Exhibit 10.4
THIRD AMENDMENT TO LEASE
1. PARTIES
1.1 THIS AGREEMENT made the 6th day of November, 2001 is between MACK-CALI
REALTY, L.P. ("Lessor") whose address is c/o Mack-Cali Realty
Corporation, 11 Commerce Drive, Cranford, New Jersey 07016 and MOVADO
GROUP, INC. ("Lessee"), whose address is Mack Centre II, One Mack
Drive, Paramus, New Jersey.
2. STATEMENT OF FACTS
2.1 Lessor and Lessee entered into a Lease dated December 21, 2000, as
amended by First Amendment to Lease dated December 21, 2000 and Second
Amendment to the lease dated July 26, 2001 (hereinafter collectively,
the "Lease") covering approximately 57,535 gross rentable square feet
on the third (3rd) floor ("Premises") in the building located at Mack
Centre II, One Mack Drive, Paramus, New Jersey ("Building"); and
2.2 Lessee desires to expand the Premises by leasing approximately 6,024
gross rentable square feet on the third (3rd) floor of the Building
contiguous to the Premises ("Second Expansion Premises"), as shown on
Exhibit A attached hereto and made a part hereof; and
2.3 The parties desire to amend certain terms of the Lease as set forth
below.
3. AGREEMENT
NOW, THEREFORE, in consideration of the terms, covenants and
conditions hereinafter set forth, Lessor and Lessee agree as follows:
3.1 The above recitals are incorporated herein by reference.
3.2 All capitalized and non-capitalized terms used in this Agreement which
are not separately defined herein but are defined in the Lease shall
have the meaning given to any such term in the Lease.
3.3 The Term applicable to the Second Expansion Premises shall commence on
the date the Second Expansion Premises are delivered to Lessee (the
"Effective Date") and shall terminate at 11:59 p.m. on June 30, 2013,
said date being the Expiration Date, as defined in the Lease. Lessor
shall use reasonable efforts to deliver the Second Expansion Premises
to Lessee on or about December 1, 2001 but shall have no liability for
failure to deliver same by said date.
3.4 Lessor hereby leases the Second Expansion Premises to Lessee, and
Lessee shall accept the Second Expansion Premises on the Effective
Date in its "AS-IS" condition with the Building systems serving the
Second Expansion Premises in good working order. Lessor represents
that to the best of its knowledge there are no unlawful quantities of
asbestos or contaminates in the Second Expansion Premises.
3.5 Lessee, at its sole cost and expense, shall perform improvement work
to the Second Expansion Premises including, without limitation,
legally demising the Second Expansion Premises in accordance with
Exhibit B attached hereto and made part hereof. Lessor shall provide
an allowance towards such improvements work of up to ONE HUNDRED FIFTY
THOUSAND SIX HUNDRED AND 00/100 DOLLARS ($150,600.00) ("Lessor's
Construction Allowance.
3.6 From and after the Effective Date, the following shall be effective:
a. Lessor shall lease to Lessee and Lessee shall hire from Lessor
the Second Expansion Premises as shown on Exhibit A attached
hereto and made part hereof.
b. The Premises shall be defined as approximately 63,559 gross
rentable square feet on the third (3rd) floor of the Building and
Paragraph 7 of the Preamble to the Lease be shall deemed amended
accordingly.
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c. In addition to the Fixed Basic Rent payable applicable to the
Premises, Lessee shall pay Lessor Fixed Basic Rent applicable to the
Second Expansion Premises which shall accrue as follows and Paragraph
10 of the Preamble to the Lease shall be deemed supplemented
accordingly:
<Table>
<Caption>
Lease Year(s) Yearly Rate Monthly Installment
Effective Date-6/30/05 $149,094.00 $12,424.50
7/1/05-6/30/09 $161,142.00 $13,428.50
7/1/09-6/30/13 $173,190.00 $14,432.50
</Table>
Notwithstanding anything hereinabove to the contrary, Lessee's
obligation to pay the accrual of Fixed Basic Rent for the Second
Expansion Premises shall commence only on the three (3) month
anniversary of the Effective Date.
