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STORE LEASES AGREEMENT

Retail Lease Agreement

STORE LEASES AGREEMENT | Document Parties: EXPRESS, INC. | BATH  BODY WORKS, LLC | Corporate Real Estate | DIVA US, LLC | Information Management | One Limited | Three Limited | VICTORIA'S SECRET STORES, LLC You are currently viewing:
This Retail Lease Agreement involves

EXPRESS, INC. | BATH BODY WORKS, LLC | Corporate Real Estate | DIVA US, LLC | Information Management | One Limited | Three Limited | VICTORIA'S SECRET STORES, LLC

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Title: STORE LEASES AGREEMENT
Date: 2/16/2010
Industry: Retail (Apparel)     Law Firm: Kirkland Ellis     Sector: Services

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Exhibit 10.14

STORE LEASES AGREEMENT

This STORE LEASES AGREEMENT is entered into as of July 6, 2007 (this “ Agreement ”), by and among LIMITED STORES, LLC (“ LS ”), BATH & BODY WORKS, LLC (“ Bath & Body Works ”), VICTORIA’S SECRET STORES, LLC (“ Vic ”), DIVA US, LLC (“ Diva ”), EXPRESS, LLC (“ Express ”) and LIMITED BRANDS, INC. (“ Limited ”) ;

WITNESSETH:

WHEREAS, each of LS, Bath & Body Works, Vic and Diva are subsidiaries of Limited (collectively, the “ Limited Tenants ” and each a “ Limited Tenant ”);

WHEREAS, one of LS or Limited is the original prime tenant under each of the leases for the stores described on Schedule 1 hereto (each such store a “ Limited Store ” and collectively, the “ Limited Stores ”);

WHEREAS, Limited is the prime tenant under each of the leases for the stores described on Schedule 2 hereto pursuant to a Master Assignment and Assumption Agreement dated as of the date hereof (but effective prior to this Agreement) between Limited and Express (the “ Master Assignment ”), which leases for such Schedule 2 stores are guaranteed by Limited (each such store a “ Guaranteed Lease Store ” and collectively, the “ Guaranteed Lease Stores ”) pursuant to a guaranty agreement (collectively, the “ Guarantees ” and each a “ Guaranty ”) with respect to the obligations arising under such leases;

WHEREAS, as of the date hereof, Express occupies a portion of one or more Limited Stores without a written agreement;

WHEREAS, as of the date hereof, and after giving effect to the transactions contemplated by the Master Assignment, Express is the original and current prime tenant under the leases for the stores described on Schedule 3 hereto (each such store an “ Express Store ” and collectively, the “ Express Stores ”);

WHEREAS, as of the date hereof, one (or more) Limited Tenant(s) (other than Limited) occupies (or occupy) a portion of one or more Express Stores and/or the Guaranteed Lease Stores without a written agreement;

WHEREAS, in the locations listed on Schedule 6 , there are one or more stores operated by prior affiliates of Limited, such stores operating as Limited Too, Lane Bryant and/or Lerner (each a “ Prior Affiliate ”);

WHEREAS, each Prior Affiliate is a party to one or more previously executed store leases agreements by and between Prior Affiliates and Limited or its Affiliates (each a “ Prior Affiliate SLA ”);


WHEREAS, as of the date hereof, Express directly leases premises described on Schedule 4 hereto which are adjacent to, but not fully separated, either physically and/or functionally, from premises leased directly by a Limited Tenant (the “ Adjacent Premises ”);

WHEREAS, the parties hereto desire to memorialize their prior agreements and understandings with respect to such premises, as such agreements and understandings are amended by this Agreement; and

NOW, THEREFORE, in consideration of the covenants set forth herein, the parties hereto, intending to be legally bound, agree as follows:

1. Definitions .

As used in this Agreement the following terms will have the following meanings, applicable both to the singular and the plural forms of the terms described:

Affiliate ” means a corporation, partnership, limited liability company or other business entity, which, directly or indirectly, controls, is controlled by, or is under common control with, another corporation, partnership, limited liability company or other business entity. If more than fifty percent (50%) of the voting stock of a corporation is owned by another corporation, partnership, limited liability company or other business entity, the corporation whose stock is so owned shall be deemed to be controlled by the corporation, partnership, limited liability company or business entity owning such stock. An Affiliate of Express as defined under this paragraph, however, only refers to Affiliates thereof after the Closing Date.

