EXHIBIT 10.11
______________________________
LEASE AGREEMENT
______________________________
BANK OF COMMUNICATIONS
as Landlord,
and
LOGICAL DESIGN SOLUTIONS, INC.
as Tenant
______________________________
PREMISES:
TWENTY-FIRST and TWENTY-SECOND FLOORS
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
______________________________
PREPARED BY:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
I N D E X
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Article Page
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Demised Premises......................................................1
Term..................................................................1
Rent..................................................................1
Tenant's Covenants....................................................4
Use and Occupancy.....................................................4
Compliance with Laws and Insurance Requirements.......................5
Alterations...........................................................5
Ownership of Improvements.............................................7
Repairs...............................................................7
Assignment, Mortgaging and Subletting.................................8
Electricity, Gas and Water...........................................10
Additional Rent......................................................14
Subordination and Attornment.........................................20
Liability of Landlord................................................21
Destruction, Fire or Other Casually..................................21
Eminent Domain.......................................................23
Defaults and Remedies and Waiver of Redemption.......................24
Landlord's Right to Perform Tenant's Obligations.....................26
Covenant of Quiet Enjoyment..........................................26
Indemnity............................................................26
Excavation...........................................................27
Hazardous Environmental Condition....................................27
Broker...............................................................28
Waiver of Jury Trial.................................................28
Surrender of Premises................................................28
Rent Limitation......................................................29
Fire Protection Requirements.........................................29
Insurance............................................................30
Access to Premises...................................................31
(i)
Article Page
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Vaults...............................................................32
Bankruptcy...........................................................32
Rules and Regulations................................................33
Successors and Assigns...............................................34
Notice...............................................................34
No Waiver and Entire Agreement.......................................35
Captions.............................................................35
Inability to Perform.................................................35
No Representations by Landlord.......................................36
Failure to Give Possession...........................................36
Glass................................................................37
Floor Load...........................................................37
Services and Equipment...............................................37
Untenantability......................................................40
Moving...............................................................40
Negative Covenants...................................................41
Window Cleaning......................................................41
Landlord's Work......................................................42
Cancellation Option..................................................45
Right of First Offer.................................................45
Renewal Option.......................................................46
Schedule
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Schedule A - Rent..............................................48
Exhibits
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Exhibit I - Description of Demised Premises.................49
Exhibit II - Rules and Regulations...........................52
Exhibit III - Cleaning and Janitorial Services................55
(ii)
LEASE dated as of the 25th day of March 1998, by and between BANK OF
COMMUNICATIONS, a banking corporation authorized to do business within the State
of New York, having its principal office at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Borough of Manhattan, City, County and State of New York
(hereinafter referred to as "Landlord"), and LOGICAL DESIGN SOLUTIONS, INC., a
New Jersey corporation, having its principal place of business at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as "Tenant").
W I T NE S S E T H:
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ARTICLE 1
Demised Premises
----------------
Section 1.01. Landlord hereby leases to Tenant and Tenant hereby hires from
Landlord space described in Exhibit I attached hereto and made a part hereof,
which space, together with all appurtenances, fixtures, improvements, additions
and other property attached thereto or installed therein during the term of this
lease (except as otherwise hereinafter expressly provided) is collectively
herein referred to as the "Demised Premises" in the building and on the site
commonly known as One Exchange Plaza, (a/k/a 55 Broadway), in the Borough of
Manhattan, City, County and State of New York (herein referred to as the
"Building", or the "Real Property") upon and subject to all of the terms,
covenants and conditions herein contained.
ARTICLE 2
Term
----
Section 2.01. The Demised Premises are leased for a term (hereinafter
referred to as the "Demised Term") commencing on the date of the mutual
execution and delivery of this agreement, as indicated above (hereinafter
referred to as the "Commencement Date"), and ending on the day which is the last
day of that certain month which is seven (7) years from the date on which
"Landlord's Work" (as defined in Article 47 hereof is substantially complete,
unless said Demised Term shall be sooner terminated pursuant to the provisions
hereof (hereinafter referred to as the "Expiration Date"). The parties agree
that rent, pursuant to Article 3, shall first become due as set forth in Article
3 and Schedule A below.
ARTICLE 3
Rent
----
Section 3.01. Tenant covenants and agrees during the Demised Term to pay
Landlord a fixed minimum rental in lawful money of the United States of America
in equal monthly installments in advance, as set forth on Schedule A attached
hereto and made a part hereof, on the first day of each month at the office of
Landlord or such other place as Landlord may designate, without setoff,
deduction or abatement (except as otherwise expressly herein provided), except
that if the first day of the Demised Term shall be a date other than the first
day of the calendar month Tenant shall pay on or before such first day to
Landlord an amount equal
to such proportion of an equal monthly installment of rent as the number of days
from said first day to the end of calendar month in which such first day occurs
bears to the total number of days in said calendar month and said payment shall
represent the pro-rata monthly rent for such first calendar month, and the same
method shall be used in computing rent to be paid for the last partial calendar
month, if any, of the Demised Term. In the event a monthly installment of rent,
or any installment of additional rent, is not paid to Landlord by Tenant within
five (5) business days of the date on which the installment is due, Tenant shall
pay to Landlord, an additional rent, which shall be deemed part of the fixed
minimum rental, equal to six percent (6%) of the unpaid monthly, or other,
installment.
Section 3.02. Except as otherwise herein expressly provided, all costs,
charges and expenses of any kind which Tenant is required by the terms hereof to
pay to Landlord shall be deemed additional rental, and in the event said
additional rental shall not be paid, Landlord shall have all rights and remedies
with respect thereto as shall be herein provided in the case of nonpayment of
rent.
Section 3.03. A. Notwithstanding any provision contained in this Article
Three or in Article Two of this lease, Tenant, upon execution and delivery of
this lease, shall pay to Landlord the sum of $549,000.00 which will be held by
Landlord as security for the due performance by Tenant of the covenants and
obligations of Tenant under this lease, including the covenant to pay rent. This
amount shall be held by Landlord in a special account of Landlord's selection,
which account may or may not bear interest. In the event any interest is earned
on said deposit it shall be credited thereto when earned and shall be
distributed to Tenant once annually, less any administrative fee which Landlord
is permitted by law to retain. In the event that the amount deposited must be
used by Landlord for any reason resulting from the default by Tenant under any
covenant or obligation set forth in this lease, then Tenant shall promptly, upon
receipt of notice from Landlord, replenish the account by payment of the amount
set forth in Landlord's notice. Upon Tenant's surrender of the Demised Premises
at the expiration of this lease, assuming the Demised Premises are left in the
condition required hereunder, the amount deposited pursuant to this section,
together with interest thereon, if any, shall be returned to Tenant by Landlord.
B. In lieu of a cash deposit, Tenant may deliver to Landlord a clean,
irrevocable, non-documentary and unconditional Letter of Credit in the amount of
$549,000.00 issued by and drawn upon any commercial bank (hereinafter referred
to as the "Issuing Bank") with offices for banking purposes in the City of New
York and which shall mean a bank, trust company, national banking association or
savings and loan association which (or the-parent company of which) shall have
outstanding unsecured, uninsured and unguaranteed indebtedness, or shall have
issued a letter of credit or other credit facility that constitutes the primary
security for any outstanding indebtedness (which is otherwise uninsured and
unguaranteed), that is then rated, without regard to qualification of such
rating by symbols such as "+" or "-" or numerical notation, "Aa" or better by
▇▇▇▇▇'▇ Investors Service and "AA" or better by Standard & Poor's Corporation,
and has combined capital, surplus and undivided profits of not less than
$500,000,000, which Letter of Credit shall have a term of not less than one
year, be in form and content satisfactory to Landlord, be for the account of
Landlord, be in the amount of the Security Deposit and be fully transferable by
Landlord without the payment of any fees or charges, it being agreed that if any
such fees or charges shall be so imposed, then such fees or charges, shall be
paid by Tenant.
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Notwithstanding anything to the contrary contained herein, Landlord agrees to
accept a qualifying Letter of Credit issued by First Union Bank of New Jersey.
The Letter of Credit shall provide that it shall be deemed automatically
renewed, without amendment, for consecutive periods of one year each thereafter
during the term of this Lease, unless the Issuing Bank sends notice (the
"Non-Renewal Notice") to Landlord by certified mail, return receipt requested,
not less than thirty (30) days next preceding the then expiration date of the
Letter of Credit that it elects not to have such Letter of Credit renewed.
Additionally, the Letter of Credit shall provide that Landlord shall have the
right, exercisable within twenty (20) days of its receipt of the Non-Renewal
Notice, by sight draft on the Issuing Bank, to receive the monies represented by
the existing Letter of Credit and to hold such proceeds pursuant to the terms of
this Article 3 as a cash security pending the replacement of such Letter of
Credit. In the event that Tenant defaults in respect of any of the terms,
provisions, covenants or conditions of this Lease, including, but not limited
to, the payment of Rent and Additional Rent, Landlord may apply or retain the
whole or any part of the cash security so deposited or may notify the Issuing
Bank and thereupon receive all the monies represented by the Letter of Credit
and use, apply, or retain the whole or any part of such proceeds, as the case
may be, to the extent required for the payment of any Rent or Additional Rent or
any other sum as to which Tenant is in default or for any sum which Landlord may
expend or may be required to expend by reason of Tenant's default in respect of
any of the terms, provisions, covenants or conditions of this Lease, including,
but not limited to, any damages or deficiency in the reletting of the Premises,
whether such damages or deficiency accrue or accrues before or after summary
proceedings or other reentry by Landlord. If Landlord applies or retains any
part of the cash security or proceeds of the Letter of Credit, as the case may
be, Tenant, upon demand, shall deposit with Landlord the amount so applied or
retained so that Landlord shall have the full deposit on hand at all times
during the Term. If Tenant shall fully and faithfully comply with all of the
terms, provisions, covenants and conditions of this lease, the cash security or
Letter of Credit, as the case may be, shall be returned to Tenant after the
Expiration Date and after delivery of the entire possession of the Premises to
Landlord. Tenant expressly agrees that Tenant shall have no right to apply any
portion of the Security Deposit against any of Tenant's obligations to pay Rent
or Additional Rent hereunder and, if Tenant shall seek to so apply such Security
Deposit, Tenant shall pay liquidated damages to Landlord in a sum equal to one
and one-half (1-1/2) times the amount of any such unpaid Rent or Additional
Rent. In the event of a sale of the Real Property or the Building or leasing of
the Building, Landlord shall have the right to transfer the cash security to the
vendee or lessee and with respect to the Letter of Credit, within thirty (30)
days of notice of such sale or leasing, Tenant, at Tenant's sole cost and
expense, shall arrange for the transfer of the Letter of Credit to the new
landlord, as designated by Landlord in the foregoing notice or have the Letter
of Credit reissued in the name of the new landlord and Landlord shall thereupon
be released by Tenant from all liability for the return of such security. Tenant
shall look solely to the new landlord for the return of such cash security or
Letter of Credit and the provisions hereof shall apply to every transfer or
assignment made of the security to a new landlord. Tenant further covenants and
agrees that it shall not assign or encumber or attempt to assign or encumber the
monies or Letter of Credit deposited herein as security and that neither
Landlord nor its successors or assigns shall be bound by any such assignment,
encumbrance, attempted assignment or attempted encumbrance.
C. In the event Tenant is fully compliant with all of the terms and provisions
set forth in this agreement, then Landlord shall accept a reduction of the
security deposit pursuant to paragraphs "A" or "B" above, whichever is
applicable, in accordance with the following schedule:
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(i) for months 24 to 36 of the Demised Term, the security deposit shall be
no less than $320,250.00;
(ii) for months 37 to 48 of the Demised Term, the security deposit shall be
no less than $274,500.00; and
(iii) for months 49 to the Expiration Date, the security deposit shall be
no less than $137,250.00.
In the event the security deposit is in the form of cash, pursuant to
paragraph "A" of this section, each reduction shall be made by the Landlord
refunding the required amount to Tenant, in accordance with the schedule set
forth above. On the other hand, if the security deposit is in the form of a
Letter of Credit, pursuant to paragraph "B" of this section, then Tenant shall
provide Landlord with a new Letter of Credit, in the reduced amount, which shall
comply fully with the provisions of said paragraph, whereupon the previously
delivered Letter of Credit in the higher amount shall be returned to Tenant.
D. The security deposit shall be returned to Tenant, provided same has not been
utilized pursuant to the provisions contained herein, within thirty (30) days
after the Expiration Date and delivery of the entire possession of the premises
to Landlord.
ARTICLE 4
Tenant's Covenants
------------------
Section 4.01. Tenant covenants (i) to pay the fixed minimum rental set
forth in Article Three and Schedule A, as well as the additional rental provided
for herein; (ii) to observe and perform the terms, covenants and conditions of
this Lease on Tenant's part to be observed and performed; and (iii) to be liable
for all of the obligations, liabilities, duties, costs, expenses, burdens, and
requirements set forth in this Lease, inclusive of all Schedules and Exhibits
hereto.
ARTICLE 5
Use and Occupancy
-----------------
Section 5.01. Tenant shall use and occupy the Demised Premises solely in
connection with Tenant's business; to wit, general offices for a corporate
communications company, or other reasonable use in connection with Tenant's
business.
Section 5.02. Tenant will not use or occupy, or permit the use or occupancy
of, the Demised Premises for any unlawful purposes or for any purpose or in any
manner which would (i) violate the provisions of this lease, (ii) tend in any
way to impair the character, reputation or appearance of the Building as a first
class office building, (iii) unreasonably interfere with the use and enjoyment
of any part of the Building by any other tenant or occupant, including Landlord
or any person affiliated with or associated with Landlord, or (iv) be
inconsistent with the professional character and reputation of other tenants in
the Building. Tenant shall have the right of access to the Demised Premises on a
three hundred sixty-five day a year (seven days per week) basis, provided that
Tenant complies with all reasonable security or other requirements of the
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Landlord relating to access, use and occupancy of the Demised Premises on
weekends, holidays and before 8:00 A.M. and after 6:00 P.M. on Monday through
Friday.
ARTICLE 6
Compliance with Laws and Insurance Requirements
-----------------------------------------------
Section 6.01. Tenant, at Tenant's sole cost and expense, shall comply with
all laws, orders and regulations of Federal, State, County, and Municipal
authorities, and with all directions pursuant to law, of all public officers,
which shall impose any duty upon Landlord or Tenant arising out of Tenant's use
of the Demised Premises except that Tenant shall not be required to make any
structural alterations in order so to comply unless such alterations shall be
necessitated or occasioned by the acts, omissions, or negligence of Tenant or
any person claiming through or under Tenant, or any of Tenant's servants,
employees, contractors, agents, visitors or licensees, or by the use or
occupancy of the Demised Premises by Tenant or any such person.
Section 6.02. Tenant shall not do anything, or permit anything to be done,
in or about the Demised Premises which shall (i) invalidate or be in conflict
with the provisions of any fire or other insurance policies covering the
Building or any property located therein, or (ii) result in refusal by fire
insurance companies in good standing to insure the Building or any such property
in amounts reasonably satisfactory to Landlord, or (iii) subject Landlord to any
liability or responsibility for injury to any person or property by reason of
any business operation being conducted in the Demised Premises, or (iv) cause
any increase in the fire insurance rates applicable to the Building or property
located therein at the beginning of the Demised Term or at any time thereafter.
Tenant, at Tenant's expense, shall comply with all rules, orders, regulations or
requirements of the New York Board of Fire Underwriters and the New York Fire
Insurance Rating Organization or any similar body relating to the Demised
Premises.
Section 6.03. In any action or proceeding wherein Landlord and Tenant are
parties, a schedule or "make up" of rates applicable to the Building or property
located therein issued by the New York Fire Insurance Rating Organization, or
other similar body fixing such fire insurance rates, shall be prima facie
evidence of the facts therein stated and of the several items and charges in the
fire insurance rates then applicable to the Building or property located
therein.
ARTICLE 7
Alterations
-----------
Section 7.01. Tenant shall not make or perform, or permit the making or
performance of, any alterations, installations, improvements, additions or other
physical changes in or about the Demised Premises costing in excess of Ten
Thousand Dollars ($10,000) in the aggregate over any twelve month period
(referred to collectively as "Alterations") without Landlord's prior written
consent. Notwithstanding the foregoing provisions of this Section 7.01, all
Alterations made by Tenant shall be made and performed in conformity with and
subject to the following provisions: (i) All Alterations shall be made and
performed at Tenant's sole cost and expense at reasonable times and in a
reasonable manner for the performance of such work; (ii) Alterations
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shall be made only by contractors or mechanics approved in writing by Landlord,
which approval shall not be unreasonably delayed or withheld; (iii) No
Alterations to be performed by Tenant shall adversely affect any service
required to be furnished by Landlord to Tenant or to any other tenant or
occupant of the Building; (iv) No Alteration shall be made if the value or
utility of the Building after completion of such Alteration will be materially
less than its value or utility immediately prior thereto; (v) No Alteration
shall affect the outside appearance of the Building; no air conditioners may be
installed through windows nor shall the color or style of any blinds or shades
be changed; (vi) All large business machines and mechanical equipment shall be
placed and maintained by Tenant in settings sufficient, in Landlord's reasonable
judgment, to absorb and prevent vibration, noise and annoyance to other tenants
or occupants of the Building; (vii) Tenant shall submit to Landlord detailed
plans and specifications (including layout, architectural, mechanical and
structural drawings) for each proposed Alteration and shall not commence any
such Alteration without first obtaining Landlord's written approval of plans and
specifications; (viii) Subject to Article 28 and prior to the commencement of
each proposed Alteration, Tenant shall furnish to Landlord duplicate original
policies of worker's compensation insurance covering all workers to be employed
in connection with such Alteration, including those to be employed by all
contractors and subcontractors, and of comprehensive public liability insurance,
in an amount not less than $3,000,000 (including property damage coverage) in
which Landlord, its agents and any mortgagee of the Building shall be named as
parties insured, which policies shall be issued by companies licensed to do
business in the State of New York and shall be maintained by Tenant or
contractors until the completion of such Alteration; (ix) All fireproof wood
test reports, electrical and air conditioning certificates, and all other
permits, approvals and certificates required by all governmental authorities
shall be timely obtained by Tenant and copies thereof submitted to Landlord; (x)
Notwithstanding Landlord's approval of plans and specifications for any
Alteration, all Alterations shall be made and performed in full compliance with
all applicable laws, orders and regulations of Federal, State, County and
Municipal authorities, and with all directions, pursuant to law, of all public
offices, and with all applicable rules, orders, regulations and requirements of
the New York Board of Fire Underwriters and the New York Fire Insurance Rating
Organization or any similar body; (xi) All Alterations shall be made and
performed in accordance with the Rules and Regulations attached hereto as
Exhibit II and made a part hereof; (xii) All materials and equipment to be
incorporated in the Demised Premises as a result of all Alterations shall be new
and first quality; and no such materials or equipment, shall be subject to any
lien, encumbrance, chattel mortgage or title retention or security agreement;
(xiii) Notwithstanding anything contained herein to the contrary, Tenant is
absolutely prohibited from performing any Alteration to the heating,
ventilation, air conditioning, electrical or plumbing systems in the Building.
