Option as to Subject Space ............................. 26
15.5 Concessionaires ................................................... 27
15.6 Assignment in Bankruptcy .......................................... 27
ARTICLE 16 ................................................................. 27
INDEMNITY .............................................................. 27
16.1 Indemnification ................................................... 27
ARTICLE 17 ................................................................. 28
EMINENT DOMAIN ......................................................... 28
17.1 Entire or Substantial Taking ...................................... 28
17.2 Partial Taking .................................................... 28
17.3 Election to Terminate ............................................. 28
17.4 Disposition of Proceeds ........................................... 28
ARTICLE 18 ................................................................. 29
DAMAGE OR DESTRUCTION .................................................. 29
18.1 Damage or Destruction: Landlord to Rebuild ........................ 29
18.2 Option to Terminate ............................................... 29
(iii)
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18.3 Portions to be Rebuilt by Landlord and Tenant ..................... 29
18.4 Non-Liability ..................................................... 30
18.5 Operations During Reconstruction Period ........................... 30
ARTICLE 19 ................................................................. 30
ENTRY BY LANDLORD ...................................................... 30
19.1 Access to Premises ................................................ 30
19.2 Leasing Activities ................................................ 31
ARTICLE 20 ................................................................. 31
ABANDONMENT ............................................................ 31
20.1 Abandonment ....................................................... 31
ARTICLE 21 ................................................................. 31
EVENTS OF DEFAULT BY TENANT ............................................ 31
21.1 Event of Default .................................................. 31
ARTICLE 22 ................................................................. 32
REMEDIES OF LANDLORD ................................................... 32
22.1 Remedies .......................................................... 32
22.2 Late Charge ....................................................... 34
ARTICLE 23 ................................................................. 34
ESTOPPEL CERTIFICATES AND SUBORDINATION ................................ 34
23.1 Estoppel Certificates ............................................. 34
23.2 Subordination ..................................................... 35
23.3 Priority Option ................................................... 35
23.4 Attornment ........................................................ 35
ARTICLE 24 ................................................................. 35
SALE OF PREMISES ....................................................... 35
24.1 Sale of Premises by Landlord ...................................... 35
ARTICLE 25 ................................................................. 36
HOLDING OVER ........................................................... 36
25.1 Holding Over ...................................................... 36
ARTICLE 26 ................................................................. 36
SURRENDER OF PREMISES .................................................. 36
26.1 Surrender ......................................................... 36
26.2 Merger Upon Surrender ............................................. 36
(iv)
6
ARTICLE 27 ................................................................. 36
GENERAL PROVISIONS ..................................................... 36
27.1 Waivers ........................................................... 36
27.2 No Accord and Satisfaction ........................................ 37
27.3 Notices ........................................................... 37
27.4 Relationship of the Parties ....................................... 37
27.5 Attorneys' Fees ................................................... 37
27.6 Binding Effect .................................................... 37
27.7 Interest on Past Due Obligations .................................. 38
27.8 Severability ...................................................... 38
27.9 Entire Agreement; Amendment ....................................... 38
27.10 Captions ......................................................... 38
27.11 Construction ..................................................... 38
27.12 Time of Essence .................................................. 38
27.13 Execution of Additional Documents ................................ 38
27.14 Time Periods ..................................................... 38
27.15 Recordation ...................................................... 39
27.16 Brokers .......................................................... 39
27.17 Quiet Enjoyment .................................................. 39
27.18 Force Majeure .................................................... 39
(v)
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EXHIBITS
A - Description of Project
B - Site Plan for Premises
C - Work Letter Agreement
D - Sample Menu
D-1 - Prohibited Menu Items
E - Ownership of Tenant
F - Accounting Procedures
G - Restricted Area
(vi)
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FUNDAMENTAL LEASE PROVISIONS
LANDLORD: Mandalay Corp., a Nevada corporation
Landlord's Address: c/o Circus Circus Enterprises, Inc.
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
With a copy to: Circus Circus Enterprises, Inc.
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: General Counsel
TENANT: Border Grill Las Vegas, LLC,
a Nevada limited liability company
Tenant's Address: 0000 0xx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
and
After opening to the Premises address
With a copy to Tenant's attorney: Xxxxx X. Xxxxx, Esq.
1900 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
and another copy to: Xxx Xxxxx, Esq.
Singer, Xxxxx & Xxxxxxxxx
000 X. Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
TENANT'S TRADENAME: BORDER GRILL
PREMISES: The Floor Area located on two floors
and shown by diagonal lines on
EXHIBIT B together with the
exclusive use of that portion of the
patio area also shown by diagonal
lines on EXHIBIT B. The Premises is
comprised of approximately 9,666
square feet of Floor Area in the
interior of the Premises
(approximately 6,140 square feet on
the
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first floor and approximately 3,526
square feet of floor area on the
second floor) and approximately
3,670 square feet of adjacent patio
area as shown on Exhibit B. The
Premises shall not include the
exterior walls, the roof, the area
above or below the Premises, or the
land upon which the Premises are
located.
ESTIMATED LATEST
DELIVERY DATE: May 15, 1998
ESTIMATED RENT
COMMENCEMENT DATE: June 15, 1998
TERM: A period commencing on the
Commencement Date and expiring on
the last day of the month in which
the tenth (10th) anniversary of the
Rent Commencement Date occurs.
OPTIONS TO EXTEND: One 60-month option to extend
MINIMUM RENT: $6,250/month
SECURITY DEPOSIT: None
ANNUAL PERCENTAGE 5% of Gross Sales (as defined
RENTAL RATE: herein) (subject to adjustment per
SECTION 5.2 below)
USE OF PREMISES: Mexican restaurant. Tenant shall
also have the non-exclusive right to
sell alcoholic beverages from the
Premises. Tenant may allow its
patrons to purchase food and
beverages at the Premises for
consumption outside the Premises,
but Tenant shall not offer delivery
service outside the Premises,
including, but not limited to, the
patio areas not included within the
Premises. Copies of sample menus for
the Restaurant are attached as
EXHIBIT D ("SAMPLE MENU") for purpose
of defining the character of the
Restaurant to be operated on the
Premises. The attachment of the
Sample Menu shall not limit the
items that Tenant may serve in the
Premises, but Tenant may not, by
adding or deleting menu items,
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change the character of the
Restaurant without Landlord's prior
written consent, which consent shall
not be unreasonably withheld. Copies
of menu items not permitted to be
served at the Restaurant are
attached as EXHIBIT D-1.
GUARANTOR(S): None
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LEASE
FOR
RESTAURANT SPACE
(the "Lease")
DATE: November 12, 1998
LANDLORD: MANDALAY CORP., a Nevada corporation
TENANT: BORDER GRILL, LAS VEGAS, LLC, a
Nevada limited liability company
In consideration of the mutual covenants and agreements contained in
this Lease, Landlord and Tenant, acting through its manager TT&T, LLC, agree as
follows:
ARTICLE 1
DEFINITIONS
As used in this Lease, the following terms shall have the following
meanings:
1.1 Affiliate: In relation to any Person, any other Person controlled,
directly or indirectly, by such Person, any other Person that controls, directly
or indirectly, such Person or any Person directly or indirectly under common
control with such Person.
1.2 Commencement Date: The date of Substantial Completion (as defined
in the Work Letter Agreement attached as Exhibit C).
1.3 Floor Area: The respective portion of the floor area of the
Premises from time to time subject to lease by Tenant pursuant to this Lease, as
determined and applied by Landlord.
1.4 Gross Sales: The actual receipts of sales or rentals of all food,
goods, wares and merchandise sold, leased or delivered and the actual charges of
all services performed by Tenant or by any subtenant, licensee or concessionaire
of Tenant in, at, from, or arising out of the use of the Premises, whether for
wholesale, retail, cash, credit, or trade-ins or otherwise, without reserve or
deduction for inability or failure to collect. Gross Sales shall include,
without limitation, sales and services: (a) where the orders therefor originate
in, at, from, or arising out of the use of the Premises, whether delivery or
performance is made from the Premises or from some other place, (b) made or
performed by mail, telephone, telegraph, facsimile, or other electronic means,
(c) made or performed by means of mechanical or other vending devices in the
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Premises, and (d) which Tenant or any subtenant, licensee, concessionaire or
other person in the normal and customary course of its business would credit or
attribute to its operations at the Premises or any part thereof. Any sum
deposited with and forfeited to Tenant shall be included in Gross Sales. Each
installment or credit sale shall be treated as a sale for the full price in the
month during which such sale is made, regardless of whether or when Tenant
receives payment therefor. No franchise or capital stock tax and no income or
similar tax based on income or profits shall be deducted from Gross Sales. Gross
Sales shall not include, or if included there shall be deducted (but only to the
extent they have been included in Gross Sales): (i) the net amount of any cash
or credit refunds or credit allowed on services upon any sale or rental from the
Premises where the merchandise sold or rented, or some part thereof, is returned
by the purchaser to Tenant after the sale or rental (not exceeding in amount the
selling or rental price of the item in question) or upon the rejection of any
food or beverage from the Premises, provided that Tenant shall not be required
to accept any returned merchandise if a cash refund or credit allowance is
issued in lieu thereof, and provided further that any credit or refund shall
reduce Gross Sales for the accounting period such credit or refund is made but
shall not affect Gross Sales for the period in which the original sales or
rental relating to such income were made; (ii) the amount of any city, county,
state or federal sales, use, gross receipts, transaction privilege, luxury,
casino entertainment or excise tax ("CET") on such sale which is both added to
the selling price (or absorbed in the price) and paid to the taxing authorities
by Tenant (but not by any vendor of Tenant); (iii) the amount of any discount on
sales to employees; (iv) service charges. interest and collection expenses
received or receivable from customers for sales on credit and service, credit
card and other charges or fees paid by Tenant to credit card companies, banks
and similar organizations resulting from use of credit or debit cards by
customers; (v) income from or the value of any complimentary items or discounts
granted pursuant to SECTION 7.10 hereof, of the costs of any complimentary
issued by Landlord or any of its Affiliates for food, beverages, other goods,
services, merchandise or the like purchased or received from or at the Premises
to any hotel or casino guest of Landlord or any such Affiliate at the Project or
any other hotel/casino owned or operated by Landlord or any of its Affiliates,
(vi) income from the reimbursement pursuant to SECTION 7.11 hereof of the costs
of any room charges incurred by any hotel guest at the Project or any other
property owned or operated by Landlord or any of its Affiliates, provided that
all such items shall be considered income for purposes of calculating Gross
Sales during the accounting period when such charges are made by the guest;
(vii) income from inventory returned to suppliers in an amount not to exceed the
original amount paid by Tenant for the returned inventory, and (viii) the
redemption of gift certificates (but not the purchase of gift certificates). The
retail value of food or merchandise used or given away as samples shall not be
included in Gross Sales, but rather shall be credited against the amount of
Gross Sales made from the Premises. Where coupons, 2 for -1's or other discount
promotions are used, only the actual sales price paid to Tenant shall be
included in Gross Sales.
1.5 Lease Year: The period during the Lease Term commencing an January
1st in each year and ending at midnight on the 31st of December of that year,
except that the first Lease Year
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shall commence at the start of the Lease Term and shall end at midnight on the
31st of December of that year, and except that the last Lease Year shall end at
the expiration of the term of this Lease or at the time of any earlier
termination of this Lease in accordance with the terms hereof.
1.6 Permitted Closure Period: Any period when the Premises may be
temporarily closed for relocation pursuant to SECTION 2.3 or remodeling pursuant
to SECTION 2.4, closed if permitted under SECTION 7.4, untenantable by reason of
any force majeure event described in SECTION 27.18, temporarily closed for
repairs or maintenance under ARTICLE 11, or temporarily closed due to failure to
supply Services under ARTICLE 10, or temporarily closed because of a partial
taking pursuant to SECTION 17.2.
1.7 Person: Any natural person, corporation, limited liability company,
partnership, limited partnership, limited liability partnership, association,
organization or any other entity of whatsoever nature.
1.8 Project: The building and related improvements commonly referred to
as Mandalay Bay Resort & Casino located at 0000 Xxx Xxxxx Xxxxxxxxx Xxxxx, Xxx
Xxxxx, Xxxxxx, and more generally depicted on EXHIBIT A attached hereto.
1.9 Rent Commencement Date: The earlier of (i) thirty (30) days after
Substantial Completion (as defined in the Work Letter) or (ii) the date Tenant
opens for business in the Premises, provided, however, that the Commencement
Date shall not occur any earlier than the Estimated Rent Commencement Date
unless Tenant agrees to open for business prior to such date. Tenant agrees that
it will use reasonable efforts to open prior to the Estimated Rent Commencement
Date if it receives possession of the Premises on or before the Estimated Latest
Delivery Date, but it will not be in default under this Lease if it fails to do
so.
1.10 Rules and Regulations: The rules and regulations adopted in
accordance with SECTION 14.1.
1.11 Tenant Improvements: The improvements to the Premises to be
constructed pursuant to EXHIBIT C.
1.12 TI Costs: The cost of the Tenant Improvements determined in
accordance with EXHIBIT C. Wherever applicable in this Lease, the TI Costs shall
be deemed to be amortized over the initial ten (10) year term of this Lease.
1.13 TI Cost Statement: A statement setting forth the TI Costs as set
forth on EXHIBIT C.
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ARTICLE 2
LEASE OF PREMISES AND CONSTRUCTION
2.1 Lease. Landlord leases the Premises to Tenant and Tenant leases the
Premises from Landlord, for the Lease Term, at the rental, and upon the
covenants and conditions contained in this Lease, including the Fundamental
Lease Provisions and all Exhibits attached hereto. In addition to the Premises,
Tenant shall have the right to use, in common with Landlord and other tenants or
licensees of the Project, areas to be designated by Landlord for receiving,
garbage disposal, freight elevators, locker room facilities and employee and
customer parking areas (the "COMMON AREAS"). The Common Areas may be altered,
reconfigured or relocated by Landlord from time to time during the Lease Term.
2.2 Construction of Premises. Landlord shall construct or cause to be
constructed the Tenant Improvements in accordance with the Work Letter Agreement
attached as EXHIBIT C. Landlord shall be obligated to spend up to Six Hundred
Seventy-Five Thousand and No/100 Dollars ($675,000.00), as a tenant improvement
allowance to be used in accordance with the terms of the Work Letter Agreement.
Except as specifically set forth in this Lease and in the Work Letter Agreement
attached hereto as EXHIBIT C, Landlord shall not be obligated to provide or pay
for any improvement work or services related to the improvement of the Premises.
Tenant also acknowledges that Landlord has made no representation or warranty
regarding the condition of the Premises or the Project except as specifically
set forth in this Lease and the Work Letter Agreement.
2.3 Relocation.
(a) Tenant acknowledges that Landlord shall have an absolute
right at anytime after the third anniversary of the Lease and from time
to time thereafter to relocate the Premises within the Project, at
Landlord's cost, provided that the premises to which Tenant is
relocated (i) shall be no less than ninety percent (90%) of the size of
the original premises, (ii) shall be located in an area having
substantially similar levels of pedestrian foot traffic, (iii) shall
have similar visibility, quality and, adjacent view, (iv) shall have
access to a substantially comparable patio area and two-story layout as
exists for the original premises, and (v) shall be appropriately
configured for Tenant's restaurant use. If Landlord exercises its right
to relocate Tenant pursuant to this Section, Landlord shall notify
Tenant in writing (the "Relocation Notice") specifying the location of
the new premises. If Tenant objects to the new premises, Tenant shall
notify Landlord in writing within ten (10) business days following the
Relocation Notice, specifying its objections to the new premises. If
Tenant fails to object within such 10-business day period, Tenant shall
be deemed to have approved the new premises. If Tenant objects to the
new premises, Landlord and Tenant shall meet and confer in an attempt
to address Tenant's concerns, but if Landlord is unable to resolve the
same
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within thirty (30) days after the Relocation Notice, Landlord may
terminate this Lease upon written notice to Tenant. Provided that
Tenant is not in default at the time of any such termination, Landlord
shall reimburse Tenant for the unamortized portion of any TI Costs paid
for by Tenant. If this Lease is not terminated pursuant to this SECTION
2.3 and as a result of a relocation under this SECTION 2.3 there is any
reduction in the Floor Area of the Premises, then Minimum Rent and the
Threshold Amount shall be reduced to an amount equal to that proportion
that the Floor Area after the relocation bears to the Floor Area of the
Premises prior to the relocation.
