Preview
FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022
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EXHIBIT 2
FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022
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AGREEMENT OF LEASE
between
BATTERY PARK CITY AUTHORITY,
d/b/a HUGH L. CAREY BATTERY PARK CITY AUTHORITY,
Landlord
and
PIER A BATTERY PARK ASSOCIATES, LLC,
Tenant
for operation of
the Building Known as "Pier A"
22 Battery Place
New York, New York
(comprising part of Block 16, Lot 1)
{NY120624;5}
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Table of Contents
1 Demised Premises: 3
2. Term: 4
3. Rent: 4
4. Use of Public Areas: 7
5. Impositions: 8
6. Use: "As Is" 9
7. Repairs and Maintenance: 9
8. Alterations: 10
9. Ownership of Alterations: 12
10. Window Cleaning: 12
11. Requirements of Governmental Authorities: 12
12. Subordination: 13
13. Tenant's Liability and Indemnity: 14
14. Destruction, Fire and Other Casualty' 15
15. Eminent Domain 17
16. Assignment and Sublease; Leasehold Mortgage. 17
18. Electric Current' 22
19. Access to Demised Premises: 22
21. Default: 23
22. Remedies of Landlord and Waiver of Redemption: 25
23. Fees and Expenses: 26
24. No Representations by Landlord: 26
25. End of Term; Surrender: 27
26. Quiet Enjoyment' 27
27 Failure to Give Possession: 27
28. No Waiver' 28
29. Waiver of Trial by Jury' 28
30. [Intentionally Omitted] 28
31. Bills and Notices; Communications. 28
32. Water and Sewer Charges: 29
33. Sprinklers: 30
34. Insurance' 30
35. Landlord's Work: 32
36. Tenant's Work: 32
37. Signage; Advertising/Lighting 36
38. Electricity and Other Utilities: 36
39. Consents: 37
40. Unavoidable Delays: 37
41. Broker: 37
42. Partial Invalidity; Joint Liability: 38
43. Rent Arrears: 38
44. OFAC Certification and Indemnification: 38
45. Holding Over: 39
46. Captions: 40
47. Security; Construction Escrow: 40
48. Certain Definitions: 41
49. Adjacent Excavation; Shoring: 42
50. Rules and Regulations: 42
51. [intentionally omitted]' 42
52. Pornographic Uses Prohibited: 42
53. Estoppel Certificate: 43
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54. Successors and Assigns: 43
55. Rent; Net Lease: 43
56. Financial Reporting by Tenant; Landlord Audit Rights. 43
57. Miscellaneous. 44
58. Security of Demised Premises: 44
59. Hazardous Waste. 44
60. No Discrimination 44
EXHIBIT A: 50
EXHIBIT B: 51
EXHIBIT C. 52
EXHIBIT D: 54
EXHIBIT E 57
EXHIBIT F: 60
EXHIBIT a 63
EXHIBIT H: 60
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6 4,
AGREEMENT OF LEASE (THE "LEASE"), made as of this -I day of March, 2011 (the "Effective Date"), by
and between Battery Park City Authority, d/b/a/ Hugh L. Carey Battery Park City Authority, a body
corporate and politic constituting a public benefit corporation of the State of New York having an office at
One World Financial Center, New York, NY 10281, party of the first part, hereinafter referred to as
LANDLORD or as BPCA, and Pier A Battery Park Associates, LLC, a Delaware limited partnership
having an office at 93 Pearl Street, New York, NY 10004, party of the second part, hereinafter referred to
as TENANT.
WITNESSETH:
WHEREAS, the City of New York (the "City") is the Landlord of the property known as Pier A in
Manhattan, New York and certain lands under water and an upland area contiguous to Pier A, including
the Building, underwater pilings, deck and interior and exterior systems, all designated as Block 16 , Lot 1
on the Tax Map of the City of New York for the Borough of Manhattan, and all improvements now or
hereafter located thereon, and including the breakwater adjacent to Pier A, but specifically excluding any
and all development rights appurtenant to the foregoing property that are not utilized for the Project in
accordance with the terms of the City Lease (as hereinafter defined, with the aforesaid property, subject
to said exclusion, being referred to herein as the "Pier A Property"); and
WHEREAS, the City has leased the Pier A Property to BPCA (the "City Lease") for the purpose of
redevelopment of said Property, for uses that will further the City's goal of promoting the development of
the City's waterfront, and ancillary uses;
WHEREAS, Landlord desires to sublease to Tenant the portion of the Pier A Property comprising
the entire interior space in the Building, for the exclusive use of Tenant during the Term (as hereinafter
defined), to operate said space for the purposes hereinafter set forth, and to license portions of the
Promenade and Plaza to Tenant, for use during the periods and for the purposes specified herein.
NOW THEREFORE, it is hereby mutually covenanted and agreed by and between the parties
hereto that this Lease is made upon and subject to the terms, covenants and conditions hereinafter set
forth.
1. Demised Premises:
(A) Landlord hereby leases to Tenant, and Tenant hereby hires from Landlord, for the Term set
forth herein, the entire interior space, subject to the exceptions noted in subsection B, below (said interior
space, subject to said exceptions, being referred to herein as the "Demised Premises" or the "Premises"),
of the Building, which rests atop a pier that extends westward into the Hudson River, comprises a portion
of Block 16, Lot 1 on the Tax Map of the Borough of Manhattan, City of New York, and is located at the
southwest tip of Manhattan, immediately to the south of Battery Park City, and to the northwest of
Historic Battery Park. A site plan showing the location of the Building, and the floor plans for each of the
three floors, are attached hereto as Exhibit A. The gross square footage of the Demised Premises is
38,725 square feet. The first and second floors of the Building each contains approximately 15,000 gross
square feet of space, while the third floor contains approximately 8,725 square feet.
(B) Nothing herein contained shall be construed as a letting by Landlord to Tenant of (1) the outer
faces of exterior walls of the Demised Premises, (2) the space below the surface of the floor of the
Demised Premises; (3) the land below, or air rights above, the Demised Premises, or (4) the roof of the
Building. All space in or adjacent to the Demised Premises used for common areas, shafts, stacks, pipes,
conduits, fan rooms, electric or other utilities or Building equipment comprising components of the
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building systems installed by Landlord (as set forth in Exhibit D annexed hereto), as well as access
thereto through the Demised Premises, for the purposes of operation, maintenance, and repair, are
reserved to Landlord.
2. Term:
(A) This Lease is for a term (the "Term") beginning on the Commencement Date, and expiring
(the "Expiration Date") at the close of business on the day immediately preceding the twenty-fifth (25th)
anniversary of the Commencement Date (as defined below) (or, if the Commencement Date is other than
the first day of a month, then the Expiration Date shall be the end of the month in which the 25th
anniversary of the Commencement Date occurs) for the rental amount set forth in Article 3, below. As
used herein, the term "Commencement Date" shall mean the earlier of (x) the date on which Tenant takes
possession of the Demised Premises, and (y) the date on which Landlord's Work (as defined in Section
35) has been Substantially Completed, and Landlord delivers the Demised Premises to Tenant. As used
herein, the term "Substantially Completed" means the finishing of Landlord's Work subject only to Punch
List Items (as defined below), as certified by Landlord's Architect. Unless Landlord notifies Tenant to the
contrary, "Landlord's Architect" refers to H3 Hardy Collaboration Architecture, LLC.
(B) Landlord shall notify Tenant when Landlord's Work has been Substantially Completed, and
shall deliver to Tenant with said notice a copy of the certificate of Landlord's Architect referred to above.
Tenant shall arrange with Landlord to inspect the Premises within 5 business days of such notification.
Tenant shall notify Landlord of all Punch List Items (as hereinafter defined) within ten (10) business days
after said inspection. Landlord shall endeavor to complete said Punch List Items within ten (10) business
days after receipt of such list. As used herein, the term "Punch List Items" shall mean those items of
Landlord's Work
(1) that have not been completed,
(2) are directly related to Tenant's Use (as defined in Section 6 (A)), with said items
consisting of the provision of (a) the HVAC system, other than the interior distribution, (b) electrical
connection to the Demised Premises, and the switchgear for the electrical service, (c) telecom connection
stubbed to the interior of the Demised Premises, (d) fire protection, (e) fire alarm and (f) plumbing service,
and
(3) as to which the extent of work remaining to be performed in order to effect completion
does not, individually or in the aggregate, prevent Tenant from performing Tenant's Work (as defined in
Section 36), and would not prevent Tenant from opening for business had Tenant's Work been
completed.
