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EXHIBIT 10.7(a)
FIRST AMENDMENT TO LEASE
between
500-512 SEVENTH AVENUE LIMITED PARTNERSHIP, Landlord
and
G-III LEATHER FASHIONS, INC., Tenant
Premises:
Entire 34th and 35th Floors
512 Seventh Avenue
New York, New York
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FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (this "Amendment") made as of the 1st day of
July, 2000, by and between 500-512 SEVENTH AVENUE LIMITED PARTNERSHIP, a New
York limited partnership, having an office c/o Newmark & Company Real Estate,
Inc. ("Landlord"), and G-III LEATHER FASHIONS, INC., a New York corporation,
having an office at 512 Seventh Avenue, New York, New York ("Tenant").
W I T N E S S E T H:
WHEREAS, by Agreement of Lease dated as of June, 1993 (such lease, as the
same may have been or may hereafter be amended, is hereinafter called the
"Lease"), Landlord's predecessor-in-interest, did demise and let unto Tenant and
Tenant did hire and take from Landlord's predecessor-in-interest the entire
thirty-fourth (34th) and thirty-fifth (35th) floors (collectively, the "demised
premises") as more particularly described in the Lease in the building (the
"Building") known by the street address 512 Seventh Avenue, New York, New York;
WHEREAS, the term of the Lease currently expires on January 31, 2003;
WHEREAS, Tenant desires to extend the term of the Lease and Landlord is
agreeable thereto on the terms and conditions hereinafter set forth; and
WHEREAS, Landlord and Tenant desire to modify and amend the Lease as
hereinafter provided.
NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained and other good and valuable consideration, the adequacy and receipt of
which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
1. All capitalized terms used herein shall have the meanings ascribed to
them in the Lease unless otherwise specifically set forth herein to the
contrary.
2. The term of the Lease is hereby extended for an additional term (the
"Extended Term") of ten (10) years and nine (9) months commencing on July 1,
2000 (the "Extended Term Commencement Date") and ending on March 31, 2011 (the
"Expiration Date"), as if the Expiration Date was originally set forth in the
Lease as the expiration date thereof, instead of January 31, 2003.
3. Effective as of the first day of the Extended Term:
(a) The fixed annual rent to be paid by Tenant to Landlord under the
Lease during the Extended Term shall be abated during the period commencing on
the Extended Term Commencement Date and ending on December 31, 2000, and
thereafter shall be payable as follows:
(i) For the period commencing on January 1, 2001 and ending on
December 31, 2001, the fixed annual rent shall be Five Hundred Fifty Two
Thousand Four Hundred Forty-Eight and 00/100 Dollars ($552,448.00) per year, or
Forty Six Thousand Thirty-Seven and 33/100 Dollars ($46,037.33) per month;
(ii) For the period commencing on January 1, 2002 and ending
on December 31, 2002, the fixed annual rent shall be Five Hundred Sixty-Nine
Thousand Twenty-One and 44/100 Dollars ($569,021.44) per year, or Forty-Seven
Thousand Four Hundred Eighteen and 45/100 Dollars ($47,418.45) per month;
(iii) For the period commencing on January 1, 2003 and ending
on December 31, 2003, the fixed annual rent shall be Five Hundred Eighty-Six
Thousand Ninety-Two and 08/100 Dollars ($586,092.08) per year, or Forty-Eight
Thousand Eight Hundred Forty-One and 01/100 Dollars ($48,841.01) per month;
(iv) For the period commencing on January 1, 2004 and ending
on December 31, 2004, the fixed annual rent shall be Six Hundred Three Thousand
Six Hundred Seventy-Four and 85/100 Dollars ($603,674.85) per year, or Fifty
Thousand Three Hundred Six and 24/100 Dollars ($50,306.24) per month;
(v) For the period commencing on January 1, 2005 and ending on
December 31, 2005, the fixed annual rent shall be Six Hundred Twenty-One
Thousand Seven Hundred Eighty Five and 09/100 Dollars ($621,785.09) per year, or
Fifty-One Thousand Eight Hundred Fifteen and 42/100 Dollars ($51,815.42) per
month;
(vi) For the period commencing on January 1, 2006 and ending
on December 31, 2006, the fixed annual rent shall be Seven Hundred Twenty-Five
Thousand Three Hundred Fifty-Nine and 97/100 Dollars ($725,359.97) per year, or
Sixty Thousand Four Hundred Forty-Six and 66/100 Dollars ($60,446.66) per month;
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(vii) Notwithstanding anything to the contrary contained
herein, for the period commencing on January 1, 2006 and ending on March 31,
2006, the fixed annual rent shall be abated;
(viii) For the period commencing on January 1, 2007 and ending
on December 31, 2007, the fixed annual rent shall be Seven Hundred Forty-Four
Thousand Five Hundred Seventy One and 01/100 Dollars ($744,571.01) per year, or
Sixty-Two Thousand Forty-Seven and 58/100 Dollars ($62,047.58) per month;
(ix) For the period commencing on January 1, 2008 and ending
on December 31, 2008, the fixed annual rent shall be Seven Hundred Sixty-Four
Thousand Three Hundred Fifty-Eight and 38/100 Dollars ($764,358.38) per year, or
Sixty-Three Thousand Six Hundred Ninety-Six and 53/100 Dollars ($63,696.53) per
month;
(x) For the period commencing on January 1, 2009 and ending on
December 31, 2009, the fixed annual rent shall be Seven Hundred Eighty-Four
Thousand Seven Hundred Thirty-Nine and 38/100 Dollars ($784,739.38) per year, or
Sixty Five Thousand Three Hundred Ninety-Four and 95/100 ($65,394.95) per month;
and
(xi) For the period commencing on January 1, 2010 and ending
on December 31, 2010, the fixed annual rent shall be Eight Hundred Five Thousand
Seven Hundred Thirty-One and 80/100 Dollars ($805,731.80) per year, or
Sixty-Seven Thousand One Hundred Forty-Four and 32/100 Dollars ($67,144.32) per
month; and
(xii) For the period commencing on January 1, 2011 and ending
on March 31, 2011, the fixed annual rent shall be Eight Hundred Twenty-Seven
Thousand One Hundred Eighty-Four and 64/100 Dollars ($827,184.64) per year, or
Sixty-Eight Thousand Nine Hundred Thirty-Two and 05/100 Dollars ($68,932.05) per
month.