(b) All costs and expenses of relocating to the new premises,
including, without limitation, all reasonable costs incurred by Tenant
in relocating to the new premises, shall be paid by Landlord. If
Landlord exercises its right to relocate Tenant, Landlord shall
reconstruct the Tenant Improvements in a form substantially equivalent
to the improvements constructed pursuant to EXHIBIT C and shall install
at Landlord's expense all furnishings, equipment, furniture and
finishes necessary to make the relocated premises substantially the
same as the original premises (the "FINISH WORK"). Within ten (10) days
after Landlord has notified Tenant that it has substantially completed
the improvements (in accordance with the standards for "SUBSTANTIAL
COMPLETION" as set forth in the Work Letter Agreement) to be
constructed by Landlord on the relocated premises and has completed the
Finish Work for the relocated premises, Tenant shall surrender the
original premises and the relocated premises shall be deemed the
Premises hereunder. During any portion of such 10-day period that
Tenant is not conducting business in either premises, rent and all
other costs or charges payable hereunder (other than premiums for
insurance maintained by Tenant hereunder) shall be abated and the Lease
Term shall be extended for the entire period during which Tenant is not
doing business. Following any relocation. Landlord and Tenant shall
execute an amendment designating the relocated premises on EXHIBIT B
setting forth the revised expiration date of the Term and the revised
Minimum Rent and Threshold Amount, if applicable. Other than EXHIBIT B,
the Lease Term extension and any adjustment to Minimum Rent and the
Threshold Amount, all terms and conditions contained in this Lease
shall continue unmodified following such relocation.
2.4 Remodeling. Landlord may, in connection with any remodeling of all
or any portion of the Project, change, at Landlord's sole cost and expense, the
dimensions or reduce the size of the Premises to not less than ninety percent
(90%) of its original size so long as the remodeled Premises and improvements
are substantially similar to the original Premises and improvements; provided,
however, that if, in Tenant's reasonable judgment, as a result thereof the
remaining portion of the Premises is not suitable for the purpose for which
Tenant has leased the Premises, Tenant may terminate this Lease by written
notice to Landlord given within thirty (30) days after Landlord notifies Tenant
of Landlord's intention to remodel; provided further, however, that such
termination shall not be effective if within thirty (30) days of Tenant's notice
thereof, Landlord notifies Tenant either of its election to relocate Tenant
pursuant to SECTION 2.3
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hereof or to rescind Landlord's intention to remodel. If Tenant terminates this
Lease pursuant to this SECTION 2.4, Landlord shall reimburse Tenant the
unamortized portion of any TI Costs paid for by Tenant, provided Tenant is not
in default at the time of any such termination. If Tenant does not elect to
terminate this Lease pursuant to this SECTION 2.4 and as a result of Landlord's
remodeling under this SECTION 2.4 there is any reduction in the area of
Premises, then Minimum Rent and the Threshold Amount shall be reduced to an
amount equal to that proportion that the Floor Area after the remodeling bears
to the Floor Area of the Premises prior to the remodeling. In the event of any
remodeling pursuant to this SECTION 2.4, Landlord shall repair any damage to the
Premises and repair or replace any improvements, furniture, fixtures, equipment
and other property damaged or removed thereby. Without limiting the foregoing,
if the kitchen area is reduced as the result of any remodeling, Landlord shall
be responsible for restoring the kitchen area in such a manner so that the size
and layout of the kitchen area remain relatively the same as existed in the
original Premises so as to adequately serve the remodeled service and seating
area, and the kitchen remains sufficient to meet the needs of Tenant in its
reasonable judgment. In connection with any such remodeling, Landlord may
require Tenant to cease conducting business in the Premises for a period not to
exceed thirty (30) days. The rent and all other costs and charges payable or
reimbursable hereunder (other than premiums for insurance maintained by Tenant
hereunder) shall be abated during any period that Landlord requires Tenant to
cease conducting business under this SECTION 2.4 and Landlord will reimburse
Tenant for its actual, out-of-pocket costs directly incurred during any period
Tenant is required to cease conducting business in the Premises and which cannot
reasonably be avoided; provided that, in no event, shall the amount of such
reimbursement per day exceed an amount equal to the average daily cost of
salaries and other employee related expenses and other non-avoidable expense
over the immediately preceding six (6) month period. The Lease Term shall be
extended by an amount of time equal to the entire period during which Landlord
requires Tenant to cease conducting business under this Section. Following such
remodeling, Landlord and Tenant shall execute an amendment designating any
changes to the Premises pursuant to this Section on EXHIBIT B, the revised
expiration date of the Term and the revised Minimum Rent and Threshold Amount,
if applicable.
2.5 Amortization of Tenant Improvements. For purposes of any payments
due to Tenant in the event of a termination under SECTION 2.3 and SECTION 2.4,
such amount shall be paid upon the effective date of termination of the Lease
and the surrender by the Tenant of the Premises. In calculating the termination
payment, the TI Costs shall be determined by reference to the TI Cost Statement
and shall be amortized over the initial Lease Term, and no such payment shall be
due in the event any such termination occurs during an Option Term.
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ARTICLE 3
TERM
3.1 Duration. The term of this Lease (the "LEASE TERM") shall be for
the period specified in the FUNDAMENTAL LEASE PROVISIONS, unless sooner
terminated in accordance with the provisions hereof. Following the commencement
of the Lease Term, Tenant and Landlord shall, upon either party's request,
execute and deliver to Landlord an addendum to this Lease specifying the
Commencement Date, the Rent Commencement Date and the last day of the Lease
Term. Tenant agrees that if for any reason whatsoever Landlord is unable to
deliver possession of the Premises to Tenant by the Estimated Latest Delivery
Date specified in the FUNDAMENTAL LEASE PROVISIONS, this Lease shall not be void
or voidable, nor shall the Landlord be liable to Tenant for any loss or damage
resulting therefrom.
3.2 Options to Extend Term. Provided (i) Tenant is not in default of
any provision of the Lease at the time of exercise or at any time thereafter
prior to the commencement of the Option Term (defined below) or (ii) there have
not been more than five (5) monetary defaults or seven (7) total defaults during
the Lease Term, Tenant may extend the Lease Term for an additional five (5) year
period ("OPTION TERM") by giving Landlord written notice not more than eighteen
(18) months nor less than twelve (12) months before the expiration of the Lease
Term. Time is of the essence in the exercise of the options. All of the terms
and conditions of the Lease shall apply to the Option Term so far as applicable,
and reference in the Lease to the "LEASE TERM" shall be deemed to include the
Option Term to the extent exercised, except that (i) the right to extend the
Lease Term for the Option Term shall not apply and (ii) the Minimum Rent,
Threshold Amount and the Comp Threshold shall each be increased by ten percent
(10%) from the amounts applicable to the Lease Term.
3.3 Landlord's Right to Terminate.
(a) Tenant acknowledges that Landlord is relying on Tenant's
ability to generate a threshold level of traffic in the Premises which
will benefit the Project. Therefore, if in the period commencing the
first day of the month following the first anniversary of the Rent
Commencement Date and ending on the twelfth (12th) month thereafter or
during any succeeding (but not overlapping) twelve (12) month period
(each referred to as the "MEASUREMENT PERIOD"), Tenant does not have
Gross Sales greater or equal to the "THRESHOLD AMOUNT" (defined below),
then Landlord may terminate this Lease by written notice to Tenant
given within sixty (60) days from the date when Landlord receives the
Monthly Statement for the twelve (12) calendar month of the Measurement
Period indicating that the Gross Sales for any such Measurement Period
were not the Threshold Amount. For purposes of this Section, the
Threshold Amount shall be $2,500,000 until the third anniversary of the
Rent Commencement Date and $3,000,000 commencing on the third
anniversary of the Rent Commencement Date and continuing until the end
of
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the Lease Term. The Threshold Amount shall be reduced prorata for any
Permitted Closure Period and as provided in SECTIONS 2.3 and 2.4. Upon
the exercise by Landlord of the termination right described in this
SECTION 3.3(a), this Lease shall be terminated and neither Landlord nor
Tenant shall have any further liability or obligation to the other,
except with respect to liabilities, obligations or other provisions
specifically stated in this Lease to survive any termination hereof and
with respect to SECTION 3.3(b).
(b) If Landlord exercises the termination right set forth in
SECTION 3.3(a) above, Landlord shall pay to Tenant a termination
payment equal to (i) the portion of the TI Costs paid for by Tenant
(calculated by deducting the TI Allowance from the total TI Costs, as
such terms are defined in the Work Letter Agreement), less (ii)
Tenant's Net Profit derived from the Premises since the Commencement
Date. For purposes of this Lease "NET PROFIT" shall be calculated on an
after tax basis and mean the Gross Sales (subject to modification as
provided below) derived from the Premises less all amounts used to pay
or establish reasonable reserves for all expenses relating to the
operation of the Premises, including, but not limited to, the cost of
food and beverages, wages and benefits, supplies, advertising and
promotion, administrative expenses, a management fee not to exceed 5%
of gross receipts, capital improvements, repair and replacements of
FF&E, and any other proper cash expenditure as reasonably determined by
the Landlord. If the Net Profit received from the Premises since the
Commencement Date exceeds the portion of the TI Costs paid by Tenant,
there shall be no termination payment due to Tenant if Landlord
exercises its rights under SECTION 3.3(a) of this Lease.
ARTICLE 4
MINIMUM RENT
4.1 Minimum Rent. Commencing on the Rent Commencement Date, Tenant
shall pay Landlord for each month during the Lease Term from and after the Rent
Commencement Date, rent each month in the amount set forth in the Fundamental
Lease Provisions (the "Minimum Rent"). Minimum Rent shall be paid monthly in
advance on the first day of each month of the Lease Term from and after the Rent
Commencement Date, without any deduction or offset other than any rent abatement
specifically provided for under the terms of this Lease. If the Rent
Commencement Date occurs on a day other than the first day of a calendar month,
then upon the Rent Commencement Date, Tenant shall pay to Landlord, as Minimum
Rent for the partial month, a pro rata portion of the Minimum Rent payable for a
full month.
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ARTICLE 5
PERCENTAGE RENT
5.1 Percentage Rent. In addition to the Minimum Rent and other sums
required to be paid by Tenant under this Lease, and subject to the provisions of
SECTION 5.2 below, Tenant shall pay as "PERCENTAGE RENT" a sum equal to the
Annual Percentage Rental Rate times the amount of Gross Sales of Tenant made
from or upon the Premises during each Lease Year, less the amount of Minimum
Rent paid by Tenant during such Lease Year. Percentage Rent shall be computed
each month, and within fifteen (15) days of the date such month ends, Tenant
shall pay to Landlord the amount by which the sum computed as the Annual
Percentage Rental Rate of Tenant's Gross Sales during that period exceeds the
Minimum Rent paid by Tenant for the same period. In no event shall Landlord be
obligated to refund to Tenant any portion of the Minimum Rent for a given Lease
Year if the amount calculated by multiplying the Annual Percentage Rental Rate
by the Gross Sales is less than the Minimum Rent for such Lease Year.
5.2 Adjustment to Annual Percentage Rental Rate. The Annual Percentage
Rental Rate shall be seven percent (7%) of Gross Sales for that portion of
annual Gross Sales of Tenant made from or upon the Premises in excess of Four
Million Five Hundred Thousand Dollars ($4,500,000) in any Lease Year. Such
adjustment will be reflected in the annual payment referenced in Section 5.3
below.
5.3 Annual Adjustment. Within ninety (90) days after the end of each
Lease Year, Tenant shall determine the amount of Tenant's Gross Sales during
that Lease Year and the amounts payable to Landlord as Minimum Rent and as
Percentage Rent for that Lease Year. If the total amount of Minimum Rent and
Percentage Rent owing for the Lease Year is greater than the total amount of
Minimum Rent and Percentage Rent paid by Tenant during the Lease Year, Tenant
shall immediately pay the deficiency to Landlord. If the total amount of Minimum
Rent and Percentage Rent paid by Tenant during a Lease Year exceeds the total
amount of Minimum Rent and Percentage Rent required to be paid by Tenant during
such Lease Year, Tenant shall receive a credit equivalent to the excess which
may be deducted by Tenant from the next accruing payment or payments of either
Minimum Rent or Percentage Rent or, if the Lease has expired, Landlord shall pay
such amount to Tenant within thirty (30) days after such amount has been
determined.
5.4 Tenant Reports. On or before the fifteenth (15th) day following the
end of each month during the Lease Term, Tenant agrees to submit to Landlord a
written statement signed by Tenant and certified by Tenant to be true and
correct, showing the amount of Gross Sales during the preceding month ("MONTHLY
STATEMENT"). On or before the sixtieth (60th) day following the end of each
Lease Year, Tenant agrees to submit to Landlord a written statement signed by
Tenant and certified by Tenant to be true and correct, showing the amount of
Gross Sales during the preceding Lease Year.
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5.5 Tenant Records. Tenant agrees to keep full, complete and proper books,
records and accounts of the daily Gross Sales from the Premises and any
concession operated at any time in the Premises; of inventories, purchases and
receipts of merchandise; of sales tax; and of all other transactions and
matters, including sales slips, cash register tape readings, sales books, bank
books, deposit slips and sales tax reports, normally examined and required to be
kept by an independent accountant and/or any Regulatory Authority (as
hereinafter defined) pursuant to accepted auditing standards in performing an
audit of Gross Sales. All such books, records and accounts shall be kept for a
period of at least one (1) year following the end of each Lease Year. Within one
(1) year after the end of the Lease Year, Landlord, its agents and employees,
upon at least seven (7) days prior written notice, may examine and inspect all
of the books and records relating to the business conducted upon the Premises
for the purpose of investigating and verifying the accuracy of any statement of
Gross Sales and Net Profit during the prior Lease Year. Tenant agrees to require
any subtenants, concessionaires, and licensees to also maintain records meeting
the requirements of this SECTION 5.5.
5.6 Audit. At any time within one (1) year after the end of the Lease
Year, Landlord may cause an audit of Tenant's business to be made for the
purpose of verifying the accuracy of any statement of Gross Sales and Net Profit
during the prior Lease Year. The audit shall be performed by a representative
selected by Landlord, and Tenant agrees to make all records available for the
audit at the Premises or at Tenant's corporate offices, as Tenant may elect. If
the results of the audit show that Tenant's statement of Gross Sales for any
period has been understated by four percent (4%) or more, then Tenant shall
immediately pay Landlord the cost of the audit in addition to any deficiency
payment required, plus an amount equal to twelve percent (12%) of the amount of
the understatement. If understatements are shown for more than five (5) monthly
periods or three (3) annual periods during the Lease Term, such understatements
shall be an incurable event of default under this Lease unless such
understatements are the result of wrongful acts of Tenant's employees outside
the scope of employment (i.e., embezzlement by an employee); provided that if
any understatement is based on a single error that results in a consistent under
reporting of Gross Sales, such error shall constitute a single understatement
for purpose of this Section unless Tenant fails to correct such error on
subsequent statements prepared after the error is discovered. Any information
obtained by Landlord as a result of receiving statements of Gross Sales or
auditing the same or otherwise pursuant to this Lease shall be held in strict
confidence by Landlord except (i) in any proceeding or action to collect the
cost of the audit or deficiency, and then only to the extent relevant thereto,
(ii) to the extent required to be disclosed by law or by regulatory authorities,
or (iii) with respect to a prospective sale, mortgage, lease or leaseback of the
Project or a portion thereof including the Premises, and then only to
prospective lenders, purchasers, lessees under a ground lease or sale leaseback
or their consultants.
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ARTICLE 6
ADDITIONAL RENT
6.1 Additional Rent. In addition to Minimum Rent and Percentage Rent, all
other payments to be made by Tenant under this Lease, including, but not limited
to the Service Charge payable under Article 10, shall be deemed Additional Rent
and shall be due and payable within five (5) days of written demand if no other
time for payment is specified.
6.2 Payments by Landlord. Upon ten (10) days prior written notice to
Tenant or such shorter period as may be necessary for Landlord to avoid a
delinquency and/or late charge, Landlord may pay any sum or do any act which
Tenant has failed to do, and Tenant agrees to pay Landlord, upon demand, all
sums so expended by Landlord, together with interest from the date of
expenditure until paid at a rate equal to the lesser of twelve percent (12%)
per annum or the maximum rate allowed by law. Such sum and interest shall also
be deemed Additional Rent.
ARTICLE 7
USE AND OPERATION
7.1 Designated Use. Tenant agrees to use the Premises solely for the
purpose set forth in the FUNDAMENTAL LEASE PROVISIONS. Tenant shall not use or
permit the Premises to be used for any other purpose whatsoever without
Landlord's prior written consent. Landlord hereby covenants and agrees that, so
long as Tenant is not in default hereunder, Tenant shall have the exclusive
right to operate a Mexican and Latin American style restaurant within the
Project. Notwithstanding anything to the contrary in this Section or elsewhere
in this Lease, Tenant acknowledges and agrees that such exclusive right shall
not limit or restrict the following: (i) Mexican and/or Latin American items
available for catered functions or through room service, (ii) selected items of
Mexican and/or Latin cuisine offered in other restaurants so long as not more
than twenty-five percent (25%) of the items offered in such other restaurants
are characterized as Mexican and/or Latin cuisine, or (iii) coffee shops and
buffets or similar food service operations in the Project. On or before the
Commencement Date, Tenant shall submit its menu to Landlord if it is different
from the Sample Menu attached as EXHIBIT D. Tenant may change selected menu
items, but shall not substantially change the overall character of items being
offered for sale without Landlord's prior written consent, which consent will
not be unreasonably withheld. Without limiting the foregoing, Tenant shall not
sell or offer for sale the types of cuisine listed on Exhibit D-1 in excess of
the percentages listed thereon.
