PRIME LANDLORD: Xxxxx Management Corp.
LANDLORD: xxxx and xxxxx xxxxxxx incorporated
TENANT: Xxxxxx'x, Inc.
A portion of Floor 0,0 Xxxx 00xx Xxxxxx - Xxx Xxxx, Xxx Xxxx
SUBLEASE
Execution Date: As of July 23, 1999
Reference is made to a certain Lease ("Lease") dated as of July 12,
1985, as amended by an Amendment of Lease dated as of January 1, 1994,
originally between Xxxxx Management Corp. ("Prime Landlord"), as landlord,
and North Pearl St. Shoes, Inc., as tenant, with respect to premises ("Prime
Premises") consisting of the entire sixth (6th) floor of 0 Xxxx 00xx Xxxxxx,
Xxx Xxxx (the "Building"). xxxx and xxxxx xxxxxxx incorporated ("Landlord")
has succeeded to the interest of the tenant under the Lease.
WHEREAS. Landlord desires to sublease a portion or the Prime
Premises to Xxxxxx'x, Inc. ("Tenant"), consisting of approximately 3,500
square feet of floor area (the "Premises");
WHEREAS, Tenant desires to sublease the Premises from Landlord;
NOW THEREFORE, in consideration of the rents to be paid by Tenant to
Landlord and the full and complete performance of all terms, covenants and
conditions herein contained to be performed by Landlord and Tenant, the
parties hereto hereby agree as follows:
1. PREMISES
1.1 The Premises consist of a portion of the sixth (6th) floor of 0
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, containing approximately 3,500 square
feet of floor area, and being substantially as shown on Exhibit A attached
hereto and incorporated by reference herein. Landlord hereby demises and
leases to Tenant, and Tenant hereby hires and takes from Landlord, the
Premises. The demise of the Premises shall be upon all of the same terms and
conditions of the Lease (i.e. the rights and benefits of Prime Landlord under
the Lease shall redound to Landlord hereunder and the covenants and
obligations of the party-tenant under the Lease with respect to the Premises
shall be assumed and performed by Tenant hereunder), except to the extent
inconsistent with the provisions of this Sublease or the state of facts
contemplated hereby. As between Landlord and Tenant, in the event of any
conflict between the terms of this Sublease and the terms of the Lease, the
terms of this Sublease shall control.
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1.2 INAPPLICABLE OF LEASE
The following provisions of the Lease shall have no force or effect
or applicability to this Sublease:
Rider to Lease, Section 44
Rider to Lease, Section 50; and
Rider to Lease, Section 51 B.
1.3 DEFINITIONS
Any terms used herein shall have the same definition as used in the
Lease except as follows and except as otherwise hereinafter set forth:
Landlord: xxxx and xxxxx xxxxxxx incorporated.
Tenant: Xxxxxx'x. Inc., a Delaware
corporation.
Term Commencement Date: August 15, 1999 (subject to the
Approval Condition).
Termination Date: December 30, 2003.
Rent Commencement Date: Thirty (30) days after the Term
Commencement Date (provided,
however, a separate electrical
payment in the amount of $802.08 per
month shall be due and payable for
the one (1) month period prior to
the Rent Commencement Date).
Term of this Sublease: The period of time from and after
the Term Commencement Date through
the Termination Date.
Yearly Base Rent: Subject to rent escalations herein
provided, yearly base rent shall be
calculated at the rate of
$147,000.00 per annum, and payable
at the rate of $12,250.00 per month
(and proportionately at such rate
for any partial month).
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Approval Condition: The obtaining by Landlord of
approval of this Sublease from Prime
Landlord. In the event the Approval
Condition is not satisfied on or
before October 1, 1999, this
Sublease shall automatically
terminate and be of no further force
or effect. Landlord agrees to submit
this Sublease to the Prime Landlord
promptly following its execution by
Landlord and Tenant.
2. TERM
The Term of this Sublease shall commence on the Term Commencement Date
and shall terminate on the Termination Date.
3. CONDITION OF PREMISES
Tenant shall take the Premises "as-is", in the condition in which
the Premises are in as of the Execution Date of this Sublease, without any
obligation on the part of Landlord to prepare or construct the Premises for
Tenant's occupancy. Except as otherwise expressly provided herein, Tenant
acknowledges that Landlord has made no representations or warranties as to
whether the Premises are in compliance with applicable laws, ordinances or
regulations. Landlord represents that as of the Term Commencement Date, the
existing HVAC and electrical systems serving the Premises will be in working
order.
