Lease Agreement

 

LEASE

 

THIS LEASE (the “ Lease ” ) is entered into as of December 24, 2004, by and between PM Realty, LLC, a Nevada limited liability company ( “ PM Realty ” ) and Hard Rock Hotel, Inc., a Nevada corporation ( “ HRH ” and, together with PM Realty, “ Landlord ” ) and Mr. Chow of Las Vegas, LLC, a Nevada limited liability company ( “ Tenant ” ):

 

Recitals

 

1.                                        HRH owns certain parcels of real property located at the northwest corner of Paradise Road and Harmon Avenue in Las Vegas, Nevada, identified as having Assessor Parcel Numbers 162-22-201-001, 162-22-201-002 and 162-22-201-003 (the “Hotel/Casino Parcel”) consisting of approximately 16.65 acres and upon which the Hard Rock Hotel and Casino (the “Hotel/Casino”) is constructed and operated.

 

2.                                        PM Realty is affiliated with HRH and is the owner of approximately 23.29 acres of real property located adjacent to the Hotel/Casino Parcel and identified as having Assessor Parcel Numbers 162-21-602-003, 162-21-602-002, 162-22-103-004 and 162-21-504-005 (the “ Development Property”).

 

3.                                        PM Realty, HRH and/or its or their developers intend to develop the Development Property to include new construction of not less than Seven Hundred Fifty Thousand (750,000) square feet of new structures inclusive of five (5) high-rise structures, the Restaurant Building, as defined below, and the New Pool, as defined below.  Three (3) of the high-rise structures shall be developed as condominium units and located generally in the area depicted on Exhibit “B” as “The Condominiums.”  The remaining two (2) high-rise structures shall consist of condominium units which may be utilized for hotel purposes and shall be located generally in the area depicted on Exhibit “B” as “The Hotel Condominiums.”  The proposed development on the Development Property is collectively referred to herein as the “Development ” .

 

4.                                        It is anticipated that the Development shall take place in two phases.  “Phase I Development” shall consist of the construction of: (i) new retail/restaurant space of not less than Twenty-five Thousand (25,000) square feet, which retail/restaurant space is depicted on Exhibit “B” as the “Retail/Restaurant Space”, and

 

 

shall include facilities for no less than three (3) restaurants of the type commonly described as “high end” or “destination” restaurants (the “New Restaurants”), each of which shall have price points and standards of service and quality similar to the existing price points and standards of service as exist in the “Simon” and “Nobu” restaurants located in the Hotel/Casino, (ii) meeting spaces, a spa, and a concert facility, located in the Restaurant Building (as defined below); (iii) the Hotel Condominium depicted on Exhibit “B” as the “Phase I Hotel Condominium”; (iv) the Condominium depicted on Exhibit “B” as the “Phase I Condominium”; (v) the New Pool (as defined below); and (vi) all Common Areas necessary to service and provide access to all of the foregoing, including adequate parking facilities.  The building in which the Retail/Restaurant Space are to be located is hereinafter referred to as the “Restaurant Building.”  “Phase II Development” shall consist of the remainder of the new construction and may or may not be built as determined by Landlord in its sole discretion.

 

5.                                        It is anticipated that all or a portion of the Development Property will be conveyed to a joint venture entity (the “Development Entity”), which such entity shall be owned by Peter Morton or an entity owned by Peter Morton, and other venturers in the Development.

 

6.                                        Additionally, it is contemplated that a portion of the Development Property will be conveyed either by sale or lease from either PM Realty or the Development Entity to HRH such that HRH will ultimately own and/or manage that portion of the Development Property consisting of the Retail/Restaurant Space to be contain in the Restaurant Building.  As used herein, the term “Hotel Complex” shall collectively refer to the Hotel/Casino Parcel, the Hotel/Casino, and, as portions of the Development and the Development Property are constructed and open for operation, such portions that open for operation.

 

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are acknowledged, Landlord and Tenant hereby agree as follows:

 

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ARTICLE I

EXHIBITS

 

Section 1.1 .                                                            Development

 

Landlord hereby represents and warrants to Tenant that (i) Landlord shall construct the Phase I Development, and (ii) the Phase I Hotel Condominium and the Restaurant Building shall be physically connected to the Hotel/Casino with enclosed passageways.  The criteria for the Phase I Development set forth in this paragraph and in Recital Paragraphs 3 and 4 above, is referred to herein as the “Development Requirements.”

 

Section 1.2 .                                                            Location of Premises

 

Not later than May 1, 2005, Landlord shall provide Tenant with dimensioned preliminary site plans, elevations and sections concerning the Retail/Restaurant Space (collectively, the “Preliminary Site Plan”) which Preliminary Site Plan shall specify the locations, elevations, footprints and configurations of the New Restaurants.  Tenant shall select, in its sole discretion, which of the New Restaurants shall be utilized by Tenant as the Premises (as defined below).  Tenant shall notify Landlord of Tenant’s election within fifteen (15) days after receipt of the Preliminary Site Plan.  Upon Tenant’s selection of the location of the Premises, such location shall be depicted on a site plan and attached hereto as Exhibit “B-1.”  Landlord shall reasonably cooperate with Tenant’s requests and recommendations regarding the positioning and layout of the Premises in connection with Landlord’s design of the Development.  Without limiting the generality of the foregoing, to the extent Tenant delivers to Landlord any plans or drawings depicting Tenant’s proposed layout of the Premises (the “Tenant’s Preliminary Layout”), including the location of the kitchen, Landlord shall use its best efforts to incorporate Tenant’s Preliminary Layout in Landlord’s Construction Plans (as defined below).  In the event Tenant disapproves of the Preliminary Site Plan, Tenant shall have the right, upon written notice to Landlord delivered within five (5) days from the date Tenant receives the Preliminary Site Plan, to terminate this Lease, in which event this Lease shall terminate on the date such termination notice is delivered by Tenant and the parties shall have no continuing obligations hereunder (and, except as provided below, neither party shall be obligated to pay any termination fees, penalties, or other charges in connection with such termination). Notwithstanding anything to the contrary contained herein, in the event at least one (1) of

 

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the New Restaurants depicted on the Preliminary Site Plan does not incorporate all three of the Required Elements, as defined below, and Tenant terminates this Lease in accordance with the foregoing, then Landlord shall, within ten (10) days following the date of Tenant’s termination notice, pay to Tenant a lease termination fee in the amount of Two Hundred Fifty Thousand Dollars ($250,000) for each Required Element that was not incorporated into the Maximum Required Element Space (i.e. for a maximum termination fee pursuant to this paragraph of Seven Hundred Fifty Thousand Dollars ($750,000)).  The parties hereby acknowledge and agree that such lease termination fee is a payment in the nature of liquidated damages and not a penalty, and is fair and reasonable in light of all of the circumstances existing on the date of this Agreement, including the parties’ estimation of the amount of lost opportunity costs to Tenant.  As used herein, the “Maximum Required Element Space” shall mean the one New Restaurant containing the greatest number of the Required Elements.  As used herein, “Required Element(s)” shall mean premises: (i) containing a Store Floor Area of not less than nine thousand (9,000) contiguous square feet, (ii) having a slab-to-slab height of not less than twenty-five (25) feet throughout the premises (provided that if Landlord, despite its best efforts, cannot incorporate Tenant’s Preliminary Layout into the Landlord’s Construction Plans, and the layout as proposed by Landlord requires the installation of ducts or exhausts within the Premises, the twenty-five (25) feet height shall be measured from the slab floor to the lowest point of any such ducts or exhausts), and (iii) having glass windows/doors with unobstructed views of the New Pool, which glass windows/doors shall be approximately fifty (50) feet of linear feet.

