MODIFICATION OF LEASE AGREEMENT
MODIFICATION OF LEASE AGREEMENT (this "Agreement") made this 11th day
of August, 1998 between FASHION GALLERY OWNERS, LLC, a New York limited
liability company, having an office at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(hereinafter referred to as "Landlord") and XXXXXX XXX MARKETING, INC.
(successor-in-interest to THE XXXXXX XXX COMPANIES, INC.) having an office at
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (hereinafter referred to as "Tenant").
WHEREAS, Tenant is currently the tenant of the entire Second and Fourth
floors and Storage Room #15 (which space is hereinafter collectively referred to
as the "Original Demised Premises") in the building known as 0000 Xxxxxxxx in
the County and State of New York (the "Building"), pursuant to that certain
Agreement of Lease dated April 29, 1997 between 0000 Xxxxxxxx Associates
(Landlord's predecessor-in-interest) ("Associates"), as landlord and The Xxxxxx
Xxx Companies, Inc. (predecessor-in-interest to Tenant), as tenant (the
"Lease"), which Lease is to terminate on its terms on April 30, 2002 (the
"Original Expiration Date");
WHEREAS, the parties desire to modify the Lease to, among other things,
add the entire third floor, substantially as shown on the plan annexed hereto as
Exhibit A-1 (which space is hereinafter referred to as the "Additional
Premises") in the Building and to extend the Term, upon the terms and conditions
hereinafter set forth (each capitalized term not specifically defined herein
shall have the same meaning given to it in the Lease).
NOW, THEREFORE, in consideration of the mutual premises and conditions
the parties agree as follows:
1. Modification of Lease. On the later to occur of (i) the date first
set forth above as the date upon which this Agreement was executed and (ii) the
"Approval Date" (as defined in Paragraph 15 of this Agreement), (such later date
being hereinafter referred to as, the "Effective Date") the Lease shall be
deemed modified as follows:
A. The Term of the Lease shall be extended to expire at
midnight on the expiration of Lease Year Ten, as defined below (the "Extended
Expiration Date"), or on such earlier date upon which the Term of this Lease
shall expire or be cancelled or terminated pursuant to any of the conditions or
covenants of the Lease or pursuant to law and the Extended Expiration Date shall
be substituted for the Expiration Date, as applicable, in the Lease.
B. With respect to the Additional Premises, "Lease Year One"
shall be deemed to commence on the first day of the calendar month following the
Effective Date and shall end on the last day of the successive twelve month
period. If the Effective Date shall be on the first day of the month, Lease Year
One shall commence on such date and shall end on the day immediately preceding
the first anniversary of the Effective Date. The term "Lease Year" shall refer
to each year of the Term including Lease Year One. Each succeeding Lease Year
after Lease Year One shall run for the
successive twelve month period from the expiration of the preceding Lease Year
and shall be consecutively numbered (i.e. the tenth Lease Year shall be known as
Lease Year Ten). From and after the Original Expiration Date, the provisions of
this Paragraph B shall also apply to the Original Demised Premises.
C. The area of the "Demised Premises", as defined in the Lease
shall consist of all of the Original Demised Premises and the Additional
Premises (substantially as shown on the plan annexed hereto as Exhibit A-2), and
except as specifically provided herein, all references in the Lease to the
"Demised Premises" shall mean the Original Demised Premises and the Additional
Premises.
D. 1. Notwithstanding anything to the contrary contained
herein, Base Annual Rent on account of the Original Demised Premises shall
continue to be due and payable as set forth in the Lease, except that during the
period from the Original Expiration Date through the Extended Expiration Date,
Base Annual Rent payable on account of the Original Demised Premises shall be as
follows: (a) during the period 5/l/02 through the expiration of Lease Year Four,
$1,260,646.00 per annum; (b) for each Lease Year during the period from the
commencement of Lease Year Five through the expiration of Lease Year Seven,
$1,341,978.00 per annum; and (c) for each Lease Year during the period from the
commencement of Lease Year Eight through the Extended Expiration Date,
$1,504,642.00 per annum. Notwithstanding the foregoing, there shall be no Base
Annual Rent, solely on account of the Original Demised Premises, payable for the
two (2) week period immediately prior to the Original Expiration Date; provided,
however, that in the event Tenant is dispossessed or this Lease is terminated by
reason of Tenant's default, the Base Annual Rent for such period shall be
immediately due and payable.
