LEASE

 

 

 

                                                                  Exhibit 10.102

 

 

                                      LEASE

 

                            DATED AS OF MAY 23, 2005

 

                                 BY AND BETWEEN:

 

              METROFLAG SW, LLC, a Nevada limited liability company

 

                                   AS LANDLORD

 

                                       AND

 

        S & W OF LAS VEGAS, L.L.C., a Delaware limited liability company

 

                                    AS TENANT

 

                                       FOR

 

                               RESTAURANT PREMISES

 

                                   located at

 

                         3767 LAS VEGAS BOULEVARD SOUTH

 

                                LAS VEGAS, NEVADA

 

 

 

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        THIS LEASE, dated as of the 23rd day of May, 2005 (this "Lease"),

between METROFLAG SW, LLC, a Nevada limited liability company having an address

at c/o Flag Luxury Properties, LLC, 650 Madison Avenue, 15th Floor, New York, NY

10022, as landlord (hereinafter referred to as "Landlord"), and S & W OF LAS

VEGAS, L.L.C., a Delaware limited liability company having an address at c/o

Smith & Wollensky Restaurant Group, 1114 First Avenue, New York, NY, as tenant

(hereinafter referred to as "Tenant").

 

                              W I T N E S S E T H:

                              - - - - - - - - - -

 

        WHEREAS, Tenant, as the ground lessee, and The Somphone Limited

Partnership, a Nevada limited partnership ("Fee Owner"), as the ground lessor,

entered into that certain Lease With An Option To Purchase, dated February 9,

1998, as amended by that certain First Amendment to Lease Agreement, dated May

8, 1998, and as further amended by that certain Letter Agreement, dated February

6, 2003, and as further amended by that certain Second Amendment to Lease

Agreement, dated April 29, 2003 (as amended, the "Ground Lease") for that

certain parcel of real property located in the City of Las Vegas, Clark County,

Nevada containing approximately 1.82 acres, measuring approximately 130 feet

along the west property line and 601 feet along the south property line;

commonly known as 3767 Las Vegas Boulevard South and Assessor's Parcel No.

162-21-301-014, the legal description of which is attached hereto as Exhibit "A"

("Land"), together with all improvements located on the Land, including

buildings, structures, and other facilities (collectively, the "Property");

 

        WHEREAS, Tenant, as "Seller" and Landlord, as "Purchaser", entered into

that certain Contract for Sale dated as of March 23, 2005 ("Contract") which

requires Tenant, after certain conditions are satisfied, to exercise its option

to purchase ("Purchase Option") fee simple title to the Property from the Fee

Owner and subsequently assign to Landlord all of its rights, title and interest

in and to the Ground Lease, including but not limited to the right to close on

the Purchase Option as exercised ("Ground Lease Assignment");

 

        WHEREAS, in accordance with the Contract and prior to the date of this

Lease, Tenant, as the ground lessee under the Ground Lease, exercised its

Purchase Option;

 

        WHEREAS, contemporaneous with the execution and delivery of this Lease,

Tenant executed and delivered to Landlord the Ground Lease Assignment assigning

all of its rights, title and interest in and to the Ground Lease, but excluding

all of Tenant's rights, title and interest in and to all furniture, fixtures,

equipment, machinery, art, artifacts, paintings, sculptures, wall hangings,

china, glassware, and silverware and all other items of personal property

located on the Premises or used in the operation of the Restaurant located on

the Premises (collectively, the "Personal Property"), and all licenses, permits,

authorizations, approvals or general intangible rights in connection with the

use or operation of the Restaurant (collectively, the "Intangible Rights");

 

        WHEREAS, contemporaneous with the execution and delivery of this Lease

and the Ground Lease Assignment, Landlord closed on the Purchase Option and

purchased fee simple title to the Property from Fee Owner in its "As Is"

condition, status and situation, including the physical, structural, legal, and

environmental condition, classification and status of the Property,

 

 

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and Tenant has agreed to leaseback the Premises from Landlord in its "as is"

condition, status and situation, including the physical, structural, legal, and

environmental condition, classification and status; and

 

        WHEREAS, pursuant to the Contract, Landlord, as "Purchaser", agreed to

leaseback to Tenant (after Landlord purchased the fee title to the Property from

Fee Owner) and Tenant, as "Seller", agreed to lease from Landlord that portion

of the Building as more particularly shown or identified in the floor plans

attached as Exhibit "B" hereto (the "Premises"), which lease shall be

accompanied by, to the extent reasonably necessary in connection with the

Restaurant operations, and only during the Term of this Lease, (i) an exclusive

license for the use and maintenance of the existing grease trap and trash

containers, and (ii) a non-exclusive license for the use and maintenance of the

utility lines, Parking Spaces (as herein defined), and access driveway and

appurtenances now existing or necessary in connection therewith. Pursuant to

this Lease, neither the Landlord's Direct Space (as herein defined) nor any

portion of the Property, other than the Premises, is hereby demised. Such

Premises were, immediately prior to the date of this Lease, occupied by Tenant

and operated by Tenant as a white tablecloth, first class, sit-down, fine dining

establishment primarily serving steak, with waiter and waitress service, and

consistent with currently existing "Smith and Wollensky" standards

("Restaurant"); provided, however, that Tenant shall have the right, at any time

(and from time to time) during the Term, to change the type of foods being

served at the Premises, including, without limitation, the right to completely

eliminate steak from the menu.

 

        NOW THEREFORE, in consideration of the mutual covenants contained herein

and other good and valuable consideration, the receipt and sufficiency of which

is hereby acknowledged, Landlord and Tenant for themselves, their heirs,

executors, administrators, legal representatives, successors and assigns, hereby

covenant as follows:

 

1.       DEFINITIONS.

 

        The following terms defined below shall for all purposes of this Lease

have the meaning specified unless the context requires otherwise:

 

              (a)      "ADA" shall mean The Americans With Disabilities Act, and

                      any other state or local laws of similar intent, as the

                      same may be in effect or amended from time to time.

 

              (b)      "Additional Rent" shall have the meaning ascribed to it in

                      Section 4.C.

 

              (c)      "Building" shall have the meaning ascribed to it in

                      Section 3.C.

 

              (d)      "Business Days" or "business days" shall be deemed to mean

                       all days other than Saturdays, Sundays and Holidays. The

                      term "Holidays" shall be deemed to mean all federal and

                      state holidays observed in the State.

 

              (e)      "Commencement Date" shall have the meaning ascribed to it

                      in Article 2.

 

              (f)      "Default Rate" shall have the meaning ascribed to it in

                      Article 37.

 

 

 

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               (g)      "Expiration Date" shall have the meaning ascribed to it in

                      Article 2.

 

              (h)      "Gross Receipts" shall have the meaning ascribed to it in

                      Section 4.A.ii.

 

              (i)      "Hazardous Substances" shall have the meaning ascribed to

                      it in Section 19.

 

              (j)      "Landlord's Direct Lease" shall initially be each of the

                      Subleases assumed by Landlord at the closing of the

                       Contract of Sale transaction, and any lease for any such

                      space made by Landlord thereafter.

 

              (k)      "Landlord's Direct Space" shall be the collective space

                      demised under the Subleases.

 

               (l)      "Landlord's Direct Tenant" shall initially be each of the

                      the space tenants under the Subleases or any tenant of any

                      such space thereafter.

 

              (m)      "Legal Requirements" shall have the meaning ascribed to it

                      in Section 5.

 

              (n)      "Minimum Rent" shall have the meaning ascribed to it in

                      Section 4.A.i.

 

              (o)      "Parking Spaces" shall have the meaning ascribed to it in

                      Section 30.

 

              (p)      "Premises" shall have the meaning ascribed to it in the

                      sixth whereas clause.

 

              (q)      "Related Parties" shall have the meaning ascribed to it in

                       Article 12.

 

              (r)      "Repairs" shall have the meaning ascribed to it in Section

                      5.A.

 

              (s)      "Restaurant" shall have the meaning ascribed to it in the

                      sixth whereas clause.

 

               (t)      "Shared Allocated Expenses" shall have the meaning

                      ascribed to it in Section 7.

 

              (u)      "State" shall mean the State of Nevada.

 

              (v)      "Subleases" shall have the meaning ascribed to it in the

                      Contract of Sale.

 

              (w)      "Tenant" shall have the meaning ascribed to it the

                      introductory paragraph of this Lease.

 

              (x)      "Tenant Affiliate" shall mean any person that controls or

                      is controlled by, or is under common control with, Tenant,

                      with the word "control" (and, correspondingly, "controlled

                      by" and "under common control with"), as used with respect

                       to any person, meaning the possession of the power to

 

 

 

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                      direct or cause the direction of the management and

                      policies of such person. The term "person" shall mean any

                      natural person or persons, a partnership, a corporation,

                      and any other form of business or legal association or

                      entity, unless expressly otherwise stated.

 

               (y)      "Tenant's Work" shall have the meaning ascribed to it in

                      Article 5.

 

2.       TERM.

 

        Landlord hereby leases to Tenant and Tenant hereby hires from Landlord

the Premises for the term ("Term") commencing as of the date hereof (the

"Commencement Date"), and ending on the last day of the four hundred and

eightieth (480th) full calendar month (the "Expiration Date") occurring after

the Commencement Date, subject to earlier termination in accordance with the

terms and conditions hereof, at an annual rental rate as provided for in Article

4 herein, which Tenant agrees to pay in lawful money of the United States, which

shall be legal tender in payment of all debts and dues, public and private, at

the time of payment, without any set off or deduction whatsoever, except as

provided in Section 34.A. of this Lease.