 

Section 1.3 .                                                            Premises Development Criteria

 

Landlord represents and warrants to Tenant that the Premises selected by Tenant pursuant to Section 1.2 above shall be designed so as to (i) have slab-to-slab height of not less than twenty-five (25) feet (provided Landlord shall use its best efforts to provide a slab-to-slab height of thirty (30) feet wherever possible, and provided further that if Landlord, despite its best efforts, cannot incorporate Tenant’s Preliminary Layout into the Landlord’s Construction Plans, and the layout as proposed by Landlord requires the installation of ducts or exhausts within the Premises, the twenty-five (25) feet height shall be measured from the slab floor to the lowest point of any such ducts or exhausts), (ii) have not less than fifty (50) feet of linear frontage on the exterior Common Areas immediately adjoining and with unobstructed views of the New Pool (as defined below) ,

 

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(iii) visibility from the common areas of the interior of the Hotel Complex, (iv) be located not less than one hundred (100) feet from any restroom facilities (other than restrooms inside of other retail establishments), (v) permit and accommodate the Tenant’s Terrace Area (as defined below) and (vi) comply with the provisions of Section 2.1 below.  The Premises shall have primary entrance from the interior of the Hotel Complex and, if feasible from a security perspective (as determined in Landlord’s reasonable discretion), an independent entrance from the exterior of the Hotel Complex.  The Premises shall, at a minimum, accommodate a primary dining area adequate to provide seating for two hundred (200) people, a bar lounge area adequate to provide seating for fifty (50) people, a private dining facility adequate to provide seating for fifty (50) people, and contain adequate areas for storage, dishwashing, office restrooms, employee lockers/lounge, kitchen, and other “back of the house” and ancillary areas adequate to operate a restaurant consistent with other Mr. Chow restaurants existing as of the date of this Lease.  The development criteria for the New Restaurants and the Premises set forth herein are collectively referred to herein as the “Minimum Premises Development Criteria.”  Subject to the Development Requirements, the Minimum Premises Development Criteria and the Tenant Protections (as defined below), Tenant acknowledges that Landlord shall have the right to determine the nature and extent of the Common Areas of the Development and to make such changes, rearrangements, additions and reductions thereto as Landlord reasonably deems desirable, including, without limitation, the location, relocation, addition and/or elimination of driveway entrances and exits, the direction and flow of traffic, landscaped areas and other facilities of the Common Areas.

 

Section 1.4 .                                                            Modifications to Common Areas

 

Landlord reserves the right to change or modify the Common Areas (hereinafter defined) of the Hotel Complex or any part thereof, including the size and configuration of the parking areas, the configuration of the entrances, exits and parking aisle alignments, dimensions of hallways, malls and corridors, and the size, shape, location and arrangement of such Common Areas, provided that any such changes or modifications do not (i) materially obstruct Tenant’s (or its employee’s, agents’, customers’, invitees’, suppliers’ and contractors’) right of pedestrian ingress to and egress from the Premises, the Common Areas and the Hotel Complex, (ii) interfere with Tenant’s use of utilities, (iii) adversely affect the visibility of the Premises to and from the Common Areas including

 

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but not limited to the pool areas, (iv) adversely affect the view from the Premises and/or the Tenant’s Terrace Area to the new pool area (the “New Pool”) to be developed as part of the Phase I Development, or (v) otherwise materially interfere with Tenant’s operations in the Premises (subclauses (i) through (v) are collectively referred to herein as “Tenant Protections”).  In addition to the Tenant Protections, any modifications to the Common Areas shall not conflict with the provisions of Sections 1.2 and 1.3 above.

 

ARTICLE II

PREMISES AND TERM

 

Section 2.1 .                                                            Premises

 

Landlord hereby leases to Tenant, and Tenant hereby rents from Landlord, the space selected by Tenant in accordance with the provisions of Article 1 above (hereinafter called the “Premises”).  The Premises shall contain not greater than eleven thousand (11,000) square feet nor less than nine thousand (9,000) square feet.  The actual square footage of the Premises is hereinafter referred to as the “Store Floor Area.” The Store Floor Area shall be measured to the interior face of all party or adjacent tenant walls, to the interior faces of all other walls and to the building line where there is no wall. Tenant shall also have the right to use the balconies and/or portion of the Common Area immediately adjacent to the Premises as designated on Exhibit “B-1” attached hereto for outdoor seating by Tenant’s customers (the “Tenant’s Terrace Area”).  The Tenant’s Terrace Area shall (i) consist of not less than eight hundred (800) square feet and, at a minimum, accommodate a dining area adequate to provide seating for a minimum of fifty (50) people, and (ii) be facing the New Pool and have an unobstructed view to such New Pool.  Tenant shall have the right to place furniture and weather-related equipment, including, but not limited to, heaters, within the Tenant’s Terrace Area as reasonably determined by Tenant; provided that the selection of such furniture and equipment shall be subject to the approval process for the approval of Tenant’s Exterior Plans set forth in Section 3.1 below.  Tenant shall comply with all applicable laws in connection with its use of the Tenant’s Terrace Area.  Tenant shall further have the right, but not the obligation, to construct a mezzanine level within the Premises, and Landlord shall not object to any such proposed mezzanine level depicted on any plans and specifications submitted to Landlord by Tenant, provided that such proposed mezzanine shall comply with all applicable laws and codes. In no event shall the square footage of Tenant’s Terrace Area

 

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or any mezzanine level within the Premises be included in determining the Store Floor Area of the Premises.

 

Section 2.2 .                                                            Roof and Walls

 

Landlord reserves to itself the roof and exterior walls of the Restaurant Building, and all space above the ceiling within the Premises, to accommodate the building’s structural, mechanical and electrical conduit piping, ducting and venting requirements in locations which will not materially interfere with Tenant’s use of the Premises.

 

Section 2.3 .                                                            Lease Term

 

This Lease shall be in full force and effect from the date of execution hereof save and except that the initial term of this Lease (hereinafter called “Lease Term”) shall not begin to run, and no rent shall be due and payable, until the “Commencement Date,” as defined herein.  The Lease Term shall commence upon the date that Tenant opens for business to the public in the Premises (the “Commencement Date”).  Upon the determination of the Commencement Date, Landlord shall notify Tenant thereof in writing. The Lease Term shall end on the last day of the tenth (10th) Lease Year (hereinafter defined) after the Commencement Date unless sooner terminated as herein provided.