7.2 Insurance Requirements: Governmental Regulations. Tenant shall not do
or permit anything to be done in or about the Premises, or bring or keep
anything on the Premises, which will in any way increase the rate of fire
insurance on the Project over and above the customary rates for fire insurance
for projects including fine-dining restaurant(s) similar to the Premises. At
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Tenant's expense, Tenant agrees to comply, in all material respects, with all
fire and public liability insurance requirements relating to the Premises.
Tenant agrees to comply promptly, in all material respects, with all
governmental laws, ordinances, orders, rules and regulations affecting the
Premises, including, without limitation, any applicable environmental law,
regulation, ordinance or order of any governmental entity, or any other federal,
state or local laws relating to the contamination of or adverse effects on the
environment. Tenant hereby agrees to indemnify and hold Landlord harmless for,
from and against any losses, liabilities, damages, costs, expenses, and claims
of any kind whatsoever, including reasonable attorneys' fees, incurred by
Landlord and arising from or relating to the violation by Tenant of any
agreement of Tenant made in the immediately foregoing sentence. This indemnity
shall survive the expiration or earlier termination of the Lease Term.
7.3 Restrictions on Use. Without limiting the provisions of this Article
7, no auction, fire or bankruptcy sales may be conducted in the Premises without
Landlord's prior written consent. Tenant shall not, without Landlord's prior
written approval, operate or permit to be operated on the Premises any coin or
token operated vending machines or similar device for the sale or leasing to the
public of any goods, wares, merchandise, food, beverages, and/or service,
including, without limitation, pay telephones, pay lockers, pay toilets, scales
and amusement devices. Tenant shall not use or permit the use of any portion of
the Premises for sleeping apartments, lodging rooms or gaming activities. Tenant
shall not perform any acts or carry on any practices which may injure the
Premises or other parts of the Project or be a nuisance or menace to other
tenants in the Project, Landlord or the patrons and customers of either of them.
Tenant agrees to keep the Premises, the walkways adjacent to the Premises, and
any loading platform and service areas allocated or approved by Landlord for the
use by Tenant (whether or not such use is exclusive), clean and free from
Tenant's rubbish and dirt at all times. Tenant agrees to store all trash and
garbage within the Premises or in other area designated by Landlord and to
arrange for removal of such trash and garbage at Tenant's expense. Tenant shall
not make any use of the Premises which is not in compliance with the terms of
this Lease or with the Rules and Regulations.
7.4 Business Operations. Commencing on the Rent Commencement Date and
throughout the remainder of the Lease Term (except (i) during Permitted Closure
Periods, (ii) on Christmas and (iii) during a Tenant Remodel Period (defined
below)), Tenant agrees to continuously occupy and use the entire Premises for
the purpose or purposes specified above, during those days, nights and hours as
shall be determined by Tenant with Landlord's approval, which shall not be less
than nine (9) hours per day, seven days a week. In the event Tenant needs to
close the Premises during the Lease Term during any period other than a
Permitted Closure Period, Christmas or Tenant Remodel Period, Tenant shall
obtain Landlord's prior written consent, which consent may be given or withheld
in Landlord's sole discretion, and if Landlord gives such consent such closure
shall not constitute a breach of this SECTION 7.4. Tenant shall have the right
to close its business to the public for not more than three (3) days every third
Lease Year for remodeling (a "Tenant Remodel Period") provided that (i) Tenant
notifies Landlord in writing at least thirty (30) days prior to any such planned
closing, (ii) all such closings occur on days other
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than Fridays, Saturdays and Sundays, and (iii) all such closings are scheduled
so that they do not conflict with any major activities in the Project or
otherwise unreasonably disrupt Project operations. In the event of a breach by
Tenant of any of the conditions of this SECTION 7.4 which is due to the actions
or inaction of Tenant, Landlord shall have, in addition to any and all remedies
herein provided, the right, at its option, to collect not only the Minimum Rent
herein provided, but additional rent at the rate of one-twentieth (1/20) of the
Minimum Rent herein provided for each and every day that Tenant is not open for
business as herein provided. Tenant shall carry at all times in the Premises
sufficient quantities and qualities of products as shall be reasonably designed
to service its customers and meet anticipated customer demand, and shall staff
the Premises at all times with sufficient personnel to serve its customers.
Tenant's method of conducting its business in the Premises shall at all times be
in keeping with and not inconsistent with or detrimental to the operation by
Landlord of the Project as an exclusive, first-class resort casino facility.
Tenant shall refrain from using or permitting the use of the Premises or any
portion thereof for office, clerical or other non-selling purposes, except space
in the Premises may be used for such purposes to such extent as is reasonably
required for the conduct of Tenant's business thereon. Tenant shall not use the
Premises for storage or warehouse purposes beyond such use as is reasonably
required to keep Tenant's restaurant adequately stocked for sales of product and
merchandise in, at or from the Premises.
7.5 Tradename. Subject to the provisions of this SECTION 7.7, Tenant
shall conduct business under the tradename set forth in the FUNDAMENTAL LEASE
PROVISIONS and no other without prior written consent of Landlord. The rights to
use the name "Border Grill" or any other tradename under which Tenant is
permitted to operate pursuant to this Lease shall be owned by or licensed to
Tenant for the entire Term of this Lease including all extensions thereof.
Tenant represents that the licensor has filed an application to federally
register Border Grill. If a third party claim is threatened or asserted with
respect to Tenant's use of the tradename and Tenant determines, in its
reasonable judgment, to cease using such tradename as a result of such claim
Tenant may change its tradename, provided that Landlord consents to the new
tradename, which consent shall not be unreasonably withheld or delayed. Tenant
also shall have the right to change the tradename under which it is operating in
the Premises in conjunction with any corporate-wide change of tradename or any
permitted assignment or sublease hereunder. Landlord shall not acquire any
property rights in or to the name "Border Grill" by virtue of this Lease. Tenant
shall not conduct any business at any time either before or after the
termination of this Lease, either in the Premises or elsewhere, under a name in
which the words "Mandalay Bay" appears except in reference to the location of
the Premises, without Landlord's prior written consent, and Tenant shall not
acquire any property right in or to any name which contains said word
combinations as a part thereof. Any permitted use by Tenant of the words
"Mandalay Bay" during the term of this Lease shall not permit Tenant to use, and
Tenant shall not use, such words either after the termination of this Lease or
at any other location.
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7.6 Employees.
(a) Tenant shall control the conduct, demeanor and appearance of
its officers, agents and employees so as to run a first class business in
strict conformity with any standards reasonably adopted by Landlord,
provided such standards do not unreasonably interfere with Tenant's
operation of the Premises. Tenant will ensure that its personnel act so
as not to annoy, disturb or be offensive to customers, patrons or others
in the Project, and if any of Tenant's personnel act in a manner
objectionable to Landlord, Landlord will bring such objection to the
attention of Tenant's manager, who will immediately take all necessary
steps to correct the cause of such objection. Tenant warrants that its
employees, while working in connection with this Agreement, will comply
with any and all applicable federal, state or local laws, rules and
regulations and ordinances.
(b) Tenant shall be responsible for all salaries, employee
benefits, social security taxes, federal and state unemployment insurance
and any and all similar taxes relating to its employees and for workers'
compensation coverage with respect to its employees pursuant to
applicable law. Tenant's employees shall not be entitled to participate
in, or to receive, any of Landlord's employee benefit or welfare plans,
and they shall not be deemed agents or employees of Landlord for purposes
of this Lease or any other purpose. Tenant will comply with any
applicable federal, state or local law, ordinance, rule or regulation,
regarding its employees, including federal or state laws or regulations
regarding minimum compensation, overtime and equal opportunities for
employment.
(c) Tenant shall not cause or permit its employees to enter upon
those areas of the Project which are designated "EMPLOYEES ONLY," as the
parties acknowledge that for such purposes, "EMPLOYEES" refers to the
employees of Landlord and not to the employees of Tenant.
(d) Landlord requires, and Tenant will therefore develop and
implement, a drug testing program for Tenant's employees employed at the
Premises. Except for the initial salaried, full time
management/supervisory staff (who must be tested prior to opening of the
Premises) Tenant's employees employed at the Premises shall be tested no
later than when the individual employee completes at least 520 hours of
service for Tenant at the Premises.
(e) Tenant shall require standard uniforms to be worn by all of
its employees at all times while on duty in the Premises so that all
employees present a clean and well groomed appearance. Landlord may, at
any time, direct Tenant to require any of its employees not so attired
while on duty to immediately conform to the requirements of this
subparagraph (e) or leave the Premises.
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7.7 Security. Tenant acknowledges that Landlord's security department and
security officers are not responsible for providing security services for the
Premises (including the portion of the adjoining patio included in the Premises,
but excluding any other portion of the Patio), and that responsibility to
provide security services for the Premises if Tenant so elects is the obligation
of Tenant. In no event shall Landlord be liable to Tenant or any third-party for
the security department's failure to respond to a request for aid or assistance
by Tenant.
7.8 Regulatory Authorities. If Tenant is required to apply to either the
Nevada Gaming Commission or any other agency regulating Landlord's activities
(collectively herein, the "REGULATORY AUTHORITIES") for a finding of suitability
or other approval, Tenant shall promptly do so. If after application and
applicable hearings, Tenant is found unsuitable by any Regulatory Authority,
then Tenant shall immediately undertake corrective action to comply with any
requirement of the Regulatory Authority to be found suitable, including, without
limitation, terminating any objectionable or unsuitable employee, provided,
however, that in the event that the corrective action taken is not satisfactory
to such Regulatory Authority, then this Lease shall thereupon immediately cease
and terminate and be of no further force or effect. Unless otherwise directed by
the Regulatory Authorities and provided that Tenant is not in default under this
Lease at the time of such termination, Landlord shall reimburse Tenant for the
unamortized portion of any TI Costs paid for by Tenant. In addition, Tenant
acknowledges that Landlord will hold gaming and liquor licenses in connection
with its operations at the Project. If the employment or continued employment of
any person by Tenant or continued association with Tenant could have a material
adverse effect on any gaming or liquor license, permit or approval held or
sought by Landlord or any Affiliate of Landlord (as determined by Landlord in
good faith), Landlord shall so notify Tenant and Tenant shall take all necessary
action to immediately eliminate such adverse effect. If such material adverse
effect is not eliminated within twenty (20) days after notice from Landlord,
Landlord may terminate this Lease upon ten (10) days written notice to Tenant.
Unless otherwise directed by the Regulatory Authorities and provided that Tenant
is not in default under this Lease at the time of such termination, Landlord
shall reimburse Tenant for the unamortized portion of any TI Costs paid for by
Tenant.
7.9 Restrictive Covenant. During the first seven (7) years of the Lease
Term, Tenant shall not, directly or indirectly, alone or as a partner, joint
venturer member, consultant, franchisor, franchisee, agent or independent
contractor, own or operate any Border Grill or any other Mexican restaurant with
a substantially similar name and/or a deceptively similar concept in the
Restricted Area described on EXHIBIT G (excluding, however, any restaurant in or
for any project owned or controlled by Landlord or any of its Affiliates within
such radius). In addition, if this Lease is terminated prior to the expiration
of the Lease Term for any reason other than a breach of the Lease by Landlord or
pursuant to SECTION 2.3. SECTION 2.4, SECTION 3.3, ARTICLE 17 or ARTICLE 18
below, Tenant shall not, directly or indirectly, alone or as a partner, joint
venturer, member, consultant, franchisor, franchisee, agent or independent
contractor, own or operate any Border Grill restaurant that is not open for
business at the time of such termination in the Restricted Area for a period of
one (1) year. Tenant acknowledges that the restrictions contained in this
Section are reasonable in scope and duration and are necessary to protect
Landlord. If any
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provision of this Section, as applied to any party or to any circumstance, is
adjudged by a court to be invalid or unenforceable, the same will in no way
affect any other circumstance or the validity or enforceability of the remainder
of this Lease. If any such provision, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have
the power to reduce the duration and/or area of such provision, and/or to delete
specific words or phrases, and in its reduced form, such provision shall then be
enforceable and shall be enforced. The parties agree and acknowledge that the
breach of this Section will cause irreparable damage to Landlord and upon breach
of any provision of this Section, Landlord shall be entitled to injunctive
relief, specific performance or other equitable relief; provided, however, that
the foregoing remedies shall in no way limit any other remedies which Landlord
may have at law or in equity.
7.10 Landlord Comps. Tenant agrees that Landlord may "comp" its guests,
officers, directors or employees or those of its Affiliates at Tenant's
restaurant. Landlord shall be entitled to the following:
(a) $50,000 of complimentary item free of charge during each Lease
Year (the "COMP THRESHOLD"); provided, however, that no more than $4,175
of the total Comp Threshold (the "MONTHLY COMP LIMIT") shall be used by
Landlord during any month. Notwithstanding the preceding sentence, if
Landlord exceeds the Monthly Comp Limit any month during a Lease Year, and
at the end of such Lease Year the Comp Threshold has not been reached
("UNUSED COMP THRESHOLD"), Tenant shall pay to Landlord with the annual
adjustment to Percentage Rent, an amount equal to ninety percent (90%) of
the Unused Comp Threshold but not exceeding the aggregate amount that
Landlord paid Tenant for comps under this SECTION 7.10(a) in all months
when the Monthly Comp Limit was exceeded during such Lease Year. The Comp
Threshold shall be reduced prorata for any Permitted Closure Period.
(b) After the Comp Threshold has been reached in a given LEASE YEAR
or during any month in which the Monthly Comp Limit has been reached,
Tenant shall xxxx Landlord for food and beverage items provided on a
complimentary basis at an amount equal to ninety percent (90%) of the
retail price charged by Tenant for such food and/or beverage items.
Payment for food and beverages provided under this SECTION 7.10(b) shall
be made in accordance with EXHIBIT F.
Gratuities on all complimentary items shall be paid directly by the guest,
and shall not be charged to Landlord, except, however, pursuant to SECTION 7.11
if such gratuities are room charges. Landlord shall pay the applicable taxes on
all complimentary items provided under this SECTION 7.10. Taxes and gratuities
shall not be applied toward the Comp Threshold or subject to the ten percent
(10%) discount. Any charges to Landlord for complimentary items under this
SECTION 7.10 shall be billed by Tenant and paid by Landlord in the manner
described in EXHIBIT F.
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Landlord shall designate patrons who are to receive complimentary food
and/or beverages either by (i) giving Tenant reasonable advance notice of the
patron's visit to the Restaurant (which notice shall be given by employees
authorized to do so in writing by Landlord and shall set forth any limitations
on any complimentary food and beverage) or (ii) written notice after the
patron's visit, in which event Landlord and Tenant shall make the appropriate
adjustment to any room charge made by such patron or other adjusting payments.
7.11 Room Charges. Guests of the Project and Landlord's Affiliates shall
be entitled to xxxx charges for services and food and beverage service and
gratuities at Tenant's restaurant to their rooms only if Tenant's point of sale
system is compatible with and capable of interfacing with Landlord's point of
sale system for the Project, in Landlord's sole judgment. Any connection to
Landlord's point of sale system shall be at Tenant's expense and subject to any
restrictions and procedures established by Landlord. Any room charges shall be
paid by Landlord to Tenant in accordance with accounting procedures reasonably
established by Landlord. Information obtained by Landlord as a result of any
room charges shall be held in strict confidence as provided in SECTION 5.6
above.
7.12 Beverage Providers. Tenant acknowledges that from time to time
Landlord may agree to utilize certain designated brands of the beverage items
listed on EXHIBIT H on a company-wide basis (e.g., Landlord may contract with a
selected manufacturer of carbonated beverages to utilize such manufacturer's
brands). Upon receipt of a notice specifying any such beverage brand choice,
Tenant agrees to honor such brand choice and use only the selected product,
provided that Tenant shall be permitted to serve its own specialty beverages
including its own make of any mix.
7.13 Complimentary Rooms. During the Lease Term, Landlord shall provide to
members, managers and employees of Tenant and/or its designated Affiliate who
travel to Las Vegas, Nevada for business related to the Premises, complimentary
rooms in, at Landlord's discretion, the Project or one of the other hotels owned
by Landlord or its Affiliates, provided that there is space available in such
hotels on the night of the visit, and provided further that following the Rent
Commencement Date the number of complimentary room nights provided to Tenant in
each Lease Year (prorated for any partial Lease Year) shall not exceed one
hundred eighty (180). Tenant shall be liable for all taxes on any complimentary
rooms provided pursuant to this SECTION 7.13 and all incidental charges, which
amounts shall be paid within ten (10) days after receipt of an invoice therefor.