 

3.       USE; AS-IS POSSESSION.

 

        A. Use. Tenant shall use, occupy and operate, in such manner as required

by this Lease, the Premises for the operation of the Restaurant and for no other

purpose (subject, however, to the provisions of Article 24 below).

 

        B. "As-Is". Tenant acknowledges that, prior to the date of this Lease,

Tenant was the tenant under the Ground Lease, which has been simultaneously

assigned to Landlord pursuant to the Ground Lease Assignment, and as the tenant

under such Ground Lease has had continuous possession of the Premises from the

date of the Ground Lease through and including the date of this Lease and has

inspected the Premises and the Property and that neither Landlord, nor any agent

of Landlord has made any representations with regard to the Premises or the

Property, including, without limitation, with respect to the physical condition

of the Building or the Land, conditions relating to Hazardous Substances, or

Additional Rent, expenses of operation, or any other matter or thing affecting

or related to the Premises of the Property, except as expressly set forth in

this Lease. Tenant represents and warrants to Landlord that Tenant is thoroughly

acquainted with the condition of the Premises, the Building and the Property,

and agrees to take the Premises "As-Is." Tenant acknowledges that Tenant shall

be responsible for all costs and expenses incurred in connection with the

operation, maintenance, repair and replacement of the Building, subject to

obligations and payments relating to the Shared Allocated Expenses.

Notwithstanding the foregoing, Landlord shall be entitled to receive and retain

all rents (excluding payments for Taxes, if any shall be required to be made

pursuant to Landlord's Direct Leases) from the Landlord's Direct Tenants who may

now or hereafter occupy Landlord's Direct Space.

 

        C. The Building. There currently exists on the Property a 3-story

building constructed by Tenant and containing approximately thirty thousand

eight hundred (30,800) total square feet ("Building"), including all roof

coverings and exterior facades and any walkways,

 

 

 

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<PAGE>

 

 

 

driveways, and all structural, mechanical, electrical, heating, ventilating, air

conditioning, sanitation, sewage treatment and disposal, plumbing and vertical

transportation elements of such building. Landlord's Direct Space constitutes

approximately 2,214 square feet and is currently leased pursuant to the

Subleases.

 

4.       RENTAL.

 

        Tenant shall pay the rent as hereinafter provided. The payments of rent

reserved under this Lease for the Term hereof shall be and consist of (A)

Minimum Rent (as hereinafter defined), and (B) all items of Additional Rent (as

hereinafter defined).

 

        A.       Minimum Rent.

 

                (i) Minimum Rent, together with any and all sales tax (if any)

thereon, shall be payable by Tenant to Landlord in monthly installments in

advance on the first day of each month, at the office of Landlord set forth on

the first paragraph of this Lease or such other place within the continental

United States as Landlord may designate in writing. For purposes of this Lease,

"Minimum Rent" shall be at the rate of One Million Four Hundred Thousand Dollars

($1,400,000.00) per annum ($116,666.67 per month) for the period from the

Commencement Date through the day immediately preceding the fifth (5th)

anniversary of the Commencement Date. Annual Minimum Rent shall increase every

five (5) years commencing on the fifth (5th) anniversary of the Commencement

Date and through the Expiration Date to an amount equal to the greater of (a)

105% of the existing annual Minimum Rent at the end of the immediately prior

five-year rent period, or (b) 6% of annual Gross Receipts (as hereinafter

defined) measured at the end of the immediately prior five-year rent period

based on the Gross Receipts for the prior twelve (12) months. To the extent that

the increase has not been determined or agreed upon as of any rent adjustment

date as a result of dispute or otherwise, Tenant shall pay Minimum Rent computed

under the provisions of clause 4A(i)(a) above until such time as a definitive

determination has been reached, whereupon such rent adjustment shall be

retroactively made and Tenant shall then pay any additional Minimum Rent due as

computed in accordance with the determination. If such definitive determination

shall not have been made within ninety (90) days after the end of the

immediately prior five-year rent period solely because of a failure by Tenant to

provide the necessary and correct information within such 90-day period, then

Tenant shall also pay interest on the rent deficiency at the Default Rate from

the date the amount should have been paid had the determination been made timely

until the date of payment.

 

                (ii) As used herein (but subject to the exclusions set forth

below), the term "Gross Receipts" is defined as the dollar aggregate of:

 

                     (a) the sales price of all food, beverages, goods, wares,

gift certificates as redeemed, and merchandise sold and the charges for all

services performed in any manner whatsoever from all business conducted on, in,

at or from the Premises, including, but not limited to, catering, private events

and banquet services, whether made for cash, by check, on credit or otherwise,

without reserve or deduction for inability or failure to collect same,

including, but not limited to, such sales and services (1) where the orders

therefor originate at and are accepted in any manner whatsoever in the Premises,

but delivery or performance thereof

 

 

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is made from, to or at any other place; (2) pursuant to mail, telephone, e-mail

or internet or other similar orders received, billed or shipped at or from the

Premises; (3) by means of mechanical or other vending devices, if any; (4) as a

result of transactions originating from whatever source and which the Tenant in

the normal and customary course of its operations would credit or attribute

solely to its business at the Premises;

 

                    (b) all cash payments for display fees, slotting allowances,

promotional considerations, merchandising or license fees or revenues and

rebates, for the right to stock, promote or advertise any event, product or

service at the Premises, but the same shall be included only if such payments

are received by Tenant from a particular vendor or other party with respect only

to the Premises (in contradistinction to any payments received by Tenant with

respect to the Premises where the particular vendor or other party is also

making payments of the same nature with respect to one or more other restaurants

at locations operated by Tenant and/or any Tenant Affiliate in addition to the

Premises);

 

                    (c) all deposits not refunded to customers of Tenant; and

 

                    (d) all monies received from any operations at the Premises

that are in the nature of payments for the foods and beverages served by Tenant

at or from the Premises or for the furnishing of food and beverage services

(e.g., banquets, parties or catering) at the Premises.

 

                (iii) Expressly excluded from Gross Receipts shall be (i) the

proceeds from the sale of Tenant's trade fixtures and equipment; (ii) all sums

and credits received from insurance companies in settlement of claims for loss

or damage to merchandise or trade fixtures or equipment or otherwise (except

that, notwithstanding the foregoing, any portion of business interruption

insurance received by Tenant from insurance companies that is expressly

allocated to the sales or other revenues that would otherwise be included in the

definition of Gross Receipts shall also be included in Gross Receipts); (iii)

the amount of any sales, excise or equivalent tax levied upon sales and payable

over to the appropriate governmental authority (to the extent Tenant actually

pays such taxes or is entitled to a credit for same); (iv) coin telephone

receipts; (v) insurance proceeds from damage by fire or other casualty; (vi) the

amount of discounts afforded to employees of Tenant in accordance with Tenant's

then existing written employee policy, Tenant's preferred customers and in

connection with promotional or charitable activities at the Premises; (vii)

catering and off-premises banquet services which were neither (a) prepared,

served or supplied at, by or from the Premises, nor (b) ordered from the

Premises in any manner described in subsection (iii)(a) above; (viii) service

fees and charges, if any, payable to financial service companies in order for

Tenant's patrons to utilize such companies' credit cards or similar payment

arrangements at the Premises; (ix) tips and gratuities; (x) payments for display

fees, slotting allowances, promotional considerations, merchandising or license

fees or revenues, rebates, and other payments received in any manner whatsoever

for the right to stock, promote or advertise any event, product or service at

the Premises in any situation where the particular vendor or other party is also

making payments of the same nature with respect to one or more other restaurants

at locations operated by Tenant and/or any Tenant Affiliate in addition to the

Premises (except that the foregoing shall not be construed to exclude any

payments for the foods and beverages served by Tenant at or from the Premises,

or for any banquet or party

 

 

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services at the Premises); (xi) gaming (including, but not limited to, slot

machine) receipts; and (xii) any value attributable to goods and services

received and used by Tenant in barter for Tenant's food and beverages

(including, without limitation, in connection with Tenant's acceptance of

"barter cards").

 

                (iv) As used in this Article 4, the term "Tenant" shall include

Tenant and all assignees, subtenants, licensees, concessionaires and any and all

other parties conducting business on, in, at, or from the Premises. Gross

Receipts shall not, however, include any exchange of goods or merchandise

between the restaurants of Tenant or its affiliates where such exchange of goods

or merchandise is made solely for the convenient operation of the business of

Tenant and not for the purpose of consummating a sale which has theretofore been

made on, at, in or from the Premises, or for the purpose of depriving Landlord

of the benefit of a sale which otherwise would be made on, at, in or from the

Premises, nor the amount of returns to shippers or manufacturers, nor the amount

of any cash or credit refund made upon any sale where the merchandise sold, or

some part thereof, is thereafter returned by the purchaser and accepted by

Tenant. No deduction shall be made from Gross Receipts for any franchise, income

or gross receipts taxes or for any other taxes based upon the income of Tenant

(unless, but only to the extent that, any of the foregoing shall be imposed on

Tenant in lieu of any sales, excise or equivalent tax).

 

                (v) On or before the ninetieth (90th) day following the end of

each lease year, during the term hereof, Tenant shall furnish Landlord, at the

place then fixed for the payment of rent and, if different, also at the address

for notice to Landlord, a statement of Gross Receipts, reasonably satisfactory

to Landlord in form and substance, certified as correct by an officer of Tenant,

showing the amount of Gross Receipts for such lease year through the end of such

lease year.