Except as set forth above, the fixed annual rent shall be paid by
Tenant to Landlord in equal monthly installments in advance on the first day of
each and every month without any set-off or deduction whatsoever in the manner
provided in the Lease.
(b) The Fourth Article of the Lease is hereby deleted and the
following is substituted therefor:
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"Tenant shall use and occupy the demised
premises for showroom, design, general
offices and sales offices for sale at
wholesale and not retail, of all apparel
and accessories."
(c) The Tenth Article of the Lease is hereby deleted and the
following is substituted therefor:
"TENTH: - (i) 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 Fourth Article hereof, (C) mortgage, pledge or encumber this
Lease or the demised premises or any part thereof in any manner or permit
any lien to be filed against this Lease, the demised premises or the
Building by reason of any act or omission on the part of Tenant or enter
into any agreement which would permit the filing of a lien by any broker
(except for a broker's agreement in connection with a proposed assignment
by Tenant of its rights and obligations under the Lease or a sublease of
all or a portion of the demised premises), or (D) advertise, or authorize
a broker to advertise, for a subtenant or an assignee at a specified
rental rate, without, in each instance, obtaining the prior consent of
Landlord, except as otherwise expressly provided in this Article 10. For
purposes of this Article 10, (w) 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
(provided, however, that any transfer of stock of Tenant or any affiliate
of Tenant by Morris Goldfarb to members of his immediate family for estate
planning purposes shall not be deemed to effect an assignment of the
Lease), (x) a takeover agreement shall be deemed a transfer of this Lease,
(y) any person or legal representative of Tenant, to whom Tenant's
interest under this Lease passes by
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operation of law, or otherwise, shall be bound by the provisions of this
Article 10, and (z) a modification, amendment or extension of a sublease
shall be deemed a sublease.
(ii) The provisions of subparagraph (i) 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 or, if Tenant is a partnership, with a successor
partnership (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 either the (x)
the assignee has a net worth at least equal to or in excess of the net
worth of Tenant immediately prior to such merger or transfer, or (y) such
assignee delivers a letter of credit, in the form annexed hereto as
Exhibit A, in the amount equal to the product of (A) twelve (12) and (B)
the then prevailing monthly fixed rent).
(iii) Any assignment or transfer, whether made with Landlord's consent as
required by subparagraph (i) or without Landlord's consent pursuant to
subparagraph (ii) hereof, shall be made only if, and shall not be
effective until, the assignee shall execute, acknowledge and deliver to
Landlord a recordable agreement (unless the assignment shall be a "deemed"
assignment by reason of a transfer of a majority interest in Tenant), 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 of subparagraph (i) 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 annual 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 annual rent and additional 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.
(iv) The liability of Tenant, and the due performance by Tenant of the
obligations on its part to be performed under this Lease, shall not
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be discharged, released or impaired in any respect by an agreement or
stipulation made by Landlord or any grantee or assignee of Landlord, by
way of mortgage, or otherwise, extending the time of, or modifying any of
the obligations contained in this Lease, or by any waiver or failure of
Landlord to enforce any of the obligations on Tenant's part to be
performed under this Lease, and Tenant shall continue to be liable
hereunder. If any such agreement or modification operates to increase the
obligations of a tenant under this Lease, the liability under this
subparagraph (iv) 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 after
this Lease shall be assigned, no demand or notice of any default to the
named Tenant shall be required. Tenant and each of its successors in
interest hereby expressly waive any such demand or notice.
(v) (A) Should Tenant determine, subject to the provisions of this Lease,
to assign this Lease, other than by an assignment contemplated by
subparagraph (ii) hereof, Tenant shall not less than forty-five (45) days
prior to the effective date of the contemplated assignment, deliver to
Landlord a term sheet setting forth the terms and the effective date of
the contemplated assignment transaction, the identify of the proposed
assignee and information (including, without limitation, current financial
information regarding net worth, credit and financial responsibility) with
respect to the nature and character of the proposed assignee's business,
and Landlord shall then have the right to elect, by notifying Tenant
within thirty (30) days of such delivery, to (x) terminate this Lease, as
of such effective date as if it were the Expiration Date set forth in this
Lease or (y) accept an assignment of this Lease from Tenant, and Tenant
shall then promptly execute and deliver to Landlord, or Landlord's
designee if so elected by Landlord, in form reasonably satisfactory to
Landlord's counsel, an assignment which shall be effective as of such
effective date.