 

Section 2.4 .                                                            Option to Extend Lease Term

 

Tenant shall have two (2) options (the “Option(s)”) to renew this Lease for an additional term of five (5) years each (the “Renewal Term(s)”).  The terms and conditions of this Lease shall apply with full force and effect during the Renewal Terms as if it were the Lease Term, except there shall be no Option for any further renewal term after the last Renewal Term.  Tenant shall, subject to Article XV of this Lease, exercise said Options by giving written notice thereof to Landlord not earlier than eighteen (18) months, and not later than six (6) months (each an “Option Exercise Period”), prior to the end of the then current term; provided, however, that Tenant shall not have the right to exercise any Option if Tenant is in default beyond all applicable notice and cure periods at the time of such exercise.

 

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Section 2.5 .                                                            Lease Year Defined

 

“Lease Year,” as used herein, means a period of twelve (12) consecutive months during the Lease Term commencing on the Commencement Date and each subsequent anniversary thereof; provided, however, that if the Commencement Date is not the first day of a month, then the first Lease Year shall commence on the Commencement Date and end on the last day of the twelfth full calendar month thereafter and the second and each succeeding Lease Year shall commence on the first day of the next calendar month.

 

ARTICLE III

RESTAURANT DESIGN AND

LANDLORD’S WORK

 

Section 3.1 .                                                            Restaurant Design

 

Tenant shall, within ninety (90) days from the Construction Plan Approval Date (as defined in Section 3.2(A) below), submit plans and specifications for all structural components of Tenant’s Work to Landlord (the “Tenant’s Structural Plans”).  Landlord shall have a period of ten (10) business days within which to make reasonable comments and changes thereto, which comments and/or changes shall be limited to concerns regarding structural integrity or safety.  If Landlord does not respond to Tenant’s submission of Tenant’s Structural Plans within such ten (10) business day period, then Landlord shall be deemed to have approved the same.  If Landlord responds with comments as described above, then Tenant shall revise the Tenant’s Structural Plans taking into consideration Landlord’s comments and resubmit them to Landlord for approval within thirty (30) days from the date of receipt of such comments.  Landlord shall then have five (5) business days to approve such revised Tenant’s Structural Plans.  If Landlord does not respond to the resubmission of Tenant’s Structural Plans within such five (5) business day period, Landlord shall be deemed to have approved the same.  Tenant shall also, prior to commencement of Tenant’s Work, submit plans for the exterior components of Tenant’s Work (the “Tenant’s Exterior Plans”) to Landlord.  Landlord hereby appoints and authorizes Peter Morton (“Morton”) as Landlord’s sole and exclusive agent to review and approve the Tenant’s Exterior Plans, and Tenant hereby appoints and authorizes Michael Chow (“Chow”) as Tenant’s agent in connection with the Tenant’s Exterior Plans.  Morton and Chow shall personally work together to mutually agree upon the Tenant’s Exterior Plans within thirty (30) days from the date of Tenant’s submittal of

 

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Tenant’s Exterior Plans to Landlord.  If Chow is not personally available to work on the Tenant’s Exterior Plans within such thirty (30) day period, or if Morton and Chow do not, in good faith, mutually agree upon Tenant’s Exterior Plans within such thirty (30) day period, then, the decision of Morton shall control with respect to any remaining items of the Tenant’s Exterior Plans that have not been previously agreed to between Morton and Chow.  If for any reason Morton is not personally available to work on the Tenant’s Exterior Plans within such thirty (30) day period, the Tenant’s Exterior Plans shall be designed by Tenant to be harmonious with the exterior theme of the Restaurant Building, which exterior theme shall be determined in the reasonable discretion of Landlord.  As used herein, “Tenant’s Plans” shall refer collectively to the Tenant’s Structural Plans and Tenant’s Exterior Plans.  Notwithstanding the foregoing, Landlord acknowledges and agrees that all decisions regarding the interior design of the Premises, including, without limitation, all finish materials, color scheme, window treatments, furniture, fixtures and equipment, shall be made by Tenant in Tenant’s sole discretion, and Landlord shall have no approval rights thereto.  Subject to the provisions of Section 24.17 below, Landlord will provide complimentary hotel accommodations at the Hotel Complex for Tenant’s representatives when in Las Vegas to participate in the design approval process.

 

Section 3.2 .                                                            Landlord’s Work

 

A.                                    Landlord shall, at its sole expense, construct and perform all work being required of Landlord (the “Landlord’s Work”) described in the work letter attached hereto as Exhibit “C”.  The Landlord’s Work shall be performed in accordance with the Construction Plans, as defined below.  On or prior to December 31, 2005, Landlord shall submit to Tenant, for Tenant’s review and approval, a fully detailed and dimensioned scale construction drawings for Landlord’s Work the (“Construction Plans”), which shall be consistent with the approved Preliminary Site Plan and include the following: (a) architectural drawings including plan views of the storefront, floor areas, and reflected ceiling; elevations of the storefront and interiors; sections through the storefront, partitions, and along the longitudinal axis; (b) electrical drawings including circuitry plans, panel schedules, riser diagrams, load calculations, and all calculations and forms required by applicable law; (c) all mechanical drawings, including but not limited to heating, ventilating, and air conditioning design calculations, an equipment schedule and specifications, the design for the air distribution and make up duct work system, smoke exhaust system, exhaust fan(s), plumbing fixtures and piping specifications; and (d) fire

 

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sprinkler plans including distribution piping to Landlord’s system stub-in point.  Tenant shall approve or disapprove of the Construction Plans within ten (10) business days following receipt thereof.  If Tenant disapproves of any submittal, the parties shall promptly (but not later than ten (10) business days following Tenant’s disapproval notice) meet in an effort to agree upon the revisions to be made to the submittal, and Landlord shall, within ten (10) business days following such meeting, revise the submittal as agreed upon at such meeting and resubmit the same to Tenant.  The foregoing process shall be repeated until the Construction Plans are approved by Tenant; provided, however, that if Tenant disapproves of three resubmittals by Landlord and the parties are unable to resolve the remaining issues within fifteen (15) days following the date Tenant notifies Landlord of Tenant’s disapproval of such third resubmittal, Tenant shall have the right to terminate this Lease upon written notice to Landlord hereunder and the parties shall have no continuing obligations hereunder (and neither party shall be obligated to pay any termination fees, penalties, or other charges in connection with such termination).  As used herein the date on which Tenant notifies Landlord of Tenant’s final approval of the Construction Plans shall be referred to herein as the “Construction Plan Approval Date.”  Tenant’s approval of the Construction Plans shall not create any responsibility or liability whatsoever on the part of Tenant, including, without limitation, for their completeness, sufficiency, design, workability or compliance with applicable laws.  Upon approval of the Construction Plans by Tenant, Landlord shall commence and thereafter diligently prosecute Landlord’s Work to completion without interruption or delay, in a first-class and good and workerlike manner, using new materials, in compliance with all applicable laws.  Any changes to the approved Construction Plans by Landlord shall be subject to Tenant’s approval.  Landlord, at Landlord’s expense, shall procure all building and other permits and approvals necessary for performing Landlord’s Work.  The date on which Landlord delivers the Premises to Tenant with the Landlord’s Work completed shall be referred to herein as the “Delivery Date.”  Landlord warrants that Landlord’s Work shall be delivered free and clear of liens, encumbrances and violations or conditions which may constitute violations of any law relating to the use, occupancy and construction of the Premises and Restaurant Building.  No later than five (5) days prior to the Delivery Date, Landlord and Tenant, or their representatives, shall inspect Landlord’s Work and to the extent Tenant discovers any deviations or deficiencies, then Tenant may deliver a list (“Punch List”) of such deviations or deficiencies (“Punch List Items”) to Landlord.  The existence of a Punch List shall not postpone the Delivery Date as long as (A) the Punch