2. This Base Annual Rent solely on account of the
Additional Premises and in addition to the Base Annual Rent for the Original
Demised Premises shall be as follows: (a) for Lease Year One through Lease Year
Two, $589,657.00 per annum; (b) for Lease Year Three through Lease Year Four,
$630,323.00 per annum; (c) for Lease Year Five through Lease Year Seven,
$670,989.00 per annum; and (d) for Lease Year Eight through Lease Year Ten,
$752,321.00 per annum. Notwithstanding the foregoing, there shall be no Base
Annual Rent, solely on account of the Additional Premises (except for the
increase to Base Annual Rent attributable to electricity pursuant to Section
66.01 of this Lease), payable for the period commencing on the Effective Date
and terminating on September 30, 1998; provided, however, that in the event
Tenant is dispossessed or this Lease is terminated by reason of Tenant's
default, the Base Annual Rent for such period shall be immediately due and
payable. Simultaneously with the execution of this Agreement, Tenant has paid to
Landlord, if by check subject to collection, one full month of Base Annual Rent
for the Additional Premises, which amount shall be credited on a per diem basis
toward the payment of the installments of Base Annual Rent first due and payable
hereunder.
E. For purposes of calculating Additional Rent and other applicable
payments for the Additional Premises, the following terms shall have the
following meanings (for purposes of calculating Additional Rent and other
applicable payments for the Original Demised Premises, such terms shall have the
meanings ascribed to them in the Lease):
-2-
(i) "Base Tax Year" shall mean the Taxes for the twelve
month fiscal year commencing on July 1, 1998.
(ii) "Tenant's Proportionate Share" shall mean five and
ninety hundredths of one percent (5.90%).
F. The following provisions shall be added to and made a part of the
Lease:
"ARTICLE 66 - Cost of Electricity for Additional
Premises
66.01 Landlord agrees to supply the Additional Premises, as of the
Effective Date, with such electric current as Tenant shall reasonably require
(consistent with the existing electrical capacity contained in the Additional
Premises) for Tenant's wiring facilities and equipment within the Additional
Premises and in consideration thereof, Tenant agrees that the Base Annual Rent
reserved in this Lease shall be increased by the sum of Fifty Thousand Eight
Hundred Thirty-Two and 50/100ths Dollars ($50,832.50) per annum subject to
survey as provided in Section 66.02 hereof (the "Base Charge"). The Base Charge
increase to Base Annual Rent shall in no event be subject to reduction pursuant
to the provisions of this Article, but shall be subject to increase as
hereinafter provided. Landlord shall not be liable in any way to Tenant for any
failure or defect in the supply or character of electric energy furnished to the
Additional Premises not due to the gross negligence or willful misconduct of
Landlord or if the same is changed or is no longer available or suitable for
Tenant's requirements or is interrupted as a result of any cause not
attributable to Landlord.
