SUBLEASE
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THIS SUBLEASE is dated and effective as of June 1, 2000 by and between BANG
& OLUFSEN AMERICA, INC., a Delaware corporation ("Sublessor") and HARVEY
ELECTRONICS, INC., a New York corporation ("Sublessee").
RECITALS
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A. Sublessor leases certain retail space consisting of approximately 1,600
square feet located in the ground floor of the southerly side of the building
commonly known as 86 Greenwich Avenue, Greenwich, Connecticut pursuant to the
terms of a Lease dated April 3, 2000 (as the same may be amended, supplemented,
restated, renewed and/or extended from time to time, the "Overlease") with
Greenwich Avenue Limited Partnership ("Landlord"). Said retail space is more
particularly described in the Overlease and is referred to herein as the
"Premises."
B. Sublessee desires to sublet the Premises from Sublessor and Sublessor is
willing to sublease the Premises to Sublessee, subject to the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the foregoing Recitals, the covenants
and agreements hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Defined Terms; Other Words and Phrases. Capitalized terms used herein
and not otherwise defined in this Sublease shall have the meanings specified in
the Overlease. Whenever it is provided in this Sublease that a party "may"
perform an act or do anything, it shall be construed that such party "may, but
shall not be obligated to," so perform or so do. The following words and phrases
shall be construed as follows: (i) "at any time" shall be construed as "at any
time or from time to time;" (ii) "any" shall be construed as "any and all;"
(iii) "include" and "including" shall be construed as "including but not limited
to;" and (iv) "will" and "shall" shall each be construed as mandatory. Except as
otherwise specifically indicated, all references to paragraph numbers and
letters shall refer to paragraphs of this Sublease and all references to
Exhibits shall refer to the Exhibits attached to this Sublease. The word
"hereby", "hereof", "hereto", "herein" and "hereunder" and any similar terms
shall refer to this Sublease as a whole and not to any particular paragraph. The
word "hereafter" shall mean after the effective date hereof and the word
"heretofore" shall mean before the effective date hereof. Words of the
masculine, feminine or neuter gender shall mean and include the corresponding
words of other genders, and words implying the singular number shall mean and
include the plural number and vice versa. The paragraph headings are inserted in
this Sublease for convenience only and are not intended to, and shall not be
construed to limit, enlarge or affect the scope or intent of this Sublease or
the meaning of any provision hereof.
2. Sublease of Premises. In consideration of the rents reserved in this
Sublease and the obligations herein to be observed and performed by Sublessor
and Sublessee, Sublessor hereby demises and subleases to Sublessee, and
Sublessee hereby sublets from Sublessor, the Premises for the term hereinafter
provided. Except as may be specifically provided to the contrary in this
Sublease, the Premises are hereby demised and subleased pursuant to the terms
and conditions of the Overlease, a copy of which is attached hereto as Exhibit
A. Sublessee hereby (i) assumes all of the terms, covenants and conditions of
Sublessor, as Tenant, under the Overlease, (ii) adopts and makes, for itself,
all waivers and releases set forth in the Overlease and (iii) covenants and
agrees to strictly (x) observe, pay and perform all of Sublessor's obligations,
as Tenant, under the Overlease and (y) comply with all covenants, agreements and
undertakings made by Sublessor, as Tenant, in the Overlease. The covenants,
agreements and undertakings of Sublessee set forth in the immediately preceding
sentence (including the assumption of the terms, covenants and conditions of the
Overlease) are being made for the express benefit of, and may be relied upon by,
Sublessor and Landlord.
3. Term. The term of this Sublease shall commence on the date hereof and
shall end one day immediately before the regularly scheduled expiration of the
initial term of the Overlease, unless sooner terminated as provided herein. This
Sublease shall automatically terminate on the earlier to occur of (i) the
termination of the Licensed Dealer Agreement dated as of June 1, 2000 by and
between Sublessor and Sublessee (as the same may be amended, supplemented,
restated, renewed and/or extended from time to time, the "Dealer Agreement"),
whether such termination occurs due to lapse of time, a default or breach
thereof by either party thereto, or otherwise; or (ii) the termination of the
Overlease, whether such termination occurs due to lapse of time, a default or
breach thereof by either party thereto, or otherwise.
