EXHIBIT 10.12
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AGREEMENT OF LEASE
between
570 LEXINGTON COMPANY, L.P.,
Landlord
and
THE MUSIC CONNECTION CORPORATION
Tenant
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
Proskauer Rose LLP
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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TABLE OF CONTENTS
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ARTICLE 1
DEMISE, PREMISES, TERM, RENT............................... 9
ARTICLE 2
USE AND OCCUPANCY.......................................... 10
ARTICLE 3
ALTERATIONS................................................ 11
ARTICLE 4
REPAIRS-FLOOR LOAD......................................... 16
ARTICLE 5
WINDOW CLEANING............................................ 18
ARTICLE 6
REQUIREMENTS OF LAW........................................ 18
ARTICLE 7
SUBORDINATION.............................................. 20
ARTICLE 8
RULES AND REGULATIONS...................................... 23
ARTICLE 9
INSURANCE, PROPERTY LOSS OR DAMAGE; REIMBURSEMENT.......... 24
ARTICLE 10
DESTRUCTION-FIRE OR OTHER CAUSE............................ 26
ARTICLE 11
EMINENT DOMAIN............................................. 30
ARTICLE 12
ASSIGNMENT, SUBLETTING, MORTGAGE, ETC...................... 32
ARTICLE 13
ELECTRICITY................................................ 45
ARTICLE 14
ACCESS TO PREMISES......................................... 49
ARTICLE 15
CERTIFICATE OF OCCUPANCY................................... 51
ARTICLE 16
DEFAULT.................................................... 51
ARTICLE 17
REMEDIES AND DAMAGES....................................... 55
ARTICLE 18
LANDLORD FEES AND EXPENSES................................. 57
ARTICLE 19
NO REPRESENTATIONS BY LANDLORD............................. 57
ARTICLE 20
END OF TERM................................................ 60
ARTICLE 21
QUIET ENJOYMENT............................................ 61
ARTICLE 22
FAILURE TO GIVE POSSESSION................................. 61
ARTICLE 23
NO WAIVER.................................................. 61
ARTICLE 24
WAIVER OF TRIAL BY JURY.................................... 63
ARTICLE 25
INABILITY TO PERFORM........................... 63
ARTICLE 26
BILLS AND NOTICES.............................. 63
ARTICLE 27
ESCALATION..................................... 64
ARTICLE 28
SERVICES....................................... 72
ARTICLE 29
PARTNERSHIP TENANT............................. 75
ARTICLE 30
VAULT SPACE.................................... 76
ARTICLE 31
SECURITY....................................... 77
ARTICLE 32
CAPTIONS....................................... 78
ARTICLE 33
PARTIES BOUND.................................. 78
ARTICLE 34
BROKER......................................... 78
ARTICLE 35
INDEMNITY...................................... 79
ARTICLE 36
ADJACENT EXCAVATION-SHORING.................... 80
ARTICLE 37
MISCELLANEOUS.................................. 80
ARTICLE 38
RENT CONTROL................................... 83
Schedule A - Rules and Regulations
Schedule B - Cleaning Specifications
EXHIBIT "A" - Floor Plan
EXHIBIT "B" - Tenant's Final Plans
EXHIBIT "C" - Approved Contractors in connection with Alterations
performed as of the date on which this Lease shall be
Unconditionally Executed and Delivered by Landlord and
Tenant
AGREEMENT OF LEASE, made as of the 26th day of February, 1999, between
Landlord and Tenant.
W I T N E S S E T H:
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The parties hereto, for themselves, their legal representatives, successors
and assigns, hereby covenant as follows.
DEFINITIONS
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"Affiliate" shall mean a Person which shall (1) Control, (2) be under the
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Control of, or (3) be under common Control with the Person in question.
"Alteration Fee" shall have the meaning set forth in Section 3.2 hereof.
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"Alterations" shall mean alterations, installations, improvements,
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additions or other physical changes (other than decorations) in or about the
Premises.
"Applicable Rate" shall mean the lesser of (x) two (2) percentage points
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above the then current Base Rate, and (y) the maximum rate permitted by
applicable law.
"Assessed Valuation" shall have the meaning set forth in Section 27.1
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hereof.
"Assignment Proceeds" shall have the meaning set forth in Section 12.8
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hereof.
"Assignment Statement" shall have the meaning set forth in Section 12.8
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hereof.
"Bankruptcy Code" shall mean 11 U.S.C. Section 101 et seq., or any statute
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of similar nature and purpose.
"Base Electricity Inclusion Factor" shall have the meaning set forth in
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Section 13.2 hereof.
"Base Operating Expenses" shall have the meaning set forth in Section 27.1
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hereof.
"Base Operating Year" shall have the meaning set forth in Section 27.1
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hereof.
"Base Rate" shall mean the rate of interest publicly announced from time to
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time by The Chase Manhattan Bank, N.A., or its successor, as its "prime lending
rate" (or such other term as may be used by The Chase Manhattan Bank, N.A., from
time to time, for the rate presently referred to as its "prime lending rate"),
which rate was 7.75% on December 16, 1998.
1
"Base Taxes" shall have the meaning set forth in Section 27.1 hereof.
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"Broker" shall have the meaning set forth in Article 34 hereof.
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"Building" shall mean all the buildings, equipment and other improvements
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and appurtenances of every kind and description now located or hereafter
erected, constructed or placed upon the land and any and all alterations, and
replacements thereof, additions thereto and substitutions therefor, known by the
address of ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
"Building Systems" shall mean the mechanical, gas, electrical, sanitary,
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heating, air conditioning, ventilating, elevator, plumbing, life-safety and
other service systems of the Building.
"Business Days" shall mean all days, excluding Saturdays, Sundays and all
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days observed by either the State of New York or the Federal Government and by
the labor unions servicing the Building as legal holidays.
"Commencement Date" shall have the meaning set forth in Section 1.1
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hereof.
"Consumer Price Index" shall mean the Consumer Price Index for All Urban
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Consumers published by the Bureau of Labor Statistics of the United States
Department of Labor, New York, N.Y. - Northeastern N.J. Area, All Items (1982-84
= 100), or any successor index thereto, appropriately adjusted. In the event
that the Consumer Price Index is converted to a different standard reference
base or otherwise revised, the determination of adjustments provided for herein
shall be made with the use of such conversion factor, formula or table for
converting the Consumer Price Index as may be published by the Bureau of Labor
Statistics or, if said Bureau shall not publish the same, then with the use of
such conversion factor, formula or table as may be published by ▇▇▇▇▇▇▇▇-▇▇▇▇,
Inc., or any other nationally recognized publisher of similar statistical
information. If the Consumer Price Index ceases to be published, and there is
no successor thereto, such other index as Landlord and Tenant shall agree upon
in writing shall be substituted for the Consumer Price Index. If Landlord and
Tenant are unable to agree as to such substituted index, such matter shall be
submitted to the American Arbitration Association or any successor organization
for determination in accordance with the regulations and procedures thereof then
obtaining for commercial arbitration.
"Control" or "control" shall mean direct or indirect ownership of more than
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fifty percent (50%) of the outstanding voting stock of a corporation or other
majority equity and control interest if not a corporation and the possession,
directly or indirectly of power to direct or cause the direction of the
management and policy of such corporation or other entity, whether through the
ownership of voting securities, by statute or according to the provisions of a
contract.
"Deficiency" shall have the meaning set forth in Section 17.2 hereof.
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"Electric Rate" shall have the meaning set forth in Section 13.2 hereof.
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2
"Electricity Additional Rent" shall have the meaning set forth in Section
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13.3 hereof.
"Electricity Inclusion Charge" shall have the meaning set forth in Section
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13.2 hereof.
"Electricity Statement" shall have the meaning set forth in Section 13.3
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hereof.
"Electric Rate" shall have the meaning set forth in Section 13.2 hereof.
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"Escalation Rent" shall mean, individually or collectively, the Tax Payment
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and the Operating Payment.
"Estimate" shall have the meaning set forth in Section 10.3(A) hereof.
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"Event of Default" shall have the meaning set forth in Section 16.1 hereof.
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"Expiration Date" shall mean the Fixed Expiration Date or such earlier date
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on which the Term shall sooner end pursuant to any of the terms, conditions or
covenants of this Lease or pursuant to law.
"1st Rental Period" shall have the meaning set forth in Section 1.1 hereof.
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"First Security Period" shall mean the period commencing on the
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Commencement Date and ending on the day immediately preceding the fifth (5/th/)
anniversary of the Rent Commencement Date.
"Fixed Expiration Date" shall have the meaning set forth in Section 1.1
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hereof.
"Fixed Rent" shall have the meaning set forth in Section 1.1 hereof.
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"Fourth Security Period" shall mean the period commencing on the day next
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succeeding the end of the Third Security Period and ending on the Fixed
Expiration Date.
"Governmental Authority (Authorities)" shall mean the United States of
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America, the State of New York, the City of New York, any political subdivision
thereof and any agency, department, commission, board, bureau or instrumentality
of any of the foregoing, or any quasi-governmental authority, now existing or
hereafter created, having jurisdiction over the Real Property or any portion
thereof.
"HVAC" shall mean heat, ventilation and air conditioning.
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"HVAC Systems" shall mean the Building Systems providing HVAC.
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3
"Indemnitees" shall mean Landlord, the members or partners comprising
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Landlord and its and their members, partners, shareholders, officers, directors,
employees, agents and contractors, Lessors and Mortgagees.
"Initial Alterations" shall mean the Alterations to be made by Tenant to
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initially prepare the Premises for Tenant's occupancy.
"Landlord", on the date as of which this Lease is made, shall mean 570
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Lexington Company, L.P., a New York limited partnership having an office c/o
Mendik Management Company Inc., at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, but
thereafter, "Landlord" shall mean only the fee owner of the Real Property or if
there shall exist a Superior Lease, the tenant thereunder.
"Landlord's Amount" shall have the meaning set forth in Section 19.2.
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"Landlord's Engineer" shall have the meaning set forth in Section 13.2
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hereof.
"Landlord's Work" shall have the meaning set forth in Section 19.2 hereof.
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"Lessor(s)" shall mean a lessor under a Superior Lease.
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"Letter of Credit" shall have the meaning set forth in Article 31 hereof.
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"Long Lead Work" shall mean any item which is not a stock item and must be
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specially manufactured, fabricated or installed or is of such an unusual,
delicate or fragile nature that there is a substantial risk that
(i) there will be a delay in its manufacture, fabrication, delivery
or installation, or
(ii) after delivery, such item will need to be reshipped or
redelivered or repaired
so that in Landlord's reasonable judgment the item in question cannot be
completed when the standard items are completed even though the item of Long
Lead Work in question is (1) ordered together with the other items required and
(2) installed or performed (after the manufacture or fabrication thereof) in the
order and sequence that such Long Lead Work and other items are normally
installed or performed in accordance with good construction practice. In
addition, "Long Lead Work" shall include any standard item which in accordance
with good construction practice should be completed after the completion of any
item of work in the nature of the items described in the immediately preceding
sentence.
"Mortgage(s)" shall mean any trust indenture or mortgage which may now or
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hereafter affect the Real Property, the Building or any Superior Lease and the
leasehold interest created thereby, and all renewals, extensions, supplements,
amendments, modifications, consolidations and replacements thereof or thereto,
substitutions therefor, and advances made thereunder.
4
"Mortgagee(s)" shall mean any trustee, mortgagee or holder of a Mortgage.
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"Nondisturbance Agreement" shall have the meaning set forth in Section 7.7
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hereof.
"Operating Expenses" shall have the meaning set forth in Section 27.1
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hereof.
"Operating Payment" shall have the meaning set forth in Section 27.4
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hereof.
"Operating Statement" shall have the meaning set forth in Section 27.1
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hereof.
"Operating Year" shall have the meaning set forth in Section 27.1 hereof.
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"Operation of the Property" shall mean the maintenance, repair and
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management of the Real Property and the curbs, sidewalks and areas adjacent
thereto.
"Overtime Periods" shall have the meaning set forth in Section 28.3 hereof.
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"Parties" shall have the meaning set forth in Section 37.2 hereof.
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"Partner" or "partner" shall mean any partner of Tenant, any employee of a
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professional corporation which is a partner comprising Tenant, and any
shareholder of Tenant if Tenant shall become a professional corporation.
"Partnership Tenant" shall have the meaning set forth in Article 29 hereof.
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"Person(s) or person(s)" shall mean any natural person or persons, a
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partnership, a corporation and any other form of business or legal association
or entity.
"Possession Date" shall mean the date on which Landlord's Work shall be
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Substantially Completed; provided, however if Landlord shall be delayed in
Substantially Completing Landlord's Work by reason of a Tenant's Delay, the
Possession Date shall mean the date on which Landlord's Work would have been
Substantially Completed but for such Tenant's Delay.
"Premises" shall mean, subject to the provisions of Section 14.4 hereof,
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the entire rentable area of the forty-second (42/nd/) floor of the Building as
set forth on the floor plan attached hereto and made a part hereof as Exhibit
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"A".
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"Real Property" shall mean the Building, together with the plot of land
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upon which it stands.
"Recapture Space" shall have the meaning set forth in Section 12.6 hereof.
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"Recapture Sublease" shall have the meaning set forth in Section 12.6
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hereof.
"Related Entity" shall have the meaning set forth in Section 12.4 hereof.
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5
"Rental" shall mean and be deemed to include Fixed Rent, Escalation Rent,
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all additional rent and any other sums payable by Tenant hereunder.
"Rent Commencement Date" shall mean the Possession Date.
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"Requirements" shall mean all present and future laws, rules, orders,
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ordinances, regulations, statutes, requirements, codes and executive orders,
extraordinary as well as ordinary, of all Governmental Authorities now existing
or hereafter created, and of any and all of their departments and bureaus, and
of any applicable fire rating bureau, or other body exercising similar
functions, affecting the Real Property or any portion thereof, or any street,
avenue or sidewalk comprising a part of or in front thereof or any vault in or
under the same, or requiring removal of any encroachment, or affecting the
maintenance, use or occupation of the Real Property or any portion thereof.
"Rules and Regulations" shall mean the rules and regulations annexed hereto
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and made a part hereof as Schedule A, and such other and further rules and
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regulations as Landlord or Landlord's agents may from time to time adopt on such
notice to be given as Landlord may elect, subject to Tenant's right to dispute
the reasonableness thereof as provided in Article 8 hereof.
"2nd Rental Period" shall have the meaning set forth in Section 1.1 hereof.
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"Second Security Period" shall mean the period commencing on the day next
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succeeding the end of the First Security Period and ending on the day
immediately preceding the sixth (6/th/) anniversary of the Rent Commencement
Date.
"Security Amount" shall mean:
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(i) during the First Security Period, One Hundred Nine Thousand Five
Hundred Dollars ($109,500.00);
(ii) during the Second Security Period, Ninety-One Thousand Two
Hundred Fifty Dollars ($91,250.00);
(iii) during the Third Security Period, Seventy-Three Thousand
Dollars ($73.000.00); and
(iv) during the Fourth Security Period, Fifty-Four Thousand Seven
Hundred Fifty Dollars ($54,750.00).
"Security Period" shall mean any of the periods described as First through
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Fourth Security Periods, as applicable.
"Space Factor" shall mean Three Thousand Seven Hundred Twelve (3,712) as
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the same may be increased or decreased pursuant to the terms hereof.
"Specialty Alterations" shall mean Alterations consisting of kitchens (but
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not ▇▇▇▇▇ units), executive bathrooms, raised computer floors, computer
installations, vaults, libraries, internal staircases, dumbwaiters, pneumatic
tubes, vertical and horizontal transportation systems, and other Alterations of
a similar character.
6
"Sublease Expenses" shall have the meaning set forth in Section 12.7
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hereof.
"Sublease Profit" shall have the meaning set forth in Section 12.7 hereof.
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"Sublease Rent" shall have the meaning set forth in Section 12.7 hereof.
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"Substantial Completion" or Substantially Completed" or words of similar
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import shall mean that Landlord's Work has been substantially completed, it
being agreed that Landlord's Work shall be deemed substantially complete
notwithstanding the fact that (a) minor or insubstantial details of construction
or demolition and/or mechanical adjustment and/or decorative items remain to be
performed, and (b) any Long Lead Work remains to be performed, any of which does
not materially interfere with Tenant's conduct of Tenant's business in the
Premises.
"Superior Lease(s)" shall mean all ground or underlying leases of the Real
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Property or the Building and all renewals, extensions, supplements, amendments
and modifications thereof.
"Taxes" shall have the meaning set forth in Section 27.1 hereof.
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"Tax Payment" shall have the meaning set forth in Section 27.2 hereof.
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"Tax Statement" shall have the meaning set forth in Section 27.1 hereof.
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"Tax Year" shall have the meaning set forth in Section 27.1 hereof.
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"Tenant" on the date as of which this Lease is made, shall mean The Music
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Connection Corporation, a Virginia corporation, having an office at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, but thereafter "Tenant" shall mean only
the tenant under this Lease at the time in question; provided, however, that the
originally named tenant and any assignee of this Lease shall not be released
from liability hereunder in the event of any assignment of this Lease.
"Tenant Statement" shall have the meaning set forth in Section 12.6 hereof.
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"Tenant's Amount" shall have the meaning set forth in Section 19.2 hereof.
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"Tenant's Delay" shall have the meaning set forth in Section 19.2 hereof.
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"Tenant's Engineer" shall have the meaning set forth in Section 13.2
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hereof.
"Tenant's Final Plans" shall have the meaning set forth in Section 19.2
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hereof.
"Tenant's Property" shall mean Tenant's movable fixtures and movable
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partitions, telephone and other equipment, furniture, furnishings, decorations
and other items of personal property.
7
"Tenant's Share" shall mean Eight Thousand Two Hundred Forty-Nine ten
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thousandths percent (0.8249%) as the same may be increased or decreased pursuant
to the terms hereof. Landlord and Tenant have agreed that solely for purposes of
calculating Tenant's Share, the rentable area of the Building is conclusively
deemed to be Four Hundred Fifty Thousand (450,000) rentable square feet and the
rentable area of the Premises is conclusively deemed to be Three Thousand Seven
Hundred Twelve (3,712) rentable square feet.
"Tentative Monthly Escalation Charge" shall have the meaning set forth in
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Section 27.4 hereof.
"Term" shall mean a term which shall commence on the Commencement Date and
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shall expire on the Expiration Date.
"Third Engineer" shall have the meaning set forth in Section 13.2 hereof.
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"Third Security Period" shall mean the period commencing on the day next
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succeeding the end of the Second Security Period and ending on the day
immediately preceding the seventh (7/th/) anniversary of the Rent Commencement
Date.
"Total Cost" shall have the meaning set forth in Section 19.2 hereof.
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"Unavoidable Delays" shall mean any delays resulting from strikes or labor
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troubles or by accident, or by any cause whatsoever beyond Landlord's or
Tenant's control (as the case may be), including, but not limited to, laws,
governmental preemption in connection with a national emergency or by reason of
any Requirements of any Governmental Authority or by reason of failure of the
HVAC, electrical, plumbing or other Building Systems in the Building, or by
reason of the conditions of supply and demand which have been or are affected by
war or other emergency.
ARTICLE 1
DEMISE, PREMISES, TERM, RENT
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Section 1.1. Landlord hereby leases to Tenant and Tenant hereby hires from
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Landlord the Premises for the Term to commence on the date hereof (the
"Commencement Date") and to end on the date (the "Fixed Expiration Date") that
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shall be the last day of the month in which the day immediately preceding the
tenth (10th) anniversary of the Rent Commencement Date shall occur, at an annual
rent (the "Fixed Rent") of:
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(1) One Hundred Ninety-Six Thousand Seven Hundred Thirty-Six
Dollars ($196,736.00) per annum for the period (the "1st Rental Period")
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commencing on the Rent Commencement Date and ending on the day immediately
preceding the third (3rd) anniversary of the Rent Commencement Date, or if the
Rent Commencement Date shall occur other than on
8
the first day of the month, ending on the last day of the month in which the
third (3rd) anniversary of the Rent Commencement Date occurs payable in equal
monthly installments, in advance, of Sixteen Thousand Three Hundred Ninety-Four
and 67/100 Dollars ($16,394.67); and
(2) Two Hundred Seven Thousand Eight Hundred Seventy-Two
Dollars ($207,872.00) per annum for the period (the "2nd Rental Period")
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commencing on the day next succeeding the end of the 1st Rental Period and
ending on the day immediately preceding the sixth (6th) anniversary of the Rent
Commencement Date, or if the Rent Commencement Date shall occur other than on
the first day of the month, ending on the last day of the month in which the
sixth (6th) anniversary of the Rent Commencement Date occurs payable in equal
monthly installments, in advance of Seventeen Thousand Three Hundred Twenty-Two
and 67/100 Dollars ($17,322.67); and
(3) Two Hundred Nineteen Thousand Eight Dollars ($219,008.00)
per annum for the period commencing on the day next succeeding the end of the
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2nd Rental Period and ending on the Fixed Expiration Date payable in equal
monthly installments, in advance, of Eighteen Thousand Two Hundred Fifty and
67/100 Dollars ($18,250.67),
(which Fixed Rent amounts include, if Landlord shall be supplying electricity
pursuant to Section 13.2 hereof, the Base Electricity Inclusion Factor) which
Tenant agrees to pay in lawful money of the United States which shall be legal
tender in payment of all debts and dues, public and private, at the time of
payment, in advance, on the first (1st) day of each calendar month during the
Term commencing on the Rent Commencement Date, at the office of Landlord or such
other place as Landlord may designate, without any set-off, offset, abatement or
deduction whatsoever, except that Tenant shall pay the first full monthly
installment on the execution hereof. At the request of Landlord, Fixed Rent
shall be payable when due by wire transfer of funds to an account designated
from time to time by Landlord.
Section 1.2. Tenant shall pay to Landlord, as additional rent, on account
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of electricity consumed at the Premises the sum of Nine Hundred Twenty-Eight
Dollars ($928.00) per month during the period commencing on the Commencement
Date and ending on the day immediately preceding the Rent Commencement Date;
such payments to be made on the Commencement Date and on the first (1st) day of
each calendar month thereafter during such period. If such period shall
commence on a date other than the first (1st) day of a calendar month or end on
a day other than on the last day of a calendar month, as the case may be, such
monthly amount on account of electricity shall be appropriately adjusted.