4. YEARLY BASE RENT
Commencing as of the Rent Commencement Date and continuing
thereafter throughout the term of this Sublease, Tenant shall pay to Landlord
on the first day of each calendar month, the monthly amounts of Yearly Base
Rent set forth above, without offset, abatement, deduction, or demand.
Notwithstanding anything to the contrary set forth herein, provided Tenant is
not then in default of its obligations hereunder, monthly payments of Base
Rent (but not any additional charges payable hereunder) shall xxxxx during
the months of June 2000, April 2001 and February 2002.
All Yearly Base Rent and other charges due under the Sublease shall
be paid to Landlord at the office of Landlord at the Building, or at such
other address as Landlord may designate in writing to Tenant. Tenant's
obligation to make such payments shall survive the Termination Date, or
sooner termination of this Sublease. All costs and expenses which Tenant
assumes or agrees to pay pursuant to this Sublease shall be deemed to be rent
and, in the event of non-payment, Landlord shall have all the rights and
remedies set forth in the Lease in the case of
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non-payment of Yearly Base Rent. To the extent Landlord is charged for any
additional service by Prime Landlord in respect of the Premises, Tenant shall
pay such additional service to Landlord as additional rent.
5. ELECTRICITY, REAL ESTATE TAXES AND WAGE RATE INCREASES
5.1 Electric energy will be provided to the Premises in
accordance with Section 35 of the Lease, except that the annual rate of
electricity rent payable by Tenant shall not be less than $2.75 per square
foot per annum, subject to increase as set forth in the Lease. The Yearly
Base Rent set forth in this Sublease includes, as electricity rent, $9,625.00
(or $2.75 per square foot of rentable area of the Premises); provided,
however, during the months of August, 1999, June, 2000, April 2001 and
February, 2002, Tenant shall be responsible for a separate monthly electric
charge. Tenant's annual electricity charge shall be subject to
redetermination as provided in the Lease.
5.2 Tenant shall be responsible for its pro rata share of
increases in real estate taxes payable by Landlord as provided in Section 39
of the Lease; provided, however, the "Base Tax", for the purposes of this
Sublease, shall mean the taxes for the tax year July 1, 1999 through June 30,
2000. For the purposes of calculating Tenant's share of taxes payable by
Landlord, Tenant's proportionate share shall be 58.33%.
5.3 Tenant shall be responsible for payments due in connection
with increases in the Wage Rate, as set forth and defined in Section 40 of
the Lease; provided, however, (a) the "Base Wage Rate" shall mean the Wage
Rate in effect on December 31, 1999, and (b) the Yearly Base Rent shall
increase by $.0075 per square foot for each $.01 increase in the Wage Rate of
the Base Wage Rate.
6. ASSIGNMENT AND SUBLETTING
Tenant shall have no right to assign or hypothecate this Sublease,
or any portion herein, or to sublet the Premises, or any portion thereof,
without the express written consent of Landlord, which consent shall not be
unreasonably withheld or delayed. It is understood and agreed that (i)
Landlord's right to review any such transfer shall be consistent with the
Prime Landlord's rights under Article 11 and Section 44 of the Rider to
Lease; and (ii) any such transfer shall be subject to the approval of the
Prime Landlord as set forth in the Lease.
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7. TENANT'S LIABILITY INSURANCE AND INDEMNITY
Tenant's Comprehensive General Liability insurance which Tenant is
required to maintain throughout the term of this Sublease pursuant to Section
48 of the Lease, shall name Landlord and Prime Landlord as additional insured
parties.
Tenant's indemnity, pursuant to Section 38 of the Lease, shall run
in favor of both Prime Landlord and Landlord.
Tenant shall carry all insurance with respect to the Premises
required pursuant to Sections 47D and 48 of the Lease.
8. TENANT'S RISK
Wherever the term "Landlord" is used in Section 48B of the Least,
such term shall be deemed to refer to Landlord and Prime Landlord.
9. TENANT'S ALTERATIONS
Prior to making any alterations to the Premises, Tenant shall submit
plans and specifications to Landlord for its review and approval (and for the
Prime Landlord's approval, to the extent required by the terms of the Lease).