 

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List Items are customarily classified as “punch list” items in the construction industry, and (B) neither the failure to complete nor the process of completing any such Punch List Items will delay or interfere with Tenant’s Work or the operation of Tenant’s business in the Premises.  Landlord shall correct or cure the Punch List Items within ten (10) days following Landlord’s receipt of the Punch List, as the case may be, or such longer period as may be reasonably necessary, provided Landlord is proceeding with due diligence to complete the Punch List Items.  Landlord may enter the Premises at any reasonable time to correct or cure the Punch List Items, provided Landlord takes reasonable precautions to avoid interfering with Tenant’s Work or Tenant’s business at the Premises.  If Landlord has not corrected or cured any remaining Punch List Items to Tenant’s reasonable satisfaction within sixty (60) days following Landlord’s receipt of the Punch List, then Tenant may complete the Punch List Items, and offset Tenant’s actual costs so expended, together with interest at twelve percent (12%) per annum, from the date such costs were incurred, against the rent next coming due.

 

B.            Landlord acknowledges and agrees that Tenant has foregone other opportunities to develop and operate a restaurant in other hotels in Las Vegas based upon Landlord’s timely construction and opening of the Phase I Development.  Subject only to delays caused by Uncontrollable Delays (as defined below), in the event Landlord has not, on or before June 1, 2006, either (i) received all necessary permits to construct the Phase I Development or (ii) has not commenced ground-breaking work on the Phase I Development, then in either such event, Tenant shall have the right, in Tenant’s sole discretion, to terminate this Lease upon written notice delivered to Landlord, in which event Landlord shall, within ten (10) days following the date of Tenant’s termination notice, pay to Tenant a lease termination fee in the amount of Two Hundred Fifty Thousand Dollars ($250,000).  The parties hereby acknowledge and agree that such lease termination fee is a payment in the nature of liquidated damages and not a penalty and is fair and reasonable in light of all of the circumstances existing on the date of this Agreement, including the parties’ estimation of the amount of lost opportunity costs to Tenant.  As used herein, “Uncontrollable Delays” shall mean and be limited to delays caused by acts of God or terrorism.  In the event of an Uncontrollable Delay which actually delays the performance of Landlord’s obligations described in subclauses (i) and (ii) above, the June 1, 2006 date set forth above shall be extended for a period equivalent to the period of such delay.  In the event the plans

 

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for, and construction of, the Development permanently ceases (as opposed to being delayed, which shall be governed by the provisions relating to Uncontrollable Delays) solely as a result of an act of God or act of terrorism occurring prior to June 1, 2006, which act is of such magnitude that makes the construction and operation of the Development commercially unfeasible, Landlord shall have the right, upon written notice to Tenant delivered on or prior to June 1, 2006, terminate this Lease, in which event this Lease shall terminate on the date such termination notice is delivered by Landlord and the parties shall have no continuing obligations hereunder (and neither party shall be obligated to pay any termination fees, penalties, or other charges in connection with such termination).  Landlord’s termination right set forth in this paragraph shall automatically become null and void if not timely exercised on or prior to June 1, 2006, and Landlord shall no longer have the right to terminate this Lease pursuant to this paragraph after June 1, 2006.

 

C.                                      As of the date of this Lease, Landlord estimates that the Restaurant Building shall be completed and open to the public on or before December 31, 2007 (the “Initial RB Scheduled Opening Date”).  The date on which the Restaurant Building actually opens to the public shall be referred to herein as the “RB Opening Date.”  The parties acknowledge and agree that Tenant shall hire and engage employees, staff and consultants, acquire perishable inventory and enter into contractual obligations in reliance upon the RB Opening Date occurring on or prior to the Initial RB Scheduled Opening Date.  In the event that the RB Opening Date does not occur on or prior to the Initial RB Scheduled Opening Date, Landlord shall be responsible for and reimburse Tenant for all out-of-pocket costs and expenses incurred by Tenant by reason of such delay, including but not limited to salaries, benefits, the amount of gratuities which would have reasonably been earned by Tenant’s employees if the Premises were open to the public and which Tenant pays to such employees (the amount of which shall be determined per local market amounts based on other “high end” destination restaurants in Las Vegas), lodging expenses for Tenant’s specialty chefs (Landlord hereby acknowledging that such specialty chefs may be retained by Tenant approximately one year in advance, and that Tenant customarily provides such employees lodging for a period of one year), replacing all perishable inventory not otherwise utilized by Tenant and reimbursement of all contractual obligations which cannot otherwise be utilized by Tenant in the operation of Tenant’s business (collectively, “Out-of-Pocket Costs”).  In

 

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the event that the RB Opening Date does not occur on or prior to the sixtieth (60 ^th ) day following the Initial RB Scheduled Opening Date, then in addition to, and not in lieu of, the Out-of-Pocket Costs, Landlord shall also pay to Tenant, as liquidated damages attributable to such delay (it being agreed that Tenant’s actual damages attributable to such delay, including lost profits, would be difficult or impossible to ascertain) the amount of Ten Thousand Dollars ($10,000) for each day that the RB Opening Date does not occur from and after the sixtieth (60 ^th ) day following the Initial RB Scheduled Opening Date (the “Lost Profits”).  In the event Landlord fails to reimburse Tenant for any out-of-pocket costs, lost profits or other expenses to be reimbursed by Landlord pursuant to this paragraph within thirty (30) days after demand therefor, Tenant may pursue all remedies at law or in equity to recover payment of the same, and Tenant may further, at its election but without any obligation to do so, offset such unreimbursed amounts against all amounts of Percentage Rent payable by Tenant hereunder until applied in full.  In the event that the RB Opening Date does not occur on or prior to December 31, 2008 (the “Outside RB Opening Date”), then Tenant shall have the right to terminate this Lease upon written notice to Landlord at any time after the Outside RB Opening Date, in which case (i) Landlord shall reimburse to Tenant, within fifteen (15) days after invoice therefor, all costs actually incurred by Tenant in preparing to open for business in the Premises, including, without limitation, the Out-of-Pocket Costs, legal fees architectural and space planning fees, costs incurred in negotiating and documenting this Lease, and costs incurred in constructing, equipping, fixturing and furnishing the Premises (collectively, the “Termination Costs”); provided, however, that the Termination Costs shall not include Lost Profits, and (ii) Landlord shall not lease, use or otherwise permit the use of the Premises for a restaurant at any time prior to December 31, 2009.  Landlord may, from time to time, upon no less than forty-five (45) days notice prior to the Initial RB Scheduled Opening Date (or any Revised RB Scheduled Opening Date, as defined below), advise Tenant in writing of any change in the estimated date that the Restaurant Building shall be completed and open to the public (any such revised date shall be referred to herein as the “Revised RB Scheduled Opening Date”).  In the event Landlord delivers written notice of a Revised RB Scheduled Opening Date, Tenant will use reasonable efforts to minimize any Out-of-Pocket Costs and expenses.  In the event Landlord notifies Tenant of a Revised RB Scheduled Opening Date occurring after the Outside RB Opening Date, then Tenant shall have the right, but not the obligation, to terminate this Lease upon written notice to