Landlord shall perform the Punch List Items in a manner so as not to interfere with the performance by
Tenant of Tenant's Work.
3. Rent:
(A) Base Rent
(1) Base Rent for the Premises shall be as follows, for each Lease Year (as hereinafter
defined):
Lease Year 1: $ 750,000
Lease Year 2: $ 900,000
Lease Year 3: $ 1,200,000
Lease Year 4: $ 1,275,000
Lease Year 5: $ 1,375,000
Lease Years 6 through 10: $ 1,475,000
Lease Years 11 through 15: $ 1,600,000
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Lease Years 16 through 20: $ 1,750,000
Lease Years 21 through 25: $ 1,900,000
(2) As used herein, the term "Lease Year" shall mean each period of twelve (12)
consecutive months elapsing after (i) the Commencement Date of the Term, if the Term begins on the
first day of a month, or (ii) the first day of the month following the Commencement Date of the Term if the
Term begins on a date other than the first day of a month; provided, however, that, under such
circumstances, Lease Year 1 shall also include the period between the Commencement Date and the first
day of the following month.
(3) Notwithstanding anything to the contrary set forth above, Tenant shall be entitled to a
Base Rent concession period commencing on the Commencement Date and ending on the one hundred
eightieth (180th) day thereafter (the "Rent Commencement Date"). Base Rent shall be payable in
advance, in equal installments, on the first day of each month during the Term, except that, if the Rent
Commencement Date occurs on other than the first day of a month, the first installment shall be payable
on the Rent Commencement Date, and shall be equal to the sum of (x) the rent for the period from the
Rent Commencement Date until the end of the month in which it occurs, determined by prorating the total
monthly rent for such period, and (ii) the rent for the full month following the month in which the Rent
Commencement Date occurs.
(B) Percentage Rent
(1) (a) For the period commencing on the date Tenant shall first receive any Gross
Sales (such date being hereinafter called the "Percentage Rent Commencement Date"), and for each
Percentage Rent Year (as hereinafter defined) thereafter during the Term, Tenant shall pay to Landlord,
for each such Percentage Rent Year, an amount ("Percentage Rent") determined as follows, which shall
be computed quarterly, and paid as follows: for each Percentage Rent Year in which Gross Sales (as
hereinafter defined) exceed $ 18,000,000 ("Breakpoint"), (with such excess above the Breakpoint being
referred to herein as the "Multiplicand"), Tenant shall pay to Landlord, as additional rent, an amount
equal to eight percent (8%) of the Multiplicand derived from the Gross Sales with respect to the
operations conducted by Tenant on the Premises, the Promenade and the Plaza.
(b) By way of example only, in the event the Gross Sales shall be equal to
$25,000,000 for any given Lease Year, then in such an event, the Percentage Rent due and owing by
Tenant for such Lease Year shall be $560,000, calculated as follows:
$25,000,000 (Gross Sales) minus $18,000,000 (Breakpoint) equals $7,000,000 (excess
over Breakpoint). The $7,000,000 is multiplied by 8% (the Gross Sales percentage set forth
above).
(c) As used herein, the term "Gross Sales" shall mean gross sales of all food,
beverage, other menu items, merchandise, and goods and other services sold or performed by or for
Tenant in, upon, or from the Premises, the Plaza, or the Promenade, whether for cash or credit (including,
but not limited to, fees paid to Tenant by licensees). Gross Sales shall not include (i) sales and service
taxes collected from customers and paid to the appropriate taxing authority, (ii) costs of management or
employee meals, (iii) the discounted portion of menu prices whether by way of coupons, promotions or
otherwise (iv) service or sales carrying charges, interest or other charges, however denominated, paid by
customers solely for extension of credit; (v) goods returned to sources for full credit; (vi) transfers of
goods in the ordinary course of business, without consideration, to another store or warehouse owned by
or affiliated with Tenant;(vii) sale of fixtures, equipment or property which has been used at the Premises
but is not stock in trade;(viii) income from vending machines, pay telephones, lockers maintained
substantially for the use and convenience of Tenant's employees only and not open to the general
public;(ix) amounts of discounts (provided that such discounts are at least equal to Tenant's mark-up)
allowed to Tenant's employees pursuant to established discount policies;(x) receipt from sales to jobbers
and transactions, without consideration, with any other store of Tenant, any affiliate of Tenant or with any
concessionaire;(xi) sums received in settlement of claims for loss or damage of merchandise;(xii)
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amounts retained by credit card companies, as the fee (as a percentage of sales) charged to Tenant by
such credit card company for such service;(xiii) uncollected bad checks received by Tenant, and
fraudulent (unpaid) purchases from Tenant; (xiv) gift certificates; or like vouchers, until such time as the
same shall have been converted into a sale by redemption at the Demised Premises; (xv) rebates arising
from construction costs and capital improvements and equipment and fixture purchases; (xvi) gratuities to
employees, (xvii) any recovery of amounts in respect of tort or contract claims (other than claims for
nonpayment of amounts that would have been Gross Sales), (xviii) refunds or rebates from third parties
with respect to amounts paid or payable by Tenant for goods or services in connection with the
development of the Demised Premises or the use or operation of said Premises (but excluding any in-
kind payments to third parties who provide such goods or services), (xix) interest or other investment
income earned from time to time by Tenant and (xxi) Capital Proceeds (as hereinafter defined). The fact
that a particular item is listed as an Excluded Item shall not imply that such item would have been
included in Gross Sales but for such listing.
"Capital Proceeds" shall mean (i) proceeds of any sale or other disposition of any direct or indirect interest
in Tenant or Tenant's interest under the Lease (other than subleases, concessions, licenses or other
agreements granted by Tenant for the use or occupancy of any part of the Premises), (ii) proceeds of any
taking by, or conveyance to, any governmental authority as a result of, or in lieu of in anticipation of, the
exercise of the right of condemnation or eminent domain (other than a temporary taking) of all or any part
of the Premises or Tenant's interest therein, (iii) insurance proceeds (other than the proceeds of rents or
business interruption insurance) or other recoveries on account of any casualty, damage or injury, by fire
or otherwise, to the Premises or any part thereof, (iv) the value of, or the proceeds of the sale or other
disposition of, federal rehabilitation tax credits, if any, under Section 47 of the Internal Revenue Code,
and (v) proceeds of any loan, financing or other capital transaction.
(2) For the purposes of this Article 3 (B), Percentage Rent Year shall mean the calendar
year. If the Percentage Rent Commencement Date shall occur on a day other than the first day of a
Percentage Rent Year, the first Percentage Rent Year, for purposes of Percentage Rent payments,
shall be the period from the Percentage Rent Commencement Date through the first day of the next
succeeding calendar year, and the Breakpoint shall be prorated for such period.
(3) Tenant shall deliver to Landlord as soon as practicable after the end of each fiscal
quarter in each Percentage Rent Year, but in no event later than thirty (30) days thereafter, a statement
(the "Quarterly Percentage Rent Statement") showing in reasonable detail Gross Sales from the prior
fiscal quarter, with the Restaurant Portion and the Events and Entertainment Portion (if any) shown
separately, together with the computation of the amounts of said portions pursuant to Article 3 (B) (i) (a),
above. The first Quarterly Percentage Rent Statement submitted by Tenant to Landlord, during a
Percentage Rent Year, in which the Breakpoint is exceeded, shall be accompanied by payment of
Percentage Rent incurred through the end of said quarter. If said quarter is not the last quarter of the
Percentage Rent Year, then the payment for said quarter shall be credited against the annual payment.