66.02 (a) Landlord, from time to time during the Term of this Lease,
shall have the right to select a reputable independent electrical engineer or
consultant (the "Consultant") to prepare surveys of the electrical consumption
within the Additional Premises in order to determine whether the Base Charge for
electricity (as the same may have been increased by previous surveys and
determinations) is less than the Electrical Consumption Charge (as defined in
Section 66.03 below) which should be charged to Tenant. If the Base Charge shall
be less than the Electrical Consumption Charge, which the Consultant determines
to be applicable to Tenant then, effective as of the date of the Consultant's
determination, the Base Charge (as the same may have been previously increased
pursuant to the provisions hereof) shall be further increased by an amount equal
to the excess of (i) the then Electrical Consumption Charge determined to be
applicable by the Consultant over (ii) the Base Charge (plus any previous
increases to the Base Charge pursuant to the provisions hereof). Notwithstanding
the foregoing, the first survey shall not be made during Lease Year One unless
Tenant's proposed alterations in the Additional Premises involve an increase in
the existing electrical capacity of the Additional Premises of more than 110%
above the electrical capacity of the Additional Premises existing as of the
Effective Date (of which fact Landlord shall be the sole judge), and any
increase to the Base Charge resulting from such survey shall be retroactive to
the Commencement Date.
(b) Surveys made by the Consultant shall be based upon the use
of such electric current on Business Days, and such other days and hours when
Tenant uses electricity for lighting
-3-
and for the operation of the machinery, appliances and equipment used by Tenant
in the Additional Premises.
(c) The cost of the first survey shall be borne by Landlord.
Tenant shall pay the fees of the Consultant making all other surveys if such
survey results in an increase in the Electrical Consumption Charge, which
increase is not caused by an increase in the Electric Rate. The findings of the
Consultant shall be binding and conclusive on Landlord and Tenant; provided,
however, that Tenant may dispute the findings of the Consultant in accordance
with Section 66.08, below.
66.03 The "Electrical Consumption Charge" for electricity consumed by
Tenant within the Additional Premises, as determined by the Consultant, shall be
computed by multiplying the Electric Rate (as defined below) by Tenant's
consumption of electricity as determined by the Consultant. In no event,
however, shall the Electrical Consumption Charge be less than Landlord's actual
cost of acquiring and distributing electricity to Tenant. The term "Electric
Rate" shall mean, at the time in question, the actual cost to Landlord of
acquiring electricity for the Premises, including all surcharges, taxes, fuel
adjustments, taxes regularly passed on to customers by the public utility, and
other sums payable in respect thereof for the supply of electrical energy to
Landlord for the entire Building.
66.04 Tenant's use of electric energy in the Additional Premises shall
not at any time exceed the capacity of any of the electrical conductors and
equipment in, or otherwise serving, the Additional Premises. In order to insure
that such capacity is not exceeded and to avert possible adverse effect upon the
Building's electric service, Tenant shall not, without Landlord's prior written
consent in each instance (which shall not be unreasonably delayed or withheld),
connect any fixtures, appliances or equipment to the Building's electric
distribution system other than ordinary office and showroom equipment exclusive
of major computers, or make any material alteration or addition to the electric
system of the Additional Premises existing on the Effective Date. Landlord
agrees not to unreasonably withhold or delay its consent to the installation of
additional risers to the Premises, provided that all additional risers or other
equipment required therefor shall be provided by Landlord and the cost thereof
shall be paid by Tenant to Landlord within ten (10) days of demand and provided
further, that Landlord shall have the right to cause a survey of the Premises to
be made by the Consultant, at Tenant's sole cost and expense, to determine the
amount of the increase in the Base Annual Rent to reflect the value to Tenant of
the potential additional electric energy to be made available to Tenant by the
estimated additional capacity of such additional risers of the connected load of
such fixtures, appliances or equipment (measured, in respect of risers, at their
lowest point in the Building). The amount of such increase shall be determined
by the Consultant. Such determination shall be binding and conclusive upon the
parties unless disputed by Tenant within thirty (30) days of receipt of such
Consultant's report. Landlord, its agents and Consultants may survey the
electrical fixtures, appliances and equipment in the Additional Premises and
Tenant's use of electric energy therein from time to time after the initial
survey described above to ascertain whether Tenant is complying with its
obligations under this Section.
-4-
66.05 Tenant shall not place a load upon any floor of the Premises
exceeding the floor load per square foot area which it was designed to carry and
which is allowed by law, which floor load is 120 lbs/sq. ft. live load.