 

                (vi) With respect only to the last lease year of any five-year

rent period (excluding the last five-year rent period in the Term), if Tenant

shall default in furnishing Landlord with the annual statement of Gross Receipts

required under this Article 4 within the applicable time period referred to

herein, and if such default shall continue for at least ten (10) Business Days

after Landlord shall notify Tenant of such default, then (without limiting

Landlord's remedies in respect of such a default) Landlord shall have the right

to audit such books and records of Tenant as may be necessary to ascertain the

Gross Receipts for the period in question, and Tenant shall pay Landlord within

ten (10) days after receipt of written demand for the reasonable and actual cost

of said audit, plus any increase in the Minimum Rent found to be due as a result

thereof, plus interest on such increase in the Minimum Rent at the Default Rate

from the date when such increased Minimum Rent would have been due under this

Lease until paid.

 

                (vii) Tenant shall prepare and keep, for not less than three (3)

years following Landlord's receipt of Tenant's certified annual statement of

Gross Receipts as aforesaid for the last lease year of any five-year rent

period, adequate books and records showing Gross Receipts for each month of the

last lease year of the most recent five-year rent period. Each sale shall be

registered at the time the same is made in a computerized point-of-sale system

database or in cash registers containing locked-in cumulative totals reasonably

satisfactory to Landlord.

 

 

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                (viii) With respect only to the last lease year of any five-year

rent period (excluding the last five-year rent period in the Term), Landlord or

its authorized representatives shall have the right, upon not less than ten (10)

Business Days prior written notice, to audit at the Premises all statements of

Gross Receipts required to be furnished by Tenant hereunder and to inspect the

books and records (including sales tax records and sales tax returns) of Tenant

and all subtenants, assignees, licensees, concessionaires, and other occupants

of the Premises pertaining to Gross Receipts. Tenant's statements of Gross

Receipts shall be deemed conclusive unless Landlord shall deliver to Tenant

written objection thereto within one (1) year following the date that Tenant

shall have delivered such statement to Landlord. If Landlord's audit shall

disclose a deficiency in Gross Receipts, then, provided said deficiency has been

determined accurately and in accordance with the definition of Gross Receipts

set forth in the Lease, Tenant shall promptly pay Landlord any increase in

Minimum Rent due with regard to such deficiency, together with interest thereon

at the Default Rate from the date when such increased Minimum Rent would have

been timely due under the Lease until paid. If any audit shall reveal an

overpayment by Tenant of any increased Minimum Rent paid, then such overpayment

shall be promptly refunded to Tenant. If any audit shall reveal that Tenant's

actual Gross Receipts was greater than that reported by Tenant by at least five

(5%) percent for the last lease year of any five-year rent period, then the

Minimum Rent for the immediately following lease year shall be increased by one

hundred fifty (150%) percent of the difference between (x) the adjustment that

would have been made had Gross Receipts been correctly computed for the last

lease year of the most recent five-year rent period, and (y) the adjustment that

was proposed to be made based on Tenant's reported Gross Receipts for such last

lease year of the most recent five-year rent period.

 

                (ix) The books and records which Tenant is required to maintain,

and Landlord has the right to audit under this Article 4, shall include, without

limitation, general ledgers, journals of receipts and disbursements, bank

statements, bank deposit slips and records, cash register records and tapes,

computerized point-of-sale system databases and other records, sales slips and

checks, and all federal, state and local sales tax returns, if and to the extent

that the foregoing items are utilized by Tenant in the conduct of Tenant's

business operations at the Premises. If any dispute arises over Gross Receipts

or any increase to Minimum Rent due hereunder, Tenant shall retain its books and

records pertaining to the period in question until said dispute is resolved by

agreement of the parties or by final judgment (beyond appeal) entered in

litigation over the matter, notwithstanding anything else in this Lease to the

contrary.

 

                (x) Landlord acknowledges receipt of advice from Tenant to the

effect that Tenant, in the normal and customary course of Tenant's operations,

reports annual sales on either a 52-week basis or on a 53-week basis. It is the

intention of Landlord and Tenant that Gross Receipts be measured on a 52-week

basis. Accordingly, if the last year of a five-year rent period occurs when

Tenant has included a 53rd week in its fiscal year for sales reporting purposes,

then the annual Gross Receipts number to be used for establishing the Minimum

Rent for the next five-year rent period shall be determined by dividing the

total amount of Gross Receipts reported with respect to such last year of a

five-year rent period by 53, and multiplying the result by 52.

 

        B.       Security Deposit (Intentionally Omitted).

 

 

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        C.       Rental Payments. Throughout the term of this Lease, Tenant shall

pay to Landlord, without demand, deductions, set-offs or counterclaims, except

as provided in Section 34.A of this Lease, the rent, which is hereby defined as

the sum of the Minimum Rent and all Additional Rent, when and as the same shall

be due and payable hereunder. Tenant shall also pay to Landlord all applicable

sales or other taxes (but no income taxes of any kind) which may be imposed on

any item of rent at the same time as such item of rent is due and payable to

Landlord. Unless otherwise stated, all sums of money or charges of any kind or

nature, other than Minimum Rent, payable by Tenant to Landlord pursuant to this

Lease or the exhibits attached hereto are defined as "Additional Rent" and are

due thirty (30) days after the rendering of an invoice therefor, and failure to

pay such sums of money or charges shall carry the same consequences as Tenant's

failure to pay Minimum Rent. All Minimum Rent and Additional Rent shall be

payable in United States funds to Landlord (or such other name as Landlord shall

direct in writing) and sent to Landlord at the address set forth on the first

paragraph of this Lease, or as otherwise directed by Landlord (but only within

the continental United States). No payment by Tenant or receipt by Landlord of a

lesser amount than the correct rent shall be deemed to be other than a payment

on account and no endorsement or statement on any check or other communication

accompanying a check for payment of any amounts payable hereunder shall be

deemed an accord and satisfaction, and Landlord may accept such check in payment

without prejudice to Landlord's right to recover the balance of any sums owed by

Tenant hereunder or to pursue against Tenant any additional remedies available

under this Lease or provided at law or in equity. Without limitation of any

other obligations of Tenant which shall survive the expiration of the Term, the

obligations of Tenant to pay Minimum Rent and Additional Rent which have accrued

as of the date of expiration or sooner termination of the Term of this Lease

shall survive such expiration or earlier termination.

 

        D. Late Charge. In the event any installment of Minimum Rent or

Additional Rent required hereunder to be paid is not received within ten (10)

days after the same are due, then, for each and every late payment, Tenant shall

immediately pay, as Additional Rent, interest thereon at the Default Rate, from

the due date until such installment of Annual Minimum Rent or Additional Rent is

fully paid, provided that Tenant shall not be required to pay interest the first

time in any calendar year that Tenant has not paid annual Minimum Rent or

Additional Rent within ten (10) days after such payment shall first become due,

unless Tenant shall not have paid such rent within ten (10) days after Landlord

shall have given Tenant notice that such rent is past due. The provisions herein

for late payment service charges shall not be construed to extend the date for

payment of any sums required to be paid by Tenant hereunder or to relieve Tenant

of its obligation to pay all such sums at the time or times herein stipulated.

Notwithstanding the imposition of such service charges pursuant to this Section

4.D., Tenant shall be in default under this Lease if any or all payments

required to be made by Tenant are not made on or before the time due and as

stipulated in this Lease, and neither the demand for, nor collection by,

Landlord of such late payment service charges shall be construed as a cure of

such default on the part of Tenant. The late charge shall be deemed Additional

Rent and the right to require it shall be in addition to all of Landlord's other

rights and remedies hereunder or at law and shall not be construed as liquidated

damages or as limiting Landlord's remedies in any manner. It is agreed that the

said service charge is a fair and reasonable charge under the circumstances and

shall not be construed as interest on a debt payment. In the event any charge

imposed hereunder or under

 

 

                                       9

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any other section of this Lease is either stated to be or construed as interest,

then no such interest charge shall be calculated at a rate which is higher than

the maximum rate which is allowed under the usury laws of the State, which

maximum rate of interest shall be substituted for the rate in excess thereof, if

any, computed pursuant to this Lease.

 

5.       ALTERATIONS, REPAIRS AND MAINTENANCE OF BUILDING.

 