Section 1.3. Notwithstanding anything herein to the contrary,
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(a) provided no Event of Default shall have occurred and be
continuing on the first day of the eighteenth (18/th/) month after the Rent
Commencement Date, Tenant shall be entitled to a credit against Fixed Rent due
on such date in the amount of Fifteen Thousand Four Hundred Sixty-Six and 67/100
Dollars ($15,466.67);
9
(b) provided no Event of Default shall have occurred and be
continuing on the first day of the nineteenth (19/th/) month after the Rent
Commencement Date, Tenant shall be entitled to a credit against Fixed Rent due
on such date in the amount of Fifteen Thousand Four Hundred Sixty-Six and 67/100
Dollars ($15,466.67);
(c) provided no Event of Default shall have occurred and be
continuing on the first day of the twentieth (20/th/) month after the Rent
Commencement Date, Tenant shall be entitled to a credit against Fixed Rent due
on such date in the amount of Fifteen Thousand Four Hundred Sixty-Six and 67/100
Dollars ($15,466.67);
(d) provided no Event of Default shall have occurred and be
continuing on the first day of the sixtieth (60/th/) month after the Rent
Commencement Date, Tenant shall be entitled to a credit against Fixed Rent due
on such date in the amount of Sixteen Thousand Three Hundred Ninety-Four and
67/100 Dollars ($16,394.67); and
(e) provided no Event of Default shall have occurred and be
continuing on the first day of the sixty-first (61/st/) month after the Rent
Commencement Date, Tenant shall be entitled to a credit against Fixed Rent due
on such date in the amount of Sixteen Thousand Three Hundred Ninety-Four and
67/100 Dollars ($16,394.67).
ARTICLE 2
USE AND OCCUPANCY
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Section 2.1. Tenant shall use and occupy the Premises as general and
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executive offices, uses incidental thereto and for no other purpose.
Section 2.2. (A) Tenant shall not use the Premises or any part thereof,
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or permit the Premises or any part thereof to be used, (1) for the business of
photographic, multilith or multigraph reproductions or offset printing, except
in connection with, either directly or indirectly, Tenant's own business and/or
activities, (2) for a banking, trust company, depository, guarantee or safe
deposit business, which is open primarily to the general public for off-the-
street transactions, (3) as a savings bank, a savings and loan association, or
as a loan company, which is open primarily to the general public for off-the-
street transactions, (4) for the sale of travelers checks, money orders, drafts,
foreign exchange or letters of credit or for the receipt of money for
transmission, which is open primarily to the general public for off-the-street
transactions, (5) as a stockbroker's or dealer's office or for the underwriting
or sale of securities, which is open primarily to the general public for off-
the-street transactions, (6) by the United States government, the City or State
of New York, any foreign government, the United Nations or any agency or
department of any of the foregoing or any other Person having sovereign or
diplomatic immunity, (7) as a restaurant or bar or for the sale of
confectionery, soda or other beverages, sandwiches, ice cream or baked goods or
for the preparation, dispensing or consumption of food or beverages in any
manner whatsoever, except for consumption by Tenant's officers, employees and
business guests, (8) as an employment agency (other than as an executive search
firm), labor
10
union, school, or vocational training center (except for the training of
employees of Tenant intended to be employed at the Premises), or (9) as a ▇▇▇▇▇▇
shop or beauty salon.
(B) In connection with, and incidental to, Tenant's use of the
Premises for general and executive offices as provided in this Article 2,
Tenant, at its sole cost and expense and upon compliance with all applicable
Requirements, may install a "▇▇▇▇▇" or similar unit in the Premises for the
purpose of warming food for the officers, employees and business guests of
Tenant (but not for use as a public restaurant), provided that Tenant shall
obtain all permits required by any Governmental Authorities for the operation
thereof and such installation shall comply with the provisions of this Lease,
including, without limitation, Article 3 hereof. Tenant may also install, at
its sole cost and expense and subject to and in compliance with the provisions
of Articles 3 and 4 hereof, vending machines for the exclusive use of the
officers, employees and business guests of Tenant, each of which vending
machines (if it dispenses any beverages or other liquids or refrigerates) shall
have a waterproof pan located thereunder, connected to a drain.
ARTICLE 3
ALTERATIONS
-----------
Section 3.1. (A) Except as provided in Section 3.4 hereof, Tenant shall
-----------
not make any Alterations without Landlord's prior consent. Landlord shall not
unreasonably withhold, condition or delay its consent to any proposed
nonstructural Alterations, provided that such Alterations (i) are not visible
from the outside of the Building, (ii) do not affect any part of the Building
other than the Premises or require any alterations, installations, improvements,
additions or other physical changes to be performed in or made to any portion of
the Building or the Real Property other than the Premises, (iii) do not
adversely affect any service required to be furnished by Landlord to Tenant or
to any other tenant or occupant of the Building, (iv) do not affect the proper
functioning of any Building System, and (v) do not affect the certificate of
occupancy for the Building or the Premises. Landlord shall not be deemed to be
unreasonable with respect to withholding its consent to any proposed
nonstructural Alteration which meets the criteria set forth in this Section
3.1(A) if the Lessor or Mortgagee, as the case may be, shall withhold its
consent.
(B) (1) Prior to making any Alterations, including, without
limitation, the Initial Alterations, Tenant shall (i) 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 approval of such plans and
specifications (except with respect to any nonstructural Alterations referred to
in Section 3.4 hereof for which Landlord's approval is not required or with
respect to any Alterations of such a scope that plans and specifications are not
required by any Requirement and would not be customarily required in accordance
with good construction practice), which, in the case of nonstructural
Alterations which meet the criteria set forth in Section 3.1(A) above, shall not
be unreasonably withheld, conditioned or delayed, (ii) at Tenant's expense,
obtain all permits, approvals and certificates required by any Governmental
Authorities, it being agreed that all filings with Governmental Authorities to
obtain such permits, approvals and certificates shall be
11
made, at Tenant's expense, by a Person designated by Landlord, and (iii) furnish
to Landlord duplicate original policies or certificates thereof of worker's
compensation (covering all persons to be employed by Tenant, and Tenant's
contractors and subcontractors in connection with such Alteration) and
comprehensive public liability (including property damage coverage) insurance in
such form, with such companies, for such periods and in such amounts as Landlord
may reasonably approve, naming Landlord and its agents, any Lessor and any
Mortgagee, as additional insureds. Upon completion of such Alteration, Tenant,
at Tenant's expense, shall obtain certificates of final approval of such
Alteration required by any Governmental Authority and shall furnish Landlord
with copies thereof, together with the "as-built" plans and specifications for
such Alterations, it being agreed that all filings with Governmental Authorities
to obtain such permits, approvals and certificates shall be made, at Tenant's
expense, by a Person designated by Landlord. All Alterations shall be made and
performed substantially in accordance with the plans and specifications therefor
as approved by Landlord (to the extent such plans and specifications are
required to be delivered to Landlord for approval as provided herein), all
Requirements, the Rules and Regulations, and all rules and regulations relating
to Alterations promulgated by Landlord in its reasonable judgment. All materials
and equipment to be incorporated in the Premises as a result of any Alterations
or a part thereof shall be first quality and no such materials or equipment
(other than Tenant's Property) shall be subject to any lien, encumbrance,
chattel mortgage or title retention or security agreement. In addition, no
Alteration shall be undertaken prior to Tenant's delivering to Landlord either
(i) a performance bond and labor and materials payment bond (issued by a surety
company and in form reasonably satisfactory to Landlord), each in an amount
equal to 120% of the cost of such Alteration (as reasonably estimated by
Landlord's architect, engineer, or contractor), or (ii) such other security as
shall be reasonably satisfactory to Landlord or required by any Mortgagee or
Lessor. If, as a result of any Alterations performed by Tenant, including,
without limitation, the Initial Alterations, any alterations, installations,
improvements, additions or other physical changes are required to be performed
or made to any portion of the Building or the Real Property other than the
Premises in order to comply with any Requirement(s), which alterations,
installations, improvements, additions or other physical changes would not
otherwise have had to be performed or made pursuant to applicable Requirement(s)
at such time, Landlord, at Tenant's sole cost and expense, may perform or make
such alterations, installations, improvements, additions or other physical
changes and take such actions as Landlord shall deem reasonably necessary and
Tenant, within ten (10) days after demand therefor by Landlord, shall provide
Landlord with such security as Landlord shall reasonably require, in an amount
equal to 120% of the cost of such alterations, installations, improvements,
additions or other physical changes, as reasonably estimated by Landlord's
architect, engineer or contractor. All Alteration(s) requiring the consent of
Landlord shall be performed only under the supervision of an independent
licensed architect approved by Landlord, which approval shall not be
unreasonably withheld, conditioned or delayed.
(2) Landlord reserves the right to disapprove any plans and
specifications in part, to reserve approval of items shown thereon pending its
review and approval of other plans and specifications, and to condition its
approval upon Tenant making revisions to the plans and specifications or
supplying additional information. Any review or approval by Landlord of any
plans and/or specifications or any preparation or design of any plans by
Landlord's architect
12
or engineer (or any architect or engineer designated by Landlord) with respect
to any Alteration is solely for Landlord's benefit, and without any
representation or warranty whatsoever to Tenant or any other Person with respect
to the compliance thereof with any Requirements, the adequacy, correctness or
efficiency thereof or otherwise.
(C) Tenant shall be permitted to perform Alterations during the hours
of 8:00 A.M. to 6:00 P.M. on Business Days, provided that such work shall not
unreasonably interfere with or interrupt the operation and maintenance of the
Building or unreasonably interfere with or interrupt the use and occupancy of
the Building by other tenants in the Building. Otherwise, Alterations shall be
performed at such times and in such manner as Landlord may from time to time
reasonably designate. All Tenant's Property installed by Tenant and all
Alterations in and to the Premises which may be made by Tenant at its own cost
and expense prior to and during the Term, shall remain the property of Tenant.
Upon the Expiration Date, Tenant shall remove Tenant's Property from the
Premises and, at Tenant's option, Tenant also may remove, at Tenant's cost and
expense, all Alterations made by Tenant to the Premises, provided, however, in
any case, that Tenant shall repair in a good and workerlike manner to good
condition any damage to the Premises or the Building caused by such removal.
Notwithstanding the foregoing, however, provided that Tenant submits to Landlord
together with Tenant's submission of plans and specifications for Alterations
(including, without limitation, the Initial Alterations) for Landlord's review a
statement directing Landlord's attention to the provisions of this Section
3.1(C) with respect to Landlord's obligation to notify Tenant which Alterations
(including, without limitation, the Initial Alterations) constitute Specialty
Alterations and whether Landlord will require Tenant to remove any such
Specialty Alterations, and in the event Landlord requires such removal, Tenant
shall remove such Specialty Alterations on or prior to the Expiration Date, and,
in each case, repair in a good and workerlike manner to good condition any
damage to the Premises or the Building caused by such removal.
(D) (1) All Alterations shall be performed, at Tenant's sole cost and
expense, by Landlord's contractor(s) or by contractors, subcontractors or
mechanics approved by Landlord. Prior to making an Alteration, at Tenant's
request, Landlord shall furnish Tenant with a list of contractors who may
perform Alterations to the Premises on behalf of Tenant (it being agreed that
the list of contractors approved by Landlord with respect to Alterations
performed as of the date on which this Lease shall be unconditionally executed
and delivered by Landlord and Tenant is attached hereto and made a part hereof
as Exhibit "C". If Tenant engages any contractor set forth on the list, Tenant
----------
shall not be required to obtain Landlord's consent for such contractor unless,
prior to the earlier of (a) entering into a contract with such contractor, and
(b) the commencement of work by such contractor, Landlord shall notify Tenant
that such contractor has been removed from the list.
(2) Notwithstanding the foregoing, with respect to any
Alteration affecting any Building System, (i) Tenant shall select a contractor
from a list of approved contractors furnished by Landlord to Tenant (containing
at least three (3) contractors) and (ii) the Alteration shall, at Tenant's cost
and expense, be designed by Landlord's engineer for the relevant Building
System.
13
(E) Any mechanic's lien filed against the Premises or the Real
Property for work claimed to have been done for, or materials claimed to have
been furnished to, Tenant shall be discharged by Tenant within thirty (30) days
after Tenant shall have received notice thereof (or such shorter period if
required by the terms of any Superior Lease or Mortgage), at Tenant's expense,
by payment or filing the bond required by law. Tenant shall not, at any time
prior to or during the Term, directly or indirectly employ, or permit the
employment of, any contractor, mechanic or laborer in the Premises, whether in
connection with any Alteration or otherwise, if such employment would interfere
or cause any conflict with other contractors, mechanics or laborers engaged in
the construction, maintenance or operation of the Building by Landlord, Tenant
or others, or of any adjacent property owned by Landlord. In the event of any
such interference or conflict, Tenant, upon demand of Landlord, shall cause all
contractors, mechanics or laborers causing such interference or conflict to
leave the Building immediately.
(F) Tenant expressly acknowledges that the Real Property has been
designated a landmark site, that the Premises are subject to the jurisdiction of
the Landmark Preservation Commission and, in accordance with Section 25-322b of
the Chapter 3 (Landmarks Preservation and Historic Districts) of the
Administrative Code of New York, as amended (the "Chapter"), Tenant further
-------
expressly acknowledges and agrees to obtain a permit from the Commission (as
such term is defined in the Chapter) in accordance with Sections 25-305, 25-306,
25-309 and 25-310 of the Chapter and the rules set forth in Title 63 of the
Rules of the City of New York, before commencing any demolition, construction,
reconstruction, alterations or minor work on the Building or the Real Property
as described in such Sections and Rules. Tenant hereby acknowledges and agrees
that such demolition, construction, reconstruction, alterations or minor work
includes, but is not limited to (i) work to the exterior of the Premises
involving windows, signs, awnings, flagpoles, banners and storefront alterations
and (ii) interior work to the Premises that (a) requires a permit from the
Department of Buildings, or (b) changes, destroys or affects an interior
architectural feature of an interior landmark or an exterior architectural
feature of an improvement that is a landmark or located on a landmark site or in
a historic district. Notwithstanding anything contained in this Lease to the
contrary, (a) prior to making any Alterations, including, without limitation,
the Initial Alterations, Tenant shall (i) at its sole cost and expense, obtain
or cause to be obtained all permits, consents and approvals from the Commission,
as required pursuant to the Chapter, in connection with the making of such
Alterations, and (ii) furnish Landlord with copies thereof and (b) Tenant hereby
indemnifies and saves harmless Landlord and Landlord's agents against and from
any and all claims, penalties, fines, loss, cost, damage, liability or expense
(including, without limitation, attorneys' fees and disbursements) resulting
from or arising out of any failure by Tenant to comply with the requirements of
the Chapter.
Section 3.2. Tenant shall pay to Landlord or to Landlord's agent, as
------------
additional rent, all actual, third party out-of pocket costs and expenses
incurred by Landlord or Landlord's agent in connection with any Alterations,
excluding the Initial Alterations (the "Alteration Fee"). The Alteration Fee
--------------
shall be paid by Tenant within ten (10) Business Days after demand therefor.
Tenant also shall pay any fee charged by any Lessor or Mortgagee in reviewing
the plans and specifications for such Alterations or inspecting the progress of
completion of the same.
14
Section 3.3. Upon the request of Tenant, Landlord, at Tenant's cost and
------------
expense, shall join in any applications for any permits, approvals or
certificates required to be obtained by Tenant in connection with any permitted
Alteration (provided that the provisions of the applicable Requirement shall
require that Landlord join in such application) and shall otherwise cooperate
with Tenant in connection therewith, provided that Landlord shall not be
obligated to incur any cost or expense, including, without limitation,
attorneys' fees and disbursements, or suffer any liability in connection
therewith.
Section 3.4. Anything contained in this Lease to the contrary
------------
notwithstanding, Landlord's consent shall not be required with respect to any
nonstructural Alteration, provided that (a) consent for such Alteration is not
required under the terms of any Superior Lease or Mortgage, and (b) such
Alteration (i) is not visible from the outside of the Building, (ii) does not
affect any part of the Building other than the Premises or require any
alterations, installations, improvements, additions or other physical changes to
be performed in or made to any portion of the Building or the Real Property
other than the Premises, (iii) does not adversely affect any service required to
be furnished by Landlord to any other tenant or occupant of the Building, (iv)
does not affect the proper functioning of any Building System, (v) does not
affect or violate the provisions of the certificate of occupancy for the
Building or the Premises, and (vi) the estimated cost of the labor and materials
for which shall not exceed Twenty-Five Thousand Dollars ($25,000), which amount
shall be increased on the third (3rd) anniversary of the Commencement Date and
annually thereafter by the annual percentage increase, if any, in the Consumer
Price Index from that in effect on the date immediately preceding the
Commencement Date, either individually or in the aggregate with other
nonstructural Alterations constructed within any twelve (12) month period;
provided, however, that at least ten (10) days prior to making any such
nonstructural Alteration, Tenant shall submit to Landlord for informational
purposes only the detailed plans and specifications for such Alteration, as
required by Section 3.1(B)(1)(i) hereof, and any such Alteration shall
otherwise be performed in compliance with the provisions of this Article 3.
ARTICLE 4
REPAIRS-FLOOR LOAD
------------------
Section 4.1. Landlord shall operate, maintain and make all necessary
------------
repairs (both structural and nonstructural) to the part of Building Systems
which provide service to the Premises (but not to the distribution portions of
such Building Systems located within the Premises with respect to which Tenant
shall have performed an Alteration or repair which shall have affected such
Building Systems) and the public portions of the Building, both exterior and
interior, in conformance with standards applicable to non-institutional first
class office buildings in Manhattan. Tenant, at Tenant's sole cost and expense,
shall take good care of the Premises and the fixtures, equipment and
appurtenances therein and the distribution systems with respect to which Tenant
shall have performed an Alteration or repair which shall have affected such
Building Systems and shall make all nonstructural repairs thereto as and when
needed to preserve them in good working order and condition, except for
reasonable wear and tear, obsolescence and damage for which Tenant is not
responsible pursuant to the provisions of Article 10 hereof and damage caused by
Landlord, Landlord's agents, employees or contractors. Landlord shall
15
repair, at Landlord's sole cost and expense, all damage to the Premises caused
by or resulting from the negligence of Landlord or Landlord's agents, employees
or contractors. Notwithstanding the foregoing, but subject to Section 10.5
hereof, all damage or injury to the Premises or to any other part of the
Building and Building Systems, or to its fixtures, equipment and appurtenances,
whether requiring structural or nonstructural repairs, caused by or resulting
from omission (where this Lease or applicable law imposes a duty to act),
negligence or improper conduct of, or Alterations made by, Tenant, Tenant's
agents, employees, invitees or licensees, shall be repaired at Tenant's sole
cost and expense, by Tenant to the reasonable satisfaction of Landlord (if the
required repairs are nonstructural in nature and do not affect any Building
System), or by Landlord (if the required repairs are structural in nature or
affect any Building System). All of the aforesaid repairs shall be of first
quality and of a class consistent with non-institutional first class office
building work or construction and shall be made in accordance with the
provisions of Article 3 hereof. If Tenant fails after ten (10) days' notice (or
such shorter period as Landlord may be permitted pursuant to any Superior Lease
or Mortgage or such shorter period as may be required due to an emergency) to
proceed with due diligence to make repairs required to be made by Tenant, the
same may be made by Landlord at the expense of Tenant, and the expenses thereof
incurred by Landlord, with interest thereon at the Applicable Rate, shall be
forthwith paid to Landlord as additional rent after rendition of a ▇▇▇▇ or
statement therefor. Tenant shall give Landlord prompt notice of any defective
condition in the Premises, or in any Building System, located in, servicing or
passing through the Premises.
Section 4.2. Tenant shall not place a load upon any floor of the Premises
------------
exceeding sixty (60) pounds per square foot "live load". Tenant shall not move
any safe, heavy machinery, heavy equipment, business machines, freight, bulky
matter or fixtures into or out of the Building without Landlord's prior consent,
which consent shall not be unreasonably withheld, and shall make payment to
Landlord of Landlord's costs in connection therewith. If such safe, machinery,
equipment, freight, bulky matter or fixtures requires special handling, Tenant
shall employ only persons holding a Master Rigger's license to do said work.
All work in connection therewith shall comply with all Requirements and the
Rules and Regulations, and shall be done during such hours as Landlord may
reasonably designate. Business machines and mechanical equipment shall be
placed and maintained by Tenant at Tenant's expense in settings sufficient in
Landlord's reasonable judgment to absorb and prevent vibration, noise and
annoyance. Except as expressly provided in this Lease, there shall be no
allowance to Tenant for a diminution of rental value and no liability on the
part of Landlord by reason of inconvenience, annoyance or injury to business
arising from Landlord, Tenant or others making, or failing to make, any repairs,
alterations, additions or improvements in or to any portion of the Building or
the Premises, or in or to fixtures, appurtenances or equipment thereof.
Section 4.3. Landlord shall use its reasonable efforts to minimize
------------
interference with Tenant's use and occupancy of the Premises in making any
repairs, alterations, additions or improvements; provided, however, that
Landlord shall have no obligation to employ contractors or labor at so-called
overtime or other premium pay rates or to incur any other overtime costs or
expenses whatsoever, except that Landlord, at its expense but subject to
recoupment pursuant to Article 27 hereof, shall employ contractors or labor at
so-called overtime or other premium pay rates if necessary to make any repair
required to be made by it hereunder to remedy any
16
condition that either (i) results in a denial of access to the Premises, (ii)
threatens the health or safety of any occupant of the Premises, or (iii) except
in the case of a fire or other casualty, materially interferes with Tenant's
ability to conduct its business in the Premises. In all other cases, at Tenant's
request, Landlord shall employ contractors or labor at so-called overtime or
other premium pay rates and incur any other overtime costs or expenses in making
any repairs, alterations, additions or improvements, and Tenant shall pay to
Landlord, as additional rent, within ten (10) Business Days after demand, an
amount equal to the difference between the overtime or other premium pay rates
and the regular pay rates for such labor and any other overtime costs or
expenses so incurred.
Section 4.4. Both the design and decoration of the elevator areas of each
------------
entire floor of the Premises and the public corridors of any floor of the
Premises occupied by more than one (1) occupant (as a result of a subletting or
occupancy arrangement, if any, in accordance with Article 12 hereof) shall be
subject to Landlord's approval, which approval shall not be unreasonably
withheld, conditioned or delayed and such elevator areas and public corridors
shall be maintained and kept clean by Tenant to Landlord's reasonable
satisfaction. Nothing contained in the foregoing sentence, however, shall
vitiate Landlord's obligation to clean the Premises as provided in Section 28.4
hereof.
ARTICLE 5
WINDOW CLEANING
---------------
Tenant shall not clean, nor require, permit, suffer or allow any window in
the Premises to be cleaned from the outside in violation of Section 202 of the
Labor Law, or any other Requirement, or of the rules of the Board of Standards
and Appeals, or of any other board or body having or asserting jurisdiction.