All such alterations shall be subject to all terms and conditions of the
Lease. If Tenant shall make any alterations to the Premises then Landlord may
elect, at the time that it approves Tenant's plans for the same, if leaving
any of same would render the Premises unmarketable or would materially
increase the cost of either demolishing the Premises or making it ready for
another tenant/subtenant, to require the Tenant at the expiration or sooner
termination of the term of this Sublease to remove those alterations which
would render the premises unmarketable or would materially increase the cost
of either demolishing the Premises or making it ready for another
tenant/subtenant and repair any damage caused by such removal. Subject to the
immediately preceding sentence, Tenant shall remove such alterations and
additions made by Tenant and all of its personal property and shall repair
any damages to the Premises or the Building caused by their installation or
by such removal. Landlord agrees to use reasonable efforts to obtain listings
for Tenant in the building directory located on the first floor of the
Building. Tenant shall be entitled to Tenant's proportionate share of the
total listings available to Landlord (provided Landlord obtains all necessary
approvals for such listings).
10. NONRECOURSE PROVISIONS
In no event shall Landlord (or any of the officers, trustees.
directors, partners, beneficiaries, joint venturers, members, stockholders or
other principals or representatives, and the like, disclosed or undisclosed,
thereof) ever be personally liable for any obligations of
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Landlord under this Sublease. Notwithstanding anything to the contrary set
forth herein, Landlord (but not any officer, trustee, director, partner,
beneficiary, joint venturer, member, stockholder or other principal or
representative, and the like, disclosed or undisclosed, thereof) shall be
liable for up to $100.000.00 ("Recourse Amount") of any final, unappealable
(or unappealed) judgment against Landlord in favor of Tenant resulting from
the termination of this Sublease due solely to Landlord's default under the
Lease. The Recourse Amount shall be decreased by $20,000 on January 1 of each
calendar year during the Term of this Sublease.
11. NOTICES
Any notices required or permitted to be sent to the parties, hereto
shall be sent to the following addresses unless and until either party gives
written notice to the other party of any change in such addresses:
To Landlord: xxxx and xxxxx xxxxxxx incorporated
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx Xxxxxxxxxxxx
with a copy to: xxxx and xxxxx xxxxxxx incorporated
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxxxx
To Tenant: Xxxxxx'x Inc.
0 Xxxx 00xx Xxxxxx
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to: Xxxxxx'x Inc.
0000 Xx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
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12. LEASE
12.1 SUBORDINATION OF SUBLEASE TO LEASE
This Sublease shall, in all respects, be subject to and subordinate
to the Lease, and the rights of Prime Landlord thereunder. Without limiting
the foregoing, neither Landlord nor Tenant shall take any action which shall
violate the covenants and restrictions binding Landlord as party-tenant under
the Lease.
12.2 LANDLORD'S CONSENT
Wherever Landlord's consent or approval is required or requested
under this Sublease, the consent or approval, as the case may be, of Prime
Landlord shall also be required, and it shall be deemed to be a reasonable
reason for withholding Landlord's consent or approval, as the case may be, if
Landlord is unable to obtain all of such consents or approvals. Landlord
agrees to use reasonable efforts to obtain such consents or approvals
provided however, that in using such reasonable efforts (i) Landlord shall in
no event be required to spend any amount to obtain such consent or approvals,
and (ii) Landlord shall not be required to adversely affect its economic or
leasehold position in order to obtain such consents or approvals.
12.3 OBLIGATIONS OF THE PARTIES
Tenant hereby agrees to perform all of the obligations imposed on
Landlord as party-tenant under the Lease except for the payment or Yearly
Base Rent, electricity charges, real estate taxes and wage rate escalation in
respect of Tenant's Premises, the terms for which are expressly provided for
herein. Landlord shall have no obligations or liabilities under this Sublease
except as provided in the following sentence and as otherwise expressly
provided in this Sublease. Provided that Tenant is not in default hereunder,
Landlord hereby agrees to
(a) pay all Yearly Base Rent and other charges payable to the
Prime Landlord under the Lease; and
(b) use reasonable efforts to cause the Prime Landlord to perform
all of the obligations imposed upon the Prime Landlord under
the Lease.