        A. As used in this Lease, the term "repairs" shall mean all structural

or non-structural, ordinary or extraordinary maintenance, repairs and, when

required, replacements necessary to maintain the Premises (as well as those

improvements outside of the Premises for which Tenant has an exclusive license

pursuant to the terms of this Lease; it being agreed, however, that any repairs

or replacements to such improvements that are necessitated by any act or

omission of Landlord, or by any of Landlord's agents, employees or contractors,

shall be repaired or replaced by Tenant at Landlord's reasonable cost) at all

times in a first-class condition. All repairs shall be performed by Tenant in a

good and workmanlike manner and in accordance with all applicable Legal

Requirements. Tenant shall use reasonable efforts to perform any repair work in

a manner so as to not materially or unreasonably interfere with or impair the

use of the Landlord's Direct Space by Landlord's Direct Tenants and the other

portions of the Property not covered by this Lease. Without limiting the

generality of the foregoing, Tenant, at its expense, shall maintain and promptly

make any and all necessary repairs to or replacements of: (i) those portions of

any pipes, lines, ducts, wires or conduits (whether contained within or outside

the Premises) which serve the Premises exclusively or serve the Premises and

Landlord's Direct Space jointly; (ii) the glass windows, plate glass doors,

storefronts and all fixtures or appurtenances composed of glass that are located

at the Premises; (iii) Tenant's signs; (iv) the roof, walls, foundation and

exterior portions of the Building; (v) the floor coverings, doors and door

frames, windows and window frames, walls, storefront including security gates,

grilles or enclosures, locks and closing devices, partitions and ceilings in the

Premises; and (vi) the heating, ventilating, air conditioning, electrical, ansul

and plumbing system(s), grease traps, equipment and fixtures which are installed

by Tenant or which exclusively serve the Premises or are jointly shared with the

Landlord's Direct Space. Should any modifications or alterations be required to

any of the foregoing by reason of applicable Legal Requirements, the same shall

be made by Tenant, at Tenant's cost and expense in a prompt manner. Landlord

shall afford Tenant reasonable access to areas of the Property outside of the

Premises (and shall cause Landlord's Direct Tenants to afford Tenant reasonable

access to areas of the Landlord's Direct Spaces) and otherwise reasonably

cooperate with Tenant, if and as needed in connection with such repairs. In

connection with any of the foregoing which are Tenant's responsibility and

whether required by reason of applicable Legal Requirements or otherwise, if

Landlord shall have an imminent risk of liability if the necessary repairs or

replacements are not made, or if Landlord's use and occupancy of other portions

of the Property (including, without limitation, any construction that Landlord

intends to perform thereon) shall be impaired thereby, and Tenant shall fail to

make such repairs or replacements, then Landlord shall have the right to make

such repairs or replacements in the event that such failure continues after

Landlord shall have given Tenant reasonable notice of Landlord's intent to do so

(except that, in an emergency, no prior notice shall be required), in which case

Tenant shall reimburse Landlord for the reasonable cost and expense Landlord has

incurred therefor. Notwithstanding

 

 

                                       10

<PAGE>

 

 

the foregoing, the provisions of this Article shall not apply with respect to

the making of repairs in the case of fire or other casualty, in which case the

provisions of Article 14 hereof shall govern.

 

        B. Tenant shall make no changes in or to the Building or the Premises of

a structural nature or which would (in more than a de minimis manner) adversely

affect utility services, telephone or telecommunications lines or facilities, or

plumbing or electrical lines or facilities (collectively, "Utility Service

Facilities") serving any portion of the Building which constitutes a Landlord's

Direct Space in a manner which would (in more than a de minimis manner)

adversely affect the Landlord's Direct Space or its use or potential use,

without first obtaining Landlord's approval thereto, which approval shall not be

unreasonably withheld, conditioned or delayed.

 

         C. In connection with any repairs or other alterations performed by or

for, or required to be performed by, Tenant hereunder ("Tenant Work"), such work

shall be performed by Tenant subject to the following conditions:

 

                (i) Tenant shall comply with all applicable laws, rules,

regulations, codes, ordinances, and governmental and administrative rulings,

orders, directions (hereinafter referred to as "Legal Requirements"), and the

requirements of the fire insurance rating organization having jurisdiction

thereof, and the local board of fire underwriters, and the reasonable

recommendation of Landlord's and Tenant's insurance company or any similar body,

and Tenant shall have procured and paid for, so far as the same may be required,

all governmental permits, approvals, certificates and authorizations. Upon the

request of Tenant, Landlord, at Tenant's cost and expense, shall promptly join

in any applications for any permits, approvals or certificates required to be

obtained by Tenant in connection with any Tenant Work (provided that the

provisions of the applicable Legal Requirement shall require that Landlord join

in such application) and shall otherwise cooperate with Tenant in connection

therewith, provided that Landlord shall not be obligated to incur any cost or

expense, or suffer any liability, in connection therewith. Tenant shall

indemnify and hold Landlord harmless from and against any claims or liability

resulting from any inaccuracy contained in such applications.

 

                (ii) Prior to commencing any structural Tenant Work, all plans

and specifications therefor shall be submitted to Landlord for its prior written

approval, which approval shall not be unreasonably withheld, conditioned or

delayed. Landlord shall review Tenant's final plans and specifications for any

structural Tenant Work requiring Landlord's consent that Tenant desires to

perform in the Building within ten (10) Business Days after Tenant shall have

submitted to Landlord final plans and specifications therefor ("Tenant's

Plans"), and Landlord shall notify Tenant within said 10-Business Day period (a)

that Landlord approves Tenant's Plans, (b) that Landlord requires additional

information or details in order to evaluate Tenant's Plans, or (c) Landlord's

reason(s) for refusing to approve Tenant's Plans and/or required revision(s) to

Tenant's Plans. If Landlord shall fail to so notify Tenant within said

10-Business Day period, then, provided Tenant shall have given Landlord an

additional five (5) Business Days notice thereof and Landlord shall have failed

to respond to Tenant within such 5-Business Day period, Landlord shall be deemed

to have approved such Tenant's Plans. Prior to commencing any non-structural

Tenant Work, if Tenant shall have prepared plans and

 

 

                                        11

<PAGE>

 

 

specifications therefor, a copy of the same shall be submitted to Landlord for

informational purposes only.

 

                (iii) Landlord reserves the right, from time to time, to inspect

the progress of all Tenant Work for the purpose of approving or disapproving its

conformity with approved plans, specifications and drawings, as may be

applicable. Landlord shall use reasonable commercial efforts to minimize

interference with Tenant's business operations and/or construction any time that

Landlord enters the Premises. Tenant shall coordinate its activities fairly with

respect to the orderly flow of work, utilization of on-site utilities, loading,

unloading, and non-interference with the Landlord's Direct Tenants.

 

                (iv) Tenant shall obtain releases of liens complying with NRS

108.2457 from all of its contractors and subcontractors, materialmen and

laborers furnishing work and materials to the Tenant for Tenant's Work at the

Premises.

 

                 (v) All Tenant Work shall be done in such a manner so as not

impose any additional expense upon Landlord.

 

                (vi) Upon completion of any Tenant Work, Tenant shall promptly

record a notice of completion as provided in NRS Section 108.228 and shall

furnish a copy of the same to Landlord, together with:

 

                    (a) a certificate from Tenant's architect that the subject

work was performed substantially in accordance with the filed plans and in

accordance with all applicable Legal Requirements, including, without

limitation, the Americans with Disabilities Act of 1990 and the rules and

regulations with respect thereto, as same are or may be modified, amended or

revised,

 

                    (b) all appropriate certifications from all governmental

authorities having jurisdiction to the effect that such work has been performed

and completed (i) substantially in accordance with filed plans and

specifications, (if required), and (ii) in accordance with all applicable Legal

Requirements;

 

                     (c) a complete set of "as built" plans within ninety (90)

days after the completion of the work if "as-built" plans and specifications are

required by applicable Legal Requirements or otherwise prepared by Tenant (and,

if Tenant shall not be obligated to deliver "as-built" plans and specifications

pursuant to the provisions thereof, then Tenant shall deliver to Landlord plans

and specifications stamped "final" by Tenant's architect and marked to reflect

field notes and incorporating all changes and revisions), which plans will be

annexed to this lease as Exhibits, and Landlord and Tenant shall, upon the

request of the other party, execute amendments to this lease incorporating such

plans as Exhibits; and

 

                    (d) lien waivers complying with NRS 108.2457 from all

contractors, subcontractors or any other entities or persons performing work or

supplying materials or services to the premises in connection with the work.

 

 

                                       12

<PAGE>

 

 

                 (vii) Tenant hereby indemnifies and saves Landlord harmless from

and against any and all bills for labor performed and equipment, fixtures and

materials furnished to Tenant, and from and against any and all liens, bills or

claims therefor or levied against the Premises containing the same and from and

against all losses, damages, costs, expenses, suits and claims whatsoever in

connection with Tenant's Work.

 

                (viii) Tenant shall provide written notice to Landlord prior to

commencement of any Tenant Work, regardless of whether or not Landlord's consent

or approval is required for such Tenant Work, so that Landlord will have an

opportunity to record a notice of non-completion pursuant to NRS 108.234.

Landlord hereby notifies Tenant that, pursuant to NRS 108.234(4), Tenant must

obtain and record a payment and completion bond as provided in NRS 108.234(4)

before causing a work of improvement to be constructed, altered or repaired upon

the Premises.

 

        D. Notwithstanding anything contained in this Lease to the contrary and

subject to such use satisfying Legal Requirements and the other applicable

provisions of this Lease, Tenant shall be entitled, at its sole cost and

expense, to use the existing Building roof for an outdoor terrace or cafe, but

shall otherwise not be entitled to increase or enlarge the Building beyond its

existing building envelope without the consent of Landlord, which may be

withheld or denied in its sole and absolute discretion.

 

6.       FIXTURES AND PERSONALTY.

 

         All fixtures (other than Tenant's trade fixtures or other Personal

Property) installed in the Premises at any time, either by Tenant or by Landlord

on Tenant's behalf, shall, upon expiration of this Lease, become the property of

Landlord and shall remain upon and be surrendered with the Premises. Nothing in

this Article 6 shall be construed to give Landlord title to or to prevent

Tenant's removal of Tenant's trade fixtures or Personal Property. With respect

to any of such items which Tenant is permitted to remove prior to the expiration

of this Lease, upon removal thereof from the Premises, Tenant shall immediately

and at its expense, repair any damage to the Premises, the Building or the

Property due to such removal. All property permitted to be removed by Tenant at

the end of the term remaining in the Premises after Tenant's vacating of the

Premises shall be deemed abandoned and may, at the election of Landlord, either

be retained as Landlord's property or disposed of as Landlord sees fit.

Notwithstanding anything contained in this Lease to the contrary, Tenant shall

have the right to repair, alter, remove, replace or improve any Personal

Property owned or leased by Tenant or its employees and located in the Premises.

Tenant shall have the right to allow liens, mortgages and other encumbrances to

be placed upon any and all items of Personal Property.