4. Specific Covenants. Without limiting the generality of the covenants and
agreements of Sublessee contained herein in respect of the performance and
observance of Sublessor's obligations as Tenant under the Overlease, Sublessee
covenants and agrees to (i) use and occupy the Premises, and shall conduct its
business at the Premises, strictly in accordance with the uses set forth in
Article 10 of the Overlease and (ii) deliver copies of any notices it receives
relating to, or otherwise affecting, the Premises to Sublessor immediately upon
Sublesse's receipt thereof. Sublessee further covenants and agrees that in any
action or proceeding involving Landlord, Sublessor and Sublessee, any claims,
causes of action and issues between Sublessor and Sublessee shall be severed
from such action or proceeding and shall be separately heard.
5. Rent. (a) Sublessee shall pay to Sublessor as the minimum monthly rental
hereunder the sum of $8,666.67 per month commencing on July 1, 2000 and
continuing on the first day of each succeeding month thereafter during the term
of this Sublease (the "Basic Monthly Rent"). Basic Monthly Rent shall be
adjusted from time to time in accordance with the provisions in the Overlease in
respect of adjustments to "fixed rent" (as that term is defined in the
Overlease) as provided in Article 1 thereof, such that Basic Monthly Rent shall
at all times during the term of the Sublease equal the monthly installments of
fixed rent due from time to time under the Overlease. Basic Monthly Rent for any
partial month shall be prorated at the rate of 1/30th of the Basic Monthly Rent
counting the actual number of days elapsed.
(b) Sublessee shall pay during the term of this Sublease, as additional
rental hereunder (hereinafter referred to as "Additional Rent"), before any
fine, penalty, interest or cost may be added thereto for the nonpayment thereof,
(i) all real estate taxes, special assessments, water rates and charges, sewer
rates and charges (including any sum or sums payable for present or future sewer
or water capacity), charges for public utilities, street lighting, excise
levies, licenses, permits, inspection fees, other governmental charges, and all
other charges or burden of whatsoever kind and nature (including costs, fees,
and expenses of complying with any restrictive covenants or similar agreements
to which the Premises and/or the real property on which the Premises are located
are subject) incurred in the use, occupancy, ownership, operation, leasing or
possession of the Premises and/or arising under or related to this Sublease,
whether any of the foregoing be general or special, ordinary or extraordinary,
foreseen or unforseen (all of which are collectively referred to herein as
"Impositions"), which at any time during the term hereof may have been or may be
assessed, levied, confirmed, imposed upon, or become a lien on the Premises, or
any portion thereof, or any appurtenance thereto, or this Sublease or the rents
or income therefrom and (ii) any other amounts due Landlord under the terms of
the Overlease (other than minimum rent), including common area maintenance
costs, promotional charges, marketing charges and all other taxes, assessments,
levies and charges of any nature whatsoever required to be paid by Sublessor
under the Overlease (collectively, the "Overlease Charges"). Sublessee shall pay
to Sublessor any taxes or increases in taxes which result from any improvements
to the Premises which Sublessee makes at any time during the term hereof.
Sublessee shall pay to Sublessor (a) all Impositions, whether heretofore or
hereafter levied for assessed upon the Premises, or any portion thereof, and/or
this Sublease which are due and payable during the term of this Sublease to
Sublessor within five days of receipt of a statement specifying such amount from
Sublessor and (b) all Overlease Charges at the times and in the manner specified
therefor in the Overlease. Anything herein to the contrary notwithstanding,
Sublessor shall pay its prorata portion of any Impositions and/or Overlease
Charges due and payable with respect to the Premises, or any portion thereof,
and/or this Sublease during the years in which the term hereof both commences
and ends based on the number of days in each said year within the term of this
Sublease, and Sublessor shall pay the balance of any such Impositions during
said years.
(c) Basic Monthly Rent and Additional Rent shall be payable to Sublessor in
US Dollars at the address hereinafter set forth, or at such other place as
Sublessor may designate from time to time. All payments of Basic Monthly Rent
and Additional Rent shall be made without any prior demand therefor and without
any deductions or setoffs whatsoever. At Sublessor's option, all Basic Monthly
Rent and Additional Rent shall be paid by Sublessee directly to the Landlord at
the address and in the manner specified therefor in the Overlease, in which case
Sublessee shall furnish Sublessor with written evidence of each such payment
promptly following payment thereof.