Tenant acknowledges and agrees that Landlord shall have no liability
or obligation to Tenant based upon any representation or warranty made by
Prime Landlord to Landlord under the Lease or based upon any act or omission
of Prime Landlord or the agents, employees or contractors of Prime Landlord.
Without limiting the foregoing, Landlord shall have no liability to Tenant,
and Tenant's obligation to pay rent and other charges due under this Sublease
shall not be reduced or abated, in the event that Prime Landlord fails to
provide any
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service to perform any maintenance or repairs, or to perform any other
obligation which Prime Landlord is required to provide or to perform pursuant
to the Lease.
13. WAIVER OF SUBROGATION
Without limiting Tenant's obligations under Section 48 of the Lease,
Tenant will cause each insurance policy carried by it insuring the Premises
as well as the contents thereof, including trade fixtures and personal
property, against loss by fire or any of the casualties covered by standard
extended coverage to be written in such a manner as to provide that the
insurer waives all right of recovery by way of subrogation against Prime
Landlord or Landlord in connection with any loss or damage covered by such
policy. Prime Landlord or Landlord shall not be liable to Tenant for any loss
or damage caused by fire or any of the casualties covered by standard
extended coverage
14. BROKERAGE
Tenant warrants and represents that Tenant has dealt with no broker
or consultant in connection with the consummation of this Sublease other than
Xxxxxxx Xxxxxxx Commercial ("Elliman") and Xxxxxxx Commercial Real Estate,
Inc. ("Xxxxxxx"), and in the event of any brokerage claims against Landlord
made by anyone other than Elliman and Xxxxxxx predicated upon prior dealings
with Tenant, Tenant agrees to defend the same and indemnify Landlord against
any such claim. Landlord shall be responsible to Elliman and Xxxxxxx for all
brokerage fees due Elliman and Xxxxxxx in connection with the execution of
this Sublease, all as set forth in separate written agreements with Elliman
and Xxxxxxx.
15. APPROVAL CONDITION
This Sublease shall be void and without force or effect unless and
until the Approval Condition, as defined in Section 1.3 hereof, has occurred.
16. SECURITY DEPOSIT
Tenant agrees to pay to Landlord, upon execution and
delivery of this Sublease, the sum of ONE HUNDRED FIFTY-SIX THOUSAND SIX
HUNDRED TWENTY-FIVE and 00/100 DOLLARS ($156,625.00) as a security deposit
hereunder, and that Landlord shall hold the same throughout the term of this
Sublease as security for the performance by Tenant of all obligations on the
part of Tenant to be kept and performed. Landlord shall have the right from
time to time, without prejudice to any other remedy Landlord may have on
account thereof, to apply such deposit, or any part thereof, to Landlord's
damages arising from any default on the part of Tenant. Should the entire
security deposit, or any portion thereof, be applied by Landlord in
accordance with the provisions hereof, Tenant shall forthwith upon demand pay
to Landlord
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an amount sufficient to restore such security deposit to the original amount
specified herein. Landlord shall have the same rights and remedies for the
non-payment by Tenant of any amounts due on account of the security deposit
as Landlord has hereunder for the failure of Tenant to pay the yearly base
rent. Tenant not then being in default, Landlord shall return the deposit, or
so much thereof as shall not have theretofore been applied in accordance with
the terms of this sublease, to Tenant on the expiration or earlier
termination of the term of this sublease and performance by Tenant of all the
obligations of Tenant to be performed hereunder, including, without
limitation, the surrender of possession of the Premises in compliance with
the provisions hereof and the payment of all amounts to be paid by Tenant.
However, if the determination of any amount to be paid by Tenant to Landlord,
is not made at the expiration or earlier termination of this lease, Landlord
may retain such portion of the security deposit as Landlord believes in the
exercise of Landlord's good faith judgment is an appropriate reserve against
such future liability of Tenant and return only the balance of such deposit
pending the final determination and payment of all such amounts by Tenant to
Landlord. While Landlord holds such deposit, Landlord shall have no
obligation to pay interest on the same, unless required so to do by
applicable law, and shall have the right to commingle the same with
Landlord's other funds. If Landlord conveys Landlord's interest under this
Sublease, the deposit, or any part thereof not previously applied, may be
turned over by Landlord to Landlord's grantee, and if so turned over, Tenant
agrees to look solely to such grantee for proper application of the deposit
and the return thereof in accordance herewith. The holder of a mortgage on
property which includes the Premises shall never be responsible to Tenant for
the return or application of any such deposit, whether or not such holder
succeeds to the position of Landlord hereunder, unless such deposit shall
have been received in hand by such holder.