Similarly, no Alteration of any nature shall be permitted if such Alteration
requires the issuance of an amended or updated Certificate of Occupancy. These
limitations shall apply even if the Tenant otherwise complies with all of the
requirements of this Article.
Section 7.02. Tenant shall not permit any mechanic's liens to be filed
against the Demised Premises, the Building or the real property on which the
Building is erected (hereinafter referred to as the "Real Property") for work
claimed to have been done for, or materials claimed to have been furnished to
Tenant, and Tenant shall discharge any such liens at Tenant's sole cost within
twenty-one (21) days after notice that they have been filed.
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Section 7.03. Tenant shall not, at any time prior to or during the Demised
Term, directly or indirectly employ, or permit the employment of, any
contractor, mechanic or laborer in the Demised Premises, whether in connection
with any Alteration or otherwise, if such employment will interfere with other
contractors, mechanics, or laborers engaged in the construction, maintenance or
operation of the Building by Landlord, Tenant or others. In the event of any
such interference or conflict, Tenant, upon demand of Landlord, shall cause all
contractors, mechanics or laborers causing such interference to leave the
Building immediately.
Section 7.04. Any such alterations, but not decorations, shall not be
removed by Tenant at the end of the Demised Term or any extension thereof,
except for Tenant's Personal Property, as defined in Article 8 below.
ARTICLE 8
Ownership of Improvements
-------------------------
Section 8.01. All appurtenances, fixtures, improvements, additions and
other property attached to or installed in the Demised Premises whether by
Landlord or Tenant or others, and whether at Landlord's or Tenant's expense, or
the expense of both, shall become the property of Landlord, at the expiration of
the Demised Term, except that any such property installed at the sole expense of
Tenant with respect to which Tenant has not been granted any credit or allowance
by Landlord, and which is removable without material damage to the Building or
is removable provided Tenant repairs any damage caused by such removal, shall be
and remain the property of Tenant and is referred to as "Tenant's Personal
Property". Any replacements of any property of Landlord, whether made at
Tenant's expense or otherwise, shall be and remain the property of Landlord.
ARTICLE 9
Repairs
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Section 9.01. Tenant shall take good care of the Demised Premises and, at
Tenant's sole cost and expense, shall make all repairs and replacements: (i) as
and when needed to the interior walls in the Demised Premises, floor coverings
of all type, ceilings and lighting fixtures unless such repairs and replacements
are necessitated by the acts, omissions or negligence of Landlord or any person
claiming through or under Landlord, or any of their servants, employees,
contractors, agents, visitors or licensees; and (ii) to the structural elements
of the Demised Premises but only when such structural repairs are necessitated
or occasioned by the material omissions or negligence of Tenant or any person
claiming through or under Tenant, or any of their servants, employees,
contractors, agents, visitors or licensees. Without affecting Tenant's
obligations set forth in the preceding sentence, Tenant, at Tenant's sole cost
and expense, shall make all repairs and replacements, as and when necessary, to
Tenant's Personal Property, and to any alterations made or performed by Tenant.
All repairs and replacements made by or on behalf of Tenant or any person
claiming through or under Tenant shall be at least equal in quality and
appearance to the original work or installation.
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Section 9.02. Landlord represents that all lighting fixtures, ballasts,
HVAC, mechanical, electrical, plumbing systems shall be in good working order at
the time the Demised Premises are delivered to Tenant for occupancy.
ARTICLE 10
Assignment, Mortgaging and Subletting
-------------------------------------
Section 10.01. Tenant covenants and agrees, for Tenant and its successors,
assigns and legal representatives, that neither this Lease nor the terms and
estate in or rights to Demised Premises hereby granted, nor any part hereof or
thereof, will be mortgaged, pledged, encumbered or otherwise transferred
(whether voluntarily, involuntarily, by operation of law, or otherwise), and
that neither the Demised Premises, nor any part thereof, will be encumbered in
any manner by reason of any act or omission on the part of the Tenant. If the
Tenant is a corporation, then any transfer of its shares of stock, or the
issuance of new shares of stock which, in either case, represents or amounts to
the conveyance of a controlling interest in Tenant, shall constitute a
prohibited mortgage, pledge or encumbrance hereunder.
Section 10.02. Tenant covenants and agrees that it will not assign this
lease nor its interest in the Demised Premises granted thereby without the
Landlord's prior written consent, in every case, which consent shall not be
unreasonably withheld or delayed, and further covenants that if Tenant is a
corporation, any transfer of its shares of stock, or the issuance of new shares
of stock which, in either case, represents or amounts to the conveyance of a
controlling interest in Tenant, shall constitute a prohibited assignment
hereunder. The word "assign" shall for the purposes of this Article 10 include
use or occupancy, or permitting the use or occupancy of the Demised Premises,
permitting the use or desk space in the Demised Premises, permitting the use of
the Demised Premises for mailing privileges or granting of a concession
involving the use of all or a portion of the Demised Premises, by any person
other than Tenant.
Section 10.03. Tenant covenants and agrees that it will not sublet the
Demised Premises or any part thereof, without the prior written consent of
Landlord in every case, which consent shall not be unreasonably withheld or
delayed. If Tenant is a corporation, any transfer of its shares of stock, or the
issuance of new shares of stock, either of which results in the grantee of such
stock claiming a sublease interest in the Demised Premises, without the prior
written consent of Landlord shall constitute a prohibited subletting hereunder.
The word "sublet" shall for the purposes of this Article 10 include use or
occupancy, or permitting the use or desk space in the Demised Premises,
permitting the use of the Demised Premises for mailing privileges or granting of
a concession involving the use of all or a portion of the Demised Premises, by
any person other than Tenant.
Section 10.04. Notwithstanding anything hereinbefore contained in this
Article 10, in the event Tenant desires Landlord's consent to a proposed
assignment or subletting, Tenant by notice in writing shall notify Landlord of
the name of the proposed assignee or sublessee, such information as to the
proposed assignee's or sublessee's financial responsibility and standing as
Landlord may request, and of the covenants, agreements, terms, provisions and
conditions contained in the proposed assignment or sublease (a signed copy of
which shall be delivered to the Landlord upon a request to Landlord for its
consent).
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Section 10.05. Landlord shall not be deemed to have unreasonably withheld
its consent to a proposed assignment or subletting if:
(i) such conveyance will result in there being a total of more than four
(4) tenancies or sub-tenancies in the Demised Premises or two (2) tenancies on
either floor thereof;
(ii) the space to be sublet shall be used for any purposes other than those
set forth in Article 5 hereof;
(iii) the proposed assignee or sublessee is a government or any subdivision
or agency thereof; a labor union; a messenger service; or an employment agency
(unless said agency is an executive search or recruiting firm); or
(iv) the Tenant fails to agree in writing that any rent paid by the
proposed assignee or sub-tenant, after actual and reasonable expenses paid by
Tenant in connection with such assignment or subletting, and which is in excess
of the rent and additional rent due the Landlord hereunder, will be divided
equally between Landlord and Tenant.
Section 10.06. Any conveyance pursuant to this Article 10 shall be subject
to all the covenants, agreements, provisions and conditions contained in this
lease. Tenant covenants and agrees that notwithstanding any such conveyance to
any transferee and/or acceptance of rent or additional rent by Landlord from any
transferee, Tenant shall be and shall remain fully liable for the payment of the
fixed rent and additional rent due and to become due hereunder and for the
performance of all the covenants, agreements, terms, provisions and conditions
contained in this lease on the part of Tenant to be performed. Tenant further
covenants and agrees that notwithstanding any such conveyance, no other,
additional, or further conveyance, including subletting of the Demised Premises
or any part thereof shall or will be made except upon compliance with and
subject to the provisions of this Article 10.
Section 10.07. If the Demised Premises or any part thereof be sublet or
occupied by anybody other than Tenant, Landlord may, after default by Tenant,
collect rent from the subtenant or occupant, and apply the net amount collected
to the rent herein reserved, but no such subletting, occupancy or collection
shall be deemed a waiver by Landlord of any of Tenant's covenants contained in
this lease, or the acceptance of the subtenant or occupant as Tenant, or a
release of Tenant from the further performance by Tenant of covenants on the
part of Tenant herein contained.
Section 10.08. For the purposes of this Article 10, "conveyance of a
controlling interest in Tenant" shall mean the proposed conveyance of fifty
percent (50%) or more of the voting capital stock of the Tenant to a non-
affiliated, third party entity or entities, but shall not include the conveyance
of capital stock of the Tenant in an underwritten public offering of the
Tenant's capital stock.
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ARTICLE 11
Electricity, Gas and Water
--------------------------
Section 11.01. A. Definitions
-----------
For purposes of this Article 11, the following terms shall have the
following meanings:
1. The term "Landlord's Cost" shall mean, the average cost per kilowatt
hour and average cost per kilowatt demand, by time of day, if
applicable, to Landlord of purchasing electricity for the Building,
including, without limitation, fuel adjustment charges (as determined
for each month of the relevant period and not averaged) rate
adjustment charges, sales tax, and/or any other factors, used by the
public utility company (the "Utility") servicing the Building in
computing its charges to Landlord applied to the kilowatt hours of
energy and kilowatts of demand purchased by Landlord during a given
period, and further including transmission and transformer losses (to
be determined by Landlord if such losses are not measured by the
Submeter, as defined herein); and
2. The term "Landlord's Statement", shall mean an instrument containing a
computation (or estimate thereof), of Landlord's Cost (hereinabove
defined), or any other computation to be made by Landlord pursuant to
the provisions of this Article 11.
B. Method of Furnishing Electric Current to the Demised Premises
-------------------------------------------------------------
Subject to the provisions of subdivision 4 of paragraph C hereof, Tenant
agrees that Landlord may furnish electricity to Tenant on a "rent inclusion"
basis or on a "submetering" basis.
1. Submetering: Landlord shall, at Landlord's sole cost and expense (to the
-----------
extent not already in place, install a meter or meters (collectively, the
"Submeter")), at a location designated by Landlord, connections from the risers
and/or circuits servicing the Demised Premises to the Submeter and perform all
other work necessary for the furnishing of electric current by Landlord to the
Demised Premises in the manner provided for in this subdivision. If and so long
as electric current is supplied by Landlord to the Demised Premises to service
Tenant's office equipment and the machinery and mechanical equipment for the air
conditioning units utilized by Tenant, if any, Tenant will pay Landlord or
Landlord's designated agent, as additional rent for such service, the amounts,
as determined by the Submeter, for the purpose of measuring Tenant's consumption
and demand. In the event said air conditioning units are used by other tenants
of the building, the electric charges for such units shall be allocated by
Landlord proportionately, on the basis of the respective amount of rentable
square feet occupied by such tenants, including Tenant. Tenant shall not be
charged for electric charges for such units during times in which other tenants
have requested air-conditioning on weekends and outside regular business hours.
The additional rent payable by Tenant pursuant to this subdivision 1, shall be
computed in the same manner as that for computation of Landlord Cost, as applied
to the Demised Premises, plus a fee (the "Overhead Charge") equal to six percent
(6%) of such charge
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to Landlord, representing administrative/overhead costs to Landlord. The amounts
computed from the Submeter together with the Overhead Charge, are herein
collectively called the "Electricity Additional Rent", and such amounts computed
from the Submeter shall be binding and conclusive on Tenant. If the Submeter
should fail to properly register or operate at any time during the term of this
lease for any reason whatsoever, Landlord may estimate the Electricity
Additional Rent, and when the Submeter is again properly operative, an
appropriate reconciliation shall be made, by Tenant paying any deficiency to
Landlord within ten (10) days after demand therefor, or by Landlord crediting
Tenant with the amount of any overpayment, as the case may be. Landlord, at its
option, may from time to time, increase the Electricity Additional Rent based
upon, among other things, any increase in Landlord's Cost. The periods to be
used for the aforesaid computation shall be as Landlord, in its sole discretion,
may from time to time elect. Where more than one meter measures the electric
service to Tenant (including such electric energy as is consumed in connection
with the operation of the ventilation and air conditioning equipment servicing
the Demised Premises), the electric service rendered through each meter may be
computed and billed at Landlord's option, separately as above set forth, or
cumulatively. Bills for the Electricity Additional Rent (the "Bills") shall be
rendered to Tenant at such time as Landlord may elect.
Landlord and Tenant agree, that the Submeter might be installed subsequent
to the date (the "Initial Occupancy Date") that Tenant, or anyone (including,
without limitation, any contractors or other workmen) claiming under or through
Tenant first enters the Demised Premises. In such event, Landlord, at Landlord's
sole option, may either (x) estimate the Electricity Additional Rent payable by
Tenant for the period commencing on the Initial Occupancy Date and ending on the
Occupancy Reading Date (hereinafter defined), and Tenant shall pay to Landlord,
within ten (10) days after demand therefor, the amount set forth on Landlord's
estimate and, after rendition of a subsequent Landlord's Statement, an
appropriate reconciliation shall be made for any deficiency owed by Tenant, or
any overage paid by Tenant or (y) render a Landlord's Statement to Tenant, after
a reading of the installed Submeter is made (said date upon which the Submeter
is read, being herein called the "Occupancy Reading Date") on or about the date
upon which Tenant shall have commenced normal business operations in the Demised
Premises, and the amount calculated from the Submeter on the Occupancy Reading
Date shall be determined on a per them basis and then multiplied by the number
of days from the Initial Occupancy Date through the Occupancy Reading Date to
arrive at the amount due for said period, and Tenant shall pay the Electricity
Additional Rent on the basis of such Submeter reading within ten (10) days after
rendition of Landlord's Statement detailing such computation.
If any tax, exclusive of federal, state or city income tax payable by
Landlord, is imposed upon Landlord's receipts from the sale or resale of
electric current to Tenant by any federal, state or municipal authority, Tenant
agrees that, unless prohibited by law, Tenant's Proportionate Share (as said
term is defined in Article 12 hereof of such taxes shall be passed on to, and
included in the ▇▇▇▇ of, and paid by Tenant to Landlord as additional rent.
In the event the Submeter ceases to operate properly, Landlord shall cause
such Submeter to be repaired within a reasonable time after receiving written
notice from Tenant that such Submeter is inoperative.
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2. Direct Meter
------------
Tenant shall have the option, at any time during the Demised Term,
including any renewal period, if any, of contracting directly with the local
provider of electricity for the supply of electricity to the Demised Premises.
In such case, Tenant shall, on a timely basis, pay for all electrical
consumption within or pertaining to the Demised Premises based on the readings
of an electrical meter for such space either already existing or to be installed
by Landlord at its sole cost and expense. Landlord shall not be responsible for
any interruption or discontinuance of electrical service and shall have no
liability for any condition, claim, loss or damage experienced by Tenant
resulting from its agreement with the electricity supplier.
C. General Conditions
------------------
1. Landlord shall not be liable to Tenant for any loss or damage or expense
which Tenant may sustain or incur if either the quantity or character of
electric service is changed or is no longer available or suitable for Tenant's
requirements, but, if such condition results solely from Landlord's acts or
omissions or any other condition within Landlord's reasonable control, Landlord
shall use due diligence to restore electric service. In the event electrical
service is discontinued in the Demised Premises, solely and directly as a result
of Landlord's acts or omissions, and if such condition continues for a period in
excess of thirty (30) consecutive days, then, beginning on the thirty-first
(31st) day, Tenant shall be entitled to an abatement of the Annual Base Rent,
computed on a per day basis, for each day the Demised Premises are without
electricity, after such thirtieth consecutive day. Any good faith attempt by the
Landlord to restore electrical power to the Demised Premises shall result in a
waiver of the Tenant's right to an abatement of rent hereunder. Landlord hereby
represents that the electric service to the Demised Premises is suitable for
Tenant's intended use of the Demised Premises.
2. Tenant covenants and agrees that at all times its use of electric
current shall never exceed the capacity of existing feeders to Tenant's floor(s)
or space (if less than an entire floor) or the capacity of the risers or wiring
installation in the Building. Tenant agrees not to connect any additional
electrical equipment to the Building electric distribution system, other than
lamps, typewriters, word processing equipment, photocopy machines, personal
computers, telecommunications machines and other small office machines which
consume comparable amounts of electricity, without Landlord's prior written
consent, which consent shall not be unreasonably withheld or delayed. Any riser
or risers to supply Tenant's electrical requirements shall, upon written request
of Tenant but subject to the prior written approval of Landlord in each
instance, be installed by Landlord, at Tenant's sole cost and expense, if, the
same are necessary and will not cause permanent damage or injury to the Building
or Demised Premises or cause or create a dangerous or hazardous condition or
entail excessive or unreasonable alterations, repairs or expense or interfere
with or disturb other tenants or occupants. If, in Landlord's sole judgment,
Landlord shall consent to the installation of such riser or risers, in addition
to such installation, Landlord will also, at Tenant's sole cost and expense,
install all other equipment proper and necessary in connection therewith subject
to the aforesaid terms and conditions.