ARTICLE 6
REQUIREMENTS OF LAW
-------------------
Section 6.1. (A) Tenant, at its sole cost and expense, shall comply with
------------
all Requirements applicable to the use and occupancy of the Premises, including,
without limitation, those applicable to the making of any Alterations therein or
the result of the making thereof and those applicable by reason of the nature or
type of business operated by Tenant in the Premises except that (other than with
respect to the making of Alterations or the result of the making thereof) Tenant
shall not be under any obligation to make any Alteration in order to comply with
any Requirement applicable to the mere general "office" use (as opposed to
Tenant's particular manner of use) of the Premises, unless otherwise expressly
required herein. Tenant shall not do or permit to be done any act or thing upon
the Premises which will invalidate or be in conflict with a standard "all-risk"
insurance policy; and shall not do, or permit anything to be done in or upon the
Premises, or bring or keep anything therein, except as now or hereafter
permitted by the ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ Board of Fire
Underwriters, the Insurance Services Office or other authority having
jurisdiction and then only in such quantity and manner of
17
storage as not to increase the rate for fire insurance applicable to the
Building, or use the Premises in a manner (as opposed to mere use as general
"offices") which shall increase the rate of fire insurance on the Building or on
property located therein, over that in similar type buildings or in effect on
the Commencement Date. If by reason of Tenant's failure to comply with the
provisions of this Article, the fire insurance rate shall be higher than it
otherwise would be, then Tenant shall desist from doing or permitting to be done
any such act or thing and shall reimburse Landlord, as additional rent
hereunder, for that part of all fire insurance premiums thereafter paid by
Landlord which shall have been charged because of such failure by Tenant, and
shall make such reimbursement upon demand by Landlord. In any action or
proceeding wherein Landlord and Tenant are parties, a schedule or "make up" of
rates for the Building or the Premises issued by the Insurance Services Office,
or other body fixing such fire insurance rates, shall be conclusive evidence of
the facts therein stated and of the several items and charges in the fire
insurance rates then applicable to the Building.
(B) Landlord, at its sole cost and expense (but subject to recoupment
as provided in Article 27 hereof), shall comply with all Requirements applicable
to the Premises and the Building which affect Tenant's use or occupancy of the
Premises other than those Requirements with respect to which Tenant or other
tenants or occupants of the Building shall be required to comply, subject to
Landlord's right to contest the applicability or legality thereof.
Section 6.2. Tenant, at its sole cost and expense and after notice to
------------
Landlord, may contest by appropriate proceedings prosecuted diligently and in
good faith, the legality or applicability of any Requirement affecting the
Premises, provided that (a) Landlord (or any Indemnitee) shall not be subject to
imprisonment or to prosecution for a crime, nor shall the Real Property or any
part thereof be subject to being condemned or vacated, nor shall the certificate
of occupancy for the Premises or the Building be suspended or threatened to be
suspended by reason of non-compliance or by reason of such contest; (b) before
the commencement of such contest, if Landlord or any Indemnitee may be subject
to any civil fines or penalties or other criminal penalties or if Landlord may
be liable to any independent third party as a result of such noncompliance,
Tenant shall furnish to Landlord either (i) a bond of a surety company
satisfactory to Landlord, in form and substance reasonably satisfactory to
Landlord, and in an amount equal to one hundred twenty percent (120%) of the sum
of (A) the cost of such compliance, (B) the criminal or civil penalties or fines
that may accrue by reason of such non-compliance (as reasonably estimated by
Landlord), and (C) the amount of such liability to independent third parties (as
reasonably estimated by Landlord), and shall indemnify Landlord (and any
Indemnitee) against the cost of such compliance and liability resulting from or
incurred in connection with such contest or non-compliance (except that Tenant
shall not be required to furnish such bond to Landlord if it has otherwise
furnished any similar bond required by law to the appropriate Governmental
Authority and has named Landlord as a beneficiary thereunder) or (ii) other
security reasonably satisfactory in all respects to Landlord; (c) such non-
compliance or contest shall not constitute or result in a violation (either with
the giving of notice or the passage of time or both) of the terms of any
Mortgage or Superior Lease, or if such Superior Lease or Mortgage shall
condition such non-compliance or contest upon the taking of action or furnishing
of security by Landlord, such action shall be taken or such security shall be
furnished at the expense of Tenant; and (d) Tenant shall keep Landlord regularly
advised as to the status of such
18
proceedings. Without limiting the applicability of the foregoing, Landlord (or
any Indemnitee) shall be deemed subject to prosecution for a crime if Landlord
(or any Indemnitee), a Lessor, a Mortgagee or any of their officers, directors,
partners, shareholders, agents or employees is charged with a crime of any kind
whatsoever, unless such charges are withdrawn ten (10) days before Landlord (or
any Indemnitee), such Lessor or such Mortgagee or such officer, director,
partner, shareholder, agent or employee, as the case may be, is required to
plead or answer thereto.
ARTICLE 7
SUBORDINATION
-------------
Section 7.1. This Lease shall be subject and subordinate to each and every
------------
Superior Lease and to each and every Mortgage. This clause shall be self-
operative and no further instrument of subordination shall be required from
Tenant to make the interest of any Lessor or Mortgagee superior to the interest
of Tenant hereunder; however, Tenant shall execute and deliver promptly any
instrument, in recordable form, that Landlord, any Mortgagee or Lessor may
request to evidence and confirm such subordination. If the date of expiration
of any Superior Lease shall be the same day as the Expiration Date, the Term
shall end and expire twelve (12) hours prior to the expiration of the Superior
Lease. Tenant shall not do anything that would constitute a default under any
Superior Lease or Mortgage, or omit to do anything that Tenant is obligated to
do under the terms of this Lease so as to cause Landlord to be in default
thereunder. If, in connection with the financing of the Real Property, the
Building or the interest of the lessee under any Superior Lease, or if in
connection with the entering into of a Superior Lease, any lending institution
or Lessor shall request reasonable modifications of this Lease that do not
increase Tenant's monetary obligations under this Lease, or adversely affect or
diminish the rights (other than to a de minimus extent), or increase the other
obligations of Tenant under this Lease, Tenant shall make such modifications
(other than to a de minimus extent).
Section 7.2. If at any time prior to the expiration of the Term, any
------------
Superior Lease shall terminate or be terminated for any reason or any Mortgagee
comes into possession of the Real Property or the Building or the estate created
by any Superior Lease by receiver or otherwise, Tenant agrees, at the election
and upon demand of any owner of the Real Property or the Building, or of the
Lessor, or of any Mortgagee in possession of the Real Property or the Building,
to attorn, from time to time, to any such owner, Lessor or Mortgagee or any
person acquiring the interest of Landlord as a result of any such termination,
or as a result of a foreclosure of the Mortgage or the granting of a deed in
lieu of foreclosure, upon the then executory terms and conditions of this Lease,
subject to the provisions of Section 7.1 hereof and this Section 7.2, for the
remainder of the Term, provided that such owner, Lessor or Mortgagee, or
receiver caused to be appointed by any of the foregoing, as the case may be,
shall then be entitled to possession of the Premises and provided further that
such owner, Lessor or Mortgagee, as the case may be, or anyone claiming by,
through or under such owner, Lessor or Mortgagee, as the case may be, including
a purchaser at a foreclosure sale, shall not be:
19
(1) liable for any act or omission of any prior landlord (including,
without limitation, the then defaulting landlord), except to the extent that
such act or omission constitutes a default which continues after such party
succeeds to the interest of the defaulting landlord; or
(2) subject to any defense or offsets which Tenant may have against
any prior landlord (including, without limitation, the then defaulting
landlord), or
(3) bound by any payment of Rental which Tenant may have made to any
prior landlord (including, without limitation, the then defaulting landlord)
more than thirty (30) days in advance of the date upon which such payment was
due, or
(4) bound by any obligation to make any payment to or on behalf
of Tenant, or
(5) bound by any obligation to perform any work or to make
improvements to the Premises, except for (i) repairs and maintenance pursuant to
the provisions of Article 4, the need for which repairs and maintenance first
arises or continues after the date upon which such owner, Lessor, or Mortgagee
shall be entitled to possession of the Premises, (ii) repairs to the Premises or
any part thereof as a result of damage by fire or other casualty pursuant to
Article 10 hereof, but only to the extent that such repairs can be reasonably
made from the net proceeds of any insurance actually made available to such
owner, Lessor or Mortgagee, and (iii) repairs to the Premises as a result of a
partial condemnation pursuant to Article 11 hereof, but only to the extent that
such repairs can be reasonably made from the net proceeds of any award made
available to such owner, Lessor or Mortgagee, or
(6) bound by any amendment or modification of this Lease made
without its consent, or
(7) bound to return Tenant's security deposit, if any, until such
deposit has come into its actual possession and Tenant would be entitled to such
security deposit pursuant to the terms of this Lease.
The provisions of this Section 7.2 shall enure to the benefit of any such owner,
Lessor or Mortgagee, shall apply notwithstanding that, as a matter of law, this
Lease may terminate upon the termination of any Superior Lease, 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 owner,
Lessor or Mortgagee, shall execute, at Tenant's expense, from time to time,
instruments, in recordable form, in confirmation of the foregoing provisions of
this Section 7.2, satisfactory to any such owner, Lessor or Mortgagee,
acknowledging such attornment and setting forth the terms and conditions of its
tenancy. Nothing contained in this Section 7.2 shall be construed to impair any
right otherwise exercisable by any such owner, Lessor or Mortgagee.
Notwithstanding the provisions of this Section 7.2, this Lease shall not
terminate by reason of the termination of any Superior Lease without the prior
written consent of the Mortgagee of the Mortgage which is a first mortgage on
Landlord's interest in the Real Property or the leasehold estate created by such
Superior Lease.
20
Section 7.3. From time to time, within seven (7) days next following
------------
request by Landlord, any Mortgagee or any Lessor, Tenant shall deliver to
Landlord, such Mortgagee or such Lessor a written statement executed by Tenant,
in form satisfactory to Landlord, such Mortgagee or such Lessor, (1) stating
that this Lease is then in full force and effect and has not been modified (or
if modified, setting forth all modifications), (2) setting forth the date to
which the Fixed Rent, Escalation Rent and other items of Rental have been paid,
(3) stating whether or not, to the best knowledge of Tenant, Landlord is in
default under this Lease, and, if Landlord is in default, setting forth the
specific nature of all such defaults, and (4) as to any other matters reasonably
requested by Landlord, such Mortgagee or such Lessor. Tenant acknowledges that
any statement delivered pursuant to this Section 7.3 may be relied upon by any
purchaser or owner of the Real Property or the Building, or Landlord's interest
in the Real Property or the Building or any Superior Lease, or by any Mortgagee,
or by an assignee of any Mortgagee, or by any Lessor.
Section 7.4. From time to time, within seven (7) days next following
------------
request by Tenant, Landlord shall deliver to Tenant a written statement executed
by Landlord (i) stating that this Lease is then in full force and effect and has
not been modified (or if modified, setting forth all modifications), (ii)
setting forth the date to which the Fixed Rent, Escalation Rent and any other
items of Rental have been paid, (iii) stating whether or not, to the best
knowledge of Landlord (but without having made any investigation), Tenant is in
default under this Lease, and, if Tenant is in default, setting forth the
specific nature of all such defaults, and (iv) as to any other matters
reasonably requested by Tenant and related to this Lease.
Section 7.5. As long as any Superior Lease or Mortgage shall exist, Tenant
------------
shall not seek to terminate this Lease by reason of any act or omission of
Landlord until Tenant shall have given written notice of such act or omission to
all Lessors and Mortgagees at such addresses as shall have been furnished to
Tenant in writing by such Lessors and Mortgagees and, if any such Lessor or
Mortgagee, as the case may be, shall have notified Tenant within ten (10)
Business Days following receipt of such notice of its intention to remedy such
act or omission, until a reasonable period of time shall have elapsed following
the giving of such notice, during which period such Lessors and Mortgagees shall
have the right, but not the obligation, to remedy such act or omission.
Section 7.6. Tenant hereby irrevocably waives any and all right(s) it may
------------
have in connection with any zoning lot merger or transfer of development rights
with respect to the Real Property including, without limitation, any rights it
may have to be a party to, to contest, or to execute, any Declaration of
Restrictions (as such term is used in Section 12-10 of the Zoning Resolution of
The City of New York effective December 15, 1961, as amended) with respect to
the Real Property, which would cause the Premises to be merged with or unmerged
from any other zoning lot pursuant to such Zoning Resolution or to any document
of a similar nature and purpose, and Tenant agrees that this Lease shall be
subject and subordinate to any Declaration of Restrictions or any other document
of similar nature and purpose now or hereafter affecting the Real Property. In
confirmation of such subordination and waiver, Tenant shall execute and deliver
promptly any certificate or instrument that Landlord reasonably may request.
21
Section 7.7. (A) Landlord shall use its reasonable efforts to obtain (a)
------------
from each Mortgagee, an agreement in form and substance satisfactory to such
Mortgagee to the effect that, if there shall be a foreclosure of its Mortgage,
such Mortgagee will not make Tenant a party defendant to such foreclosure, evict
Tenant, disturb Tenant's possession under this Lease, or terminate or disturb
Tenant's leasehold estate or rights hereunder, and will recognize Tenant as the
direct tenant of such Mortgagee on the same terms and conditions as are
contained in this Lease (subject to the provisions of Section 7.2 hereof)
provided no Event of Default shall have occurred and be continuing hereunder,
and (b) from each Lessor, an agreement in form and substance satisfactory to
such Lessor to the effect that if its Superior Lease shall terminate or be
terminated for any reason, Lessor will not evict Tenant, disturb Tenant's
possession under this Lease, or terminate or disturb Tenant's leasehold estate
or rights hereunder, and will recognize Tenant as the direct tenant of such
Lessor on the same terms and conditions as are contained in this Lease (subject
to the provisions of Section 7.2 hereof) and Lessor shall not make Tenant a
party in any action to terminate such Superior Lease or to remove or evict
Tenant from the Premises provided no Event of Default shall have occurred and be
continuing (any such agreement, or any agreement of similar import, from a
Mortgagee or a Lessor, as the case may be, being hereinafter referred to as a
"Nondisturbance Agreement").
-------------------------
(B) Landlord shall have no liability to Tenant for its failure to
obtain any Nondisturbance Agreement. Landlord's agreement to use reasonable
efforts hereunder shall not impose any obligation upon Landlord (i) to incur any
cost or expense (other than reasonable attorneys' fees and disbursements) or
(ii) to institute any legal or other proceeding in connection with obtaining
such Nondisturbance Agreement.
(C) If required by the Mortgagee or the Lessor, within seven (7) days
after notice thereof, Tenant shall join in any Nondisturbance Agreement to
indicate its concurrence with the provisions thereof to attorn to such Mortgagee
or Lessor, as the case may be, as Tenant's landlord hereunder on the terms and
conditions set forth in such Nondisturbance Agreement.
Section 7.8. Landlord represents that, on the date on which this Lease is
------------
unconditionally executed and delivered by Landlord and Tenant there is no
Superior Lease and the Mortgagee is Union Bank of Switzerland.
ARTICLE 8
RULES AND REGULATIONS
---------------------
Tenant and Tenant's contractors, employees, agents, visitors, invitees and
licensees shall comply with the Rules and Regulations. Tenant shall have the
right to dispute the reasonableness of any additional Rule or Regulation
hereafter adopted by Landlord. If Tenant disputes the reasonableness of any
additional Rule or Regulation hereafter adopted by Landlord, the dispute shall
be determined by arbitration in the City of New York in accordance with the
rules and regulations then obtaining of the American Arbitration Association or
its successor. Any such determination shall be final and conclusive upon the
parties hereto. The right to dispute the reasonableness of any additional Rule
or Regulation upon Tenant's part shall be
22
deemed waived unless the same shall be asserted by service of a notice upon
Landlord within thirty (30) days after receipt by Tenant of notice of the
adoption of any such additional Rule or Regulation. Nothing in this Lease
contained shall be construed to impose upon Landlord any duty or obligation to
enforce the Rules and Regulations or terms, covenants or conditions in any other
lease against any other tenant, and Landlord shall not be liable to Tenant for
violation of the same by any other tenant, its employees, agents, visitors or
licensees, except that Landlord shall not enforce any Rule or Regulation against
Tenant which Landlord shall not then be enforcing against all other office
tenants in the Building (other than Landlord or its Affiliates).
ARTICLE 9
INSURANCE, PROPERTY LOSS OR DAMAGE; REIMBURSEMENT
-------------------------------------------------
Section 9.1. (A) Any Building employee to whom any property shall be
------------
entrusted by or on behalf of Tenant shall be deemed to be acting as Tenant's
agent with respect to such property and neither Landlord nor its agents shall be
liable for any damage to property of Tenant or of others entrusted to employees
of the Building, nor for the loss of or damage to any property of Tenant by
theft or otherwise. Neither Landlord nor its agents shall be liable for any
injury (or death) to persons or damage to property, or interruption of Tenant's
business, resulting from fire or other casualty; nor shall Landlord or its
agents be liable for any such injury (or death) to persons or damage caused by
other tenants or persons in the Building or caused by construction of any
private, public or quasi-public work; nor shall Landlord be liable for any
injury (or death) to persons or damage to property or improvements, or
interruption of Tenant's business, resulting from any latent defect in the
Premises or in the Building (provided that the foregoing shall not relieve
Landlord from its obligations, if any, to repair such latent defect pursuant to
the provisions of Article 4 hereof). Anything in this Article 9 to the contrary
notwithstanding, except as set forth in Articles 4, 10, 13, 28 and 35 of this
Lease and otherwise as expressly provided herein, Landlord shall not be relieved
from responsibility directly to Tenant for any loss or damage caused directly to
Tenant wholly or in part by the negligent acts or omissions of Landlord.
Nothing in the foregoing sentence shall affect any right of Landlord to the
indemnity from Tenant to which Landlord may be entitled under Article 35 hereof
in order to recoup for payments made to compensate for losses of third parties.
(B) If at any time any windows of the Premises are temporarily
closed, darkened or bricked-up due to any Requirement or by reason of repairs,
maintenance, alterations, or improvements to the Building, or any of such
windows are permanently closed, darkened or bricked-up due to any Requirement,
Landlord shall not be liable for any damage Tenant may sustain thereby and
Tenant shall not be entitled to any compensation therefor, nor abatement or
diminution of Fixed Rent or any other item of Rental, nor shall the same release
Tenant from its obligations hereunder, nor constitute an actual or constructive
eviction, in whole or in part, by reason of inconvenience or annoyance to
Tenant, or injury to or interruption of Tenant's business, or otherwise, nor
impose any liability upon Landlord or its agents. If at any time the windows of
the Premises are temporarily closed, darkened or
23
bricked-up, as aforesaid, then, unless Tenant is required pursuant to the Lease
to perform the repairs, maintenance, alterations, or improvements, or to comply
with the Requirements, which resulted in such windows being closed, darkened or
bricked-up, Landlord shall perform such repairs, maintenance, alterations or
improvements and comply with the applicable Requirements with reasonable
diligence and otherwise take such action as may be reasonably necessary to
minimize the period during which such windows are temporarily closed, darkened,
or bricked-up.
(C) Tenant shall immediately notify Landlord of any fire or accident
in the Premises.
Section 9.2. Tenant shall obtain and keep in full force and effect (i) an
------------
"all risk" insurance policy for Tenant's Specialty Alterations and Tenant's
Property at the Premises in an amount equal to one hundred percent (100%) of the
replacement value thereof, and (ii) a policy of commercial general liability and
property damage insurance on an occurrence basis, with a broad form contractual
liability endorsement. Such policies shall provide that Tenant is named as the
insured. Landlord, Landlord's managing agent, Landlord's agents and any Lessors
and any Mortgagees (whose names shall have been furnished to Tenant) shall be
added as additional insureds, as their respective interests may appear, with
respect to the insurance required to be carried pursuant to clauses (i) and (ii)
above. Such policy with respect to clause (ii) above shall include a provision
under which the insurer agrees to indemnify, defend and hold Landlord,
Landlord's managing agent, Landlord's agents and such Lessors and Mortgagees
harmless from and against, subject to the limits of liability set forth in this
Section 9.2, all cost, expense and liability arising out of, or based upon, any
and all claims, accidents, injuries and damages mentioned in Article 35. In
addition, the policy required to be carried pursuant to clause (ii) above shall
contain a provision that (a) no act or omission of Tenant shall affect or limit
the obligation of the insurer to pay the amount of any loss sustained and (b)
the policy shall be non-cancellable with respect to Landlord, Landlord's
managing agent, Landlord's agents and such Lessors and Mortgagees (whose names
and addresses shall have been furnished to Tenant) unless thirty (30) days'
prior written notice shall have been given to Landlord by certified mail, return
receipt requested, which notice shall contain the policy number and the names of
the insured and additional insureds. In addition, upon receipt by Tenant of any
notice of cancellation or any other notice from the insurance carrier which may
adversely affect the coverage of the insureds under such policy of insurance,
Tenant shall immediately deliver to Landlord and any other additional insured
hereunder a copy of such notice. The minimum amounts of liability under the
policy of insurance required to be carried pursuant to clause (ii) above shall
be a combined single limit with respect to each occurrence in an amount of
$5,000,000 for injury (or death) to persons and damage to property, which amount
shall be increased from time to time to that amount of insurance which in
Landlord's reasonable judgment is then being customarily required by prudent
landlords of non-institutional first class buildings in New York City. All
insurance required to be carried by Tenant pursuant to the terms of this Lease
shall be effected under valid and enforceable policies issued by reputable and
independent insurers permitted to do business in the State of New York, and
rated in Best's Insurance Guide, or any successor thereto (or if there be none,
an organization having a national reputation) as having a general policyholder
rating of "A" and a financial rating of at least "XIII".
- ----
Section 9.3. Landlord shall obtain and keep in full force and effect (a)
------------
insurance against loss or damage by fire and other casualty to the Building,
including Tenant's Alterations
24
(exclusive of Specialty Alterations), as may be insurable under then available
standard forms of "all-risk" insurance policies, in an amount equal to one
hundred percent (100%) of the replacement value thereof or in such lesser amount
as will avoid co-insurance (including an "agreed amount" endorsement), and (b)
commercial general liability insurance in such amounts as shall be consistent,
in Landlord's reasonable judgment, with amounts carried by prudent owners of
institutional first-class buildings in midtown Manhattan. Notwithstanding the
foregoing, Landlord shall not be liable to Tenant for any failure to insure,
replace or restore any Alterations unless Tenant shall have notified Landlord of
the completion of such Alterations and of the cost thereof, and shall have
maintained adequate records with respect to such Alterations to facilitate the
adjustment of any insurance claims with respect thereto. Tenant shall cooperate
with Landlord and Landlord's insurance companies in the adjustment of any claims
for any damage to the Building or such Alterations.
Section 9.4. On or prior to the Commencement Date, each party shall
------------
deliver to the other party appropriate certificates of insurance, including
evidence of waivers of subrogation required pursuant to Section 10.5 hereof,
required to be carried by each party pursuant to this Article 9. Evidence of
each renewal or replacement of a policy shall be delivered by each party to the
other party at least twenty (20) days prior to the expiration of such policy.
Section 9.5. Tenant acknowledges that Landlord shall not carry insurance
------------
on, and shall not be responsible for damage to, Tenant's Property or Specialty
Alterations, and that Landlord shall not carry insurance against, or be
responsible for any loss suffered by Tenant due to, interruption of Tenant's
business.