66.06 Tenant, at its sole cost and expense, shall furnish and install
all replacement lighting, tubes, lamps and bulbs required in the Additional
Premises. Tenant, at its sole cost and expense, shall install all replacement
ballasts in the Additional Premises using Landlord's designated contractor,
provided that the cost is thereof is at commercially competitive rates.
66.07 Landlord reserves the right to discontinue furnishing electric
energy to Tenant in the Additional Premises at any time upon not less than
thirty (30) days' notice to Tenant so long as: (i) the discontinuance is not
discriminatory to Tenant; and (ii) electric service is available from the public
utility or otherwise. If Landlord exercises such right this Lease shall continue
in full force and effect and shall be unaffected thereby, except that from and
after the effective date of such termination (a) Landlord shall not be obligated
to furnish electric energy to Tenant and (b) the Base Annual Rent shall be
reduced by the Base Charge then in effect. If Landlord so discontinues
furnishing electric energy to Tenant, such electric energy may be furnished to
Tenant by means of the then existing Building system feeders, risers and wiring
to the extent that the same are available, suitable and safe for such purpose.
All meters and additional panel boards, feeders, wiring and other conductors and
equipment which may be required to obtain electric energy directly from such
public utility company shall be furnished and installed by Landlord at
Landlord's expense, unless such discontinuance is as a result of a Legal
Requirement or Force Majeure, in which event the cost thereof shall be amortized
on a straight-line basis over the useful life thereof utilized for federal
income tax purposes and Tenant shall be responsible for the payment of the
annual amortization amount(s) occurring during the balance of the Term. The
change at any time of the character of electric service in the Additional
Premises not due to the gross negligence or willful misconduct of Landlord shall
not make Landlord liable or responsible to Tenant for any loss, damages or
expenses which Tenant may sustain as a result thereof.
66.08 In instances wherein Tenant has the right to dispute the
determinations made by the Consultant, Tenant shall only dispute such reports by
submitting, within thirty (30) days after receipt of the Consultant's report, a
written report by an electrical consultant retained by Tenant at Tenant's
expense. In the event that the Consultant and Tenant's electrical consultant
cannot mutually agree within thirty (30) days after the submission of Tenant's
electrical consultant's report, the matter shall be referred to arbitration in
accordance with the rules and regulations of the American Arbitration
Association. Until the determination of the consultants or the arbitrators,
Tenant shall pay the Electric Charge determined in accordance with the
Consultant's report and following such determination, an appropriate adjustment
and/or refund shall be made.
ARTICLE 67 - Security
67.01 A. Tenant has deposited with Landlord the sum of $294,828.50 as
security for the faithful performance and observance by Tenant of the terms,
provisions, covenants and conditions
-5-
of this Lease (the "Security Deposit"). The amount of the Security Deposit shall
be increased by Tenant coincident with every increase in Base Annual Rent. It is
agreed that in the event Tenant defaults beyond the expiration of any applicable
notice and grace periods (provided that Tenant shall have commenced such cure
within the applicable grace period and shall thereafter be diligently
prosecuting such cure to completion within the applicable grace period) in
respect of any of the terms, provisions, covenants and conditions of this Lease
including, but not limited to, the payment of Rent, Landlord may use, apply or
retain the whole or any part of the Security Deposit to the extent required for
the payment of any Rent or any other sum as to which Tenant is in default or for
any sum which Landlord may expend or may be required to expend by reason of
Tenant's default in respect of any of the terms, provisions, covenants, and
conditions of this Lease, including but not limited to, any damages or
deficiency accrued before or after summary proceedings or other re-entry by
Landlord. In the event that Tenant shall fully and faithfully comply with all of
the terms, provisions, covenants, and conditions of this Lease, the Security
Deposit shall be returned to Tenant after the date fixed as the end of this
Lease and after delivery of possession of the Demised Premises to Landlord in
the condition required by, and in accordance with, the terms of this Lease. In
the event of a sale of the Building or leasing of the Building, Landlord shall
transfer the Security Deposit to the vendee or lessee and Landlord shall