3. The parties acknowledge that they understand that it is anticipated that
electric rates, charges, etc. may be changed by virtue of time-of-day rates or
other methods of billing, and that
12
the references in the foregoing subdivisions to changes in methods of or rules
on billing are intended to include any such changes.
4. If required by applicable law or any other reason beyond Landlord's
reasonable control, Landlord shall have the right at any time, and from time to
time, during the term of this lease, upon ninety (90) days prior written notice
to Tenant, to change the furnishing of electricity to Tenant from a submetering
basis to a rent inclusion basis, or vice versa. In addition, if required by
applicable law or any other reason beyond Landlord's reasonable control, or if
Landlord shall terminate furnishing electricity to a majority of the tenants in
the Building then receiving electricity from Landlord, Landlord shall have the
right to terminate the furnishing of electricity to the Demised Premises on a
rent-inclusion, submetering, or any other basis at any time, upon ninety (90)
days' written notice to the Tenant in which event Tenant may make application
directly to the Utility for Tenant's entire separate supply of electric current
to the Demised Premises and Landlord shall permit its wires and conduits, to the
extent available and safely capable in Landlord's sole judgment, to be used for
such purpose. Any meters, risers or other equipment or connections necessary to
enable Tenant to obtain electric current directly from the Utility shall be
installed at Landlord's sole cost and expense, subject to the provisions of this
lease. Rigid conduit only will be allowed. Landlord, upon the expiration of the
aforesaid ninety (90) days' written notice to the Tenant may discontinue
furnishing the electric current but this lease shall otherwise remain in full
force and effect. Landlord will permit Tenant to continue to receive electricity
from Landlord on a redistribution basis for such period of time as is reasonably
required by Tenant to arrange to obtain electricity service directly from the
Utility. Commencing when Tenant receives such direct service and as long as
Tenant shall continue to receive such service, the fixed rent payable under this
lease shall be reduced where electricity rent inclusion is discontinued, by a
sum equal to what the ERIF portion of the fixed rent was at the time of such
discontinuance (the parties acknowledge that in the case of termination of
redistribution by submetering, the fixed rent payable under this lease would not
be affected thereby).
5. In the event that pursuant to any of the provisions of this Article, any
initial determinations, statements or estimates are made by or on behalf of
Landlord (whether such initial determinations, statements or estimates are
subject to dispute or not pursuant to the provisions of this Article), Tenant
shall pay to Landlord the amount(s) set forth on such initial determinations,
statements or estimates, as the case may be, until subsequent determinations,
statements or estimates are rendered, at which time, the parties shall make
adjustment for any deficiency owed by Tenant, or any overage paid by Tenant.
6. In addition to all other sums payable by Tenant for electricity pursuant
to this Article, Tenant acknowledges and agrees that the electric current
furnished to the building fan room(s) servicing the Demised Premises will be
measured, at Landlord's option, by either (i) a survey to be performed by an
electrical consultant selected by Landlord or (ii) a meter to be installed by
Landlord and the amount determined by such consultant or meter shall be billed
and payable by Tenant as additional rent hereunder, from time to time, within
ten (10) days after rendition of a Landlord's Statement therefor, which amount
shall be equitably pro-rated in the event that such fan room(s) services
portions of the Building other than the Demised Premises.
13
Section 11.02. Tenant, at Tenant's expense, shall purchase and install all
new lamps and tubes (including, but not limited to, incandescent and
fluorescent) and new ballasts used in the Demised Premises, except that Landlord
shall furnish and install the lamps, tubes (including, but not limited to,
incandescent and fluorescent) and ballasts initially used in the Demised
Premises.
Section 11.03. If a separate water meter be installed for the Demised
Premises, or any part thereof, the Tenant will keep the same in repair and pay
the charges made by the municipality or water supply company for or in respect
to the consumption of water, as and when bills therefor are rendered. If the
Demised Premises, or any part thereof, be supplied with water through a meter
which supplies other premises, the Tenant will pay to the Landlord, as and when
bills are rendered therefor, the Tenant's proportionate part of all charges
which the municipality or water supply company shall make for all water consumed
through said meter, as indicated by said meter. Such proportionate part shall be
fixed by apportioning the respective charge according to floor area, against all
of the rentable floor area in the Building (exclusive of the basement) which
shall have been occupied during the period of the respective charges, taking
into account the period that each part of such area was occupied. Tenant agrees
to pay as additional rent the Tenant's proportionate part, determined as
aforesaid, of the sewer rent or charge imposed or assessed upon the Building of
which the premises are a part.
ARTICLE 12
Additional Rent
---------------
A. Taxes. Section 12.01. In addition to the fixed minimum rental and any
other sums, amounts or charges herein reserved, Tenant covenants and agrees to
pay to Landlord as additional rentals, sums computed in accordance with the
following provisions:
a) "Taxes" shall mean all taxes and assessments now or hereafter levied or
imposed upon the Building and the Land upon which same is situated (collectively
the "Real Property") and all new and additional taxes based on the ownership
thereof or the rents derived therefrom which might be substituted therefor, in
whole or in part, including, but without limiting the generality of the
foregoing, (i) any and all special assessments or levies which are imposed upon
the Real Property and (ii) by whatever name or designation they are called or
designated, any new or additional taxes levied or imposed upon the Landlord in
lieu of, or supplemental to, all or any part of the taxes or assessments now or
hereafter levied or imposed upon the Real Property, including, but not limited
to, any charge, fee or imposition resulting from the Property being located
within the Lower Manhattan Business Improvement District, or any similarly named
or described district. Anything herein to the contrary notwithstanding, it is
agreed that, in the event that the Taxes payable or imposed. for any Tax Year
(as hereinafter defined) are less than what they would have been because some
portion of the Real Property is exempt from Taxes, then and in each such Tax
Year for all purposes of this Article 12, "Taxes" shall be deemed to be what
they would have been if no such exemption applied, it being understood that in
such case the lesser amount of Taxes actually payable or imposed shall not be
used for purposes of any calculation provided in this Article.
14
b) The term "Tax Year" shall mean the fiscal year commencing July 1 and
ending the next succeeding June 30 or such other twelve month period for which
taxes might hereafter be levied or imposed upon the Real Property during the
Demised Term.
Section 12.02. A. Tenant shall pay to Landlord, as additional rent for each
such Tax Year, Tenant's Proportionate Share, as defined below, of the Taxes in
each Tax Year in excess of the average amount of Taxes payable in Tax Years
1997/98 and 1998/99, except that if the last day of the Demised Term shall be a
date other than the last day of a Tax Year, Tenant shall pay, as additional rent
for the last Tax Year of the Demised Term an amount equal to such proportion of
the Taxes in the last Tax Year of the Demised Term, as the number of days from
the first day of last Tax Year of the Demised Term to the last day of the
Demised Term bears to the total number of days in the Tax Year, and said payment
shall represent the pro-rata additional rent for such final Tax Year of the
Demised Term.
At some time within three months after the determination by the
governmental authority having jurisdiction thereover, of the actual and
transitional assessed valuations (if applicable) and appropriate tax rate
affecting the Real Property for any Tax Year and the determination of any other
item that may be included in Taxes, Landlord shall submit to Tenant a statement
which shall indicate the amount required to be paid by Tenant as additional rent
as in this section provided.
Within twenty (20) days after the issuance of the statement, Tenant shall
pay such additional rent as is set forth on such statement.
B. If, following the delivery of any statement referred to above, Landlord shall
receive a refund of Taxes for any Tax Year for which Tenant has paid any
additional rent under the provisions of this Article, Tenant's pro-rata share of
the net proceeds of such refund, after deduction of actual legal fees,
appraisers' fees and other expenses paid in collecting the same shall be applied
and allocated to the periods for which the refund was obtained and, if Tenant is
not then in default hereunder, Landlord shall refund Tenant's pro-rata share of
such refund. In no event shall any refund for any tax year due Tenant hereunder
exceed the additional rent paid by Tenant pursuant to this Article for such
particular Tax Year.
C. Tenant shall pay, before delinquency, all occupancy taxes and all property
taxes and assessments on Tenant's furniture, Tenant's fixtures, Tenant's
equipment and other property of Tenant at any time situated on or installed in
the Demised Premises. If at any time during the term of this lease any of the
foregoing are assessed as a part of the Real Property of which the Demised
Premises are a part, Tenant shall pay to Landlord upon demand the amount of such
additional taxes as may be levied against said Real Property by reason thereof.
Section 12.03. A. For the purposes of this lease:
1. The term "Escalation Year" shall mean each calendar year which shall
include any part of the term of this lease.
2. The term "Tenant's Proportionate Share" shall be deemed to mean 6.12%.
15
3. The term "Base Year" shall mean the twelve month period ending December
31, 1998.
4. The term "Operating Expenses" shall mean all costs and expenses (and
sales taxes thereon, if any) paid or incurred by Landlord or on behalf of
Landlord with respect to the operation, cleaning, repair, safety, management,
security and maintenance of the land and the Building, Building equipment,
sidewalks, curbs, and other areas adjacent to the Building, and with respect to
the services provided tenants, including: (i) salaries, wages and bonuses paid
to, and the cost of any hospitalization, medical, surgical, union and general
welfare benefits (including group life insurance), any pension, retirement or
life insurance plan and other benefit or similar expense (collectively "Wages")
relating to employees of Landlord or employees whose wages are chargeable to
Landlord engaged in the operation, cleaning, repair, safety, management,
security or maintenance of the Building and the Building equipment or in
providing Building maintenance services to tenants; (ii) social security,
unemployment and other payroll taxes, the cost of providing disability and
worker's compensation coverage imposed by any legal requirements, union contract
or otherwise with respect to said employees; (iii) the cost of electricity, gas,
steam, water, air conditioning and other fuel and utilities not otherwise paid
for by Tenant; (iv) the cost of casualty, rent, liability, fidelity, plate glass
and any other insurance; (v) the cost of repairs, maintenance and painting; (vi)
the cost or rental of all Building and cleaning supplies, tools, materials and
equipment; (vii) the cost of uniforms, work clothes and dry cleaning; (viii)
window cleaning, concierge, guard, watchman or other security personnel, service
or system, if any; (ix) management fees or, if no managing agent is employed by
Landlord, a sum in lieu thereof not in excess of then prevailing rates for
management fees payable in the Borough of Manhattan, City of New York for first-
class office buildings; (x) charges of independent contractors performing work
included within this definition of Operating Expenses; (xi) telephone and
stationery; (xii) legal, accounting and other professional fees and
disbursements incurred in connection with the routine, day-to-day operation and
management of the Building; (xiii) decorations; (xiv) depreciation of hand tools
and other movable equipment used in the operation, cleaning, repair, safety,
management, security or maintenance of the Building to the extent the cost of
such items are not already included in Operating Expenses; (xv) association fees
and dues; and (xvi) exterior and interior landscaping.
Provided, however, that the foregoing costs and expenses shall exclude or
have deducted from them, as the case may be:
(a) executives' salaries above the grade of building manager;
(b) expenditures for capital improvements, other than capital expenditures
made for the purpose of reducing energy consumption, in which case the cost
thereof shall be included in Operating Expenses for the Escalation Year in which
the costs are incurred and subsequent Escalation Years as hereinafter provided
in this Article. In addition, the cost of correcting defects in the original
design or construction of the Building or of the Building's systems shall be
excluded;
(c) amounts received by Landlord through proceeds of insurance to the
extent they are compensation for sums previously included in Operating Expenses
hereunder;
16
(d) costs of repairs or replacements incurred by reason of fire or other
casualty or condemnation to the extent Landlord is compensated therefor;
(e) advertising and promotional expenditures;
(f) costs incurred in performing work or furnishing services for any tenant
(including Tenant), whether at such tenant's or Landlord's expense, to the
extent that such work or service is in excess of any work or service that
Landlord is obligated to furnish to Tenant at Landlord's expense;
(g) depreciation or amortization, except as provided above;
(h) brokerage commissions and other reletting expenses;
(i) Taxes;
(j) refinancing costs and mortgage interest and amortization payments;
(k) costs and expenses incurred in connection with disputes with other
tenants and/or the enforcement of leases in the Building;
(l) costs and expenses incurred in building-out or otherwise preparing
space for occupancy by tenants (including Tenant) and any free rent;
(m) any costs and expenses not attributable specifically to the land and
Building (except as expressly provided otherwise in this Article);
(n) rental under any ground or underlying lease;
(o) interest, penalties and late charges payable due to late payments by
Landlord;
(p) Landlord's overhead to the extent not related to the land and/or
Building;
(q) repairs and replacements necessitated by reason of the negligence of
Landlord;
(r) costs and expenses incurred as a result of the removal of asbestos and
Hazardous Materials, as defined below, from the common areas of the Building;
and
(s) costs and expenses incurred in connection with Landlord curing
Landlord's default hereunder and any violations of record.
If Landlord shall purchase any item of capital equipment or make any
capital expenditure which has the effect of reducing the expenses which would
otherwise be included in Operating Expenses, then the costs of such capital
equipment or capital expenditure are to be included in Operating Expenses for
the Escalation Year in which the costs are incurred and subsequent Escalation
Years, on a straight-line basis, to the extent that such items are amortized
over such period of time as Landlord reasonably estimates such savings or
reductions in Operating
17
Expenses are expected to equal Landlord's costs for such capital equipment or
capital expenditure, with an interest factor equal to two (2) percentage points
above the prime commercial lending rate of Citibank, N.A., charged to its
customers of highest credit standing for ninety (90) day unsecured loans
("Expense Interest Rate") at the time of Landlord's having made said
expenditure. If Landlord shall lease any items of capital equipment designed to
result in savings or reductions in expenses which would otherwise be included in
Operating Expenses, then the rentals and other costs paid pursuant to such
leasing shall be included in Operating Expenses for the Escalation Year in which
they were incurred.
B. 1. For each Escalation Year commencing during the term of this lease, Tenant
shall pay ("Tenant's Operating Payment") to Landlord, as additional rent, a sum
equal to Tenant's Proportionate Share of the amount by which Operating Expenses
for such Escalation Year exceeds the Operating Expenses for the Base Year.
2. Landlord shall furnish to Tenant, prior to the commencement of each
Escalation Year, a written statement setting forth Landlord's estimate of
Tenant's Operating Payment for such Escalation Year including a gross-up of the
Base Year, and the method of calculation of Tenant's Operating Payment for such
Escalation Year. For purposes of calculating expenses in such written statement,
the Building shall be deemed to be occupied to a level of not less than ninety-
five percent (95%), but possibly higher based on the actual occupancy rate.
Tenant shall pay to Landlord on the first day of each month during such
Escalation Year an amount equal to one-twelfth (1/12th) of Landlord's estimate
of Tenant's Operating Payment for such Escalation Year. If, however, Landlord
shall furnish any such estimate for an Escalation Year subsequent to the
commencement thereof, then (a) until the first day of the month following the
month in which such estimate is furnished to Tenant, Tenant shall pay to
Landlord on the first day of each month an amount equal to the monthly sum
payable by Tenant to Landlord under this Paragraph B in respect of the last
month of the preceding Escalation Year; (b) promptly after such estimate is
furnished to Tenant or together therewith, Landlord shall give notice to Tenant
stating whether the installments of Tenant's Operating Payment previously made
for such Escalation Year were greater or less than the installments of the
Tenant's Operating Payment to be made for such Escalation Year in accordance
with such estimate, and (i) if there shall be a deficiency, Tenant shall pay the
amount thereof within thirty (30) days after demand therefor, or (ii) if there
shall have been an overpayment, Landlord shall either refund to Tenant the
amount thereof within thirty (30) days after Landlord becomes aware of such
overpayment or permit Tenant to credit the amount thereof against subsequent
payments under this Section; and (c) on the first day of the month following the
month in which such estimate is furnished to Tenant, and monthly thereafter
throughout the remainder of such Escalation Year, Tenant shall pay to Landlord
an amount equal to one-twelfth (1/12th) of Tenant's Operating Payment shown on
such estimate. Landlord may at any time or from time to time (but not more than
twice with respect to any Escalation Year) furnish to Tenant a revised statement
of Landlord's estimate of Tenant's Operating Payment for such Escalation Year,
and in such case, Tenant's Operating Payment for such Escalation Year shall be
adjusted and paid or refunded, as the case may be, substantially in the same
manner as provided in the preceding sentence.
3. After the end of each Escalation Year Landlord shall furnish to Tenant a
Landlord's Statement for such Escalation Year. Each such year-end Landlord's
Statement shall be accompanied by a computation of Operating Expenses for the
Building prepared by a certified
18
public accountant or managing agent designated by Landlord from which Landlord
shall make the computation of Operating Expenses hereunder. If the Landlord's
Statement shall show that the sums paid by Tenant under this Section exceeded
Tenant's Operating Payment paid by Tenant for such Escalation Year, Landlord
shall either refund to Tenant the amount of such excess or permit Tenant to
credit the amount of such excess against subsequent payments under this Section;
and if the Landlord's Statement for such Escalation Year shall show that the
sums so paid by Tenant were less than Tenant's Operating Payment paid by Tenant
for such Escalation Year, Tenant shall pay the amount of such deficiency within
twenty (20) days after demand therefor.
