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Sample Business ContractsHome: Sample Business Contracts:
LEASE
between
5TH MIDTOWN LLC,
Landlord
and
BUILD-A-BEAR WORKSHOP, INC.,
Tenant
July 21, 2004
PREMISES:
565 Fifth Avenue
New York, New York
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Table of Contents
Page
----
ARTICLE 1 Demise, Premises ............................................................ 1
ARTICLE 2 Term, Rents ................................................................. 1
ARTICLE 3 Completion and Occupancy of the Demised Premises ............................ 4
ARTICLE 4 Use ......................................................................... 4
ARTICLE 5 Rent Adjustments ............................................................ 5
ARTICLE 6 Tenant's Changes ............................................................ 9
ARTICLE 7 Quiet Enjoyment.............................................................. 12
ARTICLE 8 Assignment And Subletting.................................................... 12
ARTICLE 9 Compliance with Laws And Requirements Of Public Authorities ................. 18
ARTICLE 10 Insurance .................................................................. 18
ARTICLE 11 Rules and Regulations....................................................... 21
ARTICLE 12 Subordination, Notice To Lessors And Mortgagees............................. 22
ARTICLE 13 Tenant's Property........................................................... 23
ARTICLE 14 Repairs and Maintenance..................................................... 24
ARTICLE 15 Electricity................................................................. 26
ARTICLE 16 Heat, Ventilation and Air-Conditioning...................................... 27
ARTICLE 17 Services.................................................................... 27
ARTICLE 18 Access, Changes In Building Facilities, Name................................ 28
ARTICLE 19 Tenant's Work .............................................................. 29
ARTICLE 20 Non-Liability And Indemnification........................................... 31
ARTICLE 21 Destruction Or Damage....................................................... 32
ARTICLE 22 Eminent Domain.............................................................. 34
ARTICLE 23 Surrender................................................................... 35
ARTICLE 24 Conditions Of Limitation.................................................... 35
ARTICLE 25 Re-Entry By Landlord........................................................ 38
ARTICLE 26 Damages..................................................................... 39
ARTICLE 27 Waivers..................................................................... 41
ARTICLE 28 No Other Waivers or Modifications........................................... 42
ARTICLE 29 Curing Tenant's Defaults, Additional Rent................................... 43
ARTICLE 30 Broker...................................................................... 43
ARTICLE 31 Notices..................................................................... 44
ARTICLE 32 Estoppel Certificate........................................................ 44
ARTICLE 33 No Other Representations, Construction, Governing Law, Consents............. 45
ARTICLE 34 Parties Bound............................................................... 46
ARTICLE 35 Certain Definitions And Construction........................................ 46
ARTICLE 36 Adjacent Excavation And Construction - Shoring.............................. 47
ARTICLE 37 Miscellaneous............................................................... 47
ARTICLE 38 Security Deposit............................................................ 52
ARTICLE 39 Right of Termination........................................................ 54
ARTICLE 40 Shop Covenants.............................................................. 59
EXHIBIT A DESCRIPTION OF LAND.......................................................... 1
EXHIBIT B RENTAL PLAN.................................................................. 1
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EXHIBIT C RULES AND REGULATIONS........................................................ 1
EXHIBIT D DELETED PRIOR TO EXECUTION................................................... 1
EXHIBIT E DEFINITIONS.................................................................. 1
EXHIBIT F TENANT'S BUILDOUT STANDARD................................................... 1
ii
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LEASE
LEASE dated as of July 21, 2004 between 5TH MIDTOWN LLC, a New York
limited liability company, having an office at 565 Fifth Avenue, New York, New
York 10017 (hereinafter referred to as "Landlord") and BUILD-A-BEAR WORKSHOP,
INC., a Delaware corporation, having its principal office at 1954 Innerbelt
Business Center Drive, St. Louis, MO 63114 (hereinafter referred to as
"Tenant").
W I T N E S S E T H:
ARTICLE 1
DEMISE, PREMISES
1.1 Landlord hereby leases to Tenant, and Tenant hereby hires from
Landlord, the premises hereinafter described, in the building located at 565
Fifth Avenue, in the Borough of Manhattan, City, County and State of New York
(the "Building"), on the parcel of land more particularly described in Exhibit A
(the "Land"), for the term hereinafter stated, for the rents hereinafter
reserved and upon and subject to the conditions (including limitations,
restrictions and reservations) and covenants hereinafter provided. Each party
hereby expressly covenants and agrees to observe and perform all of the
conditions and covenants herein contained on its part to be observed and
performed.
1.2 The premises hereby leased to Tenant is portions of the ground floor
and basement of the Building, substantially as shown by diagonal markings on the
rental plan annexed hereto and made a part hereof as Exhibit B. Said premises,
together with all fixtures and equipment which at the commencement of this lease
or during the Term (hereinafter defined) are thereto attached (except items not
deemed to be included therein and removable by Tenant as provided in Article
13), constitute and are hereinafter referred to as the "Demised Premises".
ARTICLE 2
TERM, RENTS
2.1 The term ("Term") of this lease, for which the Demised Premises are
hereby leased, shall commence on January 1, 2005 (the "Commencement Date")
subject to postponement as provided in Section 37.17 hereof, and shall end at
noon on June 30, 2015 (the "Expiration Date"), or shall end on such earlier date
upon which the Term may expire or be canceled or terminated pursuant to any of
the conditions or covenants of this lease or pursuant to law.
2.2 The "rents" reserved under this lease, for the Term thereof, shall
be and consist of:
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A. "fixed rent" at the following annual amounts:
i. $1,800,000.00 DOLLARS per annum during the period
commencing on the Commencement Date (subject, however,
to Section 2.8 hereof) and ending on the last day of the
month preceding the month in which occurs
on the last day of the month preceding the month in
which occur the sixth (6th) anniversary of the
Commencement Date; and
ii. $2,000,000.00 DOLLARS per annum during the period
commencing on the first day of the month in which occurs
the sixth (6th) anniversary of the Commencement Date and
ending on the Expiration Date.
which shall be payable in equal monthly installments in advance on the first day
of each and every calendar month during the Term (except that Tenant shall pay,
upon the execution and delivery of this lease by Tenant, the sum of $150,000.00,
to be applied against the first rents becoming due under this lease); and
2
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B. "additional rent" consisting of all such other sums of money
as shall become due from and payable by Tenant to Landlord hereunder (for
default in payment of which Landlord shall have the same remedies as for a
default in payment of fixed rent);
all to be paid to Landlord at its office, or such other place, or to such agent
and at such place, as Landlord may designate by notice to Tenant, in lawful
money of the United States of America, by check drawn on a bank or trust company
whose principal office is located in St. Louis, Missouri, or such other city in
the contiguous forty-eight (48) states, as is reasonably satisfactory to
Landlord.
2.3 Tenant shall pay the fixed rent and additional rent reserved herein
promptly as and when the same shall become due and payable, without demand
therefor and without any abatement, deduction or setoff whatsoever, except as
expressly provided in this lease.
2.4 If the Commencement Date or the date on which Tenant's obligation to
commence rental payments occurs on a day other than the first day of a calendar
month, the fixed rent for such calendar month shall be prorated and the balance
of the first month's fixed rent theretofore paid shall be credited against the
next monthly installment of fixed rent.
2.5 If Tenant is in arrears in the payment of fixed rent or additional
rent, Tenant waives its right, if any, to designate the items in arrears against
which any payments made by Tenant are to be credited and Landlord may apply any
of such payments to any such items in arrears as Landlord, in its sole
discretion, shall determine, irrespective of any designation or request by
Tenant as to the items against which any such payments shall be credited.
2.6 No payment by Tenant nor receipt by Landlord of a lesser amount than
may be required to be paid hereunder shall be deemed to be other than on account
of any such payment, nor shall any endorsement or statement on any check or any
letter accompanying any check tendered as payment be deemed an accord and
satisfaction and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such payment due or pursue any other
remedy in this lease provided.
2.7 In every case in which Tenant is required by the terms of this lease
to pay to Landlord a sum of money and payment is not made within ten (10) days
after the same shall become due, interest shall be payable on such sum or so
much thereof as shall be unpaid from the date it becomes due until it is paid.
Such interest shall be at an annual rate which shall be at Landlord's option,
either (i) nine (9%) percent per annum or (ii) three (3) percentage points above
the Base Rate (hereinafter defined), but in no event more than the highest rate
of interest which at such time shall be permitted under the laws of the State of
New York.
2.8 Notwithstanding the provisions of Section 2.2 hereof, the fixed rent
payable thereunder shall be abated for the one hundred eighty (180) day period
commencing on the Commencement Date and ending one hundred seventy-nine (179)
days thereafter.
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ARTICLE 3
COMPLETION AND OCCUPANCY OF THE DEMISED PREMISES
3.1 Tenant has made a thorough inspection of the Demised Premises and is
thoroughly familiar with the condition of every part thereof. Tenant
acknowledges that neither Landlord nor any agent, representative or employee of
Landlord has made any representations or warranties whatsoever with respect to
the Demised Premises except as may be expressly set forth herein. Tenant agrees
to accept the Demised Premises "as is" in its condition on the Commencement
Date. Landlord shall have no obligation to make any alterations, improvements or
decorations to the Demised Premises in order to prepare the Demised Premises for
Tenant's occupancy. The taking of occupancy of the whole or any part of the
Demised Premises by Tenant shall be conclusive evidence, as against Tenant, that
Tenant accepts possession of same and the Demised Premises so occupied were in
good and satisfactory condition at the time such occupancy was taken.
ARTICLE 4
USE
4.1 Tenant shall use and occupy the Demised Premises primarily for the
display, assembly and sale of make-it-yourself plush bears, dolls and other toy
animals as well as for the sale as an incident thereto of accessories related
to such bears, dolls and other toy animals, including but not limited to
clothes, books, cosmetics, shampoos, fragrances, jewelry, cards, giftwrap,
stickers, candy and similar types of products related to bears, dolls and other
toy animals. Tenant may display and sell linens, apparel and other items
designed exclusively for Build-A-Bear Workshop and such other items related to
its principal use as are sold in a majority of Tenant's other stores. Tenant
may utilize a portion of the space not to exceed 20% of the usable area thereof
to serve party-related foods and beverages (but no alcoholic beverages), and as
an incident to its other operations, operate a photo studio for the taking of
portrait photographs.
4.2 If any governmental license or permit, shall be required for the
proper and lawful conduct of Tenant's business in the Demised Premises or any
part thereof, and if failure to secure such license or permit would in any way
affect Landlord, Tenant, at its expense, shall duly procure and thereafter
maintain such license or permit and submit the same for inspection by Landlord.
Tenant shall at all times comply with the terms and conditions of each such
license or permit.
4.3 Tenant shall not at any time use or occupy, or suffer or permit
anyone to use or occupy, the Demised Premises, or do or permit anything to be
done in the Demised Premises, in violation of the Certificate of Occupancy for
the Demised Premises or for the Building.
4.4 Tenant shall not suffer or permit the use of any portion of the
Demised Premises (a) for use by a foreign or domestic governmental office,
agency, bureau or other governmental
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instrumentality, (b) for use by or as a school, travel agency, medical or dental
office or an employment, placement or executive recruitment agency, or (c) for
use by a banking or other lending institution, real estate brokerage office, or
stock brokerage office.
4.5 Tenant shall not commit any nuisance on the Demised Premises, or do
or permit to be done anything which might result in the creation or commission
of a nuisance on the Demised Premises, and Tenant shall not cause or permit to
be caused or produced upon the Demised Premises, to permeate the same or to
emanate therefrom, any unusual, noxious or objectionable smoke, gases, vapor,
odors, noises or vibrations.