(B) In the event that this Lease shall be assigned to Landlord or
Landlord's designee or if the demised premises shall be sublet to Landlord
or Landlord's designee pursuant to this subparagraph (v), the provisions
of any such sublease or assignment and the obligations of Landlord and the
rights of Tenant with respect thereto shall not be binding upon or
otherwise affect the rights of any holder of a superior
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mortgage or of a lessor under a superior lease unless such holder or
lessor shall elect by written notice to Tenant to succeed to the position
of Landlord or its designee, as the case may be, thereunder.
(C) Should Tenant determine subject to the provisions of this Lease
to sublet the demised premises or any portion thereof, other than by a
sublease contemplated by subparagraph (ii) hereof, Tenant shall, not less
than forty-five (45) days prior to the effective date of the contemplated
sublease, deliver to Landlord, a term sheet setting forth the terms of the
contemplated sublease transaction, the effective date therefor, the
identify of the proposed subtenant, and information with respect to the
nature and character of the proposed subtenant's business, and Landlord
shall then have the right to elect, by notifying Tenant within thirty (30)
days of such delivery, to (x) terminate this Lease as to the portion of
the demised premises affected by such subletting or as to the entire
demised premises in the case of a subletting thereof, as of such effective
date, (y) in the case of a proposed subletting of the entire demised
premises accept an assignment of this Lease to Landlord from Tenant, and
Tenant shall then promptly execute and deliver to Landlord, or Landlord's
designee if so elected by Landlord, in form reasonably satisfactory to
Landlord's and Tenant's counsel, an assignment which shall be effective as
of such effective date, (z) accept a sublease from Tenant of the portion
of the demised premises affected by such proposed subletting or the entire
demised premises in the case of a proposed subletting thereof, and Tenant
shall then promptly execute and deliver a sublease to Landlord, or
Landlord's designee if so elected by Landlord, for the term provided in
the aforementioned term sheet, commencing with such effective date, at (1)
the rental terms reflected in such term sheet or (2) the rental terms
contained in this Lease on a per rentable square foot basis, as elected by
Landlord in such notice.
(D) If Landlord should elect to have Tenant execute and deliver a
sublease to Landlord or its designee pursuant to any of the provisions of
this subparagraph (v), said sublease shall be in a form reasonably
satisfactory to Landlord's counsel and on all the terms contained in this
Lease, except that:
(1) The rental terms, if elected by Landlord, may be either as
provided in item (1) or item (2) of subparagraph (v)(C) hereof,
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(2) Except as provided in this subparagraph (v)(D), the terms
of the sublease shall be on the same terms set forth in the term
sheet delivered to Landlord (as described in subparagraph (v)(C)
hereof),
(3) The subtenant thereunder shall have the right to underlet
the subleased premises, in whole or in part, without Tenant's
consent,
(4) The subtenant thereunder shall have the right to make, or
cause to be made, any changes, alterations, decorations, additions
and improvements that such subtenant may desire or authorize,
(5) Such sublease shall expressly negate any intention that
any estate created by or under such sublease be merged with any
other estate held by either of the parties thereto,
(6) Any consent required of Tenant, as lessor under that
sublease, shall be deemed granted if consent with respect thereto is
granted by Landlord,
(7) There shall be no limitation as to the use of the sublet
premises by the subtenant thereunder,
(8) Any failure of the subtenant thereunder to comply with the
provisions of said sublease, other than with respect to the payment
of rent to Tenant, shall not constitute a default thereunder or
hereunder if Landlord has consented to such non-compliance,
(9) Such sublease shall provide that Tenant's obligations with
respect to vacating the demised premises and removing any changes,
alterations, decorations, additions or improvements made in the
subleased premises shall be limited to those which accrued and
related to such as were made prior to the effective date of the
sublease, and
(10) If subtenant shall fail to pay the rent under the
sublease to Tenant within ten (10) days after such installment of
rent shall have become due, then Tenant may give subtenant notice
thereof and if subtenant shall continue to fail to make any
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such payment within thirty (30) days after the giving of such
notice, then Tenant shall be entitled to offset the amount not paid
against the next rent coming due under the Lease. Notwithstanding
anything herein to the contrary, such offset right shall not be
binding upon nor inure to any mortgagee or superior lessor.
(E) If pursuant to the exercise of any of Landlord's options
pursuant to this subparagraph (v) this Lease is terminated as to only a
portion of the demised premises, then the fixed annual rent payable
hereunder and the additional rent payable pursuant to the terms of this
Lease shall be adjusted in proportion to the portion of the demised
premises affected by such termination.