ARTICLE 8
INSURANCE
8.1 Tenant's Insurance. Tenant agrees, at Tenant's expense, to maintain
the following insurance policies during the entire Lease Term:
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(a) A policy of comprehensive public liability and property damage
insurance providing coverage against liability for injury or death to
persons and for property damage occurring in or about the Premises. Such
liability insurance shall be a broad form comprehensive, general liability
policy, including but not limited to contractual liability, in an amount
of not less than Ten Million Dollars ($10,000,000.00). Landlord agrees
that Tenant may satisfy insurance coverage limits over $1,000,000.00 by
means of an excess liability policy;
(b) A policy of plate glass insurance covering all plate and other
glass in the Premises;
(c) A policy providing fire and extended coverage, vandalism,
malicious mischief, sprinkler leakage and special extended coverage
insurance in an amount adequate to cover the full cost of replacement of
all personal property, inventory, decorations, trade fixtures,
furnishings, equipment and other contents in the Premises. Such insurance
shall be in an amount equal to the current replacement value of the
property required to be insured;
(d) A policy of business interruption insurance; and
(e) A policy of products liability insurance in form satisfactory to
Landlord and in the amount of not less than One Million Dollars
($1,000,000.00).
All such insurance policies shall, to the extent applicable, name Landlord as an
additional insured (as well as such other persons, firms or corporations as
Landlord may designate) or an additional loss payee, and shall be written by one
or more responsible insurance companies licensed to do business in Nevada with a
rating of AVII or better as rated in the most recent edition of Best's Insurance
Guide (or similar rating service if such guide is no longer published). Such
policies shall also include an endorsement requiring the company writing such
policy to give Landlord at least twenty (20) days writing in advance of any
cancellation or lapse of such policy or the effective date of any reduction in
the amount of coverage under such policy. All public liability, property damage,
and other casualty insurance policies obtained by Tenant pursuant to this
SECTION 8.1 shall be written as primary insurance and not contributing with
separate coverage which Landlord may carry. The insurance required by this
SECTION 8.1 may be covered by general policies covering all of Tenant's
locations. Prior to the Commencement Date, Tenant shall furnish Landlord with
certificates of insurance showing that insurance meeting the requirements of
this Section has been obtained and fully paid for by Tenant. Similar
certificates of insurance as to renewal policies shall be provided to Landlord
at least fifteen (15) days prior to the expiration of any policy, if requested.
The limits of the public liability insurance required to be maintained by Tenant
under this Lease shall in no way limit or diminish Tenant's liability under
Article 16 hereof and such limits shall be subject to increase at any time and
from time to time during the Lease Term if Landlord, in the exercise of
reasonable discretion, deems such an increase necessary for Landlord's adequate
protection.
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8.2 Landlord's Insurance. Landlord shall procure and maintain at its
expense in full force and effect, public liability and property damage insurance
in types of coverages and amounts as are customarily carried by operators of
similar casino facilities on and about the Las Vegas strip.
8.3 Waiver of Subrogation. Landlord and Tenant each hereby waives any and
all rights of recovery against the other or against the officers, employees,
agents and representatives of the other, on account of loss or damage occasioned
to such waiving party, or its property or any property of others under its
control to the extent that such loss or damage arises from any risk generally
covered by fire and extended coverage insurance, whether or not such an
insurance policy is maintained or there are insurance proceeds sufficient to
cover the loss. Landlord and Tenant shall each, upon obtaining the respective
policies of insurance required under this Lease, give notice to the insurance
carrier or carriers that the foregoing mutual waiver of subrogation is contained
in this Lease and obtain from the respective carriers an endorsement waiving any
right of subrogation in favor of the insurer.
ARTICLE 9
TAXES
9.1 Additional Taxes. In addition to all other amounts which Tenant is
required to pay under this Lease, Tenant shall pay before delinquency:
(a) All taxes and assessments levied against fixtures, equipment and
personal property of Tenant installed or located in the Premises; and
(b) Any and all taxes, assessments or other charges of any kind
imposed by any federal, state, county, municipal or other governmental
body or agency and payable by Landlord or Tenant (excluding income,
franchise, inheritance or estate taxes), whether or not customary or
within the contemplation of the parties, with respect to the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises.
Tenant, at its expense, shall have the right, in Landlord's name if
appropriate, to contest or review by legal proceedings, or in such other manner
as it may deem suitable (which, if instituted, Tenant shall conduct at its own
expense, and free of any expense imposed on Landlord) any tax, assessment or
other governmental imposition or charge described in this SECTION 9.1. Tenant
may defer payment of a contested item, unless such deferment would result in the
enforcement of a lien on the Premises or the Project or the imposition of a
criminal penalty on Landlord, in which event, Tenant shall promptly pay such
contested item or items or cause them to be paid under protest if at any time
the Premises or Project or any part thereof shall be in danger of being
forfeited or otherwise lost, or if Landlord shall be subjected to criminal
liability
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for such non-payment. The legal proceedings herein referred to shall include
appropriate proceedings to review tax assessments and appeals from orders
therein and appeals from any judgments, decrees, or orders. If there shall be
any refund with respect to any contested item based on a payment by Tenant,
Tenant shall be entitled to the entire amount thereof. Landlord shall promptly
cooperate with Tenant, execute such documents and take such actions as may be
reasonably necessary, (but without the imposition of cost or expense on
Landlord) to enable Tenant to properly contest any matter contemplated in this
Section 9.1.
9.2 Sales Tax. Tenant agrees to pay to Landlord a sum equal to the amount
which Landlord is required to pay or collect by reason of any privilege tax,
sales tax, gross proceeds tax, rent tax, or like tax levied, assessed or imposed
by any federal, state, county or municipal governmental authority, or any
subdivision thereof, upon any rent or other charges required to be paid under
this Lease. Such sum shall be paid simultaneously with the rental payment or
other charge upon which such sum is based.
9.3 CET. Tenant agrees that it will collect any applicable CET associated
with the sale of food, beverage or merchandise from the Premises and will pay
the same to the taxing authority on a timely basis, or if Tenant is not
permitted to pay the same directly, shall remit the CET due to Landlord no later
than the 10th day of the month following the month in which the taxable sales
occurred. Tenant shall make all documents containing information relative to the
computation of the CET available for inspection upon prior written notice by
representatives of Landlord and the Nevada Tax Commission or Nevada Gaming
Commission. This obligation shall continue beyond the Lease Term as to CET
assessed during the time Tenant operated the Premises. Tenant shall be liable
for any and all CET, interest and penalties found to be payable in connection
with the sale of food, beverage or merchandise from the Premises as a result of
understated taxable revenues, insufficiency of records or untimely payments
unless Tenant is not permitted to pay the CET directly to the taxing authority,
then if Tenant has timely remitted the payment to Landlord as required in this
Section, Tenant shall not be liable for the untimely payment of the CET to the
taxing authority.
ARTICLE 10
SERVICES
10.1 Services Provided. Provided Tenant is not in default under this
Lease, Landlord shall provide Tenant with the following services (collectively,
the "SERVICES") from the date on which Tenant opens for business and during the
Lease Term:
(a) Heating and air conditioning during the customary periods of the
year therefor during the hours of operation required hereunder when and to
the same extent as furnished to other comparable portions of the Project.
Tenant acknowledges that Tenant shall have access to the controls for
heating and air
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conditioning located within the Premises, but might not have access to the
controls for heating or air conditioning located outside the Premises and
shall not attempt to make any changes to such controls located outside the
Premises;
(b) Customary gas, water and sewer service;
(c) Electricity in sufficient amounts to provide ordinary lighting
and to operate the restaurant equipment to be installed in the Premises
and approved by Landlord;
(d) One (1) telephone and local telephone service. Long distance
telephone charges shall be Tenant's responsibility;
(e) Garbage service at the receptacles designated by Landlord; and
(f) Pay telephone within the Premises (the revenue from which shall
belong to Landlord).
Landlord's obligation to furnish Services shall be conditioned upon the
availability of adequate energy sources. Landlord shall confer with Tenant and
have the right to reduce such Services as required by any mandatory or voluntary
fuel or energy conservation program. Landlord may, from time to time, prescribe
reasonable rules and regulations for implementation of this Section.
10.2 Service Charges. As compensation for the Services, Tenant agrees to
pay Landlord an amount equal to one percent (1%) of annual Gross Sales for each
Lease Year (the "SERVICE CHARGE") payable on a monthly basis together with
Minimum Rent, prorated for any partial Lease Year. The Service Charge shall be
paid regardless of the actual cost of providing such Services.
10.3 Service Interruption. Landlord shall not be liable in damages for any
failure or interruption of any utility service to the Premises, except to the
extent that any failure or interruption arises from the gross negligence or
willful misconduct of Landlord. No failure or interruption of utility service
for any reason other than as set forth in SECTION 10.1 shall entitle Tenant to
terminate this Lease. Landlord shall not be obligated to provide any service or
maintenance or to make any repairs pursuant to this Lease when such service,
maintenance or repair is made necessary because of any wrongful act or misuse of
any utility service by Tenant, Tenant's agents, employees, servants,
contractors, subtenants or licensees. Landlord reserves the right to stop any
Service when Landlord deems such stoppage necessary, whether by reason of
accident or emergency, or for repairs or improvements or otherwise, provided,
that any such period of stoppage shall be only so long as is reasonably required
to effect any necessary repairs or maintenance. Landlord shall not be obligated
to inspect the Premises and shall not be obligated to make any repairs or
perform any maintenance hereunder unless first notified of the need thereof in
writing or, in an emergency, verbally, followed by a written confirmation, by
Tenant. Upon receipt of any such notice, Landlord shall commence any required
repair work of an emergency
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nature as soon as possible and work as expeditiously as possible to complete
such work. All other work of a non-emergency nature shall be performed as
promptly as possible. If Landlord shall fail to commence repairs or maintenance
to be performed by Landlord and not the service provider promptly after said
notice, then Tenant shall be entitled to an equitable abatement of Minimum Rent
for so long as such failure continues and the Lease Term shall be extended for a
period equal to the period of rent abatement.
ARTICLE 11
REPAIRS AND MAINTENANCE
11.1 Repairs and Maintenance by Landlord. Landlord agrees, at its sole
expense, to keep in good structural and cosmetic order, condition and repair all
common areas surrounding the Premises and the exterior walls, floor (but not
floor coverings) and roof of the Premises except for reasonable wear and tear
and except for any damage thereto caused by any act or negligence of Tenant or
its agents, employees, servants, contractors, subtenants or licensees. Landlord
agrees to maintain the Project (other than those portions of the Premises for
which Tenant is responsible and portions of the Project which are maintained by
other tenants or third parties) as a first class hotel and casino and to keep
the Project in compliance with all applicable building codes and regulations to
the extent necessary to insure Tenant's safe and continued use of the Premises.
Landlord shall make any of the foregoing repairs as expeditiously as possible
after Landlord has received written notice from Tenant that such repairs need to
be made and within thirty (30) days of receipt of such notice unless such
repairs cannot, in the exercise of reasonable diligence, be completed in thirty
(30) days, in which event Landlord shall commence such repairs within thirty
(30) days and diligently pursue the same to completion. All other items of
maintenance and repair for the Premises are the sole responsibility and expense
of Tenant.
11.2 Repairs and Maintenance by Tenant. Tenant agrees, at Tenant's
expense, to keep the Premises and any special equipment, fixtures or facilities
(including, but not limited to grease traps located outside the Premises) in a
clean, safe and sanitary condition. Tenant agrees to immediately replace broken
glass in exterior and interior windows and doors with glass of the same quality,
and, on Landlord's request, to remove any encroachments maintained or authorized
by Tenant on any public place without Landlord's prior written consent. Tenant
shall not overload any floor or facility, throw any foreign substances in
plumbing fixtures or use the plumbing fixtures for any purpose other than that
for which constructed. Tenant also agrees to keep the Premises (including
exterior entrances, store fronts and the interior of exterior walls), all
partitions, doors, fixtures and equipment (including lighting, heating and
plumbing fixtures and any separate air conditioning system) in good order,
condition and repair and in compliance with all applicable laws, rules and
regulations. The cost of maintenance and repair of that part of any wall shared
with other tenants of the Project shall be borne equally by all tenants sharing
such wall; provided, however, Tenant shall be solely responsible for repairs to
such shared walls necessitated by the negligence or intentional acts or
omissions of Tenant its agents, employees or licensees. If Tenant refuses or
neglects to commence repairs within ten (10) days after receipt of
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written demand from Landlord, or adequately to complete such repairs within a
reasonable time not to exceed thirty (30) days after such demand, Landlord, in
addition to any other rights and remedies contained or available to Landlord at
law or in equity, may enter the Premises and make the repairs, at Tenant's
expense and without liability to Tenant for any loss or damages which may accrue
to Tenant's stock or business by reason of such entry and repair work. Landlord,
at its cost, may enter into repair or maintenance contracts covering the
heating, air conditioning and ventilation systems located on the Premises and
other parts of the Project.
ARTICLE 12
ALTERATIONS AND IMPROVEMENTS
12.1 Alterations and Improvements. Except for (i) non-structural
alterations not altering the exterior appearance of the Premises and not
exceeding $25,000 for any individual item and $100,000 in the aggregate during
any Lease Year and (ii) additions to or renovations of kitchen equipment, Tenant
may not make any alterations, improvements, renovations, additions, or utility
installations ("IMPROVEMENTS") in, on or to the Premises, the exterior of the
Premises, the exterior walls, the roof, the storefront, or any structural,
mechanical or electrical component without Landlord's prior written consent. Any
Improvements (other than removable trade fixtures, equipment, furnishings, signs
and graphic displays) approved by Landlord shall be at the sole cost and expense
of Tenant, and shall be made promptly and in good and workmanlike manner and in
compliance with all applicable insurance requirements and with all applicable
permits, authorizations, building regulations, zoning laws and all other
governmental rules, regulations, ordinances, statutes and laws, now or hereafter
in effect pertaining to the Premises or Tenant's use thereof. Any Improvements
(other than removable trade fixtures, equipment, furnishings, signs and graphic
displays) made by Tenant shall at Landlord's option become the property of
Landlord upon the expiration or sooner termination of this Lease. However, as a
condition to granting its consent to Tenant to make any Improvement, Landlord
shall have the right to require Tenant to remove such Improvements, at Tenant's
sole cost and expense, upon the termination of this Lease and to surrender the
Premises in the same condition as it was prior to the making of any or all such
Improvements (ordinary wear and tear excepted) if Landlord in the exercise of
its reasonable judgment believes that such Improvements are specific to Tenant's
use and/or would materially limit Landlord's use of reletting of the Premises.
12.2 Trade Fixtures. Tenant may bring trade fixtures into the Premises and
may remove any and all removable, trade fixtures, equipment, furnishings, signs
and graphic displays (but not flooring) and other personal property of Tenant
whether or not affixed to the Premises, at any time Tenant is not in default
under this Lease, subject to any applicable grace or cure period. Tenant agrees
to repair any damage to the Premises caused by such removal. All fixtures other
than those described above which may be made or installed by either Landlord or
Tenant shall remain upon the Premises and shall become the property of Landlord
upon termination of this Lease for any reason, unless Landlord requests removal
of a particular item by Tenant as provided in SECTION
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12.1 above, in which case Tenant shall remove the item and restore the Premises
to the condition they were in prior to installation of the particular item. Upon
reasonable request of Tenant, Landlord agrees to execute and deliver any
documents necessary or advisable, for inclusion in Tenant's records or
otherwise, to evidence Landlord's consent to removal from the Premises of any
personal property or fixtures leased to or be leased to Tenant by any third
party.
12.3 Liens. Tenant agrees to keep the Premises and the Property free from
any liens arising out of any work performed on the Premises or materials
furnished to the Premises and from any claim, liens, tax lien or levy,
attachment, garnishment or encumbrance arising directly or indirectly from any
obligation, action or inaction of Tenant whatsoever. Tenant shall have twenty
(20) days after notice of the filing for record of any lien or tax lien, within
which to obtain the release and discharge thereof or to bond over the lien at
Tenant's sole cost and expense. Landlord may, at any time and in accordance with
applicable law, post notices of non-responsibility on the Premises and Tenant
shall give Landlord at least ten (10) days prior written notice of the
commencement of any work on the Premises.
ARTICLE 13
ADVERTISING
13.1 Advertising.
(a) Tenant may not install, change or modify its signs at any time without
Landlord's prior written consent, which shall not be unreasonably withheld or
delayed. Tenant agrees to properly maintain all approved signs. Upon expiration
of the Lease, Tenant agrees promptly to remove all signs and other advertising
media placed in and around the Premises by Tenant. Tenant shall repair all
damage caused to the Project or Premises by such removal, including proper
"capping off" of electrical wiring. Tenant agrees not to use any advertising
medium. such as flashing lights, searchlights, loudspeakers, phonographs,
radios, or televisions, which can be heard or experienced outside the Premises.