(4) Tenant shall deliver to Landlord as soon as practicable after the end of each
Percentage Rent Year, but in no event later than one hundred twenty (120) days thereafter, a separate
statement (the "Annual Percentage Rent Statement") for such Percentage Rent Year showing in
reasonable detail Gross Sales from the prior Percentage Rent Year, together with the computation of the
amounts pursuant to Article 3 (B) (1) (a), above. Based upon the Annual Percentage Rent Statement
submitted by Tenant to Landlord, Tenant shall make a payment of Percentage Rent simultaneously with
the submission to Landlord of the Annual Percentage Rent Statement provided that i) the Gross Sales
shall exceed the $18,000,000 amount set forth in Article 3(B) (1) (a) above, and (ii) Tenant shall receive a
credit for any Percentage Rent Payment made pursuant to subsection (c) (3), above.
(5) In connection with the payment by Tenant of Percentage Rent, the following additional
provisions shall apply:
(a) Tenant shall at all times keep and maintain at the Premises books and
records prepared on the basis required under subsection (b), below, showing in reasonable detail the
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amount of Gross Sales. Unless consented to by Landlord, such books and records relating to any
Percentage Rent Year shall not be destroyed or disposed of for a period of three (3) years after the end
of such Lease Year. Landlord or its representatives shall have the right, one time each Percentage
Rent Year, during regular business hours, on reasonable prior written notice, to examine, audit and/or
photocopy all such books and records. If an audit by Landlord with respect to a Percentage Rent Year
is not commenced within the aforesaid three (3) year period, the computation of the Percentage Rent
paid by Tenant for such Percentage Rent Year shall not thereafter be subject to Landlord's audit and
shall conclusively be deemed correct.
(b) Each Annual Percentage Rent Statement under this Lease shall be (i)
prepared in accordance with generally accepted accounting principles consistently applied and (ii)
verified by the chief financial officer or managing partner of Tenant, or if the managing partner of Tenant
is not an individual, by the chief financial officer of such managing partner, as being true and correct to
the best of his knowledge. Each Annual Percentage Rent Statement shall be certified by an
independent public accounting firm (the "C.P.A." which is a firm approved by Landlord, which approval
shall not be unreasonably withheld. Such certification shall include, without limitation, a statement by
the C.P.A. that an examination of Tenant's books and records has been conducted by the C.P.A. in
accordance with generally accepted auditing standards consistently applied and that the Annual
Percentage Rent Statement has been prepared in accordance with generally accepted accounting
principles consistently applied.
(c) If Landlord shall elect to conduct an audit of Tenant's books and records and
such audit discloses an underpayment of Percentage Rent, Tenant shall pay to Landlord within thirty
(30) days after demand the amount of such deficiency, plus interest thereon at the Base Rate (as
defined below) from the date upon which such sum was due to the date of actual payment. In addition,
if such deficiency shall be in excess of three and one-half percent (3.5%) of the amount alleged by
Tenant to be payable, Tenant shall pay to Landlord within ten (10) days after demand all commercially
reasonable costs incurred by Landlord in connection with such audit. As used herein, the term "Base
Rate" and (ii) As used herein, the "Base Rate shall be the prime or base rate announced as such from
time to time by Citibank, N.A., or its successors, at its principal office.
4. Use of Public Areas:
(A) Tenant acknowledges that the Plaza and Promenade (the "Public Areas") are intended to
server primarily as public space. Nevertheless, Tenant may use portions of such areas, from time to time,
subject to the terms and condition set forth in the introductory paragraph of Exhibit B hereto, and the
payment by Tenant to Landlord of a license fee for such limited use.
(B) Landlord hereby grants to Tenant a license to use and maintain the Public Areas for the
general purposes listed in Exhibit B (the "Public Areas License"), subject to the conditions and restrictions
set forth herein. The fee for such License shall be $ 60,000 per annum, subject to increase as hereinafter
provided (the "License Fee"), payable in advance, in equal installments, on the first day of each month,
commencing on the date when the Tenant first uses the Public Areas during the Term (the "Initial Use
Date"), except that, if said Initial Use Date occurs on other than the first day of a month, the first
installment shall be payable on said Initial Use Date, and shall be equal to the sum of (x) the License Fee
for the period from said Initial Use Date until the end of the month in which it occurs, determined by
prorating the total monthly rent for such period, and (y) the rent for the full month following the month in
which the Initial Use Date occurs. The License Fee shall be increased by three (3%) on the second
anniversary of the date on which the first monthly installment was paid, and on each successive second
anniversary off the prior increase date, until the end of the Term. The increases shall be effected on a
compound basis. Notwithstanding anything herein to the contrary, if Tenant conducts a special event on
the Plaza Pursuant to the Public Areas License, Tenant shall responsible for (in addition to the
maintenance required by Article (7) (B) (viii), above) the costs of all security required for said event.
Notwithstanding the foregoing, it is understood that the Plaza and Promenade have not yet been
designed by BPCA. Consequently, while it is expected that Tenant shall be allowed to utilize the Plaza
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and Promenade for outdoor dining and certain other uses generally as proposed by Tenant in the
descriptions set forth in Exhibit B, all uses, events, programs, equipment, furnishings and furniture shall
be subject to final detailed proposals by Tenant and written approval by BPCA on or following the
Commencement Date of the Lease. It is acknowledged that the full list of potential uses referenced in
Exhibit B reflect Tenant's desired utilization of the Promenade and Plaza, which may not be able to be
accommodated within the Public Areas as ultimately designed. As a result, it is further acknowledged
that each proposed use may not be approved by BPCA and/or may be restricted by BPCA in method,
design, location and time. Any approval of such uses of the Public Areas, and any approval of any
additional uses of the Demised Premises or any other portion of the Pier A Property which are ancillary to
Tenant's Use Program, as described in Exhibit C hereto, shall not require, as a condition to such approval
by BPCA, an increase in the Base Rent, License Fee or any other fee or charge due hereunder.
5. Impositions:
A. Tenant shall pay all impositions related to the Demised Premises or Tenant's tenancy thereof
and which pertain to any period of time during the Term. For the purposes hereof "Imposition" or
"Impositions" means.
(1) real property general and special assessments (including, without limitation, any
special assessments for business improvements or imposed by any special assessment district) other
than Real Property Taxes (as hereinafter defined):
(2) personal property taxes;
(3) occupancy and rent taxes;
(4) water, water meter and sewer rents, rates and charges;
(5) license and permit fees applicable to permits referenced in item VII, below, with the
exceptions noted therein.
(6) service charges with respect to police and fire protection, street and highway
construction, maintenance and lighting, sanitation and water supply;
(7) any other governmental excises, fines, levies, fees, rents, assessments or taxes and
charges, general and special, ordinary and extraordinary, foreseen and unforeseen, of any kind
whatsoever now or hereafter enacted; and
(8) any fines, penalties and other similar governmental charges applicable to
the foregoing, together with any interest or costs with respect to the foregoing, incurred by reason of
Tenant's failure to make any payments as herein provided.
B. As used herein, the term "Real Property Taxes" means the real property taxes assessed and
levied against the Demised Premises or any part thereof (or, if the Demised Premises or any part thereof
or the owner or occupant thereof is exempt from such real property taxes then the real property taxes
assessed and which would be levied if not for such exemption) pursuant to the provisions of Chapter 58
of the Charter of New York City and Title 11, Chapter 2 of the Administrative Code of New York City, as
the same may now or hereafter be amended, or any statute or ordinance in lieu thereof in whole or in
part,
C. Tenant shall pay each Imposition or installment thereof not later than the last date
the same may be paid without incurring any interest or penalty. Tenant shall pay Impositions to the entity
and at the location provided by the rules and regulations governing the payment of such Impositions as if
Tenant owned the Demised Premises.
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6. Use; "As Is":
(A) Tenant shall (a) use and occupy the Demised Premises for the purposes, and in
implementation of the program, listed and described on Exhibit C annexed hereto, and for no other
purpose; (b) obtain all necessary permits, licenses and approvals to operate the Premises in accordance
with said use(s) (referred to herein as "Tenant's Use"), (c) operate and maintain the Premises for the use
and enjoyment of the public, (d) [intentionally omitted]; (e) not at any time use or occupy the Demised
Premises in violation of any temporary or permanent certificate or occupancy issued for the Building of
which the Demised Premises are a part, or for the Demised Premises if a separate temporary or
permanent certificate of occupancy is issued therefor, and (f) not at any time use the Demised Premises
in violation of Article 52 hereof.