4. If the Commencement Date or the Expiration Date shall occur on a date
other than January 1 or December 31, respectively, any additional rent under
this Article for the Escalation Year in which such Commencement Date or
Expiration Date shall occur shall be apportioned in that percentage which the
number of days in the period from the Commencement Date to December 31 or from
January 1 to the Expiration Date, as the case may be, both inclusive, shall bear
to the total number of days in such Escalation Year. In the event of a
termination of this Lease, any additional rent under this Article shall be paid
or adjusted within thirty (30) days after submission of a Landlord's Statement.
In no event shall fixed rent ever be reduced by operation of this Article and
the rights and obligations of Landlord and Tenant under the provisions of this
Article with respect to any additional rent shall survive the termination of
this lease.
C. 1. Landlord's failure to render Landlord's Statements with respect to any
Escalation Year shall not prejudice Landlord's right to thereafter render a
Landlord's Statement with respect thereto or with respect to any subsequent
Escalation Year. Nothing herein contained shall restrict Landlord from issuing
Landlord's Statements at any time there is an increase in Operating Expenses
during any Escalation Year or any time thereafter.
2. Each Landlord's Statement shall be conclusive and binding upon Tenant
unless within ninety (90) days after receipt of such Landlord's Statement,
Tenant shall notify Landlord that it disputes the correctness of Landlord's
Statement, specifying the particular respects in which Landlord's Statement is
claimed to be incorrect. If Tenant shall dispute the correctness of Landlord's
Statement as aforesaid, then Tenant shall have the right, during the sixty (60)
day period following the date of Tenant's dispute notice, to inspect Landlord's
books and records solely to the extent necessary to verify the accuracy of any
such disputed item(s) of Operating Expenses. Such inspection by Tenant shall
take place at Landlord's offices or at any other reasonable location designated
by Landlord, and shall be performed only during business hours, upon reasonable
prior notice to Landlord. If the parties shall not be able to resolve such
dispute within ninety (90) days after the giving of such Landlord's Statement,
then either party may refer the matter or matters in dispute to independent
reputable certified public accountants mutually agreed upon by Landlord and
Tenant, and the decision of such accountants shall be conclusive and binding
upon the parties. If the parties shall be unable to mutually agree upon the
accountants to be retained to settle such dispute, then either party, upon not
less than ten (10) days' prior written notice to the other, may request that the
American Arbitration Association in the City of New York appoint such
accountants. Pending settlement of such dispute, Tenant shall pay Tenant's
Operating Payment as determined by Landlord and, in the event such dispute is
resolved in favor of Tenant. Landlord shall promptly reimburse Tenant for any
overpayment(s). The fees and expenses of said accountants in determining such
matter or matters shall be borne
19
by the unsuccessful party (and if both parties are partially unsuccessful, the
accountants shall apportion the fees and disbursements between the parties based
upon the degree of success of each party).
Section 12.04. The obligations of Landlord or Tenant pursuant to the
provisions of this Article, as the case may be, shall survive the expiration or
sooner termination of the term of this Lease.
Section 12.05. For purposes of this Article, the Building shall be deemed
to contain approximately 295,000 rentable square feet. An actual measurement of
the rentable space which yields a result within ten percent (10%) of this total
shall not be subject to dispute or contest by either party.
ARTICLE 13
Subordination and Attornment
----------------------------
Section 13.01. This Lease is subject and subordinate to all mortgages and
ground leases which may now or hereafter affect the Real Property and to all
renewals, modifications, consolidations, replacements and extensions of any such
mortgages and ground leases. This clause shall be self-operative and no further
instrument of subordination shall be required by any mortgagee, affecting the
Real Property. In confirmation of such subordination, Tenant shall execute
promptly any certificate or other instrument that Landlord may reasonably
request. Landlord hereby agrees to use reasonable efforts to obtain for Tenant a
subordination, non-disturbance and attornment agreement from all existing
mortgagees and lessors, in the standard form customarily employed by such
mortgagee and/or lessor.
Section 13.02. If, at any time prior to the expiration of the Demised Term,
Tenant agrees, upon demand of the holder of any mortgage in possession of the
Building, to attorn to any such holder, upon the then executory terms and
conditions of this Lease, for the remainder of the term originally demised in
this Lease, provided that such holder, shall then be entitled to possession of
the Demised Premises. The foregoing provisions of this Section shall inure to
the benefit of any such holder, shall be self-operative upon any such demand,
and no further instrument shall be required to give effect to said provisions.
Tenant, however, upon demand of any such holder, agrees to execute, from time to
time, instruments in confirmation of the foregoing provisions of this Section,
satisfactory to any such holder, acknowledging such attornment and setting forth
the terms and conditions of its tenancy. Nothing contained in this Section shall
be construed to impair any right otherwise exercisable by any such holder.
Section 13.03. From time to time, within five (5) business days next
following a request by either party, the party to which the request is directed
shall deliver to the requesting party a written statement executed and
acknowledged, (i) stating that this Lease is then in full force and effect and
has not been modified (or if modified, setting forth the specific nature of all
modifications), and (ii) setting forth the date to which the Fixed Rent has been
paid, and (iii) stating whether or not, the requesting party is in default under
this Lease, and, if so setting forth the specific nature of all such defaults.
Tenant acknowledges that any statement which it delivers pursuant to this
Section may be relied upon by a purchaser of the Building, or by any mortgagee,
20
or by assignee of the mortgagee. Landlord acknowledges that any statement which
it delivers pursuant to this Section may be relied upon by a sub-tenant of any
portion of the Demised Premises, or any third party.
ARTICLE 14
Liability of Landlord
---------------------
Section 14.01. Neither (i) the making nor performances by Landlord, Tenant
or others of any decorations, repairs, alterations, additions or improvements in
or to the Building or the Demised Premises, nor (ii) the failure of Landlord or
others to make any such decorations, repairs, alterations, additions or
improvements, to the extent the same do not unreasonably interfere with Tenant's
use and occupancy of the Demised Premises, nor (iii) any damage to the Demised
Premises or to the property of Tenant, nor any injury to any persons, caused by
other tenants or persons in the Building, if any, or by operations in the
construction of any private, public or quasi-public work, to the extent the same
do not unreasonably interfere with Tenant's use and occupancy of the Demised
Premises, nor (iv) any closing or darkening of any windows of the Demised
Premises if required by law, order or regulation of Federal, County, State or
Municipal authorities or by any direction pursuant to law of any public officer,
nor (v) any inconvenience or annoyance to Tenant or injury to or temporary
interruption of Tenant's business by reason of any of the events or occurrences
referred to in the foregoing subdivisions (i) through (iv), shall constitute an
actual or constructive eviction, in whole or in part, or entitle Tenant to any
abatement or diminution of rent, or relieve Tenant from any of its obligations
under this Lease, or impose any liability upon Landlord, or its agents, other
than such liability as may be imposed upon Landlord by law for Landlord's
negligence or the negligence of Landlord's agents, servants or employees in the
operation or maintenance of the Building or for the breach by Landlord of any
express covenant of this Lease on Landlord's part to be performed.
ARTICLE 15
Destruction, Fire or Other Casually
-----------------------------------
Section 15.01. If the Demised Premises shall be damaged by fire or other
casualty, Landlord, at Landlord's expense, shall repair such damage within one
hundred eighty (180) days from receipt of notice of such damage from Tenant,
subject to delays beyond Landlord's control. However, Landlord shall have no
obligation to repair any damage to, or to replace, Tenant's Personal Property or
any other property or effects of Tenant. Except as otherwise provided in Section
15.03, if the entire Demised Premises shall be rendered untenantable by reason
of any such damage, the Fixed Rent and all other sums otherwise due Landlord
under this Lease shall ▇▇▇▇▇ for the period from the date of such damage to the
date when such damage shall have been repaired, and if only a part of the
Demised Premises shall be so rendered untenantable, the Fixed Rent and all other
sums otherwise due Landlord under this Lease shall ▇▇▇▇▇ for the period in the
proportion which the area of the part of the Demised Premises so rendered
untenantable bears to the total area of the Demised Premises. However, if, prior
to the date when all of such damage shall have been repaired, any part of the
Demised Premises so damaged shall be rendered tenantable and shall be used or
occupied by Tenant or any person or persons claiming through or
21
under Tenant, then the amount by which the Fixed Rent and all other sums
otherwise due Landlord under this Lease shall ▇▇▇▇▇ shall be equitably
apportioned for the period from the date of any such use or occupancy to the
date when all such damage shall have been repaired. Tenant hereby expressly
waives the provisions of Section 227 of the New York Real Property Law, and of
any successor law of like import then in force, and Tenant agrees that the
provisions of this Article shall govern and control in lieu thereof.
Notwithstanding the foregoing provisions of this Section, if, prior to or during
the Demised Term, (i) the Demised Premises shall be totally damaged or rendered
wholly untenantable by fire or other casualty, and if Landlord shall decide not
to restore the Demised Premises, or (ii) the Building shall be so damaged by
fire or other casualty that, in Landlord's opinion, substantial alteration,
demolition, or total reconstruction of the Building shall be required then, in
either of such events, or (iii) if such casualty shall occur in the last two (2)
years of the Term, Landlord shall give to Tenant, within thirty (30) days after
such fire or other casualty, a thirty (30) days' notice of termination of this
Lease and, in the event such notice is given, this Lease and the Demised Term
shall come to an end and expire (whether or not said term shall have commenced)
upon the expiration of said thirty (30) days, the Fixed Rent and all other sums
otherwise due Landlord under this Lease shall be apportioned as of the date of
such fire or other casualty and any prepaid portion of Fixed Rent for any period
after such date shall be refunded by Landlord to Tenant. If the Demised Term has
not yet commenced at the time of such fire or casualty, all monies paid to
Landlord hereunder shall be refunded to Tenant.
Section 15.02. Landlord shall obtain and maintain, throughout the Demised
Term, in Landlord's fire insurance policies, provisions to the effect that such
policies shall not be invalidated should the insured waive, in writing, prior to
a loss, any or all right of recovery against any party for loss occurring to the
Building. In the event that at any time Landlord's fire insurance carriers shall
exact an additional premium for the inclusion of such or similar provisions,
Landlord shall give Tenant notice thereof. In such event, if Tenant agrees, in
writing, to reimburse Landlord for such additional premium, Landlord shall
require the inclusion of such or similar provisions by Landlord's fire insurance
policies then in force, Landlord hereby waives (i) any obligation on the part of
Tenant to make repairs to the Demised Premises necessitated or occasioned by
fire or other casualty that is an insured risk under such policies, and (ii) any
right of recovery against Tenant, any other permitted occupant of the Demised
Premises, and any of their servants, employees, agents or contractors, for any
loss occasioned by fire or other casualty that is an insured risk under such
policies. In the event that at any time Landlord's fire insurance carriers shall
not include such or similar provisions in Landlord's fire insurance policies,
the waivers set forth in the foregoing sentence shall, upon notice given by
Landlord to Tenant, be deemed of no further force or effect.
Section 15.03. Notwithstanding the provisions of Section 15.01, if any such
damage, occurring after any date when the waivers set forth in Section 15.02 are
no longer in force and effect, is due to the fault or neglect of Tenant, any
person claiming through or under Tenant, or any of its servants, employees,
agents, contractors, visitors or licensees, then there shall be no abatement of
Fixed Rent by reason of such damage.
Section 15.04. Tenant shall obtain and maintain, throughout the Demised
Term, in Tenant's fire insurance policies covering Tenant's property in the
Demised Premises (and shall cause any other permitted occupants of the Demised
Premises to obtain and maintain, in similar policies) provisions to the effect
that such policies shall not be invalidated should the insured
22
waive, in writing, prior to a loss, any or all right to recovery against any
party for loss occasioned by fire or other casualty which is an insured risk
under such policies. In the event that at any time the fire insurance carriers
issuing such policies shall exact an additional premium for the inclusion of
such or similar provisions, Tenant shall give Landlord notice thereof. In such
event, if Landlord agrees, in writing, to reimburse Tenant or any person
claiming through or under Tenant, as the case may be, for such additional
premium for the remainder of the Demised Term, Tenant shall require the
inclusion of such or similar provisions by such fire insurance carriers. As long
as such or similar provisions are included in such fire insurance policies then
in force Tenant hereby waives (and agrees to cause any other permitted occupants
of the Demised Premises to execute and deliver to Landlord written instruments
waiving) any right of recovery against Landlord, and any servants, employees,
agents or contractors of Landlord, for any loss occasioned by fire or other
casualty which is an insured risk under such policies. In the event that at any
time such fire insurance carriers shall not include such or similar provisions
in any such fire insurance policy, the waiver set forth in the foregoing
sentence shall, upon notice given by Tenant to Landlord, be deemed of no further
force of effect with respect to any insured risks under such policy from and
after the giving of such notice. During any period while the foregoing waiver of
right of recovery is in effect, Tenant, or any other permitted occupant of the
Demised Premises, as the case may be, shall look solely to the proceeds of such
policies to compensate Tenant or such other permitted occupant for any loss
occasioned by fire or other casualty which is an insured risk under such
policies.
ARTICLE 16
Eminent Domain
--------------
Section 16.01. If the whole of the Demised Premises shall be acquired or
condemned for any public or quasi-public use or purpose, this Lease and the
Demised Term shall end as of the date of the vesting of title with the same
effect as if said date were the Expiration Date. If only a part of the Demised
Premises shall so be acquired or condemned then except as otherwise provided in
this Section, this Lease and the Demised Term shall continue in force and effect
but, from and after the date of the vesting of title, the Fixed Rent shall be
reduced in the proportion which the area of the Demised Premises so acquired or
condemned bears to the total area of the Demised Premises immediately prior to
such acquisition or condemnation. If only a part of the Real Property shall be
so acquired or condemned, then if the part of the Real Property so acquired or
condemned shall contain more than ten (10%) percent of the total area of the
Demised Premises immediately prior to such acquisition or condemnation or Tenant
no longer has reasonable means of access to the Demised Premises, Tenant, at
Tenant's option, may give to Landlord, within sixty (60) days next following the
date upon which Tenant shall have received notice of vesting of title, a thirty
(30) days' notice of termination of this Lease. In the event any such thirty
(30) days' notice of termination is given, by Tenant, this Lease and the Demised
Term shall come to an end and expire upon the expiration of said thirty (30)
days with the same effect as if the date of expiration of said thirty (30) days
were the Expiration Date. If a part of the Demised Premises shall be so acquired
or condemned and this Lease and the Demised Term shall not be terminated,
pursuant to the foregoing provisions of this Section, Landlord, at Landlord's
expense, shall restore that part of the Demised Premises not so acquired or
condemned to a self-contained rental unit. In the event of any termination of
this Lease and the Demised Term pursuant to the provisions of this Section, the
Fixed Rent and all other sums
23
otherwise due Landlord under this Lease shall be apportioned as of the date of
sooner termination and any prepaid portion of rent for any period after such
date shall be refunded by Landlord to Tenant within fifteen (15) days. This
provision shall survive such termination of this Lease.
Section 16.02. In the event of any such acquisition or condemnation of all
or any part of the Real Property, Landlord shall be entitled to receive the
entire award for any such acquisition or condemnation, Tenant shall have no
claim against Landlord or the condemning authority for the value of any
unexpired portion of the Demised Term and Tenant hereby expressly assigns to
Landlord all of its right in and to any such award.
ARTICLE 17
Defaults and Remedies and Waiver of Redemption
----------------------------------------------
Section 17.01. (1) If Tenant defaults in fulfilling any of the covenants of
this Lease, including the covenants for the payment of fixed minimum rent or
additional rent, or if the Demised Premises become vacant for a period of thirty
(30) days or deserted, or, if the Demised Premises are damaged by reason of
negligence or carelessness of Tenant, its agents, employees or invitees, then,
in any one or more of such events, upon Landlord serving a written fifteen (15)
days' notice upon Tenant specifying the nature of said default and upon the
expiration of said fifteen (15) days, if Tenant shall have failed to comply with
or remedy such default, or if the said default or omission complained of is of
such a nature that the same cannot be completely cured or remedied within said
fifteen (15) day period, and if Tenant shall not have diligently commenced
curing such default within such fifteen (15) day period, and shall not
thereafter with diligence and in good faith remedy or cure such default, then
Landlord may serve a written five (5) days' notice of cancellation of this Lease
upon Tenant, and upon the expiration of said five (5) days, this Lease and the
term thereunder shall end and expire as fully and completely as if the date of
expiration of such five (5) day period were the day herein definitely fixed for
the end and expiration of this Lease and the term thereof and Tenant shall then
quit and surrender the Demised Premises to Landlord but Tenant shall remain
liable as hereinafter provided.