 

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Landlord delivered within fifteen (15) business days after receipt of Landlord’s notice of such Revised RB Scheduled Opening Date, in which case Tenant shall be entitled to the Termination Costs as set forth above.

 

D.                                     Landlord shall cause the Delivery Date to occur on or before the date (the “Scheduled Delivery Date”) which is no less than the two hundred tenth (210 ^th ) day prior to the earlier of the Initial RB Estimated Opening Date, or any Revised RB Scheduled Opening Date, as applicable.  Landlord shall notify Tenant in writing (the “Landlord’s Pre-Delivery Notice”) not less than sixty (60) days prior to the occurrence of the Delivery Date of the Scheduled Delivery Date so as to permit Tenant to prepare for the commencement of Tenant’s Work.  Tenant estimates that Tenant will open for business in the Premises on or prior to the two hundred tenth (210 ^th ) day following the Delivery Date (the “Tenant’s Scheduled Opening Date”).  The date on which Tenant actually opens for business in the Premises shall be referred to herein as the “Tenant’s Opening Date.”  In the event that the Tenant’s Opening Date does not occur on or prior to the Tenant’s Scheduled Opening Date, then Tenant shall pay to Landlord, as a late opening fee, Five Thousand Dollars ($5,000) per day for each of the first three days immediately following the Tenant’s Scheduled Opening Date that Tenant fails to open for business.  In the event that the Tenant’s Opening Date does not occur on or prior to the fourth (4 ^th ) day following the Tenant’s Scheduled Opening Date, then Tenant shall pay to Landlord, as a late opening fee, One Thousand Three Hundred Thirty Three Dollars ($1,333) per day from such fourth day to such day that Tenant opens for business.  In the event that the Tenant’s Opening Date does not occur on or prior to the sixtieth (60 ^th ) day following the Tenant’s Scheduled Opening Date, then Tenant shall pay to Landlord, as a late opening fee, Five Thousand Dollars ($5,000) per day from such sixty-first (61 ^st ) day to such day that Tenant opens for business.  Tenant’s failure to open for business at the Premises on or prior to the ninetieth (90 ^th ) day following the Tenant’s Scheduled Opening Date shall not be a default hereunder.  In the event that the Tenant’s Opening Date does not occur on or prior to the ninetieth (90 ^th ) day following the Tenant’s Scheduled Opening Date, then Landlord may declare a default by Tenant hereunder and seek all remedies provided herein.  The foregoing time periods set forth in this paragraph shall be extended for a period equivalent to any period of delay resulting from an Uncontrollable Delay.

 

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E.                                       All work designated as Tenant’s Work in Exhibit “C” attached hereto (the “Tenant’s Work”) shall be performed by Tenant.  Tenant’s Work shall be performed by Tenant at its sole cost and expense; provided, however, that Landlord shall contribute the sum (“Construction Allowance”) of up to Five Million Dollars ($5,000,000.00) as set forth below.  The Construction Allowance may be utilized by Tenant for all aspects of constructing, improving and developing the Premises, and in connection with items needed to open for business at the Premises (collectively, “Permitted Expenses”), including, without limitation, expenses related to walls, floors, ceilings, lighting, ducting, venting, mechanical, engineering and plumbing systems, HVAC systems, furniture, fixtures, and equipment, including kitchen and service area equipment, point of sale registers and computers, walk-in coolers, small appliances, tabletop items (inclusive of china, tableware and glasses), menus, uniforms, barware and other items necessary to initially open and operate Tenant’s business from the Premises, exclusive of perishable inventory and items bearing the permanent Trade Name of Tenant (provided that Tenant shall be entitled to utilize the Construction Allowance in connection with its signage for the Premises).  Tenant shall be entitled to utilize up to Three Hundred Fifty Thousand Dollars ($350,000.00) of the Construction Allowance for pre-opening expenses typically incurred in connection with a restaurant of the size and nature of Tenant’s restaurant to be operated in the Premises, which shall include, without limitation, pre-opening salaries, employee benefits and training.  The Construction Allowance shall be made available to Tenant from and after Tenant’s approval of the Preliminary Site Plan to utilize for such pre-opening expenses and deposits and any other Permitted Expenses.  Tenant shall, from time to time (but not more than once during any fifteen (15) day period), deliver to Landlord an invoice for Permitted Expenses incurred by Tenant.  Landlord shall, within fifteen (15) days from the delivery of each such invoice, deliver a check(s) to Tenant made payable to Tenant in an amount of each such invoice.

 

Section 3.4 .                                                            Obligations During Design and Construction

 

Each party shall cooperate with the other party by fully participating, at no charge, in the design and development process relating to the Premises.

 

Section 3.5 .                                                            Tenant’s Personal Property

 

All trade fixtures, decorations, signs and apparatus (as distinguished from leasehold improvements) owned by Tenant and installed in the Premises (“Tenant

 

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Personal Property”) other than Tenant Personal Property purchased with the Construction Allowance shall remain the property of Tenant and shall be removable at any time, including upon the expiration or sooner termination of this Lease; provided Tenant shall not at such time be in default of any terms or covenants of this Lease; and provided further that Tenant shall promptly repair any damage to the Premises caused by the removal of any Tenant Personal Property.  Any Tenant Personal Property not removed from the Premises by Tenant upon the expiration or within fifteen (15) days after any sooner termination of this Lease may be construed by Landlord as abandoned by Tenant. Upon the expiration or earlier termination of this Lease, Landlord and Tenant shall, in good faith, coordinate the removal of Tenant’s Personal Property from the Premises to avoid unreasonably interfering with the operations of Landlord or other tenants in the Hotel/Casino and other tenants and occupants of the Development.  Tenant shall have the right, without Landlord’s consent, to finance any Tenant Personal Property and to grant security interests therein to secure such financing. Upon request, Landlord shall subordinate any Landlord’s lien on any Tenant Personal Property to any such security interest, and Landlord agrees, upon request, to confirm such subordination in writing in a commercially reasonable form requested by Tenant and/or Tenant’s lender, within twenty (20) days after Landlord’s receipt of such form.