6. Events of Default; Remedies. (a) It shall be an "Event of Default"
hereunder if (i) Sublessee fails to make any payment of Basic Monthly Rent or
any Additional Rent when due or (ii) Sublessee breaches any of its covenants,
obligations or undertakings hereunder (other than as described in clause (i)),
or (iii) Sublessee breaches any of its covenants, obligations or undertakings
under the Dealer Agreement or any other agreement, instrument, note or other
document executed by Sublessee and delivered to Sublessor from time to time, and
in any such event, such breach continues beyond any applicable grace or cure
period specified in the Dealer Agreement or such other agreement, instrument,
note or other document, or the Dealer Agreement is terminated for any reason
whatsoever, or (iv) Sublessee shall be dissolved or shall become unable to pay
its debts as they become due, or shall make a general assignment for the benefit
of creditors or shall file any voluntary petition in bankruptcy or shall be
adjudicated a bankrupt or insolvent or shall file any petition or answer
seeking, consenting to, or acquiescing in reorganization, arrangement,
adjustment, composition, liquidation, dissolution or similar relief, under any
applicable law, statute, ordinance, order, decree, rule or regulation, or shall
file an answer admitting or shall fail to deny the material allegation of a
petition against it for any such relief; or (v) any proceeding against Sublessee
of the type referred to in clause (iv) seeking any such relief shall be
commenced, or (vi) a trustee, receiver, or liquidator of Sublessee of all or any
substantial part of its properties or assets shall be appointed with or without
the consent or acquiescence of Sublessee, or (vii) any default or event of
default occurs under the Overlease as a result of Sublessee's act or omission
(other than any of the occurrences or events enumerated in clauses (i) through
(vi) of this paragraph 6(a).
(b) Upon the occurrence of any Event of Default, Sublessor shall have all
rights and remedies available to it at law or in equity and all rights and
remedies available to the Landlord under the Overlease, including the right to
terminate this Sublease.
7. No Assumption of Obligations. Sublessor hereby disclaims any obligation
to perform any of the covenants or agreements of Landlord under the Overlease
and Sublessee hereby waives, releases and discharges Sublessor from and against
any liability or responsibility for the performance of any such covenants and
agreements. Sublessee shall indemnify, defend and hold harmless Sublessor, its
shareholders, directors, officers, employees and agents from and against any
claims, losses, liability, damages, fines, penalties, settlements, awards, costs
and expenses (including reasonable attorneys' fees and expenses) which Sublessor
may incur as a result of the execution and delivery of this Sublease or the
subtenancy created hereby or Sublessee's possession or use of the Premises. If
Landlord breaches any of its obligations under the Overlease, Sublessor shall
cooperate with Sublessee in enforcing any of Sublessee's rights or remedies
against Landlord; provided, however, that Sublessee shall reimburse Sublessor
for any reasonable costs and expenses incurred in connection therewith,
including reasonable attorneys' fees and disbursements.
8. No Representations or Warranties. Sublessee acknowledges and agrees that
it (i) has inspected the Premises and is relying solely on that inspection in
entering into this Sublease and (ii) is accepting the Premises "AS IS" without
any representation or warranty whatsoever made by Sublessor, either express or
implied. Sublessor hereby expressly disclaims any warranties in respect of the
Premises or this Sublease, either express or implied, including the implied
warranty of tenantability or fitness for a particular purpose.
9. Conflicting Terms. In the event of any conflict between the terms and
conditions of this Sublease and the terms and conditions of the Overlease, the
terms and conditions of this Sublease shall govern and be controlling in all
respects.
10. Notices. Any notice, consent or other communication required or
permitted to be given hereunder shall be in writing and shall be sent by (i)
personal delivery, (ii) a nationally recognized overnight delivery service or
(iii) telephonic facsimile and addressed as follows:
If to Sublessor: Bang & Olufsen America, Inc.
1200 Business Center Drive
Suite 100
Mt. Prospect, Illinois 60056
Attn: President
Telephonic Facsimile: (847) 699-1475
With a copy to: Jay A. Lipe, Esq. and Michael F. Sexton, Esq.