d. Parking Spaces as defined in Paragraph 14 of the Preamble to the Lease
shall be amended to be a total of two hundred fifty-four (254) spaces,
forty-three (43) of which shall be assigned and two hundred eleven
(211) of which shall be unassigned. As shown on Exhibit C attached
hereto and made a part hereof.
e. Lessee shall pay Lessor the cost of electricity consumed within the
Second Expansion Premises in accordance with Article 22 Building
Standard Office Electrical Service of the Lease.
f. Lessee's Percentage applicable to the Second Expansion Premises shall
be 1.72%.
g. Lessee shall pay Lessor, as Additional Rent, Lessee's Percentage
applicable to the Second Expansion Premises of the increased cost to
Lessor for each of the categories set forth in Article 23 (Additional
Rent) over the Base Period Costs set forth in Paragraph 2 of the
Preamble of Lease. Notwithstanding anything hereinabove to the
contrary, Lessee shall have no obligation to pay Lessee' Percentage
applicable to the Second Expansion Premises of the increased cost to
Lessor over the Base Period Costs for the Second Expansion Premises
during the first twelve (12) months following the Effective Date.
h. The term "Second Expansion Premises" shall have the same meaning as
the term "Premises" as in the Lease, and the Lease shall be deemed
amended accordingly. All terms and agreements contained in the Lease
shall apply to the Second Expansion Premises demised herein with the
same force and effect as if the same had been set forth in full herein
except as otherwise expressly provided in this Agreement.
i. Lessor shall use the Second Expansion Premises primarily as an
employee cafeteria with secondary uses as: a watch sale/company store,
a customer service window for drop off and pick up of company
products, and offices/conference rooms. As part of Lessee's cafeteria
needs, Lessor agrees to permit Lessee to install, at Lessee's sole
cost and expense, several exhaust ducts directly to the exterior of
the Building, or in the alternative, to the roof of the Building
through a Building airshaft vent or similar vent or similar opening.
Such work by Lessee shall be subject to plans approved by Lessor,
which approval shall not be unreasonably withheld, delayed or
conditioned. Lessee shall remove any such alterations at the
expiration or sooner termination of the Term and restore the Second
Expansion Premises and the Building to the condition existing prior to
such alteration.
j. Lessee shall have the right to install, at Lessee's sole cost and
expense, a new electric riser through Lessor's common Building shaft.
Such work by Lessee shall be subject to plans approved by Lessor,
which approval shall not be unreasonably withheld, delayed or
conditioned. Lessee shall remove any such alterations at the
expiration or sooner termination of the Term and restore the Second
Expansion Premises and the Building to the condition existing prior to
such alteration.
3.7 This Agreement shall not extend or otherwise amend the Term or Fixed Basic
Rent
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applicable to the Premises as defined herein.
3.8 Each of Lessor and Lessee represent and warrant to the other that no
broker except Alexander Summer LLC (the "Broker") brought about this
transaction, and each agrees to indemnify and hold the other harmless
from any and all claims of any other broker arising out of or in
connection with negotiations of, or entering into of, this Agreement.
Lessor agrees to pay Broker pursuant to a separate agreement and to
indemnify and hold harmless Lessee with respect to claims by the Broker.
3.9 Except as expressly amended herein, the Lease shall remain in full force
and effect as if the same had been set forth in full herein, and Lessor
and Lessee hereby ratify and confirm all of the terms and conditions
thereof.
3.10 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective legal representatives, successors and
permitted assigns.
3.11 Each party agrees that it will not raise or assert as a defense to any
obligation under the Lease or this Agreement or make any claim that the
Lease or this Agreement is invalid or unenforceable due to any failure of
this document to comply with ministerial requirements including, but not
limited to, requirements for corporate seals, attestations, witnesses,
notarizations, or other similar requirements, and each party hereby
waives the right to assert any such defense or make any claim of
invalidity or unenforceability due to any of the foregoing.
IN WITNESS WHEREOF, Lessor and Lessee have hereunto set their hands and
seals the date and year first above written, and acknowledge one to the other
that they possess the requisite authority to enter into this transaction and to
sign this Agreement.
