Exhibit 10.1


 


Lease


 


By and Between


 


PM Realty, LLC


 


a Nevada limited liability company,


 


and


 


Hard Rock Hotel, Inc.,


 


a Nevada corporation


 


 


and


 


 


Mr. Chow of Las Vegas, LLC


 


a Nevada limited liability company


 


i





















 


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 (60th)
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 (60th) 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 (210th) 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 (210th)
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 (4th) 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 (60th) 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 (61st)
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 (90th) 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 (90th) 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 (15th) 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


 


19





















 


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


 


20





















 


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


 


21





















 


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,


 


22





















 


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


 


23





















 


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 


 


24





















 


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


 


25





















 


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 obligation of Tenant.  Tenant
shall exercise its reasonable business judgment as to whether it shall employ
its own security personnel.  In no event
shall Landlord be liable to Tenant or any third-party for the security
department’s failure to respond to a request for aid or assistance by Tenant.


 


Section 8.4.                                                           Vending
Machines


 


Tenant
shall not, without Landlord’s prior written approval, operate or permit to be
operated on the Premises any coin or token operated vending machines or similar
device for the sale or leasing to the public of any goods, wares, merchandise,
food, beverages, and/or service including, without limitation, pay lockers, pay
toilets, scales and amusement devices; provided, that Tenant shall have the
right (i) to operate not more than two (2) public pay phones on the
Premises, and (ii) to operate such vending machines in the employee-only
areas of the Premises.


 


Section 8.5.                                                           Guest
Relations


 


A.                                   Tenant
acknowledges that the Hotel Complex is a first class hotel and that the
maintenance of Landlord’s and the Hotel Complex’s reputation and the goodwill
of all of Landlord’s guests and invitees is absolutely essential to Landlord
and that any impairment thereof whatsoever will cause great damage to
Landlord.  Tenant therefore shall operate
the Premises in accordance with the standards of honesty, integrity, quality
and courtesy so as to maintain the reputation and goodwill of Landlord and the
Hotel Complex.


 


B.                                     Tenant
shall permit guests of the Hotel/Casino and the Hotel/Condominium to charge
purchases from Tenant to their room account. 
Tenant shall be solely


 


26





















 


responsible for
ascertaining that any persons purporting to be guests of the Hotel/Casino or
the Hotel/Condominium are in fact guests. 
Tenant shall adhere to any and all procedures established by Landlord
for authorizing guest room charges. 
Landlord shall collect any charges by Tenant’s customers to their hotel
rooms. Tenant agrees to comply with all rules and regulations that
Landlord may, in its reasonable discretion, adopt from time to time to
facilitate charges to rooms and/or to minimize uncollected charges.  Tenant shall use Landlord’s point of sale
cash register or another compatible register, as the parties may mutually
agree, to record all guest charges.  If
Tenant follows all procedures established by Landlord for processing room
charges (to the extent such procedures, and all changes thereto, have been
provided to Tenant in writing) then Landlord shall assume the risk of
non-payment by hotel guests.  If Tenant
fails to follow Landlord’s procedures, then Tenant shall assume the risk of
nonpayment with regard to the charges by the hotel guests for whom such
procedures were not followed.


 


(i)                                     Landlord
shall cause to be prepared and delivered to Tenant a weekly accounting of all
charges to Hotel/Casino and the Hotel/Condominium guest accounts by Tenant’s
customers. Landlord shall pay to Tenant all charges to such guest accounts on
the second (2nd) business day after each such weekly accounting (except for
such charges that cannot be reconciled until such date that the guest checks
out, in which case Landlord shall include such charges in the weekly accounting
immediately following the date on which such guest checks out).  Landlord shall provide a weekly
reconciliation of payments made under this paragraph, and Landlord and Tenant
shall make any necessary adjustment payments due in connection with such
reconciliation.  If any customer account
was paid to Landlord by credit card, Landlord shall deduct from the amounts due
to Tenant such charges as the credit card company may assess against, or with
respect to, the account.


 


(ii)                                  Subject
to the provisions of this Section 8.5(B), Landlord agrees to assume the
risk of non-payment by Hotel/Casino and the Hotel/Condominium guests and to pay
Tenant the full amount charged by such guests to their room accounts (less any
deductions credit card companies assess against or with respect to the
accounts).  If a Hotel/Casino or Hotel/Condominium
guest charges purchases from Tenant to its room account and thereafter pays any
portion of its


 


27





















 


bill
but refuses to pay all or any portion of the charges of Tenant, then Landlord
shall assume the risk of non-payment and pay Tenant the full amount charged by
such guest to the room account.  Tenant
agrees to use its reasonable efforts to address any concerns or complaints
raised by Hotel/Casino and the Hotel/Condominium guests which such guests may
use as justification of a proposed non-payment of a charge by such guest at the
Premises.  If Landlord, in its reasonable
discretion, determines an excessive number of Hotel/Casino and the
Hotel/Condominium guests are refusing to pay the portion of the bill
attributable to charges of Tenant, then Landlord may, upon ten (10) days’
prior written notice, advise Tenant that Tenant shall no longer permit Hotel/Casino
and the Hotel/Condominium guests to charge purchases from Tenant to their room
accounts unless Landlord and Tenant thereafter establish additional procedures
and restrictions concerning processing and accepting room charges.


 


(iii)                               In the event Landlord
wrongfully fails to remit any funds due to Tenant pursuant to this section 8.5,
then Tenant shall have the right to offset any amount owed to Tenant against
the next rent(s) becoming due to Landlord, provided that Tenant shall first
have provided Landlord with ten (10) days’ prior written demand in which
to cure the delinquency.  Landlord
acknowledges that the amount of Hotel/Casino and the Hotel/Condominium guest
charges may be significant and the failure to remit the same to Tenant may
cause significant damages to Tenant.  In
light of the significant amounts which may be due to Tenant pursuant to the
provisions of this Section 8.5, Tenant shall have the right to bring legal
action against Landlord if Landlord fails to remit any funds due
hereunder.  In such action, Tenant shall
have the right to seek recovery of all amounts due, including reasonable
attorneys’ fees, together with interest thereon at the rate that would have
been charged to Tenant if Tenant were delinquent in paying amounts due under
this Lease, and Tenant shall further have the right to seek recovery of all
damages arising from Landlord’s failure to timely remit such funds to Tenant,
including all consequential and additional damages.  In the event Tenant, in its reasonable
discretion, determines that Landlord is refusing to pay charges payable to Tenant
pursuant to the provisions hereof, then Tenant may, upon ten (10) days’
prior written notice to Landlord, advise Landlord that Tenant


 


28





















 


shall
no longer permit Hotel/Casino and the Hotel/Condominium guests to charge
purchases from Tenant to their accounts.


 


C.                                     Landlord
may desire to provide designated persons with complimentary food and beverages
(“Complimentaries”) at the Premises. 
From time to time Landlord and Tenant shall develop procedures for
authorization of Complimentaries and for reimbursement by Landlord of ninety
percent (90%) of the full retail cost thereof. 
Any discounted payments to Tenant pursuant to the foregoing sentence
shall not be included in the computation of Gross Sales.  Landlord may, in its sole discretion, provide
Complimentaries to a guest of the Hotel/Casino or the Hotel/Condominium upon
such guest’s checking out of the Hotel/Casino or the Hotel/Condominium, as
applicable, for meals already charged to such guest’s room account.  Landlord shall pay one hundred percent (100%)
of all taxes applicable to such Complimentaries. The initial procedures for
authorization of Complimentaries and for reimbursement by Landlord shall be as
follows:  Landlord shall designate
persons who are entitled to receive Complimentaries either by (a) giving
Tenant reasonable advance notice of the person’s visit to the Premises (which
notice shall be given by employees authorized to do so in writing by Landlord
and shall set forth any limitations on Complimentaries to such person), or (b) with
regard to room charges, by giving Tenant written notice after the guest’s
visit, in which event Landlord and Tenant shall make the appropriate adjustment
to any room charge made by such person. 
Tenant shall cause to be prepared and delivered to Landlord a weekly
accounting of Complimentaries.  Upon
request, Tenant shall supply Landlord with such information as may be necessary
to calculate these amounts.  Landlord
shall pay to Tenant any amount required under this Section on or before
the fifth (5th) business day after Landlord’s receipt of weekly accounting
records.


 


D.                                    Landlord
acknowledges Tenant may desire to provide complimentary food or beverages or
both to selected patrons.  Tenant may
provide such complimentary food or beverages provided Tenant shall provide a
sales receipt or sales record in the same manner as any other charges at the
Premises in order to keep a record of the complimentary services provided by
Tenant.  In no event may such
complimentary services exceed two percent (2%) of Gross Sales per year.  Such complimentary services, as limited
herein, shall not be included in computation of Gross Sales.  Tenant shall keep sales records of such meals
and beverage service in the same manner as


 


29





















 


other sales and shall, on
a monthly basis, provide records of such complimentary services to
Landlord.  Such sales of food and
beverages shall not be included in the computation of Gross Sales.


 


Section 8.6.                                                           Storage


 


Tenant
shall store in the Premises only merchandise which Tenant intends to sell at,
in or from the Premises, within a reasonable time after receipt thereof.


 


Section 8.7.                                                           Painting,
Decorating, Displays, Alterations


 


Tenant
will not paint, decorate or change the architectural treatment of any part of
the exterior of the Premises nor make any structural alterations, additions or
changes in the Premises without Landlord’s written approval thereto, which
approval shall not be unreasonably withheld, conditioned or delayed.


 


Tenant
will install and maintain at all times the general appearance of displays in
the interior of the Premises which are visible from the exterior, including,
but not limited to, advertising matter, signs, merchandise and store fixtures,
which shall be maintained in keeping with the character and standards of the Mr. Chow
restaurant located in Los Angeles, California.


 


Section 8.8.                                                           Other
Operations


 


From
the full execution date of this Lease and continuing through the Lease Term and
Renewal Term, if any, Tenant shall be prohibited from operating another
restaurant under the Trade Name of “Mr. Chow” in the Clark County, Nevada
(the “Non-Compete Territory”).  After the
third (3rd) anniversary of the Rent Commencement Date, Tenant shall have the
right to open or operate other retail operations in the Non-Compete Territory,
including, without limitation, other restaurant operations under names other
than the Trade Name of “Mr. Chow” (for example, Tenant will have the right
after the third (3rd) anniversary of the Rent Commencement Date to operate
another restaurant under the name “Eurochow” within the Non-Compete Territory).  The provisions of the Section 8.8 shall
become null and void and shall be of no further force and effect on the
expiration or earlier termination of this Lease for any reason whatsoever.