Rooks, Pitts and Poust
10 South Wacker Drive
Suite 2300
Chicago, Illinois 60606
Telephonic Facsimile: (312) 876-1155
If to Sublessee: Harvey Electronics, Inc.
205 Chubb Avenue
Lyndhurst, New Jersey 07071
Attn: President
Telephonic Facsimile: (201) 842-0060
or to such other address as either party from time to time may specify in
writing to the other. Any such notice, consent or other communication shall be
deemed to have been given (i) in the case of personal delivery, when personally
delivered, or (ii) in the case of overnight delivery, as of the date of delivery
was first attempted, or (iii) in the case of telephonic facsimile, upon receipt.
12. Providing Notices. Sublessor shall forward to Sublessee promptly after
receipt thereof copies of all notices and demands from Landlord to Sublessor
with respect to the Overlease or the use and occupancy of the Premises.
13. Right to Cure. Sublessee shall have the right to cure any default of
Sublessor under the Overlease upon delivery of ten days prior notice thereof to
Sublessor and any sums paid by Sublessee in curing any such default may be
deducted by Sublessee from the rentals otherwise due Sublessor from Sublessee
hereunder. Notwithstanding the foregoing, Sublessee shall have no right to
attempt to cure any such default if (i) Sublessor notifies Sublessee that it is
contesting such default by appropriate proceedings and Sublessor provides
Sublessee with reasonable assurances that Sublessee's tenancy created hereby
will not be disturbed during the pendency of such proceedings or (ii) an Event
of Default has occurred or an event exists that, with the giving of notice or
lapse of time, or both, would constitute an Event of Default.
14. Assignment and Subletting. (a) Notwithstanding anything contained in
the Overlease to the contrary, Sublessee shall not, without the prior written
consent of Sublessor, which consent shall not be unreasonably withheld, (i)
assign, transfer, mortgage, pledge, hypothecate or encumber, or subject to or
permit to exist or be subjected to, any lien or charge, this Sublease or any
interest under it, (ii) allow to exist or occur any transfer of or lien upon
this Sublease or Sublessee's interest herein by operation of law, (iii) sublet
the Premises or any portion thereof or (iv) permit the use or occupancy of the
Premises or any portion thereof by any person, corporation, partnership, limited
liability company, trust or other legal entity (each, a "Person") for any
purpose not provided for hereunder or under the Overlease (each of the actions
or events described in clauses (i) through (iv) are referred to herein as a
"Transfer"). No consent on the part of Sublessor in respect of any Transfer
shall relieve or release (x) Sublessee from obtaining the consent of Landlord in
respect of such Transfer as provided in the Overlease or (y) any assignee,
transferee or sublessee from obtaining the consent of Sublessor and Landlord in
respect of any other Transfer. Any purported Transfer in violation of this
paragraph 14(a) shall be null and void.
Sublessee acknowledges that (i) the location of the Premises was
specifically selected by Sublessor for the purpose of opening and operating a
Bang & Olufsen store, (ii) Sublessor has invested a significant amount of time
and money in identifying this location and entering into the Overlease and (iii)
the unique location of the Premises is a material component of Sublessor's
business plan for the development and operation of Bang & Olufsen stores in the
United States in general, and the particular geographic region in which the
Premises are located. Accordingly, for purposes of this paragraph 14(a), it
shall not be deemed unreasonable of Sublessor to withhold its consent to any
Transfer if any of the following conditions are not satisfied: (A) the Person to
whom such Transfer is proposed to be made (a "Transferee") agrees in writing to
continue to use the Premises solely for the uses set forth in Article 10 of the
Overlease and can demonstrate to Sublessor's reasonable satisfaction that
Transferee has the experience and know-how necessary to successfully operate a
retail outlet for the sale of Bang & Olufsen(R) products and services; (B)
Transferee furnishes Sublessor with copies of Transferee's financial statements
covering such time periods as Sublessor may reasonably require, in form
reasonably acceptable to Sublessor, which establish that Transferee's financial
condition is at least as good as the financial condition of the Sublessee as of
the date hereof; (C) Transferee agrees in writing to assume all of the
obligations, liabilities and responsibilities of Sublessee hereunder; and (D)
the Landlord consents to the proposed Transfer and the proposed Transferee, if
such consent is required under the terms of the Overlease.