(B) BPCA will provide commercially reasonable and timely assistance to Tenant, at no cost to
Tenant for said assistance, in obtaining any approval of Tenant's Use as may be required from the New
York State Department of Environmental Conservation ("NYSDEC"), the New York State Historic
Preservation Office ("SHPO"), or the New York City Department of City Planning ("DCP") and any other
applicable governmental or quasi governmental agency. Tenant shall be responsible for using the
Demised Premises in accordance with the terms of any approvals obtained from these agencies.
(C) Tenant has inspected the Demised Premises and accepts them as is, subject to the
Substantial Completion of Landlord's Work, pursuant to Article 35 and Exhibit D annexed hereto. In any
event, Landlord makes no representation as to the condition of the Demised Premises and Tenant agrees
to accept the same subject to violations, whether or not of record. Notwithstanding the foregoing,
Landlord represents and warrants as of the Commencement Date that the roof shall be free of any and all
leaks, that the structural components of the building will be sound and that the plumbing, heating
electrical and mechanical systems shall be in good and working order
(D) Under no circumstances shall Tenant be permitted to change Tenant's Use without the prior
written consent of Landlord, which may be withheld in Landlord's sole discretion.
7. Repairs and Maintenance:
(A) Tenant agrees, at Tenant's cost and expense, to keep and maintain the Demised Premises in
good repair, order and condition and in accordance with industry standards, and in that regard to make all
non-structural repairs thereto as and when needed to preserve the Demised Premises in good working
order and condition, subject only to reasonable wear and tear, obsolescence and damage from the
elements, fire or other casualty excepted; and to make all repairs to installations made by Tenant in the
Demised Premises, to any signs installed by Tenant, and to those portions of any pipes, lines, ducts,
wires or conduits contained under, above or within, and serving the Demised Premises and which are not
the responsibility of Landlord. Tenant's obligation of repair shall include, but not be limited, to keeping
signs free of graffiti, including any signs which Landlord may permit Tenant to place on the exterior of the
Building.
(B) Tenant, at its own sole cost and expense, shall: (i) keep all exterior and interior storefront
surfaces clean and maintain the rest of the Demised Premises and all corridors and loading areas
immediately adjoining the Demised Premises in a clean, orderly and sanitary condition; (ii) provide regular
cleaning and maintenance schedules, which shall be subject to commercially reasonable approval by
BPCA; (iii) use all reasonable efforts to minimize vibration and noise from all mechanical apparatus which
may be transmitted beyond the confines of the Demised Premises; (iv) not permit the parking of delivery
vehicles so as to interfere with the use of any driveway, walk or other non-public area adjacent to the
Demised Premises; (v) use all reasonable efforts to minimize heat and odors from being transmitted from
the Demised Premises; (vi) provide for snow removal in the area within twenty (20) feet from the Demised
Premises; (vii) conduct regular pest control inspections and extermination and keep the Demised
Premises free of any pest infestations (it being understood that, to the extent that Tenant applies
pesticides to the Demised Premises, Tenant or any subcontractor hired by Tenant shall comply with
Chapter 12 of the New York City Administrative Code; and (viii) daily clean up and remove all waste,
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garbage, refuse, rubbish and litter from the Demised Premises, in the area within twenty (20) feet from the
Demised Premises, and any portion of the Plaza or Promenade that Tenant is authorized to use pursuant
to Article 4 hereof (whether or not within such area), to the extent that such waste, etc., arises from
Tenant's use of the Plaza and/or Promenade. Tenant must provide adequate waste and recycling
receptacles, and have these receptacles emptied on a daily basis and removed by private carter. Said
receptacles shall be subject to approval by BPCA, and Tenant shall store the trash inside the Building
until it is ready for pick up. Rubbish removal schedules, as well as the location and placement of all
waste and recycling containers, will be subject to reasonable approval by BPCA. Tenant will be required
to comply with all City, State and Federal regulations regarding recycling. Tenant recognizes that its
failure to carry out its obligations under this subsection (B) shall materially adversely affect Landlord and
its property and Landlord shall be entitled to immediate redress of the situation and damages caused
thereby by any legal or equitable remedy available to Landlord.
(C) BPCA's responsibility for repair and maintenance shall be limited to (i) the underwater
structural elements of the pier; (ii) the exterior of the Demised Premises including the Building shell and,
structure, exterior walls, and roof, (iii) the replacement pier deck installed by BPCA over the existing deck;
(iv) the portions of the building systems (including any plumbing, heating, ventilation and mechanic
systems) initially installed by BPCA, as described in Exhibit D annexed hereto; (v) the sidewalks adjacent
to the Demised Premises (except as otherwise provided in subsections (b) (vi) and (b) (viii), above, and
(vi) the Promenade and the Plaza (except as otherwise provided herein, in association with Tenant's use
of these spaces), in accordance with BPCA's normal standards and maintenance schedule.
Notwithstanding anything herein to the contrary, if Tenant upgrades any building system installed in part
by Landlord, then Tenant shall thereafter be responsible for the maintenance and repair of the entire
system.
(D) Except as may be specifically provided elsewhere in this Lease, there shall be no allowance
to Tenant for the diminution of rental value and no liability on the part of Landlord by reason of
inconvenience, annoyance or injury to business arising from Landlord's making any repairs, maintenance
alterations, additions or improvements (collectively, "Repairs") in or to any portion of the Building, the
Demised Premises or the fixtures, appurtenances or equipment thereof (including, but not limited to, the
erection of any crane, derrick or sidewalk shed), or failing to make any Repairs. It is specifically agreed
that Tenant shall not be entitled to any set off or reduction of rent by reason of any failure of Landlord or
others to comply with the covenants of this or any other article of this Lease. Tenant agrees that Tenant's
sole remedy at law in such instance will be by way of an action for damages for breach of contract. The
provisions of this Article 7 with respect to the making of Repairs shall not apply in the case of fire or other
casualty, which are dealt with in Article 11 hereof. Notwithstanding the foregoing, Landlord shall diligently
proceed to perform such repair work and shall use all reasonable efforts to minimize interference with
Tenant's business operations.
8. Alterations:
(A) Except for the Tenant's Work (as hereinafter defined), Tenant shall make no changes in or to
the Demised Premises of any nature without Landlord's prior written consent, which consent shall not be
unreasonably withheld or delayed. Tenant shall complete the Tenant's Work subject to the terms and
provisions of Article 36 and Exhibit E annexed hereto. Except for Tenant's Work, all alterations,
additions, repairs, replacements and restoration to the Demises Premises shall be performed by Tenant
(collectively, but not including Tenant's Work, "Alterations") and shall be done at such times as Landlord
may from time to time reasonably designate. Notwithstanding the foregoing, cosmetic changes to the
Demised Premises (painting, carpeting and millwork) shall require the consent of the Landlord) and shall
not be deemed to be an Alteration.
(B) In addition to the Tenant's Work and subject to the prior written consent of Landlord, and to
the provisions of this Article 8, as long as Pier A Battery Park Associates, LLC remains Tenant hereunder
and in occupancy of the Demised Premises, (i) Landlord shall not unreasonably withhold its consent to
any non-structural Alterations which Tenant proposes to make which do not affect utility services, fire
safety systems, required access or egress, or plumbing and electrical lines, in or to the interior of the
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Demised Premises, and which do not require the approval of any third party (it being understood, for
example, that the interior walls and partitions on the second floor have been granted historic status by
SHPO, and any consent by Landlord to the modification thereof shall be subject to approval by SHPO);
and (ii) Tenant may, but shall not be obligated to, remove any Alterations made by Tenant, solely at its
expense, provided Tenant promptly repairs any damage resulting from such removal, unless Landlord
notifies Tenant that such alterations shall be required to be removed at the time Landlord may grant
approval thereof.