4.6 Tenant agrees that the value of the demised premises and the
reputation of Landlord will be seriously injured if the demised premises are
used for any obscene or pornographic purposes or any sort of commercial sex
establishment. Tenant agrees that Tenant will not bring or permit any obscene or
pornographic material in the demised premises, and shall not permit or conduct
any obscene, nude, or semi-nude live performance on the demised premises, nor
permit use of the demised premises for nude modeling, rap sessions, or as a so-
called rubber goods shops, or as a sex club of any sort, or as a "massage
parlor." Tenant agrees further that Tenant will not permit any of these uses by
any sublessee or assignee of the demised premises. This Section 4.6 shall
directly bind any successors in interest to Tenant. Tenant agrees that if at any
time Tenant violates any of the provisions of this Section 4.6, such violation
shall be deemed a breach of a substantial obligation of the terms of this Lease
and objectionable conduct. Pornographic material is defined for purposes of this
Section 4.6 as any written or pictorial matter with prurient appeal or any
objects or instrument that are primarily concerned with lewd or prurient sexual
activities.
ARTICLE 5
RENT ADJUSTMENTS
5.1 For the purposes of this lease:
A. The term "Tenant's Tax Share" shall be deemed to mean 7.15%.
B. "Landlord's Statement" shall mean an instrument containing a
computation of additional rent due pursuant to the provisions of this Article 5
furnished by Landlord to Tenant.
C. The term "Real Property" shall mean the Building and the Land
and all easements, air rights, development rights and other appurtenances
thereto.
D. The term "Taxes" shall mean (i) all real estate taxes and
assessments (special or otherwise), municipal, district and subdistrict taxes
and impositions and any other governmental levies, impositions or charges of a
similar or dissimilar nature, whether general, special, ordinary, extraordinary,
foreseen or unforeseen, which may be assessed, levied or imposed upon all or any
part of the Real Property, whether or not the same constitutes one or more tax
lots, and (ii) any reasonable expenses (including consultants' and attorneys'
fees and
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disbursements and experts' and other witness' fees) incurred by or on behalf of
Landlord in protesting or contesting any of the foregoing or the assessed
valuation of all or any part of the Real Property; but "Taxes" shall not include
any interest or penalties incurred by Landlord as a result of Landlord's late
payment of Taxes, except for interest payable in connection with the installment
payments of assessments pursuant to the next sentence. If by law, any assessment
may be divided and paid in annual installments, then, provided the same is not
prohibited under the terms of any superior lease or any superior mortgage (as
such terms are defined in Section 12.1. hereof), for the purposes of this
Article, (x) such assessment shall be deemed to have been so divided and to be
payable in the maximum number of annual installments permitted by law and (y)
there shall be deemed included in Taxes for each Tax Year the annual installment
of such assessment becoming payable during such Tax Year, together with interest
payable during such Tax Year on such annual installment and on all installments
thereafter becoming due as provided by law, all as if such assessment had been
so divided. If at any time after the date hereof the methods of taxation
prevailing at the date hereof shall be altered so that in lieu of or as an
addition to or as a substitute for the whole or any part of the taxes and
assessments now assessed, levied or imposed upon all or any part of the Real
Property, there shall be assessed, levied or imposed (a) a tax, assessment,
levy, capital levy or otherwise, or (b) a tax, assessment, levy, imposition or
charge measured by or based in whole or in part upon all or any part of the Real
Property or the value thereof and imposed upon Landlord, or (c) a license fee
measured by the rents, or (d) a net income, franchise, "value added", or other
tax assessment, levy, imposition, charge or license fee however described or
imposed on the rents, then all such taxes, assessments, levies, impositions,
charges or license fees, or the part thereof so measured or based, shall be
deemed to be Taxes; provided that any tax, assessment, levy, imposition or
charge imposed on income from the Real Property shall be calculated as if the
Real Property were the only asset of Landlord.
E. The term "Tax Year" shall mean the twelve (12) month period
commencing July 1 of each year, or such other period of twelve (12) months as
may be duly adopted as the fiscal year for real estate tax purposes in The City
of New York.
F. The term "Base Tax" shall mean the average of the Taxes for
the Tax Years commencing July 1, 2004 and July 1, 2005. As used herein, the term
"Base Tax Year" shall mean the Tax Year commencing July 1, 2004.
G. The term "Tenant's Projected Share of Taxes" shall mean
Tenant's Tax Payment (hereinafter defined), if any, payable by Tenant for the
immediately prior Tax Year divided by twelve (12) and payable monthly by Tenant
to Landlord as additional rent, on the first day of each month, provided,
however, that for the first Tax Year Landlord shall be entitled to receive a Tax
Payment, Tenant's Projected Share of Taxes shall be as reasonably determined by
Landlord.
5.2 A. Tenant shall pay as additional rent for each Tax Year, all or
any portion of which shall be within the Term, a sum ("Tenant's Tax Payment")
equal to Tenant's Tax Share of the amount by which the Taxes payable for such
Tax Year exceed the Base Tax. Tenant's Tax Payment for each Tax Year shall be
due and payable by Tenant in full within ten (10) days after receipt of a demand
therefor from Landlord, based upon the most recent Landlord's Statement. If
there shall be any increase or decrease in Taxes for any Tax Year, whether
during or after such
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Tax Year, Landlord shall furnish a revised Landlord's Statement for such Tax
Year. If a Landlord's Statement is furnished to Tenant after the commencement of
a Tax Year in respect of which such Landlord's Statement is rendered, Tenant
shall, within fifteen (15) days after receipt of such statement, pay to Landlord
the amount of any underpayment of Tenant's Tax Payment with respect to such Tax
Year or in the event of any overpayment, Landlord shall either pay to Tenant,
or, at Landlord's election, credit against subsequent payments under this
Section 5.2, the amount of Tenant's overpayment, provided that if the Term shall
have expired or if the remaining payments under this Section 5.2 are
insufficient to absorb the credit to which Tenant is entitled, Landlord shall
pay the same or any applied portion of such credit to Tenant. If at any time
after the date hereof, Taxes are required to be paid (either to the appropriate
taxing authorities or as tax escrow payments to the holder of any superior
mortgage or the lessor of any superior lease), in full or in monthly, quarterly
or other installments on any date or dates other than as presently required,
then upon notice thereof from Landlord, Tenant's Tax Payment shall be
correspondingly accelerated or revised so that said Tenant's Tax Payment is due
at least sixty (60) days prior to the date payments are due to the taxing
authorities or the superior mortgagee or lessor. The benefit of any discount for
any early payment or prepayment of Taxes and of any tax exemption or abatement
relating to all or any part of the Real Property shall accrue solely to the
benefit of Landlord and Taxes shall be computed without subtracting such
discount or taking into account any such exemption or abatement. Whenever so
requested, but not more often than once a year, Landlord will furnish Tenant
with a reproduced copy of the bill (or receipted bill) for Taxes for the current
or next preceding Tax Year.
B. Commencing with the first Tax Year Landlord shall be entitled
to receive a Tenant's Tax Payment, Tenant shall pay to Landlord as additional
rent for the then Tax Year (on account for the subsequent Tax Year), Tenant's
Projected Share of Taxes. Upon each date that a Tenant's Tax Payment or an
installment on account thereof shall be due from Tenant pursuant to the terms of
this Section 5.2, Landlord shall apply the aggregate of the installments of
Tenant's Projected Share of Taxes then on account with Landlord against the
Tenant's Tax Payment or installment thereof then due from Tenant. In the event
that such aggregate amount shall be insufficient to discharge such Tenant's Tax
Payment or installment, Landlord shall so notify Tenant and the amount of
Tenant's payment obligation with respect to such Tenant's Tax Payment or
installment shall be equal to the amount of the insufficiency. If, however, such
aggregate amount shall be greater than the Tenant's Tax Payment or installment,
Landlord shall promptly either (i) pay the amount of excess directly to Tenant
concurrently with the notice or (ii) permit Tenant to credit the amount of such
excess against the next payment(s) of Tenant's Projected Share of Taxes due
hereunder.
C. If the real estate tax fiscal year of The City of New York
shall be changed at any time after the date hereof, any Taxes for such fiscal
year, a part of which is included within a particular Tax Year and a part of
which is not so included, shall be apportioned on the basis of the number of
days in such fiscal year included in the particular Tax Year for the purpose of
making the computations under this Section 5.02. If the imposition or allocation
of Taxes for any Tax Year is delayed for any reason, Tenant shall nevertheless
continue to pay Tenant's Tax Payment then in effect subject to retroactive
adjustment at such time as Taxes are imposed or allocated.
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D. Only Landlord shall have the right to institute tax reduction
or other proceedings to reduce the Taxes or the assessed valuation of the Real
Property. If Landlord shall receive a refund of Taxes for any Tax Year in
respect of which Tenant has made a Tenant's Tax Payment, Landlord shall either
repay to Tenant or, at Landlord's election, credit against subsequent payments
due under this Section 5.2, provided that if the Term shall have expired or if
the remaining payments under this Section 5.2 are insufficient to absorb the
credit to which Tenant is entitled, Landlord shall pay the same or any applied
portion of such credit to Tenant, Tenant's Tax Share of the refund after
deducting from such refund the reasonable costs and expenses (including experts'
and attorneys' fees) of obtaining such refund, but in no event to exceed
Tenant's Tax Payment paid for the Tax Year in respect of which the refund is
received. Nothing herein shall obligate Landlord to file any application or
institute any such proceeding. Landlord shall be under no obligation to contest
the Taxes or the assessed valuation of the Real Property or to refrain from
contesting the same, and may settle any such contest on such terms as Landlord
in its sole judgment considers proper. If the assessment for the Base Tax Year
shall be reduced from the amount originally imposed after Landlord shall have
rendered a Landlord's Statement to Tenant with respect to a Tax Year, the amount
of the Tenant's Tax Payment shall be adjusted in accordance with such change and
Tenant, on Landlord's demand, shall pay any increase in additional rent
resulting from such adjustment.
E. Tenant's Tax Payment and any credits with respect thereto as
provided in this Section 5.2, shall be made as provided in this Section 5.2,
regardless of the fact that Tenant may be exempt, in whole or in part, from the
payment of any taxes by reason of Tenant's diplomatic or other tax exempt status
or for any other reason whatsoever.
F. If a Tax Year begins prior to the Commencement Date or ends
after the Expiration Date or sooner termination of this lease (other than
pursuant to Article 24), Tenant's Tax Payment with respect to such Tax Year
shall be apportioned in the ratio of the number of days in such Tax Year
occurring within the Term to the total number of days in such Tax Year. If there
shall be a Tenant's Tax Payment payable with respect to the period commencing on
the Commencement Date, such Tenant's Tax Payment shall not become due until
Landlord shall have furnished a Landlord's Statement with respect thereto and in
no event until after the Commencement Date.
5.3 In the event of a termination of this lease, any additional rent
under this Article shall be paid or adjusted within thirty (30) days after
submission of a Landlord's Statement. In no event shall fixed rent ever be
reduced by operation of Section 5.2. The rights and obligations of Landlord and
Tenant under the provisions of this Article with respect to any additional rent
shall survive the termination of this lease.
5.4 Landlord's failure during the lease term to prepare and deliver any
of the foregoing statements or bills, or Landlord's failure to make a demand,
shall not in any way cause Landlord to forfeit or surrender its rights to
collect any of the foregoing items of additional rent which may have become due
during the term of this lease. Tenant's liability for the amounts due under this
Article shall survive the expiration of the Term.
5.5 A. Landlord's failure to render Landlord's Statements with respect
to any Tax Year shall not prejudice Landlord's right to thereafter render a
Landlord's Statement with respect
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thereto or with respect to any subsequent Tax Year, nor shall the rendering of a
Landlord's Statement prejudice Landlord's right to thereafter render a corrected
Landlord's Statement for that Tax Year. Nothing herein contained shall restrict
Landlord from issuing a Landlord's Statement at any time there is an increase in
Taxes, during any Tax Year or any time thereafter.