thereupon be released by Tenant from all liability for the return of such
Security Deposit; and Tenant agrees to look solely to the new landlord for the
return of said Security Deposit; and it is agreed that the provisions hereof
shall apply to every transfer or assignment made of the Security Deposit to a
new landlord. Tenant further covenants that it will not assign or encumber or
attempt to assign or encumber the Security Deposit and that neither Landlord nor
its successors or assigns shall be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance. In the event Landlord applies or
retains any portion or all of the Security Deposit, Tenant shall forthwith
restore the amount so applied or retained so that at all time the amount
deposited shall be as set forth above. Provided Tenant shall not then be in
default in the payment of rent or otherwise be in default under this Lease
beyond any applicable notice and grace period (provided that Tenant shall have
commenced such cure within the applicable grace period and shall thereafter be
diligently prosecuting such cure to completion within the applicable grace
period), and provided that Landlord shall not have applied all or any portion of
the security as provided for under this paragraph, then on the first (1st)
anniversary of the Effective Date, the security shall be reduced by an amount
equal to $98,276.16 (the "Reduction Amount") and Landlord shall return to Tenant
the Reduction Amount, together with interest earned thereon, if any. From and
after the first (1st) anniversary of the Effective Date and continuing
throughout the balance of the Term, Landlord shall retain an amount equal to
four (4) full months of Base Annual Rent then in effect under this Lease with
respect to the Additional Premises as the security deposit in accordance with
the terms of this Lease.
B. Tenant shall have the option to provide such Security
Deposit in the form of an irrevocable letter of credit from a commercial bank
(the "Issuer") of substantial financial standing and otherwise reasonably
acceptable to Landlord from which Landlord may draw in the event of any default
by Tenant under the terms of this Lease which continues after notice and the
expiration of any applicable grace period. Such letter of credit must be in
writing, be in form and content reasonably acceptable to Landlord, signed by the
Issuer, made payable to the order of Landlord, be assignable
-6-
by the beneficiary thereunder. Any fees payable in connection with Landlord's
assignment of the letter of credit to any successor landlord or superior
mortgagee shall be paid by Tenant. The form of letter of credit annexed hereto
as Exhibit B is acceptable to Landlord. Such letter of credit shall, by its
terms, be fully effective during a one (1) year period following the date of
issuance. Tenant shall arrange for such letter of credit to be renewed, or
replaced by an equivalent letter of credit, to provide continuing identical
security to Landlord during each subsequent one (1) year period and during any
remaining period under the Lease term (the last such extension to provide for
the continuance of such letter of credit for at least three months beyond the
Expiration Date). Subject to the penultimate sentence of this paragraph, each
such renewal or replacement of the letter of credit shall be for the full face
amount equivalent to six (6) full months' Base Annual Rent for the Additional
Premises then in effect under this Lease regardless of previous draws against
any prior letter of credit. The letter of credit shall either provide that it
shall be automatically renewed by its terms throughout the duration of this
Lease or contain a provision that requires the Issuer to notify the beneficiary
at least thirty (30) days prior to the expiration date of the letter of credit
that the letter of credit has not been renewed or replaced. No later than twenty
(20) days prior to the expiration date of each letter of credit, or renewal or
replacement thereof, Tenant shall provide written notice (and supporting
documentary evidence signed by the Issuer) to Landlord that the then effective
letter of credit has been so renewed or so replaced for the succeeding time
period. The failure of Tenant to maintain the letter of credit as herein
specified (including the failure to deliver evidence of the renewal or
replacement of the letter of credit as herein provided or the failure to
increase the undrawn balance of the letter of credit as herein provided) or the
Issuer's refusal or failure to permit Landlord to draw against the letter of
credit shall, unless Landlord receives a cash Security Deposit or replacement
letter of credit from another Issuer as herein provided, be a default under the
terms of this Lease with the same effect as a default for failure to pay rent.