 


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Section 8.9.                                                           Emissions
and Hazardous Materials


 


Tenant
shall not, without the prior written consent of Landlord, knowingly cause or
permit any Hazardous Material (hereinafter defined) to be brought or remain
upon, kept, used, discharged, leaked, or emitted in or about, or treated at the
Premises or the Hotel Complex, except for ordinary and customary types of
office and restaurant supplies and cleaning solutions in nominal quantities
typically used in the ordinary course of Tenant’s business and customarily used
in similar businesses or activities expressly permitted to be undertaken in the
Hotel Complex by Landlord provided that Tenant’s use and storage of such
products complies with all applicable laws and regulations.  As used in this Lease, “Hazardous Material(s)”
shall mean any hazardous, toxic or radioactive substance, material, matter or
waste which is or becomes regulated by any federal, state or local law,
ordinance, order, rule, regulation, code or any other governmental restriction
or requirement, and shall include asbestos, petroleum products and the terms “Hazardous
Substance” and “Hazardous Waste” as defined in the Comprehensive Environmental
Response, Compensation and Liability Act, as amended 42 U.S.C. § 9601 et
seq. (“CERCLA”), and the Resource Conservation and Liability Act, as
amended 42 U.S.C. § 9601 et  seq. (“RCRA”).  Tenant shall (i) report to any and all
applicable governmental authorities any release of reportable quantities of any
Hazardous Material(s) as required by any and all federal, state or local laws,
ordinances, orders, rules, regulations, codes or any other governmental
restrictions or requirements; (ii) within ten (10) days of receipt,
send to Landlord a copy of any notice, order, inspection report, or other
document issued by any governmental authority relevant to Tenant’s compliance
status with environmental or health and safety laws; and (iii) at the
termination of this Lease, remediate all Hazardous Materials introduced onto
the Premises by Tenant in accordance with applicable law.


 


In
addition to, and in no way limiting Tenant’s obligations as set forth in Section 11.6
of this Lease, should Tenant breach any of its duties and obligations as set
forth in this Section 8.9 of this Lease, or if any Hazardous Material(s)
introduced on the Premises by Tenant results in contamination of the Premises
or the Hotel Complex, Tenant shall indemnify, save harmless and defend
Landlord, and its contractors, agents, employees, partners, officers,
directors, and mortgagees, if any, from any and all claims, demands, damages,
expenses, fees, costs, fines, penalties, suits, proceedings, actions, causes of
action, and losses caused by or arising directly out of Tenant’s breach of its
obligations


 


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under this Section 8.9
or the presence of such Hazardous Materials introduced on the Premises by
Tenant.  Without limiting the foregoing,
if the presence of any Hazardous Material(s) on or about the Premises or the
Hotel Complex caused by Tenant results in any contamination of the Premises or
the Hotel Complex, Tenant shall, at its sole expense, promptly take all actions
to remediate such contamination as required by applicable law.


 


Landlord
represents and warrants to Tenant that as of the Delivery Date, the Premises
are free of any Hazardous Materials.  In
addition to, and in no way limiting Landlord’s obligations as set forth in Section 11.6
of this Lease, Landlord shall indemnify, save harmless and defend Tenant, and
its contractors, agents, employees, partners, officers, directors, and
mortgagees, if any, from any and all claims, demands, damages, expenses, fees,
costs, fines, penalties, suits, proceedings, actions, causes of action, and
losses caused by or arising directly out of the presence of any Hazardous
Materials at or emanating from the Premises and/or the Hotel Complex, which
Hazardous Materials were in existence prior to the Delivery Date.  Without limiting the foregoing, if any
Hazardous Material(s) exist on or about the Premises or the Hotel Complex as of
the Delivery Date, Landlord shall, at its sole expense, promptly take all
actions to remediate such contamination as required by applicable law.


 


Section 8.10.                                                     Sales
and Dignified Use


 


No
public or private auction or any fire, “going out of business,” bankruptcy or
similar sales or auctions shall be conducted in or from the Premises and the
Premises shall not be used in violation of national, state or local laws.


 


Section 8.11                                                        Gaming
Authorities


 


Tenant
acknowledges that Landlord and affiliates of Landlord are businesses that are
or may be subject to and exist because of privileged licenses issued by
governmental authorities relating to casino gaming (“Gaming Authorities”).  Tenant shall provide information reasonably
requested by Landlord’s compliance committee within five (5) business days
of Landlord’s written request.  If a
corporation, Tenant shall disclose the names of all officers and directors of
Tenant, and unless a publicly traded corporation on a national stock exchange,
Tenant shall disclose to Landlord all ownership interests in Tenant and all
lenders or sources of financing.  If
requested to do so by Landlord, Tenant


 


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shall obtain any license,
qualification, clearance or the like which shall be requested or required of
Tenant by any Gaming Authority or any regulatory authority having jurisdiction
over Landlord or any affiliate of Landlord. 
If Tenant fails to satisfy such requirement or if Landlord or any
affiliate of Landlord is directed to cease business with Tenant by any such
authority, or Tenant, or any of its officers, directors, employees, agents,
designees or representatives, or partner, owner, member, or shareholder, or any
lender or financial participant (a) is or might be engaged in, or is about
to be engaged in, any activity or activities, or (b) was or is involved in
any relationship, either of which could or does jeopardize Landlord’s business,
reputation or such licenses, or those of its affiliates, or if any such license
is threatened to be, or is, denied, curtailed, suspended or revoked, then
Tenant shall immediately (i) terminate any relationship with the
individual or entity which is the source of the problem, or (ii) cease the
activity creating the problem. If Tenant does not comply with item (i) or (ii) above,
then Landlord (x) may require Tenant to specifically perform such obligation
(the parties recognizing that damages or other remedies would be inadequate
under the circumstances) or (y) may terminate this Lease without liability to
either party; provided, however, if any matter described herein can be appealed
or is reasonably susceptible to cure, Tenant shall have a reasonable time
within which to make such appeal or effect such cure (but in no event longer
than the time available to fully comply with any requirement imposed by any
Gaming Authority or any other law) and Landlord shall not have the right to
terminate this Lease during such appeal or cure period unless required by the
Gaming Authorities.


 


Section 8.12.                                                     Tenant’s
Employees


 


A.                                   Tenant
shall staff the Premises with such number of Tenant’s employees as are
reasonably required for the proper and efficient operation thereof.


 


B.                                     Tenant
shall not cause or permit its employees to enter upon those areas of the Hotel Complex
which are designated “Employees Only” as the parties acknowledge that for the
purpose of this Section 8.12, “Employees” refers to the employees of
Landlord and not to the employees of Tenant. 
At Landlord’s request, Tenant’s employees shall obtain, at no cost to
Tenant, a name badge (“Badge”) from Landlord’s Human Resources Department prior
to working at the Premises.  If requested
by Landlord in writing, Tenant’s employees shall wear their Badge at all times
while in the Hotel


 


33





















 


Complex, excluding the
Premises unless employees of all other fine dining restaurants in the Hotel
Complex are also required to wear their Badge within such fine dining premises.


 


C.                                     Tenant
shall, in its sole discretion, fix the salary rate and provisions of employee
benefits of its employees and shall be responsible for all such salaries,
employee benefits, social security taxes, federal and state unemployment
insurance and any and all similar taxes relating to its employees and for
workers’ compensation coverage with respect thereto pursuant to applicable
law.  Tenant’s employees shall not be
entitled to participate in, or to receive, any of Landlord’s employee benefit
or welfare plans, and they shall not be deemed agents of Landlord for purposes
of this Lease.


 


D.                                    Landlord
represents and warrants to Tenant that as of the date hereof, the Hotel Complex
is not subject to any recognized labor union and that Landlord shall not
require Tenant to use any union labor in connection with the operations of
Tenant in the Premises.


 


Section 8.13.                                                     Entertainment
Zone


 


Tenant
acknowledges that the Premises is located in an entertainment zone within a
casino and that Landlord may, in its discretion, offer or provide, or allow
other persons to offer or provide, entertainment in the Hotel Complex outside
the Premises, but Landlord agrees to use reasonable efforts to prevent any such
entertainment being conducted near the Premises from materially and adversely
affecting Tenant’s use of the Premises as allowed herein.


 


Section 8.14.                                                     Landlord’s
Standard of Operations


 


Landlord
shall operate the Hotel Complex under the name “Hard Rock” and in a first-class
manner consistent with the operation of the existing Hotel/Casino.  Landlord acknowledges that the continuous
operation by Landlord of the Hotel Complex under the “Hard Rock” name and in
such first-class manner are material terms to this Lease for Tenant, and that
but for such agreement, Tenant would not have entered into this Lease.  As such, Tenant shall have the right to
terminate this Lease if the Hotel Complex is no longer operated under the name “Hard
Rock” or its operating standard falls below the standard referenced above.  Landlord shall provide Tenant with notice of
an anticipated change in the name of the Hotel Complex from “Hard Rock” to
another name not later


 


34





















 


than ninety (90) days of
the date on which such change actually occurs. 
Tenant shall give Landlord written notice of its election, if any, to
terminate this Lease within nine (9) months after Tenant’s receipt of such
written notice from Landlord.  In the
event the operating standard for the Hotel Complex falls below the standard
referenced above, Tenant may deliver a written notice to Landlord of Tenant’s
intent to terminate this Lease based upon such failure, and if Landlord fails
to raise the Hotel Complex standard to at least the standard referenced above
within thirty (30) days following the date of such notice from Tenant, Tenant
shall have the right to terminate this Lease upon delivering a termination
notice to Landlord at any time after the expiration of such 30-day period.  Landlord represents and warrants to Tenant
that Landlord has the legal right to operate the Hotel Complex under the “Hard
Rock” name, and Landlord shall indemnify and hold Tenant harmless from and
against any claims, losses or damages incurred by Tenant to the extent arising
from a breach of such representation and warranty.  All representations and warranties contained
herein regarding the use of the “Hard Rock” name or the operation of the
Hotel/Casino shall be deemed to be made only by HRH.


 


ARTICLE IX


MAINTENANCE OF PREMISES


 


Section 9.1.                                                           Maintenance
by Landlord


 


Landlord
shall, at no cost to Tenant, keep or cause to be kept the foundations, roof and
structural portions of the Premises, the exterior portions of the Premises
within the Common Area of the Hotel Complex, all grease traps and related
facilities serving the Premises, all exhaust ducts and make up air fans to the
extent located outside of the Premises, all utility systems to the extent
located outside of the Premises (regardless of whether such systems exclusively
serve the Premises), including, without limitation, the plumbing, electrical,
sewer, HVAC and water systems, and all Common Areas of the Hotel Complex in
good order, repair and condition; provided that to the extent the need for such
repair is attributable to the negligence or misconduct of Tenant, its agents or
employees, then subject to the waiver of subrogation provision set forth in Section 11.3
below, Tenant shall reimburse Landlord for the reasonable and actual cost
incurred by Landlord with respect to such repairs.  Landlord shall commence required repairs as
soon as reasonably practicable after receiving written notice from Tenant
thereof (but no later than five (5) days after such notice, or in the
event of an emergency, no later than twenty-


 


35





















 


four (24) hours after
such notice), and diligently pursue such repairs to completion.  Upon Landlord’s failure to make such repairs
following such notice and the expiration of such period, Tenant may (if such
failure has a material adverse effect on Tenant’s use of the Premises as
contemplated herein) upon five (5) days additional notice to Landlord make
such repairs on Landlord’s behalf and at Landlord’s expense, and Tenant may
deduct the cost of such repairs from its next installments of Percentage Rent
until reimbursed in full if Landlord shall fail to reimburse Tenant for such
costs within thirty (30) days following Tenant’s written demand therefor. As
used herein, “emergency” shall mean any event or condition causing or likely to
cause imminent (i) injury or damage to person or property, or (ii) interruption
of Tenant’s operations in the Premises. 
This Section 9.1 shall not apply in case of damage or destruction
by fire or other casualty or condemnation or eminent domain, in which events
the obligations of the parties shall be controlled by Article XVI and
XVII.