(2) If the notice provided for in (1) hereof shall have been given, and the
term shall expire as aforesaid; or (2a) if any execution or attachment shall be
issued against Tenant or any of Tenant's property whereupon the Demised Premises
shall be taken or occupied or attempted to be taken or occupied by someone other
than Tenant; or (2b) if Tenant fails to discharge any mechanics lien which it
permits to be filed against the Demised Premises or the Building within
twenty-one (21) days after notice that it has been filed, or (3) if Tenant shall
fail to move into, or take possession of, the premises within thirty (30) days
after the Commencement Date, then and in any of such events Landlord may without
notice, re-enter the Demised Premises either by force or otherwise, and
dispossess Tenant, the legal representative of Tenant or other occupant of the
Demised Premises by summary proceedings or otherwise, and remove their effects
and hold the Demised Premises as if this Lease had not been made, but Tenant
shall remain liable hereunder as hereinafter provided, and Tenant hereby waives
the service of notice of intention to re-enter or to institute legal proceedings
to that end. If Tenant shall make default hereunder prior to the date fixed as
the commencement of any renewal or extension of this Lease, Landlord may
24
cancel and terminate such renewal or extension agreement by written notice, but
Tenant shall remain liable as hereinafter provided
Section 17.02. In case of any such default, re-entry, expiration and/or
dispossess by summary proceedings or otherwise, (a) the fixed minimum rent,
additional rent and any other charges payable hereunder shall become due
thereupon and be paid up to the time of such re-entry, dispossess and/or
expiration, together with such reasonable expenses as Landlord may pay for legal
expenses, reasonable attorney's fees, brokerage commissions at the standard
rate, and/or putting the Demised Premises in good order, or for preparing the
same for re-rental; (b) Landlord may re-let the Demised Premises or any part or
parts thereof, either in the name of Landlord or otherwise, for a term or terms,
which may at Landlord's option be less than or exceed the period which would
otherwise have constituted the balance of the term of this Lease and may grant
concessions or free rent; and/or (c) at any time after the Demised Term shall
have expired and come to an end or Landlord shall have re-entered upon the
Demised Premises, as the case may be, whether or not Landlord shall have
collected any monthly deficiencies as aforesaid, Landlord shall be entitled to
recover from Tenant, and Tenant shall pay to Landlord, on demand, as and for
liquidated and agreed final damages, a sum equal to the amount by which the
Fixed Rent reserved in this Lease (plus additional rent) for the period which
otherwise would have constituted the unexpired portion of the Demised Term
exceeds the then fair and reasonable rental value of the Demised Premises for
the same period, both discounted to present worth at the rate of eight (8%)
percent per annum, which sum shall be payable over the course of the unexpired
portion of the Demised Term, on a monthly basis. If, before presentation of
proof of such liquidated damages to any court, commission or tribunal, the
Demised Premises, or any part thereof, shall have been relet by Landlord for the
period which otherwise would have constituted the unexpired portion of the
Demised Term, or any part thereof, the amount of rent received upon such
reletting shall be deemed, prima facie, to be the fair and reasonable rental
value for the part of the whole of the Demised Premises so relet during the term
of the reletting. The failure of Landlord to relet the Demised Premises or any
part or parts thereof shall not release or affect Tenant's liability for
damages. In computing such damages there shall be added to the said deficiency
such expenses as Landlord may incur in connection with reletting as in (a) above
set forth. Any such damages shall be paid in monthly installments by Tenant on
the rent days specified in this Lease and any suit brought to collect the amount
of the deficiency for any month or months shall not prejudice in any way the
rights of Landlord to collect the deficiency for any subsequent month or months
by a similar proceeding. Landlord at Landlord's option may make such
alterations, repairs, replacements and/or decorations in the Demised Premises as
Landlord in Landlord's sole judgment considers advisable and necessary for the
purpose of reletting the Demised Premises; and the making of such alterations
and/or decorations shall not operate or be construed to release Tenant from
liability hereunder as aforesaid. Landlord shall in no event be liable in any
way whatsoever for failure to relet the Demised Premises, or in the event that
the Demised Premises are relet, for failure to collect the rent thereof under
such reletting. In the event of a breach or threatened breach by either party of
any of the covenants or provisions hereof, the damaged party shall have the
right of injunction and the right to invoke any remedy allowed by law or in
equity as if re-entry, summary proceedings and other remedies were not herein
provided for. Mention in this lease of any particular remedy, shall not preclude
Landlord or Tenant from any other remedy, in law or in equity. The foregoing
remedies and rights of Landlord are cumulative. Tenant hereby expressly waives
any and all rights of redemption granted by or under any present or future laws
in the event of Tenant being evicted or
25
dispossessed for any cause, or in the event of Landlord obtaining possession of
the Demised Premises, by reason of the violation by Tenant of any of the
covenants and conditions of this Lease.
ARTICLE 18
Landlord's Right to Perform Tenant's Obligations
------------------------------------------------
Section 18.01. If Tenant shall default in the observance or performance of
any term or covenant on its part to be observed or performed under or by virtue
of any of the terms or provisions in any Article of this Lease, as provided in
Article 17 of this Lease, Landlord, without being under any obligation to do so
and without thereby waiving such default, may after sending the notice of
default required by Section 17.01, remedy such default for the account and at
the expense of Tenant. If Landlord makes any expenditures or incurs any
obligations for the payment of money in connection with any such default on the
part of Tenant, including, but not limited to, reasonable attorneys' fees in
instituting, prosecuting or defending any action or proceeding, such sums paid
or obligations incurred with interest and costs shall be deemed to be additional
rent hereunder and shall be paid to it by Tenant on demand.
ARTICLE 19
Covenant of Quiet Enjoyment
---------------------------
Section 19.01. Landlord covenants that upon Tenant paying the rent and
additional rent and observing and performing all the terms, covenants and
provisions of this Lease on Tenant's part to be observed and performed, Tenant
may quietly enjoy the Demised Premises, subject nevertheless to the terms and
conditions of this lease as well as any mortgage(s) now or hereafter affecting
the Real Property and provided, however, that no eviction of Tenant by reason of
paramount title or the foreclosure of any mortgage affecting the Demised
Premises shall be construed as a breach of this covenant nor shall any action by
reason thereof be brought against Landlord, subject to the terms hereof, only so
long as Landlord is in possession and is collecting rent from Tenant but not
thereafter.
ARTICLE 20
Indemnity
---------
Section 20.01. Tenant agrees to indemnify and save Landlord harmless of and
from all loss, cost, liability, damage and expense including, but not limited
to, reasonable counsel fees, penalties and fines, incurred in connection with or
arising from (i) any default by Tenant in the observance or performance of any
of the terms, covenants or conditions of this Lease on Tenant's part to be
observed or performed, or (ii) any violation of the use and occupancy provision
contained in Article 5, or (iii) any acts, omissions or negligence of Tenant or
the contractors, agents, servants, employees, visitors or licensees of Tenant in
or about the Demised Premises or the Building during, the Demised Term
including, but not limited to, any acts, omissions or negligence in the making
or performing of any Alterations.
26
Section 20.02. Tenant shall pay to Landlord within ten (10) days next
following rendition by Landlord to Tenant of bills or statements therefor: (i)
sums equal to all reasonable counsel fees paid by Landlord, in connection with
the remedying by Landlord, for Tenant's account pursuant to the provisions of
Section 17.01, of any default of Tenant, and (ii) sums equal to all reasonable
expenditures made by Landlord including, but not limited to, expenditures made
for reasonable counsel fees, in collecting or attempting to collect the Fixed
Rent, any additional rent or any other sum of money accruing under this lease or
enforcing or attempting to enforce any rights of Landlord under this lease or
pursuant to law provided that Tenant shall only be liable after the expiration
of applicable grace periods and periods within which to cure, as provided for
herein, for such amounts paid in respect of defaults remaining uncured after
such periods, whether by the institution and prosecution of summary proceedings
or otherwise; and (iii) all other sums of money (other than Fixed Rent) accruing
from Tenant to Landlord under the provisions of this Lease. Any sum of money
(other than Fixed Rent) accruing from Tenant to Landlord pursuant to any
provision of this Lease, whether prior to or after the Commencement Date, may,
at Landlord's option, be deemed additional rent, and Landlord shall have the
same remedies for Tenant's failure to pay any installment of Fixed Rent when
due. Tenant's obligations under this Article shall survive the expiration or
sooner termination of the Demised Term.
ARTICLE 21
Excavation
----------
Section 21.01. In the event that an excavation or any construction shall be
made for building or other purposes upon land adjacent to the Building, or
should be authorized to be made, Tenant shall, if necessary, afford to the
person or persons causing or authorized to cause such excavation or construction
license to enter upon the Demised Premises upon reasonable notice and at
reasonable times causing as little interference as possible with Tenant's
enjoyment of the Demised Premises, for the purpose of doing such work as shall
reasonably be necessary to protect or preserve the wall or walls of the
Building, or the Building, from injury or damage and to support them by proper
foundations, pinning and/or underpinning, or otherwise.
ARTICLE 22
Hazardous Environmental Condition
---------------------------------
Section 22.01. Tenant shall not cause or permit any Hazardous Materials
(hereinafter defined) to be used, stored, transported, released, handled,
produced or installed in, on or from the demised premises or the Building.
"Hazardous Materials", as used herein, shall mean any flammables, explosives,
radioactive materials, hazardous wastes, hazardous and toxic substances or
related materials, asbestos or any material containing asbestos, or any other
substance or material included in the definition of "hazardous substances",
"hazardous wastes", "hazard materials", "toxic substances", "contaminants" or
any other pollutant, or otherwise regulated by any Federal, state or local
environmental law, ordinance, rule or regulation including, without limitation,
the Comprehensive Environmental Response Compensation and Liability Act of 1980,
as amended, the Hazardous Materials Transportation Act, as amended, the Resource
Conservation and Recovery Act, as amended, and in the regulations adopted and
publications
27
promulgated pursuant to each of the foregoing. In the event of a violation of
any of the foregoing provisions of this Article 22 by Tenant, Landlord may, upon
reasonable prior notice (but without notice and without regard to any grace
period contained herein in the case of an emergency), take all remedial action
deemed necessary by Landlord to correct such condition and Tenant shall
reimburse Landlord for the cost thereof, upon demand, as additional rent.
Section 22.02. Tenant shall indemnify and hold harmless Landlord, its
officers, directors, principals, successors and assigns and the property from
and against any and all claims, obligations, liabilities, violations, penalties,
fines, governmental orders, suits, causes of action, judgments, damages (civil
or criminal) and all other costs and expenses of any nature whatsoever which may
result from Tenant's use or storage of Hazardous Materials in connection with
the Demised Premises or the Building within which same are located.
ARTICLE 23
Broker
------
Section 23.01. The parties hereto agree that the only brokers who brought
about this transaction were ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ and GVA ▇▇▇▇▇▇▇▇ Real Estate, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, which worked with ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Tanzman Company, LLC, ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ on Tenant's behalf.
Landlord and Tenant agree to indemnify each other and hold one another harmless
from any damages, costs, expenses suffered by Landlord or Tenant by reason of
any breach of the foregoing representation or by reason of any alleged dealings
with Tenant. Landlord shall be responsible for the payment of brokerage
commissions to ▇▇▇▇▇▇▇ & Wakefield and to GVA ▇▇▇▇▇▇▇▇ Real Estate (but not to
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ Company, LLC) pursuant to separate agreements.
ARTICLE 24
Waiver of Jury Trial
--------------------
Section 24.01. Landlord and Tenant each waive the right to trial by jury in
any summary proceeding that may hereafter be instituted by one party against the
other in respect of the Demised Premises, or in any action that may be brought
hereunder, provided such waiver is not prohibited by law.
ARTICLE 25
Surrender of Premises
---------------------
Section 25.01. Upon the expiration or other termination of the term of this
Lease, Tenant shall quit and surrender the Demised Premises in good order and
condition, ordinary wear and tear and damage by fire or other casualty, the
elements and any cause beyond Tenant's control excepted, and shall remove all
its property therefrom, except as otherwise provided in this Lease. Tenant's
obligation to observe or perform this covenant shall survive the expiration or
other termination of the term of this Lease. In the event Tenant remains in
possession of the
28
Demised Premises after the termination of this Lease, either at the stated
termination or otherwise, (i) Landlord shall be entitled to all of the rights
and remedies which are available to a Landlord against a Tenant holding over
after the expiration of a term and to such other rights and remedies as may be
provided for in this Lease, at law and/or in equity and (ii) Tenant, at the
option of Landlord, shall be deemed to be occupying the Demised Premises as a
tenant from month-to-month, at a monthly rental equal to one and one-half
(1-1/2) times the rent and additional rent payable during the last month of the
Demised Term, subject to all of the other terms of this Lease insofar as the
same are or may be applicable to a month-to-month tenancy. Such monthly rental
shall be pro rated on a per diem basis if Tenant occupies the Demised Premises
as a tenant from month-to-month for a portion of a month. Furthermore, Tenant
hereby indemnifies Landlord against any and all liability resulting from delay
by Tenant in so surrendering the Demised Premises including, but not limited to,
any claims made by any succeeding tenant or prospective tenant founded upon such
delay and agrees to be liable to Landlord for (i) any payment or rent concession
which Landlord may be required to make to any tenant obtained by Landlord for
all or any part of the Demised Premises in order to induce such tenant not to
terminate its lease by reason of the holding over by Tenant (ii) the loss of the
benefit of the bargain if any such tenant shall terminate its lease by reason of
the holding over by tenant. Tenant's obligations under this article shall
survive the expiration or termination of this Lease.
ARTICLE 26
Rent Limitation
---------------
Section 26.01. If any of the rent payable under the terms of this Lease
shall be or become uncollectible, reduced, offset, restricted or required to be
refunded because of any applicable law, ordinance, order, rule, requirement or
regulation, either currently in effect or enacted and made effective subsequent
to the date of this agreement, Tenant shall enter into such agreement(s) and
take such other actions as Landlord may request and as may be legally
permissible to permit Landlord to collect the maximum rents which, from time to
time during the continuance of such legal rent restriction, may be legally
permissible (and not in excess of the amounts reserved therefor under this
Lease). Upon the termination of such legal rent restriction, (a) the rents shall
become and thereafter be payable in accordance with the amounts reserved herein
for the periods following such termination and in addition (b) Tenant shall pay
to Landlord, in equal monthly installments paid over the unexpired portion of
the term of this Lease, and to the maximum extent legally permissible, an amount
equal to (i) the rents which would have been paid pursuant to this Lease but for
such legal rent restriction less (ii) the rents paid by Tenant during the period
such legal rent restriction was in effect.
ARTICLE 27
Fire Protection Requirements
----------------------------
Section 27.01. If there now is or shall be installed in said building a
"sprinkler system" Tenant agrees to keep the appliances thereto in the Demised
Premises in repair and good working condition, and if the New York Board of Fire
Underwriters or the New York Fire Insurance Exchange or any bureau, department
or official of the State or local government
29
requires or recommend that any changes, modifications, alterations or additional
sprinkler heads or other equipment be made or supplied by reason of the Tenant's
business, or the location of partitions, trade fixtures, or other contents of
the Demised Premises, or if such changes, modifications, alterations, additional
sprinkler heads or other equipment in the Demised Premises are necessary to
prevent the imposition of a penalty or charge against the full allowance for a
sprinkler system in the fire insurance rate as fixed by said Exchange, or by any
Fire Insurance Company, then Tenant will at Tenant's own expense, promptly make
and supply such changes, modifications, alterations, additional sprinkler heads
or other equipment.
ARTICLE 28
Insurance
---------
Section 28.01. Tenant at Tenant's own cost and expense shall maintain
insurance naming Landlord as an insured and protecting Landlord against any and
all claims for injury or damage to persons or property or for the loss of life
or of property occurring upon, in or about the Demised Premises, and the public
portions of the Building arising solely from the acts of, Tenant, its employees,
agents, contractors, clients, licenses and invitees; such insurance to afford
minimum protection during the term of this lease, of not less than $3,000,000
combined single limit coverage.
Section 28.02. Tenant shall, and shall cause any person undertaking to do
any work of any kind on the Demised Premises to provide Worker's Compensation
Insurance as may be required by law and sufficient in amount and coverage to
protect Landlord against any and all claims or injury or damage to persons or
property wherever occurring as a result of such work.
Section 28.03. Tenant at Tenant's own cost and expense shall maintain
insurance in amounts reasonably satisfactory to Landlord covering Alterations
and Improvements which are Tenant's property for the Demised Premises against
loss or damage by fire or other casualty.
Section 28.04. All such insurance shall be written in form and substance
reasonably satisfactory to Landlord by an insurance company in a financial size
category of not less than XII and with general policy holders' ratings of not
less than A, as rated in the most current available "Best's" insurance reports,
or the then equivalent thereof, and licensed to do business in New York State
and authorized to issue such policies. All policies of insurance procured by
Tenant shall contain endorsements providing that (a) such policies may not be
reduced or canceled (including for non-payment of premium) or allowed to lapse
with respect to Landlord or materially changed or amended except after 30 days
prior notice from the insurance company to Landlord, sent by certified mail,
return receipt requested; and (b) Tenant shall be solely responsible for the
payment of premiums therefor notwithstanding that Landlord or any other party is
or may be named as an insured. Duly executed certificates of insurance or, if
required by Landlord, certified copies or duplicate originals of the original
policies, together with reasonably satisfactory evidence of payment of the
premiums therefor, shall be delivered to Landlord, on or before the Commencement
Date. Each renewal or replacement of a policy shall be so deposited at least 30
days prior to the expiration of such policy. Tenant shall not carry any separate
or additional insurance concurrent in form or contributing in the event of any
loss or damage with any insurance required to be maintained by Tenant under this
lease, and all policies of insurance
30
procured by Tenant shall be written as primary policies not contributing with or
in excess of coverage that Landlord may carry.
Section 28.05. On or before Commencement Date, Tenant shall furnish
Landlord with an insurance policy or a certificate evidencing the aforesaid
insurance coverage, and renewal policies or certificates shall be furnished to
Landlord at least thirty (30) days prior to the expiration date of each policy
for which a certificate was theretofore furnished.
ARTICLE 29
Access to Premises
------------------
Section 29.01. Landlord or Landlord's agents shall have the right (but
shall not be obligated) to enter the Demised Premises in any emergency at any
time, and, at other reasonable times, upon prior notice, to examine the same and
to make such repairs, replacements and improvements as are necessary or which
Landlord may elect to perform following Tenant's default beyond all applicable
grace periods and periods within which to cure such default after notice of
same, to make repairs or perform any work which Tenant is obligated to perform
under this Lease, or for the purpose of complying with laws, regulations and
other directions of governmental authorities. Tenant shall permit Landlord to
use, and maintain and replace pipes and conduits in and through the Demised
Premises and to erect new pipes and conduits therein, Landlord may, during the
progress of any work in the Demised Premises, take all necessary materials and
equipment into said premises without the same constituting an eviction nor shall
the Tenant be entitled to any abatement of rent while such work is in progress
nor to any damages by reason of loss or interruption of business or otherwise.