LESSOR LESSEE
MACK-CALI REALTY, L.P. MOVADO GROUP, INC.
By: Mack-Cali Realty Corporation,
its general partner
By: /s/ Michael A. Grossman By: /s/ [ILLEGIBLE]
-------------------------------- -------------------------------
Michael A. Grossman Name:
Executive Vice President Title:
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EXHIBIT A
LOCATION OF SECOND EXPANSION PREMISES
[FLOOR PLAN GRAPHIC]
THIRD (3RD) FLOOR
ONE MACK DRIVE
PARAMUS, NEW JERSEY
EXHIBIT B
LESSEE'S WORK AND ALTERATIONS
Lessee may make the alterations required for Lessee's use of the Second
Expansion Premises (hereinafter the "Work") after the Effective Date of the
Second Amendment subject to the following:
a. Lessee, at its sole cost and expense, shall prepare and submit to
Lessor, for Lessor's and governmental approval, the following
descriptive information, detailed architectural and engineering
drawings and specifications (hereinafter the "Plans") for the Work.
The Plans shall be as complete and finished as required to completely
describe the Work and shall include, but not be limited to, the
following:
i. Demolition Plans depicting all existing conditions to be
removed, abandoned or cut patched.
ii. Architectural floor plans depicting partition locations and
types; door location, size, and hardware types.
iii. Structural plans, if required, depicting new structural
components and their connections to existing elements.
iv. Electrical plans depicting any new and existing electrical
wiring, devices, fixtures and equipment.
v. Mechanical plans depicting any new plumbing, piping, heating,
ventilating, air conditioning equipment, and duct work and its
connections to existing elements.
vi. Life Safety System plans depicting all new or altered alarm
system fixtures, devices, detectors and wiring within the
Second Expansion Premises and their connection to existing
systems.
vii. Coordinated reflected ceiling plan showing ceiling systems and
materials and all of the above items and their proximity to one
another.
viii. Finish plans showing locations and types of all interior
finishes with a schedule of all proposed materials and
manufacturers.
The Plans shall provide for all systems and construction components
complying with the requirements of all governmental authorities and
insurance bodies having jurisdiction over the Building.
b. The Plans for the Work are subject to Lessor's prior written approval
which shall not be unreasonably withheld, provided, however, that
Lessor may in any event disapprove the Plans if they are incomplete,
inadequate or inconsistent with the terms of the Lease or with the
quality and architecture of the Building. Lessor agrees to approve or
disapprove the Plans within three (3) business days of receipt of same
(the "Lessor's Approval Period"). If Lessor disapproves the Plans or
any portion thereof, Lessor shall promptly notify Lessee thereof and
of the revisions which Lessor reasonably requires in order to obtain
Lessor's approval Lessee shall, at its sole cost and expense, submit
the Plans, in such form as may be necessary, with the appropriate
governmental agencies for obtaining required permits and certificates.
Any changes required by any governmental agency affecting the Work or
the Plans shall be complied with by Lessee in completing said Work at
Lessee's sole cost and expense. Lessee shall submit completed Plans to
Lessor simultaneously with Lessee's submission of said plans to the
local building department.
2. Lessor shall permit Lessee to solicit competitive pricing and select its
own general and/or individual subcontractors to perform the Work in its
sole cost subject to the following:
a. All general contractors shall be subject to Lessor's prior written
approval, which shall
Exhibit B - Page 1
not be unreasonably withheld.
b. Intentionally omitted.
c. Lessee shall be permitted to use the same team of architects and
contractors who built Lessee's current office space on the third floor
of the Building.
d. If Lessee does not use the same team of architects and contractors who
built Lessee's current office space on the third floor of the Building,
then Lessee shall use the Base Building Sub-Contractors and their
respective trades are set forth in Paragraph 6 below.
e. Lessee notifies Lessor in writing of Lessee's selection of general and
subcontractors.
f. All costs associated with the biding process soliciting competitive
pricing will be at the sole cost and expense of the Lessee.