 

7.       OPERATION OF THE BUILDING.

 

        A. Except as expressly provided elsewhere in this Lease, Tenant, at

Tenant's own cost and expense, shall keep the Building in good order and repair,

and shall maintain, repair and (if and to the extent necessary) replace all

interior and exterior components of the Building, including, without limitation,

the electrical, mechanical, plumbing, heating, ventilation and air-conditioning

systems of the Building, as well as the grease trap and trash containers located

 

 

                                       13

<PAGE>

 

 

outside of the Building and for which Tenant has been granted an exclusive

license pursuant to the terms of this Lease.

 

        B. Except as set forth below with respect to areas of the Property

outside of the Building, Landlord shall not be required to furnish any services

or utilities to the Premises or the Building. Tenant shall make its own

arrangements for utility services (including, without limitation, all of

Tenant's electrical, water, gas, telephone requirements) directly with the

utility companies serving the Building.

 

        C. On the date hereof, Landlord shall succeed to the interest of the

landlord under four Landlord's Direct Leases in effect with respect to,

respectively, the four units of space located on the first floor of the Building

that are not part of the Premises. Tenant shall provide to each Landlord's

Direct Tenant the building services that the landlord under such Landlord's

Direct Lease is required to provide to the Landlord's Direct Tenant thereunder

pursuant to the terms of the existing Sublease. In addition, unless otherwise

agreed to by such Landlord's Direct Tenant, such Landlord's Direct Tenant shall

continue to have the same exclusive provision of services arrangement with

Tenant as such Landlord's Direct Tenant has prior to the date hereof pursuant to

the terms of the relevant Sublease (e.g., the right to be the exclusive provider

of cigars to the Restaurant). The rents payable under the respective Landlord's

Direct Leases shall be paid to, and be the exclusive property of, Landlord, but

all payments that are required to be paid thereunder by the Landlord's Direct

Tenants for building services shall be paid to Tenant. Landlord shall use

commercially reasonable efforts (including, without limitation, the prosecution

of legal action) to enforce all such payment obligations of the Landlord's

Direct Tenants, or assign to Tenant all rights that Landlord has to enforce such

payment obligations.

 

        D. Landlord, at Landlord's own cost and expense (except as set forth

below with respect to the Appurtenant Areas (as such term is defined below),

shall keep the areas of the Property adjacent to the Building in good order and

repair, and shall maintain, repair and (if and to the extent necessary) replace

all such areas, to the extent that they serve the Premises or Tenant's operation

of the Restaurant. With respect to the driveway and parking areas located

adjacent to the Building that serve the Premises or Tenant's operation of the

Restaurant (the "Appurtenant Areas"), Landlord and Tenant shall equitably share

the costs of such maintenance, repair and replacement in accordance with their

respective use (the "Shared Allocated Expenses"). Tenant shall reimburse

Landlord for Tenant's equitable share of such costs within thirty (30) days

after the date that Landlord's bill therefor is delivered to Tenant, which bill

shall be accompanied by detailed documentation to support such bill. If Landlord

and Tenant shall be unable to agree on how to share such costs, either Landlord

or Tenant shall have the right to submit the allocation question to binding

expedited expert determination in accordance with the provisions of Article

34.C. below (except that all costs of such expedited expert determination shall

be shared equally by Landlord and Tenant).

 

        E. Landlord and Tenant shall allow the Landlord's Direct Tenants to use

the Appurtenant Areas and other areas (including bathroom facilities in the

Restaurant) without charge, but only if and to the extent that such Landlord's

Direct Tenant had the right to do so prior to the date hereof.

 

 

                                       14

<PAGE>

 

 

8.       MECHANICS' LIENS.

 

        Tenant shall not permit a mechanic's lien to be placed on any portion of

the Premises, the Building or the Property due to work performed or material

supplied on behalf of Tenant. Notwithstanding anything to the contrary contained

in this Lease, Tenant, its successors and assigns, warrant and guarantee to

Landlord, its successors and assigns, that if any mechanic's lien shall be filed

against all or any portion of the Property, for work claimed to have been done

for, or materials claimed to have been furnished to, Tenant, the same shall be

discharged by Tenant, by payment, by recording a surety bond as provided in NRS

108.2415, or otherwise, at the sole cost and expense of Tenant, within twenty

(20) days following Tenant's receipt of notice thereof from Landlord. In the

event such mechanic's lien is not discharged or bonded over timely, as

aforesaid, Landlord may discharge same for the account of and at the expense of

Tenant by recording a surety bond as provided in NRS 108.2415, and Tenant,

promptly following demand, shall reimburse Landlord, as Additional Rent, for all

costs, disbursements, fees and expenses, including without limitation,

reasonable attorneys' fees, incurred in connection with so discharging said

mechanic's lien, and including any reimbursement by Landlord to the surety

issuing such bond, and for any amounts paid to any claimant against the bond

pursuant to the terms thereof, together with interest at the Default Rate

thereon from the time or times of payment until reimbursement by Tenant.

 

9.       UTILITIES.

 

        A. Tenant's Responsibility to Furnish. To the extent that utilities,

including but not limited to electric, gas and/or water consumed or used with

respect to the Premises are currently separately metered or measured and billed

by the utility company supplying the foregoing directly to Tenant, neither

Landlord nor Tenant shall cause such arrangement to be altered and Tenant shall

pay such charges to such company. To the extent that the same are currently not

metered separately for Landlord's Direct Tenants, Tenant shall pay the bills for

such utilities until there is separate metering, and Tenant shall pay for the

cost of separately metering such items to the extent necessary. If, however,

separate metering is not possible, and in connection with any Landlord's Direct

Lease, Landlord's Direct Tenant needs to obtain such utilities from Tenant,

Tenant shall redistribute such utility to the Landlord's Direct Tenant. If, for

reasons beyond either party's control, one or more utilities serving Landlord's

Direct Tenants and the Premises which has already been separately metered shall

no longer be separately metered in the future, Tenant shall provide such utility

or utilities to the Landlord's Direct Tenant's premises, and Landlord (or

Landlord's Direct Tenant) shall pay for the same to Tenant on the basis of the

monthly costs for such utility or utilities during the last calendar year when

such utility or utilities were separately metered, provided, however, that such

costs shall be increased if and to the extent that there shall have been a rate

increase for such utility or utilities. Promptly following the date when such

utility or utilities shall no longer be separately metered, Landlord shall

furnish Tenant with a copy of the previous year's charges (on the same periodic

billing basis) for such utility or utilities, and Landlord shall thereafter pay

to Tenant the amount required hereunder on the respective due dates of such

periodic bills.

 

        B. Interruption. Tenant acknowledges that it is arranging for and

supplying utility or other services to the Building and Landlord has no

obligation to furnish utilities or services to the

 

 

                                       15

<PAGE>

 

 

Premises. Any interruption, curtailment or change of any utility or service

shall not constitute a constructive or partial eviction, nor entitle Tenant to

any compensation or abatement of rent. Tenant shall use reasonable commercial

efforts to attempt to promptly correct any such interruption or curtailment, to

the extent such interruption or curtailment of any utility or service affects

any Landlord's Direct Tenant. To the extent such service interruption results

from the gross negligence or willful misconduct of Tenant, its agents, servants

or employees or from Tenant's failure to comply with its obligations under the

Lease, and if Landlord's Direct Tenant ceases conducting business in any portion

of the Premises due to such interruption or curtailment, Tenant shall be

responsible for reimbursing Landlord for any lost rent or additional rent it

otherwise would have received and for such additional losses as Landlord may

incur during such period until the earlier of such time as (i) Landlord's Direct

Tenant resumes business, or (ii) the interruption or curtailment ceases;

provided that, in no event shall Tenant have any greater liability to Landlord's

Direct Tenant under the foregoing provisions than Tenant would have under the

same circumstances as landlord under the existing subleases. The foregoing shall

constitute Landlord's sole remedy relating to the interruption and curtailment

of utility service to Landlord's Direct Tenants. Tenant hereby waives all

benefits of any applicable existing or future Legal Requirement permitting the

termination of this Lease due to any such interruption, curtailment or changes

as mentioned in this section. Notwithstanding anything to the contrary contained

in this Section 9B, Landlord shall not be released from any liability that

Landlord may have to Tenant under other provisions of this Lease if such

interruption, curtailment or adverse change of any utility or service shall have

been caused by Landlord, or by any of Landlord's agents, servants, employees or

contractors.

 

        C. Energy Conservation Programs. Each party shall comply with energy

conservation programs or operational directives relating to reduced power

consumption at the Property required, from time to time, by governmental

authorities or local utility providers, which programs or directives may include

reduced operating hours or reduced utility consumption during certain hours

during the day. Tenant's obligation to comply with this Section 9.C. shall be

without set-off, abatement or reduction of Minimum Rent or liability to

Landlord, in any manner whatsoever.

 

10.      REAL ESTATE TAXES.

 

        A. (i) During the Term (but subject to the provisions of Section 10D

below), Tenant shall pay, on or before the last day when such amounts are

payable without interest or penalty, to the appropriate governmental

authorities, all real estate taxes, assessments and water and sewer rents and

all personal property taxes, business and occupancy taxes, sales taxes imposed

on leases or rents, license and permit fees, and any other charges whether or

not now customary or within the contemplation of the parties, whether similar or

dissimilar to anything heretofore enumerated, together with any interest and

penalties imposed thereon, assessed or levied against the Building or any

portion thereof (collectively, "Building Taxes"). If any Building Taxes may

legally be paid in installments (without interest or penalty charges accruing),

Tenant may pay such assessment in installments. Tenant shall be liable only for

Building Taxes (or installments thereof) that become due and payable with

respect to any tax or assessment period occurring in whole or in part during the

Term hereof; provided, however, that any such real estate taxes, assessments and

water and sewer rents or other Building Taxes

 

 

                                        16

<PAGE>

 

 

assessed against the Building for the fiscal or tax year in which the Term shall

expire shall be apportioned so that Tenant shall pay those portions thereof

which correspond with the portion of such year as are within the Term.