Section 9.6. If notwithstanding the recovery of insurance proceeds by
------------
Tenant for loss, damage or destruction of its property (or rental value or
business interruptions) Landlord is liable to Tenant with respect thereto or is
obligated under this Lease to make replacement, repair or restoration, then, at
Landlord's option, either (i) the amount of the net proceeds of Tenant's
insurance against such loss, damage or destruction shall be offset against
Landlord's liability to Tenant therefor, or (ii) shall be made available to
Landlord to pay for replacement, repair or restoration.
ARTICLE 10
DESTRUCTION-FIRE OR OTHER CAUSE
-------------------------------
Section 10.1. (A) If the Premises (including Alterations other than
-------------
Specialty Alterations) shall be damaged by fire or other casualty, Tenant shall
give prompt notice thereof to Landlord. The damage, with such modifications as
shall be required in order to comply with Requirements, shall be diligently
repaired by and at the expense of Landlord to substantially the condition prior
to the damage, and until such repairs which are required to be performed by
Landlord (excluding Long Lead Work) shall be substantially completed (of which
substantial completion Landlord shall promptly notify Tenant) the Fixed Rent,
Escalation Rent and Space Factor shall be reduced in the proportion which the
area of the part of the Premises which is not usable by Tenant and is actually
not used by Tenant, bears to the total area of the Premises immediately prior to
such
25
casualty. Upon the substantial completion of such repairs (excluding Long Lead
Work), Landlord shall diligently prosecute to completion any items of Long Lead
Work remaining to be completed. Landlord shall have no obligation to repair any
damage to, or to replace, any Specialty Alterations or Tenant's Property, which
Tenant shall complete promptly after substantial completion of Landlord's repair
obligations under this Article 10. In addition, Landlord shall not be obligated
to repair any damage to, or to replace, any Alterations unless Tenant shall have
notified Landlord of the completion of such Alterations and the cost thereof,
and shall have maintained adequate records with respect to such Alterations.
Tenant shall make all necessary repairs to the Specialty Alterations and same
shall be completed promptly after substantial completion of Landlord's repair
obligations under this Article 10. Landlord shall use its reasonable efforts to
minimize interference with Tenant's use and occupancy in making any repairs
pursuant to this Section.
(B) Prior to the substantial completion of Landlord's repair
obligations set forth in Section 10.1 (A) hereof, Landlord shall provide Tenant
and Tenant's contractor, subcontractors and materialmen access to the Premises
to perform Specialty Alterations (or Alterations, if Landlord is not obligated
to repair same pursuant to the provisions hereof), on the following terms and
conditions (but not to occupy the same for the conduct of business):
(1) Tenant shall not commence work in any portion of the Premises
until the date specified in a notice from Landlord to Tenant stating that the
repairs required to be made by Landlord have been or will be completed to the
extent reasonably necessary, in Landlord's discretion, to permit the
commencement of the Specialty Alterations (or Alterations, if Landlord is not
obligated to repair same pursuant to the provisions hereof) then prudent to be
performed in accordance with good construction practice in the portion of the
Premises in question without interference with, and consistent with the
performance of, the repairs remaining to be performed.
(2) Such access by Tenant shall be deemed to be subject to all of
the applicable provisions of this Lease, including, without limitation, Tenant's
obligation to pay to Landlord fifty percent (50%) of the Electricity Additional
Rent, the Electricity Fee or the Electricity Inclusion Charge, as the case may
be, except that there shall be no obligation on the part of Tenant solely
because of such access to pay any Fixed Rent or Escalation Rent with respect to
the affected portion of the Premises for any period prior to substantial
completion of the repairs.
(3) It is expressly understood that if Landlord shall be delayed
from substantially completing the repairs due to any acts of Tenant, its agents,
servants, employees or contractors, including, without limitation, by reason of
the performance of any Specialty Alteration (or Alteration, if Landlord is not
obligated to repair same pursuant to the provisions hereof), by reason of
Tenant's failure or refusal to comply or to cause its architects, engineers,
designers and contractors to comply with any of Tenant's obligations described
or referred to in this Lease, or if such repairs are not completed because under
good construction scheduling practice such repairs should be performed after
completion of any Specialty Alteration (or Alteration, if Landlord is not
obligated to repair same pursuant to the provisions hereof), then such repairs
shall be deemed substantially complete on the date when the repairs would have
26
been substantially complete but for such delay and the expiration of the
abatement of the Tenant's obligations hereunder shall not be postponed by reason
of such delay. Any additional costs to Landlord to complete any repairs
occasioned by such delay shall be paid by Tenant to Landlord within ten (10)
days after demand, as additional rent.
Section 10.2. Anything contained in Section 10.1 hereof to the contrary
-------------
notwithstanding, if the Building shall be so damaged by fire or other casualty
that, in Landlord's opinion, substantial alteration, demolition, or
reconstruction of the Building shall be required (whether or not the Premises
shall have been damaged or rendered untenantable), then Landlord, at Landlord's
option, may, not later than ninety (90) days following the damage, give Tenant a
notice in writing terminating this Lease, provided that if the Premises are not
substantially damaged or rendered substantially untenantable, Landlord may not
terminate this Lease unless it shall elect to terminate leases (including this
Lease), affecting at least fifty percent (50%) of the rentable area of the
Building (excluding any rentable area occupied by Landlord or its Affiliates).
If Landlord elects to terminate this Lease, the Term shall expire upon a date
set by Landlord, but not sooner than the tenth (10th) day after such notice is
given, and Tenant shall vacate the Premises and surrender the same to Landlord
in accordance with the provisions of Article 20 hereof. Upon the termination of
this Lease under the conditions provided for in this Section 10.2, the Fixed
Rent and Escalation Rent shall be apportioned and any prepaid portion of Fixed
Rent and Escalation Rent for any period after such date shall be refunded by
Landlord to Tenant.
Section 10.3. (A) (i) Within forty-five (45) days after notice to
-------------
Landlord of any damage described in Section 10.1 hereof, Landlord shall deliver
to Tenant a statement prepared by a reputable contractor setting forth such
contractor's estimate (the "Estimate") as to the time required to repair such
--------
damage, exclusive of time required to repair any Specialty Alterations (which
are Tenant's obligation to repair) or to perform Long Lead Work. If the
estimated time period exceeds nine (9) months from the date of such statement,
Tenant may elect to terminate this Lease by notice to Landlord not later than
thirty (30) days following receipt of such statement. If Tenant makes such
election, the Term shall expire upon the thirtieth (30th) day after notice of
such election is given by Tenant, and Tenant shall vacate the Premises and
surrender the same to Landlord in accordance with the provisions of Article 20
hereof. If Tenant shall not have elected to terminate this Lease pursuant to
this Article 10 (or is not entitled to terminate this Lease pursuant to this
Article 10), the damages shall be diligently repaired by and at the expense of
Landlord as set forth in Section 10.1 hereof.
(ii) Notwithstanding anything to the contrary contained
herein, if (a) either Tenant shall not have elected to terminate this Lease
pursuant to the provisions of Section 10.3(A)(i) hereof, or Tenant shall not
have had the right to terminate this Lease pursuant to the provisions of Section
10.3(A)(i) hereof because the estimated time period set forth in the Estimate
did not exceed nine (9) months, and (b) Landlord shall have failed to make such
repairs on or before the date which is three (3) months after the estimated time
period set forth in the Estimate other than by reason of Unavoidable Delays,
then Tenant may elect to terminate this Lease by notice given to Landlord within
ten (10) days after the expiration of such three (3) month period, time being of
the essence with respect to Tenant's giving of such notice. If Tenant makes such
election pursuant to this subsection 10.3(A)(ii), the Term shall expire on the
tenth
27
(10th) day after notice of such election is given by Tenant, and Tenant shall
vacate the Premises and surrender the same to Landlord in accordance with the
provisions of Article 20 hereof.
(B) Notwithstanding the foregoing, if the Premises shall be
substantially damaged during the last year of the Term, Landlord or Tenant may
elect by notice, given within thirty (30) days after the occurrence of such
damage, to terminate this Lease and if either party makes such election, the
Term shall expire upon the thirtieth (30th) day after notice of such election is
given by such party and Tenant shall vacate the Premises and surrender the same
to Landlord in accordance with the provisions of Article 20 hereof.
(C) Except as expressly set forth in this Section 10.3, Tenant shall
have no other options to cancel this Lease under this Article 10.
Section 10.4. This Article 10 constitutes an express agreement governing
-------------
any case of damage or destruction of the Premises or the Building by fire or
other casualty, and Section 227 of the Real Property Law of the State of New
York, which provides for such contingency in the absence of an express
agreement, and any other law of like nature and purpose now or hereafter in
force shall have no application in any such case.
Section 10.5. The parties hereto shall procure an appropriate clause in,
-------------
or endorsement on, any fire or extended coverage insurance covering the
Premises, the Building and personal property, fixtures and equipment located
thereon or therein, pursuant to which the insurance companies waive subrogation
or consent to a waiver of right of recovery and having obtained such clauses or
endorsements of waiver of subrogation or consent to a waiver of right of
recovery, will not make any claim against or seek to recover from the other for
any loss or damage to its property or the property of others resulting from fire
or other hazards covered by such fire and extended coverage insurance, provided,
however, that the release, discharge, exoneration and covenant not to ▇▇▇ herein
contained shall be limited by and be coextensive with the terms and provisions
of the waiver of subrogation clause or endorsements or clauses or endorsements
consenting to a waiver of right of recovery. If the payment of an additional
premium is required for the inclusion of such waiver of subrogation provision,
each party shall advise the other of the amount of any such additional premiums
and the other party at its own election may, but shall not be obligated to, pay
the same. If such other party shall not elect to pay such additional premium,
the first party shall not be required to obtain such waiver of subrogation
provision. If either party shall be unable to obtain the inclusion of such
clause even with the payment of an additional premium, then such party shall
attempt to name the other party as an additional insured (but not a loss payee)
under the policy. If the payment of an additional premium is required for
naming the other party as an additional insured (but not a loss payee), each
party shall advise the other of the amount of any such additional premium and
the other party at its own election may, but shall not be obligated to, pay the
same. If such other party shall not elect to pay such additional premium or if
it shall not be possible to have the other party named as an additional insured
(but not loss payee), even with the payment of an additional premium, then (in
either event) such party shall so notify the first party and the first party
shall not have the obligation to name the other party as an additional insured.
Tenant acknowledges that Landlord shall not carry insurance on and shall not be
responsible for damage to, Tenant's
28
Property or Specialty Alterations or any other Alteration prior to the
completion of the Initial Alterations, and that Landlord shall not carry
insurance against, or be responsible for any loss suffered by Tenant due to,
interruption of Tenant's business.
ARTICLE 11
EMINENT DOMAIN
--------------
Section 11.1. If the whole of the Real Property, the Building or the
-------------
Premises shall be acquired or condemned for any public or quasi-public use or
purpose, this Lease and the 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 Real Property and not the entire Premises shall be so acquired or
condemned then, (1) except as hereinafter provided in this Section 11.1, this
Lease and the Term shall continue in force and effect, but, if a part of the
Premises is included in the part of the Real Property so acquired or condemned,
from and after the date of the vesting of title, the Fixed Rent and the Space
Factor shall be reduced in the proportion which the area of the part of the
Premises so acquired or condemned bears to the total area of the Premises
immediately prior to such acquisition or condemnation and Tenant's Share shall
be redetermined based upon the proportion in which the ratio between the
rentable area of the Premises remaining after such acquisition or condemnation
bears to the rentable area of the Building remaining after such acquisition or
condemnation; (2) whether or not the Premises shall be affected thereby,
Landlord, at Landlord's option, may give to Tenant, within sixty (60) days next
following the date upon which Landlord shall have received notice of vesting of
title, a thirty (30) days' notice of termination of this Lease if Landlord shall
elect to terminate leases (including this Lease), affecting at least fifty
percent (50%) of the rentable area of the Building (excluding any rentable area
leased by Landlord or its Affiliates); and (3) if the part of the Real Property
so acquired or condemned shall contain more than fifteen percent (15%) of the
total area of the Premises immediately prior to such acquisition or
condemnation, or if, by reason of such acquisition or condemnation, Tenant no
longer has reasonable means of access to the 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. If any such thirty (30) days' notice
of termination is given by Landlord or Tenant, this Lease and the 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 Premises shall be so acquired or condemned
and this Lease and the Term shall not be terminated pursuant to the foregoing
provisions of this Section 11.1, Landlord, at Landlord's expense, shall restore
that part of the Premises not so acquired or condemned to a self-contained
rental unit inclusive of Tenant's Alterations (other than Specialty
Alterations), except that if such acquisition or condemnation occurs prior to
completion of the Initial Alterations, Landlord shall only be required to
restore that part of the Premises not so acquired or condemned to a self-
contained rental unit exclusive of Tenant's Alterations. Upon the termination
of this Lease and the Term pursuant to the provisions of this Section 11.1, the
Fixed Rent and Escalation Rent shall be apportioned and any prepaid portion of
Fixed Rent and Escalation Rent for any period after such date shall be refunded
by Landlord to Tenant.
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Section 11.2. 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 Term and Tenant hereby expressly assigns to Landlord
all of its right in and to any such award. Nothing contained in this Section
11.2 shall be deemed to prevent Tenant from making a separate claim in any
condemnation proceedings for the then value of any Tenant's Property included in
such taking, and for any moving expenses.
Section 11.3. If the whole or any part of the Premises shall be acquired
-------------
or condemned temporarily during the Term for any public or quasi-public use or
purpose, Tenant shall give prompt notice thereof to Landlord and the Term shall
not be reduced or affected in any way and Tenant shall continue to pay in full
all items of Rental payable by Tenant hereunder without reduction or abatement,
and Tenant shall be entitled to receive for itself any award or payments for
such use, provided, however, that:
(i) if the acquisition or condemnation is for a period not extending
beyond the Term and if such award or payment is made less frequently
than in monthly installments, the same shall be paid to and held by
Landlord as a fund which Landlord shall apply from time to time to the
Rental payable by Tenant hereunder, except that, if by reason of such
acquisition or condemnation changes or alterations are required to be
made to the Premises which would necessitate an expenditure to restore
the Premises, then a portion of such award or payment considered by
Landlord as appropriate to cover the expenses of the restoration shall
be retained by Landlord, without application as aforesaid, and applied
toward the restoration of the Premises as provided in Section 11.1
hereof; or
(ii) if the acquisition or condemnation is for a period extending
beyond the Term, such award or payment shall be apportioned between
Landlord and Tenant as of the Expiration Date; Tenant's share thereof,
if paid less frequently than in monthly installments, shall be paid to
Landlord and applied in accordance with the provisions of clause (i)
above, provided, however, that the amount of any award or payment
allowed or retained for restoration of the Premises shall remain the
property of Landlord if this Lease shall expire prior to the
restoration of the Premises.
ARTICLE 12
ASSIGNMENT, SUBLETTING, MORTGAGE, ETC.
--------------------------------------
Section 12.1. (A) Except as expressly permitted herein, Tenant, without
-------------
the prior consent of Landlord in each instance, shall not (a) assign its rights
or delegate its duties under this Lease (whether by operation of law, transfers
of interests in Tenant or otherwise), mortgage or encumber its interest in this
Lease, in whole or in part, (b) sublet, or permit the subletting of, the
Premises or any part thereof, or (c) permit the Premises or any part thereof to
be occupied or used for desk space, mailing privileges or otherwise, by any
Person other than Tenant.
30
(B) If this Lease is assigned to any person or entity pursuant to the
provisions of the Bankruptcy Code, any and all monies or other consideration
payable or otherwise to be delivered in connection with such assignment shall be
paid or delivered to Landlord, shall be and remain the exclusive property of
Landlord and shall not constitute property of Tenant or of the estate of Tenant
within the meaning of the Bankruptcy Code. Any and all monies or other
consideration constituting Landlord's property under the preceding sentence not
paid or delivered to Landlord shall be held in trust for the benefit of Landlord
and shall be promptly paid to or turned over to Landlord.
Section 12.2. (A) If Tenant's interest in this Lease is assigned in
-------------
violation of the provisions of this Article 12, such assignment shall be void
and of no force and effect against Landlord; provided, however, that Landlord
may collect an amount equal to the then Fixed Rent plus any other item of Rental
from the assignee as a fee for its use and occupancy, and shall apply the net
amount collected to the Fixed Rent and other items of Rental reserved in this
Lease. If the Premises or any part thereof are sublet to, or occupied by, or
used by, any Person other than Tenant, whether or not in violation of this
Article 12, Landlord, after default by Tenant under this Lease, including,
without limitation, a subletting or occupancy in violation of this Article 12,
may collect any item of Rental or other sums paid by the subtenant, user or
occupant as a fee for its use and occupancy, and shall apply the net amount
collected to the Fixed Rent and other items of Rental reserved in this Lease.
No such assignment, subletting, occupancy or use, whether with or without
Landlord's prior consent, nor any such collection or application of Rental or
fee for use and occupancy, shall be deemed a waiver by Landlord of any term,
covenant or condition of this Lease or the acceptance by Landlord of such
assignee, subtenant, occupant or user as tenant hereunder. The consent by
Landlord to any assignment, subletting, occupancy or use shall not relieve
Tenant from its obligation to obtain the express prior consent of Landlord to
any further assignment, subletting, occupancy or use.
(B) Tenant shall reimburse Landlord on demand for any actual third
party out-of-pocket costs that may be incurred by Landlord in connection with
any proposed assignment of Tenant's interest in this Lease or any proposed
subletting of the Premises or any part thereof, including, without limitation,
any reasonable processing fee, reasonable attorneys' fees and disbursements and
the reasonable costs of making investigations as to the acceptability of the
proposed subtenant or the proposed assignee.
(C) Neither any assignment of Tenant's interest in this Lease nor any
subletting, occupancy or use of the Premises or any part thereof by any Person
other than Tenant, nor any collection of Rental by Landlord from any Person
other than Tenant as provided in this Section 12.2, nor any application of any
such Rental as provided in this Section 12.2 shall, in any circumstances,
relieve Tenant of its obligations under this Lease on Tenant's part to be
observed and performed.
(D) Any Person to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed without further act or deed to
have assumed all of the obligations arising under this Lease on and after the
date of such assignment. Any such assignee shall execute and deliver to
Landlord upon demand an instrument confirming such assumption.
31
No assignment of this Lease shall relieve Tenant of its obligations hereunder
and, subsequent to any assignment, Tenant's liability hereunder shall continue
notwithstanding any subsequent modification or amendment hereof or the release
of any subsequent tenant hereunder from any liability, to all of which Tenant
hereby consents in advance .
Section 12.3. (A) If Tenant assumes this Lease and proposes to assign
-------------
the same pursuant to the provisions of the Bankruptcy Code to any Person who
shall have made a bona fide offer to accept an assignment of this Lease on terms
---------
acceptable to Tenant, then notice of such proposed assignment shall be given to
Landlord by Tenant no later than twenty (20) days after receipt by Tenant, but
in any event no later than ten (10) days prior to the date that Tenant shall
make application to a court of competent jurisdiction for authority and approval
to enter into such assignment and assumption. Such notice shall set forth (a)
the name and address of such Person, (b) all of the terms and conditions of such
offer, and (c) adequate assurance of future performance by such Person under the
Lease as set forth in Paragraph (B) below, including, without limitation, the
assurance referred to in Section 365(b)(3) of the Bankruptcy Code. Landlord
shall have the prior right and option, to be exercised by notice to Tenant given
at any time prior to the effective date of such proposed assignment, to accept
an assignment of this Lease upon the same terms and conditions and for the same
consideration, if any, as the bona fide offer made by such Person, less any
---------
brokerage commissions which would otherwise be payable by Tenant out of the
consideration to be paid by such Person in connection with the assignment of
this Lease.
(B) The term "adequate assurance of future performance" as used in
this Lease shall mean that any proposed assignee shall, among other things, (a)
deposit with Landlord on the assumption of this Lease the sum of the then Fixed
Rent as security for the faithful performance and observance by such assignee of
the terms and obligations of this Lease, which sum shall be held by Landlord in
accordance with the provisions of Article 31 hereof, (b) furnish Landlord with
financial statements of such assignee for the prior three (3) fiscal years, as
finally determined after an audit and certified as correct by a certified public
accountant, which financial statements shall show a net worth of at least six
(6) times the then Fixed Rent for each of such three (3) years, (c) grant to
Landlord a security interest in such property of the proposed assignee as
Landlord shall deem necessary to secure such assignee's future performance under
this Lease, and (d) provide such other information or take such action as
Landlord, in its reasonable judgment shall determine is necessary to provide
adequate assurance of the performance by such assignee of its obligations under
the Lease.
Section 12.4. (A) As long as The Music Connection Corporation or a
-------------
Related Entity of The Music Connection Corporation is Tenant, Tenant shall have
the privilege, subject to the terms and conditions hereinafter set forth,
without the consent of Landlord but subject to Tenant's satisfaction of
conditions set forth in clauses (1), (4) and (5) of Section 12.8(A) hereof, and
without Landlord having the right granted in Section 12.8(B) hereof to
recapture, to assign its interest in this Lease (i) to any corporation which is
a successor to Tenant either by merger or consolidation, (ii) to a purchaser of
all or substantially all of (a) Tenant's assets, or (b) shares of Tenant's stock
(if Tenant is a corporation or trust), or (c) the interests in Tenant (if Tenant
is a partnership or other entity) (provided that in any case, such purchaser
shall have also assumed
32
substantially all of Tenant's liabilities) or (iii) to a Person which shall (1)
Control, (2) be under the Control of, or (3) be under common Control with Tenant
(any such Person referred to in this clause (iii) being a "Related Entity"). As
---------------
long as The Music Connection Corporation or a Related Entity of The Music
Connection Corporation is Tenant, Tenant also shall have the privilege, subject
to the terms and conditions hereinafter set forth, without the consent of
Landlord but subject to Tenant's satisfaction of conditions set forth in clauses
(3), (6) through (8) and (10) of Section 12.6(A) and without Landlord having the
right granted in Section 12.6(B) hereof to recapture, to sublease all or any
portion of the Premises to a Related Entity. Any assignment or subletting
described above may only be made upon the condition that (a) any such assignee
or subtenant shall continue to use the Premises in accordance with all of the
provisions of this Lease, (b) the principal purpose of such assignment or
sublease is not the acquisition of Tenant's interest in this Lease or to
circumvent the provisions of Section 12.1 of this Article (except if such
assignment or sublease is made to a Related Entity and is made for a valid
intracorporate business purpose and is not made to circumvent the provisions of
Section 12.1 of this Article), and (c) in the case of an assignment, any such
assignee shall have a net worth and annual income and cash flow, determined in
accordance with generally accepted accounting principles, consistently applied,
after giving effect to such assignment, equal to the greater of Tenant's net
worth and annual income and cash flow, as so determined, on (i) the date
immediately preceding the date of such assignment, and (ii) the Commencement
Date. Tenant shall, within ten (10) Business Days after execution thereof,
deliver to Landlord either (x) a duplicate original instrument of assignment in
form and substance reasonably satisfactory to Landlord, duly executed by Tenant,
together with an instrument in form and substance reasonably satisfactory to
Landlord, duly executed by the assignee, in which such assignee shall assume
observance and performance of, and agree to be personally bound by, all of the
terms, covenants and conditions of this Lease on Tenant's part to be observed
and performed from and after the date of assignment, or (y) a duplicate original
sublease in form and substance reasonably satisfactory to Landlord, duly
executed by Tenant and the subtenant.