Tenant agrees not to display, paint or place any handbills, bumper stickers, or
other advertising materials on any vehicle in the parking area of the Project,
or to distribute any handbills or other advertising materials within or around
the Project.
(b) Landlord agrees that it will afford within the Project like
advertising for the Premises as is afforded by Landlord to other similar
restaurants (whether owned by Landlord or leased to tenants) within the Project.
Landlord also agrees that it will promote the Premises to its guests in a like
manner as it promotes other similar restaurants in the Project in promotional
and check-in materials, room books and other internal marketing materials. For
purposes of this SECTION 13.1(b), the House of Blues shall not be considered a
similar restaurant.
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ARTICLE 14
RULES AND REGULATIONS
14.1 Rules and Regulations. Landlord may promulgate such reasonable rules
and regulations relating to the use of the Premises and the Project as Landlord
may deem appropriate and for the best interests of the Project, provided such
rules and regulations do not expressly conflict with Tenant's rights under this
Lease. Such rules and regulations shall be binding upon Tenant upon delivery of
a copy thereof to Tenant. The rules and regulations may be amended by Landlord
from time to time, subject to the standards set forth above, with advance
notice, and all such amendments shall be effective upon delivery of a copy to
Tenant.
ARTICLE 15
ASSIGNMENT AND SUBLETTNG
15.1 Assignment and Subletting. Tenant may assign its interest in this
Lease or sublet all or any portion of the Premises (a "TRANSFER") only with the
prior written consent of Landlord, which consent may be withheld in Landlord's
sole and absolute discretion, unless another standard is specifically provided
for herein. Further, Tenant acknowledges that Landlord's decision to lease the
Premises to Tenant is based, in part, on a review of the individuals and
entities comprising Tenant (and the individuals comprising any entities having
an ownership interest in Tenant), all of which are listed on EXHIBIT E.
Therefore, except as provided in SECTION 15.2 below, if Tenant is a corporation
which is not publicly traded or a partnership, limited liability company or
other entity, the issuance of any additional stock and/or the transfer,
assignment or hypothecation of any stock or interest in such corporation,
partnership, limited liability company or other entity, directly or indirectly,
to any individual or entity other than those listed on EXHIBIT E, shall be
deemed a Transfer within the meaning of this ARTICLE 15; provided, however, that
in the event any of the foregoing events is proposed with respect to any Person
that is a passive investor member of Tenant or any Person owning a direct or
indirect controlling interest in such passive investor member, then Landlord
agrees that it shall not unreasonably delay or withhold its consent to any such
Transfer. Any attempted Transfer without Landlord's prior written consent in
accordance with the applicable standard set forth herein shall be void, shall
confer no rights upon any third person and at Landlord's option shall constitute
a material, incurable event of default under this Lease. Tenant shall provide
Landlord with any and all information requested by Landlord in connection with a
proposed Transfer. Each Transfer to which Landlord has consented shall be
evidenced by an instrument in writing in form reasonably satisfactory to
Landlord and shall be executed by the assignor or sublessor and by the assignee
or subtenant (each, a "TRANSFEREE"). Each Transferee that is an assignee or
sublessee of Tenant's interest as lessee under the Lease shall also agree in
writing to assume, to be bound by, and to perform the terms, covenants, and
conditions of this Lease to be done, kept, and performed by Tenant. One executed
copy of such written instrument shall be delivered to Landlord. No such Transfer
shall
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release Tenant from Tenant's obligations to Landlord under this Lease.
Landlord's consent to a Transfer on one occasion shall not be deemed a consent
to any subsequent Transfer.
15.2 Certain Excluded Transactions. Notwithstanding the definition of
Transfer or any prohibitions or limitations on assignments or transfers set
forth in this Lease, the following shall not be deemed to be an assignment or
transfer:
(a) any transfer of Tenant's stock or ownership interest by Vantage
Bay Group, Inc., provided that the assignee does not own or operate any
project (or own any interest, directly or indirectly, in any entity which
owns a project) that competes with the Project; or
(b) any transfer of Tenant's stock or ownership interests between
Xxxxx Xxxxxxx ("XXXXXXX") Xxxx Xxx Xxxxxxxx ("XXXXXXXX") and Xxxxx Xxxxx
("XXXXX") or their spouses, domestic partners, affiliated entities, heirs,
or beneficiaries of trusts controlled by Feniger and/or Xxxxxxxx and/or
Xxxxx, provided that together Feniger and Xxxxxxxx, and their spouses,
domestic partners, affiliated entities, heirs and/or beneficiaries of
trusts controlled by Feniger and/or Xxxxxxxx (but not Xxxxx) own, directly
or indirectly, and control at least a fifty-one percent (51%) interest in
Tenant, and, provided further that Feniger and/or Xxxxxxxx remain active
in the management and operation of Tenant.
15.3 Transfers Not Requiring the Consent of Lessor. Tenant shall have the
right, upon prior notice to Landlord, but without Landlord's prior written
consent to assign this Lease or sublet the Premises to any direct or indirect
wholly-owned subsidiary, company or entity of Tenant or an affiliate controlled
by Tenant and/or Feniger and/or Xxxxxxxx, subject, however to the following
express conditions:
(a) No such assignment shall be deemed to release Tenant from
continuing liability hereunder unless at the time of such assignment
Landlord shall agree in writing to release Tenant, which agreement may be
given or withheld in Landlord's sole and absolute discretion;
(b) Any assignee must assume in writing for the benefit of Landlord
all of the obligations of Tenant under this Lease; and
(c) The operation of the Premises by any such assignee shall be the
same type of restaurant as may then be operated by Tenant.
15.4 Landlord's Option as to Subject Space. Notwithstanding anything to
the contrary contained in this ARTICLE 15, Landlord shall have the option, by
giving written notice to Tenant within thirty (30) days after receipt of any
request for approval of a Transfer in which the Transferee is an assignee or
sublessee of Tenant's interest as lessee under the Lease (other than a Transfer
permitted by SECTION 15.3), to (i) recapture the subject space, or (ii) take an
assignment
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or sublease of the subject space from Tenant. Such recapture, or sublease or
assignment shall cancel and terminate this Lease, or create a sublease or
assignment, as the case may be, with respect to the subject space as of the
effective date of the proposed Transfer until the last day of the term of the
proposed Transfer, and Tenant shall be relieved of all liability under this
Lease arising thereafter for the subject space. In the event of a recapture by
Landlord, if this Lease shall be canceled with respect to less than the entire
Premises, the rent reserved herein shall be prorated on the basis of the number
of rentable square feet retained by Tenant in proportion to the number of
rentable square feet contained in the Premises, and this Lease as so amended
shall continue thereafter in full force and effect, and upon request of either
party, the parties shall execute written confirmation of the same.
15.5 Concessionaires. Tenant agrees not to permit any business to be
operated in or from the Premises by any unaffiliated licensee or other
unaffiliated concessionaire without the prior written consent of Landlord, which
consent may be withheld in Landlord's sole and absolute discretion.
15.6 Assignment in Bankruptcy. In the event that in any bankruptcy
proceeding, whether voluntary or involuntary, Tenant, as debtor in possession,
or a trustee for Tenant desires to assign this Lease or any interest of Tenant
herein, then such assignment shall require the prior written consent of
Landlord, which consent shall not be unreasonably withheld or delayed.
ARTICLE 16
INDEMNITY
16.1 Indemnification. Landlord and its agents, employees, officers, and
directors shall not be responsible or liable for, and Tenant agrees to
indemnify, defend and hold harmless Landlord and its agents, employees,
officers, and directors for, from and against, all claims, damages, expenses
(including reasonable attorneys' fees), liabilities and judgments arising from
(i) any injury to persons, loss of life or damage to property occurring within,
on or about the Premises, (ii) the use, non-use, condition or occupation of the
Premises by Tenant or its employees, agents or invitees or (iii) the negligence
or willful misconduct of Tenant or its employees, agents or invitees; provided,
however, that with respect to the foregoing clauses (i) and (ii) Tenant shall
not be obligated to indemnify, defend or hold harmless Landlord to the extent
that any claim, damage, expense, liability or judgment arises from the gross
negligence or willful misconduct of Landlord or any employee or agent of
Landlord, or Landlord's breach of this Lease. The provisions of this Section
shall survive the expiration or sooner termination of this Lease with respect to
any claims or liability occurring prior to such expiration or termination.
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ARTICLE 17
EMINENT DOMAIN
17.1 Entire or Substantial Taking. If title to all or a substantial
portion of the Premises is taken for any public or quasi-public use under any
statute or by right of eminent domain, or by purchase in lieu of condemnation,
so that a reasonable amount of reconstruction of the Premises will not result in
the Premises being reasonably suited for Tenant's continued occupancy for the
uses and purposes for which the Premises are leased, this Lease shall terminate
as of the date that possession of said Premises, or part thereof, is taken.
17.2 Partial Taking. Except as provided in SECTION 17.3, if any part of
the Premises are taken and the remaining part (after reconstruction of the then
existing Project) is suitable, as determined by Tenant in its reasonable
discretion, for Tenant's continued occupancy for the purposes and uses for which
the Premises are leased, this Lease shall terminate as to the part so taken as
of the date that possession of such part of the Premises is taken, and the
Minimum Rent shall be equitably reduced. Landlord shall make such repairs and
alterations to the Premises as may be reasonably necessary to restore the part
not taken to useful condition. A just and proportionate part of the Minimum Rent
shall be abated during such restoration if there is a material interference with
Tenant's business.
17.3 Election to Terminate. If more than thirty-three percent (33%) of
the Floor Area of either the Project or the Premises is taken, either Landlord,
or in the case of the Premises only Tenant, may terminate this Lease upon sixty
(60) days' notice to the other party without regard to the provisions of SECTION
17.2.
17.4 Disposition of Proceeds. All compensation awarded or paid upon a
total or partial taking of the fee of the Premises shall belong to Landlord,
whether such compensation is awarded or paid as compensation for diminution in
value of the leasehold or the fee. Landlord shall not be entitled to any
separate award made to Tenant for loss of business, depreciation to, and cost of
removal of stock and fixtures so long as such award does not diminish the
compensation paid to Landlord.
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ARTICLE 18
DAMAGE OR DESTRUCTION
18.1 Damage or Destruction: Landlord to Rebuild. If the Premises are
partially or totally destroyed by fire or other casualty insurable under
Landlord's fire and extended coverage insurance so as to become partially or
totally untenantable, Landlord agrees to rebuild and repair the Premises as
provided in SECTION 18.3, unless Landlord elects not to rebuild as provided in
SECTION 18.2.
18.2 Option to Terminate. If it so happens that:
(a) Thirty-three percent (33%) or more of either the Premises
or the Project is destroyed or damaged by fire or other casualty
insurable under Landlord's fire and extended coverage;
(b) Either the Premises or the Project is destroyed to the
extent of at least thirty-three percent (33%) of the replacement cost
thereof;
(c) Either the Premises or the Project is partially or totally
destroyed by a cause or casualty other than those covered by Landlord's
fire and extended coverage insurance; or
(d) Either the Premises or the Project or any portion thereof
is declared unsafe or unfit for occupancy by any governmental authority
and repairs are thereby required;
then, in any such event, Landlord may, if Landlord elects, rebuild or put the
Premises in good condition and fit for occupancy within a reasonable time after
such destruction or damage, or Landlord may give notice in writing to Tenant not
later than thirty (30) days after any such damage or destruction terminating
this Lease. If Landlord elects to rebuild or put the Premises in good condition
and fit for occupancy, then Tenant shall be entitled to an equitable abatement
of rent for the period of time that Tenant is unable to operate in the Premises
as a result of such rebuilding, and the Lease Term shall be extended for an
amount of time equal to such period of rebuilding.
18.3 Portions to be Rebuilt by Landlord and Tenant. Landlord's
obligation to rebuild (should Landlord elect or be obligated to repair or
rebuild) shall be limited to the Premises, as originally provided to Tenant, and
Tenant, at Tenant's expense, shall replace and fully repair all of Tenant's
exterior signs, trade fixtures, equipment, display cases and other installations
originally installed by Tenant. All insurance proceeds payable under Landlord's
fire and extended coverage risk insurance shall be payable solely to Landlord,
and Tenant shall have no interest in such proceeds.
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18.4 Non-Liability. Tenant shall not be entitled to any compensation or
damages from Landlord for loss of the use of the whole or any part of the
Premises, the Project, Tenant's personal property or any inconvenience or
annoyance caused by such damage, repair, or reconstruction. Notwithstanding the
destruction of or injury to the Premises or any part of the Premises, whether or
not the same are rendered untenantable or unfit for occupancy, Tenant shall have
no right to quit and surrender possession and shall have no right to any
abatement of rent, except as specifically provided in SECTION 18.5.
18.5 Operations During Reconstruction Period. During any period of
repair and reconstruction, the Minimum Rent provided in SECTION 4.1 shall be
abated proportionately with the degree to which Tenant's use of the Premises is
impaired, such abatement to commence with the date of damage or destruction and
to continue throughout the period of repair. Tenant agrees to continue the
operation of Tenant's business on the Premises during any such period to the
extent reasonably practicable from the standpoint of prudent business
management. The obligation of Tenant to pay Percentage Rent and Additional Rent
shall remain in full force and effect under all circumstances.
ARTICLE 19
ENTRY BY LANDLORD
19.1 Access to Premises. Landlord and Landlord's employees and agents
may enter the Premises at all times during the period when Tenant is open for
business and at all other times on 24 hour advance notice except in the event of
an emergency without diminution or abatement of rent and without liability to
Tenant (i) to inspect the Premises; (ii) during periods of time when Tenant is
not open for business to the public (whenever possible) to make repairs,
additions or alterations to the Premises, the Project, or any property owned or
controlled by Landlord (and for such purposes Landlord may erect scaffolding and
other necessary structures where reasonably required by the character of the
work to be performed, always providing the entrance to the Premises shall not be
blocked thereby); (iii) to save or post any notice required or permitted under
the provisions of this Lease or by law; (iv) to cure any default by Tenant or to
exercise any remedy of Landlord for a default; and (v) for any other lawful
purpose. For the purpose of providing access as required by this Section,
Landlord shall have a key to unlock all doors on the Premises. If an excavation
is made or is authorized to be made upon land adjacent to the Premises or the
Project, Tenant agrees to permit all necessary persons to enter the premises for
the Purpose of doing such work as Landlord deems necessary to preserve the walls
of the Project from injury or damage. Nothing contained herein shall impose or
be deemed to impose any duty on the part of Landlord to do any work or repair,
maintenance, reconstruction or restoration, which under any provision of this
Lease is required to be done by Tenant; and the performance thereof by Landlord
shall not constitute a waiver of Tenant's default in failing to do the same.
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19.2 Leasing Activities. Landlord, and/or its authorized agents and
representatives, shall be entitled to enter the Premises at all times during the
period when Tenant is open for business and at all other times on 24 hours
advance notice for the purpose of exhibiting the same to prospective purchasers
and, during the last six (6) months of the Term of this Lease, Landlord shall be
entitled to exhibit the Premises for lease.
ARTICLE 20
ABANDONMENT
20.1 Abandonment. Tenant shall not vacate or abandon the Premises at
any time during the Lease Term. If Tenant violates this prohibition or is
dispossessed of the Premises involuntarily, by operation of law or otherwise, in
addition to all other remedies available to Landlord pursuant to this Lease or
at law or in equity, any personal property belonging to Tenant and left on the
Premises shall be deemed to be abandoned, at Landlord's option, or Landlord may
store such property in Tenant's name and at Tenant's expense, without notice to
Tenant.
ARTICLE 21
EVENTS OF DEFAULT BY TENANT
21.1 Event of Default. The following shall constitute events of default
by Tenant under this Lease:
(a) If Tenant fails to pay any rent (including Percentage Rent
and Additional Rent) or any other sums payable pursuant to this Lease
on the date due, whether or not the same shall have been demanded, and
such failure continues for a period of five (5) days after Tenant has
received written notice thereof; provided that if Tenant defaults in
rent payment two (2) times in any calendar year and Landlord has given
Tenant two (2) contemporaneous default notices with respect thereto, no
five (5) day cure period shall apply to any subsequent rent payment
default in that year.
(b) Any assignment of this Lease, sublease of all or any
portion of the premises or transfer of any interest in Tenant other
than as permitted under or in compliance with ARTICLE 15 of this Lease.