(C) Tenant further agrees that: (i) before undertaking any Alterations, Tenant shall first submit to
Landlord for Landlord's approval such plans and specifications as Landlord may reasonably require
showing the work proposed to be done, prepared by such registered architect or engineer reasonably
acceptable to Landlord (it being understood that, in connection with Tenant's Work, the submission of
plans and specifications shall be effected per the terms set forth in Article 36 hereof); (ii) any Alterations
shall be pursued to completion with diligence in a good and workmanlike manner and in compliance with
the provisions of Articles 8 and 11 hereof; (iii) before undertaking Tenant's Work or any Alterations,
Tenant, at Tenant's sole cost and expense, shall furnish to Landlord such bond or other form of
Preview
FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 03/21/2024 EXHIBIT 2 FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 03/21/2024 AGREEMENT OF LEASE between BATTERY PARK CITY AUTHORITY, d/b/a HUGH L. CAREY BATTERY PARK CITY AUTHORITY, Landlord and PIER A BATTERY PARK ASSOCIATES, LLC, Tenant for operation of the Building Known as "Pier A" 22 Battery Place New York, New York (comprising part of Block 16, Lot 1) {NY120624;5} FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 03/21/2024 Table of Contents 1 Demised Premises: 3 2. Term: 4 3. Rent: 4 4. Use of Public Areas: 7 5. Impositions: 8 6. Use: "As Is" 9 7. Repairs and Maintenance: 9 8. Alterations: 10 9. Ownership of Alterations: 12 10. Window Cleaning: 12 11. Requirements of Governmental Authorities: 12 12. Subordination: 13 13. Tenant's Liability and Indemnity: 14 14. Destruction, Fire and Other Casualty' 15 15. Eminent Domain 17 16. Assignment and Sublease; Leasehold Mortgage. 17 18. Electric Current' 22 19. Access to Demised Premises: 22 21. Default: 23 22. Remedies of Landlord and Waiver of Redemption: 25 23. Fees and Expenses: 26 24. No Representations by Landlord: 26 25. End of Term; Surrender: 27 26. Quiet Enjoyment' 27 27 Failure to Give Possession: 27 28. No Waiver' 28 29. Waiver of Trial by Jury' 28 30. [Intentionally Omitted] 28 31. Bills and Notices; Communications. 28 32. Water and Sewer Charges: 29 33. Sprinklers: 30 34. Insurance' 30 35. Landlord's Work: 32 36. Tenant's Work: 32 37. Signage; Advertising/Lighting 36 38. Electricity and Other Utilities: 36 39. Consents: 37 40. Unavoidable Delays: 37 41. Broker: 37 42. Partial Invalidity; Joint Liability: 38 43. Rent Arrears: 38 44. OFAC Certification and Indemnification: 38 45. Holding Over: 39 46. Captions: 40 47. Security; Construction Escrow: 40 48. Certain Definitions: 41 49. Adjacent Excavation; Shoring: 42 50. Rules and Regulations: 42 51. [intentionally omitted]' 42 52. Pornographic Uses Prohibited: 42 53. Estoppel Certificate: 43 1 FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 03/21/2024 54. Successors and Assigns: 43 55. Rent; Net Lease: 43 56. Financial Reporting by Tenant; Landlord Audit Rights. 43 57. Miscellaneous. 44 58. Security of Demised Premises: 44 59. Hazardous Waste. 44 60. No Discrimination 44 EXHIBIT A: 50 EXHIBIT B: 51 EXHIBIT C. 52 EXHIBIT D: 54 EXHIBIT E 57 EXHIBIT F: 60 EXHIBIT a 63 EXHIBIT H: 60 2 FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 03/21/2024 6 4, AGREEMENT OF LEASE (THE "LEASE"), made as of this -I day of March, 2011 (the "Effective Date"), by and between Battery Park City Authority, d/b/a/ Hugh L. Carey Battery Park City Authority, a body corporate and politic constituting a public benefit corporation of the State of New York having an office at One World Financial Center, New York, NY 10281, party of the first part, hereinafter referred to as LANDLORD or as BPCA, and Pier A Battery Park Associates, LLC, a Delaware limited partnership having an office at 93 Pearl Street, New York, NY 10004, party of the second part, hereinafter referred to as TENANT. WITNESSETH: WHEREAS, the City of New York (the "City") is the Landlord of the property known as Pier A in Manhattan, New York and certain lands under water and an upland area contiguous to Pier A, including the Building, underwater pilings, deck and interior and exterior systems, all designated as Block 16 , Lot 1 on the Tax Map of the City of New York for the Borough of Manhattan, and all improvements now or hereafter located thereon, and including the breakwater adjacent to Pier A, but specifically excluding any and all development rights appurtenant to the foregoing property that are not utilized for the Project in accordance with the terms of the City Lease (as hereinafter defined, with the aforesaid property, subject to said exclusion, being referred to herein as the "Pier A Property"); and WHEREAS, the City has leased the Pier A Property to BPCA (the "City Lease") for the purpose of redevelopment of said Property, for uses that will further the City's goal of promoting the development of the City's waterfront, and ancillary uses; WHEREAS, Landlord desires to sublease to Tenant the portion of the Pier A Property comprising the entire interior space in the Building, for the exclusive use of Tenant during the Term (as hereinafter defined), to operate said space for the purposes hereinafter set forth, and to license portions of the Promenade and Plaza to Tenant, for use during the periods and for the purposes specified herein. NOW THEREFORE, it is hereby mutually covenanted and agreed by and between the parties hereto that this Lease is made upon and subject to the terms, covenants and conditions hereinafter set forth. 1. Demised Premises: (A) Landlord hereby leases to Tenant, and Tenant hereby hires from Landlord, for the Term set forth herein, the entire interior space, subject to the exceptions noted in subsection B, below (said interior space, subject to said exceptions, being referred to herein as the "Demised Premises" or the "Premises"), of the Building, which rests atop a pier that extends westward into the Hudson River, comprises a portion of Block 16, Lot 1 on the Tax Map of the Borough of Manhattan, City of New York, and is located at the southwest tip of Manhattan, immediately to the south of Battery Park City, and to the northwest of Historic Battery Park. A site plan showing the location of the Building, and the floor plans for each of the three floors, are attached hereto as Exhibit A. The gross square footage of the Demised Premises is 38,725 square feet. The first and second floors of the Building each contains approximately 15,000 gross square feet of space, while the third floor contains approximately 8,725 square feet. (B) Nothing herein contained shall be construed as a letting by Landlord to Tenant of (1) the outer faces of exterior walls of the Demised Premises, (2) the space below the surface of the floor of the Demised Premises; (3) the land below, or air rights above, the Demised Premises, or (4) the roof of the Building. All space in or adjacent to the Demised Premises used for common areas, shafts, stacks, pipes, conduits, fan rooms, electric or other utilities or Building equipment comprising components of the 3 FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 03/21/2024 building systems installed by Landlord (as set forth in Exhibit D annexed hereto), as well as access thereto through the Demised Premises, for the purposes of operation, maintenance, and repair, are reserved to Landlord. 2. Term: (A) This Lease is for a term (the "Term") beginning on the Commencement Date, and expiring (the "Expiration Date") at the close of business on the day immediately preceding the twenty-fifth (25th) anniversary of the Commencement Date (as defined below) (or, if the Commencement Date is other than the first day of a month, then the Expiration Date shall be the end of the month in which the 25th anniversary of the Commencement Date occurs) for the rental amount set forth in Article 3, below. As used herein, the term "Commencement Date" shall mean the earlier of (x) the date on which Tenant takes possession of the Demised Premises, and (y) the date on which Landlord's Work (as defined in Section 35) has been Substantially Completed, and Landlord delivers the Demised Premises to Tenant. As used herein, the term "Substantially Completed" means the finishing of Landlord's Work subject only to Punch List Items (as defined below), as certified by Landlord's Architect. Unless Landlord notifies Tenant to the contrary, "Landlord's Architect" refers to H3 Hardy Collaboration Architecture, LLC. (B) Landlord shall notify Tenant when Landlord's Work has been Substantially Completed, and shall deliver to Tenant with said notice a copy of the certificate of Landlord's Architect referred to above. Tenant shall arrange with Landlord to inspect the Premises within 5 business days of such notification. Tenant shall notify Landlord of all Punch List Items (as hereinafter defined) within ten (10) business days after said inspection. Landlord shall endeavor to complete said Punch List Items within ten (10) business days after receipt of such list. As used herein, the term "Punch List Items" shall mean those items of Landlord's Work (1) that have not been completed, (2) are directly related to Tenant's Use (as defined in Section 6 (A)), with said items consisting of the provision of (a) the HVAC system, other than the interior distribution, (b) electrical connection to the Demised Premises, and the switchgear for the electrical service, (c) telecom connection stubbed to the interior of the Demised Premises, (d) fire protection, (e) fire alarm and (f) plumbing service, and (3) as to which the extent of work remaining to be performed in order to effect completion does not, individually or in the aggregate, prevent Tenant from performing