B. Each Landlord's Statement shall be conclusive and binding upon
Tenant, and each of Landlord's estimates given pursuant to Section 5.2B shall be
conclusively deemed to be a reasonable estimate, unless (i) within thirty (30)
days after receipt of such Landlord's Statement or estimate, as the case may be,
Tenant shall notify Landlord that it disputes the correctness of Landlord's
Statement or the reasonableness of such estimate, specifying the particular
respects in which such Landlord's Statement is claimed to be incorrect or such
estimate is claimed to be unreasonable, and (ii) if such dispute shall not be
resolved within ninety (90) days after the giving of such Landlord's Statement
or estimate, as the case may be, then either party may refer the matter or
matters in dispute to Landlord's independent reputable certified public
accountants and the decision of such accountants shall be conclusive and binding
upon the parties. The fees and expenses of said accountants in determining such
matter or matters shall be borne by the unsuccessful party (and if both parties
are partially unsuccessful, the accountant shall apportion the fees and
disbursements between the parties based upon the degree of success of each
party). Pending the determination of such dispute, Tenant shall pay additional
rent in accordance with the applicable Landlord's Statement without prejudice to
Tenant's position. If such dispute is ultimately determined in Tenant's favor,
Landlord shall promptly after such determination pay to Tenant any amount so
overpaid by Tenant.
ARTICLE 6
TENANT'S CHANGES
6.1 All renovations, material decorations, additions, installations,
improvements and/or alterations of any kind or nature in the Demised Premises
(hereinafter collectively referred to as "changes" and, as applied to changes
provided for in this Article, "Tenant's Changes") shall require the prior
written consent of Landlord in each instance. The following conditions shall
apply to all Tenant's Changes:
A. The outside appearance except for approved signage or the
strength of the Building or of any of its structural parts shall not be
affected;
B. No part of the Building outside of the Demised Premises shall
be affected;
C. The proper functioning of any of the mechanical, electrical,
sanitary and other service systems of the Building shall not be adversely
affected and the usage of such systems by Tenant shall not be increased;
D. In performing the work involved in making such changes, Tenant
shall be bound by and observe all of the conditions and covenants contained in
this Article and by the Rules and Regulations contained in Exhibit C;
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E. All materials, methods and processes used in the performance
of Tenant's Changes shall conform to the standards of the Building;
F. Before proceeding with any Tenant's Changes, Tenant will
advise Landlord thereof and shall submit to Landlord proof reasonably
satisfactory of the cost thereof; and
G. Tenant's Changes shall be performed only by contractors and
subcontractors approved by Landlord, including the sprinkler, security, life
safety system, plumbing, electrical and other Building system subcontractors for
the Building, and all engineering in connection with any Tenant's Changes shall
be performed by an engineer approved by Landlord, such approval not to be
unreasonably withheld, at Tenant's sole cost and expense.
6.2 Before proceeding with any Tenant's Changes, Tenant shall submit to
Landlord full plans and specifications and all changes and revisions thereto,
for the work to be done for Landlord's approval (which approval as to any
Tenant's Changes which Landlord shall have theretofore approved in accordance
with Section 6.1 hereof, shall not, as to plans and specifications only, be
unreasonably withheld) and Tenant shall, upon demand of Landlord, pay to
Landlord the reasonable out-of-pocket costs incurred by Landlord for the review
of such plans and specifications and all changes and revisions thereto by its
architect, engineer and other consultants. Landlord may as a condition of its
approval require Tenant to make revisions in and to the plans and specifications
and to post a bond or other security reasonably satisfactory to Landlord in an
amount to cover the estimated cost of Tenant's General Contractors Costs to
insure the completion of such changes in accordance with the provisions of this
Article 6. With respect to each Tenant's Changes (excluding the "Tenant's Work"
(as such term is hereinafter defined in Section 19.01)) estimated to cost
$5,000,00, Tenant shall pay to Landlord, as additional rent, within ten (10)
days after demand, a fee equal to ten (10%) percent of the total cost of
Tenant's Changes, including painting, plus an additional charge equal to ten
(10%) percent of the sum of such cost and fee for indirect job costs, general
conditions and coordination of the work performed in connection with such
changes. Notwithstanding the preceding sentence, For so long as the Tenant is
the named Tenant in this Lease (i.e. Build-a-Bear Workshop Inc.) the fee shall
be reduced from 10% to 1%. Unless all of the conditions contained in this
Article are fully satisfied, Landlord shall have the right, in Landlord's sole
and absolute discretion, to withhold its consent to any Tenant's Changes.
6.3 Intentionally Omitted.
6.4 Tenant, at its expense, shall obtain all necessary governmental
permits and certificates for the commencement and prosecution of Tenant's
Changes and for final approval thereof from public authorities having
jurisdiction thereover upon completion and shall furnish copies thereof to
Landlord, and cause Tenant's Changes to be performed in compliance therewith and
with all applicable laws and requirements of public authorities, and with all
applicable requirements of insurance bodies, and in good and workmanlike manner,
using new or like new materials and equipment at least equal in quality and
class to the original installations in the Building. Tenant's Changes shall be
performed in such manner as not to unreasonably interfere with or delay and
(unless Tenant shall indemnify Landlord therefor to the latter's reasonable
satisfaction) as not to impose any additional expense upon Landlord in the
construction, maintenance or operation of the Building or any portion thereof.
Throughout the performance of Tenant's Changes, Tenant, at its expense, shall
carry, or cause to be carried, worker's
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compensation insurance in statutory limits and general liability insurance for
any occurrence in or about the Building as set forth in Section 10.03. hereof,
in which Landlord and its agents shall be named as parties insured, in such
limits as Landlord may reasonably prescribe, with insurance reasonably
satisfactory to Landlord. Tenant shall furnish Landlord with satisfactory
evidence that such insurance is in effect at or before the commencement of
Tenant's Changes and, on request, at reasonable intervals thereafter during the
continuance of Tenant's Changes. If any of Tenant's Changes shall involve the
removal of any fixtures, equipment or other property in the Demised Premises
which are not Tenant's Property (as defined in Article 13), such fixtures,
equipment or other property shall be promptly replaced, at Tenant's expense,
with new fixtures, equipment or other property (as the case may be) of like
utility and equal value unless Landlord shall otherwise expressly consent in
writing and Tenant shall, upon Landlord's request, deliver to Landlord, any such
fixtures, equipment or property so removed. Upon the completion of Tenant's
Changes, Tenant shall furnish to Landlord (i) a complete set of "as-built" plans
and specifications and (ii) letters from Tenant's general contractor, architect
and the Department of Buildings evidencing satisfactory completion of Tenant's
Changes (commonly known as "job signoff tickets").
6.5 Tenant, at its expense, and with diligence and dispatch, shall
procure the cancellation or discharge of all notices of violation arising from
or otherwise connected with Tenant's Changes which shall be issued by the
Department of Buildings or any other public or quasi-public authority having or
asserting jurisdiction. Tenant shall defend, indemnify and save harmless
Landlord against any and all mechanic's and other liens filed in connection with
Tenant's Changes, including the liens of any security interest in, conditional
sales of, or chattel mortgages upon, any materials, fixtures or articles so
installed in and/or constituting part of the Demised Premises and against all
costs, expense and liabilities incurred in connection with any such lien,
security interest, conditional sale or chattel mortgage or any action or
proceeding brought thereon. Tenant, at its expense, shall procure the
satisfaction or discharge of all such liens by payment, bonding or otherwise,
within thirty (30) days after (a) Landlord makes written demand therefor, or (b)
Tenant receives actual or constructive notice thereof, whichever occurs earlier.
If a lien is filed against Landlord, the Building or the Demised Premises in
connection with any changes in or to the Demised Premises then, in addition to
any other rights and remedies available to Landlord, Landlord may, after notice
to Tenant of its intentions, take any action it deems necessary to discharge
such lien including without limitation, payment to the claimant on whose behalf
the lien was filed and the application of all or any part of any security
deposited with Landlord hereunder to any costs incurred by Landlord in
connection with the discharge of any lien. Tenant shall indemnify and hold
Landlord harmless from and against all costs so incurred by Landlord without
regard to any defense or offset that Tenant may have had against the claimant.
Neither Landlord's curative action nor the reimbursement by Tenant shall cure
Tenant's default in this regard.
6.6 Tenant agrees that the exercise of its rights pursuant to the
provisions of this Article 6 or any other provisions of this lease shall not be
done in a manner which would create any work stoppage, picketing, labor
disruption or dispute or violate Landlord's union contracts affecting the Real
Property nor interference with the business of Landlord or any Tenant or
occupant of the Building. In the event of the occurrence of any condition
described above arising from the exercise by Tenant of its rights pursuant to
the provisions of this Article 6 or any
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other provision of this lease, Tenant shall, immediately upon notice from
Landlord, cease the manner of exercise of such right giving rise to such
condition. In the event Tenant fails to cease such manner of exercise of its
rights as aforesaid, Landlord, in addition to any rights available to it under
this lease and pursuant to law, shall have the right to injunction without
notice. With respect to Tenant's Changes, Tenant shall make all arrangements
for, and pay all Landlord's established charges incurred in connection
therewith, (or if Landlord does not have established charges therefor, then all
of Landlord's reasonable out-of-pocket costs therefor) including, without
limitation, electricity, air conditioning, standby and cooperating labor,
physical protection measures, increased insurance, fire protection, security,
carting, non-exclusive use of the freight elevator (after same has been placed
in operation) and hoist elevator, if any, servicing the Demised Premises.
6.7 Unless otherwise expressly provided in this lease, Tenant shall, at
Tenant's expense, and as part of Tenant's Changes, perform all of the work in
the entire Demised Premises necessary for Tenant's occupancy thereof, subject to
the provisions of this lease. Tenant agrees that it will, prior to the
commencement of any work in the Demised Premises, deliver to Landlord all
policies of insurance required to be supplied to Landlord by Tenant pursuant to
the terms of this lease.
6.8 Tenant shall keep records of Tenant's Changes estimated to cost more
than $5,000 and of the cost thereof. Tenant shall, within fifteen (15) days
after completion of any such Tenant's Changes, furnish to Landlord copies of
such records.
ARTICLE 7
QUIET ENJOYMENT
7.1 So long as Tenant pays all of the fixed rent and additional rent due
hereunder and performs all of Tenant's other obligations hereunder, Tenant shall
peaceably and quietly have, hold and enjoy the Demised Premises subject,
nevertheless, to the obligations of this lease and, as provided in Article 12,
to the superior leases and the superior mortgages.
ARTICLE 8
ASSIGNMENT AND SUBLETTING
8.1 Tenant shall not (a) assign or otherwise transfer this lease
or the term and estate hereby granted, (b) sublet the Demised Premises or any
part thereof or allow the same to be used or occupied by others or in
violation of Article 4, (c) mortgage, pledge or encumber this lease or the
Demised Premises or any part thereof
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in any manner by reason of any act or omission on the part of Tenant, or (d)
advertise, or authorize a broker to advertise, for a subtenant or an assignee,
without, in each instance, obtaining the prior consent of Landlord, except as
otherwise expressly provided in this Article 8. For purposes of this Article 8,
(i) the transfer of a majority of the issued and outstanding capital stock of
any corporate tenant, or of a corporate subtenant, or the transfer of a majority
of the total interest in any partnership tenant or subtenant, however
accomplished, whether in a single transaction or in a series of related or
unrelated transactions, shall be deemed an assignment of this lease, or of such
sublease, as the case may be, except that the transfer of the outstanding
capital stock of any corporate tenant, or subtenant, shall be deemed not to
include the sale of such stock by persons or parties, through the
"over-the-counter market" or through any recognized stock exchange, other than
those deemed "insiders" within the meaning of the Securities Exchange Act of
1934 as amended, (ii) a takeover agreement shall be deemed a transfer of this
lease, (iii) any person or legal representative of Tenant, to whom Tenant's
interest under this lease passes by operation of law, or otherwise, shall be
bound by the provisions of this Article 8, and (iv) a modification, amendment or
extension of a sublease shall be deemed a sublease. Tenant shall pay to Landlord
on demand, as additional rent any costs incurred by Landlord to review a
proposed assignment or subletting including reasonable attorneys' fees incurred
by Landlord, and in addition, shall pay to Landlord with each request for its
consent, a processing fee of $1,000.