3. Intentionally omitted.
4. If Lessee elects to engage another general contractor, or individual
sub-contractors, Lessee shall, at its sole cost and expense, complete the
Work. Lessee shall complete such Work through its own contractors in
accordance with the following terms and conditions:
a. Lessee's workmen and mechanics shall work in harmony and not interfere
with the labor employed by Lessor, Lessor's mechanics or contractors or
by any other Lessee or their mechanic or contractors, if any. If at any
time Lessee and/or its contractors cause disharmony or interference with
the operation of the Building, Lessor shall give forty-eight (48) hours
written notice to Lessee and Lessee shall promptly resolve any dispute
so that the tenor of the construction process and the operation of the
Building is returned to that which existed prior to Lessor's notice.
Such entry by Lessee's contractors shall be deemed controlled by all of
the terms, covenants, provisions and conditions of the Lease.*
b. Prior to the commencement of the Work, Lessee shall provide Lessor with
evidence of Lessee's contractors and sub-contractors carrying such
worker's compensation, general liability, personal and property
insurance required by law and in amounts no less than the amounts set
forth in Paragraph 8 herein. Lessor shall not be liable in any way for
any injury, loss or damage which may occur to any portion of the Work,
Lessee's decorations, or installments so made, the same being solely at
Lessee's risk.
c. All proposed Building System work, including the preparation of the
plans and specifications identified herein, shall be approved by
Lessor's engineers (the "Engineering Review"), and the reasonable cost
thereof shall be Lessee's responsibility.
d. Lessor shall afford Lessee and its contractors the opportunity to use
the Building facilities in order to enable Lessee and its contractors to
perform the Work, provided however, that Lessee and its contractors
shall remain responsible for the scheduling and transportation of
materials and equipment used in the performance of such work. Lessee
shall give Lessor adequate prior notice with regard to the scheduling
and transportation of materials in and out of the Building. Lessor shall
furnish, at Lessor's expense, water, electricity, heat and ventilation
during the performance of the Work during regular construction trade
hours of 8:00 a.m. to 5:00 p.m., Monday through Friday, exclusive of
trade holidays. Scavenger service shall be provided by Lessor at
Lessee's expense.
e. All plans, changes to the plans and work installed by Lessee and its
sub-contractors shall require inspections to be made by Lessor's Base
Building Sub-Contractors at Lessee's or Lessee's contractors expense
(the "Inspection Fees"). The Base Building Sub-Contractors shall supply
Lessor with certification that work so preformed has been completed in
accordance with the Plans which have been previously approved
Exhibit B -- Page 2
by Lessor. If a Base Building Sub-Contractor is selected and actually
installs the work, the Inspection Fees described in this paragraph
with respect to such work shall not be required.
f. Lessee shall be responsible for all cleaning and removal of debris
necessitated by the performance of the Work. If Lessee fails to
provide such cleaning and removal, the same may be performed by Lessor
on Lessee's behalf (except if the debris is only located within the
Premises, Lessor shall give Lessee three (3) days notice prior to
performing such work) and Lessee will pay Lessor an amount equal to
the contractor's charge therefore.
g. Neither the outside appearance nor the strength of the Building or of
any of its structural parts shall be affected by the Work.
h. The proper functioning of any of the Building Systems shall not be
adversely affected or the usage of such systems by Lessee shall not be
materially increased above the projected usage of such systems
indicated by the current plans and specifications of the Building.
i. Lessee and its general and sub-contractors shall be bound by and
observe all of the conditions and covenants contained in the Lease and
this Exhibit A.
j. Lessor shall designate a "Project Manager" as its representative in
the Building who shall be responsible for coordination and supervision
of the Work as it pertains to the daily operation of the Building.
The Project Manager and his subordinates shall be granted access to
the Second Expansion Premises at all times during the construction
period.
5. Any part of the Work other than Lessee's trade fixtures and equipment
within the Second Expansion Premises shall become the property of the
Lessor upon installation. Furthermore, with respect to any material and
installation which is part of the Work, Lessee shall not be entitled to
remove (unless replaced with equivalent property), pledge or sell same
unless otherwise agreed to in writing by Lessor and Lessee. No refund,
credit, or removal of said items shall be permitted at the termination of
the Lease. Items installed that are not integrated in any such way with
other common building materials do not fall under this provision (Example:
shelving, furniture, trade fixtures equipment).