Tenant's Work (as defined in Section 36), and would not prevent Tenant from opening for business had Tenant's Work been completed. Landlord shall perform the Punch List Items in a manner so as not to interfere with the performance by Tenant of Tenant's Work. 3. Rent: (A) Base Rent (1) Base Rent for the Premises shall be as follows, for each Lease Year (as hereinafter defined): Lease Year 1: $ 750,000 Lease Year 2: $ 900,000 Lease Year 3: $ 1,200,000 Lease Year 4: $ 1,275,000 Lease Year 5: $ 1,375,000 Lease Years 6 through 10: $ 1,475,000 Lease Years 11 through 15: $ 1,600,000 4 FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 03/21/2024 Lease Years 16 through 20: $ 1,750,000 Lease Years 21 through 25: $ 1,900,000 (2) As used herein, the term "Lease Year" shall mean each period of twelve (12) consecutive months elapsing after (i) the Commencement Date of the Term, if the Term begins on the first day of a month, or (ii) the first day of the month following the Commencement Date of the Term if the Term begins on a date other than the first day of a month; provided, however, that, under such circumstances, Lease Year 1 shall also include the period between the Commencement Date and the first day of the following month. (3) Notwithstanding anything to the contrary set forth above, Tenant shall be entitled to a Base Rent concession period commencing on the Commencement Date and ending on the one hundred eightieth (180th) day thereafter (the "Rent Commencement Date"). Base Rent shall be payable in advance, in equal installments, on the first day of each month during the Term, except that, if the Rent Commencement Date occurs on other than the first day of a month, the first installment shall be payable on the Rent Commencement Date, and shall be equal to the sum of (x) the rent for the period from the Rent Commencement Date until the end of the month in which it occurs, determined by prorating the total monthly rent for such period, and (ii) the rent for the full month following the month in which the Rent Commencement Date occurs. (B) Percentage Rent (1) (a) For the period commencing on the date Tenant shall first receive any Gross Sales (such date being hereinafter called the "Percentage Rent Commencement Date"), and for each Percentage Rent Year (as hereinafter defined) thereafter during the Term, Tenant shall pay to Landlord, for each such Percentage Rent Year, an amount ("Percentage Rent") determined as follows, which shall be computed quarterly, and paid as follows: for each Percentage Rent Year in which Gross Sales (as hereinafter defined) exceed $ 18,000,000 ("Breakpoint"), (with such excess above the Breakpoint being referred to herein as the "Multiplicand"), Tenant shall pay to Landlord, as additional rent, an amount equal to eight percent (8%) of the Multiplicand derived from the Gross Sales with respect to the operations conducted by Tenant on the Premises, the Promenade and the Plaza. (b) By way of example only, in the event the Gross Sales shall be equal to $25,000,000 for any given Lease Year, then in such an event, the Percentage Rent due and owing by Tenant for such Lease Year shall be $560,000, calculated as follows: $25,000,000 (Gross Sales) minus $18,000,000 (Breakpoint) equals $7,000,000 (excess over Breakpoint). The $7,000,000 is multiplied by 8% (the Gross Sales percentage set forth above). (c) As used herein, the term "Gross Sales" shall mean gross sales of all food, beverage, other menu items, merchandise, and goods and other services sold or performed by or for Tenant in, upon, or from the Premises, the Plaza, or the Promenade, whether for cash or credit (including, but not limited to, fees paid to Tenant by licensees). Gross Sales shall not include (i) sales and service taxes collected from customers and paid to the appropriate taxing authority, (ii) costs of management or employee meals, (iii) the discounted portion of menu prices whether by way of coupons, promotions or otherwise (iv) service or sales carrying charges, interest or other charges, however denominated, paid by customers solely for extension of credit; (v) goods returned to sources for full credit; (vi) transfers of goods in the ordinary course of business, without consideration, to another store or warehouse owned by or affiliated with Tenant;(vii) sale of fixtures, equipment or property which has been used at the Premises but is not stock in trade;(viii) income from vending machines, pay telephones, lockers maintained substantially for the use and convenience of Tenant's employees only and not open to the general public;(ix) amounts of discounts (provided that such discounts are at least equal to Tenant's mark-up) allowed to Tenant's employees pursuant to established discount policies;(x) receipt from sales to jobbers and transactions, without consideration, with any other store of Tenant, any affiliate of Tenant or with any concessionaire;(xi) sums received in settlement of claims for loss or damage of merchandise;(xii) 5 FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 03/21/2024 amounts retained by credit card companies, as the fee (as a percentage of sales) charged to Tenant by such credit card company for such service;(xiii) uncollected bad checks received by Tenant, and fraudulent (unpaid) purchases from Tenant; (xiv) gift certificates; or like vouchers, until such time as the same shall have been converted into a sale by redemption at the Demised Premises; (xv) rebates arising from construction costs and capital improvements and equipment and fixture purchases; (xvi) gratuities to employees, (xvii) any recovery of amounts in respect of tort or contract claims (other than claims for nonpayment of amounts that would have been Gross Sales), (xviii) refunds or rebates from third parties with respect to amounts paid or payable by Tenant for goods or services in connection with the development of the Demised Premises or the use or operation of said Premises (but excluding any in- kind payments to third parties who provide such goods or services), (xix) interest or other investment income earned from time to time by Tenant and (xxi) Capital Proceeds (as hereinafter defined). The fact that a particular item is listed as an Excluded Item shall not imply that such item would have been included in Gross Sales but for such listing. "Capital Proceeds" shall mean (i) proceeds of any sale or other disposition of any direct or indirect interest in Tenant or Tenant's interest under the Lease (other than subleases, concessions, licenses or other agreements granted by Tenant for the use or occupancy of any part of the Premises), (ii) proceeds of any taking by, or conveyance to, any governmental authority as a result of, or in lieu of in anticipation of, the exercise of the right of condemnation or eminent domain (other than a temporary taking) of all or any part of the Premises or Tenant's interest therein, (iii) insurance proceeds (other than the proceeds of rents or business interruption insurance) or other recoveries on account of any casualty, damage or injury, by fire or otherwise, to the Premises or any part thereof, (iv) the value of, or the proceeds of the sale or other disposition of, federal rehabilitation tax credits, if any, under Section 47 of the Internal Revenue Code, and (v) proceeds of any loan, financing or other capital transaction. (2) For the purposes of this Article 3 (B), Percentage Rent Year shall mean the calendar year. If the Percentage Rent Commencement Date shall occur on a day other than the first day of a Percentage Rent Year, the first Percentage Rent Year, for purposes of Percentage Rent payments, shall be the period from the Percentage Rent Commencement Date through the first day of the next succeeding calendar year, and the Breakpoint shall be prorated for such period. (3) Tenant shall deliver to Landlord as soon as practicable after the end of each fiscal quarter in each Percentage Rent Year, but in no event later than thirty (30) days thereafter, a statement (the "Quarterly Percentage Rent Statement") showing in reasonable detail Gross Sales from the prior fiscal quarter, with the Restaurant Portion and the Events and Entertainment Portion (if any) shown separately, together with the computation of the amounts of said portions pursuant to Article 3 (B) (i) (a), above. The first Quarterly Percentage Rent Statement submitted by Tenant to Landlord, during a Percentage Rent Year, in which the Breakpoint is exceeded, shall be accompanied by payment of Percentage Rent incurred through the end of said quarter. If said quarter is not the last quarter of the Percentage Rent Year, then the payment for said quarter shall be credited against the annual payment. (4) Tenant shall deliver to Landlord as soon as practicable after the end of each Percentage Rent Year, but in no event later than one hundred twenty (120) days thereafter, a separate statement (the "Annual Percentage Rent Statement") for such Percentage Rent Year showing in reasonable detail Gross Sales from the prior Percentage Rent Year, together with the computation of the amounts pursuant to Article 3 (B) (1) (a), above. Based upon the Annual Percentage Rent Statement submitted by Tenant to Landlord, Tenant shall make a payment of Percentage Rent simultaneously with the submission to Landlord of the Annual Percentage Rent Statement provided that i) the Gross Sales shall exceed the $18,000,000 amount set forth in Article 3(B) (1) (a) above, and (ii) Tenant shall receive a credit for any Percentage Rent Payment made pursuant to subsection (c) (3), above. (5) In connection with the payment by Tenant of Percentage Rent, the following additional provisions shall apply: (a) Tenant shall at all times keep and maintain