Closing Date ” is defined in the Unit Purchase Agreement included as one of the Transaction Documents.

Excess Rent ” means, in respect of any Leased Premises, rent or any other amount payable under the relevant Prime Lease, which is calculated on the basis of a fixed percentage of sales over a pre-determined sales level, and is in addition to the fixed base rent or other fixed payment required by the relevant Prime Lease.

Express Premises ” means that portion of the Leased Premises occupied by Express pursuant to a Prime Lease or this Agreement.

Gross Sales ” shall mean the term (or any similar term) used in the relevant Prime Lease to determine the basis for calculating the payments due to the Landlord thereunder, regardless of whether the relevant Prime Lease refers to such term as gross sales, net sales or a similar term.

Landlord ” means the landlord under a Prime Lease.


Lease Term ” means, in respect of any Prime Lease, the initial term of such Prime Lease and any renewal or extension option thereunder exercised pursuant to the provisions of this Agreement; provided , with respect to the Guaranteed Lease Stores, the Lease Term shall not include renewal or extension options (or, if the Prime Lease Term with respect to any Leased Premises is currently under a renewal or extension option, any additional renewal or extension options) available under the Prime Lease with respect to such Leased Premises, except as provided in Section 4(a).

Leased Premises ” means the premises in which either Express or Limited Tenant has a leasehold interest as the tenant under a Prime Lease or all such premises collectively, as the context may require.

Limited Tenant Premises ” means that portion of the Leased Premises occupied by a Limited Tenant pursuant to a Prime Lease or this Agreement.

Percentage Rent ” means, in respect of any Leased Premises, monthly rent which, in lieu of a fixed monthly rent or any other amount payable under the relevant Prime Lease, is calculated exclusively as a percentage of the Gross Sales of the tenant of such Leased Premises for such month.

Prime Lease ” means each of the leases set forth on Appendix A ; all such leases are collectively referred to as the “ Prime Leases .”

Prior Affiliate Premises ” means that portion of the Leased Premises occupied by a Prior Affiliate pursuant to a Prime Lease, Prior Affiliate SLA or other agreement.

Space Size Ratios ” means, in respect of any Subleased Premises, the ratio of (x) the size of the selling space in the Subleased Premises to (y) the size of the selling space in the entire Leased Premises regardless of the person, party or entity in possession or control thereof. All such sizes, as of the date hereof, are as reflected on Schedule 5 . The applicable Space Size Ratios shall be adjusted accordingly in the event of any change in the size of either a Leased Premises or a Subleased Premises, or in the event of the presence of any other tenants or occupants in the Leased Premises, but shall not be adjusted solely due to a reallocation between the total amount of selling space and the total amount of storage space in a given Leased Premises or Subleased Premises.

Store Separation ” means all work reasonably necessary to physically separate, in a manner and to an extent mutually satisfactory to Limited and Express, the applicable Limited Tenant Premises and Express Premises, including any Adjacent Premises, whether or not such locations have been listed on the Schedules attached hereto as of the date hereof or have been inadvertently omitted therefrom and are subsequently included thereto by agreement between the parties (it being the


parties’ intention that all such affected stores, but for those specifically excluded herein, be covered hereby) including (i) compliance with all applicable local, state and federal laws, rules and regulations to ensure that the Express Premises and the Limited Tenant Premises may each be leased, used and occupied for their intended purposes lawfully in all respects, (ii) any segregation of selling or storage space, construction of firewalls, construction of access corridors, necessary modifications to and separation of the HVAC system or utilities (e.g., to enable separate services and metering), (iii) where applicable, purchase of cabinets and fixtures for use on the newly constructed separation wall, in each case on both sides of a separation wall and of comparable quality to other cabinets and fixtures already used in the relevant store, and (iv) where applicable, installation of duplicate facilities ( e.g. , bathrooms, storerooms, backrooms, fire doors, and entrances and exits to the exterior and interior malls) of comparable quality to those in existence and shared by Express and the respective Limited Tenant immediately prior to the separation. Except and to the extent noted in this Agreement as to any specific location, it is the intention of the parties hereto for each Express Premises and each Limited Tenant Premises, after the completion of the Store Separation work, if any, to be a fully functional, separated, segregated and secured lawful business unit in all respects.