 

               (ii) If the Building and the footprint of Land upon which the

Buildings stands (collectively, the "Building Area") shall be designated as a

separate tax lot (i.e., a different tax lot than any other portion of the

Property), then, from and after the date that such designation shall be made,

all of the provisions set forth in Section 10A(i) above relating to Tenant's

obligation to pay Taxes with respect to the Building shall be deemed to apply to

the entire Building Area ("Building Area Taxes").

 

        B.      (i) Landlord shall pay, on or before the last day when such

amounts are payable without interest or penalty, to the appropriate governmental

authorities, all real estate taxes, assessments and water and sewer rents and

all personal property taxes, business and occupancy taxes, sales taxes imposed

on leases or rents, license and permit fees, and any other charges whether or

not now customary or within the contemplation of the parties, whether similar or

dissimilar to anything heretofore enumerated, together with any interest and

penalties imposed thereon, assessed or levied against the Property other than

the Building (collectively, "Property Taxes"). If any Property Taxes may legally

be paid in installments (without interest or penalty charges accruing), Landlord

may pay such assessment in installments.

 

                (ii) If the Building Area shall be designated as a separate tax

lot, then, from and after the date that such designation shall be made, Property

Taxes shall be deemed to exclude Building Area Taxes.

 

        C. During the Term, all of the Landlord's Direct Tenants (other than

tenants under the existing Landlord's Direct Leases) shall be obligated to pay

their proportionate shares of Building Area Taxes to Tenant. Landlord shall use

commercially reasonable efforts (including, without limitation, the prosecution

of legal action) to enforce all such payment obligations of the Landlord's

Direct Tenants, or assign to Tenant all rights that Landlord has to enforce such

payment obligations. With respect to the existing Landlord's Direct Leases,

Landlord shall pay (in accordance with the time schedule set forth in Section

10D below) the cumulative proportionate share attributable to all of the space

in the Building that is subject to the existing Landlord's Direct Leases (which

cumulative proportionate share shall be deemed to be 7.188%) of Building Area

Taxes to Tenant, or, alternatively, Tenant may offset the amount thereof against

any payments for Taxes that Tenant is required to make to Landlord pursuant to

the provisions of this Article 10.

 

        D. Landlord and Tenant shall cooperate with each other for the purpose

of causing the Building Area to be designated as a separate tax lot. If and for

so long as the Building Area shall not be designated as a separate tax lot,

Landlord shall be responsible for the payment of both Property Taxes and

Building Area Taxes to the relevant taxing authority, and Landlord and Tenant

shall seek to determine the Building's equitable share, based on relative

values, of the combined amount of Property Taxes and Building Area Taxes. Tenant

shall pay to Landlord the amount that represents the Building's equitable share

of the combined amount of Property Taxes and Building Area Taxes on the later of

(i) five (5) days before the last day when the Property

 

 

                                       17

<PAGE>

 

 

Taxes are payable without interest or penalty, and (ii) the thirtieth (30th) day

after the date that Landlord's bill therefor is delivered to Tenant, which bill

shall be accompanied by a copy of the taxing authority's bill and the basis for

the allocation to the Building Area. If Landlord and Tenant shall be unable to

agree on the basis for such allocation, either Landlord or Tenant shall have the

right to submit the allocation question to binding expedited expert

determination in accordance with the provisions of Article 34.C. below (except

that all costs of such expedited expert determination shall be shared equally by

Landlord and Tenant). Until the initial allocation shall be determined by such

expedited expert determination, Tenant shall be responsible for seventy-five

(75%) percent of the combined amount of Property Taxes and Building Taxes, and

Landlord shall be responsible for twenty-five (25%) percent of the combined

amount of Property Taxes and Building Taxes. If the allocation made pursuant to

such expedited expert determination shall disclose that either party has

overpaid its equitable share of Taxes by more than five (5%) percent, then,

within ten (10) days following such determination, the recipient of the

overpayment shall refund such overpayment (without interest) to the party who

shall have made such overpayment. Following the initial allocation, each party

shall have the right, from time to time, to ask for a new allocation based on

new or changed circumstances.

 

        E. During the Term, Tenant shall be obligated to pay to Landlord

Tenant's equitable share of the Property Taxes allocable to the Appurtenant

Areas, subject to the same payment and allocation procedures set forth in

Section 10.D. above.

 

        F. If and for so long as the Building Area shall not have been

designated as a separate tax lot, Landlord agrees to consult with a real estate

tax consultant or advisor engaged by Landlord from time to time and, in the

exercise of reasonable and prudent ownership judgment, Landlord shall contest

any unreasonable tax assessment applicable to Building Area Taxes if and to the

extent such tax counsel advises Landlord that a reasonable basis exists

therefor. Tenant shall reimburse Landlord for an equitable share of the costs of

such contest (unless the same shall be deducted from any refund or credit, in

which case such costs, as well as such refund or credit, shall be allocated

equitably between Building Area Taxes and Property Taxes). Any dispute as to

what constitutes an equitable share shall be subject to the relevant procedures

set forth in Section 10D above.

 

11.      INDEMNITY; INSURANCE.

 

        A. Tenant's Indemnity. Except if and to the extent that the same shall

be caused by the negligence or willful misconduct of Landlord or any of

Landlord's principals, officers, agents, contractors, servants, employees,

licensees and invitees, Tenant covenants and agrees to indemnify and save

Landlord and its principals, partners, officers, members, affiliates and

employees, disclosed or undisclosed, harmless from and against any and all

claims, losses, damages (excluding consequential damages) or expenses

(including, without limitation, reasonable attorneys' fees and expenses) or

other liability arising during the term of this Lease resulting from (i) the

performance of any Tenant Work, or the possession, use, occupancy, management,

repair, maintenance or control of the Premises or any part thereof by Tenant or

any of its subtenants, concessionaires, licensees, subtenants, invitees,

visitors or assignees, or its or their employees, agents, visitors, invitees,

contractors or subcontractors of any tier; or (ii) any act or omission of Tenant

(alleged or otherwise), or of any of its subtenants, concessionaires,

 

 

                                       18

<PAGE>

 

 

licensees, subtenants, invitees, visitors or assignees, or its or their

employees, agents, visitors, invitees, contractors or subcontractors of any

tier; or (iii) any injury to person or property or loss of life sustained in or

about the Premises or any part thereof; or (iv) Tenant's failure to diligently

investigate and promptly notify Landlord with respect to any of the foregoing,

including, without limitation, any expenses incurred by Landlord in the event

that an insurance carrier disclaims coverage on the basis of "late notice" due

to Tenant's failure to comply with this Section 11A. Tenant shall, at its own

cost and expense and by counsel approved by Landlord, which approval shall not

be unreasonably withheld (and with counsel to Tenant's insurer being hereby

approved), defend any and all actions, suits and proceedings which may be

brought against Landlord with respect to or in connection with any of the

foregoing, and Tenant shall pay, satisfy and discharge any and all judgments,

orders and decrees which may be made or entered against, Landlord, or its

respective principals, disclosed or undisclosed, with respect to, or in

connection with, any of the foregoing. The commercial general liability coverage

maintained by Tenant pursuant to this Lease shall specifically insure the

contractual obligations of Tenant as set forth in this Article and/or as

provided in this Lease.

 

B.        Tenant's Insurance Obligations.

 

                (i) Tenant, at Tenant's sole cost and expense, shall obtain and

maintain in effect commencing on the Commencement Date and continuing throughout

the Term of this Lease, insurance policies providing for the following

coverages: (a) commercial general liability and property damage insurance

insuring against loss or liability for personal injury, death or property

damage, with minimum liability limits in the amount of Two Million

($2,000,000.00) Dollars based on year 2005 dollars for personal injury or death

of any one person, Five Million ($5,000,000.00) Dollars based on year 2005

dollars for two or more persons in any one occurrence and Two Million

($2,000,000.00) Dollars based on year 2005 dollars for damaged property

resulting from any one occurrence; (b) standard "all risk" property insurance

against fire, theft, vandalism, malicious mischief, sprinkler leakage, lighting,

earthquake (with commercially reasonable sublimits, currently $10 million),

windstorm, explosion, riot, riot attending a strike, civil commotion, damage

from aircraft and vehicles and smoke damage and such additional perils as now

are or hereafter may be included in a standard extended coverage endorsement

from time to time in general use in the State and as are customarily carried by

occupants of similar facilities, insuring (on a replacement value basis) the

Building, all equipment and improvements and all alterations, replacements,

changes and additions thereto, located on or appurtenant to the Premises, and

all merchandise, trade fixtures, furnishings and equipment of Tenant located in,

on or about the Premises (with any and all proceeds of such insurance, so long

as this Lease shall remain in effect, to be used only to repair or replace or

pay for the items so insured); (c) products liability insurance for merchandise

offered for sale or lease from the Premises, including liquor liability coverage

and coverage for liability arising out of the consumption of food and alcoholic

beverages on or obtained at the Premises, of not less than Two Million

($2,000,000) Dollars per occurrence for personal injury and death and property

damage; (d) workers' compensation coverage as required by law; (e) with respect

to Tenant's Work, alterations, improvements and the like required or permitted

to be made by Tenant hereunder, contingent liability and builder's risk

insurance in amounts satisfactory to Landlord in its reasonable judgment, and

(f) business interruption insurance, with Landlord designated as a

 

 

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co-loss payee, as its interest may appear, and (in implementation thereof)

including direction that all payments to the extent of an amount equal to

Tenant's total Minimum Rent and Taxes obligation for twelve (12) full months

under this Lease, be made to Landlord.