 

ARTICLE IV

RENT

 

Section 4.1 .                                                            Rent

 

Landlord acknowledges that there shall be no minimum base rent payable by Tenant under this Lease.  Tenant covenants and agrees to pay to Landlord, without notice or demand, at Landlord’s address for notice (Landlord’s and Tenant’s notice addresses being the addresses specified in Section  24.7  hereof), as rent for the Premises the amount equal to six percent (6%) of “Gross Sales” as defined herein during each month of the Lease Term payable in the manner, and under the terms, set forth in Section 4.2 of this Lease  (hereinafter called “Percentage Rent”).

 

Section 4.2 .                                                            Payment of Percentage Rent

 

On or before the fifteenth (15 ^th ) day of each calendar month during the Term (including the calendar month next succeeding the last month of the Term), Tenant

 

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shall deliver to Landlord a written statement signed by Tenant or an officer of Tenant as being true and correct, setting forth the amount of Tenant’s Gross Sales during the immediately preceding calendar month, and on the same date Tenant shall pay Landlord the Percentage Rent for the immediately preceding calendar month.  Within ninety (90) days after the end of each calendar year during the Term (except for the calendar year in which this Lease terminates), Tenant shall deliver to Landlord a written statement, signed and certified by Tenant or an officer of Tenant to be true and correct, setting forth the amount of Tenant’s Gross Sales made during the immediately preceding year (the “Yearly Reconciliation”).  Within ninety (90) days after the termination of the Lease, Tenant shall deliver to Landlord a written statement, signed and certified by Tenant or an officer of Tenant to be true and correct, setting forth the amount of Tenant’s Gross Sales made during the final year, or part thereof, of the Lease (the “Final Reconciliation”).  The authorized exclusions from Percentage Rent shall be reconciled and the computation of payment of the actual Percentage Rent due hereunder shall be made on an annual basis for each preceding year.  If the Yearly Reconciliation or Final Reconciliation shows that additional Percentage Rent is due to Landlord, Tenant shall pay that amount to Landlord within thirty (30) days of the date of the Yearly Reconciliation or Final Reconciliation.  If the Yearly Reconciliation or Final Reconciliation shows that a credit is due to Tenant, Tenant shall receive a credit for that amount against the next accruing payments of rent hereunder.  If any credit due to Tenant exists at the expiration or termination of this Lease, the amount of such credit shall be paid in cash by Landlord to Tenant within three (3) days following such expiration or termination.  Landlord’s obligation to refund any such credit to Tenant shall survive the expiration or termination of this Lease.

 

Section 4.3 .                                                            Miscellaneous Rent Provisions

 

The parties acknowledge and agree that (i) the Percentage Rent payable by Tenant hereunder is inclusive of all real and personal property taxes; common area operating and maintenance costs; common area and general insurance premiums for the Hotel Complex, or any portion thereof; all marketing, promotional and advertising fees or charges payable by tenants or occupants of the Hotel Complex; all parking fees or charges for guests and employees of Tenant; and all other charges or fees typically payable by tenants or occupants of the Hotel Complex, and (ii) except for Tenant’s obligation to pay for its utilities, maintenance and insurance as set forth in Sections 7.1,

 

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9.2, and 11.2, respectively, Tenant shall not be obligated to pay any other fees, rents or charges to Landlord in connection with this Lease and Tenant’s occupancy of the Premises.  Any installment of Percentage Rent or rents to be paid by Tenant which is not paid by the tenth (10th) day after the date when due shall bear interest as of the first day of the month on which any sum is due and owing at the rate of twelve percent (12%) per annum until paid.

 

Section 4.4 .                                                            Gross Sales Defined

 

As used in this Lease, “Gross Sales” shall mean all receipts or revenues of Tenant at the Premises from all sources of any kind (subject to the limitations set forth in this Agreement), including, without limitation, the sale of food, beverage, and merchandise computed on an accrual basis in accordance with GAAP (except as expressly provided herein).  Notwithstanding the foregoing, Gross Sales shall not include: (i) the amount of any city, county, state or federal sales, use, gross receipts, casino entertainment, luxury or excise tax imposed by any governmental authority upon the sale of merchandise or services or both, collected from customers from receipts which are included in Gross Sales or otherwise paid by Tenant, (ii) charges of credit card companies with respect to all receipts which are included in Gross Sales, (iii) gratuities paid to the staff (or paid to the Tenant and paid by the Tenant to the staff) by patrons with respect to functions which generate Gross Sales, (iv) amounts collected by Tenant from patrons for the account of, and for direct payment to, unrelated third parties providing services specifically for a patron’s function which generate Gross Sales, such as flowers, music and entertainment, (v) proceeds paid as a result of an insurable loss (unless paid for the loss or interruption of business and representing payment for damage for loss of income and profits of those restaurant operations which are intended to generate Gross Sales), (vi) proceeds of condemnation and eminent domain awards, (vii) the exchange of merchandise between stores of Tenant and its affiliates when such exchanges are made solely for the operation of Tenant’s business and properly accounted for to Landlord, (viii) sums or credit received by Tenant in settlement of any claims for loss of or damage to merchandise, (ix) merchandise returned for credit to shippers, jobbers, wholesalers or manufacturers, (x) any amount collectible by Tenant on behalf of any charity, club or similar organization which Tenant pays over to such charity, club or similar organization, provided that it is understood that Tenant must have the approval of Landlord to host charity functions where food and beverage is provided on a complimentary basis, (xi) merchandise

 

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returned in the amount of cash refunded, credit given, or discounts and allowance granted or exchanges made, provided that the sale price of such items was originally included in Gross Sales, (xii) revenue from sale of trade fixtures after use in the Premises, (xiii) revenue from vending machines for Tenant’s employee use only, (xiv) revenue from sales to employees of Tenant at an employee discount, not to exceed three percent (3%) of Gross Sales for any calendar year, (xv) redemptions of gift certificates (provided the revenues from the sale of any such gift certificates at the Premises were included in Gross Sales), (xvi) intentionally omitted, (xvii) uncollected accounts and bad debts, not to exceed one percent (1%) of Gross Sales for any calendar year, (xviii) reimbursement for expenses incurred in assisting other restaurants operated by affiliates of Tenant in providing off-property catering services where such affiliates are the originators of such catering services and are primarily responsible for the performance of all functions related thereto, (xix) any discounted payments from Landlord to Tenant in connection with Complimentaries, as described in Section 8.5(C) below, and (xx) any other items specifically excluded from the computation of Gross Sales per the terms of this Lease.