Store Separation Costs ” means all costs reasonably necessary to effectuate a Store Separation (exclusive of costs, fees and expenses incurred by any party hereto to evaluate for its own account the design, commencement and/or completion of any aspect of Store Separation work performed by the other party or parties, as the case may be, hereunder).

Subleased Premises ” means the portion of the Leased Premises occupied by either Express or a Limited Tenant as the subtenant in accordance with this Agreement, individually or collectively, as the context may require. Each of the Subleased Premises as of the date hereof is described on Schedules 1, 2 and 3 .

Subtenant ” means either a Limited Tenant or Express, as the context may require, which party subleases the Subleased Premises from the other party (as Tenant under a Prime Lease) pursuant to this Agreement; provided , with respect to any Guaranteed Lease Store, Express shall be deemed to be the Tenant hereunder.

Tenant ” means either a Limited Tenant or Express, as the context may require, which party is the direct tenant under a Prime Lease; provided , with respect to any Guaranteed Lease Store, Express shall be deemed to be the Tenant hereunder.

Transaction Documents ” means the Unit Purchase Agreement, together with all other agreements and documents contemplated thereby executed and delivered by such parties and their respective Affiliates with respect to the chain of stores known as “Express”.


Unit Purchase Agreement ” means that certain Unit Purchase Agreement dated as of May 15, 2007 among Limited, Express Investment Corp., Limited Brands Store Operations, Inc. and Express Holding, LLC, as amended.

2. Sublease .

(a) Limited Stores . With respect to the Limited Stores set forth on Schedule 1 hereto, the respective Limited Tenant, in consideration of the covenants and agreements to be performed by Express as subtenant and upon the terms and conditions hereinafter stated, does hereby sublease, demise and let unto Express, and Express does hereby sublease from such Limited Tenant, each of the Express Premises upon the terms and conditions set forth below.

(b) Guaranteed Lease Stores . With respect to the Guaranteed Lease Stores set forth on Schedule 2 hereto, (i) Limited, in consideration of the covenants and agreements to be performed by Express as subtenant and upon the terms and conditions hereinafter stated, does hereby sublease, demise and let unto Express, and Express does hereby (A) sublease from Limited, the entire Leased Premises with respect to such Guaranteed Lease Stores upon the terms and conditions set forth below and (B) assume and shall fully perform and discharge, with respect to each Guaranteed Lease Store, all the obligations of Limited as “Tenant” under the Prime Lease with respect to such Guaranteed Lease Store during the Term (as defined below) and shall abide by and adhere to all restrictions contained in, and all other terms, covenants and conditions of, each Prime Lease, and, except as otherwise provided herein, Express acknowledges that Limited shall have no duty to take any action to comply with the obligations of Limited as “Tenant” under each Prime Lease with respect to the Guaranteed Lease Stores and, in turn, (ii) Express shall sub-sublease the Limited Tenant Premises at such Guaranteed Lease Stores to the Limited Tenant in accordance with Section 2(c) below.

(c) Express Stores . With respect to the Express Stores set forth on Schedule 3 hereto and the Guaranteed Lease Stores in accordance with Section 2(b) above, Express, in consideration of the covenants and agreements to be performed by the Limited Tenant as subtenant and upon the terms and conditions hereinafter stated, does hereby sublease, demise and let unto such Limited Tenant, and such Limited Tenant does hereby sublease from Express, each of the Limited Tenant Premises upon the terms and conditions set forth below.