Landlord shall, however, use diligence in making repairs, alterations, additions
or improvements so as to minimize any inconvenience to Tenant's business and
Landlord shall be responsible for restoring any damage caused to Tenant's
property. Throughout the term hereof Landlord shall have the right to enter the
Demised Premises at reasonable hours after prior notice for the purpose of
showing the same to prospective purchasers or mortgagees of the Building, and
during the last six months of the term for the purpose of showing the same to
prospective tenants. If Tenant is not present to open and permit any entry into
the Demised Premises during an emergency, Landlord or Landlord's agents may
enter the same whenever such entry may be necessary by master key or by force
provided reasonable care is exercised to safeguard Tenant's property and such
entry shall not render Landlord or its agents liable therefor, nor in any event
shall the obligations of Tenant hereunder be affected. Landlord shall have the
right at any time, without the same constituting an eviction and without
incurring liability to Tenant therefor to change the arrangement and/or location
of public entrances, passageways, doors, doorways, corridors, elevators, stairs,
toilets, or other public parts of the Building and to change the name, number or
designation by which the Building may be known. To effectuate the purposes of
this section, Tenant shall provide Landlord with a duplicate key(s) to allow
Landlord access to all portions of the Demised Premises. Failure to so provide
Landlord with such key(s) shall constitute a material breach of this Lease.
31
ARTICLE 30
Vaults
------
Section 30.01. No vaults, vault space or area, whether or not enclosed or
covered, not within the property line of the building is leased hereunder,
anything contained in or indicated on any sketch, blue print or plan, or
anything contained elsewhere in this Lease to the contrary notwithstanding.
Landlord makes no representations as to the location of the property line of the
Building. All vaults and vault space and all such areas not within the property
line of the Building, which Tenant may be permitted to use and/or occupy, is to
be used and/or occupied under a revocable license, and if any such license be
revoked, or if the amount of such space or area be diminished or required by any
Federal, State or Municipal authority or public utility, Landlord shall not be
subject to any liability nor shall Tenant be entitled to any compensation or
diminution or abatement of rent, nor shall such revocation, diminution or
requisition be deemed constructive or actual eviction. Any tax, fee or charge of
Municipal authorities for such vault or area shall be paid by Tenant.
ARTICLE 31
Bankruptcy
----------
Section 31.01. If at the date fixed as the commencement of the term of this
Lease or if at any time during the Demised Term there shall be filed by or
against Tenant in any court pursuant to any statute either of the United States
or of any state, a petition in bankruptcy or insolvency or for reorganization or
for the appointment of a receiver or trustee of all or a portion of Tenant's
property, and within 90 days thereof, Tenant fails to secure a dismissal
thereof, or if Tenant makes an assignment for the benefit of creditors or
petition for, or enters into, an arrangement for the benefit of creditors, this
Lease, at the option of Landlord, exercised within 30 days after notice of the
happening of any one or more of such events, may be canceled and terminated
effective upon giving written notice to the Tenant at the Demised Premises (but
if any of such events occur prior to the Commencement Date, this lease shall be
ipso facto canceled and terminated) and whether such cancellation and
termination occur prior to or during the term, neither Tenant nor any person
claiming through or under Tenant by virtue of any statute or of any order of any
court, shall be entitled to possession or to remain in possession of the Demised
Premises but shall forthwith quit and surrender the Demised Premises, and
Landlord, in addition to the other rights and remedies Landlord has by virtue of
any other provision herein or elsewhere in this lease contained or by virtue of
any statute or rule of law, may retain as liquidated damages, any rent, security
deposit or moneys received by it from Tenant or others in behalf of Tenant. If
this lease shall be assigned in accordance with its terms, the provisions of
this Article 31 shall be applicable only to the party then owning the Tenant's
interest in this lease.
Section 31.02. It is stipulated and agreed that in the event of the
termination of this Lease pursuant to Section 31.01 hereof, Landlord shall
forthwith, notwithstanding any other provisions of this Lease to the contrary,
be entitled to recover from Tenant as and for liquidated damages an amount equal
to the amount by which the rent reserved hereunder for the unexpired portion of
the Demised Term is less than the fair and reasonable rental value of the
Demised
32
Premises for the same period. In the computation of such damages the difference
between any installment of rent becoming due hereunder after the date of
termination and the fair and reasonable rental value of the Demised Premises for
the period for which such installment was payable shall be discounted to the
date of termination at the rate of eight (8%) percent per annum. If the Demised
Premises or any part thereof be relet by Landlord for the unexpired term of this
lease, or any part thereof, before presentation of proof of such liquidated
damages to any court, commission or tribunal, the amount of rent received upon
such reletting shall be deemed to be the fair and reasonable rental value for
the part or the whole of the premises so relet during the term of the reletting.
Nothing herein contained shall limit or prejudice the right of Landlord to prove
for and obtain as liquidated damages by reason of such termination, an amount
equal to the maximum allowed by any statute or rule of law in effect at the time
when, and governing the proceedings in which, such damages are to be proved,
whether or not such amount be greater, equal to, or less than the amount of the
difference referred to above.
ARTICLE 32
Rules and Regulations
---------------------
Section 32.01. Tenant, its servants, employees, agents, visitors and
licensees shall observe faithfully and comply strictly with the rules and
regulations set forth in Exhibit 11 attached hereto and made a part hereof.
Landlord shall have the right from time to time during the term of this Lease to
make reasonable changes in and additions to the rules thus set forth.
Section 32.02. Any failure by Landlord to enforce any rules and regulations
now or hereafter in effect, either against Tenant or any other tenant in the
Building, shall not constitute a breach hereunder or waiver of any such rules
and regulations. Notwithstanding the foregoing, Landlord shall not discriminate
in the enforcement of any rules and regulations Landlord has by virtue of any
other provision herein or elsewhere in this lease contained or by virtue of any
statute or rule of law, may retain as liquidated damages, any rent, security
deposit or moneys received by it from Tenant or others in behalf of Tenant. If
this lease shall be assigned in accordance with its terms, the provisions of
this Article 31 shall be applicable only to the party then owning the Tenant's
interest in this lease.
Section 32.03. It is stipulated and agreed that in the event of the
termination of this Lease pursuant to Section 31.01 hereof, Landlord shall
forthwith, notwithstanding any other provisions of this Lease to the contrary,
be entitled to recover from Tenant as and for liquidated damages an amount equal
to the amount by which the rent reserved hereunder for the unexpired portion of
the Demised Term is less than the fair and reasonable rental value of the
Demised Premises for the same period. In the computation of such damages the
difference between any installment of rent becoming due hereunder after the date
of termination and the fair and reasonable rental value of the Demised Premises
for the period for which such installment was payable shall be discounted to the
date of termination at the rate of eight (8%) percent per annum. If the Demised
Premises or any part thereof be relet by Landlord for the unexpired term of this
lease, or any part thereof, before presentation of proof of such liquidated
damages to any court, commission or tribunal, the amount of rent received upon
such reletting shall be deemed to be the fair and reasonable rental value for
the part or the whole of the premises so relet during the term of the reletting.
Nothing herein contained shall limit or prejudice the right of Landlord
33
to prove for and obtain as liquidated damages by reason of such termination, an
amount equal to the maximum allowed by any statute or rule of law in effect at
the time when, and governing the proceedings in which, such damages are to be
proved, whether or not such. amount be greater, equal to, or less than the
amount of the difference referred to above.
ARTICLE 33
Successors and Assigns
----------------------
Section 33.01. The covenants, conditions and agreements contained in this
Lease shall bind and enure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and, except as otherwise
provided herein, their assigns.
Section 33.02. The term "Landlord" wherever used in this Lease shall be
limited to mean and include only the owner or owners of the Real Property at the
time in question or a mortgagee in possession, so that in the event of any sale,
assignment or transfer of the Real Property, such owner, or mortgagee in
possession shall thereupon be released and discharged from all covenants,
conditions and agreements of Landlord hereunder; but such covenants, conditions
and agreements shall be binding upon each new owner, or mortgagee in possession
for the time being of the Real Property, until sold, assigned or transferred.
ARTICLE 34
Notice
------
Section 34.01. Any notice, request or demand permitted or required to be
given by the terms and provisions of this Lease, or by any law or governmental
regulation, either by Landlord of Tenant or by Tenant of Landlord, shall be in
writing. Unless otherwise required by such law or regulation such notice,
request or demand shall be given, and shall be deemed to have been served and
given by Landlord and received by Tenant, when Landlord (1) shall have caused
such notice, request or demand to be personally delivered or shall have
deposited such notice, request or demand by registered or certified mail, return
receipt requested mail enclosed in a securely closed postpaid wrapper, in a
United States Government general or branch post office, addressed to Tenant at
the Demised Premises, and (2) until Tenant has moved into the Demised Premises,
shall have caused such notice, request or demand to be personally delivered or
shall have deposited such notice, request or demand by registered mail enclosed
in a securely closed postpaid wrapper in such a post office addressed to Tenant
at its address as stated on the first page of this Lease. Such notice, request
or demand shall be given, and shall be deemed to have been served and given by
Tenant and received by Landlord, when Tenant shall have caused such notice
request or demand to be personally delivered or shall have deposited such
notice, request or demand by registered or certified mail, on a return receipt
requested basis, enclosed in a securely closed postpaid wrapper in such a post
office addressed to Landlord at ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇. Either party may, by notice as aforesaid designate a different address or
addresses for notices, requests or demands to it.
34
ARTICLE 35
No Waiver and Entire Agreement
------------------------------
Section 35.01. The failure of Landlord to seek redress for violation of, or
to insist upon the strict performance of, any covenant or condition of this
lease, or any of the Rules and Regulations set forth or hereafter adopted by
Landlord, shall not prevent a subsequent act, which would have originally
constituted a violation, from having all the force and effect of an original
violation. The receipt by Landlord of rent with knowledge of the breach of any
covenant of this Lease shall not be deemed a waiver of such breach. No provision
of this Lease shall be deemed to have been waived by Landlord, unless such
waiver be in writing signed by Landlord. No payment by Tenant or receipt by
Landlord of a lesser amount than the monthly rent herein stipulated shall be
deemed to be other than on account of the earliest stipulated rent, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment as rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such rent or pursue any other remedy in this lease provided.
Section 35.02. This Lease with the schedules and exhibits annexed hereto
contain the entire agreement between Landlord and Tenant and any executory
agreement hereafter made between Landlord and Tenant shall be ineffective to
change, modify, waive, release, discharge, terminate or effect an abandonment of
this Lease, in whole or in part, unless such executory agreement is in writing
and signed by the party against whom enforcement of the change, modification,
waiver, release, discharge, termination or the effecting of the abandonment is
sought.
Section 35.03. If any term or provision of this Lease shall, to any extent
be invalid or unenforceable, the remainder of this lease shall not be affected
thereby and the balance of the terms and provisions of this lease shall be valid
and enforceable to the fullest extent either hereunder or as permitted by law.
ARTICLE 36
Captions
--------
Section 36.01. The Table of Contents and Captions of Articles in this lease
are inserted only as a matter of convenience and for reference and they in no
way define, limit or describe the scope of this lease or the intent of any
provision thereof.
ARTICLE 37
Inability to Perform
--------------------
Section 37.01. This Lease and the obligation of Tenant to pay rent or
additional rent hereunder and perform and comply with all of the other covenants
and agreements hereunder on the part of Tenant to be performed and complied with
shall in no way be affected, impaired or excused (i) because of Landlord's delay
or failure to perform or comply with any of the
35
covenants or provisions hereunder on the part of Landlord to be performed or
complied with, nor (ii) because Landlord is unable to fulfill any of its
obligations under this Lease nor (iii) because Landlord is unable to supply or
is delayed in supplying any service expressly or impliedly to be supplied nor
(iv) because Landlord is unable to make, or is delayed in making any repair,
additions, alterations or decorations nor (v) because Landlord is unable to
supply or is delayed in supplying any equipment or fixtures, if Landlord is
prevented or delayed from doing any of the foregoing by reason of strike or
labor troubles or any other cause whatsoever wholly or partially beyond
Landlord's control including, but not limited to, force majeure or governmental
pre-emption in connection with a National Emergency or by reason of any rule,
order or regulation of any department or subdivision thereof of any government
agency or by reason of the conditions of supply and demand which have been or
are affected by war or other emergency.
ARTICLE 38
No Representations by Landlord
------------------------------
Section 38.01. Landlord or Landlord's agents have made no representations
or promises with respect to the Building, the Land or the Demised Premises
except as herein expressly set forth and no rights, easements or licenses are
acquired by Tenant by implication or otherwise except as expressly set forth in
the provisions of this Lease. The taking possession of the Demised Premises by
Tenant shall be conclusive evidence, as against Tenant, that Tenant accepts the
Demised Premises and that same were in good and satisfactory condition at the
time such possession was so taken.
ARTICLE 39
Failure to Give Possession
--------------------------
Section 39.01. If Landlord is unable to give possession of the Demised
Premises to Tenant on the Commencement Date, Landlord shall not be subject to
any liability for failure to give possession on said date and the validity of
the lease shall not be impaired under such circumstances, but the rent payable
hereunder shall be abated, provided Tenant is not responsible for the inability
to obtain possession, until after Landlord shall have given Tenant written
notice that the premises are substantially ready for Tenant's occupancy. If
permission is given to Tenant to enter into the possession of the Demised
Premises or to occupy premises other than the Demised Premises prior to the
Commencement Date, Tenant covenants, and agrees that such occupancy shall be
deemed to be under all the terms, covenants, conditions and provisions of this
lease, except as to the covenant to pay rent. The provisions of this Article are
intended to constitute "an express provision to the contrary" within the meaning
of Section 223-a of the New York Real Property Law.
36
ARTICLE 40
Glass
-----
Section 40.01. Landlord shall replace at the expense of the Tenant any and
all broken glass in the skylights, doors and walls in and about the Demised
Premises. Landlord may insure and keep insured all plate glass in the skylights,
doors and walls in the Demised Premises for and in the name of Landlord and
bills for the premiums therefor shall be rendered by Landlord to Tenant at such
times as Landlord may elect, and shall be due from and payable by Tenant when
rendered, and the amount thereof shall be deemed to be, and shall be paid as,
additional rent.
ARTICLE 41
Floor Load
----------
Section 41.01. Tenant shall not place a load upon any floor in the Demised
Premises heavier than the floor load per square foot which said floor was
designed to carry and as permitted by law. Landlord may prescribe the weight and
position of heavy equipment of any kind, including business machines and safes,
and Tenant shall pay for the cost of any installations necessary to permit the
safe installation of such equipment and to reduce vibration, noise and other
annoyances. Occupancy of the Demised Premises shall be limited to the number of
people per square foot of space permitted pursuant to the Zoning Resolution of
the City of New York as well as all other duly enacted laws, ordinances, orders
and regulations.
ARTICLE 42
Services and Equipment
----------------------
Section 42.01. Any service which Landlord is required to furnish pursuant
to the provisions of this Lease may, at Landlord's option, be furnished from
time to time in whole or in part by employees of Landlord or by one or more
third persons. Upon notice to Tenant, any such third person, and in particular
the managing agent of the Building from time to time, shall be deemed to be
agent of Landlord within the meaning of Section 14.01 hereof and entitled to be
indemnified and saved harmless as if it were Landlord within the meaning of
Section 20.01 hereof.
Section 42.02. So long as this Lease is in full force and effect Landlord
shall, at its cost and expense:
(a) Provide necessary elevator facilities on Business Days (defined as all
days except Saturdays, Sundays and all federal, state or local legal holidays,
as well as any other days recognized as holidays under applicable union
contracts) during "regular hours" (that is between the hours of 8:00 A.M. and
6:00 P.M.) and shall have at least one passenger elevator subject to call at all
other times thereby providing access to the Demised Premises, on a 24 hours a
day, 7 days a week basis. At Landlord's option, the elevators shall be operated
by automatic control or manual control, or by a combination of both of such
methods. In connection with Tenant's initial
37
move-in to the Demised Premises, Tenant shall pay only Landlord's actual costs
including standard building service fees for providing freight elevator service
after hours.
(b) Maintain and operate the base building heating system and shall,
subject to the design specifications of the heating system and to energy
conservation requirements of, and voluntary energy conservation programs
sponsored by, governmental authorities, furnish heat (hereinafter called "Heat
Service") to the Demised Premises. Heat service shall be provided, as may be
required for comfortable occupancy of the Demised Premises during regular hours
of Business Days during the heating season. If Tenant shall require heat service
during hours other than regular hours or on days other than Business Days and
Saturdays as provided above (hereinafter called "After Hours"), Landlord shall
furnish such After Hours heat service upon advance notice given the day before
from Tenant, and Tenant shall pay the building standard charge for the
electricity consumed by the HVAC system during After Hours pursuant to Article
11 hereof.
(c) Supply base building air conditioning (hereinafter referred to as "A/C
service") to the Demised Premises, subject to the design specifications of the
systems and to energy conservation requirements of, and voluntary energy
conservation programs sponsored by, governmental authorities, during regular
hours of Business Days from May 15 to September 15. Landlord represents that the
base building air conditioning is not operated on Tenant's electrical submeter.
If Tenant shall require A/C service during After Hours, Landlord shall furnish
such After Hours HVAC service upon advance notice the day before from Tenant,
and Tenant shall pay the building standard charge for the electricity consumed
by the HVAC System during After Hours pursuant to Article 11 hereof. All extra
charges shall be separately designated and calculated.