In addition to all other remedies available to Landlord in the event of default
by Tenant under the terms of this Lease beyond the expiration of any applicable
notice and grace periods (provided that Tenant shall have commenced such cure
within the applicable grace period and shall thereafter be diligently
prosecuting such cure to completion within the applicable grace period),
Landlord shall have the specific remedy of immediately drawing against the
letter of credit in any amount up to and including the full face amount of such
letter of credit for payment of any Rent or other sum Landlord may be required
to expend by reason of Tenant's default, except that Landlord shall have the
right to draw the full face amount of the letter of credit in the event Tenant
fails to renew or replace the letter of credit as herein provided, in which
event Landlord shall hold such amount as a cash Security Deposit in accordance
with the provisions of the first paragraph of this Section 67.01. In the event
that Landlord draws against the letter of credit as provided for under this
paragraph, other than as a result of Landlord's draw of the full face amount of
the letter of credit as a result of Tenant's failure to renew or replace the
letter of credit as herein provided, then Tenant shall, upon demand by Landlord,
increase the then undrawn balance of the letter of credit to the amount provided
for herein. In the event that Tenant fails to so increase the then undrawn
balance of the letter of credit as herein provided, then Landlord shall be
entitled to draw the remaining balance of the letter of credit. It is
specifically agreed and understood that, in the event that Landlord has not
received from Tenant either a cash Security Deposit or a letter of credit, in
the form and substance required pursuant to the provisions of this paragraph,
within ten (10) days following Tenant's execution of this Modification of Lease
Agreement ("Amendment"), then this
-7-
Amendment shall be, at the sole option of Landlord, null and void and of no
further force and effect. Notwithstanding the foregoing, provided Tenant shall
not then be in default in the payment of rent or otherwise be in default under
this Lease beyond any applicable notice and grace period (provided that Tenant
shall have commenced such cure within the applicable grace period and shall
thereafter be diligently prosecuting such cure to completion within the
applicable grace period), and provided that Landlord shall not have drawn down
any amount under the letter of credit as provided for under this paragraph, then
Tenant shall have the right, on the first (1st) anniversary of the Effective
Date, to reduce the face amount of the letter of credit by the Reduction Amount.
From and after the first (1st) anniversary of the Effective Date and continuing
throughout the balance of the Term, the letter of credit shall be for the full
face amount equivalent to four (4) full months of Base Annual Rent then in
effect under this Lease for the Additional Premises.
67.02 If the Security Deposit held by Landlord shall be in cash, the
same shall be held in an interest-bearing account and any interest earned shall
be for the account of Tenant and shall be held by Landlord as an addition to the
Security Deposit for the entire Term of the Lease. Landlord shall be entitled to
an administrative fee of 1% per annum, or such greater percentage permitted by
law, on the amount of the Security Deposit held by Landlord. The administrative
fee shall be paid to Landlord at the end of the Term of this Lease or at such
other time or times as Landlord shall elect.
67.03 In the event that during the Term of this Lease the Security
Deposit held by Landlord (not including interest) is less than four monthly
installments of the Base Annual Rent payable with respect to the Additional
Premises under Article 3, Tenant shall, on written demand by Landlord, deposit
with Landlord on account of the security herein provided for, the difference
between the Security Deposit then held by Landlord and a sum equal to four (4)
months' installments of Base Annual Rent.
67.04 If Tenant fails to pay any Base Annual Rent or any Additional
Rent payable under this Lease within ten (10) days after such payment is due
twice in any twelve-month period, Tenant shall furnish Landlord, within ten days
after demand by Landlord, with additional monies equal to one month's
installment of Base Annual Rent at the rate payable during the last Lease Year
which shall be added to and included in the Security Deposit."