8.2 (a) The provisions of Section 8.1 hereof shall not apply to
transactions with a corporation into or with which Tenant is merged or
consolidated or with an entity to which substantially all of Tenant's assets are
transferred (provided such merger or transfer of assets is for a good business
purpose and not principally for the purpose of transferring the leasehold estate
created hereby), and provided further, that the assignee has a net worth at
least equal to or in excess of the networth of the assignor at the time of the
assignment.
(b) Notwithstanding anything to the contrary contained in Section
8.6, Landlord shall not have the rights described therein and Landlord shall not
unreasonably withhold its consent if Tenant desires to assign this lease or
sublease of all or a portion of the Demised Premises to an affiliate of Tenant,
provided the use of the Demised Premises shall continue to be for the purpose
permitted by Section 4.1 hereof. As used in this paragraph, the term "affiliate"
shall mean an individual, partnership, corporation, unincorporated association
or other entity controlling, controlled by (i.e., a subsidiary) or under common
control with Tenant and for the purposes of the foregoing,"control" shall mean
ownership of a majority of the legal and beneficial interest in such corporation
or other entity, together with the ability to direct the management, affairs and
operations
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thereof. Any transfer or cessation of control over any affiliate or subsidiary
to which this lease is assigned or to which space is sublet (including by
means of a transaction contemplated by paragraph (a) hereof) shall constitute an
assignment of this lease to which all of the provisions of this Article 8 shall
apply other than Tenant's rights contained in this Section 8.2. In the event
that Tenant assigns this lease in accordance with this paragraph, the assignee
of this lease shall execute an agreement of the type required to be executed by
an assignee pursuant to Section 8.3 hereof.
8.3 Any assignment or transfer, whether made with Landlord's consent as
required by Section 8.1 or without Landlord's consent pursuant to Section 8.2,
shall be made only if, and shall not be effective until, the assignee shall
execute, acknowledge and deliver to Landlord an agreement, in form and substance
reasonably satisfactory to Landlord, whereby the assignee shall assume the
obligations and performance of this lease and agree to be personally bound by
and upon all of the covenants, agreements, terms, provisions and conditions
hereof on the part of Tenant to be performed or observed and whereby the
assignee shall agree that the provisions Section 8.1 hereof shall,
notwithstanding such an assignment or transfer, continue to be binding upon it
in the future. Tenant covenants that, notwithstanding any assignment or
transfer, whether or not in violation of the provisions of this lease, and
notwithstanding the acceptance of fixed rent by Landlord from an assignee or
transferee or any other party, Tenant shall remain fully and primarily liable
for the payment of the fixed rent due and to become due under this lease and for
the performance of all of the covenants, agreements, terms, provisions and
conditions of this lease on the part of Tenant to be performed or observed.
8.4 The liability of Tenant for the due performance by Tenant of the
obligations on its part to be performed under this lease, shall not be
discharged, released or impaired in any respect by an agreement or stipulation
made by Landlord with any immediate or remote successor by assignment or
otherwise of Tenant, extending the time of or modifying any of the obligations
contained in this lease, or by any waiver or failure of Landlord to enforce
against such successor any of the obligations on Tenant's part to be performed
under this lease, and Tenant shall continue liable hereunder. If any such
agreement or modification entered into between Landlord and any such successor
operates to increase the obligations of Tenant under this lease, the liability
under this Section 8.4 of the tenant named in the lease or any of its successors
in interest, (unless such party shall have expressly consented in writing to
such agreement or modification) shall continue to be no greater than if such
agreement or modification had not been made. To charge Tenant named in this
lease and its successors in interest, no demand or notice of any default shall
be required; Tenant and each of its successor in interest hereby expressly
waives any such demand or notice.
8.5 Landlord shall not unreasonably withhold or delay its consent to an
assignment of this lease or a subletting of the whole Demised Premises for
substantially the remainder of the term of this lease, provided:
(a) Tenant shall furnish Landlord with the name and business
address of the proposed subtenant or assignee, information with respect to the
nature and character of the proposed subtenant's or assignee's business, or
activities, such references and
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current audited financial information with respect to net worth, credit and
financial responsibility as are reasonably satisfactory to Landlord, and an
executed counterpart of the sublease or assignment agreement;
(b) The proposed subtenant or assignee is a reputable party whose
financial net worth, credit and financial responsibility is, considering the
responsibilities involved, reasonably satisfactory to Landlord;
(c) The nature and character of the proposed subtenant or
assignee, its business or activities and intended use of the Demised Premises is
confined to the use permitted in Section 4.1 hereof or to the sale of luxury
women's apparel;
(d) Each sublease shall specifically state that (i) it is subject
to all the terms, covenants, agreements, provisions, and conditions of this
lease, (ii) the subtenant, will not have the right to a further assignment
thereof or sublease or assignment thereunder, or to allow the Demised Premises
to be used by others, without the consent of Landlord in each instance;
(e) Tenant shall have complied with the provisions in Section 8.6
and Landlord shall not have made any of the elections provided for in Section
8.6;
(f) The subletting or assignment, as the case may be, does not
contemplate a division of the Demised Premises; and
(g) The proposed assignment shall be for a consideration which
reflects the fair market value of the leasehold being assigned or the proposed
subletting shall be at a rental rate which reflects the fair market rental
value of the space being sublet taking into account all relevant conditions,
including the fact that it is a sublease, the condition of the space and the
length of the remaining term and in no event shall Tenant advertise or list with
brokers at a lower rental rate than Landlord is charging for comparable space.
8.6 (a) Should Tenant agree to assign this lease, other than by an
assignment contemplated by Section 8.2, Tenant shall as soon as that agreement
is consummated, but no less than four (4) months prior to the effective date of
the contemplated assignment, deliver to Landlord an executed counterpart of such
agreement, and all ancillary agreements with the proposed assignee, and Landlord
shall than have the right to elect, by notifying Tenant within 60 days of such
delivery, to terminate this lease, as of such effective date as if it were the
Expiration Date set forth in this lease.
(b) Should Tenant agree to sublet the Demised Premises, other than
by a sublease contemplated by Section 8.2, Tenant shall, as soon as that
agreement is consummated, but no less than four (4) months prior to the
effective date of the contemplated sublease, deliver to Landlord, an executed
counterpart of the proposed sublease and all ancillary agreements with the
proposed sublessee, and Landlord shall then have the right to elect, by
notifying Tenant within sixty (60) days of such delivery, to terminate this
lease as of such effective date.
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(c) If Landlord shall give its consent to any assignment of this
lease or to any sublease, Tenant shall in consideration therefor, pay to
Landlord, as additional rent:
(i) in the case of an assignment, fifty (50%) percent of all
sums and other considerations paid to Tenant by the assignee for or by reason of
such assignment (including, but not limited to, sums paid for the sale of
Tenant's fixtures, leasehold improvements, equipment, furniture, furnishings or
other personal property, less, in the case of a sale of any of the foregoing
other than leasehold improvements, the then net unamortized or undepreciated
cost thereof determined on the basis of Tenant's federal income tax returns);
and
(ii) in the case of a sublease, fifty (50%) percent of any
rents, additional charges or other consideration payable under the sublease to
Tenant by the subtenant which is in excess of the fixed rent and additional rent
accruing during the term of the sublease in respect of the subleased space (at
the rate per square foot payable by Tenant hereunder) pursuant to the terms
hereof (including, but not limited to, sums paid for the sale or rental of
Tenant's leasehold improvements, or less, in the case of the sale of any
of foregoing other than leasehold improvements, the then net unamortized or
undepreciated cost thereof determined on the basis of Tenant's federal income
tax returns).
The sums payable under this Section 11.06(c) shall be paid to Landlord as and
when paid by the subtenant or assignee to Tenant. There shall first be deducted
in the calculation of the amounts paid to Tenant pursuant to clause (i) hereof,
or the excess pursuant to clause (ii) hereof, the following costs incurred by
Tenant in connection with the proposed subletting or assignment, as the case may
be (x) reasonable or usual brokerage fees paid to unaffiliated brokers; and (y)
reasonable legal and advertising expenses.
8.7 Landlord's consent to any sublease or assignment shall not be deemed
or construed to modify, amend or affect the terms and provisions of this lease,
or Tenant's obligations hereunder, which shall continue to apply to the
occupants thereof, as if the sublease or assignment had not been made.
Notwithstanding any assignment or sublease, Tenant shall remain fully liable for
the payment of fixed annual rent and additional rents and for the other
obligations of this lease on the part of Tenant to be performed or observed. In
the event that Tenant defaults in the payment of any rent, Landlord is
authorized to collect any rents due or accruing from any assignee, subtenant or
other occupant of the Demised Premises and to apply the net amounts collected to
the fixed rent and additional rent reserved herein, and the receipt of any such
amounts by Landlord from an assignee or subtenant, or other occupant of the
Demised Premises, shall not be deemed or construed as releasing Tenant from
Tenant's obligations hereunder or the acceptance of that party as a direct
tenant.
8.8 With respect to each and every sublease or subletting authorized by
Landlord under the provisions of this lease, it is further agreed:
A. no subletting shall be for a term ending later than one day
prior to the Expiration Date of this lease;
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B. no sublease shall be valid, and no subtenant shall take
possession of the Demised Premises or any part thereof, until an executed
counterpart of such sublease has been delivered to Landlord; and
C. each sublease shall provide that it is subject and subordinate
to this lease and to the matters to which this lease is or shall be subordinate,
and that in the event of termination, re-entry or dispossession by Landlord
under this lease Landlord may, at its option, take over all of the right, title
and interest of Tenant, as sublessor, under such sublease, and such subtenant
shall at Landlord's option, attorn to Landlord pursuant to the then executory
provisions of such sublease, except that Landlord shall not (i) be liable for
any previous act or omission of Tenant under such sublease, (ii) be subject to
any offset, not expressly provided in such sublease, which theretofore accrued
to such subtenant against Tenant, (iii) be bound by any previous modification of
such sublease or by any previous prepayment of rent, (iv) be liable for any
security deposited pursuant to this lease unless such security has actually been
delivered to Landlord, or (v) be obligated to perform any work or to contribute
to the cost of any work or improvements in the Demised Premises.
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ARTICLE 9
COMPLIANCE WITH LAWS AND
REQUIREMENTS OF PUBLIC AUTHORITIES
9.1 Tenant shall give prompt notice to Landlord of any notice it
receives of the violation of any law or requirement of public authority, and at
its expense shall comply with all laws and requirements of public authorities
which shall, with respect to the Demised Premises or the use and occupation
thereof, or the abatement of any nuisance, impose any violation, order or duty
on Landlord or Tenant, arising from (a) Tenant's use of the Demised Premises,
(b) the manner of conduct of Tenant's business or operation of its
installations, equipment or other property therein, (c) any cause or condition
created by or at the instance of Tenant, and/or (d) breach of any of Tenant's
obligations hereunder. However, Tenant shall not be so required to make any
structural or other substantial change in the Demised Premises unless the
requirement arises from a cause or condition referred to in clauses (b), (c) or
(d) above. Landlord, at its expense, shall comply with all other such laws and
requirements of public authorities as shall affect the Demised Premises, but
may, at its expense (and if necessary, in the name of but without expense to
Tenant) contest the same.
ARTICLE 10
INSURANCE
10.1 Tenant shall not do or suffer or permit anything to be done in or
about the Demised Premises or the Building which would: (a) subject Landlord to
any liability for injury to any person or property, (b) cause any increase in
the insurance rates applicable to any policies of insurance carried by Landlord
covering the Real Property, the Building or the rental income to be derived
therefrom or the Building equipment or other property of Landlord, or cause
insurance companies of good standing to refuse to insure the aforesaid interests
of Landlord in amounts reasonably satisfactory to Landlord, (c) result in the
cancellation of any policy of insurance or the assertion of any defense by the
insurer to any claim under any policy of insurance maintained by or for the
benefit of Landlord or (d) violate any insurance requirement.