(d) Prior Affiliate SLAs. Notwithstanding anything contained herein to the contrary, Express hereby (i) acknowledges the occupancy by Prior Affiliates of the Prior Affiliate Premises, as applicable and (ii) acknowledges and agrees that the terms and conditions of this Agreement and all of the rights of Express hereunder are and shall remain subject to the terms and conditions of each Prior Affiliate SLA.


(e) Diva Space. Express hereby acknowledges and agrees (i) that Diva currently occupies approximately 557 square feet of the Leased Premises situated at Annapolis Mall, as identified on Attached Schedule 3 (the “Diva Space”) and (ii) that, notwithstanding anything contained herein to the contrary, if Limited Brands hereafter decides to close such Diva store and to cause Diva to vacate the Diva Space, then, upon thirty (30) days prior written notice to Express, Limited Brands shall have the right and option to put the Diva Space to Express, whereupon, the same shall be and become part of the Express Premises and the responsibility of Express for all purposes hereunder and under the pertinent Prime Lease.

3. Priority of Prime Lease .

(a) Except to the extent otherwise expressly set forth in this Agreement, this Agreement, as it relates to the Subleased Premises (and, in the case of the Guaranteed Lease Stores, the Leased Premises), is expressly subject and subordinate to the applicable Prime Lease and all the terms, conditions and covenants therein contained. Except to the extent otherwise expressly set forth in this Agreement, in which event the terms of this Agreement shall prevail, all the terms, covenants and conditions of a Prime Lease shall be applicable with respect to the corresponding Subleased Premises (and, in the case of the Guaranteed Lease Stores, the Leased Premises) with the same force and effect as if Tenant were the landlord under the Prime Lease and Subtenant were the tenant thereunder, and the provisions of the Prime Lease are incorporated herein by reference with the same force and effect as if they were fully set forth herein. Limited represents and warrants that the transactions contemplated by this Agreement and the Master Assignment are, with respect to each Leased Premises and Subleased Premises, as the context may require, (i) permitted under the terms of the respective Prime Lease without the respective Landlord’s consent thereunder or (ii) if such Prime Lease requires the Landlord’s consent thereunder, such consent has been obtained (or, subject to Section 29.D.(b) of this Agreement, will be obtained) by Limited at Limited’s sole cost and expense, and Limited agrees to indemnify, defend and hold harmless Express with respect to any Claims (as defined below) incurred by Express in connection with (x) with respect to the Guaranteed Lease Stores, the assignment of each Prime Lease to Limited under the Master Assignment and the subsequent subletting of each the Leased Premises to Express under this Agreement and (y) with respect to the Limited Stores and the Express Stores, the subletting of the Subleased Premises to either Express or a Limited Tenant, as the case may be; provided , however , Limited shall have no obligation and shall not be liable in any manner to Express with respect to any Claims that arise by reason of the sale, directly or indirectly, of the stock of Express and/or the change of control of Express, except as otherwise provided in the Unit Purchase Agreement. Limited’s foregoing indemnification, defense and hold harmless obligations shall survive the expiration or termination of this Agreement.

(b) Subtenant agrees that nothing in this Agreement shall be deemed to grant Subtenant any rights that would conflict with any of the covenants and


conditions of the Prime Lease, and Subtenant agrees that it will do nothing in, on or about the Subleased Premises that would result in the breach by Tenant of its undertakings and obligations under the Prime Lease. Subtenant hereby assumes and shall fully perform and discharge, with regard and to the extent applicable to the Subleased Premises, all the obligations of Tenant as tenant under the Lease during the Lease Term and shall abide by and adhere to all other terms, covenants and conditions of the Prime Lease. Nothing contained in this Agreement shall be construed as a guaranty by Tenant of any of the obligations, covenants, warranties, agreements or undertakings of the Landlord in the Prime Lease. Tenant covenants that it will keep, observe and perform on a timely basis all of its obligations and undertakings under the Prime Lease (exclusive of those pertaining to the Subleased Premises which are the responsibility of Subtenant hereunder after the sublease thereof to Subtenant and the completion of the transactions contemplated by the Transaction Documents).