(vi) In the event that Landlord does not exercise any of the options
available to it pursuant to subparagraph (v) hereof, Landlord shall not
unreasonably withhold or delay its consent to an assignment of this Lease
or a subletting of the whole or any part of the 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 and information with respect to the
nature and character of the proposed subtenant's or assignee's business,
or activities, such references and current 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 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, in
Landlord's reasonable judgment, in keeping with the standards of the
Building and the floor or floors on which the demised premises are
located;
(D) The proposed subtenant or assignee is not then an occupant of
any part of the Building or a party who dealt with Landlord or Landlord's
agent (directly or through a broker) with respect
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to space in the Building during the six (6) months immediately preceding
Tenant's request for Landlord's consent;
(E) All costs incurred with respect to providing reasonably
appropriate means of ingress and egress from the sublet space or to
separate the sublet space from the remainder of the demised premises
shall, subject to the provisions of this Lease with respect to
alterations, installations, additions or improvements be borne by Tenant;
(F) Each sublease shall specifically state that (x) it is subject to
all of the applicable terms, covenants, agreements, provisions, and
conditions of this Lease, (y) the subtenant will not have the right to a
further sublease thereunder (except the subtenant of an entire floor of
the demised premises shall have all the rights to assign and sublease
afforded to the named Tenant herein (i.e., G-III Leather Fashions, Inc.);
provided, notwithstanding the provisions of subparagraph (vii)(B) of this
Article 10, such subtenant shall pay to Landlord any and all rents,
additional charge or other consideration payable under such sub-sublease
or otherwise to subtenant by the sub-subtenant which is in excess of the
fixed annual rent and additional rent accruing during the term of such
sub-sublease in respect of the sub-subleased space (at the rate per square
foot payable by subtenant thereunder) pursuant to the terms of this Lease
(including, but not limited to, sums paid for the sale or rental of
subtenant's fixtures, leasehold improvements, equipment, furniture or
other personal property, less, in the case of the sale thereof, the then
net unamortized or undepreciated cost thereof determined on the basis of
subtenant's federal income tax returns), and less the reasonable costs of
effecting such transaction, including, without limitation, brokerage
commissions, legal fees and build out costs, or to allow the demised
premises to be used by others, without the consent of Landlord in each
instance, and (z) a consent by Landlord thereto 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 premises involved, and the occupants thereof, as if the sublease had
not been made;
(G) Tenant shall together with requesting Landlord's consent
hereunder, have paid Landlord any reasonable out-of-pocket costs incurred
by Landlord to review the requested consent including any attorneys fees
incurred by Landlord;
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(H) The proposed subtenant or assignee is not (w) a retail branch of
a bank trust company, safe deposit business, savings and loan association
or loan company; (x) an employment or recruitment agency; (y) school,
college, university or educational institution whether or not for profit;
(z) a government or any subdivision or agency thereof;
(I) In the case of a subletting of a portion of the demised
premises, the layout of the portion so sublet shall be commercially
reasonable and suitable for normal renting purposes and such subletting
will not result in more than two (2) occupants (including Tenant)
occupying the demised premises; and
(J) Tenant shall not have advertised or listed with any brokers the
proposed assignment or subletting at a rental rate less than the rental
rates then being charged under leases being entered into by Landlord for
comparable space in the Building.
(vii) If Tenant shall assign this Lease or sublease all or any part of the
demised premises, Tenant shall pay to Landlord, as additional rent:
(A) in the case of an assignment, an amount equal to one-quarter
(1/4) of all sums and other considerations paid to Tenant by the assignee
for or by reason of such assignment or otherwise (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 thereof, the then net unamortized or
undepreciated cost thereof determined on the basis of Tenant's federal
income tax returns); and
(B) in the case of a sublease, one-quarter (1/4) of the amount equal
to any and all rents, additional charge or other consideration payable
under the sublease or otherwise to Tenant by the subtenant which is in
excess of the fixed annual 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 fixtures, leasehold improvements, equipment, furniture or other
personal property, less, in the case of the sale thereof, the then net
unamortized or undepreciated cost thereof determined on the basis of
Tenant's federal income tax returns).
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The sums payable under this subparagraph (vii) shall be paid to Landlord
as and when paid by the subtenant or assignee, as the case may be, to
Tenant.
(viii) If 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 annual rent and additional rent reserved
herein. The receipt by Landlord of any amounts from an assignee or
subtenant, or other occupant of any part 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."
(d) The Twelfth Article of the Lease is hereby supplemented with the
following:
"(c) Notwithstanding anything to the contrary, Landlord shall have the
right and privilege to serve at any time up to six (6) months prior to the
expiration of the term of this Lease, a notice upon Tenant that any
'nonstandard alterations' shall be removed and, in the event of service of
such notice, Tenant will, at Tenant's cost and expense, remove the same in
accordance with such request and repair any damage to the demised premises
caused by such removal; provided that Landlord shall have advised Tenant
at the time it consented to any such nonstandard alteration that Landlord
may require its removal at the end of the Lease term, if and to the extent
that Tenant shall have requested in writing such advice from Landlord when
it requested Landlord's consent to such alteration. For the purposes of
this Article 12, a 'nonstandard alteration' shall mean auditoriums or
similar type special use areas, vaults, atriums, kitchen equipment and
installations, internal stairways, slab reinforcements, raised floors or
other alterations which impede the installation of duct work or other
normal installations above the finished ceiling or which are not suitable
for normal office occupancy or which would be unusually difficult or
costly to remove in comparison to usual alterations required for general
office purposes. Notwithstanding the foregoing, it is understood and
agreed by the parties hereto that all improvements and other alterations
to the demised premises made by or on behalf of Tenant prior to July 1,
2000, shall be deemed to be standard alterations which Landlord may not
require Tenant to remove."