 

                (ii) All insurance policies herein to be procured by Tenant

shall: (a) be issued by insurance companies reasonably satisfactory to Landlord

and authorized to do business in the State (it being agreed that the insurance

companies being utilized by Tenant on the date hereof shall be deemed

satisfactory to Landlord); (b) be written as primary policy coverage and

non-contributing with respect to any coverage which Landlord may carry, and that

any coverage carried by Landlord therefor shall be excess insurance; and (c)

insure and name Landlord and any of its mortgagees and any parties in interest

designated by Landlord as additional insureds, as their respective interests may

appear (except with respect to workers' compensation insurance). Neither the

issuance of any insurance policy required hereunder, nor the minimum limits

specified herein with respect to Tenant's insurance coverage, shall be deemed to

limit or restrict in any way Tenant's liability arising under or out of this

Lease. With respect to each and every one of the insurance policies herein

required to be procured by Tenant, on or before the Commencement Date, and

before any such insurance policy shall expire, Tenant shall deliver to Landlord

upon Landlord's written request a duplicate original or certified copy of each

such policy or a certificate of the insurer, certifying that such policy has

been issued, providing the coverage required by this Lease and containing

provisions specified herein. Each and every insurance policy required to be

carried hereunder by or on behalf of Tenant shall provide (and any certificate

evidencing the existence of each such insurance policy shall certify) that, (x)

unless Landlord shall first have been given ten (10) days' prior written notice

thereof, the insurer will not cancel or terminate the coverage provided by such

insurance policy for reason of non-payment, and (y) unless Landlord shall first

have been given thirty (30) days' prior written notice thereof, the insurer will

not otherwise cancel or materially change the coverage provided by such

insurance policy. The term "insurance policy" as used in this Article 11 shall

be deemed to include any extensions or renewals of such insurance policy. In the

event that Tenant shall fail to promptly furnish any insurance coverage

hereunder required to be procured by Tenant, and if such failure shall continue

for a period of not less than ten (10) days following written notice thereof to

Tenant, Landlord, at its sole option, shall have the right to obtain the same

and pay the premium therefor for a period not exceeding one (1) year in each

instance, and the premium so paid by Landlord shall be immediately due and

payable by Tenant to Landlord as Additional Rent.

 

                (iii) Any insurance required to be carried by Tenant pursuant to

the provisions of this Lease may be written as either a primary or umbrella

policy (or both) and may be carried under a blanket policy or policies covering

the Premises and other locations of Tenant and/or Tenant Affiliates, provided

that each such policy shall in all respects comply with the provisions of this

Section 11B and shall set forth the specific dollar amount of the coverage of

such policy that is applicable solely to the Premises, and such dollar amount

shall not be less than the amount required pursuant to this Section 11B.

 

        C. Landlord's Indemnity. Except if and to the extent that the same shall

be caused by the negligence or willful misconduct of Tenant or any of Tenant's

principals, officers, agents, contractors, servants, employees, licensees and

invitees, Landlord covenants and agrees to

 

 

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indemnify and save Tenant and its principals, partners, officers, members,

affiliates and employees, disclosed or undisclosed, harmless from and against

any and all claims, losses, damages (excluding consequential damages) or

expenses (including, without limitation, reasonable attorneys' fees and

expenses) or other liability arising during the term of this Lease resulting

from (i) the performance of any construction on the Property, or the possession,

use, occupancy, management, repair, maintenance or control of the Property or

any part thereof by Landlord or any of its tenants, concessionaires, licensees,

subtenants, invitees, visitors or assignees, or its or their employees, agents,

visitors, invitees, contractors or subcontractors of any tier; or (ii) any act

or omission of Landlord (alleged or otherwise), or of any of its tenants,

concessionaires, licensees, subtenants, invitees, visitors or assignees, or its

or their employees, agents, visitors, invitees, contractors or subcontractors of

any tier; or (iii) any injury to person or property or loss of life sustained in

or about the Property (excluding the Building); or (iv) Landlord's failure to

diligently investigate and promptly notify Tenant with respect to any of the

foregoing, including, without limitation, any expenses incurred by Tenant in the

event that an insurance carrier disclaims coverage on the basis of "late notice"

due to Landlord's failure to comply with this Section 11C. Landlord shall, at

its own cost and expense and by counsel approved by Tenant, which approval shall

not be unreasonably withheld (and with counsel to Landlord's insurer being

hereby approved), defend any and all actions, suits and proceedings which may be

brought against Tenant with respect to or in connection with any of the

foregoing, and Landlord shall pay, satisfy and discharge any and all judgments,

orders and decrees which may be made or entered against, Tenant, or its

respective principals, disclosed or undisclosed, with respect to, or in

connection with, any of the foregoing. The commercial general liability coverage

maintained by Landlord pursuant to this Lease shall specifically insure the

contractual obligations of Landlord as set forth in this Article and/or as

provided in this Lease. Landlord's indemnity hereunder shall not be applicable

to the acts or omissions of any Landlord's Direct Tenants.

 

        D. Landlord's Insurance Obligations. Landlord, at Landlord's expense,

shall maintain at all times during the Term, with a reputable insurance company

licensed to do business in the State and otherwise satisfactory to the holder of

any first mortgage on the Property, commercial general liability insurance

against all claims, demands or actions for injury to or death of person or

property having a limit of not less than $10,000,000 per occurrence and/or in

the aggregate, including products liability, contractual liability and

independent contractors' coverage, with broad form endorsement, arising from or

related to, or in any way connected with the conduct of Landlord, the operation

of Landlord's business in the Property (excluding the Premises) and/or caused by

the acts or omissions of Landlord, and/or Landlord's employees, agents, servants

and contractors. Said insurance policy shall (i) name Tenant as an additional

insured, as its interest may appear, and (ii) be written as primary policy

coverage and non-contributing with respect to any coverage that Tenant may

carry, and that any coverage carried by Tenant therefor shall be excess

insurance. Certificates of all such insurance and evidence of payment thereof,

or duly executed duplicates of the policy, shall be furnished by Landlord to

Tenant on or before the Commencement Date, and not less than 30 days prior to

the expiration of the term (and each renewal term) of such coverage. Neither the

issuance of any insurance policy required hereunder, nor the minimum limits

specified herein with respect to Landlord's insurance coverage, shall be deemed

to limit or restrict in any way Landlord's liability

 

 

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arising under or out of this Lease. With respect to the insurance policy

required to be procured by Landlord, on or before the Commencement Date, and

before such insurance policy shall expire, Landlord shall deliver to Tenant upon

Tenant 's written request a duplicate original or certified copy of each such

policy or a certificate of the insurer, certifying that such policy has been

issued, providing the coverage required by this Lease and containing provisions

specified herein. The insurance policy required to be carried hereunder by

Landlord shall provide (and any certificate evidencing the existence of each

such insurance policy shall certify) that, unless Tenant shall first have been

given thirty (30) days' prior written notice thereof, the insurer will not

cancel, materially change or fail to renew the coverage provided by such

insurance policy.

 

12.      WAIVER OF SUBROGATION.

 

        Notwithstanding anything to the contrary in this Lease, each party

hereby releases the other party (which term as used in this Article includes the

employees, agents, partners, members, shareholders, officers and directors

(hereinafter, collectively, the "Related Parties") of the other party) from all

liability, whether for negligence or otherwise, in connection with loss to the

extent covered in whole or in part by any fire and/or extended coverage

insurance policies which the releasor is required by this Lease to carry or

carries with respect to the Property or the Building, or any interest or

property in or on the Property or the Building. Each party agrees that its

insurance policies aforesaid will include a waiver by insurer of all of its

rights of subrogation against Landlord, Tenant and their respective Related

Parties.

 

13.      EXCULPATORY CLAUSE.

 

        Notwithstanding anything contained in this Lease, at law or in equity to

the contrary, it is expressly understood, acknowledged and agreed by Tenant that

there shall at no time be or be construed as being any personal liability by or

on the part of Landlord under or in respect of this Lease or in any wise related

hereto or the Premises; it being further understood, acknowledged and agreed

that Tenant is accepting this Lease and the estate created hereby upon and

subject to the understanding that it shall not enforce or seek to enforce any

claim or judgment or any other matter, for money or otherwise, personally

against Landlord or any officer, director, stockholder, partner, member,

principal (disclosed or undisclosed), representative or agent of Landlord, but

shall look solely to the equity of Landlord in the Property, and not to any

other assets of Landlord, for the satisfaction of any and all remedies or claims

of Tenant in the event of any breach by Landlord of any of the terms, covenants

or agreements to be performed by Landlord under this Lease or otherwise; such

exculpation of any officer, director, stockholder, partner, member, principal

(disclosed or undisclosed), representative or agent of Landlord from personal

liability as set forth in this Article to be absolute, unconditional and without

exception of any kind.

 

 

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14.      CASUALTY AND CONDEMNATION.

 

        A.       Casualty

 

                1. Continuance of Lease. Subject to the provisions of Section

14.A.4. below, in the event of any damage to the Building by fire or other

casualty, this Lease shall not be terminated or otherwise affected.