at the Premises books and records prepared on the basis required under subsection (b), below, showing in reasonable detail the 6 FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 03/21/2024 amount of Gross Sales. Unless consented to by Landlord, such books and records relating to any Percentage Rent Year shall not be destroyed or disposed of for a period of three (3) years after the end of such Lease Year. Landlord or its representatives shall have the right, one time each Percentage Rent Year, during regular business hours, on reasonable prior written notice, to examine, audit and/or photocopy all such books and records. If an audit by Landlord with respect to a Percentage Rent Year is not commenced within the aforesaid three (3) year period, the computation of the Percentage Rent paid by Tenant for such Percentage Rent Year shall not thereafter be subject to Landlord's audit and shall conclusively be deemed correct. (b) Each Annual Percentage Rent Statement under this Lease shall be (i) prepared in accordance with generally accepted accounting principles consistently applied and (ii) verified by the chief financial officer or managing partner of Tenant, or if the managing partner of Tenant is not an individual, by the chief financial officer of such managing partner, as being true and correct to the best of his knowledge. Each Annual Percentage Rent Statement shall be certified by an independent public accounting firm (the "C.P.A." which is a firm approved by Landlord, which approval shall not be unreasonably withheld. Such certification shall include, without limitation, a statement by the C.P.A. that an examination of Tenant's books and records has been conducted by the C.P.A. in accordance with generally accepted auditing standards consistently applied and that the Annual Percentage Rent Statement has been prepared in accordance with generally accepted accounting principles consistently applied. (c) If Landlord shall elect to conduct an audit of Tenant's books and records and such audit discloses an underpayment of Percentage Rent, Tenant shall pay to Landlord within thirty (30) days after demand the amount of such deficiency, plus interest thereon at the Base Rate (as defined below) from the date upon which such sum was due to the date of actual payment. In addition, if such deficiency shall be in excess of three and one-half percent (3.5%) of the amount alleged by Tenant to be payable, Tenant shall pay to Landlord within ten (10) days after demand all commercially reasonable costs incurred by Landlord in connection with such audit. As used herein, the term "Base Rate" and (ii) As used herein, the "Base Rate shall be the prime or base rate announced as such from time to time by Citibank, N.A., or its successors, at its principal office. 4. Use of Public Areas: (A) Tenant acknowledges that the Plaza and Promenade (the "Public Areas") are intended to server primarily as public space. Nevertheless, Tenant may use portions of such areas, from time to time, subject to the terms and condition set forth in the introductory paragraph of Exhibit B hereto, and the payment by Tenant to Landlord of a license fee for such limited use. (B) Landlord hereby grants to Tenant a license to use and maintain the Public Areas for the general purposes listed in Exhibit B (the "Public Areas License"), subject to the conditions and restrictions set forth herein. The fee for such License shall be $ 60,000 per annum, subject to increase as hereinafter provided (the "License Fee"), payable in advance, in equal installments, on the first day of each month, commencing on the date when the Tenant first uses the Public Areas during the Term (the "Initial Use Date"), except that, if said Initial Use Date occurs on other than the first day of a month, the first installment shall be payable on said Initial Use Date, and shall be equal to the sum of (x) the License Fee for the period from said Initial Use Date until the end of the month in which it occurs, determined by prorating the total monthly rent for such period, and (y) the rent for the full month following the month in which the Initial Use Date occurs. The License Fee shall be increased by three (3%) on the second anniversary of the date on which the first monthly installment was paid, and on each successive second anniversary off the prior increase date, until the end of the Term. The increases shall be effected on a compound basis. Notwithstanding anything herein to the contrary, if Tenant conducts a special event on the Plaza Pursuant to the Public Areas License, Tenant shall responsible for (in addition to the maintenance required by Article (7) (B) (viii), above) the costs of all security required for said event. Notwithstanding the foregoing, it is understood that the Plaza and Promenade have not yet been designed by BPCA. Consequently, while it is expected that Tenant shall be allowed to utilize the Plaza 7 FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 03/21/2024 and Promenade for outdoor dining and certain other uses generally as proposed by Tenant in the descriptions set forth in Exhibit B, all uses, events, programs, equipment, furnishings and furniture shall be subject to final detailed proposals by Tenant and written approval by BPCA on or following the Commencement Date of the Lease. It is acknowledged that the full list of potential uses referenced in Exhibit B reflect Tenant's desired utilization of the Promenade and Plaza, which may not be able to be accommodated within the Public Areas as ultimately designed. As a result, it is further acknowledged that each proposed use may not be approved by BPCA and/or may be restricted by BPCA in method, design, location and time. Any approval of such uses of the Public Areas, and any approval of any additional uses of the Demised Premises or any other portion of the Pier A Property which are ancillary to Tenant's Use Program, as described in Exhibit C hereto, shall not require, as a condition to such approval by BPCA, an increase in the Base Rent, License Fee or any other fee or charge due hereunder. 5. Impositions: A. Tenant shall pay all impositions related to the Demised Premises or Tenant's tenancy thereof and which pertain to any period of time during the Term. For the purposes hereof "Imposition" or "Impositions" means. (1) real property general and special assessments (including, without limitation, any special assessments for business improvements or imposed by any special assessment district) other than Real Property Taxes (as hereinafter defined): (2) personal property taxes; (3) occupancy and rent taxes; (4) water, water meter and sewer rents, rates and charges; (5) license and permit fees applicable to permits referenced in item VII, below, with the exceptions noted therein. (6) service charges with respect to police and fire protection, street and highway construction, maintenance and lighting, sanitation and water supply; (7) any other governmental excises, fines, levies, fees, rents, assessments or taxes and charges, general and special, ordinary and extraordinary, foreseen and unforeseen, of any kind whatsoever now or hereafter enacted; and (8) any fines, penalties and other similar governmental charges applicable to the foregoing, together with any interest or costs with respect to the foregoing, incurred by reason of Tenant's failure to make any payments as herein provided. B. As used herein, the term "Real Property Taxes" means the real property taxes assessed and levied against the Demised Premises or any part thereof (or, if the Demised Premises or any part thereof or the owner or occupant thereof is exempt from such real property taxes then the real property taxes assessed and which would be levied if not for such exemption) pursuant to the provisions of Chapter 58 of the Charter of New York City and Title 11, Chapter 2 of the Administrative Code of New York City, as the same may now or hereafter be amended, or any statute or ordinance in lieu thereof in whole or in part, C. Tenant shall pay each Imposition or installment thereof not later than the last date the same may be paid without incurring any interest or penalty. Tenant shall pay Impositions to the entity and at the location provided by the rules and regulations governing the payment of such Impositions as if Tenant owned the Demised Premises. 8 FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 03/21/2024 6. Use; "As Is": (A) Tenant shall (a) use and occupy the Demised Premises for the purposes, and in implementation of the program, listed and described on Exhibit C annexed hereto, and for no other purpose; (b) obtain all necessary permits, licenses and approvals to operate the Premises in accordance with said use(s) (referred to herein as "Tenant's Use"), (c) operate and maintain the Premises for the use and enjoyment of the public, (d) [intentionally omitted]; (e) not at any time use or occupy the Demised Premises in violation of any temporary or permanent certificate or occupancy issued for the Building of which the Demised Premises are a part, or for the Demised Premises if a separate temporary or permanent certificate of occupancy is issued therefor, and (f) not at any time use the Demised Premises in violation of Article 52 hereof. (B) BPCA will provide commercially reasonable and timely assistance to Tenant, at no cost to Tenant for said assistance, in obtaining any approval of Tenant's Use as may be required from the New York State Department of Environmental Conservation ("NYSDEC"), the New York State Historic Preservation Office ("SHPO"), or the New York City Department of City Planning ("DCP") and any other applicable governmental or quasi governmental agency. Tenant shall be responsible for using the Demised Premises in accordance with the terms of any approvals obtained from these agencies. (C) Tenant has inspected the Demised Premises and accepts them as is, subject to the Substantial Completion of Landlord's Work, pursuant to Article 35 and Exhibit D annexed hereto. In any event, Landlord makes no representation as to the condition of the Demised Premises and Tenant agrees to accept the same subject to violations, whether or not of record. Notwithstanding the foregoing, Landlord represents and warrants as of the Commencement Date that the roof shall be free of any and all leaks, that the structural components of the building will be sound and that the plumbing, heating electrical and mechanical systems shall be in good and working order (D) Under no circumstances shall Tenant be permitted to change Tenant's Use without the prior written consent of Landlord, which may be withheld in Landlord's sole discretion. 