 


Section 9.2.                                                           Maintenance
by Tenant


 


Tenant
shall, at its expense, keep the interior, non-structural portions of the
Premises (including all entrances and vestibules), including all partitions,
window and window frames and moldings, glass, store fronts, doors, door
openers, fixtures, equipment, the exhaust ducts and make up air fans but only
to the extent located within the Premises, and the utility systems but only to
the extent located within the Premises (including plumbing, electrical, sewer,
HVAC and water systems), in good order, condition and repair; provided,
however, that to the extent the need for such repair is attributable to the
negligence or misconduct of Landlord, its agents or employees, then subject to
the waiver of subrogation provision set forth in Section 11.3 below,
Landlord shall, at its expense, perform such repairs.  This Section shall not apply in case of
damage or destruction by fire or other casualty or condemnation or eminent
domain, in which events the obligations of the parties shall be controlled by Article XVI
and XVII.


 


Section 9.3.                                                           Surrender
of Premises


 


At the
expiration or earlier termination of the Lease Term, Tenant shall surrender the
Premises in good and clean condition, reasonable wear and tear and damage by
unavoidable casualty excepted, and deliver all keys for, and all combinations
on locks, safes and vaults in, the Premises to Landlord at Landlord’s notice
address as specified in Section 24.


 


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ARTICLE X


SIGNS, AWNINGS, CANOPIES, FIXTURES, ALTERATIONS


 


Section 10.1.                                                     Tenant
Directories; Advertising


 


Landlord
shall include Tenant on any signs Landlord elects to erect in the Hotel Complex
showing the location of all restaurants within the Hotel Complex.  Landlord shall also include promotional
materials, including a representative menu, for Tenant’s restaurant in the
in-room directories and service guides in the hotel rooms.  Landlord agrees that it will provide, at a
minimum, levels and types of exposure for the Premises to its guests as it does
for other fine dining restaurants in the Hotel Complex and the Hotel Complex’s
promotional and check–in materials, room books, internal signage and other
internal marketing materials, web sites, directional signage, dining guides,
dining advertisements, Hotel Complex pamphlets, maps, concierge materials,
phone “on hold” messaging and Hotel Complex intercom messaging (parking garage,
walkways, etc.).  Tenant’s name on all
such signs and in such directories shall be no less prominent than that of any
other restaurant operator thereon or therein. 
Landlord shall also, at no cost to Tenant, prepare promotional videos
for the Hotel Complex’s in-room television system, and shall permit Tenant to
have a promotional spot on the in–room television systems in the Hotel Complex.
Tenant shall not be charged for running such promotional spot.  All promotional materials described herein
shall be approved in advance by Tenant, and to the extent Tenant approves any
such promotional material, Tenant shall be deemed to have granted Landlord a
revocable license to utilize Tenant’s trademarks and service marks in
connection with such approved promotional material.  Landlord and Tenant shall cooperate in good
faith in preparing the design and content for all such advertising and
promotional materials, and Tenant shall, upon Landlord’s request, provide
Landlord with information and logos, in a form appropriate for the intended
advertising medium (i.e. in-room directories, phone “on hold” messaging, etc.)
for Landlord’s use in developing and preparing such advertising and promotional
materials.


 


Section 10.2.                                                     Removal
and Restoration by Tenant


 


Tenant
shall make no exterior or structural alterations, changes, additions or
improvements without obtaining Landlord’s prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed.  All alterations, changes and additions


 


37





















 


and all improvements,
including leasehold improvements, made by Tenant, or made by Landlord on Tenant’s
behalf, whether or not paid for wholly or in part by Landlord, shall be leased
to Tenant for the Lease Term.  Any
alterations, changes, additions and improvements shall immediately, upon the
termination of this Lease, no longer be leased to Tenant, be considered part of
the Premises, and not be removed at or prior to the end of the Lease Term without
Landlord’s written consent.  Tenant shall
have the right, without the prior consent of Landlord, to make interior,
non-structural alterations, changes, additions and improvements to the
Premises.


 


Section 10.3.                                                     Tenant’s
Liens


 


A.  Tenant acknowledges that Landlord is the
Owner of the Hotel Complex and the Premises and that Tenant neither has, nor at
anytime hereunder will have, any fee ownership interest in the Hotel Complex or
the Premises.  Tenant shall not suffer
any mechanics’ or materialmen’s lien to be filed against the Premises or the
Hotel Complex by reason of work, labor, services or materials performed or
furnished to Tenant or anyone holding any part of the Premises under
Tenant.  If any such lien shall at any
time be filed as aforesaid, Tenant may contest the same in good faith, but,
notwithstanding such contest, Tenant shall, within thirty (30) days after the
filing thereof, cause such lien to be released of record by payment, bond,
order of a court of competent jurisdiction, or otherwise in a manner
satisfactory to Landlord and its mortgagee. 
In the event of Tenant’s failure to release of record any such lien
within the aforesaid period, Landlord may remove said lien by paying the full
amount thereof or by bonding, and Tenant, upon demand, shall pay Landlord the
amount so paid out by Landlord in connection with the discharge of said lien,
which amount shall be due and payable in full to Landlord as additional rent on
the first day of the next following month. 
Nothing contained in this Lease shall be construed as a consent on the
part of Landlord to subject Landlord’s estate in the Premises to any lien or
liability under the lien laws of the State of Nevada.  Tenant’s obligation to observe and perform
any of the provisions of this Section 10.3 shall survive the expiration of
the Lease Term or the earlier termination of this Lease. Landlord shall have
the right to record, post and maintain on the Premises any notices of
non-responsibility provided for under applicable law.


 


B.                                     Tenant
shall not create or suffer to be created a security interest or other lien
against any improvements, additions or other construction made by Tenant in or
to


 


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the Premises (other than
a purchase money security interest in favor of a lender and relative to Tenant’s
trade fixtures, equipment or furniture), and should any security interest be
created in breach of the foregoing, Landlord shall be entitled to discharge the
same by exercising the rights and remedies afforded it under paragraph A of
this section.


 


Section 10.4.                                                     Signs,
Awnings and Canopies


 


Tenant
shall have the right to install signage on the exterior of the Premises,
including the right to install its name sign on the exterior façade and all
entrances to the Premises, in such locations and of such size and design as
shall be permitted by law and as approved by Landlord, which approval shall not
be unreasonably withheld, conditioned or delayed.  Landlord shall not have the right to
disapprove the design of any signage which consists of the prototypical or
classic “Mr. Chow” signage.  Landlord
shall respond to any such signage submittal by Tenant within twenty (20) days
after submittal thereof, and Landlord’s failure to respond within such twenty
(20) day period shall be deemed Landlord’s consent thereto.  Notwithstanding the foregoing, Landlord
acknowledges and agrees that Tenant shall, at a minimum, be entitled to install
such exterior signage at levels, sizes and types not less prominent than the
exterior signs for other fine dining restaurants in the Hotel Complex.  Tenant shall be entitled to place signs or
other advertising material in the interior of the Premises without Landlord’s
consent.


 


ARTICLE XI


INSURANCE


 


Section 11.1.                                                     By
Landlord


 


Landlord
covenants and agrees that from and after the Delivery Date, and during the Term
of this Lease, Landlord will carry and maintain, with regard to the Hotel
Complex, the following types of insurance, in the amounts specified and in the
form hereinafter provided, with insurance companies authorized to do business
in the state in which the Premises is located and rated A-/VIII or better in
the most current edition of Best’s Insurance Report:


 


A.                                   Landlord
shall keep and maintain in full force and effect commercial general liability
insurance in an amount not less than $2,000,000, adjusted annually for
inflation,


 


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written on a combined
single limit per occurrence basis for property damage and personal and bodily
injury or death of one or more persons.


 


B.                                     Landlord
shall, at all times, keep and maintain in full force and effect all risk
policy(s) of insurance, including coverage for sprinkler damage, vandalism and
malicious mischief, covering the roof, demising walls, structural portions and
perimeter walls of the Hotel Complex and equipment (excluding Tenant’s personal
property, furniture, fixtures, and equipment) in an amount not less than full
replacement cost (exclusive of the cost of excavations, foundations and footings)
updated from time to time during the Term of this Lease or the amount of such
insurance which Landlord’s mortgage lender may require Landlord to maintain,
whichever is the greater.


 


C.                                     Landlord
may maintain any of its required insurance under blanket policies of insurance
covering the Premises and any other premises of Landlord or companies
affiliated with Landlord, provided that the coverage afforded will not be
reduced or diminished by reason of the use of such blanket policy of insurance.


 


Section 11.2.                                                     By
Tenant


 


Tenant
covenants and agrees that from and after the Delivery Date, and during the Term
of this Lease, Tenant will carry and maintain, at its sole cost and expense,
the following types of insurance, naming as insureds Tenant, Landlord, Landlord’s
lenders (to the extent Landlord notifies Tenant of the identities of such
lenders in writing) and other parties with an insurable interest as designated
by Landlord, in the amount specified and in the form hereinafter provided for
with insurance companies authorized to do business in the state in which the
Premises is located and rated A-/VIII or better in the most current edition of
Best’s Insurance Report.


 


A.                                   Tenant
shall keep in full force and effect commercial general liability insurance,
which shall include broad form property damage liability coverage, extended
bodily injury coverage, advertising injury liability coverage, contractual
liability coverage and independent contractors coverage, in the amount not less
than two million dollars ($2,000,000.00), adjusted annually for inflation,
written on a combined single limit per occurrence basis for property damage,
personal injury and bodily injury or death of one or more persons.


 


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B.                                     If
Tenant sells, serves or furnishes alcoholic beverages in the ordinary course of
its business at the Premises, then Tenant shall maintain and keep in full force
and effect throughout the Term of this Lease, Liquor Liability Insurance in an
amount not less than $1,000,000 written on a combined single limit per
occurrence basis.


 


C.                                     Tenant
shall at all times during the Term hereof maintain in full force and effect a
policy(s) of all risk insurance including coverage for sprinkler damage,
vandalism and malicious mischief, covering all Tenant personal property,
including alterations, improvements and betterments to the Premises now
existing or to be added, to the extent of their full replacement costs as
updated from time to time during the Term of this Lease.  Tenant shall maintain a policy covering such
items of personal property that were purchased by Tenant with funds from the
Construction Allowance (the “Allowance Policy”), and a separate policy covering
all such other items of personal property (the “Non-Allowance Policy”).  Landlord shall be the named loss payee under
the Allowance Policy, and Tenant shall be the named loss payee under the
Non-Allowance Policy.


 


D.                                    Tenant
may maintain any of its required insurance coverages under blanket policies of
insurance covering said Premises and any other premises of Tenant, or companies
affiliated with Tenant, provided that the coverage afforded will not be reduced
or diminished by reason of the use of such blanket policy.