For purposes of this Sublease, any change in ownership or active management
of Sublessee shall be deemed an assignment or transfer which requires the prior
consent of Sublessor; provided, however, that so long as Sublessee is a publicly
traded company, any transfer or series of transfers as part of a single
transaction, of the common stock of Sublessee shall not require the prior
consent of Sublessor unless, as a result of such transfer or series of
transfers, control of Sublessee is acquired by any manufacturer of consumer
electronics products having annual sales in the United States of $10,000,000 or
more. For purposes of the immediately preceding sentence, "control" shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of Sublessee, whether through the
ownership of voting securities, by contract or otherwise.
(b) Sublessor may assign its interest herein to any Person without
Sublessee's consent; provided, however, that the provisions of this paragraph
14(b) shall in no way limit or modify the provisions of`Article 3 of the
Overlease.
15. Alterations and Improvements. (a) Notwithstanding anything contained in
the Overlease to the contrary, Sublessee shall not make any alterations,
modifications, additions or improvements to the Premises (including any
decorating) without Sublessor's prior consent, which consent shall not be
unreasonably withheld; provided, however, that it shall not be deemed
unreasonable for Sublessor to withhold its consent if (i) Landlord refuses to
consent to any such alterations, modifications, additions or improvements or
(ii) any such alterations, modifications, additions or improvements (x) relate
to or affect any structural elements of the building in which the Premises are
located (the "Building") or any mechanical, electrical or plumbing systems or
fixtures within, attached to or otherwise forming a part of, the Building or (y)
are inconsistent with Sublessor's guidelines, conditions and rules in effect
from time to time with respect to stores selling Sublessor's products and
services under the terms of the Dealer Agreement as in effect from time to time
or any other agreement or arrangement similar thereto. Nothing contained herein
shall relieve Sublessee from the obligation to obtain Landlord's consent in
respect of any such alterations, modifications, additions or improvements to the
Premises under the terms of the Overlease.
(b) All alterations, modifications, additions and improvements made by
Sublessor to the Premises shall be made in strict compliance with the provisions
of the Overlease, including Article 8 thereof. Title to any improvements to the
Premises made by Sublessee (other than Sublessee's trade fixtures and equipment)
shall be vested in, and such improvements shall be the property of, the party
designated in the Overlease, and in the absence of any such designation, title
to any such improvement shall vest in Sublessor. Any trade fixtures or equipment
installed by Sublessee shall remain its property, but shall be otherwise
governed by the terms of the Overlease.
16. Miscellaneous. (a) This Sublease shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
(b) This Sublease may be amended or modified only by a written instrument
executed by Sublessor and Sublessee and acknowledged in writing by Landlord.
(c) This Sublease shall be governed by and construed in accordance with the
law of the state in which the Premises are located without reference to choice
of law or conflicts of law principles.
(d) The commercial general liability insurance maintained by Sublessee as
required under the terms of the Overlease shall name Sublessor, the Overlessor,
its asset manager (if applicable) and its property manager as an additional
insureds thereunder. Without limiting Sublessee's obligations with respect to
insurance under the Overlease, Sublessee shall furnish Sublessor, concurrent
with the execution and delivery of this Sublease and thereafter at least 30 days
prior to the expiration of any such commercial general liability insurance
policy, with a certificate of insurance with respect thereto, together with
evidence that all premiums therefor have been paid in full, which confirms the
policy limits in the amount(s) required under the terms of the Overlease and
names Sublessor, the Overlessor, its asset manager (if applicable) and its
property manager as an additional insureds thereunder.
(e) This Sublease may be executed in multiple counterparts, each of which
shall be deemed an original, but all of which taken together shall constitute
one and the same instrument.
(f) Time is of the essence in respect of the performance and observance of
each and every provision of this Sublease in which the time of performance is a
factor.
(g) The waiver by either party hereto of any breach or any term, covenant
or condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition on any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptance of any rental
hereunder by Sublessor shall not be deemed to be a waiver of any preceding
breach of Sublessee of any term, covenant or condition of this Sublease, other
than the failure of Sublessee to pay the particular rental so accepted,
regardless of Sublessor's knowledge of such preceding breach at the time of
acceptance of such rental. No covenant, term or condition of this Sublease shall
be deemed to have been waived by the non-breaching party, unless such waiver be
in writing signed by such non-breaching party.