(B) If Tenant is a partnership, the admission of new Partners, the
withdrawal, retirement, death, incompetency or bankruptcy of any Partner, or the
reallocation of partnership interests among the Partners shall not constitute an
assignment of this Lease, provided the principal purpose of any of the foregoing
is not to circumvent the restrictions on assignment set forth in the provisions
of this Article 12. The reorganization of Tenant from a professional corporation
into a partnership or the reorganization of a Tenant from a partnership into a
professional corporation, shall not constitute an assignment of this Lease,
provided that immediately following such reorganization the Partners of Tenant
shall be the same as the shareholders of Tenant existing immediately prior to
such reorganization, or the shareholders of Tenant shall be the same as the
Partners of Tenant existing immediately prior to such reorganization, as the
case may be. If Tenant shall become a professional corporation, each individual
shareholder in Tenant and each employee of a professional corporation which is a
shareholder in Tenant shall have the same personal liability as such individual
or employee would have under this Lease if Tenant were a partnership and such
individual or employee were a Partner in Tenant. If any individual Partner in
Tenant is or becomes an employee of a professional corporation, such individual
shall have the same personal liability under this Lease
33
as such individual would have if he and not the professional corporation were a
Partner of Tenant.
(C) Except as set forth above, either a transfer (including the
issuance of treasury stock or the creation and issuance of new stock or a new
class of stock) of a controlling interest in the shares of Tenant or of any
entity which has an interest in Tenant through one or more intermediaries (if
Tenant or such entity is a corporation or trust) or a transfer of a majority of
the total interest in Tenant or of any entity which has an interest in Tenant
through one or more intermediaries (if Tenant or such entity is a partnership or
other entity) at any one time or over a period of time through a series of
transfers, shall be deemed an assignment of this Lease and shall be subject to
all of the provisions of this Article 12, including, without limitation, the
requirement that Tenant obtain Landlord's prior consent thereto. The transfer
of shares of Tenant or of any entity which has an interest in Tenant through one
or more intermediaries (if Tenant or such entity is a corporation or trust) for
purposes of this Section 12.4 shall not include the sale of shares by persons
other than those deemed "insiders" within the meaning of the Securities Exchange
Act of 1934, as amended, which sale is effected through the "over-the-counter
market" or through any recognized stock exchange.
Section 12.5. If, at any time after the originally named Tenant herein may
-------------
have assigned Tenant's interest in this Lease, this Lease shall be disaffirmed
or rejected in any proceeding of the types described in paragraph (E) of Section
16.1 hereof, or in any similar proceeding, or in the event of termination of
this Lease by reason of any such proceeding or by reason of lapse of time
following notice of termination given pursuant to said Article 16 based upon any
of the Events of Default set forth in such paragraph, any prior Tenant,
including, without limitation, the originally named Tenant, upon request of
Landlord given within thirty (30) days next following any such disaffirmance,
rejection or termination (and actual notice thereof to Landlord in the event of
a disaffirmance or rejection or in the event of termination other than by act of
Landlord), shall (1) pay to Landlord all Fixed Rent, Escalation Rent and other
items of Rental due and owing by the assignee to Landlord under this Lease to
and including the date of such disaffirmance, rejection or termination, and (2)
as "tenant", enter into a new lease with Landlord of the Premises for a term
commencing on the effective date of such disaffirmance, rejection or termination
and ending on the Expiration Date, unless sooner terminated as in such lease
provided, at the same Fixed Rent and upon the then executory terms, covenants
and conditions as are contained in this Lease, except that (a) Tenant's rights
under the new lease shall be subject to the possessory rights of the assignee
under this Lease and the possessory rights of any person claiming through or
under such assignee or by virtue of any statute or of any order of any court,
(b) such new lease shall require all defaults existing under this Lease to be
cured by Tenant with due diligence, and (c) such new lease shall require Tenant
to pay all Escalation Rent reserved in this Lease which, had this Lease not been
so disaffirmed, rejected or terminated, would have accrued under the provisions
of Article 27 hereof after the date of such disaffirmance, rejection or
termination with respect to any period prior thereto. If any such prior Tenant
shall default in its obligation to enter into said new lease for a period of ten
(10) days next following Landlord's request therefor, then, in addition to all
other rights and remedies by reason of such default, either at law or in equity,
Landlord shall have the same rights and remedies against such Tenant as if such
Tenant had
34
entered into such new lease and such new lease had thereafter been terminated as
of the commencement date thereof by reason of such Tenant's default thereunder.
Section 12.6. (A) Notwithstanding the provisions of Section 12.1 hereof,
-------------
if Landlord shall not exercise its rights pursuant to paragraph (B) of this
Section 12.6, Landlord shall not unreasonably withhold, condition or delay its
consent to any subletting of the Premises, provided that:
(1) the Premises shall not, without Landlord's prior consent,
have been listed or otherwise publicly advertised for subletting at a rental
rate less than the greater of (i) the Rent Per Square Foot with respect to the
portion of the Premises proposed to be sublet hereunder and (ii) the prevailing
rental rate set by Landlord for comparable space in the Building or if there is
no comparable space the prevailing rental rate reasonably determined by
Landlord;
(2) Intentionally Omitted Prior to Execution;
(3) no Event of Default shall have occurred and be
continuing;
(4) upon the date Tenant delivers the Tenant Statement to
Landlord and upon the date immediately preceding the commencement date of any
sublease approved by Landlord, the proposed subtenant shall have a financial
standing (taking into consideration the obligations of the proposed subtenant
under the sublease) reasonably satisfactory to Landlord, be of a character, be
engaged in a business, and propose to use the Premises in a manner in keeping
with the standards in such respects of the other tenancies in the Building;
(5) the proposed subtenant (or any Person who directly or
indirectly, Controls, is Controlled by or is under common Control with the
proposed subtenant) shall not be a tenant or subtenant of any space in the
Building, nor shall the proposed subtenant (or any Person who directly or
indirectly, Controls, is Controlled by or is under common Control with the
proposed subtenant) be a Person with whom Landlord is negotiating or discussing
to lease space in the Building; if Tenant shall propose to sublease space and is
about to commence negotiations with a tenant, subtenant or prospective
subtenant, Tenant shall advise Landlord of the identity of such prospective
subtenant and Landlord shall promptly advise Tenant if the execution of a
sublease with such tenant, subtenant or prospective subtenant would violate the
provisions of this clause (5);
(6) the character of the business to be conducted or the
proposed use of the Premises by the proposed subtenant shall not (a) be likely
to increase Landlord's operating expenses beyond that which would be incurred
for use by Tenant or for use in accordance with the standards of use of other
tenancies in the Building; (b) increase the burden on existing cleaning services
or elevators over the burden prior to such proposed subletting; (c) violate any
provision or restrictions herein relating to the use or occupancy of the
Premises; (d) require any alterations, installations, improvements, additions or
other physical changes to be performed in or made to any portion of the Building
or the Real Property other than the Premises; or (e) violate any provision or
restrictions in any other lease for space in the Building or in any
35
Superior Lease or Mortgage; if Landlord shall have consented to a sublease and,
as a result of the use and occupancy of the subleased portion of the Premises by
the subtenant, operating expenses are increased by more than a de minimus
amount, then Tenant shall pay to Landlord, within ten (10) days after demand, as
additional rent, all resulting increases in operating expenses;
(7) the subletting shall be expressly subject to all of the
terms, covenants, conditions and obligations on Tenant's part to be observed and
performed under this Lease and the further condition and restriction that the
sublease shall not be modified without the prior written consent of Landlord,
which consent shall not be unreasonably withheld, conditioned or delayed or
assigned (by operation of law or otherwise; for purposes of this clause (7), the
transfer of a majority of the issued and outstanding capital stock of any
corporate subtenant or the transfer of a majority of the total interest in a
subtenant (if a partnership or other entity), however accomplished, whether in a
single transaction or in a series of related or unrelated transactions, shall be
deemed an assignment of the sublease, except that the transfer of the
outstanding capital stock of a corporate subtenant shall be deemed not to
include the sale of such stock by persons other than those deemed "insiders"
within the meaning of the Securities Exchange Act of 1934, as amended, which
sale is effected through the "over-the-counter market" or through any recognized
stock exchange) encumbered or otherwise transferred or the subleased premises
further sublet by the subtenant in whole or in part, or any part thereof
suffered or permitted by the subtenant to be used or occupied by others, without
the prior written consent of Landlord in each instance;
(8) the subletting shall end no later than one (1) day
before the Expiration Date and shall not be for a term of less than eighteen
(18) months unless it commences less than eighteen (18) months before the
Expiration Date;
(9) no subletting shall be for less than the One Thousand
Five Hundred (1,500) contiguous rentable square feet and at no time shall there
be more than two (2) occupants, including Tenant, in the Premises; and
(10) such sublease shall expressly provide that in the event
of termination, re-entry or dispossess of Tenant by Landlord under this Lease,
Landlord may, at its option, take over all of the right, title and interest of
Tenant, as sublessor under such sublease, and such subtenant, at Landlord's
option, shall attorn to Landlord pursuant to the then executory provisions of
such sublease, except that Landlord shall not be:
(i) liable for any act or omission of Tenant under such
sublease, or
(ii) subject to any defense or offsets which such subtenant
may have against Tenant, or
(iii) bound by any previous payment which such subtenant may
have made to Tenant more than thirty (30) days in advance of the date upon which
such payment was due, unless previously approved by Landlord, or
36
(iv) bound by any obligation to make any payment to or on
behalf of such subtenant, or
(v) bound by any obligation to perform any work or to make
improvements to the Premises, or portion thereof demised by such sublease, or
(vi) bound by any amendment or modification of such sublease
made without its consent, or
(vii) bound to return such subtenant's security deposit, if
any, until such deposit has come into its actual possession and such subtenant
would be entitled to such security deposit pursuant to the terms of such
sublease.
If Tenant proposes to sublet a portion of the Premises then, unless the context
otherwise requires, references in this Section 12.6 to the Premises shall be
deemed to refer to the portion of the Premises proposed to be sublet by Tenant.
(B) At least fifteen (15) Business Days prior to any proposed
subletting of the Premises, Tenant shall submit a statement to Landlord (a
"Tenant Statement") containing the following information: (a) the name and
-----------------
address of the proposed subtenant, (b) a description of the portion of the
Premises to be sublet, (c) the terms and conditions of the proposed subletting,
including, without limitation, the rent payable and the value (including cost,
overhead and supervision) of any improvements (including any demolition to be
performed) to the Premises for occupancy by such subtenant, (d) the nature and
character of the business of the proposed subtenant, and (e) any other
information that Landlord may reasonably request, together with a statement
specifically directing Landlord's attention to the provisions of this Section
12.6(B) requiring Landlord to respond to Tenant's request within fifteen (15)
Business Days after Landlord's receipt of the Tenant Statement. Landlord shall
have the right, exercisable by notice to Tenant within fifteen (15) Business
Days after Landlord's receipt of the Tenant Statement, to sublet (in its own
name or that of its designee) such portion of the Premises ("Recapture Space")
---------------
from Tenant on the terms and conditions set forth in the Tenant Statement,
subject to the further provisions of paragraph (C) of this Section 12.6. If
Landlord shall fail to notify Tenant within said fifteen (15) Business Day
period of Landlord's intention to exercise its rights pursuant to this Section
12.6(B) hereof or of Landlord's consent to or disapproval of the proposed
subletting pursuant to the Tenant Statement as contemplated by Section 12.6(A)
hereof, or if Landlord shall have consented to such subletting as provided in
Section 12.6(A) hereof, Tenant shall have the right to sublease that portion of
the Premises to such proposed subtenant on the same terms and conditions set
forth in the Tenant Statement, subject to the terms and conditions of this
Lease, including, without limitation, paragraph (A) of this Section 12.6. If
Tenant shall not enter into such sublease within sixty (60) days after the
delivery of the Tenant Statement to Landlord, then the provisions of Section
12.1 hereof and this Section 12.6 shall again be applicable to any other
proposed subletting. If Tenant shall enter into such sublease within sixty (60)
days as aforesaid, Tenant shall deliver a true, complete and fully executed
counterpart of such sublease to Landlord within five (5) days after execution
thereof.
37
(C) If Landlord exercises its option to sublet the Recapture Space,
such sublease to Landlord or its designee as subtenant (each, a "Recapture
---------
Sublease") shall:
--------
(1) be at a rental equal to the lesser of (x) the sum of
the Fixed Rent and Escalation Rent then payable hereunder and (y) the sublease
rent set forth in the Tenant Statement and otherwise, be upon the same terms and
conditions as those contained in this Lease (as modified by the Tenant
Statement, except such as are irrelevant or inapplicable and except as otherwise
expressly set forth to the contrary in this paragraph (C);
(2) give the subtenant the unqualified and unrestricted
right, without Tenant's permission, to assign such sublease and to further
sublet the Recapture Space or any part thereof and to make any and all changes,
alterations, and improvements in the Recapture Space;
(3) provide in substance that any such changes,
alterations, and improvements made in the Recapture Space may be removed, in
whole or in part, prior to or upon the expiration or other termination of the
Recapture Sublease provided that any material damage and injury caused thereby
shall be repaired;
(4) provide that (i) the parties to such Sublease expressly
negate any intention that any estate created under such Sublease be merged with
any other estate held by either of said parties, (ii) prior to the commencement
of the term of the Recapture Sublease, Landlord, at its sole cost and expense
(to the extent the Tenant Statement so provides), shall make such alterations as
may be required or reasonably deemed necessary by the subtenant to physically
separate the Recapture Space, if such Recapture Space constitutes a portion of
the Premises, from the balance of the Premises, and to provide appropriate means
of ingress to and egress thereto and to the public portions of the balance of
the floor such as toilets, janitor's closets, telephone and electrical closets,
fire stairs, elevator lobbies, etc. (iii) at the expiration of the term of such
Recapture Sublease, Tenant shall accept the Recapture Space in its then existing
condition, broom clean; and
(5) provide that the subtenant or occupant may use and
occupy the Recapture Space for any lawful purpose (without regard to any
limitation set forth in the Tenant Statement).
(D) Performance by Landlord, or its designee, under a Recapture
Sublease or a sub-subtenant or assignee of Landlord or its designee as subtenant
shall be deemed performance by Tenant of any similar obligation under this Lease
and Tenant shall not be liable for any default under this Lease or deemed to be
in default hereunder if such default is occasioned by or arises from any act or
omission of Landlord or its designee as the subtenant under the Recapture
Sublease or is occasioned by or arises from any act or omission of any occupant
under the Recapture Sublease.
(E) If Landlord is unable to give Tenant possession of the
Recapture Space at the expiration of the term of the Recapture Sublease by
reason of the holding over or retention
38
of possession of any tenant or other occupant, then (w) Landlord shall continue
to pay all charges previously payable, and comply with all other obligations,
under the Recapture Sublease until the date upon which Landlord shall give
Tenant possession of the Recapture Space free of occupancies, (x) neither the
Expiration Date nor the validity of this Lease shall be affected, (y) Tenant
waives any rights under Section 223-a of the Real Property Law of New York, or
any successor statute of similar import, to rescind this Lease and further
waives the right to recover any damages from Landlord which may result from the
failure of Landlord to deliver possession of the Recapture Space at the end of
the term of the Recapture Sublease, and (z) Landlord, at Landlord's expense,
shall use its reasonable efforts to deliver possession of the Recapture Space to
Tenant and in connection therewith, if necessary, shall institute and diligently
and in good faith prosecute holdover and any other appropriate proceedings
against the occupant of such Space; if Landlord fails to prosecute such
proceedings in such manner and such failure continues after reasonable notice
thereof by Tenant, Tenant may prosecute such proceedings in Landlord's name and
at Landlord's expense.
(F) The failure by Landlord to exercise its option under
Section 12.6(B) with respect to any subletting shall not be deemed a waiver of
such option with respect to any extension of such subletting or any subsequent
subletting of the Premises affected thereby.
Section 12.7. (A) In connection with any subletting of all or any portion
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of the Premises Tenant shall pay to Landlord an amount equal to fifty percent
(50%) of any Sublease Profit derived therefrom. Anything contained herein to
the contrary notwithstanding Tenant shall not be entitled to any proceeds
derived from or relating to (directly or indirectly) any subletting of the
Recapture Space by Landlord or its designee to a subtenant. All sums payable
hereunder by Tenant shall be calculated on an annualized basis, but shall be
paid to Landlord, as additional rent, within ten (10) days after receipt thereof
by Tenant.
(B) For purposes of this Lease:
(1) "Sublease Profit" shall mean the excess of (i) the
---------------
Sublease Rent over (ii) the then Fixed Rent, Escalation Rent and, if applicable,
the Electricity Additional Rent.
(2) "Sublease Rent" shall mean any rent or other
-------------
consideration paid Tenant directly or indirectly by any subtenant or any other
amount received by Tenant from or in connection with any subletting (including,
but not limited to, sums paid for the sale or rental, or consideration received
on account of any contribution, of Tenant's Property or sums paid in connection
with the supply of electricity or HVAC) less the Sublease Expenses.
(3) "Sublease Expenses" shall mean: (i) in the event of a
-----------------
sale of Tenant's Property, the then unamortized or undepreciated cost thereof
determined on the basis of Tenant's federal income tax returns, (ii) the
reasonable out-of-pocket costs and expenses of Tenant in making such sublease,
such as brokers' fees, attorneys' fees, and advertising fees paid to unrelated
third parties, (iii) any sums paid to Landlord pursuant to Section 12.2(B)
hereof, (iv) the cost of improvements or alterations made by Tenant expressly
and solely for the purpose of preparing that portion of the Premises for such
subtenancy if not used by Tenant subsequent to
39
the expiration of the term of the sublease, and (v) the unamortized or
undepreciated cost of any Tenant's Property leased to and used by such
subtenant. In determining Sublease Rent, the costs set forth in clauses (ii),
(iii) and (iv) shall be amortized on a straight-line basis over the term of such
sublease and the costs set forth in clause (v) shall be amortized on a straight
line basis over the greater of the longest useful life of such improvements,
alterations or Property (as permitted pursuant to the Internal Revenue Code of
1986, as amended) and the term of such sublease.
(4) Sublease Profit shall be recalculated from time to time
to reflect any corrections in the prior calculation thereof due to (i)
subsequent payments received or made by Tenant, (ii) the final adjustment of
payments to be made by or to Tenant, and (iii) mistake. Promptly after receipt
or final adjustment of any such payments or discovery of any such mistake,
Tenant shall submit to Landlord a recalculation of the Sublease Profit, and an
adjustment shall be made between Landlord and Tenant, on account of prior
payments made or credits received pursuant to this Section 12.7. In addition, if
Sublease Expenses utilized for the purpose of calculating Sublease Profit
included an amount attributable to the cost of the improvements made by Tenant
expressly and solely for the purpose of preparing the Premises for the occupancy
of the subtenant and subsequent to the expiration of the sublease such
improvements and/or alterations were not demolished and/or removed, Sublease
Profits shall be recalculated as if the cost of such improvements and/or
alterations were not incurred by Tenant and Tenant promptly shall pay to
Landlord fifty percent (50%) of the additional amount of such Sublease Profit
resulting from such recalculation.
Section 12.8. (A) Notwithstanding the provisions of Section 12.1 hereof,
-------------
if Landlord shall not exercise its rights pursuant to paragraph (B)(2) of this
Section 12.8, Landlord shall not unreasonably withhold, condition or delay its
consent to an assignment of this Lease in its entirety provided that:
(1) no Event of Default shall have occurred and be
continuing;
(2) upon the date Tenant delivers the Assignment Statement
to Landlord and upon the date immediately preceding the date of any assignment
approved by Landlord, the proposed assignee shall have a financial standing
(taking into consideration the obligations of the proposed assignee under this
Lease) reasonably satisfactory to Landlord, be of a character, be engaged in a
business, and propose to use the Premises in a manner in keeping with the
standards in such respects of the other tenancies in the Building;
(3) the proposed assignee (or any Person who directly or
indirectly, Controls, is Controlled by or is under common Control with the
proposed assignee) shall not be a person or entity with whom Landlord is
negotiating to lease space in the Building at the time of receipt of an
Assignment Statement;
(4) the character of the business to be conducted or the
proposed use of the Premises by the proposed assignee shall not (a) be likely to
increase Landlord's operating expenses beyond that which would be incurred for
use by Tenant or for use in accordance with the standards of use of other
tenancies in the Building; (b) increase the burden on existing
40
cleaning services or elevators over the burden prior to such proposed
assignment; (c) violate any provision or restrictions herein relating to the use
or occupancy of the Premises; (d) require any alterations, installations,
improvements, additions or other physical changes to be performed in or made to
any portion of the Building or the Real Property other than the Premises; or (e)
violate any provision or restrictions in any other lease for space in the
Building or in any Superior Lease or Mortgage; if Landlord shall have consented
to an assignment and, as a result of the use and occupancy of the Premises by
Tenant/assignee, operating expenses are increased by more than a de minimus
amount, then Tenant shall pay to Landlord, within ten (10) days after demand, as
additional rent, all resulting increases in operating expenses; and
(5) the assignee shall agree to assume all of the obligations of
Tenant under this Lease from and after the date of the assignment.
(B) (1) At least fifteen (15) Business Days prior to any proposed
assignment, Tenant shall submit a statement to Landlord (the "Assignment
----------
Statement") containing the following information: (i) the name and address of
---------
the proposed assignee, (ii) the essential terms and conditions of the proposed
assignment, including, without limitation, the consideration payable for such
assignment and the value (including cost, overhead and supervision) of any
improvements (including any demolition to be performed) to the Premises proposed
to be made by Tenant to prepare the Premises for occupancy by such assignee,
(iii) the nature and character of the business of the proposed assignee, and
(iv) any other information that Landlord may reasonably request, together with a
statement specifically directing Landlord's attention to the provisions of this
Section 12.8(B) requiring Landlord to respond to Tenant's request within fifteen
(15) Business Days after Landlord's receipt of the Assignment Statement. The
Assignment Statement shall be executed by Tenant and the proposed assignee and
shall indicate both parties' intent (but not necessarily binding obligation) to
enter into an assignment agreement conforming to the terms and conditions of the
Assignment Statement and on such other terms and conditions to which the parties
may agree which are not inconsistent with the essential terms set forth in the
Assignment Statement.