G. In lieu of a porters wage increase payable on account of the
Additional Premises, Tenant shall pay to Landlord, as Additional Rent, during
each Lease Year following Lease Year One of the Term for the Additional
Premises, an amount equal to three percent (3%) of the Base Annual Rent (as
increased from time to time by the escalation described in this subparagraph G)
payable for the prior Lease Year on account of the Additional Premises. Such
payments shall be made, in equal monthly installments, in advance, on the first
day of each and every calendar month throughout the Term of the Lease. Section
38.02 of the Lease shall not be applicable to the Additional Premises.
H. Section 39.02 of the Lease is hereby deleted in its entirety.
-8-
I. Section 41.01(c)(ii) of the Lease is hereby amended by deleting the
second sentence thereof in its entirety.
J. Section 41.01(d) of the Lease is hereby deleted in its entirety.
K. Article 45 of the Lease is hereby deleted in its entirety and the
following is inserted in lieu thereof:
"ARTICLE 45 - Use of Demised Premises
45.01 Tenant shall use and occupy the Demised Premises for showrooms
for the display and sale of women's moderate priced, better or designer apparel
and related women's accessories and related women's apparel items, and for
design and sample making related thereto and executive and general offices for
clothing and accessory lines of Tenant and its affiliated companies and
businesses."
L. 47.01 of the Lease is hereby amended by deleting the word "two" in
the fourth line thereof and substituting in lieu thereof the word "three".
2. Further Modification of Lease. On the Original Expiration Date, the
Lease shall be deemed further modified as follows:
A. Sections 42.01 and 42.04 of the Lease shall be deleted and
thereafter electricity shall be supplied to the Original Demised Premises
pursuant to Article 66 of the Lease except that the "Base Charge" applicable
solely to the Original Demised Premises (and in addition to the Base Charge
applicable to the Additional Premises) shall be $101,665.00 and all references
in Article 66 to the Additional Premises shall be deemed to include the Original
Demised Premises as the context may require.
B. "Base Tax Year" solely on account of the Original Demised
Premises (and in addition to the Base Tax Year applicable to the Additional
Premises) shall be modified to mean the Taxes for the twelve month fiscal year
commencing on July 1, 1998.
C. Sections 37.07, 38.02, 38.03 and 38.04 regarding porters
wage increase payments shall be deleted and, in lieu thereof, Tenant shall pay
to Landlord, as Additional Rent on account of the Original Demised Premises (and
in addition to such similar payments applicable to the Additional Premises),
during each annual period set forth in paragraphs 1(D)(1)(a) through (c) above
an amount equal to three percent (3%) of the Base Annual Rent payable for the
prior annual period on account of the Original Demised Premises. Such payment
shall be made, in equal monthly installments, in advance, on the first day of
each and every calendar month throughout the balance of the Term of the Lease.
3. Delivery of Additional Premises and Landlord's Contribution.
Landlord is delivering and Tenant shall accept the Additional Premises "AS IS",
together with all fixtures, equipment and
-9-
improvements existing in the Additional Premises as of the date of this
Agreement and Landlord makes no representation as to the repair, condition or
working order of the Additional Premises.
4. Tenant's Continuing Obligations. Notwithstanding anything to the
contrary contained herein, all of Tenant's existing and future obligations to
pay items of Base Annual Rent and Additional Rent under the Lease, as amended
hereby, with regard to the Original Demised Premises shall continue and nothing
in this Agreement shall affect Tenant's obligations under the Lease including,
but not limited to, the obligation to make all payments due under the Lease, as
hereby amended, prior to demand and without any set-off or deduction whatsoever.