7. Repairs and Maintenance: (A) Tenant agrees, at Tenant's cost and expense, to keep and maintain the Demised Premises in good repair, order and condition and in accordance with industry standards, and in that regard to make all non-structural repairs thereto as and when needed to preserve the Demised Premises in good working order and condition, subject only to reasonable wear and tear, obsolescence and damage from the elements, fire or other casualty excepted; and to make all repairs to installations made by Tenant in the Demised Premises, to any signs installed by Tenant, and to those portions of any pipes, lines, ducts, wires or conduits contained under, above or within, and serving the Demised Premises and which are not the responsibility of Landlord. Tenant's obligation of repair shall include, but not be limited, to keeping signs free of graffiti, including any signs which Landlord may permit Tenant to place on the exterior of the Building. (B) Tenant, at its own sole cost and expense, shall: (i) keep all exterior and interior storefront surfaces clean and maintain the rest of the Demised Premises and all corridors and loading areas immediately adjoining the Demised Premises in a clean, orderly and sanitary condition; (ii) provide regular cleaning and maintenance schedules, which shall be subject to commercially reasonable approval by BPCA; (iii) use all reasonable efforts to minimize vibration and noise from all mechanical apparatus which may be transmitted beyond the confines of the Demised Premises; (iv) not permit the parking of delivery vehicles so as to interfere with the use of any driveway, walk or other non-public area adjacent to the Demised Premises; (v) use all reasonable efforts to minimize heat and odors from being transmitted from the Demised Premises; (vi) provide for snow removal in the area within twenty (20) feet from the Demised Premises; (vii) conduct regular pest control inspections and extermination and keep the Demised Premises free of any pest infestations (it being understood that, to the extent that Tenant applies pesticides to the Demised Premises, Tenant or any subcontractor hired by Tenant shall comply with Chapter 12 of the New York City Administrative Code; and (viii) daily clean up and remove all waste, 9 FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 03/21/2024 garbage, refuse, rubbish and litter from the Demised Premises, in the area within twenty (20) feet from the Demised Premises, and any portion of the Plaza or Promenade that Tenant is authorized to use pursuant to Article 4 hereof (whether or not within such area), to the extent that such waste, etc., arises from Tenant's use of the Plaza and/or Promenade. Tenant must provide adequate waste and recycling receptacles, and have these receptacles emptied on a daily basis and removed by private carter. Said receptacles shall be subject to approval by BPCA, and Tenant shall store the trash inside the Building until it is ready for pick up. Rubbish removal schedules, as well as the location and placement of all waste and recycling containers, will be subject to reasonable approval by BPCA. Tenant will be required to comply with all City, State and Federal regulations regarding recycling. Tenant recognizes that its failure to carry out its obligations under this subsection (B) shall materially adversely affect Landlord and its property and Landlord shall be entitled to immediate redress of the situation and damages caused thereby by any legal or equitable remedy available to Landlord. (C) BPCA's responsibility for repair and maintenance shall be limited to (i) the underwater structural elements of the pier; (ii) the exterior of the Demised Premises including the Building shell and, structure, exterior walls, and roof, (iii) the replacement pier deck installed by BPCA over the existing deck; (iv) the portions of the building systems (including any plumbing, heating, ventilation and mechanic systems) initially installed by BPCA, as described in Exhibit D annexed hereto; (v) the sidewalks adjacent to the Demised Premises (except as otherwise provided in subsections (b) (vi) and (b) (viii), above, and (vi) the Promenade and the Plaza (except as otherwise provided herein, in association with Tenant's use of these spaces), in accordance with BPCA's normal standards and maintenance schedule. Notwithstanding anything herein to the contrary, if Tenant upgrades any building system installed in part by Landlord, then Tenant shall thereafter be responsible for the maintenance and repair of the entire system. (D) Except as may be specifically provided elsewhere in this Lease, there shall be no allowance to Tenant for the diminution of rental value and no liability on the part of Landlord by reason of inconvenience, annoyance or injury to business arising from Landlord's making any repairs, maintenance alterations, additions or improvements (collectively, "Repairs") in or to any portion of the Building, the Demised Premises or the fixtures, appurtenances or equipment thereof (including, but not limited to, the erection of any crane, derrick or sidewalk shed), or failing to make any Repairs. It is specifically agreed that Tenant shall not be entitled to any set off or reduction of rent by reason of any failure of Landlord or others to comply with the covenants of this or any other article of this Lease. Tenant agrees that Tenant's sole remedy at law in such instance will be by way of an action for damages for breach of contract. The provisions of this Article 7 with respect to the making of Repairs shall not apply in the case of fire or other casualty, which are dealt with in Article 11 hereof. Notwithstanding the foregoing, Landlord shall diligently proceed to perform such repair work and shall use all reasonable efforts to minimize interference with Tenant's business operations. 8. Alterations: (A) Except for the Tenant's Work (as hereinafter defined), Tenant shall make no changes in or to the Demised Premises of any nature without Landlord's prior written consent, which consent shall not be unreasonably withheld or delayed. Tenant shall complete the Tenant's Work subject to the terms and provisions of Article 36 and Exhibit E annexed hereto. Except for Tenant's Work, all alterations, additions, repairs, replacements and restoration to the Demises Premises shall be performed by Tenant (collectively, but not including Tenant's Work, "Alterations") and shall be done at such times as Landlord may from time to time reasonably designate. Notwithstanding the foregoing, cosmetic changes to the Demised Premises (painting, carpeting and millwork) shall require the consent of the Landlord) and shall not be deemed to be an Alteration. (B) In addition to the Tenant's Work and subject to the prior written consent of Landlord, and to the provisions of this Article 8, as long as Pier A Battery Park Associates, LLC remains Tenant hereunder and in occupancy of the Demised Premises, (i) Landlord shall not unreasonably withhold its consent to any non-structural Alterations which Tenant proposes to make which do not affect utility services, fire safety systems, required access or egress, or plumbing and electrical lines, in or to the interior of the 10 FILED: NEW YORK COUNTY CLERK 03/21/2024 09:13 PM INDEX NO. 156217/2022 NYSCEF DOC. NO. 26 RECEIVED NYSCEF: 03/21/2024 Demised Premises, and which do not require the approval of any third party (it being understood, for example, that the interior walls and partitions on the second floor have been granted historic status by SHPO, and any consent by Landlord to the modification thereof shall be subject to approval by SHPO); and (ii) Tenant may, but shall not be obligated to, remove any Alterations made by Tenant, solely at its expense, provided Tenant promptly repairs any damage resulting from such removal, unless Landlord notifies Tenant that such alterations shall be required to be removed at the time Landlord may grant approval thereof. (C) Tenant further agrees that: (i) before undertaking any Alterations, Tenant shall first submit to Landlord for Landlord's approval such plans and specifications as Landlord may reasonably require showing the work proposed to be done, prepared by such registered architect or engineer reasonably acceptable to Landlord (it being understood that, in connection with Tenant's Work, the submission of plans and specifications shall be effected per the terms set forth in Article 36 hereof); (ii) any Alterations shall be pursued to completion with diligence in a good and workmanlike manner and in compliance with the provisions of Articles 8 and 11 hereof; (iii) before undertaking Tenant's Work or any Alterations, Tenant, at Tenant's sole cost and expense, shall furnish to Landlord such bond or other form of