(c) In the event of any breach by Subtenant of any term, covenant or condition of this Agreement, in addition to the rights and remedies provided in this Agreement, Tenant shall have all the rights against Subtenant as would be available to the Landlord against Tenant, as tenant, under the applicable Prime Lease if such breach were by Tenant thereunder, including the right to terminate the sublease under certain circumstances set forth in the Prime Lease, provided, however , Tenant shall first have given Subtenant notice and an opportunity to cure, if any, that is similar, but less by three (3) days, to that which the applicable Landlord would be obligated to provide Tenant under the applicable Prime Lease for such a default.

4. Term; Renewals; Termination .

(a) The term of the sublease granted herein with respect to each of the Subleased Premises shall be coextensive, less one day, with the Lease Term of the corresponding Prime Lease, unless sooner terminated or extended as provided herein. The parties hereto acknowledge that (i) with respect to the Limited Stores and the Express Stores, the Lease Term shall include renewal or extension options exercisable by Tenant (only if in fact such renewal or extension options are exercised) and that the exercise of any such option shall be determined by Tenant or Subtenant as hereinafter provided and (ii) with respect to Guaranteed Lease Stores, and except as provided below, the Lease Term shall not include renewal or extension options (or, if the Lease Term with respect to any Leased Premises is currently under a renewal or extension option, any additional renewal or extension options) available under the Prime Lease with respect to such Leased Premises, and Express agrees that Express shall have no right to exercise, or to cause Limited to exercise, any renewal or extension terms under the Prime Lease with respect to any such Guaranteed Lease Store (unless Limited is completely and unconditionally released from any and all liability under any Prime Lease and any guaranty in respect thereof or Express provides to Limited a letter of credit in form and amount satisfactory to Limited from a financial institution acceptable to Limited securing Limited from loss with respect


to any liability or guaranty obligation, in which event Express shall have the right to exercise, or cause Limited to exercise, any such renewal or extension terms). Subtenant shall indemnify Tenant and hold Tenant harmless against any and all claims by the applicable Landlord in the event Subtenant fails to vacate any Subleased Premises by the expiration date of the sublease term granted herein and the sublease term has not been validly renewed or extended.

(b) Subject to subsection (a)(ii) above, Tenant shall notify Subtenant no later than the 60th day prior to the deadline by which Tenant may exercise any renewal or extension option in respect of the Prime Lease if Tenant has determined not to exercise any such option, and Tenant shall first offer to assign the Prime Lease to Subtenant to the extent permitted under such Prime Lease or by the Landlord, or otherwise to cooperate with Subtenant to allow Subtenant, in its discretion, to exercise any such option with respect to the Leased Premises, so long as Tenant and its Affiliates have no responsibility or liability under the Prime Lease (or any Guaranty, as the case may be) after the expiration of the Lease Term (without giving effect to such renewal option). If Subtenant decides to, and is permitted to, assume the Prime Lease on such terms, then Subtenant shall assume responsibility for and pay any and all costs relating to such Leased Premises (including, without limitation, all liabilities and obligations under the Prime Lease as so extended). Subtenant acknowledges that in the event of any expiration of a Lease Term, this Agreement shall terminate with respect to the corresponding Prime Lease.

(c) Subject to subsection (a)(ii) above, if Tenant desires to renew or extend a Prime Lease, then Tenant shall notify Subtenant thereof no later than 60 days prior to the deadline by which Tenant may exercise any renewal or extension option in respect of the Prime Lease. Within 10 Business Days of Subtenant’s receiving such notice, Subtenant shall notify Tenant as to whether Subtenant wishes to remain in the Subleased Premises. If both parties have decided to renew or extend their respective lease arrangements, then, unless otherwise agreed, the parties shall each negotiate and enter into separate lease arrangements with the applicable Landlord with respect to each party’s respective premises. Any Store Separations (and the corresponding Store Separation Costs) shall be performed and paid for in accordance with Section 9 of this Agreement. Limited and Express agree that, except as set forth in subsection (a)(ii) above, neither Limited nor any Affiliate thereof shall be required to provide any guaranty or other assurance for any renewal or extension of any Prime Lease beyond the original Lease Term.