(2) Landlord shall have the right, exercisable within fifteen (15)
Business Days after Landlord's receipt of the Assignment Statement, to take an
assignment of this Lease (in its own name or that of its designee) for the same
consideration payable to Tenant pursuant to the terms of the Assignment
Statement (less the amount of any brokerage commission which would have been
payable on account of the assignment pursuant to the Assignment Statement),
provided Landlord shall take possession of the Premises "as is" in its condition
as of the date of such assignment and shall be entitled to a credit against the
consideration otherwise payable in the amount, if any, of the value of any
improvements, work or demolition proposed to be provided or performed by Tenant
pursuant to the Assignment Statement. If Landlord shall exercise its rights
pursuant to this Section 12.8(B)(2), then from and after the date of such
assignment to Landlord or its designee, Tenant and any guarantors of Tenant's
obligations hereunder shall have no further rights or obligations pursuant to
this Lease (except for those obligations which shall survive the expiration of
the Term).
41
(3) If Landlord shall fail to notify Tenant within said fifteen (15)
Business Day period of Landlord's intention to exercise its rights pursuant to
paragraph (B)(2) of this Section 12.8 or of Landlord's consent to or
disapproval of the proposed assignment pursuant to the Assignment Statement, or
if Landlord shall have consented to such assignment as provided in Section
12.8(A) hereof, Tenant shall be free to assign the Premises to such proposed
assignee on the same terms and conditions set forth in the Assignment Statement.
If Tenant shall not enter into such assignment within sixty (60) days after the
delivery of the Assignment Statement to Landlord, then the provisions of this
Section 12.8 shall again be applicable in their entirety to any proposed
assignment.
(4) If Tenant shall propose to assign this Lease and is about to
commence negotiations with a prospective assignee, Tenant shall advise Landlord
of the identity of such prospective assignee and Landlord shall, within five (5)
Business Days, advise Tenant if the execution of an assignment agreement with
such prospective assignee would violate the provisions of paragraph (A)(3) of
this Section 12.8.
(C) If Tenant shall assign this Lease, Tenant shall deliver to
Landlord, within ten (10) days after execution thereof, (x) a duplicate original
instrument of assignment in form and substance reasonably satisfactory to
Landlord, duly executed by Tenant, and (y) an instrument in form and substance
reasonably satisfactory to Landlord, duly executed by the assignee, in which
such assignee shall assume observance and performance of, and agree to be
personally bound by, all of the terms, covenants and conditions of this Lease on
Tenant's part to be observed and performed.
(D) Tenant shall pay to Landlord, upon receipt thereof, an amount
equal to fifty percent (50%) of all Assignment Proceeds. For purposes of this
paragraph (D), "Assignment Proceeds" shall mean all consideration payable to
-------------------
Tenant, directly or indirectly, by any assignee, including Landlord pursuant to
paragraph (B) of this Section 12.8, or any other amount received by Tenant from
or in connection with any assignment (including, but not limited to, sums paid
for the sale or rental, or consideration received on account of any
contribution, of Tenant's Property) after deducting therefrom: (i) in the event
of a sale (or contribution) of Tenant's Property, the then unamortized or
undepreciated cost thereof determined on the basis of Tenant's federal income
tax returns, (ii) the reasonable out-of-pocket costs and expenses of Tenant in
making such assignment, such as brokers' fees, attorneys' fees, and advertising
fees paid to unrelated third parties, (iii) any payments required to be made by
Tenant in connection with the assignment of its interest in this Lease pursuant
to Article 31-B of the Tax law of the State of New York or any real property
transfer tax of the United States or the City or State of New York (other than
any income tax), (iv) any sums paid by Tenant to Landlord pursuant to Section
12.2(B) hereof, (v) the cost of improvements or alterations made by Tenant
expressly and solely for the purpose of preparing the Premises for such
assignment, as determined by Tenant's federal income tax returns, (vi) the
unamortized or undepreciated cost of any Tenant's Property leased to and used by
such assignee, and (vii) the then unamortized or undepreciated cost of the
Alterations determined on the basis of Tenant's federal income tax returns less
the Tenant Fund. If the consideration paid to Tenant for any assignment shall be
paid in installments, then the expenses specified in this paragraph (D) shall be
amortized over the period during which such
42
installments shall be payable. If Landlord exercises its right to take an
assignment of this Lease pursuant to the provisions of Section 12.8(B) hereof,
in no event shall Tenant be entitled to any proceeds derived from or relating to
(directly or indirectly) any lease or sublease of the Premises by Landlord or
further assignment of the Lease.
Section 12.9. Notwithstanding any other provision of this Lease, neither
------------
Tenant nor any direct or indirect assignee or subtenant of Tenant may enter into
any lease, sublease, license, concession or other agreement for use, occupancy
or utilization of space in the Premises which provides for a rental or other
payment for such use, occupancy or utilization based in whole or in part on the
net income or profits derived by any person from the property leased, occupied
or utilized, or which would require the payment of any consideration which would
not fall within the definition of "rents from real property", as that term is
defined in Section 856(d) of the Internal Revenue Code of 1986, as amended.
ARTICLE 13
ELECTRICITY
-----------
Section 13.1. Tenant shall at all times comply with the rules,
------------
regulations, terms and conditions applicable to service, equipment, wiring and
requirements of the public utility supplying electricity to the Building. The
risers serving the Premises shall be capable of supplying six (6) ▇▇▇▇▇ of
electricity per rentable square foot of the Premises (exclusive of base building
HVAC) and Tenant shall not use any electrical equipment which, in Landlord's
reasonable judgment, would exceed such capacity or interfere with the electrical
service to other tenants of the Building. In the event that, in Landlord's sole
judgment, Tenant's electrical requirements necessitate installation of an
additional riser, risers or other proper and necessary equipment, Landlord shall
so notify Tenant of same. Within five (5) Business Days after receipt of such
notice, Tenant shall either cease such use of such additional electricity or
shall request that additional electrical capacity (specifying the amount
requested) be made available to Tenant. Landlord, in Landlord's sole judgment
shall determine whether to make available such additional electrical capacity to
Tenant and the amount of such additional electrical capacity to be made
available. If Landlord shall agree to make available additional electrical
capacity and the same necessitates installation of an additional riser, risers
or other proper and necessary equipment, including, without limitation, any
switchgear, the same shall be installed by Landlord. Any such installation shall
be made at Tenant's sole cost and expense, and shall be chargeable and
collectible as additional rent and paid within ten (10) days after the rendition
of a ▇▇▇▇ to Tenant therefor. Landlord shall not be liable in any way to Tenant
for any failure or defect in the supply or character of electric service
furnished to the Premises by reason of any requirement, act or omission of the
utility serving the Building or for any other reason not attributable to the
negligence of Landlord, whether electricity is provided by public or private
utility or by any electricity generation system owned and operated by Landlord.
Section 13.2. (A) Unless Landlord elects to supply electricity to the
------------
Premises pursuant to Section 13.3 or Landlord is required by Requirements or the
public utility serving the Premises to have Tenant obtain electricity from the
public utility furnishing electricity to the Building
43
pursuant to the provisions of Section 13.4 hereof, Landlord shall furnish
electric current to the Premises for the use of Tenant for the operation of the
lighting fixtures and the electrical receptacles for ordinary office equipment
in the Premises on a "rent inclusion" basis, that is, there shall be no separate
charge to Tenant for such electric current by way of measuring such electricity
service on any meter. The Fixed Rent set forth in this Lease includes an annual
charge for electricity service of Eleven Thousand One Hundred Thirty-Six Dollars
($11,136.00) (the "Base Electricity Inclusion Factor", such amount, as it may be
---------------------------------
increased pursuant to the provisions of this Lease, being referred to as the
"Electricity Inclusion Factor"). The parties agree that although the charge for
----------------------------
furnishing electrical energy is included in the Fixed Rent on a so-called "rent
inclusion" basis, the value to Tenant of such service may not be fully reflected
in the Fixed Rent. Accordingly, Tenant agrees that Landlord, at Landlord's
option and at Landlord's sole cost and expense, may cause a reputable and
independent electrical engineer or electrical consulting firm, selected by
Landlord (such engineer or consulting firm being hereinafter referred to as
"Landlord's Engineer"), to make a determination, following the commencement of
-------------------
Tenant's normal business activities in the Premises, of the Full Value of such
service to Tenant. As used herein, the "Full Value" to Tenant of such service
----------
shall mean the product obtained by multiplying the demand and consumption of
electric energy at the Premises by the Electric Rate. Landlord's Engineer shall
certify such determination in writing to Landlord and Tenant. If the Full Value
to Tenant is in excess of the Electricity Inclusion Factor, the Electricity
Inclusion Factor and the Fixed Rent shall be increased by such excess. However,
if it shall be so determined that the Full Value to Tenant of such service does
not exceed the Electricity Inclusion Factor, the Electricity Inclusion Factor
shall be decreased by any excess of the Electricity Inclusion Factor over the
Full Value, provided, however, that in no event shall the Electricity Inclusion
Factor be decreased to an amount less than the Base Electricity Inclusion
Factor.
(B) If during the Term the Electric Rate shall increase over the Base
Electric Rate, the Electricity Inclusion Factor (and therefore the Fixed Rent)
shall be proportionately increased or decreased, as the case may be, provided
that in no event shall the Electricity Inclusion Factor be reduced below the
Base Electricity Inclusion Factor.
(C) (i) Landlord, from time to time during the Term, may cause
Landlord's Engineer to survey the demand and consumption of electrical energy at
the Premises (it being agreed that off-peak and on-peak use shall be considered
by the Engineer, to the extent relevant, in making the determination of the Full
Value). If the then Full Value shall exceed the then Electricity Inclusion
Factor, the Electricity Inclusion Factor (and therefore the Fixed Rent), shall
be proportionately increased or decreased, as the case may be, based on the
increased demand and consumption and the then prevailing Electric Rate, provided
that in no event shall the Electricity Inclusion Factor be reduced below the
Base Electricity Inclusion Factor.
(ii) Landlord shall furnish to Tenant a written statement (an
"Electricity Statement") setting forth Landlord's determination of any increase
----------------------
or decrease (subject to the terms of this Section 13.2) which has occurred in
the Full Value and the Electricity Inclusion Factor (and therefore the Fixed
Rent) pursuant to the provisions of either Sections 13.2(A), (B), or (C)(i).
Any such increase in the Electricity Inclusion Factor and the
44
Fixed Rent shall be effective as of the date of such increase in the Electric
Rate or the consumption and demand of electric energy by Tenant and shall be
retroactive to such dates if necessary. Any retroactive increase shall be paid
by Tenant within ten (10) days after demand and such amount shall be collectible
by Landlord as Fixed Rent hereunder.
(iii) Each such Electricity Statement given by Landlord pursuant
to Section 13.2(C)(ii) above, shall be conclusive and binding upon Tenant,
unless within sixty (60) days after the receipt of such Electricity Statement,
Tenant shall notify Landlord that it disputes the correctness of the Electricity
Statement. If such dispute is based on Tenant's demand and consumption of
electric current, Tenant shall submit a survey and determination of such
adjustment, made at its sole cost and expense, by a reputable and independent
electrical engineer or electrical consulting firm ("Tenant's Engineer"), within
-----------------
sixty (60) days after receipt of such Electricity Statement. If Landlord and
Tenant are unable to resolve the dispute differences between them within thirty
(30) days after receipt by Landlord of a copy of the determination of Tenant's
Engineer, the dispute shall be decided by a third reputable and independent
electrical engineer or electrical consulting firm ("Third Engineer"). If the
--------------
parties shall fail to agree upon the designation of the Third Engineer within
forty (40) days after the receipt by Landlord of the determination of Tenant's
Engineer, then either party may apply to the American Arbitration Association or
any successor thereto for the designation of the Third Engineer. The Third
Engineer shall conduct such hearings as he deems appropriate. The Third
Engineer, within thirty (30) days after his designation, shall select the
determination of either Landlord's Engineer or Tenant's Engineer and such
determination shall be conclusive and binding upon the parties whether or not a
judgment shall be entered in any court. The fees of the Third Engineer and the
costs of arbitration shall be paid equally by the parties, except that each
party shall pay its own counsel fees and expenses, if any, in connection with
the arbitration. Pending the resolution of such dispute by agreement or
arbitration as aforesaid, Tenant shall pay the increase in the Electricity
Inclusion Factor in accordance with the Electricity Statement, without prejudice
to Tenant's position, as herein provided. If the dispute shall be resolved in
Tenant's favor, Landlord, at its option, shall either credit the amount of such
overpayment against subsequent monthly installments of Fixed Rent hereunder or
pay to Tenant the amount of such overpayment.
(D) Landlord's failure during the Term to prepare and deliver any
Electricity Statement, or bills, or Landlord's failure to make a demand, under
this Article or any other provisions of this Lease, shall not in any way be
deemed to be a waiver of, or cause Landlord to forfeit or surrender, its rights
to collect any portion of the increase in the Electricity Inclusion Factor (and
therefore the Fixed Rent) which may have become due pursuant to this Article 13
during the Term. Tenant's liability for the amounts due under this Article 13
shall survive the expiration or sooner termination of this Lease and Landlord's
obligation, if any, to refund any payments by Tenant in excess of the amounts
required to be paid by Tenant to Landlord pursuant to this Article 13 shall
survive the expiration or sooner termination of this Lease. The preceding
sentence shall not, however, be construed as limiting or restricting, in any
manner whatsoever, Landlord's right pursuant to this Lease or pursuant to law to
offset any such overpayments by Tenant against any amounts which may be due and
payable as provided in this Lease.
45
(E) In no event shall any adjustment of the payments made or to be
made hereunder result in a decrease in Fixed Rent or additional rent payable
pursuant to any other provision of this Lease, or in the amount paid for
electricity for the prior year.
(F) The Electricity Inclusion Factor shall be collectible by Landlord
in the same manner as Fixed Rent.
(G) For the purposes of this Section 13.2, Landlord and Tenant agree
that the term "Electric Rate" (including all applicable surcharges, demand
-------------
charges, energy charges, fuel adjustment charges, time of day charges, taxes and
other sums payable in respect thereof) shall mean the service classification
pursuant to which Landlord purchases electricity from the utility company
servicing the Building.
(H) If Landlord discontinues furnishing electricity to Tenant
pursuant to this Section 13.2, the Fixed Rent shall be decreased by the
Electricity Inclusion Factor effective as of the date Landlord discontinues the
provision of electricity in such manner.
Section 13.3. (A) If Landlord shall no longer elect to have electricity
-------------
furnished to the Premises pursuant to Section 13.2 hereof then, unless Landlord
is required by Requirements or the public utility serving the Premises to have
Tenant obtain electricity from the public utility company furnishing electricity
to the Building pursuant to the provisions of Section 13.4 hereof, electricity
shall be furnished by Landlord to the Premises and Tenant shall pay to Landlord,
as additional rent for such service, during the Term, an amount (the
"Electricity Additional Rent") equal to (i) the amount Landlord actually pays to
----------------------------
the utility company to provide electricity to the Premises, including all
applicable surcharges, demand charges, time-of-day charges, energy charges, fuel
adjustment charges, rate adjustment charges, taxes and other sums payable in
respect thereof and net of any rebates or credits actually received by Landlord
in respect of such electricity supplied to the Premises, based on Tenant's
demand and/or consumption of electricity (and/or any other method of quantifying
Tenant's use of or demand for electricity as set forth in the utility company's
tariff) as registered on a meter or submeter (installed by Landlord at
Landlord's sole cost and expense) for purposes of measuring such demand,
consumption and/or other method of quantifying Tenant's use of or demand for
electricity (it being agreed that such meter or submeter shall measure demand
and consumption, and off-peak and on-peak use, in either case to the extent such
factors are relevant in making the determination of Landlord's cost) plus (ii)
an amount equal to the actual out-of-pocket costs and expenses incurred by
Landlord in connection with reading such meters and preparing bills therefor.
Tenant, from time to time, shall have the right to review Landlord's meter
readings, and Landlord's calculation of the Electricity Additional Rent, at
reasonable times and on reasonable prior notice, by giving notice thereof to
Landlord on or prior to the ninetieth (90th) day after the date when Landlord
gives Tenant a ▇▇▇▇ or statement for the Electricity Additional Rent.
(B) Where more than one meter measures the electricity supplied to
Tenant, the electricity rendered through each meter shall be computed and billed
in the aggregate as if one (1) meter measured the electricity supplied in
accordance with the provisions hereinabove set forth. Bills for the Electricity
Additional Rent shall be rendered to Tenant at such time as
46
Landlord may elect, but not more frequently than once per month, and Tenant
shall pay the amount shown thereon to Landlord within ten (10) days after
receipt of such ▇▇▇▇. Tenant expressly acknowledges that in connection with the
installation of the meters or submeters, the electricity being supplied to the
Premises shall be temporarily interrupted. Landlord shall use reasonable efforts
to minimize interference with the conduct of Tenant's business in connection
with such installation; provided, however, that Landlord shall have no
obligation to employ contractors or labor at so-called overtime or other premium
pay rates or to incur any other overtime costs or expenses whatsoever.
Section 13.4. If Landlord shall be required by Requirements or the public
------------
utility serving the Premises to discontinue furnishing electricity to Tenant
this Lease shall continue in full force and effect and shall be unaffected
thereby, except only that from and after the effective date of such
discontinuance, Landlord shall not be obligated to furnish electricity to Tenant
and Tenant shall not be obligated to pay the Electricity Additional Rent or the
Electricity Inclusion Charge, as the case may be. If Landlord so discontinues
furnishing electricity to Tenant, Tenant shall use diligent efforts to obtain
electric energy directly from the public utility furnishing electric service to
the Building. The costs of such service shall be paid by Tenant directly to such
public utility. Such electricity may be furnished to Tenant by means of the
existing electrical facilities serving the Premises, at no charge, to the extent
the same are available, suitable and safe for such purposes as determined by
Landlord. All meters and all additional panel boards, feeders, risers, wiring
and other conductors and equipment which may be required to obtain electricity
shall be installed by Landlord at Tenant's expense. Provided Tenant shall use
and continue to use diligent efforts to obtain electric energy directly from the
public utility, Landlord, to the extent permitted by applicable Requirements,
shall not discontinue furnishing electricity to the Premises until such
installations have been made and Tenant shall be able to obtain electricity
directly from the public utility.
ARTICLE 14
ACCESS TO PREMISES
------------------
Section 14.1. (A) Tenant shall permit Landlord, Landlord's agents,
------------
representatives, contractors and employees and public utilities servicing the
Building to erect, use and maintain, concealed ducts, pipes and conduits in and
through the Premises. Landlord, Landlord's agents, representatives,
contractors, and employees and the agents, representatives, contractors, and
employees of public utilities servicing the Building shall have the right to
enter the Premises at all reasonable times upon reasonable prior notice (except
in the case of an emergency in which event Landlord and Landlord's agents,
representatives, contractors, and employees may enter without prior notice to
Tenant), which notice may be oral, to examine the same, to show them to
prospective purchasers, or prospective or existing Mortgagees or Lessors, and to
make such repairs, alterations, improvements, additions or restorations (i) as
Landlord may deem necessary or desirable to the Premises or to any other portion
of the Building, or (ii) which Landlord may elect to perform following ten (10)
days after notice, except in the case of an emergency (in which event Landlord
and Landlord's agents, representatives, contractors, and employees may enter
without prior notice to Tenant), following Tenant's failure to make repairs or
perform any
47
work which Tenant is obligated to make or perform under this Lease, or (iii) for
the purpose of complying with any Requirements, a Superior Lease or a Mortgage,
and Landlord shall be allowed to take all material into and upon the Premises
that may be required therefor without the same constituting an eviction or
constructive eviction of Tenant in whole or in part and the Fixed Rent (and any
other item of Rental) shall in no wise ▇▇▇▇▇ while said repairs, alterations,
improvements, additions or restorations are being made, by reason of loss or
interruption of business of Tenant, or otherwise.
(B) Any work performed or installations made pursuant to this Article
14 shall be made with reasonable diligence and Landlord shall use its reasonable
efforts to minimize interference with Tenant's access to and use and occupancy
of the Premises in making any repairs, alterations, additions or improvements,
as provided in the provisions of Section 4.3 hereof. Landlord shall cause any
debris or refuse to be removed from the work area in the Premises at the end of
each day, and upon completion of any such work, Landlord shall repair any damage
to the Premises caused by or resulting from such work or activity.
(C) Except as hereinafter provided, any pipes, ducts, or conduits
installed in or through the Premises pursuant to this Article 14 shall be
concealed behind, beneath or within partitioning, columns, ceilings or floors
located or to be located in the Premises. Notwithstanding the foregoing, any
such pipes, ducts, or conduits may be furred at points immediately adjacent to
partitioning columns or ceilings located or to be located in the Premises,
provided that the same are completely furred and that the installation of such
pipes, ducts, or conduits, when completed, shall not reduce the usable area of
the Premises beyond a de minimis amount.
----------
Section 14.2. During the twelve (12) month period prior to the Expiration
------------
Date, Landlord may exhibit the Premises to prospective tenants thereof upon
reasonable prior notice (which may be oral) and at reasonable times.
Section 14.3. If Tenant shall not be present when for any reason entry
------------
into the Premises shall be necessary or permissible, Landlord or Landlord's
agents, representatives, contractors or employees may enter the same without
rendering Landlord or such agents liable therefor if during such entry Landlord
or Landlord's agents shall accord reasonable care under the circumstances to
Tenant's Property, and without in any manner affecting this Lease. Nothing
herein contained, however, shall be deemed or construed to impose upon Landlord
any obligation, responsibility or liability whatsoever, for the care,
supervision or repair of the Building or any part thereof, other than as herein
provided.
Section 14.4. Landlord also shall have the right at any time, without the
------------
same constituting an actual or constructive eviction and without incurring any
liability to Tenant therefor, to change the arrangement or location of entrances
or passageways, doors and doorways, and corridors, elevators, stairs, toilets,
or other public parts of the Building and to change the name, number or
designation by which the Building is commonly known, provided any such change
does not (a) unreasonably reduce, interfere with or deprive Tenant of access to
the Building or the Premises or (b) reduce the rentable area (except by a de
--
minimis amount) of
-------
48
the Premises. All parts (except surfaces facing the interior of the Premises) of
all walls, windows and doors bounding the Premises (including exterior Building
walls, exterior core corridor walls, exterior doors and entrances), all
balconies, terraces and roofs adjacent to the Premises, all space in or adjacent
to the Premises used for shafts, stacks, stairways, chutes, pipes, conduits,
ducts, fan rooms, heating, air cooling, plumbing and other mechanical
facilities, service closets and other Building facilities are not part of the
Premises, and Landlord shall have the use thereof, as well as access thereto
through the Premises for the purposes of operation, maintenance, alteration and
repair.