 


Section 11.3.                                                     Mutual
Waiver of Subrogation Rights


 


Landlord
and Tenant and all parties claiming under them mutually release and discharge
each other from all claims and liabilities arising from or caused by any
casualty or hazard covered or required hereunder to be covered in whole or in
part by insurance on the Premises or in connection with property on or
activities conducted on the Premises to the extent of such insurance coverage
or required coverage, and waive any right of subrogation which might otherwise
exist in or accrue to any person on account thereof to the extent of such
insurance coverage or required coverage and evidence such waiver by endorsement
to the required insurance policies, provided that such release shall not
operate in any case where the effect is to invalidate or increase the cost of such
insurance coverage (provided, that in the case of increased cost, the other
party shall


 


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have the right, within
thirty (30) days following written notice, to pay such increased cost, thereby
keeping such release and waiver in full force and effect).


 


Section 11.4.                                                     Indemnification.


 


A.                                   Subject
to Section 11.3 above, and except for Landlord’s negligence and
intentional acts and omissions, Tenant covenants and agrees to indemnify and
save and hold harmless Landlord, its parent, subsidiaries and affiliates, and
their officers, directors, shareholders and employees, from and against any and
all claims and demands for damages to persons or property or for loss of life,
including but not limited to any and all claims or demands against Tenant and
all loss, cost, damages, charges, fines, penalties, causes of action, suits and
judgments, including reasonable legal expenses in connection with defending any
such action arising from any matter or thing growing out of Tenant’s occupation
or use of the Premises and/or in connection with Tenant’s obligations hereunder
including, but not limited to, the sale of alcoholic beverages from the
Premises.


 


B.                                     Subject
to Section 11.3 above, and except for Tenant’s negligence and intentional
acts and omissions, Landlord covenants and agrees to indemnify and save and
hold harmless Tenant, its parent, subsidiaries and affiliates, and their
officers, directors, shareholders and employees, from and against any and all
claims and demands for damages to persons or property or for loss of life,
including but not limited to any and all claims or demands against Landlord and
all loss, cost, damages, charges, fines, penalties, causes of action, suits and
judgments, including reasonable legal expenses in connection with defending any
such action arising from any matter or thing concerning or growing out of the
occupation or use of any portion of the Hotel Complex prior to the Delivery
Date and/or in connection with Landlord’s obligations hereunder, including, but
not limited to, the performance of Landlord’s Work


 


ARTICLE XII


ESTOPPEL CERTIFICATE, ATTORNMENT, SUBORDINATION


 


Section 12.1.                                                     Estoppel
Certificate


 


Upon
the written request of either party (the “Requesting Party”), the other party
(the “Responding Party”) shall, within twenty (20) days following the written
request of the Requesting Party, deliver a executed written statement
certifying: (a) the commencement


 


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and termination dates; (b) that
this Lease is in full force and effect and has not been assigned, modified,
supplemented or amended (except by such writings as shall be stated), (c) that
all conditions under this Lease to be performed by the Requesting Party have
been satisfied (stating exceptions, if any), (d) that no defenses or
offsets against the enforcement of this Lease by the Requesting Party exist (or
stating those claimed); (e) as to advance rent, if any, paid by Tenant, (f) the
date to which rent has been paid, (g) as to the amount of security
deposited with Landlord, and (h) such other factual information as the
Requesting Party reasonably requires. 
Persons receiving such statements shall be entitled to rely upon them.


 


Section 12.2.                                                     Subordination


 


This
Lease and the estate of Tenant hereunder shall be subject and subordinate to
any ground lease, deed of trust, or mortgage lien which now encumber or which
at any time hereafter may encumber the Premises (such ground lease, deed of
trust or mortgage lien, and any replacement, renewal, modification,
consolidation or extension thereof being hereinafter referred to as an “Encumbrance”).  Any Encumbrance shall be prior and paramount
to this Lease and to the right of Tenant hereunder and all persons claiming
through and under Tenant, or otherwise, in the Premises.  Tenant’s acknowledgment and agreement of
subordination provided for in this Section 12.2 shall be self-operative
and no further instrument of subordination shall be required.  However, Tenant, on Tenant’s behalf, and on
behalf of all persons claiming through and under Tenant, covenants and agrees
that, from time to time at the request of Landlord or the holder of any
Encumbrance, Tenant will execute and deliver any necessary or proper
instruments or certificates reasonably necessary to acknowledge or confirm the
priority of the Encumbrance over this Lease and the subordination of this Lease
thereto or to evidence Tenant’s consent to any Encumbrance.  Notwithstanding the foregoing, any holder of
an Encumbrance may elect to the extent possible that this Lease shall have
priority over such Encumbrance and, upon notification of such election by the
holder of such Encumbrance, this Lease shall be deemed to have priority over
such Encumbrance, whether this Lease is dated prior to or subsequent to the
date of such Encumbrance. 
Notwithstanding the foregoing, the subordination of this Lease to any
Encumbrance under this Section 12.2 shall only be effective if the holder
of such Encumbrance (a “Superior Mortgagee”) executes and delivers to Tenant a
non-disturbance agreement, the form of which shall be (a) the Superior
Mortgagee’s standard form if the Superior Mortgagee is an


 


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institution, or (b) a
commercially reasonable form if the Superior Mortgagee is not an
institution.  Tenant shall execute and
deliver to any Superior Mortgagee any such non-disturbance agreement requested
by such Superior Mortgagee within twenty (20) days of such Superior Mortgagee’s
request therefor.


 


Section 12.3.                                                     Attornment


 


Tenant
agrees that if the holder of any Encumbrance or any person claiming under said
Encumbrance shall succeed to the interest of Landlord in this Lease, Tenant
shall recognize and attorn to said holder as Landlord under the terms of this
Lease. Tenant agrees that it will, upon the request of Landlord, execute,
acknowledge and deliver any and all instruments necessary or reasonably
requested by Landlord or its lender to give effect or notice of such attornment
and failure of Tenant to execute any such document or instrument on demand
shall constitute a default by Tenant under the terms of this Lease.


 


ARTICLE XIII


ASSIGNMENT, SUBLETTING AND CONCESSIONS


 


Section 13.1.                                                     Consent
Required


 


Except
as expressly provided in Section 13.2 of this Lease, Tenant shall not
mortgage, pledge, encumber, franchise, assign or in any manner transfer this
Lease, voluntarily or involuntarily, by operation of law or otherwise, nor
sublet all or any part of the Premises for the conduct of any business by any
third person or business entity, or for any purpose other than is herein
authorized without Landlord’s prior written consent, which shall not be unreasonably
withheld or delayed by Landlord. 
Landlord shall approve or disapprove any proposed assignment or
subletting within twenty (20) days after Tenant’s request for the same.  If Landlord disapproves any proposed
assignment or subletting, Landlord shall inform Tenant of the specific reasons
for such disapproval upon Tenant’s request. 
Any consent by Landlord to any assignment or subletting, or other
operation by a concessionaire, or licensee, shall not constitute a waiver of
the necessity for such consent under any subsequent assignment or subletting or
operation by a concessionaire or licensee.


 


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Section 13.2.                                                     Consent
not Required


 


Notwithstanding
anything to the contrary contained in this Lease, Tenant shall have the right
to assign this Lease or sublet the Premises to a parent, subsidiary or other
affiliate of Tenant without Landlord’s consent but with notice to
Landlord.  As used herein, “affiliate”
shall mean a person or entity which controls, is controlled by or is under
common control with Tenant. In addition and notwithstanding the foregoing, so
long as no default then exists under this Lease, Tenant may assign this Lease,
without Landlord’s consent but with notice to Landlord (A) in connection
with a merger, consolidation, reorganization, restructuring or sale of Tenant
or Tenant’s parent company or of all or substantially all of the assets of
Tenant or Tenant’s parent company, or (B) in connection with the sale of
Tenant’s restaurant business at the Premises, provided that the following
requirements are met: (i) the sale of Tenant’s restaurant business at the
Premises is made together with the sale of two (2) or more of Tenant’s or
its affiliates’ restaurant businesses at other locations, (ii) the net
worth of the purchasing entity is not less than Three Million Dollars
($3,000,000.00) at the time of the proposed transfer, (iii) the purchasing
entity has at least three (3) years’ experience in operating other
first-class restaurants comparable to that of Tenant’s restaurant operations at
the Premises, (iv) the purchasing entity shall have an ongoing obligation
to operate the Premises in a first-class manner consistent with the operation
of the Premises prior to such transfer throughout the remainder of the Term and
(v) the purchasing entity satisfies the requirements of Section 8.11
above.  Any assignee of this Lease shall
expressly assume the obligations of Tenant under this Lease.  Furthermore, notwithstanding anything
contained in this Lease to the contrary, (a) any sale or issuance of
Tenant’s stock in connection with a private or public offering, or (b) any
transfer of the outstanding voting stock of Tenant registered under applicable
securities laws which are traded on a recognized national securities exchange
or over-the-counter shall not require Landlord’s consent, notwithstanding that
any such sale, issuance or transfer may result in a change of voting control of
Tenant.  Notwithstanding any assignment
or subletting pursuant to this Section, Tenant shall remain fully liable on
this Lease and for the performance of all terms, covenants and provisions of
this Lease.


 


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ARTICLE XIV


PROMOTION OF HOTEL COMPLEX


 


Tenant
shall refer to the Hotel Complex under the name “Hard Rock Hotel and Casino”
(the “Hotel Name”), or such other names as Landlord may designate from time to
time in writing, in designating the location of the Premises in all newspaper
and other advertising of the Premises and in all other references to the
location of the Premises.  Tenant
acknowledges Landlord’s proprietary rights in and to the Hotel Name and other
intellectual property right’s of the “Hard Rock” logo.  In that regard, Landlord shall have the right
to prohibit any advertising, promotion or display by Tenant utilizing Landlord’s
Hotel Name or logo which, in Landlord’s sole opinion, impairs or would tend to
impair the reputation of Landlord.  Prior
to utilizing Landlord’s Hotel Name or logo on any advertising by Tenant, Tenant
shall submit to Landlord for written approval a tangible specimen of
advertising material proposed to be utilized by Tenant.  Landlord shall either approve or disapprove of
such usage within twenty (20) days of such submission.  Landlord’s failure to disapprove within such
twenty (20) day period shall be deemed approval.  In the event Tenant utilizes the Hotel Name
or the “Hard Rock” logo in violation of this paragraph, then Landlord shall
have the right to seek an injunction to cease such violation.  The rights granted to Tenant pursuant to this Section 14
shall terminate upon the expiration of the Lease Term or the earlier
termination for breach of this Lease or Landlord’s cessation of the use of the
Hotel Name or termination of Landlord’s right to use the Hotel Name.  The rights granted herein shall not be
assigned or sublicensed to any third party, other than in accordance with the
provisions of this Section 14 or to the assignee or sublessee of Tenant’s
interest in this Lease pursuant to a permitted assignment or sublease.