10.2 If, as the result of any failure by Tenant to comply with the terms
of Section 10.01., the insurance rates applicable to any policy of insurance
carried by Landlord covering the Real Property, the Building or the rental
income to be derived therefrom or the Building equipment or other property of
Landlord, shall be increased, Tenant agrees to pay Landlord, as additional rent,
within ten (10) days after Landlord's demand therefor, the portion of the
premiums for said insurance attributable to such higher rates. Tenant hereby
indemnifies Landlord against all liability which Landlord may sustain in the
event that any insurance carried by Landlord shall be canceled as a result of
any failure by Tenant to comply with the terms of Section 10.01. A schedule or
rule book issued by the Insurance Services Office or any other insurance rating
organization having jurisdiction, or the rating procedures or rules of
Landlord's insurance companies shall be conclusive evidence of the several items
and charges which make up the insurance rates and premiums on the Demised
Premises and the Building and the rental income to be derived therefrom.
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10.3 A. Tenant shall secure and keep in full force and effect
throughout the Term, at Tenant's sole cost and expense, (i) Comprehensive
General Liability Insurance, written on an occurrence basis, to afford
protection in such amount as Landlord may determine and in no event less than
Five Million ($5,000,000.00) Dollars combined single limit for personal and
bodily injury and death arising therefrom and Broad Form property damage
(including a "personal injury" endorsement covering claims arising out of false
arrest, false imprisonment, defamation, libel and slander, wrongful eviction,
discrimination and invasion of privacy without exclusion of coverage for claims
of personal injury brought by employees, agents or contractors of an insured)
arising out of any one occurrence in, upon, adjacent to or in connection with
the Demised Premises or any part thereof, which insurance shall included
coverage for contractual liability (including the matters set forth in Article
20 hereof), owner's protective liability, independent contractor's liability and
completed operations liability; (ii) insurance upon the Premises Unit, Tenant's
Property (as hereinafter defined), fixtures, furnishings and equipment,
including Tenant's Changes, in an amount equal to the full replacement value
thereof (including an "agreed amount" endorsement), including any increase in
value resulting from increased costs, with coverage against such perils and
casualties as are commonly included in "all risk" insurance policies (including
breakage of glass within the Demised Premises, sprinkler leakage and collapse)
and if commercially available at competitive rates, back-up of sewers and drains
in the Demised Premises installed by or on behalf of Tenant (or anyone claiming
under or through Tenant); (iii) Broad Form Boiler and Machinery Insurance on all
air conditioning equipment, miscellaneous electrical apparatus, boilers and
other pressure vessels or systems, whether fired or unfired, installed by Tenant
(or by Landlord, at Tenant's expense) in or near the Demised Premises, either as
part of the extended coverage insurance mentioned in clause (ii) of this Section
or in amounts set up by Landlord, but in no event less than Two Million
($2,000,000.00) Dollars; (iv) during the course of construction of Tenant's
Initial Work and any Tenant's Changes and until completion thereof, at
Landlord's election, Commercial Property Insurance or Builder's Risk Insurance,
on an "all risk" basis (including collapse) on a completed value (non-reporting)
form for full replacement value covering the interests of Landlord and Tenant in
all work incorporated in the Building and all materials and equipment in or
about the Demised Premises; (v) Workers' Compensation Insurance, as required by
law and (vi) such other insurance in such amounts as Landlord may reasonably
require from time to time. All such insurance shall contain only such
"deductibles" as Landlord shall approve in writing, which approval shall not be
unreasonably withheld if commercially reasonable. The minimum amounts of
insurance required under this Section 10.03.A. shall not be construed to limit
the extent of Tenant's liability under this lease. In addition, prior to any
entry upon the Demised Premises by Tenant or any of Tenant's employees, agents
or contractors, Tenant shall deliver or cause to be delivered to Landlord
certificates evidencing that all insurance required hereunder is in full force
and effect. Tenant shall have the right to insure and maintain the insurance
coverages set forth in this Section under blanket insurance policies covering
other premises occupied by Tenant so long as such blanket policies comply as to
terms and amounts with the insurance provisions set forth in this lease;
provided that upon request, Tenant shall deliver to Landlord a certificate of
Tenant's insurer evidencing the portion of such blanket insurance allocated to
the Demised Premises.
B. All such insurance shall be written in form and substance
reasonably satisfactory to Landlord by an insurance company in a financial size
category of not less than XII and with general policy holders' ratings of not
less than A, as rated in the most current available
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"Best's" insurance reports, or the then equivalent thereof, and licensed to do
business in New York State and authorized to issue such policies. All policies
of insurance procured by Tenant shall contain endorsements providing that (i)
such policies may not be reduced or canceled (including for non-payment of
premium) or allowed to lapse with respect to Landlord or materially changed or
amended except after thirty (30) days' prior notice from the insurance company
to Landlord, sent by registered mail; and (ii) Tenant shall be solely
responsible for the payment of premiums therefor notwithstanding that Landlord
or any other party is or may be named as an insured. Duly executed certificates
of insurance (including endorsements and evidence of the waivers of subrogation
required pursuant to Section 10.04.) or, if required by Landlord, certified
copies or duplicate originals of the original policies, together with reasonably
satisfactory evidence of payment of the premiums therefor, shall be delivered to
Landlord, on or before the Commencement Date. Each renewal or replacement of a
policy shall be so deposited at least thirty (30) days prior to the expiration
of such policy. Tenant shall not carry any separate or additional insurance
concurrent in form or contributing in the event of any loss or damage with any
insurance required to be maintained by Tenant under this lease, and all policies
of insurance procured by Tenant shall be written as primary policies not
contributing to or in excess of coverage that Landlord may carry.
C. All insurance procured by Tenant under this Article 10 shall
be issued in the names and for the benefit of Landlord (and each member thereof
in the event Landlord is a partnership or joint venture) and Landlord's managing
agent, each as an additional named insured (but only as to the Demised
Premises), Tenant and, if Landlord requests, the superior mortgagee and/or
lessor of a superior lease on the Land and/or the Building (but only as to the
Demised Premises), as their respective interests may appear, and shall contain
an endorsement that each of Landlord, Landlord's managing agent and such
mortgagee or lessor, although named as an insured, nevertheless shall be
entitled to recover under said policies for any loss or damages occasioned to
it, its agents, employees, contractors, directors, shareholders, partners and
principals (disclosed or undisclosed) by reason of the negligence or tortious
acts of Tenant, its servants, agents, employees and contractors. Landlord agrees
that only Tenant shall be named a loss payee under Tenant's insurance policies
covering Tenant's Property and Workers' Compensation.
10.4 Each party shall include in each of its insurance policies covering
loss, damage or destruction by fire or other casualty (insuring the Building and
Landlord's property therein and the rental value thereof, in the case of
Landlord, and insuring Tenant's Property and the fixtures required to be insured
by Tenant pursuant to Section 10.03. and business interruption insurance in the
case of Tenant) a waiver of the insurer's right of subrogation against the other
party or, if such waiver should be unobtainable or unenforceable, (a) an express
agreement that such policy shall not be invalidated if the insured waives before
the casualty the right of recovery against any party responsible for a casualty
covered by such policies, or (b) any other form of permission for the release of
the other party. If such waiver, agreement or permission shall cease to be
obtainable without additional charge, then if the other party shall so elect and
shall pay the insurer's additional charge therefor, such waiver, agreement or
permission shall be included in the policy, or the other party shall be named as
an additional insured in the policy, provided, however, that Tenant shall at no
time be named a loss payee under any of Landlord's insurance policies.
Notwithstanding the foregoing, any failure by Tenant as an additional insured
promptly
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to endorse to the order of Landlord any instrument for the payment of money
under a policy of which Landlord is the owner or original or primary insured
shall be a default under this lease.
10.5 Each party hereby releases the other party with respect to any claim
(including a claim for negligence) which it might otherwise have against the
other party for loss, damage or destruction with respect to its property
(including rental value or business interruption) occurring during the Term and
with respect and to the extent to which it is insured under a policy or policies
containing a waiver of subrogation or permission to release liability or naming
the other party as an additional insured, as provided in Section 10.04. If,
notwithstanding the recovery of insurance proceeds by either party for loss,
damage or destruction of its property (or rental value or business
interruption), the other party is liable to the first party with respect thereto
or is obligated under this lease to make replacement, repair or restoration or
payment, then provided the first party's right of full recovery under its
insurance policies is not thereby prejudiced or otherwise adversely affected,
the amount of the net proceeds of the first party's insurance against such loss,
damage or destruction shall be offset against the second party's liability to
the first party therefor, or shall be made available to the second party to pay
for replacement, repair or restoration, as the case may be.
10.6 The waiver of subrogation or permission for release referred to in
Section 10.04. shall extend to the agents of each party and its and their
employees and, in the case of Landlord, shall also apply to any superior
mortgagee or holder of a superior lease of which Tenant has received written
notice. The releases provided for in Section 10.05. shall likewise extend to
such agents and employees, if and to the extent that such waiver or permission
is effective as to them. Nothing contained in Sections 10.04. or 10.05 shall be
deemed to impose upon either party any duty to procure or maintain any of the
kinds of insurance referred to therein except as otherwise required in this
Article 10. If Tenant shall fail to maintain insurance in effect as required in
this Article 10, the release by Tenant set forth in Section 10.05. shall be in
full force and effect to the same extent as if such required insurance
(containing a waiver of subrogation) were in effect.
ARTICLE 11
RULES AND REGULATIONS
11.1 Tenant and its employees and agents shall faithfully observe and
comply with the Rules and Regulations annexed hereto as Exhibit C and such
changes therein (whether by modification, elimination or addition) as Landlord
at any time or times hereafter may make and communicate in writing to Tenant,
which do not unreasonably affect the conduct of Tenant's business in the Demised
Premises except as required by any governmental law, rule, regulation, ordinance
or similar decree; provided, however, that in case of any conflict or
inconsistency between the provisions of this lease and any of the Rules and
Regulations as originally promulgated or as changed, the provisions of this
lease shall control.
11.2 Nothing in this lease contained shall be construed to impose upon
Landlord any duty or obligation to Tenant to enforce the Rules and Regulations
or the terms, covenants or conditions in any other lease as against any other
tenant, and Landlord shall not be liable to Tenant for violation of the same by
any other tenant or its employees, agents or visitors.
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However, Landlord shall not enforce any of the Rules and Regulations in such
manner as to discriminate against Tenant or anyone claiming under or through
Tenant.
ARTICLE 12
SUBORDINATION, NOTICE TO LESSORS AND MORTGAGEES
12.1 This lease, and all rights of Tenant hereunder, are and shall be
subject and subordinate in all respects to all ground leases, overriding leases
and underlying leases of the Land and/or the Building now or hereafter existing
and to all mortgages which may now or hereafter affect the Land and/or the
Building and/or any of such leases, whether or not such mortgages shall also
cover other lands and/or buildings, to each and every advance made or hereafter
to be made under such mortgages, and to all renewals, modifications,
replacements and extensions of such leases and such mortgages and spreaders and
consolidations of such mortgages. This Section shall be self-operative and no
further instrument of subordination shall be required. In confirmation of such
subordination, Tenant shall promptly execute and deliver any instrument that
Landlord, the lessor of any such lease or the holder of any such mortgage (or
any of their respective successors in interest) may request to evidence
subordination. The leases to which this lease is, at the time referred to,
subject and subordinate pursuant to this Article are sometimes referred to as
"superior leases" and the mortgages to which this lease is, at the time referred
to, subject and subordinate are sometimes referred to as "superior mortgages".
If, in connection with the obtaining, continuing or renewing of financing, a
superior lessor or superior mortgagee or a prospective superior lessor or
prospective superior mortgagee shall request reasonable modifications of this
lease as a condition of such financing, Tenant will not unreasonably withhold
its consent thereto, provided that such modifications do not materially and
adversely either increase the obligations of Tenant hereunder or affect the
rights of Tenant under this lease.