(d) Except as otherwise expressly provided in this Agreement, all rights of the “tenant” under a Prime Lease to terminate such Prime Lease, including, without limitation, any “kickout” or “cotenancy” rights or rights to terminate in the event of a casualty or condemnation or default by the Landlord (“ Termination Rights ”), shall belong exclusively to Tenant and may be exercised by Tenant in its sole and absolute discretion without liability to Subtenant; provided , (1) in the event the Limited Tenants occupy more than fifty percent (50%) of the sales area in an Express Store


and/or Guaranteed Lease Store, all such Termination Rights shall belong solely to the Limited Tenants as if they were the Tenant hereunder, (2) except as otherwise provided in Schedule 10 hereto, in the event that Express occupies more than fifty percent (50%) of the sales area in a Limited Store and/or fifty percent (50%) or more of the sales area in a Guaranteed Lease Store, all such Termination Rights shall belong solely to Express as if it were the Tenant hereunder; and (3) in the event that Tenant shall wish to exercise a Termination Right, Tenant shall promptly notify Subtenant of its intent to terminate a Prime Lease and shall first offer to assign the Prime Lease to Subtenant to the extent permitted under such Prime Lease or by the Landlord, so long as Tenant and its Affiliates have no responsibility or liability under the Prime Lease (or any Guaranty, as the case may be) after such assignment. Subtenant acknowledges that in the event of any such termination, this Agreement shall terminate with respect to the corresponding Prime Lease.

5. Utilities/Other Services .

(a) Except as otherwise specified herein, the only services, utilities or rights to which Subtenant is entitled under this Agreement with respect to the Subleased Premises are those to which the applicable Tenant is entitled from the Landlord under the applicable Prime Lease, and Tenant shall have no liability to Subtenant for the failure to provide such services, utilities or rights unless such failure is the result of some act or omission of Tenant under the Prime Lease or any subtenant, concessionaire or licensee of Tenant (other than Subtenant or any of its Affiliates), or its employees, agents, contractors or invitees. Tenant, however, covenants to cooperate fully with Subtenant to ensure that Subtenant shall receive the same level of all such services and utilities in the Subleased Premises in accordance with past business practices and operations at the subject store immediately prior to the Closing Date.

(b) If any utility services to the Leased Premises are not separately metered as between the Subleased Premises and the remainder of the Leased Premises, the accounts shall be in the name of Tenant, or the Landlord if required by the Prime Lease, and the payments to the utility companies or the Landlord, as the case may be, shall be shared pro rata by Subtenant, Tenant and any other occupant of the Leased Premises based on their respective Space Size Ratios, and without regard to consumption. Either party shall have the right to cause the utility services furnished to their respective premises to be separately metered or sub-metered, subject to applicable law and the obtaining of any necessary consent from the Landlord and provided that the party causing separate metering or sub-metering pays all costs and expenses related thereto and that the other party’s utility services are not thereby diminished. For so long as utility services in respect of the Subleased Premises are paid for by Landlord or Tenant, they shall be considered to be “monetary obligations” for purposes of Section 6 and invoiced and paid in accordance therewith.


6. Monetary Obligations Under the Prime Lease .

(a) With respect to the Leased Premises, except as specified in Section 7, and except with respect to Percentage Rent, all monetary obligations of Tenant (including, without limitation, base, fixed or minimum rent, common area maintenance charges, real estate taxes and assessments, insurance charges, waste removal, merchants association dues, marketing, advertising and other promotional fund contributions, utilities (if applicable), HVAC and chilled water charges, whether same are payable pursuant to the Prime Lease) shall be shared pro rata by Subtenant, Tenant and any other occupant of the Leased Premises in proportion to their respective Space Size Ratios. With respect to any Prime Lease which provides for payment of Excess Rent, the determination of whether any such Excess Rent is payable shall be made on a consolidated basis among Tenant, Subtenant and other occupant of the Leased Premises, and if any Excess Rent is due and owing to the Landlord, such Excess Rent shall be paid pro rata by Tenant, Subtenant and any other occupant of the Leased Prem


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