(c) if Tenant fails to observe or perform any of the other
covenants or agreements contained in this Lease to be observed or
performed by Tenant; except that if such failure is of a type that can
be cured or corrected by Tenant, then such failure shall not be a
default unless such failure continues for thirty (30) days after
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written notice of breach is given by Landlord to Tenant; and further
except that if such failure is of such a character as to require more
than thirty (30) days to correct, Tenant shall not be in default if
Tenant commences action to correct such failure within the 30-day
period and thereafter, using reasonable diligence, cures such failure;
(d) If Tenant or any guarantor of this Lease shall become
bankrupt, go into receivership, or make an assignment for the benefit
of creditors, or take or have taken against Tenant or any guarantor of
this Lease any proceedings of any kind under any provision of any
federal or state bankruptcy law provided, however, that in the case of
any involuntary proceeding against Tenant, if the same is dismissed
within sixty (60) days of filing then such involuntary proceeding shall
not be an event of default; or
(e) If Tenant shall abandon the Premises, with Tenant's
absence from the Premises for a period of ten (10) consecutive days
(other than during a Permitted Closure Period) to be conclusive
evidence that the Premises have been abandoned.
ARTICLE 22
REMEDIES OF LANDLORD
22.1 Remedies. On any event of default, Landlord, at Landlord's option,
without notice or demand, may do any one or more of the following, in any order,
successively or concurrently, except that in every case, Landlord, in good
faith, shall take all reasonable efforts to mitigate damages:
(a) Landlord may take any action deemed necessary by Landlord,
in Landlord's sole and absolute discretion, to cure the default. Tenant
shall be liable to Landlord for all of Landlord's reasonable expenses
so incurred, as Additional Rent, payable on demand by Landlord to
Tenant.
(b) Landlord may terminate this Lease by written notice to
Tenant of Landlord's election to do so. Upon Landlord's notice of
termination, Landlord may recover from Tenant:
(i) The worth at the time of award of the unpaid
Minimum Rent, Percentage Rent, and Additional Rent which had
been earned at the time of termination;
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(ii) The worth at the time of award of the amount by
which the unpaid Minimum Rent, which would have been earned
after termination until the time of award exceeds the amount
of such rental loss that Tenant proves could be reasonably
avoided;
(iii) The worth at the time of award of the amount by
which the unpaid Minimum Rent for the balance of the term
after the time of award exceeds the amount of such rental loss
that Tenant proves could be reasonably avoided; and
(iv) Any other amount reasonably necessary to
compensate Landlord for all the detriment proximately caused
by Tenant's failure to perform its obligations under the
Lease, including, but not limited to, the unamortized portion
of any TI Costs paid by Landlord.
The "worth at the time of the award" of the amounts referred in SUBSECTIONS (i)
and (ii) above shall be computed by allowing interest at the lesser of the rate
of 12% per annum or the maximum rate of interest allowed by law. The "worth at
the time of the award" of the amount referred to in SUBSECTION (iii) above shall
be computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus 1 percent.
(c) Landlord may without declaring the Lease Term ended,
reenter the Premises and occupy the same, or any portion thereof, for
and on account of Tenant as hereinafter provided, applying any moneys
received first to the payment of such expenses as Landlord may have
paid, assumed or incurred in recovering possession of the Premises,
including costs, expenses, reasonable attorneys' fees, and expenditures
for placing the same in good order and condition, or preparing or
altering the same for reletting, and all other expenses, commissions
and charges paid, assumed or incurred by Landlord in or in connection
with reletting the Premises and then to the fulfillment of the
covenants of Tenant. Any such reletting as provided for herein may be
for the remainder of the Lease Term or for a longer or shorter period.
Such reletting shall be for such rent and on such other terms and
conditions as Landlord, in its sole discretion, deems appropriate.
Tenant shall have no right or authority whatsoever to collect any rent
from such tenants, subtenants or any licensees or concessionaires on
the Premises. In any case, and whether or not the Premises or any part
thereof be relet, Tenant, until the end of what would have been the
Lease Term in the absence of such default, shall be liable to Landlord
and shall pay to Landlord monthly an amount equal to the average amount
due as rent hereunder, less the net proceeds for said month, if any, of
any reletting effected for the account of Tenant pursuant to the
provisions of this subparagraph, after deducting all of Landlord's
expenses in connection with such reletting, including, without
limitation, all repossession costs, brokerage commissions, legal
expenses, reasonable attorneys' fees, reasonable expenses of employees,
alteration costs (except costs limited in this Section), and expenses
of
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preparation for such reletting (all said costs are cumulative and shall
be applied against proceeds of reletting until paid in full). Landlord
reserves the right to bring such actions for the recovery of any
deficits remaining unpaid by Tenant to Landlord hereunder as Landlord
may deem advisable from time to time without being obligated to await
the end of the Lease Term for a final determination of Tenant's
account; and the commencement or maintenance of one or more actions by
Landlord in this connection shall not bar Landlord from bringing
subsequent actions for further accruals pursuant to the provisions of
this Section.
(d) Landlord may pursue all rights and remedies of Landlord,
which shall in any event be cumulative and not alternative, and shall
be in addition to any and all rights provided at law or in equity.
For the purposes of determining the Percentage Rent which would be payable to
Landlord by Tenant hereunder subsequent to Tenant's default, the Percentage Rent
for each month of the unexpired term hereof shall be deemed to be an amount
equal to the average of the Percentage Rent paid or payable by Tenant to
Landlord hereunder annually during the three (3) years immediately preceding the
date of default, or such lesser period of time as has occurred since the
Commencement Date.
22.2 Late Charge. If any installment of rent or any other sum payable
by Tenant hereunder is not received by Landlord within five (5) days of the date
when due, a late charge of five percent (5%) of such overdue installment or
other payment shall be immediately and automatically payable by Tenant to
Landlord, without the necessity of delivery of any notice; provided, however,
that Landlord shall give Tenant notice of non-payment and five (5) days from
receipt of such notice to cure such non-payment twice in any twelve (12) month
period before assessing such late fee.
ARTICLE 23
ESTOPPEL CERTIFICATES AND SUBORDINATION
23.1 Estoppel Certificates. Tenant agrees at any time and from time to
time upon not less than ten (10) business days' prior request by Landlord, to
execute, acknowledge and deliver to Landlord a statement in writing certifying
that this Lease is unmodified and in full force and effect (or if there have
been modifications, that the Lease is in full force and effect as modified and
stating the modifications), stating the dates to which the Minimum Rent and
other charges have been paid in advance, if any, add confirming Tenant's
acceptance of the Premises, the commencement of the Lease Term, the rent
provided under the Lease, and such other matters as Landlord may request, it
being intended that any such statement delivered pursuant to this Section may be
relied upon by any prospective purchaser, mortgagee, beneficiary under a deed of
trust, or assignee of any mortgagee of the Premises or the Project. Landlord
shall not request Tenant
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provide more than two (2) estoppel certificates in any Lease Year unless such
additional estoppels are required in connection with any sale or financing of
the Project.
23.2 Subordination. Tenant agrees upon request of Landlord to
subordinate this Lease and its rights hereunder to the lien of any mortgage,
deed of trust or other encumbrance, together with any renewals, extensions or
replacements thereof, now or hereafter placed, charged or enforced against the
Premises, or any portion thereof, or any property of which the Premises is a
part, provided, however, that any such subordination instrument shall contain
reasonable non-disturbance and attornment provisions in favor of Tenant and
binding on such lender, and to execute and deliver at any time, and from time to
time, upon demand by Landlord, such documents as may be required to effectuate
such subordination.
23.3 Priority Option. In the event that the mortgagee or beneficiary of
any such mortgage or deed of trust elects to have this Lease a prior lien to its
mortgage or deed of trust, then and in such event, upon such mortgagee's or
beneficiary's giving written notice 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 recordation of such mortgage or deed
of trust.
23.4 Attornment. Tenant shall, in the event any proceedings are
brought for the foreclosure of the Premises or in the event of exercise of the
power of sale under any deed of trust made by Landlord covering the Premises,
attorn to the purchaser upon any such foreclosure or sale and recognize such
purchaser as Landlord under this Lease, provided, however, that such purchaser
shall also agree to grant Tenant reasonable and customary non-disturbance and
mutual attornment rights.
ARTICLE 24
SALE OF PREMISES
24.1 Sale of Premises by Landlord. Landlord may at any time assign or
transfer its interest as Landlord in and to this Lease, or any part thereof, and
may at any time sell or transfer its interest in the fee to the Premises, or its
interest in and to the whole or any portion of the Premises. In the event of any
sale or exchange of the Premises by Landlord and the assignment by Landlord of
this Lease and execution by the new owner of an acceptance and assumption
agreement agreeing to accept the assignment and assume all of Landlord's
obligations hereunder, Landlord shall be and is hereby entirely released of all
liability under any and all of its covenants and obligations contained in or
derived from this Lease occurring after the consummation of such sale or
exchange and assignment.
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ARTICLE 25
HOLDING OVER
25.1 Holding Over. If Tenant should remain in possession of the
Premises after the expiration of the Lease Term with the consent of Landlord and
without executing a new lease, then such holding over shall be construed as a
tenancy from month-to-month, subject to all conditions, provisions and
obligations of this Lease, insofar as the same are applicable to a
month-to-month tenancy, except that Minimum Rent shall increase by fifty percent
(50%). Tenant shall continue in possession until such tenancy is terminated by
either Landlord or Tenant giving written notice of termination to the other
party at least thirty (30) days prior to the effective date of termination.
ARTICLE 26
SURRENDER OF PREMISES
26.1 Surrender. On the last day or sooner termination of the Lease
Term, Tenant agrees to quit and surrender the Premises, broom clean, in good
condition and repair (reasonable wear and tear and damage by acts of God or
other casualties excepted) together with all alterations, additions and
improvements (unless notified otherwise by Landlord) which may have been made
in, to or on the Premises, except trade fixtures installed at the expense of
Tenant. Tenant, on or before the end of the Lease Term, shall remove all of
Tenant's property from the Premises, and all property not removed shall be
deemed abandoned by Tenant. If the Premises are not surrendered at the end of
the Lease Term, Tenant shall indemnify Landlord against loss or liability
resulting from delay by Tenant in so surrendering the Premises including,
without limitation, any claim made against Landlord by any succeeding tenant
based on such delay.
26.2 Merger Upon Surrender. The voluntary or other surrender of this
Lease by Tenant, or a mutual cancellation of this Lease, shall not automatically
work a merger, and Landlord may either terminate all or any existing
subtenancies or treat the surrender or cancellation as an assignment to Landlord
of any or all such subtenancies.
ARTICLE 27
GENERAL PROVISIONS
27.1 Waivers. One or more waivers by Landlord of any covenant or
condition contained in this Lease or of any breach or default by Tenant shall
not be consumed as a waiver of a subsequent breach or default of the same or of
any other covenant or condition, and the consent or approval by Landlord to or
of any act of Tenant which requires Landlord's consent or approval shall not be
deemed to waive or render unnecessary Landlord's consent or approval to or of
any
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subsequent or similar act by Tenant. The subsequent acceptance by Landlord of
rent or of any other payment shall not constitute a waiver of any concurrent or
preceding breach or default by Tenant of any term, covenant or condition of this
Lease, other than the failure of Tenant to pay the particular rental or payment
so accepted, regardless of Landlord's knowledge of such preceding or concurrent
breach or default at the time of acceptance of such rent or payment. No waiver
shall be effective unless it is in writing and signed by Landlord.
27.2 No Accord and Satisfaction. No payment by Tenant or receipt by
Landlord of a lesser amount than the rent provided to be paid shall be deemed to
be other than on account of the earliest rent due and payable under this Lease,
nor shall any endorsement or statement on any check or any letter accompanying
any check or payment as rent be deemed an accord and satisfaction. Landlord may
accept any such check or payment without prejudice to Landlord's right to
recover the balance of such rent or pursue any other remedy provided in this
Lease.
27.3 Notices. All notices, demands, and statements shall be in writing
and shall be given by personal delivery, facsimile transmission, express
delivery service or by deposit in the United States mail, certified, return
receipt requested, postage prepaid, addressed to the parties at the addresses
appearing in the FUNDAMENTAL LEASE PROVISIONS or at such other place as either
party may designate in writing to the other party. The date notice is given
shall be the date on which the notice is delivered, if notice is given by
personal delivery, facsimile transmission if confirmation of transmission is
made, or express delivery service, or the date of deposit in the mail, if the
notice is sent through the United States mail. Notice is deemed to have been
received on the date on which the notice is delivered, if notice is given by
personal delivery, facsimile transmission or express delivery service, or three
(3) days after deposit in the mail, if the notice is sent through the United
States mail.
27.4 Relationship of the Parties. Nothing contained in this Lease shall
be deemed or construed by the parties or by any third person to create the
relationship of principal and agent, of partnership, of joint venture or of any
association between Landlord and Tenant, and neither the method of computation
of rent nor any other provision contained in this Lease nor any acts of the
parties shall be deemed to create any relationship between Landlord and Tenant
other than the relationship of landlord and tenant.
27.5 Attorneys' Fees. In the event of any action or proceeding brought
by either party against the other under this Lease or any guarantee of this
Lease, the prevailing party shall be entitled to recover attorneys' fees in such
amount as the court or other fact finder may judge reasonable.
27.6 Binding Effect. Subject to all limitations on assignment and
subletting set forth in this Lease, all of the terms and provisions of this
Lease shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties to this Lease.
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27.7 Interest on Past Due Obligations. Any amount due to Landlord
which is not paid when due shall bear interest from the due date until paid at
the rate equal to the lesser of twelve percent (12%) per annum or the maximum
rate allowed by law. Payment of such interest shall not excuse or cure any
default by Tenant under this Lease.
27.8 Severability. If any one or more of the provisions of this Lease
or the applicability of any such provision to a specific situation shall be held
invalid or unenforceable, such provision shall be modified to the minimum extent
necessary to make it or its application valid and enforceable, and the validity
and enforceability of all other provisions of this Lease and all other
applications of such provisions shall not be affected by such determination.
27.9 Entire Agreement: Amendment. This Lease, together with the
attached Exhibits which are an integral part of this Lease, constitutes the
entire agreement between the parties pertaining to the subject matter of this
Lease. All prior and contemporaneous agreements, representations and
understandings of the parties, oral or written, are superseded and merged in
this Lease. No supplement, modification or amendment of this Lease shall be
binding unless in writing and executed by both parties.
27.10 Captions. The captions of the Sections and Articles of this
Lease are for convenience only and shall not be considered or referred to in
resolving questions of interpretation or construction. References in this Lease
to "SECTIONS" and "ARTICLES" are to the various Sections and Articles of this
Lease, unless otherwise noted.
27.11 Construction. The laws of the State of Nevada shall govern the
validity, performance, and enforcement of this Lease. This Lease shall not be
construed either for or against Landlord or Tenant. This Lease shall be
interpreted in an effort to reach an equitable result. Whenever the context may
require, any pronouns used in this Lease shall include the corresponding
masculine, feminine or neuter forms and the singular form of nouns and pronouns
shall include the plural and vice versa. If there is more than one Tenant, the
obligations under this Lease shall be considered the joint and several
obligations of each. Whenever or wherever in this Lease, the consent of Landlord
or Tenant is required, such consent shall not be unreasonably withheld or
delayed, unless otherwise specifically stated herein.
27.12 Time of Essence. Time is of the essence with respect to the
performance of each of the covenants and agreements contained in this Lease.
27.13 Execution of Additional Documents. Landlord and Tenant each agree
to execute such additional documents as may be necessary or appropriate to fully
carry out the provisions of this Lease.
927.14 Time Periods. If the time for the performance of any obligation
or taking of action under this Lease expires on a Saturday, Sunday or legal
holiday, the time for performance or
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taking such action shall be extended to the next succeeding day which is not a
Saturday, Sunday or legal holiday.
27.15 Recordation. Tenant shall not record, or cause to be recorded,
this Lease or any memorandum of this Lease, without the prior written consent of
Landlord.
27.16 Brokers. The parties warrant that they have had no dealings with
any broker or agent in connection with this Lease, and covenant to pay, hold
harmless and indemnify each other from and against any and all cost, expense or
liability for any compensation, commissions and charges claimed by any broker or
agent with respect to this Lease or the negotiation thereof.
27.17 Quiet Enjoyment. Upon Tenant paying the Minimum Rent and
Additional Rent, and performing all of the covenants, conditions and provisions
on Tenant's part to be observed and performed hereunder, Tenant shall have the
quiet possession of the Premises for the entire Lease Term, subject to all of
the provisions of this Lease.
27.18 Force Majeure. The parties to this Agreement shall be excused
from the performance of any obligation under this Agreement, excluding in the
case of Tenant, the obligation to pay Rent or other sums payable hereunder, in
the event such performance is prevented by reason of a strike, boycott, lockout
or other labor trouble; any storm, fire, earthquake or Act of God; any riot,
civil disturbance, or any act of war or of the public enemy; the shortage,
unavailability or disruption in the supply of labor, materials, fuels or the
disruption of electrical, or other required utility service; any present or
future governmental law, ordinance, order, rule or regulation; or any other
cause or contingency beyond the respective parties' control; but only during
such time as such party is unable due to a specified reason herein to perform
its obligations hereunder.