 


ARTICLE XV


DAMAGE AND DESTRUCTION


 


If the
Premises are hereafter damaged or destroyed or rendered partially untenantable
for their accustomed use by fire or other casualty insured under the coverage
which Landlord is obligated to carry pursuant to Section 11.1 hereof,
Landlord shall promptly repair the same to substantially the condition which
they were in immediately prior to the happening of such casualty (excluding
stock in trade) provided, however, that Landlord shall not be obligated to
repair and restore if such casualty is not


 


46





















 


covered by the insurance
which Landlord is obligated to carry pursuant to Section 11.1 hereof, and
provided, further, that Landlord shall not be obligated to expend for any
repair or restoration an amount in excess of the insurance proceeds recovered
therefore, and provided, further, that if the Premises be damaged, destroyed or
rendered untenantable for their accustomed uses by fire or other casualty to
the extent of more than fifty percent (50%) of the cost to replace the Premises
during the last three (3) years of the Lease Term, then either Landlord or
Tenant shall have the right to terminate this Lease effective as of the date of
such casualty by giving to the other party written notice of such termination
within sixty (60) days after the occurrence of such casualty; provided,
however, that if Landlord elects to terminate this Lease and Tenant then has
any remaining Renewal Terms, Tenant may nullify Landlord’s termination by
delivering written notice to Landlord within ten (10) days after receipt
of Landlord’s termination notice that Tenant elects to exercise such Renewal
Term, in which case this Lease shall continue in full force and effect and Landlord
shall repair and restore the Premises as set forth herein.  If this Lease shall terminate, Landlord shall
promptly repay to Tenant any rent theretofore paid in advance which was not
earned at the date of such casualty.  In
each instance that Landlord repairs or restores the Premises after damage or
destruction, Landlord shall promptly repair or replace the fixtures,
furnishings, furniture, leasehold improvements, carpeting, wall covering, floor
covering, drapes, ceiling and equipment to the same condition as they were in
immediately prior to the casualty, and if Tenant has closed its store, Tenant
shall promptly open for business upon the completion of such repairs.  Should Landlord not repair the Premises to
substantially the condition which they were in immediately prior to the
casualty, as herein above described, within one hundred eighty (180) days
following the date of the casualty, Tenant shall have the right to: (i) terminate
this Lease upon written notice to Landlord delivered at any time prior to
Landlord’s completion of all such repairs, or (ii) upon written notice to
Landlord, complete such repairs on Landlord’s behalf and at Landlord’s expense,
and Tenant may deduct the cost of such repairs from its next installments of
Rent until reimbursed in full if Landlord shall fail to reimburse Tenant for
such costs within thirty (30) days following Tenant’s written demand therefor.


 


Notwithstanding
anything to the contrary set forth herein, in the event all or any portion of
the Hotel/Casino and the Hotel/Condominium shall be damaged or destroyed by
fire or other cause (notwithstanding that the Premises may be unaffected
thereby), to


 


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the extent the cost of
restoration thereof would exceed thirty percent (30%) of the amount it would
have cost to replace the Hotel/Casino and the Hotel/Condominium in its entirety
at the time such damage or destruction occurred, then Landlord may terminate
this Lease by giving Tenant thirty (30) days prior notice to Landlord’s
election to do so, which notice shall be given, if at all, within ninety (90)
days following the date of such occurrence. 
In the event of the termination of this Lease as aforesaid, this Lease
shall cease thirty (30) days after such notice is given, and the rent and other
charges hereunder shall be adjusted as of that date.


 


ARTICLE XVI


EMINENT DOMAIN


 


Section 16.1.                                                     Condemnation


 


If ten
percent (10%) or more of the floor area of the Premises or fifteen percent
(15%) or more of the Hotel/Casino and the Hotel/Condominium shall be acquired
or condemned by right of eminent domain for any public or quasi public use or
purpose, then either Landlord or Tenant may terminate this Lease by giving
notice to the other party of its election. 
If the Lease shall not be terminated as aforesaid, then it shall
continue in full force and effect, and Landlord shall, at Landlord’s expense,
within a reasonable time after possession is physically taken (subject to
delays due to shortage of labor, materials or equipment, labor difficulties,
breakdown of equipment, government restrictions, fires, other casualties or
other causes beyond the reasonable control of Landlord) repair or rebuild what
remains of the Premises for Tenant’s occupancy. 
To the extent such repairs physically affect the Premises, Landlord
shall submit plans and specifications for such repairs to Tenant for Tenant’s
prior approval.


 


Section 16.2.                                                     Damages


 


Landlord
reserves, and Tenant assigns to Landlord, all rights to damages on account of
any taking or condemnation or any act of any public or quasi public authority
for which damages are payable.  Tenant
shall execute such instruments of assignment as Landlord requires, join with
Landlord in any action for the recovery of damages, if requested by Landlord,
and turn over to Landlord any damages recovered in any proceeding.  If Tenant fails to execute instruments
required by Landlord, or undertake such other steps as requested, Landlord
shall be deemed the duly authorized irrevocable


 


48





















 


agent and
attorney-in-fact of Tenant to execute such instruments and undertake such steps
on behalf of Tenant.  Notwithstanding the
foregoing, Landlord does not reserve, and Tenant shall have the right to claim,
such compensation as may be separately awarded or allocated by reason of (i) trade
fixtures and equipment installed by Tenant at its own cost, and (ii) the
cost or loss to which Tenant might be incurred in removing Tenant’s
merchandise, fixtures, leasehold improvements and equipment.


 


ARTICLE XVII


DEFAULT BY TENANT


 


Section 17.1.                                                     Right
to Re-Enter


 


The
following shall be considered for all purposes to be defaults under and
breaches of this Lease:  (a) any
failure of Tenant to pay any rent or other amount due hereunder within ten (10) days
after written notice of such failure; (b) any failure by Tenant to perform
or observe any other of the terms, provisions, conditions and covenants of this
Lease for more than thirty (30) days after written notice of such failure,
excepting such defaults that cannot be cured completely within such thirty (30)
day period providing Tenant, within said thirty (30) day period, has promptly
commenced to proceed with diligence and in good faith to remedy such default;
or (c) the bankruptcy or insolvency of Tenant or the filing by or against
Tenant of a petition in bankruptcy or for reorganization or arrangement or for
the appointment of a receiver or trustee of all or a portion of Tenant’s
property, or Tenant’s assignment for the benefit of creditors.  In the event of a default which is not cured
by Tenant within the applicable cure period, Landlord, in addition to all other
rights or remedies it may have, shall have the right thereupon or at any time
thereafter to terminate this Lease, and shall have the right, after any such
termination, to re-enter and take possession of the Premises, remove all
persons and property from the Premises, store such property at Tenant’s
expense, and sell such property if necessary to satisfy any deficiency in
payments by Tenant as required hereunder, all without being deemed guilty of
trespass or constructive eviction.  In
the event that Tenant fails to pay any rent or other amount due hereunder
within ten (10) days after written notice of such failure from Landlord
more than three (3) times in any consecutive twelve (12) month period,
then, commencing with the fourth (4th) such non-payment by Tenant,
Tenant shall pay Landlord a late charge equal to five percent (5%) of the
delinquent amount.


 


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Section 17.2.                                                     Right
to Relet


 


If
Landlord re-enters the Premises as above provided, or if it takes possession
pursuant to legal proceedings or otherwise, it may either terminate this Lease
or it may, from time to time, without terminating this Lease, make such
alterations and repairs as it deems advisable to relet the Premises, and relet
the Premises or any part thereof for such term or terms (which may extend
beyond the Lease Term) and at such rentals and upon such other terms and conditions
as Landlord in its sole discretion deems advisable; upon each such reletting
all rentals received by Landlord therefrom shall be applied, first, to any
indebtedness other than rent due hereunder from Tenant to Landlord; second, to
pay any costs and expenses of reletting, including without limitation, brokers
and attorneys’ fees and costs of advertising, alterations and repairs; third,
to rent due hereunder, and the residue, if any, shall be held by Landlord and
applied in payment of future rent as it becomes due hereunder.


 


If
rentals received from such reletting during any month are less than that to be
paid during that month by Tenant hereunder, Tenant shall immediately pay any
such deficiency to Landlord.  No re-entry
or taking possession of the Premises by Landlord shall be construed as an
election to terminate this Lease unless a written notice of such termination is
given by Landlord.


 


Notwithstanding
any such reletting without termination, Landlord may at any time thereafter
terminate this Lease for any prior breach or default.  If Landlord terminates this Lease for any
breach, or otherwise takes any action on account of Tenant’s breach or default
hereunder, in addition to any other remedies it may have, it may recover from
Tenant all damages incurred by reason of such breach or default, including
reasonable attorney’s fees at the trial and appellate levels, all costs of
retaking the Premises and including the excess, if any, of the total rent and
charges reserved in this Lease for the remainder of the Lease Term, all of
which shall be immediately due and payable by Tenant to Landlord.


 


In
determining the rent payable by Tenant hereunder subsequent to default, the
Percentage Rent for each year of the unexpired portion of the Lease Term shall
equal the average Percentage Rent which Tenant was obligated to pay from the
commencement of


 


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the Lease Term to the
time of default, or during the three (3) full calendar years, whichever is
shorter.


 


Section 17.3.                                                     Bankruptcy


 


A.                                   Assumption
of Lease.  In the event Tenant shall
become a Debtor under Chapter 7 of the Bankruptcy Code (“Code”) or a petition
for reorganization or adjustment of debts is filed concerning Tenant under
Chapters 11 or 13 of the Code, or a proceeding is filed under Chapter 7 and is
transferred to Chapters 11 or 13, the Trustee or Tenant, as Debtor and as
Debtor-In-Possession, may not elect to assume this Lease unless, at the time of
such assumption, the Trustee or Tenant has:


 


(i)                                     Cured
or provided Landlord “Adequate Assurance” (as defined below) that:


 


(a)                                  Within
ten (10) days from the date of such assumption the Trustee or Tenant will
cure all monetary defaults under this Lease and compensate Landlord for any
actual pecuniary loss resulting from any existing default, including without
limitation, Landlord’s reasonable costs, expenses, accrued interest at twelve
percent (12%) per annum, and attorneys’ fees incurred as a result of the
default;


 


(b)                                 Within
thirty (30) days from the date of such assumption the Trustee or Tenant will
cure all non-monetary defaults under this Lease; and


 


(c)                                  The
assumption will be subject to all of the provisions of this Lease.


 


(ii)                                  For
purposes of this Section 17.6, Landlord and Tenant acknowledge that, in
the context of a bankruptcy proceeding of Tenant, at a minimum “Adequate
Assurance” shall mean:


 


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(a)                                  The
Trustee or Tenant has and will continue to have sufficient unencumbered assets
after the payment of all secured obligations and administrative expenses to
assure Landlord that the Trustee or Tenant will have sufficient funds to
fulfill the obligations of Tenant under this Lease, and to keep the Premises
stocked with merchandise and properly staffed with sufficient employees to
conduct a fully operational, actively promoted business in the Premises; and


 


(b)                                 The
Bankruptcy Court shall have entered an Order segregating sufficient cash
payable to Landlord and/or the Trustee or Tenant shall have granted a valid and
perfected first lien and security interest and/or mortgage in property of
Trustee or Tenant acceptable as to value and kind to Landlord, to secure to
Landlord the obligation of the Trustee or Tenant to cure the monetary and/or
non-monetary defaults under this Lease within the time periods set forth above;
and


 


(c)                                  The
Trustee or Tenant at the very least shall deposit a sum,  equal to one (1) month’s rent to be held
by Landlord (without any allowance for interest thereon) to secure Tenant’s
future performance under the Lease.