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(e) The Twenty-Second Article of the Lease is hereby deleted and the
following is substituted therefor:
"(i) Tenant agrees that Landlord shall furnish electricity to
Tenant on a 'submetering' basis. Landlord shall install any submeters
reasonably required in Landlord's judgment in the demised premises for the
purposes of this Article, at Tenant's sole cost and expense. Electricity
and electric service, as used herein, shall mean any element affecting the
generation, transmission, and/or distribution or redistribution of
electricity, including, but not limited to, services which facilitate the
distribution of service.
(ii) Tenant covenants and agrees to purchase electricity from
Landlord or Landlord's designated agent at charges, terms and rates,
including, without limitation, fuel adjustments and taxes, equal to those
specified in the Con Edison SC#4-l rate schedule effective on the date
Landlord first provides electricity to the demised premises on a
submetering basis (the "effective" date), or any successor rate schedule
or service classification, plus five percent (5%) for transmission line
loss and other redistribution costs. Where more than one (1) meter
measures the service of Tenant in the Building, then the service
registered by each meter shall be aggregated and billed at the applicable
rate as if there were only one (1) sub-meter measuring Tenant's aggregate
use in the entire demised premises. Bills therefore shall be rendered at
such times as Landlord may elect and the amount, as computed from a meter,
shall be deemed to be, and be paid as, Additional Charges. If any tax is
imposed by any Federal, State or Municipal authority upon Landlord's
receipts from the sale or resale of electrical energy to Tenant hereunder,
Tenant covenants and agrees that where permitted by law, Tenant's pro-rata
share of such taxes shall be included in the amount of Additional Charges
to be paid by Tenant to Landlord hereunder.
(iii) If all or part of the submetering additional rent
payable in accordance with this Article 22 becomes uncollectible or
reduced or refunded by virtue of any law, order or regulation, the parties
agree that, at Landlord's option, in lieu of submetering Additional
Charges, and in consideration of Tenant's use of the Building's electrical
distribution system and receipt of redistributed electricity and payment
by Landlord of consultant's fees and other redistribution costs, the fixed
annual rent to be paid under this Lease shall be increased by an
"alternative charge" which shall be the
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average per rentable square foot rate payable by Tenant for electricity
during the prior twelve (12) month period pursuant to this Article.
(iv) Landlord shall not be liable for any loss or damage or
expense which Tenant may sustain or incur if either the quantity or
character of electric service is changed or is no longer available or
suitable for Tenant's requirements. Tenant covenants and agrees that at
all times its use of electric current shall never exceed the capacity of
existing feeders to the Building or wiring installation. Any riser or
risers to supply Tenant's electrical requirements, upon written request of
Tenant, will be installed by Landlord, at the sole cost and expense of
Tenant, if, in Landlord's reasonable judgment, the same are reasonably
necessary and will not cause permanent damage or injury to the Building or
demised premises or cause or create a dangerous or hazardous condition or
entail excessive or unreasonable alterations, repairs or expenses or
otherwise interfere with or disturb other tenants or occupants of the
Building, except to a de minimis extent. In addition to the installation
of such riser or risers, Landlord will also at the sole cost and expense
of Tenant, install all other equipment proper and necessary in connection
therewith subject to the aforesaid terms and conditions. The parties
acknowledge that they understand that it is anticipated that electric
rates, charges, etc., may be changed by virtue of time-of-day rates or
other methods of billing, electricity purchases and the redistribution
thereof, and that the references in the foregoing paragraphs to changes in
methods of or rules on billing are intended to include any such changes.
Anything hereinabove to the contrary notwithstanding, in no event is the
submetering additional rent or any "alternative charge", to be less than
an amount equal to the total of Landlord's payment to public utilities
and/or other providers for the electricity consumed by Tenant (and any
taxes thereon or on redistribution of same) plus five percent (5%) for
transmission line loss and other redistribution costs. Landlord reserves
the right to terminate the furnishing of electricity upon sixty (60) days'
prior written notice to Tenant; provided Landlord terminates the
furnishing of electricity to at least fifty percent (50%) of the tenants
of the Building (not including those retail tenants on the ground floor of
the Building) to whom Landlord is furnishing electricity on a submetered
basis, in which event the Tenant may make application directly to the
public utility and/or other providers for the Tenant's entire separate
supply of electric current and Landlord shall permit its wires and
conduits, to the extent available and safely capable, to be used for such
purpose, but only to the extent of Tenant's then
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authorized load. Any meters, risers, or other equipment or connections
reasonably necessary to furnish electricity on a submetering basis or to
enable Tenant to obtain electric current directly from such utility and/or
other providers shall be installed at Tenant's sole cost and expense. Only
rigid conduit or electrical metal tubing (EMT) will be allowed. Landlord,
upon the expiration of the aforesaid sixty (60) days' prior written notice
period may discontinue furnishing the electric current but this Lease
shall otherwise remain in full force and effect.