 

                2. Reconstruction. If the Building is damaged by fire or other

casualty, then (i) all fire and extended coverage insurance proceeds from

policies carried by Tenant with respect to the Building ("Insurance Proceeds")

shall be held in escrow by Tenant (subject to the provisions of Section 14.A.3

below) and be made available for payment of the cost of repairing and (if and to

the extent necessary) reconstructing the Building, (ii) the Building shall be

promptly repaired or (if and to the extent necessary) reconstructed, and (iii)

the Minimum Rent and other charges payable by Tenant to Landlord shall not be

abated. All permits required in connection with said repairs and reconstruction

shall be obtained by Tenant and shall be paid for from the Insurance Proceeds.

Any amount which must be expended by Tenant to repair and restore the Premises

in excess of the Insurance Proceeds shall be the sole obligation of Tenant.

Tenant shall be obligated to repair and/or reconstruct the Building at least

substantially to the condition that the Building was in prior to the occurrence

of such damage, and Tenant shall be required to pay for the costs in excess of

any insurance proceeds. In connection with any repair or restoration hereunder,

Tenant shall be required to satisfy the Tenant's Work provisions of Article 5.C.

above.

 

                3. Mortgagee's Rights. Landlord's institutional mortgagee of the

Property shall have the right to require Tenant to deposit all Insurance

Proceeds with a bank or trust company selected by such mortgagee (which may be

such mortgagee) (the "Depository"), and whose reasonable fees shall by paid by

Tenant. The Depository shall hold all Insurance Proceeds and shall disburse the

same in accordance with then customary practices in the State relating to the

disbursement of insurance proceeds to a triple-net lessee obligated to

reconstruct a building. Unless Tenant shall exercise the termination right set

forth in Section 14.A.4 below, such mortgagee shall have no right to require the

Insurance Proceeds (or any portion thereof) to be applied for any purpose other

than the repair and/or reconstruction of the Building.

 

                 4. Tenant's Termination Right. If damage that occurs during the

last two (2) years of the Term is such that, in the reasonable judgment of

Tenant there is or will be substantial and material interference with the

conduct by Tenant of its business at the Premises, and the anticipated time for

completion of the repairs that will permit Tenant to resume normal business

operations exceeds one hundred eighty (180) days from the date of the damage,

then, provided that Tenant shall pay Landlord an amount sufficient to complete

the repair or restoration of such damage (whether from insurance proceeds or

otherwise), Tenant may on notice to Landlord ("Tenant's Termination Notice")

delivered within forty-five (45) days after the date of the damage, terminate

this Lease effective thirty (30) days after receipt of Tenant's Termination

Notice by Landlord. Any dispute regarding the sufficiency of proceeds or

otherwise under the provisions of this Section 14.A.4 shall be resolved by

arbitration in accordance with the provisions of Article 34.B. hereof.

 

 

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        B. Condemnation. If all of the leaseable space in the Premises, or the

primary means of access to the Premises, shall be acquired or condemned by

eminent domain for any public or quasi public use or purpose, then and in that

event, the term of this Lease shall cease and terminate from the date of title

vesting in such proceeding, and all Minimum Rent and Additional Rent shall be

prorated to such date. If more than ten (10%) percent of the leaseable space in

the Premises shall be acquired or condemned by eminent domain for any public or

quasi public use or purpose, and if Tenant reasonably determines that it is no

longer economical to operate the Restaurant in the Premises, then and in that

event, Tenant shall have the right to terminate the Lease, in which case the

term of this Lease shall cease and terminate from the date of title vesting in

such proceeding, and all Minimum Rent and Additional Rent shall be prorated to

such date. In the event of any such termination, Tenant may claim, prove and

receive such awards as may be allowed for the value of Tenant's leasehold,

Tenant's moving expenses, personal property, fixtures, equipment and any other

property installed or paid for by Tenant in the Premises or other related or

compensable costs (collectively, a "Tenant Award"), except that, if separate

awards shall not be made for the Building and the remainder of the Property,

Landlord shall be entitled to receive the value of the Land (unencumbered and

not benefited by this leasehold) and the value of such Landlord Direct Leases as

shall then exist, out of the condemnation award prior to Tenant being entitled

to receive any Tenant Award. In the event of a temporary taking of the use of

the Premises or any part thereof, this Lease shall remain in full force and

effect, and there shall be no abatement of Minimum Rent or Additional Rent, but

Tenant shall be entitled to receive the entire award therefor (except as may be

paid for such Landlord Direct Leases as shall then exist) as may be paid for the

period of taking that occurs within the Term, and Landlord shall be entitled to

receive such portion of the award therefor as may be paid for the period of

taking that occurs after the expiration of the Term.

 

15.      FINANCING REQUIREMENTS.

 

        If, in connection with obtaining financing or refinancing for the

Property of which the Premises forms a part, a bank, insurance company or other

institutional lender shall request reasonable modifications to this Lease as a

condition to such financing or refinancing, Tenant will not unreasonably

withhold, delay or defer its consent thereto, including, without limitation, to

the extent that Tenant may be reasonably required to give notices of any

defaults by Landlord to such lender and/or permit the curing of such defaults by

such lender together with the granting of such additional time for such curing

as may be reasonably required for such lender to obtain possession of the

Property, provided such lender timely notifies Tenant of its intention to cure

such default and thereafter diligently prosecutes such cure until completed,

provided, however, that such modifications do not increase the obligations or

decrease the rights of Tenant hereunder or adversely affect the leasehold

interest hereby created or interfere with or otherwise impair Tenant's ability

to operate the Restaurant in Tenant's accustomed method of operation (in each of

the foregoing cases, other than in a de minimis manner), or increase any of

Tenant's monetary obligations under the Lease.

 

16.      SPRINKLERS.

 

        If after the Commencement Date, based upon a change in applicable law or

regulations, if any bureau, department or official of the federal, state or

local government requires any changes,

 

 

                                       24

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modifications, alterations, or additional sprinkler heads or other equipment be

made or supplied in or to the existing sprinkler or alarm system in the Premises

by reason of Tenant's business, or the location of partitions, trade fixtures,

or other contents of the Premises, Tenant shall, at Tenant's expense, promptly

make such system changes, modifications, alterations, and supply additional

heads or other equipment as required whether the work involved shall be

structural or non-structural in nature.

 

17.      COMPLIANCE WITH LAWS.

 

        Tenant covenants and agrees to comply promptly, at Tenant's sole cost

and expense, with all present and future Legal Requirements and with the

directives of all federal, state and local governments, departments, commissions

and boards which shall impose any violation, order or duty with respect to the

Premises upon Landlord or Tenant arising out of Tenant's use or manner of use

thereof, including, but not limited to, all Legal Requirements pertaining to

ADA, fire protection, smoke protection and security requirements.

 

18.      PERMITS AND FEES.

 

        If any governmental license or permit shall be required for the proper

and lawful conduct of Tenant's business in the Premises, or any part thereof,

Tenant, at its expense, shall duly procure and thereafter maintain such license

or permit and upon request submit a copy of the same for inspection by Landlord.

Tenant shall, at all times, comply with the terms and conditions of each such

license or permit. Tenant shall neither do nor omit to be done on the Premises

anything as a result of which any liquor license or other license may expire or

be forfeited, suspended or imperiled. Tenant shall conduct the business carried

on in the Premises in a lawful, proper and orderly manner with such staff as

shall be necessary to supervise the conduct of all persons in or about the

Premises from time to time and establish and preserve the good character of the

Premises with the licensing authorities and the public. Tenant shall do all

things necessary to maintain and from time to time renew its liquor license and

not do or permit or suffer to be done anything which will prejudice the future

grant or renewal of such license and comply with all requirements and

recommendations from time to time of the licensing authority (including any

general conditions contained in any rules of management issued by any local

authority). Tenant shall not agree to any exclusive arrangement or tie with any

liquor supplier in respect of the Premises that will extend past the expiration

or termination of the term of this Lease.

 

19.      HAZARDOUS SUBSTANCES.

 

        A. Tenant covenants and agrees that no activities undertaken by Tenant,

its employees, contractors, representatives and agents, on or about the Property

shall violate any Legal Requirement (whether now existing or hereafter enacted

or promulgated) or any judicial or administrative interpretations thereof,

including any judicial or administrative orders or judgments, governing the use,

storage, transportation and disposal of any hazardous substances, including

petroleum, petroleum products and other petrochemicals, asbestos,

polychlorinated biphenyls, or any other hazardous or toxic materials or waste

(hereinafter collectively referred to as "Hazardous Substances"). Tenant further

covenants and agrees to indemnify, protect and save

 

 

                                       25

<PAGE>

 

 

Landlord and any mortgagee harmless from and against any and all damages,

losses, liabilities, obligations, penalties, claims, litigation, demands,

defenses, judgments, suits, proceedings, costs, disbursements and expenses of

any kind or of any nature whatsoever (including, without limitation, legal and

experts' fees and disbursements) which may at any time be imposed upon, incurred

by, asserted, claimed or awarded against Landlord and any mortgagee and arising

from or out of any Hazardous Substances on, in, under or affecting (x) all or

any portion of the Property (including the Building) introduced during the term

of this Lease, or (y) all or any portion of the Building and the footprint of

Land upon which the Buildings stands introduced prior to the term of this Lease,

in each case by, or on behalf of, Tenant, any subtenant, assignee or licensee of

the Premises, which indemnity shall include, without limitation, (i) the costs

of handling, storage and disposal of any and all such Hazardous Substances from

all or any portion of the Property or the Premises, (ii) additional costs

required to take necessary precautions to protect against the release of such

Hazardous Substances on, in, under or affecting the Property or the Premises,

into