(d) Provide cleaning and janitorial services on Business Days as set forth
on Exhibit 4. Tenant shall pay to Landlord on demand the costs incurred by
Landlord for (a) extra cleaning work in the demised premises required because of
(i) misuse or neglect on the part of Tenant or its employees or visitors, (ii)
use of portions of the demised premises for preparation, serving or consumption
of food or beverages, data processing, or reproducing operations, private
lavatories or toilets or other special purposes requiring greater or more
difficult cleaning work than office areas, (iii) unusual quantity of interior
glass surfaces, (iv) non-building standard materials or finishes installed by
Tenant or at its request and (b) removal from the Demised Premises and the
Building of so much of any refuse and rubbish of Tenant as shall exceed that
ordinarily accumulated daily in the routine of business office occupancy.
Landlord, its cleaning contractor and their employees shall have After Hours
access to the Demised Premises and the free use of light, power and water in the
` demised premises as reasonably required for the purpose of cleaning the
Demised Premises in accordance with Landlord's obligations hereunder.
(e) Furnish water for lavatory and drinking and office cleaning purposes.
If Tenant requires, uses or consumes water for any other purposes, Tenant agrees
to Landlord installing a meter or meters or other means to measure Tenant's
water consumption, and Tenant further agrees to reimburse Landlord for the cost
of the meter or meters and the installation thereof, and to pay for the
maintenance of said meter equipment and/or to pay Landlord's cost of other means
of measuring such water consumption by Tenant including standard building
service fees. Tenant
38
shall reimburse Landlord for the cost of all water consumed, as measured by said
meter or meters or as otherwise measured, including sewer rents.
(f) Landlord shall maintain and clean all Common Building Facilities; shall
be responsible to remove snow and ice from the common building areas and
facilities and provide access to the building for the Tenant.
(g) Landlord shall provide vermin extermination and repair and replacement
of any item in the building damaged by vermin.
(h) Landlord shall maintain a concierge desk with a concierge present at
all times during Business Hours.
(i) (1) Except as otherwise specifically set forth herein, Landlord shall
maintain, repair and replace as necessary, keep in good order, safe and clean
condition, the plumbing, sprinkling, HVAC, electrical and mechanical lines and
equipment associated therewith, elevators and boilers, broken and damaged glass;
(2) utility and trunk lines, tanks and transformers and the interior and
exterior structure of the building, including the roof, exterior walls, bearing
walls, support beams, floor slabs, foundations support columns and window
frames; (3) common building facilities located within or outside the building
including, the common entrances, corridors, interior and exterior doors and
windows, stairways, lavatory facilities and access ways therefore.
Section 42.03. Any use of the Demised Premises, or any part thereof, or
rearrangement of partitioning in a manner that interferes with normal operation
of the heat and air-conditioning systems (hereinafter called the systems)
servicing the same, may require changes in such systems. Such changes, so
occasioned, shall be made by Tenant, at its expense, subject to Landlord's prior
written approval of such changes, which approval shall not be unreasonably
withheld. Tenant shall not make any change, alteration, addition or substitution
to the air-conditioning system without Landlord's prior written approval.
Section 42.04. Landlord reserves the right without any liability
whatsoever; or abatement of fixed annual rent, or additional rent, to stop the
heating, air- conditioning, elevator, plumbing, electric and other systems when
necessary by reason of accident or emergency or for repairs, alterations,
replacements or improvements. If possible, Tenant shall receive reasonable
advance notice.
Section 42.05. Landlord may fix in its reasonable discretion, at any time
and from time to time, the hours during which, and the regulations under which,
foods and beverages may be brought into the Building by persons other than the
regular employees of Tenant.
Section 42.06. If the Tenant elects to hire maintenance contractors for its
own use, then Tenant agrees to employ such office maintenance contractors as
Landlord may from time to time designate, for all waxing, polishing, lamp
replacement, cleaning and maintenance work in the Demised Premises, provided
that the quality thereof and the charges therefor are reasonably comparable to
that of other contractors. Tenant shall not employ any other contractor without
Landlord's prior written consent. Nothing herein is intended to reduce the
cleaning and maintenance services to be provided by Landlord.
39
Section 42.07. (a) Tenant, at its sole cost and expense, shall comply with
all Legal Requirements pertaining to the collection, sorting, separation, and
recycling of waste products, garbage, refuse, and trash. Tenant shall sort and
separate such waste products, garbage, refuse, and trash to such categories as
provided by applicable legal and building standard requirements. Each separately
sorted category of waste products, garbage, refuse, and trash shall be placed in
separate receptacles approved by Landlord and shall be removed from the Demised
Space by Landlord as part of its services to be provided hereunder; except that
any medical or hazardous waste, if any, shall remain the responsibility of the
Tenant to remove from the Building, unless some exist due to the acts or
omissions of the Landlord. (b) Landlord reserves the right to refuse to collect
or accept from Tenant any waste products, garbage, refuse, or trash that is not
separated and sorted as required by applicable legal requirements and building
standards and to require Tenant to arrange for the collection thereof, at
Tenant's sole cost and expense, utilizing a contractor satisfactory to Landlord.
Tenant shall pay all costs, expenses, fines, penalties, or damages that may be
imposed on Landlord or Tenant by reason of Tenant's failure to comply with the
provisions of this Article 42.07.
Section 42.08. Landlord will not be required to furnish any other services,
except as otherwise provided in this Lease. Landlord agrees to provide services
as required and set forth herein, on a non-discriminatory basis.
ARTICLE 43
Untenantability
---------------
Section 43.01. Anything to the contrary contained herein notwithstanding,
if the Demised Premises are rendered untenantable by any event, except one due
to the actions of the Tenant, its employees or invitees, Tenant shall have the
right to terminate this Lease, pursuant to the terms of this Article. The term
untenantable is intended to mean that Tenant cannot for more than thirty (30)
consecutive days conduct its business in the Demised Premises. If Landlord and
Tenant shall disagree as to whether or not Tenant can conduct its business in
the Demised Premises, Tenant's right to terminate shall accrue only after the
matter shall have been submitted to arbitration and the arbitrator has
determined that the event or condition has in fact objectively and substantially
interfered with Tenant's conduct of its operations in the Demised Premises and
in the event of such a determination favorable to Tenant, Tenant's right to
terminate shall relate back to, and be effective as of, the date on which Tenant
has given Landlord notice of its exercise of such right to terminate.
ARTICLE 44
Moving
------
Section 44.01. Tenant shall notify Landlord of the date Tenant intends to
move into, or out of, the Demised Premises, by a writing received by Landlord at
least forty-eight (48) hours prior to such date.
40
Section 44.02. Moving into or out of the Demised Premises shall be under
and pursuant to the reasonable and direct supervision of the Landlord, which
shall designate the reasonable and permissible times for same, including the
permissible use of elevators and hand trucks and dollies.
Section 44.03. Moving into or out of the Demised Premises shall be at
Tenant's sole cost and expense. Tenant agrees to use reasonable care required to
preserve and maintain all parts of the Demised Premises and the Building,
including elevators, if any, and to avoid interference with the use and
enjoyment of same by other Tenants of the Building. Tenant agrees to indemnify,
defend and hold harmless Landlord for any damage or destruction of the Building
or injury to persons resulting from Tenant moving into or out of the Demised
Premises; including any action or proceeding by any party claiming to have been
injured personally or otherwise as a result of Tenants conduct, whether or not
such action or proceeding is meritorious. This obligation shall come into effect
regardless of whether the conduct or act giving rise to the damage or injury
shall have been performed by the Tenant itself or by an agent, hired laborer or
independent contractor of Tenant.
ARTICLE 45
Negative Covenants
------------------
Section 45.01. Tenant will not disfigure or deface any part of the
building, or suffer the same to be done, except so far as may be necessary to
affix such trade fixtures as are herein consented to by Landlord; Tenant will
not obstruct, or permit the obstruction of the street or the sidewalk adjacent
thereto; will not permit the accumulation of waste or refuse matter. Tenant will
not obstruct or permit the obstruction of the light, halls, stairway or
entrances to the building, and will not erect or inscribe any sign, signals or
advertisements unless and until the style and location thereof have been
approved by Landlord; and if any be erected or inscribed without such approval,
Landlord may remove the same at the sole cost and expense of Tenant. No water
cooler, air conditioning unit or system or other apparatus shall be installed or
used without the prior written consent of Landlord.
ARTICLE 46
Window Cleaning
---------------
Section 46.01. Tenant agrees that it will not require, permit, suffer, nor
allow the cleaning of any window, or windows, in the Demised Premises from the
outside (within the meaning of Section 202 of the Labor Law) unless the
equipment and safety devices required by law, ordinance, regulation or rule,
including, without limitation, Section 202 of the New York Labor Law, are
provided and used, and unless the rules, or any supplemental rules of the
Industrial Board of the State of New York are fully complied with; and Tenant
hereby agrees to indemnify the Landlord, Owner, Agent, Manager and/or
Superintendent, as a result of Tenant's requiring, permitting, suffering, or
allowing any window, or windows in the Demised Premises to be cleaned from the
outside in violation of the requirements of the aforesaid laws, ordinances,
regulations and/or rules.
41
ARTICLE 47
Landlord's Work
---------------
A. Tenant, at Tenant's expense, shall prepare such plans and specifications
(which plans, and specifications are hereinafter called the "Plans") which shall
contain complete information (including engineering required, if any) and
dimensions necessary and sufficient for the construction and finishing of the
Demised Premises by Landlord. The Plans shall be submitted by Tenant to Landlord
upon execution and delivery of this lease. Any revisions to the Plans required
by Landlord shall be performed by Tenant within five (5) business days after
demand by Landlord.
In accordance with Plans, Landlord, at Landlord's expense, subject to the
Cap, as described below, and except as otherwise expressly specified in this
lease, will cause its designated contractor to make and complete in and to the
Demised Premises the work and installations (hereinafter called "Landlord's
Work") specified in Exhibit III annexed hereto (which unless otherwise
specifically provided herein, shall include such removal as may be required of
existing installations, shall be of a material, design, capacity, quality,
finish and color of the standard adopted by Landlord for the building and, where
quantities are hereinafter specified, such quantities shall include any existing
installations to the extent usable and used in the performance of Landlord's
Work). Tenant shall utilize the services of Landlord's designated architect in
connection with the preparation of the Plans. The fees charged by said architect
shall be considered part of the Work Cost, as defined below, payable by
Landlord.
Notwithstanding any provision of this lease to the contrary, any requests
for revisions to the Plans or other notices to be given to Tenant by Landlord
pursuant to this Article may be given to Tenant's designated representative,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, either (i) delivered personally or (ii) sent by certified mail,
return receipt requested, or overnight courier, with receipt acknowledged, to:
Tenant, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇.
B. The term "Work Cost" as used in this Article shall mean the actual cost
(including the cost of applicable insurance premiums and the cost of
architectural services and engineering) to Landlord of furnishing and installing
such part of Landlord's Work, subject to the Cap, as defined below.
C. In all instances where Tenant is required to supply information or
authorizations with regard to Landlord's Work, Tenant shall supply the same
within five (5) business days after written request therefor by Landlord.
D. Except as provided in this Article, Landlord shall not be required to
spend any money or to do any work to prepare the Demised Premises for Tenant's
occupancy. The specification of Landlord's Work represents the limit of
Landlord's responsibilities in connection with the preparation of the Demised
Premises and except as so provided, Tenant shall take the Demised Premises "AS-
IS". The Demised Premises shall be delivered free of asbestos containing
materials and Landlord's Work shall comply with applicable law. Any other
improvements, alterations or additions shall be performed by Tenant, but subject
to all of the terms, conditions and covenants of this lease.
▇▇
▇. ▇▇▇▇▇▇▇▇ can make no representation of the date on which it will
substantially complete Landlord's Work and, Landlord shall be under no penalty
or liability to Tenant whatsoever by reason of any delay in such performance and
this lease shall not be affected thereby.
F. Tenant shall be permitted to enter into the Demised Premises for
installation of its machinery, equipment and fixtures and performance of its
work, all as permitted by this lease prior to the Commencement Date at its sole
risk, provided that such entry and work do not interfere in any way with
Landlord's performance of the Landlord's Work. At any time during such period of
prior entry, if Landlord notifies Tenant that Tenant's entry or work is
interfering with or delaying Landlord's performance of Landlord's Work, Tenant
shall forthwith discontinue any further work and shall remove from the Demised
Premises, and shall cause its workmen or contractors to remove therefrom, any
equipment, materials or installations which are the subject of Landlord's
notice.
G. All work performed by Landlord, shall, upon installation, become
Landlord's property and shall be surrendered at the expiration or sooner
termination of the term of this lease, in good condition, reasonable wear and
tear excepted.
H. 1. For the purposes of this Article, Landlord's Work shall be deemed to
be substantially completed when all major construction is completed, (or when
all major construction would have been completed but for delays caused by Tenant
as provided in Paragraph 2 below or otherwise) although (i) minor items of
construction or improvements which do not unreasonably interfere with Tenant's
ability to carry on its business in the Demised Premises and/or (ii) any
Additional Work is not completed. Tenant shall within thirty (30) days after the
Commencement Date of this lease submit to Landlord a "punch-list" of such minor
unfinished work which punch-list items, after approval by Landlord, will be
diligently completed. Tenant shall periodically inspect Landlord's Work and make
any objections thereto, if called for, without delay, so as to mitigate changes,
delays and costs.
2. Tenant specifically acknowledges and agrees that the Work Cost
will increase and there will be delay in completion of Landlord's Work by reason
of (i) Tenant's failure or unreasonable delay to consult with Landlord to enable
Landlord to prepare plans or specifications; (ii) unreasonable delay or failure
by Tenant in supplying information, approving estimates or giving authorization;
(iii) Tenant's making changes or additions in the plans or specifications or
materials originally requested; (iv) interference by Tenant or Tenant's
contractors with the performance of Landlord's Work; (v) delay or failure of any
special or additional new materials selected by Tenant; (vi) Additional Work
(without regard to any time periods granted to Tenant hereunder for the approval
of estimates and/or revisions of the Workletter); (vii) any resubmissions or
revisions of the Plans (without regard to any time periods granted to Tenant
hereunder for making such resubmissions or revisions); or (viii) work,
materials, components and other items specified by Tenant which are not building
standard, and/or are not readily available to Landlord or Landlords' designated
contractor, or require special manufacturing, fabrication or installation, or
require additional time to obtain or install thereby delaying the date that
Landlord's Work would otherwise be substantially completed, including but not
limited to, special wallcoverings, light fixtures, entrance doors, woodwork,
glass, stairways, door hardware, floor coverings and security and communications
devices.
43
Landlord shall not be responsible for any of the delays set forth in this
Article, and, at Landlord's option, the term of this lease shall commence five
(5) business days after the date on which Landlord's Work would have been
substantially completed if not for the occurrence of any such delays. In
addition, Tenant shall reimburse Landlord, as additional rent, for any and all
losses, costs and damages suffered by Landlord caused by any such delays.
I. In the event Landlord has agreed to perform any work over and above
Landlord's Work (the "Additional Work") then, prior to commencing such
Additional Work, Landlord or Landlord's contractor shall advise Tenant (the
"Estimate") of the net increase, if any, in the Work Cost by reason of the
performance of such Additional Work. Landlord will not unreasonably withhold its
consent to any Additional Work which does not change the scope of Landlord's
Work as shown on the Plans and will not delay the performance of Landlord's
Work. Within five (5) days after Landlord's submission of the Estimate, Tenant
shall, in writing, either accept or reject the Estimate. Tenant's failure either
to accept or reject the Estimate within said five (5) day period shall be deemed
rejection thereof. Tenant may only accept the Estimate by countersigning a copy
thereof and returning same to Landlord together with a sum equal to twenty (20%)
percent of the Estimate. Thereafter, Tenant shall pay to Landlord, as additional
rent, the balance of the cost of the Additional Work at such time or times as
agreed to, but in no event shall the balance be paid later than the completion
of the Additional Work, upon rendition of a reasonably detailed invoice
therefor.
J. If Tenant shall fail to make timely payment of any sums payable to
Landlord pursuant to this Article, then, in addition to all other rights and
remedies afforded Landlord in the event of such non-payment, Landlord may,
without notice to Tenant, discontinue the performance of Landlord's Work and/or
Additional Work (or any items thereof) until such time as Tenant makes payment
to Landlord of all such past due sums and provides Landlord with adequate
assurance of the timely payment of all additional sums which may or shall be
payable by Tenant pursuant to this Article. Any delay resulting from the
discontinuance of Landlord's Work and/or Additional Work pursuant to this
Paragraph shall be deemed a delay caused by Tenant.
K. Notwithstanding anything contained to the contrary in this lease, the
total cost of Landlord's Work which Landlord shall provide Tenant without charge
and for building installations performed shall be SEVEN HUNDRED SIXTY-FIVE
THOUSAND DOLLARS ($765,000.00) (the "Cap"). Tenant hereby acknowledges that if
the building's engineer is required either for plumbing or sprinklers on
Saturdays, Sundays and holidays or before 7:30 a.m. or after 6:00 p.m. Monday
through Friday, Tenant still pay for same at the rate of $50.00 per hour.
Furthermore, if Tenant requires the use of the freight elevator on Saturdays,
Sundays or holidays, or before 7:30 a.m. or after 6:00 p.m. Monday through
Friday, Tenant shall pay for same at the rate of $50.00 per hour. If the cost of
Landlord's Work (including the cost of applicable insurance premiums and the
cost of engineering, if any) shall exceed the Cap, Tenant expressly acknowledges
and agrees that it shall be solely responsible for payment of all costs above
the Cap.