 

Section 4.5 .                                                            Real Estate Taxes

 

Landlord shall pay or cause to be paid all Real Estate Taxes (as hereinafter defined) assessed or imposed upon the Hotel Complex, or any portion thereof, in addition to all Personal Property Taxes (as hereinafter defined), that become due or payable during the Lease Term.  As used herein, the term Real Estate Taxes shall mean and include all real estate taxes, public and governmental charges and assessments, including all extraordinary or special assessments, or assessments against any of Landlord’s personal property now or hereafter located in the Hotel Complex, all costs, expenses and attorney’s fees incurred by Landlord in contesting or negotiating with public authorities (Landlord having the sole authority to conduct such a contest or enter into such negotiations) as to any of the same.  As used herein, “Personal Property Taxes” shall mean and include all taxes or assessments levied, assessed or imposed by any governmental authority upon or against the Premises, the use or occupancy of the Premises, the rents payable by Tenant to Landlord, or otherwise with respect to the landlord-tenant relationship hereunder, including, without limitation, taxes and assessments on the machinery, equipment, inventory or other personal property or assets purchased or leased by Tenant with a portion of the Construction Allowance in connection with the Premises; provided, however, that Personal Property Taxes shall not include

 

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taxes and assessments on machinery, equipment, inventory or other personal property or assets purchased by Tenant without any contribution to the purchase price thereof from the Construction Allowance (the “Excluded Personal Property Taxes”).  Tenant shall pay, as and when due, the Excluded Personal Property Taxes.

 

Section 4.6 .                                                            Additional Rent

 

All amounts required or provided to be paid by Tenant to Landlord under this Lease other than Percentage Rent shall be deemed additional rent, and Percentage Rent and additional rent shall in all events be deemed rent.

 

ARTICLE V

PARKING AND COMMON AREAS AND FACILITIES

 

Section 5.1 .                                                            Common Areas

 

All parking areas, access roads and facilities furnished, made available or maintained by Landlord in or near the Hotel Complex,  including employee parking areas, truck ways, driveways, loading docks and areas, delivery areas, multi-story parking facilities, package pickup stations, elevators, escalators, pedestrian sidewalks, malls, including the enclosed mall, courts and ramps, landscaped areas, retaining walls, stairways, Monorail, first-aid and comfort stations, lighting facilities, sanitary systems, utility lines, water filtration and treatment facilities, those areas within and adjacent to the Hotel Complex for ingress and egress to and from the Hotel Complex,  which from time to time may be provided by Landlord or others for the convenience, use or benefit of the tenants of the Hotel Complex, Landlord, the occupants and visitors of the Hotel Complex and their respective concessionaires, agents, employees, customers, invitees and licensees, those areas, if any, upon which temporary or permanent off-site utility systems or parking facilities serving the Hotel Complex, may from time to time be located and other areas and improvements provided by Landlord for the general use in common of tenants and their customers in the Hotel Complex  (all herein called “Common Areas”) shall, subject to the Tenant Protections, at all times be subject to the exclusive control and management of Landlord and Landlord shall have the right, from time to time, to establish, modify and enforce reasonable rules, regulations and requirements with respect to all Common Areas.  Tenant agrees to comply with, and to cause its employees and contractors to comply with, all such rules, regulations and requirements set forth by

 

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Landlord, provided Landlord agrees to apply all such rules, regulations and requirements on a reasonable, uniform basis and in good faith.

 

Subject to the Tenant Protections, Landlord shall have the right from time to time to: change or modify and add to or subtract from the sizes, locations, shapes and arrangements of parking areas, entrances, exits, parking aisle alignments and other Common Areas; designate parking areas for Landlord, its employees and tenants , restrict parking by Tenant and Tenant’s employees to designated areas; construct surface, sub-surface or elevated parking areas and facilities; establish and from time to time change the level or grade of parking surfaces; add to or subtract from the buildings in the Hotel Complex; eliminate such access as may, from time to time, be available to the Hotel Complex;  and do and perform such other acts in and to said Common Areas as Landlord in its reasonable discretion, uniformly applied, deems advisable for the use thereof by tenants and their customers.  Notwithstanding the foregoing, if Landlord institutes a charge or fee to users of any parking areas or facilities of the Hotel Complex, such charge or fee shall not be applicable to Tenant, its employees or agents nor, subject to appropriate validation, Tenant’s customers.

 

Section 5.2                                                               Use of Common Areas

 

Tenant and its business invitees, employees and customers shall have the nonexclusive right, in common with Landlord, and all others to whom Landlord has granted or may hereafter grant rights, to use the Common Areas for ingress, egress and parking subject to such reasonable regulations as Landlord or such other person may from time to time impose and the rights of Landlord set forth above.  Tenant and Tenant’s customers shall also have a non-exclusive right to walk through the Hotel Complex in order to gain ingress to and egress from the Premises.  Tenant shall abide by all reasonable rules and regulations established by Landlord as described above, and cause its officers, employees, and agents to abide thereby.  Landlord may at any time close temporarily any Common Areas to make repairs or changes, prevent the acquisition of public rights therein, discourage non-customer parking, or for other reasonable purposes (provided, however, that in connection therewith, Landlord shall use commercially reasonable efforts to minimize any interference with Tenant’s use of the Premises or with access to or visibility of the Premises from the Common Areas adjacent to the Premises).  Upon Landlord’s request, Tenant shall furnish Landlord with license numbers and

 

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descriptions of cars used by Tenant’s employees of the Premises.  Tenant shall not unreasonably interfere with Landlord’s or other permitted users’ rights to use any part of the Common Areas.

 

ARTICLE VI

COST AND MAINTENANCE OF COMMON AREAS

 

Landlord will, at its sole cost and expense, operate, manage, maintain, replace and repair or cause to be operated, managed, maintained, replaced or repaired, the Common Areas of the Hotel Complex, including, but not limited to, all parking facilities, in first-class condition throughout the Term and any extensions thereof.  Tenant shall have no obligation whatsoever to pay any portion of such costs.

 

ARTICLE VII

UTILITIES AND SERVICES

 

Section 7.1 .                                                            Utilities

 

Landlord shall, as part of Landlord’s Work, provide utility lines for water, gas, telephone, electricity, and sewer stubbed to the Premises in locations designated by Tenant.  Landlord shall, at Landlord’s expense, provide and install separate meters or submeters for all such utilities (provided that if the applicable utility company does not permit the installation of separate meters or submeters to the Premises, then (i) Landlord shall provide such utility services, and (ii) Tenant shall pay to Landlord, within thirty (30) days after written invoice therefor, Tenant’s equitable share of the cost of such services as reasonably determined by Landlord based on Tenant’s actual usage thereof, provided that Landlord shall not charge Tenant at a rate in excess of the rate the service providers charge Landlord).  Landlord shall, as part of Landlord’s Work, pay for all connection fees (including user connection fees), impact fees, set up fees, and other similar fees and assessments in connection with the provision of all such utilities to the Premises.  Tenant shall directly contract with and promptly pay all charges for the use by Tenant of water, gas, telephone, electricity, and sewer at the Premises.  In the event (i) Tenant fails to pay when due charges for Tenant’s use of water, gas, telephone, electricity or sewer at the Premises, (ii) Landlord has the ability to pay the same on Tenant’s behalf, and (iii) Landlord pays such charges on Tenant’s behalf, then Tenant shall, as additional rent,

 

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reimburse Landlord for such charges actually paid by Landlord within thirty (30) days after invoice and evidence of such payment is submitted to Tenant from Landlord.