12.2 In the event of any act or omission of Landlord which would give
Tenant the right, immediately or after lapse of a period of time, to cancel or
terminate this lease, or to claim a partial or total eviction, Tenant shall not
exercise such right (a) until it has given written notice of such act of
omission to the holder of each superior mortgage and the lessor of each superior
lease whose name and address shall previously have been furnished to Tenant in
writing, and (b) unless such act or omission shall be one which is not capable
of being remedied by Landlord or such mortgage holder or superior lessor within
a reasonable period of time, until a reasonable period for remedying such act or
omission shall have elapsed following the giving of such notice and following
the time when such holder or lessor shall have become entitled under such
superior mortgage or superior lease, as the case may be, to remedy the same
(which reasonable period shall in no event be less than the period to which
Landlord would be entitled under this lease or otherwise, after similar notice,
to effect such remedy), provided such holder or lessor shall with due diligence
give Tenant written notice of intention to, and commence and continue to remedy
such act or omission.
12.3 If the lessor of a superior lease or the holder of a superior
mortgage shall succeed to the rights of Landlord under this lease, whether
through possession or foreclosure action or delivery of a new lease or deed,
then at the option and upon request of such party so succeeding
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to Landlord's rights (herein sometimes referred to as "successor landlord") and
upon successor landlord's written agreement to accept Tenant's attornment and to
recognize this lease, Tenant shall attorn to and recognize such successor
landlord as Tenant's landlord under this lease, and shall promptly execute and
deliver any instrument that such successor landlord may reasonably request to
evidence such attornment. Upon such attornment this lease shall continue in full
force and effect as, or as if it were, a direct lease between the successor
landlord and Tenant upon all of the terms, conditions and covenants as are set
forth in this lease and shall be applicable after such attornment except that
the successor landlord shall not:
A. be liable for any previous act, omission or negligence of
Landlord under this lease;
B. be subject to any counterclaim, defense or offset not
expressly provided for in this lease, which shall have theretofore accrued to
Tenant against Landlord;
C. be bound by any previous amendment or modification of this
lease not expressly provided for in this lease, or by any previous prepayment of
more than one month's fixed rent or additional rent, unless such amendment or
modification or prepayment shall have been expressly approved in writing by the
lessor of the superior lease or the holder of the superior mortgage through or
by reason of which the successor landlord shall have succeeded to the rights of
Landlord under this lease;
D. be liable for any security deposited pursuant to this lease
unless such security has actually been delivered to the successor landlord; and
E. be obligated to perform any work or to contribute to the cost
of any work or improvements in the Demised Premises.
ARTICLE 13
TENANT'S PROPERTY
13.1 All fixtures, equipment, improvements and appurtenances attached to
or built into the Demised Premises, and any changes involving additions to the
HVAC equipment and the Building security, life safety, plumbing, electrical and
other systems, at the commencement of or during the Term, whether or not by or
at the expense of Tenant, shall be and remain a part of the Demised Premises,
shall be deemed the property of Landlord and shall not be removed by Tenant,
except as expressly provided in this Article.
13.2 All movable partitions, custom-made cabinet work, other business and
trade fixtures, communications equipment and office equipment, whether or not
attached to or built into the Demised Premises, which are installed in the
Demised Premises by or for the account of Tenant, at no cost or expense to
Landlord, and which can be removed without structural damage to the Building,
and all furniture, furnishings and other articles of movable personal property
owned by Tenant and located in the Demised Premises, (all of which are sometimes
referred to as "Tenant's Property") shall be and shall remain the property of
Tenant and may be removed by
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it at any time during the Term; provided that if any of Tenant's Property is
removed, Tenant or any party or person entitled to remove same shall repair to
Landlord's reasonable satisfaction or pay the cost of repairing any damage to
the Demised Premises or to the Building resulting from such removal. Any
equipment or other property for which Landlord shall have granted any allowance
or credit to Tenant or which has replaced such items originally provided by
Landlord at Landlord's expense shall not be deemed to have been installed by or
for the account of Tenant without expense to Landlord, and shall not be
considered Tenant's Property.
13.3 At or before the Expiration Date or the date of any earlier
termination of this lease, or as promptly as practicable after such earlier
termination date, Tenant at its expense, shall remove from the Demised Premises
(a) all of Tenant's Property (except such items thereof as Tenant shall have
expressly agreed in writing with Landlord were to remain and to become the
property of Landlord), and (b) unless Landlord gives Tenant notice to the
contrary, any non-Building standard or unusual changes (including, without
limitation, interior staircases and raised flooring) (2) and Tenant shall fully
repair any damage to the Demised Premises or the Building resulting from such
removal. Tenant's obligation herein shall survive the termination of the lease.
13.4 Any other items of Tenant's Property (except money, securities and
other like valuables) which shall remain in the Demised Premises after the
Expiration Date or after a period of fifteen (15) days following an earlier
termination date, may, at the option of the Landlord, be deemed to have been
abandoned, and in such case either may be retained by Landlord as its property
or may be disposed of, without accountability, at Tenant's expense, in such
manner as Landlord may see fit.
ARTICLE 14
REPAIRS AND MAINTENANCE
14.1 Tenant shall take good care of the Demised Premises and the fixtures
and appurtenances therein. Tenant, at its expense, shall promptly make all
repairs, ordinary or extraordinary, interior or exterior, structural or
otherwise, in and about the Demised Premises and the Building, as shall be
required by reason of (a) the performance or existence of Tenant's Changes, (b)
the installation, use or operation of Tenant's Property in the Demised Premises,
(c) the moving of Tenant's Property in or out of the Demised Premises and the
Building, or (d) the misuse or neglect of Tenant or any of its employees,
agents, visitors, invitees or contractors; but Tenant shall not be responsible
for any of such repairs as are required by reason of Landlord's neglect or other
fault in the manner of performing any changes in and to the Demised Premises
which may be undertaken by Landlord for Tenant's account or are otherwise
required by reason of neglect or other fault of Landlord or its employees,
agents or contractors. Except if required by the neglect or other fault of
Landlord or its employees, agents or contractors, Tenant at its expense, shall
replace all scratched, damaged or broken doors or other glass in or about the
------------
(2) Subject to Landlord's approval.
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Demised Premises and shall be responsible for all repairs, maintenance and
replacement of wall and floor coverings in the Demised Premises and, for the
repair and maintenance of all lighting fixtures therein.
14.2 Landlord, at its expense, shall keep and maintain the Building and
its fixtures, appurtenances, systems and facilities serving the Demised Premises
in good working order, condition and repair and shall make all repairs,
structural and otherwise, interior and exterior, as and when needed in or about
the Demised Premises, except for those repairs for which Tenant is responsible
pursuant to any other provisions of this lease.
14.3 (a) Except as expressly otherwise provided in this lease, Landlord
shall have no liability to Tenant by reason of any inconvenience, annoyance,
interruption or injury to business arising from Landlord's making any repairs or
changes which Landlord is required or permitted by this lease, or required by
law, to make in or to any portion of the Building or the Demised Premises, or in
or to the fixtures, equipment or appurtenances of the Building or the Demised
Premises, provided that Landlord shall use due diligence with respect thereto
and shall perform such work, except in case of emergency, at times reasonably
convenient to Tenant and otherwise in such manner as will not materially
interfere with Tenant's use of the Demised Premises, provided however, the
preceding shall not require Landlord to perform same after Tenant's business
hours.
(b) If as a result of any repair, alteration, modification,
addition or improvement performed by Landlord in or to the Building, the Demised
Premises or any of the Building systems, the Demised Premises shall become
untenantable and Tenant shall actually discontinue occupancy thereof for the
conduct of its business for a continuous period in excess of twenty (20) days,
then beginning on the twenty-first (21st), day and continuing thereafter until
the Demised Premises again become tenantable or such earlier date as Tenant
resumes the conduct of its business therein, the fixed rent and additional rent
payable pursuant to Article 5 hereof shall be abated.
14.4 There is currently located within the Demised Premises an elevator
providing service between the ground floor and basement portions of the Demised
Premises. Under no circumstances shall Tenant remove, modify or alter such
elevator and/or any of the systems comprising or serving the elevator or
required for its operation without the Landlord's prior written approval, it
being understood between the parties that Landlord intends for such elevator to
remain in and serve the Demised Premises throughout the term of the lease. In
that connection, Tenant shall be solely responsible for repair, maintenance and
if necessary, replacement of the elevator at Tenant's sole cost and expense
throughout the term. For the purpose of maintaining and repairing the elevator,
Tenant shall contract in a manner reasonably satisfactory to Landlord for the
maintenance and repair of the elevator and to that end shall engage the services
of an elevator maintenance company reasonably satisfactory to Landlord, failing
which Landlord may, at competitive rates (or at the same rates paid by Landlord
for comparable service to its elevators) engage such maintenance company at
Tenant's sole cost and expense which shall be payable from time to time by
Tenant in accordance with invoices rendered by Landlord at Landlord's cost plus
fifteen (15%) percent which Tenant shall pay as additional rent within thirty
(30) days after demand therefor. At the end of the term,
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such elevator shall be returned to Landlord in good condition and state of
repair, ordinary wear and tear excluded.
ARTICLE 15
ELECTRICITY
15.1 A. Prior to the Commencement Date, risers, feeders and wiring
will be installed in the Building so as to adequately supply electric service to
the Demised Premises and the HVAC equipment serving the Demised Premises. A
meter system or similar device will be furnished and installed by Landlord to
measure the electricity consumed in the Demised Premises. In the event the
connected load in the Demised Premises shall at any time or from time to time
during the Term hereof exceed, or if Tenant shall desire connected load in
excess of the connected load then allocated to the Demised Premises, then Tenant
shall pay to Landlord, as additional rent, the then Building standard excess
capacity charge (the "Excess Capacity Charge") for each occurrence of such
excess capacity (over and above the wattage of any previous excess capacity for
which Tenant has paid an Excess Capacity Charge).
B. Tenant shall make all arrangements with the public utility
company (the "Utility") for obtaining electricity directly from the Utility.
Landlord will permit its electric feeders, risers and wiring serving the Demised
Premises to be used by Tenant to the extent available and safely capable of
being used for such purpose. Tenant shall be responsible to the Utility for the
payment of all charges for electricity consumed by Tenant in the Demised
Premises and all electric current used in the operation of the heating,
ventilation and air-conditioning servicing the Demised Premises (including the
Premises Unit, any supplemental air conditioning, fans and motors) shall be the
obligation of Tenant.
C. Landlord shall be obligated to pay no part of any costs
required for Tenant's direct electric service. Interruption or curtailment of
such direct service shall not constitute a constructive or partial eviction nor
entitle Tenant to any compensation or abatement of rent. Landlord shall not in
anywise be liable or responsible to Tenant for any loss, damage or expense which
Tenant may sustain or incur for such interruption or curtailment or if either
the quantity or character of electric service is changed or is no longer
available or suitable for Tenant's requirements.
15.2 Tenant covenants and agrees that at all times its use of electric
current shall never exceed the capacity of the then existing feeders to the
Building or the risers or wiring in the Building.
15.3 Tenant agrees not to connect any additional electrical equipment of
any type to the Building electric distribution system beyond that on Tenant's
Plans, other than lamps, typewriters, personal computers and other small office
machines which consume comparable
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amounts of electricity, without the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed. In no event shall Tenant
use or install any fixtures, equipment or machines, the connected load use of
which would exceed the electricity service allocated to the Demised Premises.
All meters, panel boards, wiring and other equipment which may be required to
obtain electricity from the Utility shall be maintained by Tenant at its
expense, subject to the provisions of this lease. Tenant shall make no
alterations or additions to the electrical equipment without the prior written
consent of Landlord.