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IN WITNESS WHEREOF, this Lease is executed as of the date first-above written.
MANDALAY CORP., a Nevada corporation
By: /s/ illegible
------------------------------------
Its: President
-----------------------------------
"Landlord"
BORDER GRILL LAS VEGAS, LLC,
a Nevada limited liability company
By: TT&T, LLC, a Nevada limited liability
company, Its: Managing Member
By:
-------------------------------------
Xxxxx Xxxxxxx, Managing Member
By:
-------------------------------------
Xxxx Xxx Xxxxxxxx, Managing Member
"Tenant"
ACKNOWLEDGMENTS
STATE OF )
) ss.
County of )
The foregoing instrument was acknowledged before me this
day of , 1998, by , the of Mandalay Corp.,
a Nevada corporation, on behalf of the corporation.
-------------------------------------
NOTARY PUBLIC
My Commission Expires:
----------------------
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STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On , before me, , a Notary Public
for the State of California, personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand official seal.
-------------------------------------
NOTARY PUBLIC
My Commission Expires:
----------------------
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On , before me, , a Notary Public
for the State of California, personally appeared ,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument
and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand official seal.
-------------------------------------
NOTARY PUBLIC
My Commission Expires:
----------------------
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EXHIBIT A
Description of Project
53
EXHIBIT A
[Composite First Floor Plan]
This is a conceptual site plan, and Landlord reserves the right to change,
amend, alter or revise this site plan and the Project in its sole discretion.
54
EXHIBIT B
Site Plan for Premises
55
EXHIBIT B
[GRAPHIC - Floorplan Upper Level]
56
[GRAPHIC - Floorplan Pool Level]
57
EXHIBIT C
WORK LETTER AGREEMENT
LANDLORD: MANDALAY CORP.
TENANT: BORDER GRILL LAS VEGAS, LLC
DATE: November 12, 1998
RECITALS
A. Concurrently with the execution of this Work Letter Agreement (the
"AGREEMENT"), Landlord and Tenant have entered into a lease (the "LEASE")
covering certain leased premises (the "PREMISES") more particularly described in
the Lease. Capitalized terms not defined in this Agreement shall have the
meaning set forth in the Lease.
B. To induce Tenant to enter into the Lease (which is hereby
incorporated by reference to the extent that the provisions of the Lease apply
hereto) and in consideration of the mutual covenants hereinafter contained,
Landlord has agreed to make certain improvements to the Premises in accordance
with this Agreement. The cost of such improvements shall be paid for by the
parties as set forth below.
AGREEMENT
1. Tenant Improvements. Any reference herein to "TENANT IMPROVEMENTS"
shall include all work to be done in the Premises pursuant to the Tenant
Improvement Plans described in SECTION 2 below, including but not limited to
partitioning, interior doors, floor covering and finishes, millwork reflective
ceiling, electrical fixtures, electrical outlets and switches, telephone
outlets, plumbing fixtures, paint and wall coverings, furniture, trade fixtures
and equipment. Tenant Improvements shall not include (a) the building shell, the
core area (including necessary mechanical, electrical [600-800 amp service]
(including electrical subpanels), plumbing, life safety, exhaust, heating, air
conditioning and ventilation systems included within the building shell),
unpainted exterior drywall or lath and plaster covering the exposed side of all
core walls, core and perimeter columns, sprinklers and other fire-related safety
devices (the "BASE BUILDING IMPROVEMENTS"), all of which shall be provided by
Landlord, at Landlord's expense, as base building improvements or (b) the
furniture, fixtures, equipment and other finish items not included in the Tenant
Improvement Plans (defined below), all of which shall be provided by Tenant, at
Tenant's expense.
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2. Preparation of Tenant Improvement Plans.
2.1 On or before October 30, 1998, Tenant shall cause its
architect or space planner ("TENANT'S ARCHITECT") to prepare a "SCHEMATIC DESIGN
PLAN" which will include the high wall and reflective ceilings and structural
components of the Premises (the "SHELL IMPROVEMENTS") and shall present such
Schematic Design Plan to Landlord for its review at a meeting to occur on or
about October 30, 1998 between Tenant's Architect, Landlord and Landlord's
Architect (the "SCHEMATIC DESIGN MEETING"). At the Schematic Design Meeting,
Landlord and Tenant will agree on any changes to the Schematic Design Plan, and
within ten (10) business days following the Schematic Design Meeting, Tenant
shall cause the Architect to revise the Schematic Design Plan to address such
changes and shall resubmit the same to Landlord. If Landlord objects in writing
to the resubmitted Schematic Design Plan within ten (10) days following its
receipt thereof, Tenant's Architect and Landlord and Landlord's Architect shall
meet and confer to resolve any dispute concerning the Schematic Design Plan.
2.2 On or before November 15, 1998, Landlord shall cause its
architect ("LANDLORD'S ARCHITECT") to prepare "SHELL DRAWINGS" for the Shell
Improvements and shall submit such Shell Drawings to Tenant's Architect. On or
before November 30, 1998, Tenant's Architect shall provide Landlord and
Landlord's Architect with comments and/or proposed changes to the Shell
Drawings, and Landlord, Landlord's Architect and Tenant's Architect shall meet
and confer to address any comments and/or proposed changes to the Shell Drawings
raised by Tenant's Architect.
2.3 On or before the later of forty-five (45) days after
Landlord and Tenant agree on the Schematic Design Plan or fifteen (15) days
after Landlord and Tenant agree on the Shell Drawings, Tenant shall cause its
Architect to prepare the "INTERIOR DESIGN PACKAGE SUBMITTAL" for the interior
design and finish of the Premises (the "FINISH WORK") and shall present the
same to Landlord for its approval, which approval shall generally follow the
same procedure set forth in SECTION 2.1 above.
2.4 The Schematic Design Plan and the Interior Design Package
Submittal shall each be referred to as a "SPACE PLAN" and shall collectively be
referred to as the "SPACE PLANS." The Shell Improvements and the Finish Work
shall collectively comprise the Tenant Improvements. Once approved by Landlord
and Tenant, the Space Plans and Shell Drawings shall be referred to herein as
the *TENANT IMPROVEMENT PLANS."
2.5 Once the Tenant Improvement Plans have been approved, the
Tenant Improvement Plans shall not be changed without the prior approval of
Landlord and Tenant, except as may be required by any governmental authority as
a condition to issuance of a building permit (provided that Tenant shall be
consulted on the manner that any changes required by governmental authority are
implemented and shall have reasonable approval thereof).
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3. Construction of the Tenant Improvements.
3.1 Circus Circus Development Inc. or another contractor
designated by Landlord ("CONTRACTOR") shall construct the Tenant Improvements.
3.2 Landlord shall independently retain Contractor to
construct the Tenant Improvements in accordance with the Tenant Improvements
Plans. Landlord shall have the right to assign to Tenant all warranties and
guaranties from Contractor relating to the Tenant Improvements, and upon such
assignment Tenant hereby waives all claims against Landlord relating to, or
arising out of the construction of, the Tenant Improvements.
3.3 Provided that Tenant and its agents do not interfere with
Contractor's work in the Premises, Contractor shall allow Tenant access to the
Premises prior to the Substantial Completion of the Premises for the purpose of
Tenant installing equipment or fixtures not included in the Tenant Improvements.
Prior to Tenant's entry into the Premises as permitted by the terms of this
Section, Tenant shall submit a schedule to Landlord and Contractor, for their
approval, which schedule shall detail the timing and purpose of Tenant's entry.
All provisions of the Lease shall apply to any entry by Tenant under this
Section, other than provisions relating to the payment of Minimum Rent,
Additional Rent and Percentage Rent and provisions relating to the operation of
a restaurant on the Premises.
4. Payment of Cost of the Tenant Improvements.
4.1 Promptly following execution of the Lease, Tenant shall
provide Landlord with adequate financial assurances that it has sufficient funds
to pay all TI Costs (defined below) less the Tenant Allowance.
4.2 Promptly after the Shell Drawings for the Shell
Improvements are complete, Landlord shall provide Tenant with a cost proposal,
which cost proposal shall include, as nearly as possible, the cost of all items
in connection with the design and construction of the Tenant Improvements (the
"PRELIMINARY COST"). Tenant shall have the right to approve or disapprove the
Preliminary Cost Proposal within five (5) business days of the receipt of the
same. Upon such approval, Landlord shall be released by Tenant to purchase the
items set forth in the Preliminary Cost Proposal and to commence the
construction relating to such items. If Tenant timely disapproves the
Preliminary Cost Proposal, Tenant and Landlord shall meet and confer to resolve
any disputes concerning the Preliminary Cost Proposal.
4.3 Within fourteen (14) days after the Interior Design
Package Submittal has been approved by Landlord, Landlord shall provide Tenant
with a cost proposal, which cost proposal shall include, as nearly as possible,
the cost of all items in connection with the Tenant Improvements, including the
Shell Improvements and the Finish Work (the "FINAL COST PROPOSAL"). Tenant shall
have the right to approve or disapprove the Final Proposal within five (5)
business days of the receipt of the same (provided that Tenant shall not object
to any amount
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approved as part of the Preliminary Cost Proposal). Upon such approval,
Landlord shall be released by Tenant to purchase the items set forth in the
Final Cost Proposal that were not included in the Preliminary Cost Proposal and
to commence the construction relating to such items. If Tenant timely
disapproves the Final Cost Proposal, Tenant and Landlord shall meet and confer
to resolve any disputes concerning the Final Cost Proposal.
4.4 The Preliminary Cost Proposal and the Final Cost Proposal
shall each be referred to as a "COST PROPOSAL" and shall collectively be
referred to as the "COST PROPOSALS."
4.5 Landlord hereby grants to Tenant a one-time "TENANT
ALLOWANCE" of $675,000. Such Tenant Allowance shall be used by Landlord to pay a
portion of the TI Costs for the items in the following categories:
(i) The payment of permit and license fees.
(ii) Construction of the Tenant Improvements,
including without limitation the furnishing and installation of the
following:
(1) All partitioning doors, floor coverings,
finishes, reflective ceilings, wall coverings and painting,
millwork and similar items;
(2) All electrical power, wiring, electrical outlets
and switches, tube outlets and other wiring to be installed
within the Premises;
(3) All heating, ventilation and air conditioning
duct work, diffusers and accessories required for the
completion of the air conditioning system within the Premises;
(4) Any additional Tenant requirements including, but
not limited to, odor control, special lighting, heating,
ventilation and air conditioning, noise or vibration control
or other special systems; and
(5) Fire walls and doors, partitions and/or
modifications to the sprinkler or fire and life safety systems
and other items which may be necessary to meet applicable
building code requirements for Tenant's occupancy of the
Premises.
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4.6 The amount by which the TI Costs exceed the Tenant
Allowance, shall be paid by Tenant to Landlord as provided in this SECTION 4.
Without limiting the foregoing, if Tenant requests any changes or substitutions
to any portion of the Tenant Improvements after the Tenant Improvement Plans
have been prepared and the Final Cost Proposal has been approved, any additional
costs as a result thereof that cause the TI Costs to exceed the Tenant Allowance
shall be paid by Tenant as provided in this SECTION 4. If the TI Costs are less
than the Tenant Allowance, the difference shall revert to Landlord, and Tenant
shall not be entitled to any rent credit or deduction.
4.7 In no event shall Landlord be obligated to make
disbursements pursuant to this Agreement in a total amount which exceeds the
Tenant Allowance. If Tenant is required to pay any costs in excess of the Tenant
Allowance pursuant to this SECTION 4, the estimated excess costs shall be paid
by Tenant to Landlord prior to the commencement of construction and any
additional amounts in excess of such estimated payment shall be due within five
(5) days after Tenant receives the TI Cost Statement.
4.8 Within thirty (30) days following Substantial Completion
of the Tenant Improvements Landlord shall deliver to Tenant an itemized written
statement (the "TI COST STATEMENT"), setting forth the total cost to construct
the Tenant Improvements (the "TI COSTS"), taking into account any change orders
that result in the increase or decrease to the Final Cost Proposal. The cost of
the Tenant Improvements shall not exceed the Final Cost Proposal approved by
Tenant unless Tenant approves a change order that increases such cost.
5. Completion of the Tenant Improvements: Commencement Date.
5.1 Subject to SECTION 5.2 below, the Term of the Lease shall
commence upon Substantial Completion of the Premises. For purposes of
determining the Commencement Date, "SUBSTANTIAL COMPLETION" of the Premises
shall occur upon substantial completion of construction of the Tenant
Improvements in the Premises pursuant to the Tenant Improvement Plans, with the
exception of any minor punch list items, which will not have a material adverse
impact on the operation of Tenant's restaurant, and any tenant fixtures or
equipment to be installed by Tenant.
5.2 If there shall be a delay or there are delays in the
Substantial Completion of the Premises, as a direct, indirect, partial, or total
result of:
5.2.1 Tenant's failure to comply with the time deadlines
specified in this Agreement and such failure continues for five (5) days after
the expiration of such deadline;
5.2.2 Tenant's failure to timely approve or disapprove any
matter requiring Tenant's approval and such failure continues for five (5) days
after notice of such failure;
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5.2.3 A material, uncured breach by Tenant of the terms of
this Agreement or the Lease if such breach continues for five (5) days after
written notice thereof (or such longer period as may be provided for under the
Lease);
5.2.4 Changes in any of the Tenant Improvement Plans after
disapproval of the same by Landlord or because the same do not comply with Code
or other applicable laws;
5.2.5 Tenant's written request for changes in the Tenant
Improvement Plans which relate to the design of the Premises and which are not
required by or resulting from governmental authorities or are not necessary for
the operation of the Premises or to correct an error or omission in the Tenant
Improvement Plans;
5.2.6 Tenant's requirement for materials, components, finishes
or improvements which are not available in a commercially reasonable time given
the anticipated date of Substantial Completion of the Premises as set forth in
the Lease; or
5.2.7 Any other acts or omissions of Tenant, or its agents, or
employees which Tenant fails to cure within five (5) business days after receipt
of written notice thereof; then, notwithstanding anything to the contrary set
forth in the Lease or this Agreement and regardless of the actual date of the
Substantial Completion of the Premises, the Commencement Date shall be deemed
to be the date the Commencement Date would have occurred if no Tenant delay or
delays, as set forth above, had occurred, and in addition to the Minimum Rent
Landlord shall, until Tenant opens for business, collect in lieu of Percentage
Rent one-twentieth (1/20th) of the Minimum Rent per day.
5.3 Landlord shall notify Tenant upon Substantial Completion
of the Tenant Improvements, and prior to delivery of the Premises to Tenant,
Landlord and Tenant shall conduct a "walk through" inspection of the Premises
and prepare a punch list of known or apparent deficiencies or incomplete work
required to be corrected or completed by Landlord pursuant to the Tenant
Improvement Plans. Landlord shall cause all punch list items to be repaired or
completed within a reasonable time following the walk through inspection.
Landlord shall use reasonable efforts to cause such items to be completed within
forty-five (45) days after the Commencement Date, provided that if in the
exercise of reasonable diligence such item cannot be completed within such
45-day period, Landlord shall cause such repairs to be commenced within such
45-day period and shall diligently pursue the same to completion.
6. Ownership. Except as may be expressly set forth on the Tenant
Improvement Plans, the Tenant, Improvements (other than furniture, removable
trade fixtures and equipment) shall be owned by Landlord and shall be
surrendered by Tenant at the expiration or prior termination of the Lease in
good condition and repair, ordinary wear and tear, damage due to casualty, and
obsolescence excepted.
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7. Representatives. Landlord and Tenant each appoint the following
individuals to act as their respective representatives in all matters covered by
this Agreement:
Tenant's Representative: Xxxx Xxxxxxxxxx
Landlord's Representative: Xxxx Xxxxxxxx
All inquiries, requests, instructions and authorizations and other
communications with respect to the matters covered by this Agreement will be
submitted to the Landlord's representative or Tenant's representative, as the
case may be. Each party may change its representative under this Agreement at
any time upon three (3) days prior written notice to the other party.
8. Time. Time is of the essence in this Agreement. Unless otherwise
indicated, all references herein to a "number of days" shall mean and refer to
calendar days. If Tenant fails to approve any proposed changes to the Tenant
Improvement Plans or specify in writing its objections thereof within five (5)
days after written notice as required by the Lease, then at Landlord's sole
option, at the end of such period the change order shall automatically be deemed
approved.
9. Tenant's Lease Default. Notwithstanding any provision to the
contrary contained in this Lease, if an event of default as described in the
Lease, or a default by Tenant under this Agreement, continues beyond the
expiration of any applicable notice and grace period at any time on or before
the Substantial Completion of the Premises, then (i) in addition to all other
rights and remedies granted to Landlord pursuant to the Lease. Landlord shall
have the right to withhold payment of all or any portion of the Tenant Allowance
and/or Landlord may cause Contractor to cease the construction of the Premises
(in which case, Tenant shall be responsible for any delay in the Substantial
Completion of the Premises caused by such work stoppage as set forth in SECTION
5.2 of this Agreement), and (ii) all other obligations of Landlord under the
terms of this Agreement shall be forgiven until such time as such default is
cured pursuant to the terms of the Lease.