6. Lessor shall provide a cash contribution of up to ONE HUNDRED FIFTY
THOUSAND SIX HUNDRED AND 00/100 DOLLARS ($150,600.00) ("Lessor's
Construction Allowance") for payment of the costs associated with the
completion of The Work. Lessor's Construction Allowance shall be payable
within fifteen (15) days of Lessor's receipt of the following and shall be
payable notwithstanding that the Effective Date of the Second Amendment to
Lease may not have yet occurred:
a. Copy of the Certificate of Occupancy (temporary and permanent) issued
by the local construction official;
b. AIA Document G704, Certificate of substantial completion issued and
signed by Lessee's Architect;
c. Release of Lien statements from the general and all sub-contractors
associated with the Work and invoices evidencing the cost of said
work; and
d. Lessee shall provide Lessor a set of reproducible drawings of the
Plans and a "CAD" file (in .DWG or .DXF format) of the "As-Built"
Plans.
7. The Base Building Sub-Contractors are:
FIRE SPRINKLER CONTRACTOR
"To be provided by Lessor upon request from Lessee."
ELECTRICAL CONTRACTOR
Exhibit B - Page 3
"To be provided by Lessor upon request from Lessee."
PLUMBING CONTRACTOR
"To be provided by Lessor upon request from Lessee."
HVAC CONTRACTOR
"To be provided by Lessor upon request from Lessee."
8. Lessee's Contractor's Insurance:
a. The Lessee shall require any and all contractors of the Lessee
performing work on or about the Second Expansion Premises to obtain
and/or maintain specific insurance coverage for events which could
occur while operations are being performed and which could occur after
the completion of the work. The insurance coverage of the contractor
shall be at least equal to the coverage required by Article 30 of the
Lease and the contractor shall name Lessor and, if requested,
Mortgagee as additional insureds on all policies of liability
insurance.
b. The contractor shall purchase and maintain such insurance as will
protect itself and Lessor and Lessee from claims set forth below which
may arise out of or result from its operations under the contract and
after contract completion with Lessee, whether such operations are
performed by the contractor or by any subcontractor or by anyone
directly or indirectly employed by any of them or by anyone for whose
acts any of them may be liable. The insurance coverage shall include
but not be limited to protection for:
i. Claims under Workers or Workmens Compensation, Disability
Benefits, and other Employee Benefit Acts;
ii. Claims for damages because of bodily injury, occupational
sickness, disease or death of its employees;
iii. Claims for damages because of bodily injury, sickness, disease,
or death of any person other than its employees;
iv. Claims for damages insured by the usual personal injury liability
coverages which are sustained by (i) any person as a result of an
offense directly or indirectly related to the employment of such
person by the contractor, or (ii) by any other person;
v. Claims for damages, other than to the work itself, because of
injury to or destruction of tangible property, including loss of
use resulting therefrom;
vi. Claims for damages because of bodily injury or death of any
person and/or property damage arising out of the ownership,
maintenance, or use of any motor vehicle; and
vii. Claims which include the foregoing, but not limited thereto,
which may occur while operations are being performed and claims
which may occur after operations are completed.
c. Lessee shall secure evidence of Lessee's contractor's insurance
coverage adequate to protect Lessor and Lessee.
d. The contract between the Lessee and its contractor shall require that
the Lessee's contractor hold the Lessor harmless in a form and manner
equal to the indemnity agreement in Article 12, "Indemnification" of
the Lease agreement.
e. Lessee shall cause to be executed a waiver of all subrogation rights
their contractors have or may have against Lessor and any Mortgagee
involved in the Second Expansion Premises in any way, for damages
caused by fire or other perils so insured.
-END-
Exhibit B - Page 4
EXHIBIT C
LOCATIONS OF ASSIGNED PARKING SPACES
[PARKING LOT GRAPHIC]
MACK-CALI CENTRE II
ONE MACK DRIVE
PARAMUS, NEW JERSEY