ARTICLE 16
HEAT, VENTILATION AND AIR-CONDITIONING
16.1 To the extent there are one or more air-conditioning units
(collectively, the "Unit") located in and serving the Demised Premises, Tenant
shall, at its expense, operate and maintain the Unit. Tenant's obligation to
maintain the Unit shall include, but not be limited to, the periodic cleaning
and/or replacement of filters, replacement of fuses and belts, the calibration
of thermostats and all startup and shut down maintenance of the Unit. Such
maintenance obligations shall be performed throughout the term of this Lease, on
Tenant's behalf, by a reputable air conditioning maintenance company engaged by
Tenant at its expense, and first approved by Landlord. In the event Tenant shall
fail to engage an air conditioning maintenance company as aforesaid, Landlord
may (but shall not be obligated to) perform such maintenance and/or engage an
air conditioning service company at Tenant's expense to perform the aforesaid
maintenance to the Unit, and Tenant shall pay on demand as additional rent
hereunder all expenses incurred by Landlord in connection therewith. All
electricity used in connection with the operation of the Unit shall be obtained
by Tenant upon, and subject to, all of the terms, covenants and conditions
contained in Article 15 hereof. The Unit currently utilizes condenser water from
the Building condenser water system. Tenant shall pay for all condenser water
required for the operation of the Unit at Landlord's usual charge therefor
(currently $758 per ton per year), as the same may be increased from time to
time. Such payments shall be as additional rent monthly or as otherwise required
by Landlord in accordance with Landlord's invoices therefor. Tenant shall, at
its sole cost and expense, perform any and all necessary repairs to, and cause
any and all replacements of, the Unit. The existing Unit, and any replacements
thereof or additional air conditioning units installed by Tenant during the term
of this lease shall be and remain at all times the property of Landlord, and
Tenant shall surrender the Unit and all such repairs and replacements to
Landlord in good working order and condition on the Expiration Date.
ARTICLE 17
SERVICES
17.1 Landlord shall supply reasonably adequate quantities of domestic hot
and cold water to one or more points as currently located in the Demised
Premises for ordinary drinking, lavatory and cleaning purposes. If Tenant uses
water for any other purpose, Landlord, at
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Tenant's expense, shall install meters to measure Tenant's consumption of water
for such other purposes. Tenant shall pay for the quantities of water shown on
such meters, at Landlord's cost thereof plus an administrative charge of ten
(10%) percent, on the rendition of Landlord's bills therefor.
17.2 Landlord reserves the right, without any liability to Tenant, except
as otherwise expressly provided in this lease, to stop service of any of the
heating, ventilating, air conditioning, electric, sanitary, or other systems
serving the Demised Premises, or the rendition of any of the other services
required of Landlord under this lease, whenever and for so long as may be
necessary, by reason of accidents, emergencies, strikes or the making of repairs
or changes which Landlord is required by this lease or by law to make or in good
faith deems necessary, by reason of difficulty in securing proper supplies of
fuel, steam, water, electricity, labor or supplies, or by reason of any other
cause beyond Landlord's reasonable control.
17.3 Except as provided in this Article 17, Landlord shall not be
responsible for the rendition of any services to Tenant or the Demised Premises,
including electricity, heating, ventilation, air-conditioning, cleaning or
elevator service.
ARTICLE 18
ACCESS, CHANGES IN BUILDING FACILITIES, NAME
18.1 All parts except the inside surfaces of all walls, windows and doors
bounding the Demised Premises (including exterior Building walls and doors and
any core corridor entrance) and any space in or adjacent to the Demised Premises
used for shafts, stacks, pipes, conduits, fan and air-conditioning rooms, ducts,
electric or other utilities, sinks or other Building facilities, and the use
thereof, as well as access thereto through the Demised Premises for the purpose
of operation, maintenance, decoration and repair, are reserved to Landlord.
18.2 Tenant shall permit Landlord to install, use, replace and maintain
pipes, ducts and conduits within the Demised Premises and where practicable,
within the demising walls, bearing columns and ceilings of the Demised Premises.
18.3 Landlord and Landlord's agents shall have the right, upon request
(except in emergency under clause (b) hereof) to enter and/or pass through the
Demised Premises or any part thereof, at reasonable times during reasonable
hours, (a) to examine the Demised Premises and to show them to the fee owners,
lessors of superior leases, holders of superior mortgages, or prospective
purchasers, mortgagees or lessees of the Building as an entirety, and (b) for
the purpose of making such repairs or changes in or to the Demised Premises or
in or to its facilities, which Landlord may desire to make or as may be provided
for by this lease or may be mutually agreed upon by the parties or as Landlord
may be required to make by law or in order to repair and maintain said structure
or its fixtures or facilities. Landlord shall be allowed to take all materials
into and upon the Demised Premises that may be required for such repairs,
changes, repainting or maintenance, without liability to Tenant, but Landlord
shall not unreasonably interfere with Tenant's use of the Demised Premises.
Landlord shall also have the right to enter on and/or pass through the Demised
Premises, or any part thereof, at such times as such entry
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shall be required by circumstances of emergency affecting the Demised Premises
or said structure.
18.4 During the period of twenty-four (24) months prior to the Expiration
Date Landlord may exhibit the Demised Premises to prospective tenants.
18.5 Landlord reserves the right, at any time, without incurring any
liability to Tenant therefor, to make such changes in or to the Building and
Land and the fixtures and equipment thereof, as well as in or to the street
entrances, halls, passages, elevators and stairways thereof, as it may deem
necessary or desirable.
18.6 Landlord may adopt any name for the Building. Landlord reserves the
right to change the name of the Building at any time. Tenant agrees not to refer
to the Building by any name or address other than as designated by Landlord.
18.7 For the purposes of this Article 18, the term "Landlord" shall
include lessors of leases and the holders of mortgages to which this lease is
subject and subordinate as provided in Article 12.
ARTICLE 19
TENANT'S WORK
19.1 (a) Tenant hereby covenants and agrees that Tenant will, at Tenant's
own cost and expense, and in a good and workmanlike manner, make and complete
the work and installations in and to the Demised Premises set forth below in
such manner so that the Demised Premises will be a first-class store for the
purposes contemplated by Article 4 hereof, and in any event in a manner
befitting the quality and character of the Building.
(b) Tenant, at Tenant's expense, shall prepare a final plan or final
set of plans and specifications (which said final plan or final set of plans, as
the case may be, and specifications are hereinafter called the "final plan")
which shall contain complete information and dimensions necessary for the
construction and finishing of the Demised Premises and for the engineering in
connection therewith. The final plan shall be submitted by Tenant to Landlord
for Landlord's written approval by no later than October 1, 2004, which
approval shall not be unreasonably withheld or delayed. Tenant shall promptly
reimburse Landlord upon demand for any reasonable out-of-pocket costs and
expenses incurred by Landlord in connection with Landlord's review of Tenant's
final plan. If Landlord shall disapprove the final plan, Landlord shall set
forth its reasons for such disapproval and itemize those portions of the final
plan so disapproved. Landlord shall not be deemed unreasonable in withholding
its consent to the extent that the final plan prepared by Tenant pursuant hereto
involves the performance of work or the installation in the Demised Premises of
materials or equipment which do not equal or exceed the standard of quality
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suitable for and generally applicable to a first-class office building in
Midtown Manhattan.
(c) In accordance with the final plan, Tenant, at Tenant's expense;
will make and complete in and to the Demised Premises (hereinafter sometimes
called the "Work Area") the work and installations (hereinafter called Tenant's
Work) specified in the final plan. Tenant agrees that Tenant's Work will be
performed with the least possible disturbance to the occupants of other parts of
the Building and to the structural and mechanical parts of the Building and
Tenant will, at its cost and expense, promptly comply with all laws, rules and
regulations of all public authorities having jurisdiction in the Building with
reference to Tenant's Work. Tenant shall not do or fail to do any act which
shall or may render the Building of which the Demised Premises are a part,
liable to any mechanic's lien or other lien and if any such lien or liens be
filed against the Building of which the Demised Premises are a part, or against
Tenant's Work, or any part thereof, Tenant will, at Tenant's own cost and
expense, promptly remove the same of record within thirty (30) days after the
filing of such lien or liens; or in default thereof, Landlord may, after giving
Tenant notice of its intention, cause any such lien or liens to be removed of
record by payment of bond or otherwise, as Landlord may elect, and Tenant will
reimburse Landlord for all costs and expenses incidental to the removal of any
such lien or liens incurred by Landlord. Tenant shall indemnify and save
harmless Landlord of and from all claims, counsel fees, loss, damage and
expenses whatsoever by reason of any liens, charges or payments of any kind
whatsoever that may be incurred or become chargeable against Landlord or the
Building of which the Demised Premises are a part, or Tenant's Work or any part
thereof, by reason of any work done or to be done or materials furnished or to
be furnished to or upon the Demised Premises in connection with Tenant's Work.
Tenant hereby covenants and agrees to indemnify and save harmless Landlord of
and from all claims, counsel fees, loss, damage and expenses whatsoever by
reason of any injury or damage, howsoever caused, to any person or property
occurring prior to the completion of Tenant's Work or occurring after such
completion, as a result of anything done or omitted in connection therewith or
arising out of any fine, penalty or imposition or out of any other matter or
thing connected with any work done or to be done or materials furnished or to be
furnished in connection with Tenant's Work. At any and all times during the
progress of Tenant's Work, Landlord shall be entitled to have a representative
or representatives on the site to inspect Tenant's Work and such representative
or representatives shall have free and unrestricted access to any and every part
of the Demised Premises. Tenant shall advise Landlord in writing of Tenant's
general contractor and subcontractors who are to do Tenant's Work, and such
general contractor and subcontractors shall be subject to Landlord's prior
written approval; such contractors shall, to the extent permitted by law, use
employees for Tenant's Work who will work harmoniously with other employees on
the job.
(d) Tenant shall at Tenant's sole cost and expense file all
necessary architectural plans and obtain all necessary approvals and permits in
connection with Tenant's Work being performed by it pursuant to this Article.
(e) The following conditions shall also apply to Tenant's Work:
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(i) all Tenant's Work shall be of material, manufacture,
design, capacity and color consistent with high-quality retail construction in
first-class Midtown Manhattan office buildings (hereinafter called "Building
Standard");
(ii) Tenant, at Tenant's expense shall (A) file all required
architectural, mechanical and electrical drawings and obtain all necessary
permits, and (B) furnish and perform all engineering and engineering drawings in
connection with Tenant's Work. Tenant shall obtain Landlord's approval of the
drawings referred to in (A) and (B) hereof, which approval shall not be
unreasonably withheld or delayed;
(iii) Tenant shall use an engineer approved by Landlord with
respect to the preparation of Tenant's engineering drawings in connection with
Tenant's Work;
(iv) all Tenant's Work shall be performed by Tenant in
accordance with Article 3 hereof; and
(v) Tenant's Work shall be completed and Tenant shall open for
business to the general public by no later than six (6) months after the
Commencement Date.
(f) Landlord shall, at Tenant's written request, cooperate in all
reasonable respects with Tenant in the performance by Tenant of Tenant's Work in
preparing the Demised Premises for Tenant's occupancy and Landlord shall
instruct its employees and contractors to render such assistance and to
cooperate with Tenant's employees, representatives and contractors provided that
to the extent that Landlord shall incur any reasonable, out-of-pocket expense in
so cooperating or in rendering such assistance, Tenant shall reimburse Landlord
for such expense as additional rent hereunder.
ARTICLE 20
NON-LIABILITY AND INDEMNIFICATION
20.1 Neither Landlord nor any agent or employee of Landlord shall be
liable to Tenant for any injury or damage to Tenant or to any other person or
for any damage to, or loss (by theft or otherwise) of, any property of Tenant or
of any other person, irrespective of the cause of such injury, damage or loss,
unless caused by or due to the willful acts or gross negligence of Landlord, its
agents or employees occurring within the scope of their respective employments
without negligence on the part of Tenant, it being understood that no property,
other than such as might normally be brought upon or kept in the Demised
Premises as an incident to the reasonable use of the Demised Premises for the
purpose herein permitted, will be brought upon or be kept in the Demised
Premises.