44
ARTICLE 48
Cancellation Option
-------------------
Section 48.01. Provided Tenant is, and has been throughout the term of this
lease, (up to and including the Vacate Date, as defined below) fully compliant
with all of the terms, conditions and provisions herein imposed on Tenant, then
Tenant shall have a one-time, irrevocable opportunity to cancel this lease
agreement, subject to and conditioned upon satisfaction of the following
provisions and requirements:
(i) Tenant shall notify Landlord in writing of its election to cancel this
lease no later than the fourth anniversary of the date on which Tenant is first
obligated to pay rent hereunder, pursuant to Article 3 and Schedule A hereof; as
to which date time shall be of the essence (hereinafter the "Cancellation
Notice");
(ii) The effective date of the cancellation shall be exactly twelve (12)
full months following Landlord's receipt of the Cancellation Notice from Tenant;
(iii) Upon delivery of the Cancellation Notice by Tenant, and included
therewith, Tenant shall provide for Landlord a certified check, drawn on a New
York clearinghouse bank, in the amount of $330,450.00, which payment shall not
constitute rent but shall be deemed a cancellation fee and shall be paid in
addition to all rents and additional rent payments due from Tenant up to and
including the date Tenant actually vacates and surrenders possession of the
Demised Premises pursuant to this Article (the "Vacate Date");
(iv) Up to and including the Vacate Date, all of the terms, requirements,
obligations and impositions applicable against Landlord and Tenant pursuant to
this lease shall continue in full force and effect;
(v) On the Vacate Date, this lease agreement shall be deemed terminated as
if it shall have expired pursuant to its terms, whereupon neither party shall
have any continuing rights or liabilities to the other, except that Landlord
shall thereafter promptly refund Tenant's security deposit, paid pursuant to
Article 3 hereof.
ARTICLE 49
Right of First Offer
--------------------
Section 49.01. Provided Tenant is, and has been throughout the term of this
lease, fully compliant with all of the terms, conditions and provisions herein
imposed on Tenant, then Tenant shall have the first right, on a one-time-per-
space basis, to make an irrevocable offer to lease rentable spaces on the
twentieth (20th) floor in the Building, when, as and if rentable space(s) on
said floor become available for rental. This right, however, is expressly made
subject to any agreements, terms, rights or entitlements of any other tenants or
occupants of the Building as of the Commencement Date, as defined herein. Upon
Landlord becoming aware of the availability of rentable space(s) on said floor,
Landlord shall notify Tenant of same in writing. Tenant will then have fifteen
(15) days from receipt of Landlord's notice regarding the availability of a
rentable space to notify Landlord of its desire to lease such space and said
notice from Tenant
45
shall set forth all of the material terms of Tenant's offer. Landlord may accept
or reject Tenant's offer, at its sole and absolute discretion; however, Landlord
shall not be permitted to reject Tenant's offer and then lease the subject space
to a third party on terms less favorable to Landlord than those offered by
Tenant. If Tenant does not respond to Landlord's notice regarding the impending
availability of an available space, Tenant shall be deemed to have waived any
rights it may have hereunder. Notwithstanding anything set forth herein,
Landlord shall have the right to retain any space on the 20th floor for its own
use, in which case the provisions of this Article shall not apply. Moreover,
Tenant's rights hereunder are not transferable and are deemed waived and
terminated in the event of an assignment of this lease or a subletting of the
Demised Premises.
ARTICLE 50
Renewal Option
--------------
Section 50.01. Provided Tenant has fully and faithfully complied with all
of the terms, provisions and covenants of this lease agreement, Tenant shall
have the right, on a one time, irrevocable basis to renew the Demised Term of
this lease for one additional five (5) year term. Such election to renew by
Tenant must be made in writing not later than twelve (12) months prior to the
expiration of the original Demised Term, as to which date time is of the
essence. In the event Tenant so elects to renew the term of this lease pursuant
hereto, the Annual Base Rental payable by Tenant in each year of the renewal
term shall be an amount equal to the annual fair market value ("FMV') at the
time of Tenant's notice of its election to renew. If Landlord and Tenant are
unable to agree as to the FMV, within thirty (30) days of the receipt of the
Tenant's notice to renew hereunder, then each party shall immediately thereafter
retain an independent appraiser who is a member of MAI who shall within thirty
(30) days of being retained prepare an appraisal report setting forth the FMV
rental of the property. Each party shall pay the fees and expenses of their
respective appraiser. In the event the reports of the two appraisers results in
a FMV rent difference of $27,450.00 per year or less, then the Annual Base
Rental shall be that amount which is the average of the two stated annual FMV's.
If, on the other hand, the reports yield a value difference of more than
$27,450.00 per year, then the two appraisers shall select a third appraiser,
whose fees shall be paid by the parties hereto on an equal (50/50) basis. In
such case such third appraiser shall prepare a report, also within thirty (30)
days of being retained, setting forth its analysis of the annual FMV rental of
the property, and the parties agree that the annual rental value determined by
said third appraiser shall be the Annual Base Rental amount to be paid by the
Tenant; provided, however, that said amount shall in no event be less than the
rental value determined by the appraiser selected by the Tenant nor more than
the rental amount arrived at by the appraiser selected by the Landlord.
46
IN WITNESS WHEREOF, Landlord and Tenant have respectively signed this Lease
as of the day, month and year set forth on the first page hereof.
Witness for Landlord BANK OF COMMUNICATIONS
--------------------------- ---------------------------
By:
Witness for Tenant LOGICAL DESIGN SOLUTIONS, INC.
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ /s/ E. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------- ---------------------------
By:
47
SCHEDULE "A"
------------
RENT
----
For the period from the Commencement Date to the Expiration Date, the
Annual Base Rental payable by Tenant is FIVE HUNDRED FORTY-NINE THOUSAND DOLLARS
($549,000.00) per annum, payable in equal monthly installments of FORTY-FIVE
THOUSAND SEVEN HUNDRED FIFTY DOLLARS ($45,750.00) per month on the first day of
each month.
Notwithstanding anything to the contrary set forth herein, Tenant shall be
entitled to a credit against the monthly base rental amount due and payable for
the period during which Landlord's Work, pursuant to Article 47 hereof, is being
performed as well as for the first five (5) full months following the
substantial completion of Landlord's Work, provided that and conditioned upon
Tenant's full compliance with all of the covenants and terms of this lease.
48
EXHIBIT I
DESCRIPTION OF DEMISED PREMISES
-------------------------------
[TO BE INSERTED]
49
[FLOOR PLAN]
50
[FLOOR PLAN]
51
EXHIBIT II
RULES AND REGULATIONS
---------------------
1. The rights of tenants in the entrances, corridors, and elevators of the
Building are limited to ingress to and egress from the tenants' premises for the
tenants and their employees, licensees and invitees, and no tenant shall use, or
permit the use of, the entrances, corridors, or elevators for any other purpose.
No tenant shall invite to the tenant's premises, or permit the visit of, persons
in such numbers or under such conditions as to interfere with the use and
enjoyment of any of the plazas, entrances, corridors, elevators and other
facilities of the Building by other tenants. Fire exits and stairways are for
emergency use only, and they shall not be used for any other purposes by the
tenants, their employees, licensees or invitees. No tenant shall encumber or
obstruct, or permit the encumbrances or obstruction of any of the sidewalks,
plazas, entrances, corridors, elevators, fire exits or stairways of the
Building. The Landlord reserves the right to control, supervise and/or operate
the public portions of the Building and the public facilities, as well as
facilities, furnished for the common use of the tenants, including elevators, in
such manner as it deems best for the benefit of the tenants generally.
2. The cost of repairing any damage to the public portions of the Building
or the public facilities or to any facilities used in common with other tenants,
caused by a tenant or the employees, licensees or invitees of the tenant, shall
be paid by such tenant.
3. Landlord may refuse admission to the Building outside of ordinary
business hours to any person not known to the watchman in charge, if any, or not
having a pass issued by the Landlord or not properly identified, and may require
all persons admitted to or leaving the Building outside of ordinary business
hours to register. Tenant's employees, agents and visitors shall be permitted to
enter and leave the Building whenever appropriate arrangements have been
previously made between the Landlord and the Tenant with respect thereto. Each
Tenant shall be responsible for all persons for whom he requests such permission
and shall be liable to the Landlord for all acts of such persons. Any persons
whose presence in the Building at any time shall, in the judgment of the
Landlord, be prejudicial to the safety, character, reputation and interests of
the Building or its tenants may be denied access to the Building or may be
rejected therefrom. In case of invasion, riot, public excitement or other
commotion the Landlord may prevent all access to the Building during the
continuance of the same, by closing the doors or otherwise, for the safety of
the tenants and protection of property in the Building. The Landlord may require
any person leaving the Building with any package or other object to exhibit a
pass from the tenant from whose premises the package or object is being removed,
but the establishment and enforcement of such requirement shall not impose any
responsibility on the Landlord for the protection of any tenant against the
removal of property from the premises of the tenant. The Landlord shall, in no
way, be liable to any tenant for damages or loss arising from the admission,
exclusion or ejection of any person to or from the tenant's premises or the
Building under the provisions of this rule.
4. No tenant shall obtain or accept for use in its premises ice, drinking
water, food and beverage, (other than an employee's repast), towel, barbering,
boot blacking, floor polishing, lighting, maintenance, cleaning or other similar
services from any persons not authorized by the Landlord in writing to furnish
such services, provided always that the charges for such services
52
by persons authorized by the Landlord are not excessive. Such services shall be
furnished only at such hours, in such places within the tenant's premises and
under such regulations as may be fixed by the Landlord.
5. No signs, awnings or other projections on, over or around the windows
shall be installed by any tenant, and only such signage as is permitted in
writing by the Landlord, shall be used in a tenant's premises.
6. There shall not be used in any space, or in the public halls of the
Building, either by the Tenant or by jobbers or others, in the delivery or
receipt of merchandise, any hand trucks or dollies except those approved or
supplied by the Landlord.
7. All entrance doors in each tenant's premises shall be left locked when
the tenant's premises are not in use. Entrance doors shall not be left open at
any time. All windows in each tenant's premises shall be kept closed at all
times when the premises are not in use.
8. No noise, including the playing of any musical instruments, radio or
television, which, in the judgment of the Landlord, might disturb other tenants
in the Building shall be made or permitted by any tenant, and no cooking shall
be done in the Tenant's premises, except as expressly approved by the Landlord.
Nothing shall be done or permitted in any tenant's premises, and nothing shall
be brought into or kept in any tenant's premises, which would impair or
interfere with any of the Building services or the proper and economic heating,
cleaning or other servicing of the Building or the premises, or the use or
enjoyment by any other tenant of any other premises, nor shall there be
installed by any tenant any ventilating `air conditioning, electrical or other
equipment of any kind which, in the judgment of the Landlord, might cause any
such impairment or interference. No dangerous, inflammable, combustible or
explosive object or material shall be brought into the Building by any tenant or
with the permission of any tenant.
9. Tenant shall not permit any cooking within the Demised Premises.
10. No acids, vapors or other materials shall be discharged or permitted to
be discharged into the waste lines, vents or flues of the Building which may
damage them. The water and wash closets and other plumbing fixtures in or
serving any tenant's premises shall not be used for any purpose other than the
purpose for which they were designed or constructed.
11. No signs, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by any tenant on any part of the outside or inside
the premises, including windows, or the Building without the prior written
consent of Landlord. In the event of the violation of the foregoing by any
tenant, Landlord may remove the same without any liability, and may charge the
expense incurred by such removal to the tenant or tenants violating this rule.
Interior signs and lettering on doors and elevators as and if permitted by
Landlord shall be inscribed, painted, or affixed for each tenant by Landlord at
the expense of such tenant, and shall be of a size, color and style prescribed
by Landlord. Landlord shall have the right to prohibit any advertising by any
tenant which impairs the reputation of the Building or its desirability as a
building for professional offices, and upon written notice from Landlord, Tenant
shall refrain from or discontinue such advertising.
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12. No additional locks or bolts of any kind shall be placed upon any of
the doors or windows in any tenant's premises and no lock on any door therein
shall be changed or altered in any respect. Duplicate keys for a tenant's
premises shall be procured only from the Landlord, which may impose a reasonable
charge therefor. Upon the termination of a tenant's lease, all keys to the
tenant's premises shall be delivered to the Landlord.
13. No tenant shall ▇▇▇▇, paint, nail, tack or drill into, or in any other
way deface any part of the Building or the premises demised to such tenant. No
boring, cuffing or stringing of wire shall be permitted, except with the prior
written consent of Landlord, and as Landlord may direct. No tenant shall install
any resilient tile or similar floor covering in the premises demised to such
tenant except in a manner approved by Landlord. However, ordinary activities
required to decorate and furnish the Demised Premises, such as hanging pictures,
drapes and so forth shall be permitted without the Landlord's prior written
consent.
14. Smoking and the carrying of lighted cigars, cigarettes and pipes is
specifically prohibited in all elevators of the building at all times.
15. The tenants' employees shall not loiter around the hallways, stairways,
elevators, front, roof or any other part of the building used in common by the
occupants thereof.
16. Tenant shall not allow any accumulation of refuse or debris of any kind
to remain in or about the Premises or the Building.
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EXHIBIT III
CLEANING AND JANITORIAL SERVICES
--------------------------------
The Landlord shall provide the following night services excluding strikes
or union and/or building holidays on a five day weekly schedule:
I. Service Areas/Elevator Lobby
----------------------------
A. Daily
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1. Vacuum carpet at elevator lobby, including freight area (if
applicable), nightly and spot clean as necessary.
2. Damp wipe and dry elevator call plaques and multi-directional
signage at multi tenant floors.
3. Remove finger and smudge marks from elevator hatch doors, frames,
adjacent walls, and entrance doors.
4. Sweep and damp mop VCT floor at freight area.
5. Police fire stairways daily. Sweep as needed on a daily basis.
6. Clean and dust fire hoses, extinguishers and other Life/Safety
equipment as often as needed.
7. Keep slop sink rooms in clean and orderly condition.
B. Weekly
------
1. Spray buff VCT floor at freight areas.
2. Clean and vacuum elevator saddles.
C. Monthly (or as needed)
----------------------
Fire Stairs - Mop at least once per month. Damp wipe and clean walls,
metal railings, standpipes and hose racks as required, but no less
than once per month.
D. Quarterly
---------
High dusting at light fixtures, elevator hall lanterns and diffusers,
grills, etc.
II. Tenant Office Space
-------------------
A. Daily
-----
1. Carpet sweep nightly. Spot clean as necessary.
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2. Hand dust and wipe clean all horizontal surfaces with a
chemically treated cloth including all furniture and window unit
covers, moldings, door louvers, radiators, chair rails and trim
nightly.
3. Remove all finger marks and smudges from all vertical surfaces,
including doors, door frames, around light switches and private
entrance glass and elevator doors and lambs (at full floor
tenants) nightly.
4. Empty and clean all waste receptacles and recyclable paper
receptacles and remove to designated areas nightly. Plastic
liners should be provided for waste receptacles only. Replace old
plastic liners as needed, but not less than one (1) time per
week.
5. Wash clean all water fountains and coolers nightly.
6. Dust all telephones with treated cloth nightly.
7. Clean all glass furniture tops. For textile or similar desk top
surfaces, wipe clean with a damp cloth nightly.
8. Sweep all private stairways.
9. Dry mop all VCT flooring and/or raised flooring.
B. Weekly
------
1. Vacuum-clean carpet.
2. Damp wipe all waste baskets.
C. Monthly
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Mop all private stairway structures.
D. Quarterly
---------
Do all High Dusting (that which is above eye level) quarterly, unless
otherwise specified, including, but not limited to, the following:
1. Vacuum and dust all pictures, frames, charts, graphs and similar
wall hangings not reached in nightly cleaning.
2. Vacuum and dust all vertical surfaces such as walls, partitions,
door bucks and ventilating louvers, grilles, high moldings and
other surfaces not reached in nightly cleaning.
3. Dust all overhead pipes, sprinklers, ventilating and air
conditioning louvers, ducts, high moldings and other high areas
not reached in nightly cleaning.
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4. Dust all vertical and horizontal mini blinds. Dust all window
frames.
5. Dust exterior of lighting fixtures.
6. Vacuum and dust ceiling tiles around ventilators and clean air
conditional diffusers as required.
7. Dust and spot clean all fire extinguishers as required.
III. Common Area Lavatories
----------------------
A. Daily
-----
Note: It is the intention to keep lavatories thoroughly clean and not to
use a disinfectant to mask odors. If disinfectants are necessary, an
odorless disinfectant shall be used.
1. Scour, wash and disinfect all basins, bowls and urinals with an
approved germicidal detergent solution, making sure to clean the
inner lip of bowls and urinals. Leave cleaner in bowl and do not
flush. Similarly, pour one ounce of bowl cleaner into urinal
after cleaning and do not flush.
2. Wash and disinfect both sides of all toilet seats with an
approved germicidal detergent solution. Leave toilet seat in
upright position when completed.
3. Damp wipe all ledges, toilet partitions and doors. Remove
fingertips, streaks, smudges and foreign matter from all
surfaces.
4. Spot clean light switches, doors and walls.
5. Sweep and wet mop all floor areas, including tile edges and
baseboards, with an approved germicide. Rinse with clear water.
6. Clean and polish all mirrors, soap dispensers, flushometers,
shelves, piping, toilet hinges, disposal containers and any other
bright work and enameled surfaces using a detergent/disinfectant
and water.
7. Furnish and refill all toilet tissue, paper towel and sanitary
napkin dispensers. Furnish and refill soap in dispensers, check
operation of all dispensers.
8. Report any and all mechanical deficiencies, dripping faucets,
lighting problems, etc. to Property Management Office.
9. Empty and clean paper towel and sanitary napkin disposal
receptacles, transport waste to designated location and replace
plastic liners. Contractor to maintain any and all dispensers.
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B. Monthly
-------
1. Wash any and all diffusers, grilles, toilet partitions and doors,
and tile walls with disinfectant/detergent.
2. Machine scrub floors.
3. Scrub stone saddles.
C. Semi-Annually
-------------
Polish stone saddles.
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