 


B.                                     Assignment
of Lease.  If the Trustee or Tenant
has assumed the Lease pursuant to the provisions of this Section 17.6 for
the purpose of assigning Tenant’s interest hereunder to any other person or
entity, such interest may be assigned only after the Trustee, Tenant or the
proposed assignee have complied with all of the terms, covenants and conditions
of Section 13.1 herein, including, without limitation, those with respect
to additional rent and the use of the Premises only as permitted in Article VIII
herein; Landlord and Tenant acknowledging that such terms, covenants and
conditions are commercially reasonable in the context of a bankruptcy
proceeding of Tenant.  Any person or
entity to which this Lease is assigned pursuant to the provisions of the Code
shall be deemed without further act or deed to have assumed all of the
obligations arising


 


52





















 


under this Lease on and
after the date of such assignment.  Any
such assignee shall upon request execute and deliver to Landlord an instrument
confirming such assignment.


 


C.                                     Adequate
Protection.  Upon the filing of a
petition by or against Tenant under the Code, Tenant, as Debtor and as
Debtor-in-Possession, and any Trustee who may be appointed agree to adequately
protect Landlord as follows:


 


(i)                                     To
perform each and every obligation of Tenant under this Lease until such time as
this Lease is either rejected or assumed by Order of the Bankruptcy Court; and


 


(ii)                                  To
pay all monetary obligations required under this Lease, including without
limitation, the payment of the rent payable hereunder, and such other
additional rent charges payable hereunder, which is considered reasonable
compensation for the use and occupancy of the Premises; and


 


(iii)                               Provide Landlord a
minimum thirty (30) days prior written notice, unless a shorter period is
agreed to in writing by the parties, of any proceeding relating to any
assumption of this Lease or any intent to abandon the Premises, which
abandonment shall be deemed a rejection of this Lease; and


 


(iv).                           To perform to the benefit of
Landlord otherwise required under the Code.


 


The
failure of Tenant to comply with the above shall result in an automatic
rejection of this Lease.


 


D.                                    Accumulative
Rights.  The rights, remedies and
liabilities of Landlord and Tenant set forth in this Section 17.6 shall be
in addition to those which may now or hereafter be accorded, or imposed upon,
Landlord and Tenant by the Code.


 


53





















 


ARTICLE XVIII


DEFAULT BY LANDLORD


 


Section 18.1.                                                     Default
Defined, Notice


 


Except
as expressly set forth herein to the contrary, Landlord shall in no event be
charged with default in any of its obligations hereunder unless and until
Landlord shall have failed to perform such obligations within thirty (30) days
after written notice to Landlord by Tenant, specifically describing such
failure; provided that if the nature of such default is such that it cannot be
cured within said thirty (30) -day period, Landlord shall have such additional
time as may be reasonably necessary to complete its performance so long as
Landlord has proceeded with diligence after receipt of Tenant’s notice to cure
such default.  If Landlord defaults in
the performance of any of its obligations, covenants and warranties hereunder,
then Tenant may, at its option, cure the same on behalf of the Landlord,
whereupon the cost of such curing and any out-of-pocket expenses reasonably and
necessarily arising as a consequence thereof, shall be due and payable to
Tenant from Landlord upon demand therefor by Tenant along with interest at the
rate of twelve percent (12%) per annum. 
Upon failure of Landlord to so remit to Tenant within thirty (30) days
of Landlord’s receipt of such notice, Tenant may deduct such costs from the
monthly installments of Percentage Rent next coming due under the Lease until
Tenant has been fully reimbursed for such costs.  The foregoing shall not limit or preclude
Tenant from exercising any other rights and remedies available at law or in
equity.


 


Section 18.2.                                                     Notice
to First Mortgagee


 


If the
holder of the first mortgage covering the Premises shall have given written
notice to Tenant of the address to which notices to such holder are to be sent,
Tenant shall give such holder written notice simultaneously with any notice
given to Landlord of any default of Landlord, and such holder shall have the
right to cure any default asserted in said notice within the time provided to
Landlord herein.


 


54





















 


ARTICLE XIX


NO SECURITY DEPOSIT


 


Section 19.1.                                                     Security
Deposit


 


There
shall be no security deposit, guaranty or other form of security required to be
provided by Tenant in connection with this Lease.


 


ARTICLE XX


ACCESS BY LANDLORD


 


Section 20.1.                                                     Right
of Entry


 


Landlord
and his agents and employees shall have the right to enter the Premises from
time to time at reasonable times, upon not less than twenty-four (24) hours
prior written notice to Tenant, to examine the same, to post notices as
Landlord may deem reasonably necessary or appropriate for protection of
Landlord’s interest in the Premises and, during the last six (6) months of
the Term, to show the Premises to prospective purchasers.  Landlord and its respective agents and employees
shall have the further right to enter the Premises from time to time at
reasonable times, upon not less than twenty-four (24) hours prior written
notice to Tenant, to make such repairs, alterations, improvements or additions
to the Premises or other portions of the Hotel Complex as Landlord reasonably
deems necessary; provided, however, that in the event of an emergency, Landlord
shall have the right to enter the Premises upon such reasonable notice as is
practicable under the circumstances giving rise to such emergency (or if prior
notice is not reasonable under such circumstances, Landlord shall notify Tenant
of such entry as soon as possible following such entry).  As used herein, “emergency” shall mean any
event or condition causing or likely to cause imminent and substantial injury
or damage to person or property.


 


ARTICLE XXI


HOLDING OVER, SUCCESSORS


 


Section 21.1.                                                     Holding
Over


 


If
Tenant holds over or occupies the Premises beyond the Lease Term (it being
agreed there shall be no such holding over or occupancy without Landlord’s
written


 


55





















 


consent), with or without
Landlord’s written consent, Tenant shall occupy the Premises on a tenancy at
sufferance but all other terms and provisions of this Lease shall be applicable
to such period.


 


Section 21.2.                                                     Successors


 


All
rights and liabilities herein given to or imposed upon the respective parties
hereto shall bind and inure to the several respective heirs, successors,
administrators, executors and assigns of the parties and if either party is
more than one (1) person, they shall be bound jointly and severally by
this Lease.  Landlord, at any time and
from time to time, may make an assignment of its interest in this Lease
provided (i) such assignee has the right and authority to obligate and
bind the entire Hotel Complex and, (ii) the Hotel Complex will continue to
be operated under the Hotel Name and “Hard Rock” tradename.  In the event of such assignment, Landlord and
its successors and assigns (other than the assignee of Landlord’s interest in
this Lease) shall be released from any and all liability thereafter.


 


ARTICLE XXII


QUIET ENJOYMENT


 


Section 22.1.                                                     Landlord’s
Covenant


 


If
Tenant pays the rents and other amounts herein provided, observes and performs
all the covenants, terms and conditions hereof, Tenant shall peaceably and
quietly hold and enjoy the Premises for the Lease Term without interruption by
Landlord or any person or persons claiming by, through or under Landlord.


 


ARTICLE XXIII


BOOKS AND RECORDS


 


Section 23.1.                                                     Books
and Records


 


Tenant
agrees that it will keep complete books and records reflecting Gross
Sales.  Said books and records shall
include:


 


A.                                   Dated
and time stamped cash register tapes (customer receipt and detail audit) which
provide a non-resetable, non-clearing gross sales total and/or consecutively


 


56





















 


numbered duplicate sales
tickets which are to be dated and time stamped. 
Documentation of voided sales must be kept with regular sales tickets
and tapes and originals of voided tickets must be retained;


 


B.                                     Daily
sales summaries showing sales from the Premises;


 


C.                                     Monthly
sales journals showing breakdown of sales by day; and


 


D.                                    Bank
deposit slips showing deposits of sales. 
If deposits are not made on a daily basis, then the number of days’
receipts deposited should be shown on the deposit slip.


 


Landlord shall have the
right to examine such books and records at any reasonable time at Tenant’s
corporate office or the Premises.  All such
records shall be retained by Tenant for examination by Landlord for a period of
eighteen (18) months following the end of the calendar year for which such
records apply.  Landlord shall have the
right at any time during the one hundred twenty (120) day period following the
date Tenant delivers the Yearly Reconciliation to Landlord, to have an audit
conducted of Tenant’s books and records by Landlord’s employees or auditors of
its choice for such preceding calendar year. 
Landlord shall promptly deliver a copy of the results of any such audit
to Tenant.  If any audit reveals Gross
Sales were understated by more than three percent (3%), the reasonable cost and
expense of such audit shall be borne by Tenant, and any additional Percentage
Rent found due and owing as a result of said audit shall be immediately paid by
Tenant to Landlord upon demand, together with interest at the rate of twelve
percent (12%) per annum on such amount due from the date such amount should
have been paid by Tenant.  If the
examination discloses that Tenant has overreported Gross Revenue and that, as a
result of said overreporting, Tenant has overpaid Percentage Rent, Landlord
shall give Tenant credit against the next due installment of rent due and owing
by Tenant for the overpaid Percentage Rent (or, if at the end of the Term,
Landlord shall pay such amount to Tenant within thirty (30) days after Tenant
has delivered its certified statement of Gross Revenues to Landlord).


 


57





















 


ARTICLE XXIV


MISCELLANEOUS


 


Section 24.1.                                                     Waiver


 


No
waiver by Landlord or Tenant of any breach of any term, covenant or condition
hereof shall be deemed a waiver of the same or any subsequent breach of the
same or any other term, covenant or condition. 
The acceptance of rent by Landlord shall not be deemed a waiver of any
earlier breach by Tenant of any term, covenant or condition hereof, regardless
of Landlord’s knowledge of such breach when such rent is accepted.  No covenant, term or condition of this Lease
shall be deemed waived by Landlord or Tenant unless waived in writing.


 


Section 24.2.                                                     Accord
and Satisfaction


 


Landlord
is entitled to accept, receive and cash or deposit any payment made by Tenant
for any reason or purpose or in any amount whatsoever, and apply the same at
Landlord’s option to any obligation of Tenant and the same shall not constitute
payment of any amount owed except that to which Landlord has applied the
same.  No endorsement or statement or any
check or letter of Tenant shall be deemed an accord and satisfaction or
otherwise recognized for any purpose whatsoever.  The acceptance of any such check or payment
shall be without prejudice to Landlord’s right to recover any and all amounts
owed by Tenant hereunder and Landlord’s right to pursue any other available
remedy.


 


Section 24.3.                                                     Entire
Agreement


 


There
are no representations, covenants, warranties, promises, agreements, conditions
or undertakings, oral or written, between Landlord and Tenant other than herein
set forth.  Except as herein otherwise
provided, no subsequent alteration, amendment, change or addition to this Lease
shall be binding upon Landlord or Tenant unless in writing, signed by them and
approved by Landlord’s mortgagee.