5. Broker. Each party represents to the other that notwithstanding
anything to the contrary contained in the Lease, no broker participated in or
brought about this Agreement other than Newmark & Company Real Estate, Inc., and
Xxxxx X. Xxxxxxxx & Associates, Inc. (collectively, the "Broker") and no broker,
other than the Broker, with which either party has dealt is or will be entitled
to a commission as a result of the execution or delivery of this Agreement. Each
party agrees to indemnify and save the other harmless against any claim or cost
or expense due any other broker with which such party has dealt in connection
with this Agreement. Landlord shall be responsible for any commission due the
Broker.
6. Lease in Full Force. Except as modified hereby, the terms and
provisions of the Lease, as heretofore amended, shall continue in full force and
effect and, as amended and modified hereby, all of the terms and conditions of
the Lease are hereby ratified and confirmed in all respects.
7. Governing Law. This Agreement shall be governed by the laws of the
State of New York without giving effect to the principles of conflict of laws.
8. Entire Agreement. This Agreement, together with the Lease,
constitutes the sole agreement and contains the entire understanding and
agreement of the parties. There are no understandings or agreements of the
parties relating to the subject matter of this Agreement other than as expressly
set forth herein.
9. No Oral Modifications. This Agreement and the provisions hereof
cannot be waived, changed, or terminated except by an agreement in writing
signed by the party against whom enforcement of the waiver, change, or
termination is sought.
10. No Waiver. The failure of Landlord to insist upon the strict
performance by Tenant of any of the obligations of Tenant under this Agreement
shall not be deemed to be a waiver of such obligations, and Landlord,
notwithstanding any such failure, may thereafter insist upon the strict
performance by Tenant of any such obligations.
11. Captions. The captions, headings, and titles in this Agreement are
solely for convenience of reference and shall not affect its interpretation.
-10-
12. Remedies Not Exclusive. The rights and remedies provided for in
this Agreement or that Landlord may have otherwise pursuant to the Lease, at law
or in equity, shall be distinct, separate, and cumulative and shall not be
deemed to be inconsistent with each other, and none of them, whether or not
exercised by Landlord, shall be deemed to be in exclusion of any other, and any
two or more of such rights and remedies may be exercised at the same time, all
to the extent permitted by law.
13. Invalid Provisions. If any provision of this Agreement or the
application thereof to any person or circumstance shall to any extent be invalid
or unenforceable, the remainder of this Agreement or the application of such
provision to persons or circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby, and shall be valid and
enforceable to the fullest extent permitted by law.
14. Successors and Assigns. This Agreement shall bind the parties
hereto and their respective heirs, administrators, executors, successors and
permitted assigns.
15. Condition Subsequent. This Agreement shall be void ab initio and of
no further force and effect unless, within 20 Business Days from the date of
full execution of this Agreement, Landlord obtains and delivers to Tenant the
written consent of Nomura Asset Capital Corporation, which entity Landlord
represents is the only existing mortgagee, or any successor thereof as mortgage
holder ("Mortgagee") of the Building as of the date hereof, as evidenced by the
execution and delivery by such Mortgagee of that certain Amended and Restated
Subordination, Non-Disturbance and Attornment Agreement, substantially in the
form annexed hereto as Schedule 1 (the date upon which such agreement is fully
executed and delivered to Tenant, herein referred to as the "Approval Date").
Neither Landlord nor Tenant shall have any right to cancel this Agreement during
such 20 Business Day period. Tenant shall have the right to enter the Additional
Premises during such 20 Business Day period for the purpose of inspecting and
measuring the same, provided that Tenant shall indemnify and hold Landlord
harmless from and against all loss, cost, claims and damage arising as a result
of any such entry.
-11-
IN WITNESS WHEREOF, Landlord and Tenant have cause this Agreement to be
duly executed as of the day and year first above written.
LANDLORD:
FASHION GALLERY OWNERS, LLC
By: Fashion Gallery, LLC, its Manager
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Xxxxx X. Xxxxxxxx, President
TENANT
XXXXXX XXX MARKETING, INC.
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Chief Financial Officer
-12-