10. Responsibility for Design. Except as otherwise provided in the
Lease, Tenant will be responsible for the design, function and maintenance of
all Tenant Improvements, whether or not approved or installed by Landlord at
Tenant's request. Landlord's preparation and/or approval of the Tenant
Improvement Plans will not constitute any representation or warranty by Landlord
as to the adequacy, efficiency, performance or desirability of Tenant's
Improvements in the Premises and shall create no responsibility or liability on
the part of Landlord for their completeness, design sufficiency, or compliance
with all laws, rules, and regulations of governmental agencies or authorities.
11. Notices. Notices under this Agreement shall be given in accordance
with the notice provisions set forth in the Lease.
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12. Conflicts. In the event of any conflict between the provisions of
this Agreement and the provisions of the Lease, the provisions of this Agreement
shall govern.
IN WITNESS WHEREOF, this Agreement is executed as of the date first
above written.
BORDER GRILL LAS VEGAS, LLC, a Nevada
limited liability company
BY: TT&T, LLC, a Nevada limited
liability company,
Its: Managing Member
By:
----------------------------------
Xxxxx Xxxxxxx, Managing Member
By:
----------------------------------
Xxxx Xxx Xxxxxxxx, Managing Member
"Tenant"
MANDALAY CORP., a Nevada corporation
By: /s/ [illegible]
---------------------------------
its:
----------------------------
"Landlord"
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EXHIBIT D
Sample Menu
D-1
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EXHIBIT D
LUNCH
ENTRADAS
Soup of the Day - selection changes daily 4.75
Guacamole - with cilantro, red onion and lime 5.75
Green Corn Tamales - with sour cream and salsa fresca
(3 per order) 5.75
Plantain Empanadas - stuffed with black beans, Poblano chilis and
anejo cheese (4 per order) 5.50
Panuchos - small handmade corn tortillas stuffed with black beans
and topped with chicken, avocado and pickled onions 5.75
Quesadilla - with cheeses and poblano chile: 5.00
with guacamole 6.50
with chicken 6.75
Ceviches - selection changes daily market price
Caesar Salad - with Xxxxxx cheese and garlic croutons
small 5.50 large 7.50
Grilled Cactus Salad - with Cotija cheese, tomato, red onions and
cilantro 5.75
Watercress and Jicama Salad - with lime and olive oil 5.75
BORDER GRIDDLED TACOS
Two soft tacos served with rice and black beans
Chicken 6.75 Bean and Cheese 5.75
Carnitas 6.75 Potato and Rajas 6.25
Carne Asada 7.50 Roasted Lamb 7.25
Grilled Fish 7.75
Sides
Rice: red, green and white 3.50 Moros: white rice and black beans 3.50
Rice and black beans 3.50 Rice and Fried Plantains 4.75
Rajas: sauteed sweet peppers, poblanos & onions, cheese and cream 5.00
Hand made corn (3) or flour (1) tortillas .75
(We do not use lard in our rice, beans or tortillas)
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LUNCH
Especiales de la Casa
Chicken Pozole - chicken stewed with hominy, cabbage and garlic
in mild tomato chile broth; topped with xxxxxxx cheese 8.75
Mulitas de Hongos - Portobello mushrooms layered with guacamole,
cheese, black beans and poblano xxxxxx; served with roasted
garlic tomato sauce and seared red chard. A combination of
unique textures and hot and cold flavors 12.75
Grilled Fish - selection changes daily market price
Morita Chicken Salad - breast of chicken sauteed with Morita
xxxxxx, tossed with avocado, field greens and watercress in
a chipotle vinaigrette 9.25
Grilled Skirt Steak - marinated with garlic, cilantro and cracked
pepper; served with moros and flour tortilla 12.75
Mexican Chopped Salad - with tomato, corn, avocado, peppers, pine
nuts, tortilla chips and red onion; cumin vinaigrette 8.75
Spicy Chipotle Chicken - served and baked with smoky, fiery chipotle
xxxxxx; served with rice and beans 10.75
Turkey Tostada Salad - crispy corn tortillas, grilled turkey, black
beans, cheese, crema, avocado, lettuce, cabbage and tomatoes,
tossed with a red wine vinaigrette 9.25
Chile Relleno - with three cheeses and two salsas, rice and beans 8.75
Torta de Pavo - Traditional Mexican sandwich on home made "bolillo"
bread with thin sliced grilled turkey, black beans, tomato,
pickled onions and guacamole; cracked pepper vinaigrette 7.75
Vegetarian Torta - with black beans, guacamole, cheese, roasted
peppers, poblano mashed potatoes, cucumber and watercress 7.50
Torta de Carnitas - braised pork with guacamole, cilantro, pickled
cucumbers, roasted tomato chipotle salsa and tamarind apple
sauce 7.75
18% gratuity added to parties of eight or more
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DINNER
Appetizers
Soup of the Day - selection changes daily 4.75
Panuchos - black bean stuffed tortilla topped with chicken,
pickled onions & avocado 5.75
Guacamole - mashed to order 6.00
Ceviches - selection changes daily
Quesadilla - homemade flour tortilla with cheeses & poblano chile 5.50
with guacamole 6.50 with chicken 6.50
Green Corn Tamales - with sour cream & salsa fresca (3 per order) 5.75
Guatemalan Tamale - stuffed with marinated chicken & achiote sauce 6.50
Plantain Empanadas - stuffed with black beans & cheese (4 per order) 5.50
Eulalia's Chips - with black beans, creme fraiche & chipotle salsa 4.25
Border Griddled Tacos
Homemade corn tortillas with the classic fillings
(Three tacos per order)
Chicken 6.75 Potato & Rajas 6.25
Carnitas 6.75 Beans and Cheese 5.75
Carne Asada 7.50 Roasted Lamb 7.25
Grilled Fish 7.75
Salads
Caesar Salad - made to order small 6.00 large 9.00
Tostada Salad - crispy corn tortillas, black beans, cheese, 8.50
avocado, lettuce, cabbage, and tomatoes tossed with
red wine vinaigrette
with grilled turkey 9.75
Mexican Chopped Salad - with tomato, corn, peppers, pine nuts, 6.25
diced green apples and red onion; tossed with a cumin
lemon vinaigrette
Watercress & Jicama Salad - with lime and olive oil 5.75
Grilled Cactus Salad - with Cotija cheese, tomato & red onion 5.75
18% gratuity added to parties of eight or more
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EXHIBIT D-I
Prohibited Menu Items
1. Primarily(1) Pacific Rim Nouvelle Cuisine
2. Primarily(2) Progressive American Cuisine
3. Primarily(2) Italian Cuisine
-------------------------
(1) Landlord shall have the right to add additional cuisine categories
from time to time so long as such additions do not have the cumulative effect of
limiting Tenant's ability to operate the Premises as a restaurant serving
principally Mexican cuisine nor shall such items limit Tenant's right to serve
the items on EXHIBIT D or similar items.
(2) For purposes of items 1, 2, and 3 of this Exhibit, the term
"primarily" means not more than thirty percent (30%) of the items offered.
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EXHIBIT E
Ownership of Tenant
Percentage
Interest
----------
1. TT&T,LLC(3) 51%
2. Vantage Bay Group, Inc. 49%
-------------------------
(3) The sole members of TT&T, LLC are Xxxxx Xxxxxxx (42.5%), Xxxx Xxx
Xxxxxxxx (42.5%) and Xxxxx Xxxxx (15%).
X-0
00
XXXXXXX X
Accounting Procedures
1. ROOM CHARGES. Landlord shall pay to Tenant all room charges, if any,
weekly on a day of the week to be agreed upon by Landlord and Tenant. Such
amounts shall be paid by direct deposit in a bank account established by Tenant.
Landlord shall provide a reconciliation of payments made under this PARAGRAPH 1,
and Landlord and Tenant shall make any necessary adjusting payments. Provided
that Tenant follows all procedures reasonably established by the Landlord for
processing room charges, Landlord shall assume the risk of non-payment by guests
of Landlord or its Affiliates except to the extent a guest specifically disputes
a charge for services provided by Tenant, which shall be resolved between Tenant
and the guest.
2. COMPS. By the tenth (10th) day of each month, Landlord shall provide
Tenant with a report (the "COMP REPORT") summarizing for the prior month (i) the
total amount treated as Comps under SECTION 7.10 of the Lease, (ii) the portion
of such amount applied toward the Comp Threshold and (iii) the portion of such
amount by which the Monthly Comp Threshold is exceeded in any month during the
Term of this Lease. Tenant shall supply Landlord with such information as may be
necessary to calculate these amounts. Landlord shall pay to Tenant any amount
required under SECTION 7.10(b) of the Lease on or before the fifteenth (15th) of
the month following the month for which such Comps were furnished.
3. PAYMENTS TO LANDLORD. Amounts payable by Tenant to Landlord under
the Lease, including, but not limited to, Minimum Rent, Percentage Rent, and the
Additional Rent shall be paid by Tenant in the manner provided under the Lease.
4. GROSS SALES. Tenant will provide Landlord unaudited information on
Gross Sales derived from the Restaurant on a weekly basis, in a form generally
used by Tenant and its Affiliates.
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EXHIBIT G
Restricted Area
The area in Xxxxx County, Nevada, bounded (i) on the south by Warm Springs Road,
(ii) on the west by Interstate 15, (iii) on the north by Sahara Avenue, and (iv)
on the east by Maryland Parkway, as such roads existed on July 1, 1998.
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73
EXHIBIT H
Carbonated beverages
Bottled or bag in a box juices/mixers
Iced tea (other than specialty iced tea)
Bottled iced coffee
Isotonic
Allied/Local Brands (e.g., Quinine, Xxx Xxxxxxx, Club Soda, Ginger Ale, Sweet &
Sour)
X-0
00
XXXXXXXX XXX
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
November 12, 1998
Ms. Xxxxx Xxxxxxx
BORDER GRILL LAS VEGAS, LLC
0000 0xx Xxxxxx
Xxxxx Xxxxxx, XX 00000
Re: Border Grill Lease
Dear Xx. Xxxxxxx:
Pursuant to that certain Lease for Restaurant Space ("Lease") executed
contemporaneously with this letter, Mandalay Corp. ("Landlord") has leased space
in the Mandalay Bay Resort & Casino to Border Grill Las Vegas, LLC ("Tenant").
Under Section 7.12 of the Lease, Landlord hereby notifies Tenant that it has
entered into an exclusive agreement with Pepsi-Cola Company ("Pepsi") and Tenant
shall be required to use the various brand choices designed by Pepsi, as more
specifically described on an attachment to this letter. However, Landlord and
Tenant acknowledge that the Iced Tea brand choice (Lipton) does not specifically
meet the standards required by Tenant for such product, and that Landlord has
advised Tenant that it shall not be a breach of the Lease for Tenant to
substitute a different brand choice for this particular product.
Very truly yours,
MANDALAY CORP.
By: /s/ [illegible]
-------------------------------------
Its: PRESIDENT
--------------------------------
75
*(Tropicana juices which are the same as the Citrus Hill juices listed herein
(whether in bag in a box or concentrate) will be included in this Agreement if
PepsiCo. completes its acquisition of that brand.)
FOUNTAIN BRANDS
Carbonated Soft Drinks - 5 Gallon BIB
Pepsi-Cola
Caffeine Free Pepsi
Mountain Dew
Diet Pepsi
Lemon Lime Slice
Orange Slice
Mug Root Beer
Lipton Iced Teas - 5 Gallon BIB
Plain
Peach
Raspberry
All Sport - 5 Gallon BIB
Lemon Lime
Hawaiian Punch
Fruit Punch
"Punchy" Grape
"Punchy" Pink Lemonade
Frozen Carbonated Beverages
Allied/Local Brands - 5 Gallon BIB
Quinine
Xxx Xxxxxxx
Ginger Ale
Sweet & Sour
*Citrus Hill Juice / Mixers - 5 Gallon BIB
Apple Juice
100% Orange Juice
50% Orange Juice
Grapefruit Juice
Cranberry Juice
Xxxxxxxxx Mix
76
Mandalay Corp.
0000 Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
November 25, 1998
Xxxxx Xxxxxxx
TT&T, LLC
0000 0xx Xxxxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Xxx Xxxxx, Esq.
Vantage Bay Group, Inc.
000 X. Xxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Re: Mandalay Bay Resort & Casino -- Border Grill Lease
Dear Xxxxx and Xxx:
The purpose of this letter is to confirm our understanding regarding
Section 7.8 of that certain Lease for Restaurant Space dated November 12, 1998
(the "Border Grill Lease") between Mandalay Corp., as "Landlord," and Border
Grill, Las Vegas, LLC, as "Tenant."
Under Section 7.8 of the Border Grill Lease, if Tenant is found unsuitable
by a Regulatory Authority or if the continued association with Tenant could have
a material adverse effect on any gaming or liquor license, permit or approval
held or sought by Landlord or any Affiliate of Landlord, the Border Grill Lease
is subject to termination in accordance with the terms thereof and Landlord is
obligated under said Section 7.8 to reimburse Tenant for the unamortized portion
of any TI Costs paid for by Tenant subject to the conditions stated therein (the
"Reimbursement Obligation"). TT&T, LLC ("TT&T") and Vantage Bay Group, Inc.
("Vantage Bay"), as the sole members of Tenant, have agreed that if the Border
Grill Lease would otherwise terminate under Section 7.8 because of the continued
involvement of Vantage Bay as a member in Tenant, Landlord will have an option
(but not an obligation) to purchase from Vantage Bay (or cause one of its
Affiliates to purchase) Vantage Bay's economic interest in the Tenant for a
purchase price equal to the unamortized portion of any TI Costs paid by Tenant
in which case the Border Grill Lease would not terminate. If Landlord exercises
the foregoing option, such purchase shall be in lieu of the Reimbursement
Obligation, and Landlord shall have no liability under the Lease to pay to
Tenant the Reimbursement Obligation. If Landlord does not exercise such option,
then Landlord acknowledges that the Reimbursement Obligation as set forth in
said Section 7.8 will remain in full
77
Xxxxx Xxxxxxx
Xxx Xxxxx, Esq.
November 25, 1998
Page 2
force and effect. Within three (3) days after (i) a finding of unsuitability
resulting from Vantage Bay's involvement in Tenant or (ii) a notice from
Landlord that because of Vantage Bay's involvement the continued association
with Tenant could have a material adverse effect on any gaming or liquor
license or permit or approval for the Project, Vantage Bay and TT&T shall
deliver to Landlord the Operating Agreement, Articles of Organization, and all
amendments, modifications and other documents relating to the agreement between
Vantage Bay and TT&T with respect to the Tenant and shall provide such
additional information regarding the Tenant and the operation of the Project
reasonably requested by Landlord. Within ten (10) days following receipt of
such information, Landlord shall notify Vantage Bay and TT&T in writing if
Landlord or any Affiliate of Landlord wishes to purchase Vantage Bay's economic
interest in the Tenant. If Landlord elects to purchase Vantage Bay's economic
interest in the Tenant, Landlord (or its Affiliate) and Vantage Bay shall
execute an agreement setting forth the purchase price (calculated as set forth
above) and such additional terms and conditions as shall be negotiated by
Vantage Bay and the Landlord or its Affiliate in good faith, and Vantage Bay
and the Landlord or its Affiliate shall consummate the sale of Vantage Bay's
economic interest in the Tenant as soon as reasonably possible. Landlord (or
its Affiliate) shall not be admitted as a member of Tenant, but shall have the
rights of an economic interest owner in profits, losses and distributions of
Tenant.
Except as set forth in this letter, capitalized terms shall have the
meaning set forth in the Border Grill Lease. If this letter correctly sets
forth your understanding of our agreement, please execute and return the
enclosed copy of this letter to me.
Very truly yours,
Mandalay Corp.
By:
------------------------------------
Its:
--------------------------------
78
Xxxxx Xxxxxxx
Xxx Xxxxx, Esq.
November 25, 1998
Page 3
ACCEPTED AND AGREED:
VANTAGE BAY GROUP, INC.
By:
--------------------------------------
Its:
----------------------------------
TT&T, LLC, a Nevada limited liability
company
By:
--------------------------------------
Xxxxx Xxxxxxx, Managing Member
By:
--------------------------------------
Xxxx Xxx Xxxxxxxx, Managing Member
BORDER GRILL LAS VEGAS, LLC,
a Nevada limited liability company
By: TT&T, LLC, a Nevada limited liability
company, Its: Managing Member
By:
---------------------------------
Xxxxx Xxxxxxx, Managing Member
By:
---------------------------------
Xxxx Xxx Xxxxxxxx, Managing Member