(v) Tenant's use of electric energy in the demised premises
shall not at any time exceed the capacity of any of the electrical
conductors and equipment in or otherwise serving the demised premises. In
order to insure that such capacity is not exceeded and to avert possible
adverse effect upon the Building's distribution of electricity via the
Building's electric system, Tenant shall not, without Landlord's prior
consent in each instance (which consent shall not be unreasonably withheld
or delayed), connect any fixtures, appliances or equipment (other than
normal business machines and personal computers, which do not materially
increase Tenant's electrical consumption) to the Building's electric
system or make any alterations or additions to the electric system of the
demised premises existing on the Extended Term Commencement Date. Landlord
shall continue to make electrical energy available to the demised premises
in accordance with current practice.
(vi) (1) Upon Tenant's request therefor, Landlord shall
provide Tenant with utility invoices and other reasonable documentation
supporting its computation of Additional Charges hereunder.
(2) At Landlord's option, Tenant shall purchase from
Landlord or Landlord's agent all lighting tubes, lamps, bulbs and ballasts
used in the demised premises and Tenant shall pay Landlord's reasonable
charges for providing and installing same, on demand, as additional rent."
(f) Tenant shall simultaneously upon execution of the First
Amendment of Lease dated as of July 1, 2000 (the "Amendment") deliver to
Landlord additional cash security in the amount of Thirty Thousand, Thirty and
83/100 Dollars ($30,030.83). With Tenant's delivery of this additional cash
security, the amount of security provided for in the Thirty-Eighth Article of
the
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Lease is hereby amended to be the aggregate amount of Fifty-Six Thousand Five
Hundred Ninety and 83/100 Dollars ($56,590.83).
(g) The Thirty-Ninth Article of the Lease is hereby amended as
follows:
(i) All references to "five (5) days" in subparagraph (a)
thereof are hereby deleted and "fifteen (15) days" is substituted therefor.
(ii) Subparagraph (b) thereof is hereby amended by deleting
proviso (1) therefrom and substituting the following therefor:
"(1) if Tenant shall make default in the payment of the rent
reserved herein for a period of five (5) days after receipt of
written notice from Landlord that same is past due or default
in the payment of additional rent due herein for a period of
fifteen (15) days after receipt of written notice from
Landlord that same is past due..."
(h) The Forty-Eighth Article of the Lease is hereby amended such
that notices sent by Tenant to Landlord shall be sent as set forth in the Lease
to c/o Newmark & Company Real Estate, Inc., 125 Park Avenue, New York, New York
10017. A copy of any default or any other notices shall be sent to Arent Fox
Kintner Plotkin & Kahn, PLLC, 1675 Broadway, New York, New York 10019,
Attention: Jill Hayman, Esq. The Forty-Eighth Article of the Lease is hereby
further amended such that a copy of notices sent by Landlord to Tenant shall
also be sent to Fulbright & Jaworski L.L.P., 666 Fifth Avenue, New York, New
York 10103, Attention: Douglas J. Danzig, Esq.
(i) The Fifty-Seventh Article of the Lease is hereby deleted.
(j) The term "base tax year" as set forth in the Fifty-Eighth
Article of the Lease is hereby amended to mean "the New York City real estate
tax year commencing July 1, 2000 and ending June 30, 2001 ".
(k) The Sixty-Fifth Article of the Lease is hereby deleted and the
following is substituted therefor:
"SIXTY-FIFTH: - Within fifteen (15) days after the Amendment has been
fully executed, Landlord shall pay Tenant, as a contribution to the cost
of Tenant's work to prepare the demised premises for Tenant's occupancy,
the amount of One Hundred Six Thousand Two Hundred Forty and 00/100
($106,240.00) Dollars. On February 1, 2006,
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Landlord shall pay Tenant, as a second (2nd) contribution to the cost of
Tenant's work to prepare the demised premises for Tenant's occupancy, the
amount of Three Hundred Eighteen Thousand Seven Hundred Twenty and 00/100
($318,720.00) Dollars."
(l) The Sixty-Sixth Article of the Lease is hereby deleted and the
following is substituted thereof:
"SIXTY-SIXTH: - (i) If Tenant shall fail to pay any installment of fixed
annual rent for more than five (5) days after the same becomes due and
payable or any amount of additional rent for more than fifteen (15) days
after the same becomes due and payable (collectively, the "Default
Periods"), Tenant shall pay Landlord a late charge of ten cents ($0.10)
for each dollar of such fixed annual rent or additional rent as shall not
have been paid to Landlord within said respective Default Periods. Such
late charge shall be without prejudice to any of Landlord's rights and
remedies hereunder or at law for nonpayment of rent, shall be in addition
thereto and shall be deemed to be additional rent. Notwithstanding
anything to the contrary contained herein, Tenant shall be permitted to
pay an installment of fixed annual rent late once per calendar year
without incurring a late charge, provided such payment is received no
later than the tenth (10th) day of the month in which such payment is due.