Anything in this Section 16 to the contrary
notwithstanding, Tenant shall have the right to provide in lieu of the
foregoing cash security deposit an irrevocable letter of credit in favor of
Landlord in the amount of $156,625.00, expiring no earlier than January 31,
2004, provided the form thereof and the bank issuing the letter of credit are
satisfactory to Landlord. If, despite Tenant's best efforts, Tenant is only
able to obtain a letter of credit having a maturity date before January 31,
2004, such letter of credit shall be replaced or renewed at least sixty (60)
days prior to its date of expiration; if such replacement or renewal is not
provided, Landlord may draw down upon such letter of credit in full and may
hold the amount drawn down as a cash security deposit under the provisions of
this Section. Without limiting the generality of the foregoing, the letter of
credit shall be unconditional except for the following condition: "Drafts
will be accompanied by the written statement of xxxx and xxxxx xxxxxxx
incorporated, that it is entitled to draw hereunder pursuant to the
provisions of Section 16 of that Sublease, dated July _, 1999, with Xxxxxx'x,
Inc., as Tenant, relating to premises at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx" and, by the terms of said letter of credit, Landlord shall be entitled
to draw against said letter of credit on sight. Landlord shall be entitled so
to draw the whole or any portion of the amount of said letter of credit as
aforesaid (and thereafter treat the amount so drawn as a cash security
deposit hereunder) if the Tenant is not entitled pursuant to the provisions
hereof to the
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return of said letter of credit by the date which is thirty (30) days prior
to the expiration date thereof or if the Tenant otherwise defaults in any of
its obligations hereunder.
Provided Tenant is not then (and has not previously been) in default
of its obligations under this Sublease, the security Deposit shall be reduced
to (i) $117,468.75 on August 1, 2000, and (ii) $78,312.50 on August 1, 2001,
17. END OF TERM; HOLDING OVER
Tenant covenants and agrees to vacate and surrender the Premises to
Landlord, in broom clean condition, free of personal property, furniture and
fixtures, on or before expiration or the earlier termination of the term of
this Sublease, as the case may be. Any holdover by Tenant shall, at
Landlord's option, be treated as a daily tenancy at sufferance at a daily
rate based upon twice the rental rate payable by Landlord to Prime Landlord
in respect of such hold over period, and shall otherwise be on the terms and
conditions of this Sublease so far as the same may be applicable. In
addition, Tenant shall indemnify, defend, and hold Landlord harmless from and
against any loss, cost or damage arising from Tenant's breach of its
obligation to deliver the Sublease Premises to Landlord on a timely basis in
accordance with this Section 17 (including, without limitation, any charges
which Landlord may owe to Prime Landlord pursuant to the Lease as the result
of such hold-over).
18. TIME PERIODS
Recognizing that the relationship between Landlord and Tenant is a
sublease and that, in the event of an action required or failed to be taken
by Tenant hereunder may place Landlord in default of its obligations under
the Lease, the parties hereby agree that Tenant shall have a shorter period
of time to cure its defaults and to exercise its rights under the Sublease
than Landlord has under the Lease. Therefore, and without limiting the
foregoing, the following time periods shall be applicable under this Sublease.
1. MONETARY DEFAULT: Replace the ten (10) day periods in Sections
34C(7)(a), and 34C(8)(a) with a five (5) day period.
2. NON-MONETARY DEFAULT: Replace the twenty (20) day period in
Section 34C(7)(b) with a fifteen (15) day period.
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19. ENTIRE AGREEMENT
This Sublease represents the entire agreement between Landlord and
Tenant, and may be modified or amended only by an instrument in writing
executed by both parties.
EXECUTED UNDER SEAL as of the date first above-written.
LANDLORD: TENANT
xxxx and xxxxx xxxxxxx, incorporated XXXXXX'X, INC.
By: By:
---------------------------- ------------------------
Its Its
Hereunto duly authorized Hereunto duly authorized
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