ARTICLE 15
CERTIFICATE OF OCCUPANCY
------------------------
Tenant shall not at any time use or occupy the Premises in violation of the
certificate of occupancy at such time issued for the Premises or for the
Building and in the event that any department of the City or State of New York
shall hereafter contend or declare by notice, violation, order or in any other
manner whatsoever that the Premises are used for a purpose which is a violation
of such certificate of occupancy, Tenant, upon written notice from Landlord or
any Governmental Authority, shall immediately discontinue such use of the
Premises. On the Commencement Date a temporary or permanent certificate of
occupancy covering the Premises will be in force permitting the Premises to be
used as offices, provided, however, neither such certificate, nor any provision
of this Lease, nor any act or omission of Landlord, shall be deemed to
constitute a representation or warranty that the Premises, or any part thereof,
lawfully may be used or occupied for any particular purpose or in any particular
manner, in contradistinction to mere "office" use.
ARTICLE 16
DEFAULT
-------
Section 16.1. Each of the following events shall be an "Event of Default"
------------ ----------------
hereunder:
(A) If Tenant shall default in the payment when due of any
installment of Fixed Rent and such default shall continue for three (3) Business
Days after notice of such default is given to Tenant, or in the payment when due
of any other item of Rental and such default shall continue for three (3)
Business Days after notice of such default is given to Tenant, except that if
Landlord shall have given two (2) such notices in any twelve (12) month period,
Tenant shall not be entitled to any further notice of its delinquency in the
payment of Rental until such time as twelve (12) consecutive months shall have
elapsed without Tenant having defaulted in any such payment, or
(B) if Tenant shall default in the observance or performance of any
term, covenant or condition on Tenant's part to be observed or performed under
any other lease with Landlord or Landlord's predecessor in interest of space in
the Building and such default shall
49
continue beyond any grace period set forth in such other lease for the remedying
of such default; or,
(C) if the Premises shall become deserted or abandoned; or
(D) if Tenant's interest or any portion thereof in this Lease shall
devolve upon or pass to any person, whether by operation of law or otherwise,
except as expressly permitted under Article 12 hereof; or
(E) (1) if Tenant shall generally not, or shall be unable to, or
shall admit in writing its inability to, pay its debts as they become due; or
(2) if Tenant shall commence or institute any case, proceeding or
other action (A) seeking relief on its behalf as debtor, or to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, or (B) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any substantial part of its
property; or
(3) if Tenant shall make a general assignment for the benefit of
creditors; or
(4) if any case, proceeding or other action shall be commenced or
instituted against Tenant (A) seeking to have an order for relief entered
against it as debtor or to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts under any existing
or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, or (B) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its property, which in either of such cases (i) results in
any such entry of an order for relief, adjudication of bankruptcy or insolvency
or such an appointment or the issuance or entry of any other order having a
similar effect or (ii) remains undismissed for a period of sixty (60) days; or
(5) if any case, proceeding or other action shall be commenced or
instituted against Tenant seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its property which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within sixty (60) days from the entry thereof; or
(6) if Tenant shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts set
forth in clauses (2), (3), (4) or (5) above; or
50
(7) if a trustee, receiver or other custodian is appointed for any
substantial part of the assets of Tenant which appointment is not vacated or
stayed within seven (7) Business Days; or
(F) if Tenant shall fail more than five (5) times during any twelve
(12) month period to pay any installment of Fixed Rent or any item of Rental
when due after receipt of the notice and the expiration of the applicable grace
period pursuant to the provisions of paragraph (A) above, if such notice and
grace period are then required; or
(G) if Tenant shall fail to pay any installments of Fixed Rent or
items of Rental when due as required by this Lease, and Landlord shall bring
more than three (3) summary dispossess proceedings during any twelve (12) month
period; or
(H) if this Lease is assigned (or all or a portion of the Premises
are subleased) to a Related Entity and such Related Entity shall no longer (i)
Control, (ii) be under common Control with, or (iii) be under the Control of
Tenant (or any permitted successor by merger, consolidation or purchase as
provided herein); or
(I) if Landlord shall present the Letter of Credit to the bank which
issued the same in accordance with the provisions of Article 31 hereof, and the
bank shall fail to honor the Letter of Credit and pay the proceeds thereof to
Landlord for any reason whatsoever; or
(J) if Tenant shall default in the observance or performance of any
other term, covenant or condition of this Lease on Tenant's part to be observed
or performed and Tenant shall fail to remedy such default within thirty (30)
days after notice by Landlord to Tenant of such default, or if such default is
of such a nature that it cannot with due diligence be completely remedied within
said period of thirty (30) days and Tenant shall not commence within said period
of thirty (30) days, or shall not thereafter diligently prosecute to completion,
all steps necessary to remedy such default.
Section 16.2. (A) If an Event of Default (i) described in Section 16.1(E)
-------------
hereof shall occur, or (ii) described in Sections 16.1(A), (B), (C), (D), (F),
(G), (H), (I) or (J) shall occur and Landlord, at any time thereafter, at its
option gives written notice to Tenant stating that this Lease and the Term shall
expire and terminate on the date Landlord shall give Tenant such notice, then
this Lease and the Term and all rights of Tenant under this Lease shall expire
and terminate as if the date on which the Event of Default described in clause
(i) above occurred or the date of such notice, pursuant to clause (ii) above,
as the case may be, were the Fixed Expiration Date and Tenant immediately shall
quit and surrender the Premises, but Tenant shall nonetheless be liable for all
of its obligations hereunder, as provided for in Articles 17 and 18 hereof.
Anything contained herein to the contrary notwithstanding, if such termination
shall be stayed by order of any court having jurisdiction over any proceeding
described in Section 16.1(E) hereof, or by federal or state statute, then,
following the expiration of any such stay, or if the trustee appointed in any
such proceeding, Tenant or Tenant as debtor-in-possession shall fail to assume
Tenant's obligations under this Lease within the period prescribed therefor by
law or within one hundred twenty (120) days after entry of the order for relief
or as may be allowed by
51
the court, or if said trustee, Tenant or Tenant as debtor-in-possession shall
fail to provide adequate protection of Landlord's right, title and interest in
and to the Premises or adequate assurance of the complete and continuous future
performance of Tenant's obligations under this Lease as provided in Section
12.3(B), Landlord, to the extent permitted by law or by leave of the court
having jurisdiction over such proceeding, shall have the right, at its election,
to terminate this Lease on five (5) days' notice to Tenant, Tenant as debtor-in-
possession or said trustee and upon the expiration of said five (5) day period
this Lease shall cease and expire as aforesaid and Tenant, Tenant as debtor-in-
possession or said trustee shall immediately quit and surrender the Premises as
aforesaid.
(B) If an Event of Default described in Section 16.1(A) hereof shall
occur, or this Lease shall be terminated as provided in Section 16.2(A) hereof,
Landlord, without notice, may reenter and repossess the Premises using such
force for that purpose as may be necessary without being liable to indictment,
prosecution or damages therefor and may dispossess Tenant by summary proceedings
or otherwise.
Section 16.3. If at any time, (i) Tenant shall be comprised of two (2) or
-------------
more persons, or (ii) Tenant's obligations under this Lease shall have been
guaranteed by any person other than Tenant, or (iii) Tenant's interest in this
Lease shall have been assigned, the word "Tenant", as used in Section 16.1(E),
shall be deemed to mean any one or more of the persons primarily or secondarily
liable for Tenant's obligations under this Lease. Any monies received by
Landlord from or on behalf of Tenant during the pendency of any proceeding of
the types referred to in Section 16.1(E) shall be deemed paid as compensation
for the use and occupation of the Premises and the acceptance of any such
compensation by Landlord shall not be deemed an acceptance of Rental or a waiver
on the part of Landlord of any rights under Section 16.2.
ARTICLE 17
REMEDIES AND DAMAGES
--------------------
Section 17.1. (A) If there shall occur any Event of Default, and this
-------------
Lease and the Term shall expire and come to an end as provided in Article 16
hereof:
(1) Tenant shall quit and peacefully surrender the Premises to
Landlord, and Landlord and its agents may immediately, or at any time after such
default or after the date upon which this Lease and the Term shall expire and
come to an end, re-enter the Premises or any part thereof, without notice,
either by summary proceedings, or by any other applicable action or proceeding,
in accordance with applicable law (without being liable to indictment,
prosecution or damages therefor), and may repossess the Premises and dispossess
Tenant and any other persons from the Premises and remove any and all of their
property and effects from the Premises; and
(2) Landlord, at Landlord's option, may relet the whole or any
portion or portions of the Premises from time to time, either in the name of
Landlord or otherwise, to such tenant or tenants, for such term or terms ending
before, on or after the Expiration Date, at
52
such rental or rentals and upon such other conditions, which may include
concessions and free rent periods, as Landlord, in its sole discretion, may
determine; provided, however, that Landlord shall have no obligation to relet
the Premises or any part thereof and shall in no event be liable for refusal or
failure to relet the Premises or any part thereof, or, in the event of any such
reletting, for refusal or failure to collect any rent due upon any such
reletting, and no such refusal or failure shall operate to relieve Tenant of any
liability under this Lease or otherwise affect any such liability, and Landlord,
at Landlord's option, may make such repairs, replacements, alterations,
additions, improvements, decorations and other physical changes in and to the
Premises as Landlord, in its sole discretion, considers advisable or necessary
in connection with any such reletting or proposed reletting, without relieving
Tenant of any liability under this Lease or otherwise affecting any such
liability.
(B) Tenant hereby waives the service of any notice of intention to
re-enter or to institute legal proceedings to that end which may otherwise be
required to be given under any present or future law. Tenant, on its own behalf
and on behalf of all persons claiming through or under Tenant, including all
creditors, does further hereby waive any and all rights which Tenant and all
such persons might otherwise have under any present or future law to redeem the
Premises, or to re-enter or repossess the Premises, or to restore the operation
of this Lease, after (a) Tenant shall have been dispossessed by a judgment or by
warrant of any court or judge, or (b) any re-entry by Landlord, or (c) any
expiration or termination of this Lease and the Term, whether such dispossess,
re-entry, expiration or termination shall be by operation of law or pursuant to
the provisions of this Lease. The words "re-enter," "re-entry" and "re-entered"
as used in this Lease shall not be deemed to be restricted to their technical
legal meanings. In the event of a breach or threatened breach by Tenant, or any
persons claiming through or under Tenant, of any term, covenant or condition of
this Lease, Landlord shall have the right to seek to enjoin such breach and the
right to seek to invoke any other remedy allowed by law or in equity as if re-
entry, summary proceedings and other special remedies were not provided in this
Lease for such breach. The right to invoke the remedies hereinbefore set forth
are cumulative and shall not preclude Landlord from invoking any other remedy
allowed at law or in equity.
Section 17.2. (A) If this Lease and the Term shall expire and come to an
-------------
end as provided in Article 16 hereof, or by or under any summary proceeding or
any other action or proceeding, or if Landlord shall re-enter the Premises as
provided in Section 17.1, or by or under any summary proceeding or any other
action or proceeding, then, in any of said events:
(1) Tenant shall pay to Landlord all Fixed Rent, Escalation
Rent and other items of Rental payable under this Lease by Tenant to Landlord to
the date upon which this Lease and the Term shall have expired and come to an
end or to the date of re-entry upon the Premises by Landlord, as the case may
be;
(2) Tenant also shall be liable for and shall pay to
Landlord, as damages, any deficiency (referred to as "Deficiency") between the
----------
Rental for the period which otherwise would have constituted the unexpired
portion of the Term and the net amount, if any, of rents collected under any
reletting effected pursuant to the provisions of clause (2) of Section 17.1 (A)
for any part of such period (first deducting from the rents collected under any
such
53
reletting all of Landlord's expenses in connection with the termination of this
Lease, Landlord's re-entry upon the Premises and with such reletting, including,
but not limited to, all repossession costs, brokerage commissions, legal
expenses, attorneys' fees and disbursements, alteration costs, contribution to
work and other expenses of preparing the Premises for such reletting); any such
Deficiency shall be paid in monthly installments by Tenant on the days specified
in this Lease for payment of installments of Fixed Rent; Landlord shall be
entitled to recover from Tenant each monthly Deficiency as the same shall arise,
and no suit to collect the amount of the Deficiency for any month shall
prejudice Landlord's right to collect the Deficiency for any subsequent month by
a similar proceeding; and
(3) whether or not Landlord shall have collected any monthly
Deficiency as aforesaid, Landlord shall be entitled to recover from Tenant, and
Tenant shall pay to Landlord, on demand, in lieu of any further Deficiency as
and for liquidated and agreed final damages, a sum equal to the amount by which
the Rental for the period which otherwise would have constituted the unexpired
portion of the Term (commencing on the date immediately succeeding the last date
with respect to which a Deficiency, if any, was collected) exceeds the then fair
and reasonable rental value of the Premises for the same period, both discounted
to present worth at the Base Rate; if, before presentation of proof of such
liquidated damages to any court, commission or tribunal, the Premises, or any
part thereof, shall have been relet by Landlord for the period which otherwise
would have constituted the unexpired portion of the Term, or any part thereof,
the amount of rent reserved upon such reletting shall be deemed, prima facie, 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.
(B) If the Premises, or any part thereof, shall be relet together
with other space in the Building, the rents collected or reserved under any such
reletting and the expenses of any such reletting shall be equitably apportioned
for the purposes of this Section 17.2. Tenant shall in no event be entitled to
any rents collected or payable under any reletting, whether or not such rents
shall exceed the Fixed Rent reserved in this Lease. Solely for the purposes of
this Article 17, the term "Escalation Rent" as used in Section 17.2(A) shall
mean the Escalation Rent in effect immediately prior to the Expiration Date, or
the date of re-entry upon the Premises by Landlord, as the case may be, adjusted
to reflect any increase pursuant to the provisions of Article 27 hereof for the
Operating Year immediately preceding such event. Nothing contained in Article 16
hereof or this Article 17 shall be deemed to limit or preclude the recovery by
Landlord from Tenant of the maximum amount allowed to be obtained as damages by
any statute or rule of law, or of any sums or damages to which Landlord may be
entitled in addition to the damages set forth in this Section 17.2.
ARTICLE 18
LANDLORD FEES AND EXPENSES
--------------------------
Section 18.1. If an Event of Default shall have occurred and be
-------------
continuing, or if Tenant shall do or permit to be done any act or thing upon the
Premises which would cause Landlord to be in default under any Superior Lease or
Mortgage, Landlord may (1) as provided in Section
54
14.1 hereof, perform the same for the account of Tenant, or (2) make any
expenditure or incur any obligation for the payment of money, including, without
limitation, reasonable attorneys' fees and disbursements in instituting,
prosecuting or defending any action or proceeding, and the cost thereof, with
interest thereon at the Applicable Rate, shall be deemed to be additional rent
hereunder and shall be paid by Tenant to Landlord within ten (10) Business Days
of rendition of any ▇▇▇▇ or statement to Tenant therefor and if the term of this
Lease shall have expired at the time of making of such expenditures or incurring
of such obligations, such sums shall be recoverable by Landlord as damages.
Section 18.2. If Tenant shall fail to pay any installment of Fixed Rent,
-------------
Escalation Rent or any other item of Rental when due, Tenant shall pay to
Landlord, in addition to such installment of Fixed Rent, Escalation Rent or
other item of Rental, as the case may be, as a late charge and as additional
rent, a sum equal to interest at the Applicable Rate on the amount unpaid,
computed from the date such payment was due to and including the date of
payment.
ARTICLE 19
NO REPRESENTATIONS BY LANDLORD
------------------------------
Section 19.1. Landlord and Landlord's agents and representatives have made
-------------
no representations or promises with respect to the Building, the Real Property
or the 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 herein. Tenant shall accept possession of the Premises in
the condition which shall exist on the Commencement Date "as is" (subject to the
provisions of Section 4.1 hereof), and Landlord shall have no obligation to
perform any work or make any installations in order to prepare the Premises for
Tenant's occupancy except for Landlord's Work (hereinafter defined).
Section 19.2. (A) Subject to the provisions of this Section 19.2,
-------------
Landlord, at its sole cost and expense, shall perform the work set forth on
Tenant's Final Plans (hereinafter defined) to prepare the Premises for Tenant's
occupancy ("Landlord's Work") and such work shall be effected in a prompt and
---------------
expeditious fashion, in a good and workmanlike manner and in accordance with all
applicable laws, rules and regulations. In the event that Tenant shall request
any changes to Tenant's Final Plans and the total cost of Landlord's Work (the
"Total Cost") shall increase as a result of such change over the cost (the
-----------
"Landlord's Amount") of Landlord's Work absent any changes by Tenant, then the
------------------
amount of such excess ("Tenant's Amount") shall be borne solely by Tenant. From
---------------
and after the date upon which Landlord estimates in good faith that the Total
Cost shall exceed Landlord's Amount (x) Landlord shall pay that portion of the
cost of Landlord's Work then due and payable in an amount equal to the product
of (i) the portion of the cost of Landlord's Work then due and payable, and (ii)
a fraction, the numerator of which is any portion of Landlord's Amount not
theretofore paid by Landlord and the denominator of which is the portion of such
estimated Total Cost not theretofore paid by Landlord or Tenant, and (y) Tenant
shall fund the balance of the portion of Total Cost then due and payable, on a
pari passu basis as costs are actually incurred, upon rendition by Landlord of a
---- -----
statement therefor. At Landlord's option, in lieu of the foregoing, Landlord
shall ▇▇▇▇ Tenant from time to time for all or
55
any portion of Tenant's Amount, if any, after Landlord shall have incurred an
amount equal to Landlord's Amount. Tenant's Amount shall constitute additional
rent and to the extent that the same is not paid as aforesaid, Landlord shall
have all of the remedies available to it for the nonpayment of rent and Landlord
shall have no obligation to perform any remaining Landlord's Work.
(B) Attached hereto as Exhibit "B" are the final detailed plans and
-----------
specifications for Alterations in the Premises ("Tenant's Final Plans").
--------------------
(C) To the extent required by any Requirements, Landlord shall cause
Tenant's Final Plans to be filed with such appropriate Governmental Authority.
If such Governmental Authority shall reject all or any portion of Tenant's Final
Plans, Tenant within three (3) Business Days, shall make the changes to Tenant's
Final Plans that shall be required for such approval (subject to Landlord's
approval).
(D) No approval by Landlord of Tenant's Final Plans shall in any way
be deemed to be an agreement by Landlord that the work contemplated thereby
complies with Requirements or the requirements of any insurance bodies or that
Tenant's Final Plans will be approved by the Department of Buildings of the City
of New York or any other governmental authority having jurisdiction thereover.
In performing Landlord's Work, Landlord shall be entitled to rely upon Tenant's
Final Plans and shall not be responsible for any errors or omissions in Tenant's
Final Plans.
(E) For purposes of this Lease, a "Tenant's Delay" shall mean any
--------------
delay as a result of any of the following: (i) any request by Tenant that
Landlord delay in proceeding with any segment or part of Landlord's Work; (ii)
any changes or requests for changes by, or on behalf of, Tenant, to Tenant's
Final Plans; (iii) any errors or omissions in Tenant's Final Plans; (iv) any
delay in the selection of materials to be made by Tenant; (v) any act or
omission of Tenant, or its officers, agents, servants or contractors; (vi) any
failure by Tenant to make any payment as described in this Section 19.2; or
(vii) any failure by Tenant to deliver Tenant's Plans to Landlord within the
time frames set forth in this Section 19.2. If a delay in the Substantial
Completion of Landlord's Work or any portion of such delay is the result of a
strike or other labor trouble, fire or other casualty, governmental preemption
of priorities or other controls in connection with a national or other public
emergency or shortages of fuel, supplies or labor resulting therefrom, or any
other cause beyond Landlord's reasonable control, and such delay would not have
occurred but for a delay described in the immediately preceding sentence, such
delay shall be deemed to be a Tenant's Delay for the purposes hereof.
(F) If and when Tenant shall take actual possession of the Premises,
it shall be conclusively presumed that the same were in satisfactory condition
(except for latent defects or "punchlist items") as of the date of such taking
of possession, unless within thirty (30) days after the Possession Date, Tenant
shall give Landlord notice specifying the respects in which Landlord's Work was
not in satisfactory condition. Landlord shall promptly complete any "punchlist
items" and repair any items which were not in a satisfactory condition.
Landlord shall have the right to enter the Premises subsequent to the Possession
Date, to complete Landlord's
56
Work, to complete any "punchlist items" and any Long Lead Work, and to repair
any items which were not in a satisfactory condition and the payment of Fixed
Rent and Escalation Rent shall not be affected thereby. Landlord agrees to use
reasonable efforts to minimize interference with Tenant's business at the
Premises during the completion of Landlord's Work, the performance of such
"punchlist items" and any Long Lead Work, and the performance of such repairs of
items which were not in satisfactory condition provided the foregoing shall not
increase the cost to Landlord of completing such Landlord's Work, such
"punchlist items", Long Lead Work and making of any such repairs or cause
Landlord to incur additional costs at overtime or premium rates.
Section 19.3. (A) Landlord has made and makes no representation as to the
-------------
date on which it will complete Landlord's Work. No delay in completing
Landlord's Work shall in any way affect the validity of this Lease or the
obligations of Tenant hereunder or give rise to a claim for damages by Tenant or
a claim for rescission of this Lease, nor shall the same be construed in any
wise to extend the Term hereof. Landlord agrees that, subject to Unavoidable
Delay, each item of Landlord's Work shall be prosecuted with due diligence;
provided, however, that nothing contained in this Article 19 shall be deemed to
impose upon Landlord any obligations to employ contractors or labor at so-called
overtime or other premium pay rates or to incur any other overtime costs or
expenses whatsoever. Landlord shall have the right to enter the Premises
subsequent to the Commencement Date to complete Landlord's Work and the payment
of Fixed Rent and Escalation Rent shall not be affected thereby.
(B) Notwithstanding anything to the contrary contained
herein (including without limitation, Section 19.3(A) hereof), if Landlord shall
fail to Substantially Complete Landlord's Work on or before the date that shall
be one hundred eighty (180) days after the date on which this Lease shall be
unconditionally executed and delivered by Landlord and Tenant (subject to
extension by reason of Unavoidable Delays), then, provided Landlord's failure to
Substantially Complete such Landlord's Work did not result from any delays
caused by Tenant, Tenant's agents, employees, invitees, contractors or
licensees, the Rent Commencement Date shall be delayed beyond the date referred
to in the definition of "Rent Commencement Date" two (2) days (without
duplication) for each day after the date which is one hundred eighty (180) days
after the date on which this Lease shall be unconditionally executed and
delivered by Landlord and Tenant, if any, that Landlord's Work is not
substantially completed.