(h) Sublessee acknowledges that (i) the initial term of the Overlease
expires April 3, 2005 and that Sublessor has the right to renew the Overlease
for an additional five-year period upon four months prior written notice to
Landlord and (ii) if the renewal option is exercised, the renewal term of the
Overlease expires January 1, 2010. Sublessor agrees to exercise such renewal
option at Sublessee's written direction, provided (i) no Event of Default has
occurred and is continuing, (ii) no event has occurred and no condition exists,
that with the giving of notice or lapse of time, or both, would constitute an
Event of Default, and (iii) Sublessee delivers its irrevocable, written
direction to Sublessor at least 15 days prior to the date Sublessor is required
to give its renewal notice to Landlord. In the event Sublessee fails to direct
Sublessor to exercise the renewal option, Sublessor may nevertheless do so in
its sole discretion.
(i) As a material inducement to Sublessor entering into this Sublease and
agreeing to exercise the renewal option contained in the Overlease as provided
in the immediately preceding sentence, Sublessee acknowledges, covenants, agrees
and confirms with Sublessor that, at least 15 days but not more than 60 days
prior to the expiration of the initial term of the Overlease, Sublessor will
assign all of its right, title and interest therein to Sublessee, and Sublessee
will accept such assignment and assume all of Sublessor's liability and
obligations under the Overlease that first arise from and after the effective
date of such assignment. Such assignment, acceptance and assumption shall be
effective as of the last day of the initial term of the Overlease; provided,
however, that if an Event of Default has occurred and is continuing as of the
last day of the initial term of this Sublease, such assignment, acceptance and
assumption may be terminated by Sublessor in its sole discretion.
(j) Subject to the rights of the Landlord under the Overlease and the
terms, conditions and limitations contained therein, Sublessor covenants that
Sublessee shall have the right to peaceably and quietly have, hold and enjoy the
Premises during the term of this Sublease so long as Sublessee pays and performs
all of its obligations and liabilities hereunder in strictly in accordance with
the terms hereof.
17. Initial Build-Out. (a) Sublessee covenants and agrees that it shall, at
its sole cost and expense, perform all work necessary or appropriate to
construct and equip the Premises as a Bang & Olufsen store (the "Work") in
accordance with the plans and specifications therefor (the "Plans") approved by
Sublessor and Landlord. Without limiting the generality of the foregoing, the
Work shall include installation of the storefront and storefront signs, customer
entrance door(s), floor coverings, plastering, interior decorating, wall and
ceiling treatment, completion of mechanical, electrical, plumbing, fire
sprinkler, and heating, ventilating and air conditioning systems (as necessary),
installation of electric lights and fixtures (as necessary) and all other work
(whether structural or non-structural) necessary or required.
(b) Prior to commencing any portion of the Work, Sublessee shall prepare
and submit proposed Plans to Sublessor and Landlord for their review and
approval, which approval shall not be unreasonably withheld or delayed. Approval
of the Plans by Sublessor and/or Landlord shall not create any responsibility by
either of them for the accuracy, sufficiency or completeness of the Plans, or
the compliance with any applicable laws, statutes, ordinances, orders, decrees,
codes, rules or regulations (collectively, the "Laws"). The final Plans shall be
prepared by a registered architect of the state in which the Premises are
located and licensed engineers for all items of the Work.
(c) Sublessee shall not commence any portion of the Work prior to receipt
of the Landlord's and Sublessor's approval of the Plans. Upon receipt of the
approvals from Sublessor and Landlord, Sublessee shall promptly commence
construction of the Work and shall prosecute the same with due diligence such
that Work shall be completed in time to permit the Premises to open for business
as a Bang & Olufsen store on September 1, 2000 (the "Opening Date"). The Work
shall be performed in compliance with all applicable Laws (including, without
limitation, the Americans with Disabilities Act of 1990), the Plans and the
terms of the Lease. Sublessee shall, at its sole cost and expense, obtain all
permits, approvals and consents from any governmental or quasi-governmental
authority having jurisdiction therefor that may be required in order to perform
any portion of the Work. During construction of the Work, Sublessee agrees to
keep the Premises free of trash or other debris.