 


Section 24.4.                                                     No
Partnership


 


Landlord
does not, in any way or for any purpose, become a partner, employer, principal,
master, agent or joint venturer or of with Tenant.


 


58





















 


Section 24.5.                                                     Force
Majeure


 


If
either party hereto shall be delayed or hindered in or prevented from the
performance of any act required hereunder by reason of strikes, lockouts,
failure of power, restrictive governmental laws or regulations, riots,
insurrection, war or other reason of a like nature not the fault of the party
delayed in performing work or doing acts required under this Lease, the period
for the performance of any such act shall be extended for a period equivalent
to the period of such delay.


 


Section 24.6.                                                     Submission
of Lease


 


Submission
of this Lease to Tenant does not constitute an offer to lease; this Lease shall
become effective only upon execution and delivery thereof by Landlord and
Tenant.  The effective day of this Lease
shall be the date filled in on Page 1 hereof by Landlord, which shall be
the date of execution by the last of the parties to execute the Lease.


 


Section 24.7.                                                     Notices


 


All
notices from Tenant to Landlord required or permitted by any provision of this
Agreement shall be directed to Landlord as follows:


 


Notice
to PM Realty:


 


Mr. Peter
Morton, President


PM
Realty, LLC


510 North Robertson Boulevard


Los Angeles, California 
90048


(310) 652-8747 – Telecopier


 


Notice to HRH:


 


Kevin Kelley, President


Hard Rock Hotel, Inc.


4455 Paradise Road


Las Vegas, Nevada 
89109


(702) 693-5557 – Telecopier


 


59





















 


in
each case with a copy to:


 


Kathryn
Graitge Noall, Esq.


Gordon
and Silver, Ltd.


3960
Howard Hughes Parkway, Ninth Floor


Las
Vegas, Nevada  89109


(702)
369-2666 - Telecopier


 


All
notices from Landlord to Tenant required or permitted hereunder shall be
directed as follows:


 


Mr. Michael
Chow


President


Mr. Chow
of Las Vegas, LLC


9538
Brighton Way


Suite 316


Beverly
Hills, California 90210


(310)
385-8345 - Telecopier


 


with a
copy to:


 


Steven
G. Wolff, Esq.


Rosenfeld,
Wolff, Aronson & Klein


1901
Avenue of the Stars, Suite 500


Los
Angeles, California 90067


(310)
556-0401 - Telecopier


 


All
notices to be given hereunder by any person shall be written and sent by
registered or certified mail, return receipt requested, postage pre-paid or by
an express mail delivery service, addressed to the person, intended to be
notified at the address set forth above. 
Any person may, at any time, or from time to time, notify the other
persons named herein in writing of a substitute address for that above set
forth, and thereafter notices shall be directed to such substitute
address.  Notice given as aforesaid shall
be sufficient service thereof and shall be deemed given as of the date
received, as evidenced by the return receipt of the registered or certified
mail or the express mail delivery receipt, as the case may be.


 


60





















 


Section 24.8.                                                     Captions
and Section Numbers


 


This
Lease shall be construed without reference to titles of Articles and Sections,
which are inserted only for convenience of reference.


 


Section 24.9.                                                     Number
and Gender


 


The
use herein of a singular term shall include the plural and use of the
masculine, feminine or neuter genders shall include all others.


 


Section 24.10.                                               Representation
by Corporate Tenant


 


If
Tenant is or will be a corporation, the persons executing this Lease on behalf
of Tenant hereby covenant and warrant that Tenant is a duly qualified
corporation authorized to do business in the State of Nevada, that all
franchise and corporate taxes have been paid to date and all future forms,
reports, fees and other documents necessary to comply with applicable laws will
be filed when due, and the person signing this Lease on behalf of the
corporation is an officer of Tenant, and is duly authorized to sign and execute
this Lease.


 


Section 24.11.                                               Landlord’s
Limitation of Liability


 


Anything
to the contrary herein contained, notwithstanding, there shall be absolutely no
personal liability on persons, firms or entities who constitute Landlord with
respect to any of the terms, covenants, conditions and provisions of this
Lease, and Tenant shall, subject to the rights of any first mortgagee, look
solely to the interest of Landlord, its successors and assigns, in the Hotel
Complex for the satisfaction of each and every remedy of Tenant in the event of
default by Landlord hereunder; such exculpation of personal liability is
absolute and without any exception whatsoever.


 


Section 24.12.                                               Broker’s
Commission


 


Each
party represents and warrants that it has caused or incurred no claims for
brokerage commissions or finder’s fees in connection with the execution of this
Lease, and each party shall indemnify and hold the other harmless against and
from all liabilities arising from any such claims caused or incurred by it
(including without limitation, the cost of attorney’s fees in connection
therewith).


 


61





















 


Section 24.13.                                               Partial
Invalidity


 


If any
provision of this Lease or the application thereof to any person or
circumstance shall to any extent be invalid or unenforceable, the remainder of
this Lease, or the application of such provision to persons or circumstances
other than those as to which it is invalid or unenforceable, shall not be
affected thereby and each provision of this Lease shall be valid and
enforceable to the fullest extent permitted by law.


 


Section 24.14.                                               Applicable
Law


 


This
Lease shall be construed under the laws of the State of Nevada.  Landlord and Tenant hereby acknowledge that
the courts situated in Clark County, Nevada shall have exclusive jurisdiction
over any action in connection with this Lease. 
In the event any action is commenced in connection with this Lease, the
prevailing party thereto shall be entitled to recover its costs and expenses
(including reasonable attorneys’ fees) of such action.


 


Section 24.15.                                               Definition
of Days


 


Except
as otherwise expressly provided herein, the term day shall mean a single
calendar day, whether or not a working or business day.


 


Section 24.16.                                               Recordation
of Lease


 


This
Lease shall not be recorded without the prior written consent of Landlord,
except that a memorandum of lease in the form attached hereto as Exhibit “E”
shall be executed and delivered by the parties concurrently with the execution
of this Lease and may be placed of record by either party.


 


Section 24.17.                                               Hotel
Rooms Provided by Landlord


 


A.                                   Landlord
shall provide to Tenant, at no charge to Tenant, for use by Tenant’s
principals, Michael Chow and Eva Chow, bedroom suite accommodations at the
Hotel Complex for a maximum of fifty (50) room nights during any Lease Year
throughout the Term of this Lease when such parties are in Las Vegas, Nevada on
business related to the Hotel Complex or the Premises.  Landlord shall further provide to Tenant, at
no charge to Tenant, a reasonable number of bedroom suite accommodations at the
Hotel Complex during the period prior to the opening date of the Premises and
continuing until sixty (60) days immediately following the initial opening of the
Premises, as may be


 


62





















 


required by Michael Chow
and Eva Chow to coordinate the initial opening of the restaurant (up to a
maximum of an additional one hundred (100) total room nights).


 


B.                                     Landlord
shall provide to Tenant, at no charge to Tenant, for use by Tenant’s
executives, employees and consultants, room accommodations at the Hotel Complex
for a maximum of fifty (50) room nights during any Lease Year throughout the
Term of this Lease when such parties are in Las Vegas, Nevada on business
related to the Hotel Complex or the Premises. 
Landlord shall further provide to Tenant, at no charge to Tenant, a
reasonable number of room accommodations at the Hotel Complex during the period
prior to the opening date of the Premises and continuing until sixty (60) days
immediately following the initial opening of the Premises, as may be required
by Tenant’s executives, employees and consultants to coordinate the initial
opening of the restaurant (up to a maximum of an additional fifty (50) total
room nights).  All room accommodations
for Tenant’s executives shall be deluxe accommodations, and all room
accommodations for Tenant’s employees and consultants shall be standard room
accommodations.


 


C.                                     In
the event Tenant requests accommodations at the Hotel Complex in excess of the
maximum room nights specified in Subparagraphs A and B above, then Landlord
shall provide such requested accommodations to Tenant at the prevailing most
favorable “player” or “casino” rates applicable to the class of such requested
accommodations.


 


D.                                    Tenant
shall designate a representative of Tenant to coordinate with Landlord the
provision of room accommodations by Landlord under this Section.  Notwithstanding any other provision hereof,
Landlord shall not be required to provide room accommodations to any Tenant
employee, consultant or principal of whom Landlord has not been notified by
such representative of Tenant.


 


63





















 


IN
WITNESS WHEREOF, Landlord and Tenant have signed and sealed
this Lease as of the day and year first above written.


 


	
  Landlord:

  	
  Tenant:

  
	
   

  	
   

  
	
  PM Realty, LLC,

  	
  Mr. Chow of
  Las Vegas, LLC

  
	
  a Nevada limited
  liability company

  	
  a Nevada limited
  liability company

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Hard Rock Hotel, Inc.

  	
   

  
	
  a Nevada
  corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  
										



 


64





















 


EXHIBIT “A-1”


 


Description of Development Property


(To Be Attached)


 





















 


EXHIBIT “A-2”


 


Description of Hotel/Casino Parcel


(To Be Attached)


 





















 


EXHIBIT “B”


 


Site Plan of Development


 


[Depict:


The Condominiums


The Hotel Condominiums


The Retail/Restaurant Space


The Phase I Hotel Condominium


The Phase I Condominium]


 





















 


EXHIBIT “B-1”


 


Site Plan of Premises


 


[Depict:


Premises


Tenant’s Terrace Area]


 


 


(To Be Attached)


 





















 


EXHIBIT “C”


 


Work Letter


 


I.                                         LANDLORD’S
WORK.   The following work is to be
performed exclusively by Landlord at Landlord’s sole expense (collectively, “Landlord’s
Work”):


 


A.                                   Structure.  Landlord shall design and construct the
building in which the Premises are located. 
Said building shall be constructed in accordance with local and state
building codes.   Landlord shall provide
the structural framing, columns, beams, roof deck, and exterior walls of the
Premises, all of which shall be constructed of non-combustible framing in
accordance with local and state building codes. 
Landlord to provide full height demising studs from floor to deck for
demising walls within the Premises (and Tenant shall install such demising
studs for such demising walls within the Premises).  Landlord to provide and install full height
demising studs from floor to deck for all perimeter and exterior walls of the Premises.


 


B.                                     Roof.  Landlord to provide roof, consisting of a
weather-resistant layer, thermal insulation and all structural components
thereof.  Any and all roof top screening
required by local or governing authorities shall be the Landlord’s
responsibility.


 


C.                                     Partitions.  Landlord shall provide interior demising
partitions and perimeter demising partitions. 
The demising partitions shall include drywall which shall be sanded,
taped and ready to receive paint; provided, however, that the partition between
the Premises and the view of the New Pool shall consist of glass windows/doors,
which glass windows shall consist of not less than fifty (50) linear feet.