20.2 Tenant shall indemnify and save harmless Landlord and its agents
against and from (a) any and all claims (i) arising from (x) the conduct or
management by Tenant of the Demised Premises or of any business therein, or (y)
any work or thing whatsoever done, or any
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condition created in or about the Demised Premises during the Term or during the
period of time, if any, prior to the Commencement Date that Tenant may have been
given access to the Demised Premises, or (ii) arising from any negligent or
otherwise wrongful act or omission of Tenant or any of its subtenants or
licensees or its or their employees, agents, visitors, invitees or contractors
or subcontractors of any tier, and (b) all costs, expenses and liabilities
incurred in or in connection with each such claim or action or proceeding
brought thereon. In case any action or proceeding be brought against Landlord by
reason of any such claim, Tenant, upon notice from Landlord, shall resist and
defend such action or proceeding at Tenant's expense by counsel reasonably
satisfactory to Landlord, without any disclaimer of liability in connection with
such claim.
20.3 Except as otherwise expressly provided in this lease, this lease and
the obligations of Tenant hereunder shall be in no wise affected, impaired or
excused because Landlord is unable to fulfill, or is delayed in fulfilling, any
of its obligations under this lease by reason of strike, other labor trouble,
governmental preemption or priorities or other controls in connection with a
national or other public emergency or shortages of fuel, supplies or labor
resulting therefrom, acts of God or other cause beyond Landlord's reasonable
control.
ARTICLE 21
DESTRUCTION OR DAMAGE
21.1 If the Building or the Demised Premises shall be partially or totally
damaged or destroyed by fire or other cause, then, whether or not the damage or
destruction shall have resulted from the fault or neglect of Tenant, or its
employees, agents or visitors (and if this lease shall not have been terminated
as in this Article hereinafter provided), the rents shall be abated in
accordance with Section 21.2 hereof and Landlord shall repair the damage and
restore and rebuild the Building and/or the Demised Premises, at its expense,
with reasonable dispatch after notice to it of the damage or destruction,
provided, however, that Landlord shall not be required to repair or replace any
of Tenant's Property nor to restore any Tenant's Changes.
21.2 If the Building or the Demised Premises shall be partially damaged or
partially destroyed by fire or other cause, the rents payable hereunder shall be
abated to the extent that the Demised Premises shall have been rendered
Untenantable (hereinafter defined) and for the period from the date of such
damage or destruction to the date the damage shall be repaired or restored. If
the Demised Premises or a major part thereof shall be totally (which shall be
deemed to include substantially totally) damaged or destroyed or rendered
completely (which shall be deemed to include substantially completely)
Untenantable on account of fire or other cause, the rents shall abate as of the
date of the damage or destruction and until Landlord shall repair, restore and
rebuild the Demised Premises, provided, however, that should Tenant reoccupy a
portion of the Demised Premises during the period the restoration work is taking
place and prior to the date that the same are made completely tenantable, rents
allocable to such portion shall be payable by Tenant from the date of such
occupancy.
21.3 If the Building or the Demised Premises shall be totally damaged or
destroyed by fire or other cause, or if the Building shall be so damaged or
destroyed by fire or other cause
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(whether or not the Demised Premises are damaged or destroyed) as to require a
reasonably estimated expenditure of more than thirty (30%) percent of the full
insurable value of the Building immediately prior to the casualty, then in
either such case Landlord may terminate this lease by giving Tenant notice to
such effect within one hundred eighty (180) days after the date of the casualty.
In case of any damage or destruction to the Demised Premises, Tenant may
terminate this lease, by notice to Landlord, if Landlord has not completed the
making of the required repairs and restored and rebuilt the Demised Premises
within twelve (12) months from the date of such damage or destruction, or within
such period after such date (not exceeding six (6) months) as shall equal the
aggregate period Landlord may have been delayed in doing so by adjustment of
insurance, labor trouble, governmental controls, act of God, or any other cause
beyond Landlord's reasonable control.
21.4 No damages, compensation or claim (or other expense, including
replacement premises or services) shall be payable by Landlord for
inconvenience, loss of business or annoyance arising from any repair or
restoration of any portion of the Demised Premises or of the Building pursuant
to this Article. Landlord shall use its best efforts to effect such repair or
restoration promptly and in such manner as to not unreasonably interfere with
Tenant's use and occupancy.
21.5 Notwithstanding any of the foregoing provisions of this Article, if
Landlord or the lessor of any superior lease or the holder of any superior
mortgage shall be unable to collect rent insurance proceeds applicable to the
Demised Premises or the Building by reason of some action or inaction on the
part of Tenant or any of its employees, agents or contractors, then, without
prejudice to any other remedies which may be available against Tenant, there
shall be no abatement of Tenant's rents, but the total amount of such rents not
abated (which would otherwise have been abated) shall not exceed the amount of
the uncollected insurance proceeds.
21.6 Landlord will not carry insurance of any kind on Tenant's Property or
Tenant's Changes and, except as provided by law or by reason of its fault or its
breach of any of its obligations hereunder, Landlord shall not be obligated to
repair any damage thereto or replace the same.
21.7 The provisions of this Article shall be considered an express
agreement governing any case of damage or destruction of the Demised Premises by
fire or other casualty, and Section 227 of the Real Property Law of the State of
New York, providing for such a contingency in the absence of an express
agreement, and any other law of like import, now or hereafter in force, shall
have no application in such case.
21.8 The term "Untenantable" as used in this Article shall mean that
Tenant is unable to use the Demised Premises or the portion thereof to which
reference is made for the conduct of its business in the normal course.
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ARTICLE 22
EMINENT DOMAIN
22.1 If the whole of the Building shall be lawfully taken by condemnation
or in any other manner for any public or quasi-public use or purpose, this lease
and the term and estate hereby granted shall forthwith terminate as of the date
of vesting of title in such taking (which date is hereinafter also referred to
as the "date of the taking"), and the rents shall be prorated and adjusted as of
such date.
22.2 If only a part of the Building shall be so taken, this lease shall be
unaffected by such taking except that Tenant may elect to terminate this lease
in the event of a partial taking of more than fifty (50%) percent of the useable
area of the Demised Premises and Tenant shall give notice of such election to
Landlord not later than thirty (30) days after (a) notice of such taking is
given by Landlord to Tenant, or (b) the date of such taking, whichever occurs
sooner. Upon the giving of such notice by Tenant this lease shall terminate on
the date of such taking and the rents shall be prorated as of such termination
date. Upon such partial taking and this lease continuing in force as to any part
of the Demised Premises, the rents apportioned to the part taken shall be
prorated and adjusted as of the date of taking and from such date the fixed rent
for the Demised Premises and additional rent shall be payable pursuant to
Article 5 according to the rentable area remaining.
22.3 Landlord shall be entitled to receive the entire award in any
proceeding with respect to any taking provided for in this Article without
deduction therefrom for any estate vested in Tenant by this lease and Tenant
shall receive no part of such award, except as hereinafter expressly provided in
this Article. Tenant hereby expressly assigns to Landlord all of its right,
title and interest in or to every such award. Notwithstanding anything herein to
the contrary, Tenant may, at its sole cost and expense, make an independent
claim with the condemning authority for Tenant's moving expenses, the value of
Tenant's fixtures or Tenant's Changes (other than Tenant's Changes performed
prior to Tenant's initial occupancy of the Demised Premises) which do not become
part of the Building or property of Landlord, provided however that Landlord's
award is not thereby reduced or otherwise adversely affected.
22.4 If the temporary use or occupancy of all or any part of the Demised
Premises shall be lawfully taken by condemnation or in any other manner for any
public or quasi-public use or purpose during the term of this lease, Tenant
shall be entitled, except as hereinafter set forth, to receive that portion of
the award for such taking which represents compensation for the use and
occupancy of the Demised Premises and, if so awarded, for the taking of Tenant's
Property and for moving expenses, and Landlord shall be entitled to receive that
portion which represents reimbursement for the cost of restoration of the
Demised Premises. This lease shall be and remain unaffected by such taking and
Tenant shall continue to be responsible for all of its obligations hereunder
insofar as such obligations are not affected by such taking and shall continue
to pay in full the fixed rent and additional rent when due. If the period of
temporary use or occupancy shall extend beyond the Expiration Date, that part of
the award which represents compensation for the use or occupancy of the Demised
Premises (or a part thereof) shall be divided between Landlord and Tenant so
that Tenant shall receive so much thereof as represents
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the period prior to the Expiration Date and Landlord shall receive so much
thereof as represents the period subsequent to the Expiration Date. All moneys
received by Tenant as, or as part of, an award for temporary use and occupancy
for a period beyond the date to which the rents hereunder have been paid by
Tenant shall be received, held and applied by Tenant as a trust fund for payment
of the rents falling due hereunder.
22.5 In the event of any taking of less than the whole of the Building
which does not result in a termination of this lease, or in the event of a
taking for a temporary use or occupancy of all or any part of the Demised
Premises which does not extend beyond the Expiration Date, Landlord, at its
expense, and to the extent any award or awards shall be sufficient for the
purpose, shall proceed with reasonable diligence to repair, alter and restore
the remaining parts of the Building and the Demised Premises to substantially a
Building standard condition to the extent that the same may be feasible and so
as to constitute a complete and tenantable Building and Demised Premises.
22.6 Should any part of the Demised Premises be taken to effect compliance
with any law or requirement of public authority other than in the manner
hereinabove provided in this Article, then (a) if such compliance is the
obligation of Tenant under this lease, Tenant shall not be entitled to any
diminution or abatement of rent or other compensation from Landlord therefor,
but (b) if such compliance is the obligation of Landlord under this lease, the
fixed rent hereunder shall be reduced and additional rents under Article 5 shall
be adjusted in the same manner as is provided in Section 22.02. according to the
reduction in rentable area of the Demised Premises resulting from such taking.
ARTICLE 23
SURRENDER
23.01 On the last day of the Term, or upon any earlier termination
of this lease, or upon any re-entry by Landlord upon the Demised Premises,
Tenant shall quit and surrender the Demised Premises to Landlord in good order,
condition and repair, except for ordinary wear and tear and Tenant shall remove
all of Tenant's Property therefrom except as otherwise expressly provided in
this lease and shall restore the Demised Premises wherever such removal results
in damage thereto.
ARTICLE 24
CONDITIONS OF LIMITATION
24.1 This lease and the Term and estate hereby granted are subject to the
limitations that:
A. if Tenant shall file a voluntary petition seeking an order for
relief under Title 11 of the United States Code, or Tenant shall be adjudicated
a debtor, bankrupt or
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insolvent, or shall file any petition or answer seeking, consenting to or
acquiescing in any order for relief, reorganization, arrangement, composition,
adjustment, winding-up, liquidation, dissolution or similar relief with respect
to Tenant or its debts under the present or any future federal bankruptcy act or
any other present or future applicable federal, state or other statute or law
(foreign or domestic), or shall file an answer admitting or failing to deny the
material allegations of a petition against it for any such relief or shall
generally not, or shall be unable to, pay its debts as they become due or shall
admit its insolvency or its inability to pay its debts as they become due, or
shall make a general assignment for the benefit of creditors or shall seek or
consent or acquiesce in the appointment of any trustee, receiver, examiner,
assignee, sequestrator, custodian or liquidator or similar official of Tenant or
of all or any part of Tenant's Property or if Tenant shall take any action in
furtherance of or authorizing any of the foregoing; or if Tenant shall call a
meeting of, or propose any form of arrangement, composition, extension or
adjustment with, its creditors holding a majority in amount of Tenant's
outstanding indebtedness; or
B. if any case, proceeding or other action shall be commenced or
instituted against Tenant, seeking to adjudicate Tenant as bankrupt or
insolvent, or seeking an order for relief against Tenant as debtor, or
reorganization, arrangement, composition, adjustment, winding-up, liquidation,
dissolution or similar relief with respect to Tenant or its debts under any
present or future federal bankruptcy act or any other present or future
applicable federal, state or other statute or law (foreign or domestic), or
seeking appointment of any trustee, receiver, examiner, assignee, sequestrator,
custodian or liquidator or similar official of Tenant or of all or any part of
Tenant's property, which either (i) results in the entry of an order for relief,
adjudication of bankruptcy or insolvency or such an appointment or the issuance
or entry of any other order having a similar effect or (ii) remains undismissed
for a period of sixty (60) days; or if any case, proceeding or other action
shall be commenc |