(d) Sublessee shall obtain a certificate of occupancy promptly following
completion of the Work and shall promptly forward of copy of same to Sublessor
prior to the Opening Date. Further, as promptly as possible following completion
of the Work, Sublessee shall furnish Sublessor with an original, notarized
contractor's affidavit, all subcontractor's affidavits and original, notarized
final waivers of lien from all contractors and subcontractors who supplied
labor, materials or supplies in connection with the performance of the Work. If
Sublessee or its contractor fails to perform the Work, or any portion thereof,
in a manner that is reasonably satisfactory to Sublessor or Landlord (as
applicable), Sublessee shall correct, or cause to be corrected, all of the Work
as to which Sublessor or Landlord (as applicable) objects in writing within 20
days after receipt of such objection.
(e) The Work shall be performed so as to avoid a labor dispute. If a labor
dispute arises, Sublessee shall, at its sole cost and expense, immediately take
such action as may be necessary or appropriate to end such dispute.
(f) All Work, including any repairs or corrections to the Work, shall be
performed in a first-class, workmanlike manner and shall be in a good and usable
condition upon completion thereof. All materials supplied in connection with the
Work and/or incorporated into the Premises, shall be new or like-new. Sublessee
shall require any person or legal entity performing any portion of the Work to
warrant and guarantee that such Work is free from and all defects in workmanship
and materials for a period of one year from the date of completion thereof. All
such warranties and guaranties for materials or workmanship with respect to any
portion of the Work shall be set forth in the contract with the contractor or
subcontractor, as applicable, and shall expressly inure to the benefit of
Sublessor.
(g) Neither Landlord nor Sublessor shall be liable for any labor or
materials furnish to or for the benefit of Sublessee on credit, and no
mechanic's or materialman's lien for labor or materials shall attach to or
affect any interest of Landlord or Sublessor in the Premises or the land on
which the Premises are located.
(h) Sublessee's contractor must fulfill the following insurance
requirements prior to commencement of any portion of the Work, and shall
maintain, at such contractor's sole cost and expense, the following:
(i) Worker's Compensation Insurance with statutory limits and
Employer's Liability Insurance of not less than $100,000;
(ii) General Liability Insurance with limits of not less than
$2,000,000 combined single limit for bodily injury and property damage,
including personal injury, Contractual Liability coverage specifically
endorsed to cover the indemnity provisions contained herein, and
Contractor's Protective Liability coverage if contractor uses any
subcontractors;
(iii) Motor Vehicle Liability Insurance in the contractor's name,
including owned, non-owned, leased and hired car coverage, with limits of
not less than $2,000,000 combined single limit per occurrence for bodily
injury and property damage.
Sublessee shall cause each contractor to agree to name Landlord, Sublessor,
and their respective parents, subsidiaries and affiliates as additional insureds
on the General Liability Insurance and the Motor Vehicle Liability Insurance.
(i) Sublessee shall maintain Builder's Risk Insurance for the full
replacement value of the cost of the Work.
(j) Certificates evidencing the required insurance shall be furnished to
Sublessor prior to commencement of any portion of the Work. All insurance
carriers shall have a Best's rating of A-VII or better, and shall be registered
or authorized to do business in the state in which the Premises are located.
(k) Each of Sublessee's contractors shall also, to the fullest extent
permitted under applicable Laws, protect, defend, save harmless and indemnify
Landlord, Sublessor and their respective parents, subsidiaries and affiliates
from and against any and all liability, claims, losses, fines, penalties,
damages, awards, costs or expenses (including reasonable attorneys' fees and
disbursements) incurred as a result of any injury or damage, alleged or real,
arising out of or in any way connected with, any act or omission on the part of
such contractor. Such indemnification obligations shall be expressly set forth
in each contract between Sublessee and a contractor, and shall provide that such
obligations inure to the direct benefit of Landlord, Sublessor and their
respective parents, subsidiaries and affiliates.
(l) Within ten days afer the opening for business, Sublessor shall provide
Sublessee with one set of "as-built" drawings and specifications for the
Premises.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Sublease to be
executed as of the date first written above.
SUBLESSOR:
BANG & OLUFSEN AMERICA, INC.
/s/ Ole Bek
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Its: President
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SUBLESSEE:
HARVEY ELECTRONICS, INC.
By: /s/ Franklin Karp
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Its: President
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