Further, notwithstanding anything to the contrary contained herein,
Landlord shall waive the late charge for one (1) late payment of
additional rent by Tenant per calendar year, provided such payment is
received no later than thirty (30) days after the date such payment was
due.
(ii) If in accordance with the Thirty-Ninth Article of the Lease, Tenant
shall be in default in the payment of (A) any installment of fixed annual
rent or any amount of additional rent or (B) any other sum of money which
shall become due and payable by Tenant to Landlord pursuant to the terms
of this Lease or by reason of Tenant's occupancy of the demised premises,
in addition to (and not in lieu of) the late charge provided for in
subparagraph (i) above, Tenant shall pay interest thereon at a rate equal
to the lesser of four percent (4%) above the prime rate per annum from
time to time set forth in The Wall Street Journal, calculated on the basis
of the actual days elapsed, based on a 360-day year, or the minimum rate
of interest allowed by applicable law(s), if any, then prevailing, from
the date on which such installment or payment is due to the date of
payment thereof, and such interest shall be deemed to be additional rent.
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(iii) Except as required by statute and under the laws, nothing contained
in Article 39 or in this Article 66 shall be deemed to require Landlord to
give the notices therein or herein (if any) provided for prior to the
commencement of a summary proceeding for nonpayment of rent or a plenary
action for the recovery of rent on account of any default in the payment
of the same, it being intended that such notices are for the sole purpose
of creating a conditional limitation hereunder pursuant to which this
Lease shall terminate and if Tenant thereafter remains in possession or
occupancy, it shall become a holdover tenant."
(m) The Sixty-Seventh Article of the Lease is hereby deleted and the
following is substituted therefor:
"SIXTY-SEVENTH: - (i) This Lease shall be governed in all respects by the
laws of the State of New York.
(ii) If, in connection with obtaining financing for the Building, a bank,
insurance company or other lending institution shall request reasonable
modifications to this Lease as a condition to such financing, Tenant will
not unreasonably withhold, delay or defer its consent thereto, provided
that such modifications do not increase the obligations of Tenant
hereunder, decrease the obligations of Landlord hereunder, except to a de
minimis extent, or otherwise materially or adversely affect Tenant's
leasehold interest hereby created.
(iii) Tenant shall not be entitled to exercise any right of termination or
other option granted to it by this Lease (if any) at any time when Tenant
is in monetary default, after applicable notice, grace and/or cure
periods, in the performance or observance of any of the covenants, terms,
provisions or conditions on its part to be performed or observed under
this Lease.
(iv) Tenant shall not occupy any space in the Building (by assignment,
sublease or otherwise) other than the demised premises or other premises
leased to Tenant directly by Landlord (except if the named Tenant herein
is subsequently purchased by a third party which leases space in the
Building), except with the prior written consent of Landlord in each
instance.
(v) Tenant acknowledges that it has no rights to any development rights,
"air rights" or comparable rights appurtenant to the land or building, and
consents, without further consideration, to any utilization
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of such rights by Landlord and agrees to promptly execute and deliver any
instruments which may be requested by Landlord, including instruments
which may be reasonably requested by Landlord, including instruments
merging zoning lots, evidencing acknowledgment and consent. The provisions
of this paragraph shall be deemed to be and shall be construed as an
express waiver by Tenant of any interest Tenant may have as a "party in
interest" (as such quoted term is defined in Section 12 Zoning Lot of the
Zoning Resolution of the City of New York) in the building or the land.
(vi) Any and all payments and charges to be paid by Tenant hereunder other
than the annual rent payable pursuant to this Lease shall be additional
rent hereunder for non-payment of which Landlord shall have all of the
remedies provided herein or at law.
(vii) If this Lease be a renewal of an existing lease between the parties
or their predecessors in interest, then any obligation of Tenant for the
payment of rent or additional rent or the performance of any obligation
under such existing lease which accrues prior to the expiration thereof
shall constitute an obligation under this Lease, except as modified by the
Amendment (as that term is defined in Article 38 of this Lease), for
non-payment or non-performance for which Landlord shall have all of the
remedies provided herein."
(n) The Sixty-Eighth Article of the Lease is hereby deleted and the
following is substituted therefor:
"SIXTY-EIGHTH: - As a material inducement to Landlord for entering into
this Lease, Tenant covenants and agrees that except for the inside
surfaces of all walls, windows and doors bounding the demised premises,
all of the remainder of the Building is exclusively reserved to Landlord,
subject to Tenant's right to use the common areas of the Building in
accordance with the applicable provisions of this Lease (including,
without limitation, the lobby, elevators and core bathrooms, as opposed to
private bathrooms, on the thirty-fourth (34th) and thirty-fifth (35th)
floors of the Building). Notwithstanding anything to the contrary
contained herein, Tenant shall have the right to use in accordance with
the Lease, the electric and telephone closets and so-called "slop" sinks
on the thirty-fourth (34th) and thirty-fifth (35th) floors of the
Building."
(o) The Sixty-Ninth Article of the Lease is hereby deleted.