 

Section 7.2 .                                                            Air Conditioning of Premises

 

Landlord, at Landlord’s cost, shall provide Tenant with heating and air conditioning for the Premises during the customary periods of the year and during normal business hours when, and to the same extent, as furnished to other portions of the Hotel Complex.

 

Section 7.3 .                                                            Interruption of Service

 

Except to the extent caused by Landlord’s negligence or intentional misconduct, Landlord shall not be liable to Tenant in damages or otherwise if any utilities, whether or not furnished by Landlord hereunder, are interrupted or terminated because of repair, installation or improvements, or any cause beyond Landlord’s reasonable control, nor shall any such termination relieve Tenant of any of its obligations under this Lease.

 

ARTICLE VIII

CONDUCT OF BUSINESS BY TENANT

 

Section 8.1 .                                                            Use of Premises

 

The Premises shall be occupied and used by Tenant solely for the purpose of conducting thereon the operation of a fine dining restaurant, together with a related bar and/or cocktail lounge, with standards of service and food that are consistent with the standards currently existing at the existing Mr. Chow restaurant in Los Angeles, subject to such variations as may be required due to market conditions, availability of product and desire of clientele (the “Permitted Use”).  The Permitted Use shall also include the preparation and sale of food for carry out, delivery and offsite catering, as well as the retail sale of merchandise bearing the logo of or related to the business operated by Tenant in the Premises.  Tenant shall also have the right, but not the obligation, to have, from time to time, live entertainment and/or dancing at the Premises in connection with the Permitted Use, including such entertainment and dancing in connection with special events for customers and guests of Tenant; provided that the noise from such activities do not unreasonably disturb other tenants and guests of the Hotel Complex outside of the Premises.  Tenant shall, at Tenant’s sole discretion, determine the food and beverage items to be offered in the Premises, which shall not conflict with the exclusive use rights

 

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set forth on Exhibit “D” attached hereto.  Except as set forth in Exhibit “D”, Landlord represents and warrants that as of the date of this Lease, the Landlord has not entered into any agreement with any other tenant or other occupant of the Hotel Complex which would in any way conflict with, or detrimentally affect, the Tenant’s use of the Premises for the Permitted Use.  Tenant shall not conduct gaming activities at the Premises without the prior written consent of Landlord, which consent may be withheld in Landlord’s sole discretion.

 

Except for the Nobu restaurant existing as of the date of this Lease, Landlord agrees that throughout the Term hereof, as such Term may be extended, Landlord will not lease, sublease or otherwise operate or contract for, by conveyance or otherwise, any space in the Hotel Complex as and for any restaurant serving primarily Asian cuisine.  This covenant may not be waived without Tenant’s express written consent.  Anything in this Lease to the contrary notwithstanding, Tenant may enforce this covenant by injunctive and/or other equitable relief, and, in addition, may seek damages, at law or in equity, arising from a violation thereof.

 

Section 8.2 .                                                            Conduct of Business

 

Tenant’s business at the Premises shall be conducted under the name “Mr. Chow,” or such other name as may be mutually agreed to in writing by Landlord and Tenant (the “Trade Name”).  Landlord acknowledges Tenant’s proprietary rights in and to the trademarks, service marks, tradenames and other intellectual property rights of Tenant’s Trade Name and logo.  In that regard, Tenant shall have the right to prohibit any advertising, promotion or display by Landlord utilizing Tenant’s Trade Name or logo which, in Tenant’s sole opinion, impairs or would tend to impair the reputation of Tenant or its affiliates.  Prior to utilizing Tenant’s Trade Name or logo on any advertising by Landlord, Landlord shall submit to Tenant for written approval a tangible specimen of advertising material proposed to be utilized by Landlord.  Tenant shall either approve or disapprove such usage within twenty (20) days of such submission.  Tenant’s failure to disapprove within such twenty (20) day period shall be deemed approval.  The rights granted to Landlord pursuant to this Section 8.2 shall terminate upon the expiration of the Lease Term or the earlier termination for breach of this Lease or Tenant’s cessation of the use of the Trade Name or termination of Tenant’s right to use the Trade Name.  Tenant represents and warrants to Landlord that Tenant has the legal right to use the

 

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Trade Name, and Tenant shall indemnify and hold Landlord harmless from and against any claims, losses or damages incurred by Landlord to the extent arising from a breach of such representation and warranty.

 

Subject to the provisions of this Section 8.2, Tenant’s restaurant at the Premises shall be and remain open for dinner nightly from 6:00 p.m. through 11:00 p.m. (Tenant hereby agreeing to accept last orders up to 11:00 p.m.).  The parties acknowledge and agree that the foregoing hours of operation are minimum hours, and Tenant shall have the right, but not the obligation, to open for longer hours on any day or days as determined in Tenant’s sole discretion, including opening for breakfast and/or lunch.  Tenant shall further have the right to close on not more than two (2) days per calendar year for any reason, or no reason, as Tenant may elect in its sole discretion; provided, however, that (i) such two (2) day limitation shall not apply to any period of closure resulting from casualty, eminent domain, temporary closures for repairs or alterations, and such other reasons beyond the reasonable control of Tenant, (ii) Tenant shall provide Landlord with no less than sixty (60) days’ prior notice of any such closure, and (iii) Tenant shall not close on the following days: New Year’s Eve, Super Bowl weekend, the NCAA Final Four weekend, or any national or state three-day weekend (i.e. Labor Day, Memorial Day, etc.).

 

Section 8.3 .                                                            Operation by Tenant

 

A.                                    Subject to Section 8.4 below, Tenant covenants and agrees that it will: not place or maintain any vending machines in any vestibule or entry of the Premises or outside the Premises, not permit any gaming or gaming devices in the Premises without the prior written consent of Landlord (which consent may be withheld in Landlord’s sole discretion); dispose of garbage, trash, rubbish and other refuse in containers provided outside the Premises by Landlord and remove the same regularly, as needed; keep all mechanical equipment within the Premises free of unreasonable vibration and noise and in good working order and condition; not commit or permit waste or a nuisance upon the Premises; not permit or cause objectionable odors to emanate or be dispelled from the Premises (provided that normal restaurant odors shall not be deemed a violation of the foregoing); not distribute advertising matter in or upon any Common Areas; not permit the loading or unloading or the parking or standing of delivery vehicles outside any area designated therefor; comply with all laws, recommendations, ordinances, rules and

 

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regulations of governmental authorities and agencies with respect to the specific use or occupancy of the Premises by Tenant, including but not limited to the Occupational Safety and Health Act and the Americans with Disabilities Act of 1990 (provided that Landlord shall, at Landlord’s expense, be responsible for complying with all laws of general applicability, without regard to Tenant’s specific use); and not permit any noxious, toxic or corrosive fuel or gas on the Premises.

 

B.                                      Tenant acknowledges that Landlord’s security department and security officers are not responsible for providing security services in the Premises and that all such responsibility is the obliga