 


D.                                    Floor.  Landlord shall provide reinforced concrete
floor slab throughout all portions of the Premises, and such floor slab shall
have a smooth finish.   Landlord shall
provide a 20 feet diameter x 2 feet deep clear pit for a revolving stage to be
installed by Tenant, and the floor slab must be able to house approximately 24
light fixtures of 8 1⁄2” deep x 5” diameter. The precise locations of the pit and
the light fixtures to be called out and directed by Tenant, provided that the
location of the pit shall not adversely affect the structural integrity of the
Restaurant Building.  Tenant shall be
responsible for the installation of Tenant’s floor finishes.


 





















 


E.                                      Sewer.  Landlord shall provide a 4” (or larger if
required by applicable building codes) sanitary sewer connection stubbed to the
Premises at a location and depth as and where directed by Tenant.  Landlord shall also provide one (1) 4”
(or larger if required by applicable building codes) grease waste stubbed to
the Premises as and where directed by Tenant. 
This work shall include a grease trap for grease storage appropriately
sized as and where required by local governing authorities.  All sanitary and waste lines shall have
inverts sufficiently low to preclude the use of sump pumps and/or sewage lifts
or ejectors.  Landlord shall provide
minimum of 3” plumbing vent pipes within Tenant’s Premises.


 


F.                                      Sprinklers.
Landlord shall supply a connection point to Landlord’s main sprinkler system
together with an interior hydraulically calculated system with fire protection
mains and breakers within the Premises as and where directed by Tenant.


 


G.                                     Electrical.  Landlord shall provide electrical power
sufficient for Tenant’s needs, three phase master electric service stubbed to
the Premises as and where directed by Tenant, together with any transformers to
the extent required to step down voltage.


 


H.                                    HVAC.
Landlord shall design and install a HVAC system providing not less than one (1) ton
of air-conditioning per 150 square feet of the Premises, inclusive of the
kitchen.  Landlord shall provide all
distribution (return and supply) ducting for such HVAC system to the Premises.  Such system shall minimally be capable of
supplying the kitchen make-up air, kitchen bar, and four (4) dining room
zones for a total of six (6) zones.


 


I.                                         Exhaust.  Landlord shall provide (i) shaft and all
ductwork for kitchen exhaust at a minimum of 12,000 CFM (cubic feet per minute)
(including all code required access and clean-outs and fire ratings), (ii) shaft
and ductwork for dishwasher and kettle exhaust at a minimum of 1,000 CFM
(including all code required access and clean-outs), (iii) toilet exhaust
providing a minimum of 1,000 CF M stubbed to the Premises, (iv) make-up
air stubbed to the Premises providing a minimum of 10,000CFM of outside air at
a minimum temperature of 75 degrees Fahrenheit and a maximum humidity of 60%
RH, and (v) flue(s) and combustion air for 30,000 BTU input gas fired hot
water heater(s) stubbed to the Premises (including all required fire
shafts).  All shafts and ductwork shall
be stubbed to the Premises and run to and through the roof.  All shafts shall include fire dampers and
fire protection if and as required by local governing authorities.  Exhaust


 





















 


work shall include fan
exhaust assemblies appropriately sized, as determined by Tenant’s engineers,
for the required exhaust set forth in this paragraph and any and all fitters,
scrubbers or other exhaust filtration or cleaning systems required by
applicable codes or requested by Landlord or other occupants or owners of the
Hotel Complex.


 


J.                                        Fire
Protection.  Landlord to provide a 2”
fire/life safety conduit from the main fire/life safety system stubbed to the
Premises as and where directed by Tenant. 
Landlord to provide any and all required fire hydrants, Siamese valves
and/or enunciator-type shut-off valves.


 


K.                                    Gas.  Landlord to provide a 4,000 MBTU gas
connection stubbed to the Premises as and where directed by Tenant.


 


L.                                      Water.  Landlord to provide domestic water stubbed to
the Premises as and where directed by Tenant with minimally sized water service
at 2” with sufficient pressure to preclude the use of booster pumps.  Minimum capacity shall be no less than 50 PSI
and 200 GPM.


 


M.                                 Communication
Services.  Landlord to provide two 1”
television conduits from the main television panel brought to the Premises at a
location as and where directed by Tenant. 
Landlord to further provide three (3) 1 1⁄2” rigid PVC conduits not
to exceed 3 turns and maximum 60 degree sweep, and one (1) 2” rigid PVC
pipe, and a 1 1⁄2” rigid PVC telephone conduit from the main telephone panel
stubbed to the Premises as and where directed by Tenant, with a minimum capacity
for 10 telephone and data lines.


 


N.                                    Common
Area.  Landlord to construct all
exterior improvements and systems (including all utility systems), Common
Areas, buildings and structures in the Development required for the use and
operation of the Premises by Tenant.


 


O.                                    Storefront.  N/A


 


P.                                      Separate
Utilities.  Landlord to install
separate meters or submeters for all utilities to the Premises, including
water, gas, telephone, electricity, sewer and HVAC, except to the extent the
applicable utility company does not permit the installation of separate meters
or submeters to the Premises.  Landlord
shall also provide separate shut off valves for all such utilities within the
Premises.


 





















 


Q.                                    Miscellaneous.  Landlord to provide any code required smoke
evacuation control system requirements for the building in which Tenant’s
restaurant will be located.  If Landlord’s
building will have a chilled water system to service the building in which
Tenant’s restaurant will be located, the same shall be made available for use
for Tenant’s kitchen refrigeration units including walk-in refrigerator.


 


II.                                     STANDARDS
FOR LANDLORD’S WORK.  Landlord shall
construct the Landlord’s Work in a first-class and good and workerlike manner,
using new materials, and in compliance with all applicable laws.  Landlord shall, at Landlord’s expense,
procure all building and other permits and approvals necessary for performing
Landlord’s Work.


 


III.                                 TENANT’S
WORK.  Except as otherwise specified as
included in Landlord’s Work as set forth above or in the Lease, “Tenant’s Work”
shall consist of all other work to be done in the interior of the Premises
pursuant to Tenant’s Plans.  Tenant’s
Work shall not include the work to the shell and core of the Premises, which
are to be provided by Landlord as part of Landlord’s Work.  Except as to the Tenant’s Plans which are to
be approved by Landlord pursuant to the terms of the Lease, Tenant shall have
the right to construct the restaurant and other improvements within the
Premises as Tenant may elect in its sole discretion as may be necessary or
desirable to Tenant for Tenant’s business at the Premises.  Landlord may impose covenants, conditions and
restrictions (“CC&Rs”) and reasonable rules and regulations relating
to Tenant’s Work (provided that no such CC&Rs or rules and regulations
shall dictate any aspects of Tenant’s interior aesthetics or design) to the
extent necessary to prevent the unreasonable interference with the use of the
adjoining premises by other tenants and occupants of the Hotel Complex, including
CC&Rs and rules and regulations designed to prevent unreasonable noise
or vibrations from emanating from the Premises; provided, however, that (i) such
CC&Rs shall not require Tenant to pay premium off-hours rates or overtime
in order to cause the completion of Tenant’s Work, and (ii) such CC&Rs
and rules and regulations shall be non-discriminatory and shall not be
applied against Tenant in a discriminatory manner.  During the performance of Tenant’s Work,
Tenant shall remove trash and debris from the Premises as is reasonable under
the circumstances and deposit the same in trash receptacles to be provided by
Landlord (at no cost to Tenant) in a location mutually agreed to between
Landlord and Tenant, and Landlord shall cause such receptacles to be emptied
and trash removed.  The Tenant’s Work
shall be performed by


 





















 


licensed contractors
selected by Tenant, and constructed in a first-class and good and workerlike
manner, using new materials, and in compliance with all applicable laws.


 





















 


EXHIBIT “D”


 


Exclusive Use Rights


 


Nobu
- Landlord shall not allow another tenant of the Resort to operate a restaurant
with a menu consisting primarily of Japanese cuisine during the Lease Term.


 





















 


EXHIBIT “E”


 


Memorandum Of Lease


 


MEMORANDUM
OF LEASE


 


This Memorandum of Lease
is dated the       day of                         ,
200    and is by and between PM Realty LLC, a Nevada limited
liability company and Hard Rock Hotel, Inc., a Nevada corporation
(collectively, “Landlord”) and Mr. Chow of Las Vegas, LLC, a Nevada
limited liability company (“Tenant”).


 


WITNESSETH


 


WHEREAS,
on the 24th day of December, 2004, Landlord and Tenant entered into
a Lease (the “Lease”) for certain Premises situated in the City of Las Vegas,
State of Nevada, as more particularly set forth in the Lease and which Premises
comprise a portion of the land described on Exhibit “A” attached hereto
and made a part hereof as if fully rewritten herein; and


 


WHEREAS,
the parties are desirous of placing their interests therein as a matter of
record.


 


NOW,
THEREFORE, in consideration of the mutual covenants herein contained and the
parties intending to be legally bound thereby, the parties hereto hereby agree
as follows:


 


1.                                       The
term of the Lease is ten (10) years commencing on the Commencement Date,
as defined in the Lease, and terminating on the anniversary of the Commencement
Date ten (10) years thereafter.


 


2.                                       Tenant
has the right and option to renew the Lease for two (2) additional
period(s) of five (5) years each upon the terms, covenants and conditions
set forth therein.


 


3.                                       Pursuant
to the terms of the Lease, Landlord grants to Tenant (and to its business
invitees, employees and customers), the nonexclusive right to use the Common
Areas, as defined in the Lease.


 





















 


IN
WITNESS WHEREOF, the parties have executed this Memorandum of Lease the day and
year first above written.


 


 


	
   

  	
   

  	
  Landlord:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PM Realty LLC,

  a Nevada limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Hard Rock Hotel, Inc.,

  a Nevada corporation By: Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Witness

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Tenant:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Mr. Chow of
  Las Vegas, LLC,

  a Nevada limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
  Witness

  	
   

  	
   

  
							



 


2





















 


STATE OF 


 


COUNTY OF 


 


BEFORE ME personally
appeared                                                        to
me well known and known to me to be the person(s) described therein and who
executed the foregoing instrument, and acknowledged to and before me that (he)
(she) (they) executed said instrument for the purposes therein expressed.


 


WITNESS
my hand and official seal, this         day
of                                         ,
200   .


 


Notary Public, State of 


 


 


	
   

  	
   

  
	
   

  
	
  Commission
  Expiration and Seal

  



 


 


 


STATE OF 


 


COUNTY OF 


 


BEFORE ME personally
appeared                                                            to
me well known and known to me to be the person(s) described therein and who
executed the foregoing instrument, and acknowledged to and before me that (he)
(she) (they) executed said instrument for the purposes therein expressed.


 


WITNESS
my hand and official seal, this         day
of                           ,
200   .


 


Notary Public, State of 


 


	
   

  	
   

  
	
   

  
	
  Commission
  Expiration and Seal

  



 


3





















 


STATE OF 


 


COUNTY OF 


 


BEFORE ME personally
appeared                                                         to
me well known and known to me to be the person(s) described therein and who
executed the foregoing instrument, and acknowledged to and before me that (he)
(she) (they) executed said instrument for the purposes therein expressed.


 


WITNESS
my hand and official seal, this        day
of                                 ,
200   .


 


Notary Public, State of 


 


	
   

  	
   

  
	
   

  
	
  Commission
  Expiration and Seal

  



 


4