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(p) The second sentence of the Twenty-First Article of the Lease
shall be amended to read as follows:
"Landlord or Landlord's agents shall have the right to enter the demised
premises at reasonable times after notice (which may be oral) to Tenant to
examine the same..."
4. Each party hereto covenants, warrants and represents to the other party
that it has had no dealings, conversations or negotiations with any broker other
than Newmark & Company Real Estate, Inc., concerning the execution and delivery
of this Amendment. Each party hereto agrees to defend, indemnify and hold
harmless the other party against and from any claims for any brokerage
commissions and all costs, expenses and liabilities in connection therewith,
including, without limitation, reasonable attorneys' fees and disbursements,
arising out of its respective representations and warranties contained in this
Paragraph 4 being untrue. Landlord shall pay any brokerage fees which may be due
to Newmark & Company Real Estate, Inc. in connection with this Amendment
pursuant to a separate agreement.
5. Except as expressly set forth in this Amendment, the terms and
conditions of the Lease shall continue in full force and effect without any
change or modification and shall apply for the balance of the term of the Lease
as hereby extended. In the event of a conflict between the terms of the Lease
and the terms of this Amendment, the terms of this Amendment shall govern.
6. This Amendment shall not be altered, amended, changed, waived,
terminated or otherwise modified in any respect or particular, and no consent or
approval required pursuant to this Amendment shall be effective, unless the same
shall be in writing and signed by or on behalf of the party to be charged.
7. This Amendment shall be binding upon and shall inure to the benefit of
the parties hereto and to their respective heirs, executors, administrators,
successors and permitted assigns.
8. All prior statements, understandings, representations and agreements
between the parties, oral or written, are superseded by and merged in this
Amendment, which alone fully and completely expresses the agreement between them
in connection with this transaction and which is entered into after full
investigation, neither party relying upon any statement, understanding,
representation or agreement made by the other not embodied in this Amendment
relating to the demised premises. Landlord acknowledges that Tenant occupies
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other space in the Building pursuant to separate agreements between Landlord and
Tenant which may be renewed and amended from time to time.
9. No failure or delay of either party in the exercise of any right or
remedy given to such party hereunder or the waiver by any party of any condition
hereunder for its benefit (unless the time specified herein for exercise of such
right or remedy has expired) shall constitute a waiver of any other or further
right or remedy nor shall any single or partial exercise of any right or remedy
preclude other or further exercise thereof or any other right or remedy. No
waiver by either party of any breach hereunder or failure or refusal by the
other party to comply with its obligations shall be deemed a waiver of any other
or subsequent breach, failure or refusal to so comply.
10. This Amendment shall be interpreted and enforced in accordance with
the laws of the state in which the demised premises are located without
reference to principles of conflicts of laws.
11. If any provision of this Amendment shall be unenforceable or invalid,
the same shall not affect the remaining provisions of this Amendment and to this
end the provisions of this Amendment are intended to be and shall be severable.
Notwithstanding the foregoing sentence, if (i) any provision of this Amendment
is finally determined by a court of competent jurisdiction to be unenforceable
or invalid in whole or in part, (ii) the opportunity for all appeals of such
determination have expired, and (iii) such unenforceability or invalidity alters
the substance of this Amendment (taken as a whole) so as to deny either party,
in a material way, the realization of the intended benefit of its bargain, such
party may terminate this Amendment within thirty (30) days after the final
determination by notice to the other. If such party so elects to terminate this
Amendment, then this Amendment shall be terminated and neither party shall have
any further rights, obligations or liabilities hereunder, except those
obligations which expressly survive the termination of this Amendment.
12. LANDLORD AND TENANT HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY,
UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY RIGHT EACH MAY HAVE TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER ARISING IN TORT OR CONTRACT)
BROUGHT BY EITHER AGAINST THE OTHER ON ANY MATTER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS AMENDMENT OR ANY OTHER DOCUMENT EXECUTED AND DELIVERED BY
EITHER PARTY IN CONNECTION HEREWITH (INCLUDING ANY ACTION TO RESCIND OR CANCEL
THIS AMENDMENT ON THE GROUNDS THAT THIS AMENDMENT WAS FRAUDULENTLY INDUCED OR IS
OTHERWISE VOID OR VOIDABLE).
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13. This Amendment may be executed in any number of counterparts. It is
not necessary that all parties sign all or any one of the counterparts, but each
party must sign at least one counterpart for this Amendment to be effective.
14. This Amendment shall not be binding upon either party unless and until
it is fully executed and delivered to both parties.
* * * * *
[The remainder of this page is left intentionally blank;
the signature page follows]
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IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of
the date and year first above written.
LANDLORD:
500-512 SEVENTH AVENUE LIMITED PARTNERSHIP
By: 500-512 ArCap LLC, its General Partner
By: Archon Capital, L.P., its sole Member
By: WH MezzCo GP, L.L.C., its General
Partner
By: /s/ Alan S. Kava
------------------------------
Name: Alan S. Kava
Title: Vice President
By: GS MezzCo GP, L.L.C., its General
Partner
By:
------------------------------
Name:
Title:
TENANT:
G-III LEATHER FASHIONS, INC.
By: /s/ Wayne S. Miller
------------------------------------------
Name: Wayne S. Miller
Title: CFO
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