ARTICLE 20
END OF TERM
-----------
Upon the expiration or other termination of this Lease, Tenant shall quit
and surrender to Landlord the Premises, vacant, broom clean, in good order and
condition, ordinary wear and tear and damage for which Tenant is not responsible
under the terms of this Lease excepted, and otherwise in compliance with the
provisions of Article 3 hereof. If the last day of the Term or any renewal
thereof falls on Saturday or Sunday, this Lease shall expire on the Business Day
immediately preceding. Tenant expressly waives, for itself and for any person
claiming through or under Tenant, any rights which Tenant or any such person may
have under the provisions of Section 2201 of the New York Civil Practice Law and
Rules and of any successor law of like
57
import then in force in connection with any holdover summary proceedings which
Landlord may institute to enforce the foregoing provisions of this Article 20.
Tenant acknowledges that possession of the Premises must be surrendered to
Landlord on the Expiration Date. The parties recognize and agree that the damage
to Landlord resulting from any failure by Tenant to timely surrender possession
of the Premises as aforesaid will be extremely substantial, will exceed the
amount of the monthly installments of the Fixed Rent and Rental theretofore
payable hereunder, and will be impossible to accurately measure. Tenant
therefore agrees that if possession of the Premises is not surrendered to
Landlord within twenty-four (24) hours after the Expiration Date, in addition to
any other rights or remedies Landlord may have hereunder or at law, and without
in any manner limiting Landlord's right to demonstrate and collect any damages
suffered by Landlord and arising from Tenant's failure to surrender the Premises
as provided herein, Tenant shall pay to Landlord on account of use and occupancy
of the Premises for each month and for each portion of any month during which
Tenant holds over in the Premises after the Expiration Date, a sum equal to the
greater of (i) two (2) times the aggregate of that portion of the Fixed Rent,
Escalation Rent and Rental which was payable under this Lease during the last
month of the Term, and (ii) the then fair market rental value for the Premises.
Nothing herein contained shall be deemed to permit Tenant to retain possession
of the Premises after the Expiration Date or to limit in any manner Landlord's
right to regain possession of the Premises through summary proceedings, or
otherwise, and no acceptance by Landlord of payments from Tenant after the
Expiration Date shall be deemed to be other than on account of the amount to be
paid by Tenant in accordance with the provisions of this Article 20. The
provisions of this Article 20 shall survive the Expiration Date.
ARTICLE 21
QUIET ENJOYMENT
---------------
Provided no Event of Default has occurred and is continuing, Tenant may
peaceably and quietly enjoy the Premises subject, nevertheless, to the terms and
conditions of this Lease.
ARTICLE 22
FAILURE TO GIVE POSSESSION
--------------------------
Tenant waives any right to rescind this Lease under Section 223-a of the
New York Real Property Law or any successor statute of similar nature and
purpose then in force and further waives the right to recover any damages which
may result from Landlord's failure for any reason to deliver possession of the
Premises on the Possession Date. 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. No such failure to give possession on
the date set forth in Section 1.1 hereof for the commencement of the Term shall
in any wise affect the validity of this Lease or the obligations of Tenant
hereunder or give rise to any claim for damages by Tenant or claim for
rescission of this Lease, nor shall the same be construed in any wise to extend
the Term.
58
ARTICLE 23
NO WAIVER
---------
Section 23.1. No act or thing done by Landlord or Landlord's agents during
-------------
the Term shall be deemed an acceptance of a surrender of the Premises, and no
agreement to accept such surrender shall be valid unless in writing signed by
Landlord. No employee of Landlord or of Landlord's agents shall have any power
to accept the keys of the Premises prior to the termination of this Lease. The
delivery of keys to any employee of Landlord or of Landlord's agents shall not
operate as a termination of this Lease or a surrender of the Premises. In the
event Tenant at any time desires to have Landlord sublet the Premises for
Tenant's account, Landlord or Landlord's agents are authorized to receive said
keys for such purpose without releasing Tenant from any of the obligations under
this Lease, and Tenant hereby relieves Landlord of any liability for loss of or
damage to any of Tenant's effects in connection with such subletting.
Section 23.2. 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 of the provisions of this Lease, from having all of the
force and effect of an original violation of the provisions of this Lease. The
receipt by Landlord of Fixed Rent, Escalation Rent or any other item of Rental
with knowledge of the breach of any covenant of this Lease shall not be deemed a
waiver of such breach. The failure of Landlord to enforce any of the Rules and
Regulations set forth, or hereafter adopted, against Tenant or any other tenant
in the Building shall not be deemed a waiver of any such Rules and Regulations.
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 Fixed Rent or other item
of Rental herein stipulated shall be deemed to be other than on account of the
earliest stipulated Fixed Rent or other item of Rental, or as Landlord may elect
to apply same, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as Fixed Rent or other item of Rental 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 Fixed Rent
or other item of Rental or to pursue any other remedy provided in this Lease.
This Lease contains the entire agreement between the parties and all prior
negotiations and agreements are merged herein. Any executory agreement
hereafter made shall be ineffective to change, modify, discharge 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, discharge or abandonment is sought.
Section 23.3. The failure of Tenant to seek redress for violation of, or
-------------
to insist upon the strict performance of, any covenant or condition of this
Lease on Landlord's part to be performed, shall not be deemed a waiver of such
breach or prevent a subsequent act which would have originally constituted a
violation of the provisions of this Lease from having all of the force and
effect of an original violation of the provisions of this Lease. No provisions
of this
59
Lease shall be deemed to have been waived by Tenant unless such waiver be in
writing and signed by Tenant. The payment by Tenant of Fixed Rent, Escalation
Rent or any other item of Rental or performance of any obligation of Tenant
hereunder with knowledge of any breach of any covenant of this Lease shall not
be deemed a waiver of such breach, and payment of the same by Tenant shall be
without prejudice to Tenant's right to pursue any remedy against Landlord in
this Lease provided.
ARTICLE 24
WAIVER OF TRIAL BY JURY
-----------------------
The respective parties hereto shall and they hereby do waive trial by jury
in any action, proceeding or counterclaim brought by either of the parties
hereto against the other (except for personal injury or property damage) on any
matters whatsoever arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises,
or for the enforcement of any remedy under any statute, emergency or otherwise.
If Landlord commences any summary proceeding against Tenant, Tenant will not
interpose any counterclaim of whatever nature or description in any such
proceeding (unless failure to impose such counterclaim would preclude Tenant
from asserting in a separate action the claim which is the subject of such
counterclaim), and will not seek to consolidate such proceeding with any other
action which may have been or will be brought in any other court by Tenant.
ARTICLE 25
INABILITY TO PERFORM
--------------------
Section 25.1. Except as otherwise expressly provided herein, this Lease
-------------
and the obligation of Tenant to pay Rental hereunder and perform all of the
other covenants and agreements hereunder on the part of Tenant to be performed
shall in no wise be affected, impaired or excused because Landlord is unable to
fulfill any of its obligations under this Lease expressly or impliedly to be
performed by Landlord or because Landlord is unable to make, or is delayed in
making any repairs, additions, alterations, improvements or decorations or is
unable to supply or is delayed in supplying any equipment or fixtures, if
Landlord is prevented or delayed from so doing by reason of Unavoidable Delays
(except that Landlord's insolvency or financial inability to perform shall not
be considered an Unavoidable Delay).
Section 25.2. This Lease and the obligations, covenants and agreements of
-------------
Landlord hereunder shall in no wise be affected, impaired or excused because
Tenant is unable to fulfill any of its obligations under this Lease expressly or
impliedly to be performed by Tenant, other than the obligation to pay when due
Fixed Rent, Escalation Rent and any other item of Rental, by reason of
Unavoidable Delays (except that Tenant's insolvency or financial inability to
perform shall not be considered an Unavoidable Delay).
60
ARTICLE 26
BILLS AND NOTICES
-----------------
Except as otherwise expressly provided in this Lease, any bills,
statements, consents, notices, demands, requests or other communications given
or required to be given under this Lease shall be in writing and shall be deemed
sufficiently given or rendered if delivered by hand (against a signed receipt)
or if sent by registered or certified mail (return receipt requested) addressed
if to Tenant (a) at Tenant's address set forth in this Lease, Attn.:
Business Manager, if mailed prior to Tenant's taking possession of the
Premises, or (b) at the Building, Attn.: Business Manager, if mailed
subsequent to Tenant's taking possession of the Premises, or (c) at
any place where Tenant or any agent or employee of Tenant may be found
if mailed subsequent to Tenant's vacating, deserting, abandoning or
surrendering the Premises, in each case with a copy to ▇▇▇▇▇▇▇▇,
Weprin & Ustin LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn.:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq., or
if to Landlord at Landlord's address set forth in this Lease, Attn.:
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇, and with copies to (y) Proskauer Rose LLP, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn.: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.,
and (z) each Mortgagee and Lessor which shall have requested same, by
notice given in accordance with the provisions of this Article 26 at
the address designated by such Mortgagee or Lessor, or
to such other address(es) as Landlord, Tenant or any Mortgagee or Lessor may
designate as its new address(es) for such purpose by notice given to the other
in accordance with the provisions of this Article 26. Any such ▇▇▇▇, statement,
consent, notice, demand, request or other communication shall be deemed to have
been rendered or given on the date when it shall have been hand delivered or
three (3) Business Days from when it shall have been mailed as provided in this
Article 26. Anything contained herein to the contrary notwithstanding, any
Operating Statement, Tax Statement or any other ▇▇▇▇, statement, consent,
notice, demand, request or other communication from Landlord to Tenant with
respect to any item of Rental (other than any "default notice" if required
hereunder) may be sent to Tenant by regular United States mail.
ARTICLE 27
ESCALATION
----------
Section 27.1. For the purposes of this Article 27, the following terms
-------------
shall have the meanings set forth below.
61
(A) "Assessed Valuation" shall mean the amount for which the Real
------------------
Property is assessed pursuant to applicable provisions of the New York City
Charter and of the Administrative Code of the City of New York for the purpose
of calculating all or any portion of the Taxes payable with respect to the Real
Property.
(B) "Base Operating Expenses" shall mean the Operating Expenses for
-----------------------
the Base Operating Year.
(C) "Base Operating Year" shall mean the calendar year ending
-------------------
December 31, 1999.
(D) "Base Taxes" shall mean the Taxes payable for the Tax Year
----------
commencing July 1, 1998 and ending June 30, 1999.
(E) (1) "Operating Expenses" shall mean the aggregate of those costs
------------------
and expenses (and taxes, if any, thereon, including without limitation, sales
and value added taxes) paid or incurred by or on behalf of Landlord (whether
directly or through independent contractors) in respect of the Operation of the
Property which, are properly chargeable to the Operation of the Property
together with and including (without limitation) the costs of gas, oil, steam,
water, sewer rental, electricity (for the portions of the Real Property not
leased to and occupied by tenants or available for occupancy), HVAC and other
utilities furnished to the Building and utility taxes, and the expenses incurred
in connection with the Operation of the Property such as insurance premiums,
attorneys' fees and disbursements, auditing and other professional fees and
expenses, and all expenses (including attorneys' fees and disbursements,
experts' and other witnesses' fees) incurred in contesting the validity or
amount of any Taxes or in obtaining a refund of any Taxes, but specifically
excluding:
(i) Taxes,
(ii) franchise or income taxes imposed upon Landlord,
(iii) debt service on Mortgages,
(iv) leasing commissions,
(v) capital improvements (except as otherwise provided
herein),
(vi) the cost of electrical energy furnished directly
to Tenant and other tenants of the Building,
(vii) the cost of tenant installations incurred in
connection with preparing space for a new tenant,
62
(viii) salaries of personnel above the grade of building
manager and such building manager's supervisor,
(ix) rent paid under Superior Leases (other than in the
nature of Rent consisting of Taxes or Operating Expenses),
(x) any expense for which Landlord is otherwise
compensated through the proceeds of insurance or would have been so compensated
had Landlord carried the insurance coverage required by Section 9.3 hereof is
otherwise compensated by any tenant (including Tenant) of the Building for
services in excess of the services Landlord is obligated to furnish to Tenant
hereunder,
(xi) legal fees incurred in connection with any
negotiation of, or disputes arising out of, any space lease in the Building,
(xii) depreciation, except as provided herein, and
(xiii) Landlord's advertising and promotional costs for
the Building,
except, however, that if Landlord is not furnishing any particular work or
service (the cost of which if performed by Landlord would constitute an
Operating Expense which was included or deemed to be included in Base Operating
Expenses) to a tenant who has undertaken to perform such work or service in lieu
of the performance thereof by Landlord, Operating Expenses shall be deemed to be
increased by an amount equal to the additional Operating Expenses which
reasonably would have been incurred during such period by Landlord if it had at
its own expense furnished such work or services to such tenant. Any insurance
proceeds received with respect to any item previously included as an Operating
Expense shall be deducted from Operating Expenses for the Operating Year in
which such proceeds are received; provided, however, to the extent any insurance
proceeds are received by Landlord in any Operating Year with respect to any item
which was included in Operating Expenses during the Base Operating Year, the
amount of insurance proceeds so received shall be deducted from Base Operating
Expenses and (x) the Base Operating Expenses shall be retroactively adjusted to
reflect such deduction and (y) all retroactive Operating Payments resulting from
such retroactive adjustment shall be due and payable when billed by Landlord.
Until such time as the electricity supplied to each floor of the Building and
the common and public areas of the Building (including, without limitation, the
Building Systems) shall be separately metered or submetered, Operating Expenses
shall include an amount equal to (x) (i) Landlord's cost (utilizing the
electrical rates applicable to the Building including energy charges, demand
charges, time-of-day charges, fuel adjustment charges, rate adjustment charges,
sales tax and any other factors used by the public utility in computing its
charges to Landlord) of furnishing electric current to the entire Building,
multiplied by (ii) the number of kilowatt hours of electric current furnished to
the public and common areas of the Building (including, without limitation, the
Building Systems) and other areas not available for occupancy as determined by a
survey prepared by an independent, reputable electrical engineer
63
selected by Landlord, plus (y) an amount equal to Landlord's actual third party
out-of-pocket costs in connection with the same.
(2) In determining the amount of Operating Expenses for any
Operating Year (including the Base Operating Year), if less than all of the
Building rentable area shall have been occupied by tenant(s) at any time during
any such Operating Year, Operating Expenses shall be determined for such
Operating Year to be an amount equal to the like expenses which would normally
be expected to be incurred had all such areas been occupied throughout such
Operating Year.
(3) (a) If any capital improvement is made during any Operating
Year in compliance with a Requirement, whether or not such Requirement is valid
or mandatory, or in lieu of a repair, then the cost of such improvement shall be
included in Operating Expenses for the Operating Year in which such improvement
was made; provided, however, to the extent the cost of such improvement is
required to be capitalized for federal income tax purposes, such cost shall be
amortized over the useful economic life of such improvement determined in
accordance with generally accepted accounting principles, consistently applied,
and the annual amortization, together with interest thereon at the then Base
Rate, of such improvement shall be deemed an Operating Expense in each of the
Operating Years during which such cost of the improvement is amortized.
(b) If any capital improvement is made during any
Operating Year either for the purpose of saving or reducing Operating Expenses
(as, for example, a labor-saving improvement), then the cost of such improvement
shall be included in Operating Expenses for the Operating Year in which such
improvement was made; provided, however, such cost shall be amortized over such
period of time as Landlord reasonably estimates such savings or reduction in
Operating Expenses will equal the cost of such improvement and the annual
amortization, together with interest thereon at the then Base Rate, of such
improvement shall be deemed an Operating Expense in each of the Operating Years
during which such cost of the improvement is amortized; provided, further,
however, the amortized cost of such improvement included in any Operating Year
shall not exceed the amount which Tenant would have paid had such improvement
not been made. Any portion of the amortized cost of any such capital improvement
which may not be included in Operating Expenses in an Operating Year by reason
of the foregoing limitation may be included in Operating Expenses subsequent
Operating Years (subject to such limitation).
(F) "Operating Statement" shall mean a statement in reasonable detail
-------------------
setting forth a comparison of the Operating Expenses for an Operating Year with
the Base Operating Expenses and the Escalation Rent for the preceding Operating
Year pursuant to the provisions of this Article 27.
(G) "Operating Year" shall mean the calendar year within which the
--------------
Commencement Date occurs and each subsequent calendar year for any part or all
of which Escalation Rent shall be payable pursuant to this Article 27.
64
(H) "Taxes" shall mean the aggregate amount of real estate taxes and
-----
any general or special assessments (exclusive of penalties and interest thereon)
imposed upon the Real Property (including, without limitation, (i) assessments
made upon or with respect to any "air" and "development" rights now or hereafter
appurtenant to or affecting the Real Property, (ii) any fee, tax or charge
imposed by any Governmental Authority for any vaults, vault space or other space
within or outside the boundaries of the Real Property, and (iii) any taxes or
assessments levied after the date of this Lease in whole or in part for public
benefits to the Real Property or the Building, including, without limitation,
any Business Improvement District taxes and assessments) without taking into
account any discount that Landlord may receive by virtue of any early payment of
Taxes; provided, that if because of any change in the taxation of real estate,
any other tax or assessment, however denominated (including, without limitation,
any franchise, income, profit, sales, use, occupancy, gross receipts or rental
tax) is imposed upon Landlord or the owner of the Real Property or the Building,
or the occupancy, rents or income therefrom, in substitution for any of the
foregoing Taxes, such other tax or assessment shall be deemed part of Taxes
computed as if Landlord's sole asset were the Real Property. Anything contained
herein to the contrary notwithstanding, Taxes shall not be deemed to include (u)
sales, gift, excise, corporate, utility or occupancy taxes, (v) any mortgage
recording, gains or transfer taxes payable in connection with the financing,
sale or conveyance of the Building or the Real Property or any interest therein,
(w) any taxes on Landlord's income, (x) franchise taxes, (y) estate or
inheritance taxes or (z) any similar taxes imposed on Landlord, unless such
taxes are levied, assessed or imposed in lieu of or as a substitute for the
whole or any part of the taxes, assessments, levies, impositions which now
constitute Taxes.
(I) "Tax Statement" shall mean a statement in reasonable detail
-------------
setting forth a comparison of the Taxes for a Tax Year with the Base Taxes.
(J) "Tax Year" shall mean the period July 1 through June 30 (or such
--------
other period as hereinafter may be duly adopted by the Governmental Authority
then imposing taxes as its fiscal year for real estate tax purposes), any
portion of which occurs during the Term.
Section 27.2. (A) If the Taxes payable for any Tax Year (any part or all
-------------
of which falls within the Term) shall represent an increase above the Base
Taxes, then Tenant shall pay as additional rent for such Tax Year and continuing
thereafter until a new Tax Statement is rendered to Tenant, Tenant's Share of
such increase (the "Tax Payment") as shown on the Tax Statement with respect to
-----------
such Tax Year. Tenant shall be obliged to pay the Tax Payment regardless of
whether Tenant is exempt in whole or part, from the payment of any Taxes by
reason of Tenant's diplomatic status or for any other reason whatsoever. The
Taxes shall be computed initially on the basis of the Assessed Valuation in
effect at the time the Tax Statement is rendered (as the Taxes may have been
settled or finally adjudicated prior to such time) regardless of any then
pending application, proceeding or appeal respecting the reduction of any such
Assessed Valuation, but shall be subject to subsequent adjustment as provided in
Section 27.3 hereof.
(B) At any time during or after the Term, Landlord may render to
Tenant a Tax Statement or Statements showing (i) a comparison of the Taxes for
the Tax Year with the Base Taxes and (ii) the amount of the Tax Payment
resulting from such comparison. On the first
65
day of the month following the furnishing to Tenant of a Tax Statement, Tenant
shall pay to Landlord a sum equal to 1/12th of the Tax Payment shown thereon to
be due for such Tax Year multiplied by the number of months of the Term then
elapsed since the commencement of such Tax Year. Tenant shall continue to pay to
Landlord a sum equal to one-twelfth (1/12th) of the Tax Payment shown on such
Tax Statement on the first day of each succeeding month until the first day of
the month following the month in which Landlord shall deliver to Tenant a new
Tax Statement. If Landlord furnishes a Tax Statement for a new Tax Year
subsequent to the commencement thereof, promptly after the new Tax Statement is
furnished to Tenant, Landlord shall give notice to Tenant stating whether the
amount previously paid by Tenant to Landlord for the current Tax Year was
greater or less than the installments of the Tax Payment for the current tax
year in accordance with the Tax Statement, and (a) if there shall be a
deficiency, Tenant shall pay the amount thereof within ten (10) Business Days
after demand therefor, or (b) if there shall have been an overpayment, Landlord
shall credit the amount thereof against the next monthly installments of the
Fixed Rent payable under this Lease. Tax Payments shall be collectible by
Landlord in the same manner as Fixed Rent. Landlord's failure to render a Tax
Statement shall not prejudice Landlord's right to render a Tax Statement during
or with respect to any subsequent Tax Year, and shall not eliminate or reduce
Tenant's obligation to make Tax Payments for such Tax Year.
Section 27.3. (A) Only Landlord shall be eligible to institute tax
-------------
reduction or other proceedings to reduce the Assessed Valuation. In the event
that, after a Tax Statement has been sent to Tenant, an Assessed Valuation which
had been utilized in computing the Taxes for a Tax Year is reduced (as a result
of settlement, final determination of legal proceedings or otherwise), and as a
result thereof a refund of Taxes is actually received by or on behalf of
Landlord, then, promptly after receipt of such refund, Landlord shall send
Tenant a Tax Statement adjusting the Taxes for such Tax Year and setting forth
Tenant's Share of such refund and Tenant shall be entitled to receive such
Share, at Landlord's option, either by way of a credit against the Fixed Rent
next becoming due after the sending of such Tax Statement or by a refund to the
extent no further Fixed Rent is due; provided, however, that Tenant's Share of
such refund shall be limited to the portion of the Tax Payment, if any, which
Tenant had theretofore paid to Landlord attributable to increases in Taxes for
the Tax Year to which the refund is applicable on the basis of the Assessed
Valuation before it had been reduced.
(B) In the event that, after a Tax Statement has been sent to Tenant,
the Assessed Valuation which had been utilized in computing the Base Taxes is
reduced (as a result of settlement, final determination of legal proceedings or
otherwise) then, and in such event: (i) the Base Taxes shall be retroactively
adjusted to reflect such reduction, and (ii) all retroactive Tax Payments
resulting from such retroactive adjustment shall be due and payable when billed
by Landlord. Landlord promptly shall send to Tenant a statement setting forth
the basis for such retroactive adjustment and Tax Payments.
Section 27.4. (A) If the Operating Expenses for any Operating Year (any
-------------
part or all of which falls within the Term) shall be greater than the Base
Operating Expenses, then Tenant shall pay as additional rent for such Operating
Year and continuing thereafter until a new
66
Operating Statement is rendered to Tenant, Tenant's Share of such increase (the
"Operating Payment") as hereinafter provided.
-----------------
(B) At any time during or after the Term Landlord may render to
Tenant an Operating Statement or Statements showing (i) a comparison of the
Operating Expenses for the Operating Year in question with the Base Operating
Expenses, and (ii) the amount of the Operating Payment resulting from such
comparison. Landlord's failure to render an Operating Statement during or with
respect to any Operating Year in question shall not prejudice Landlord's right
to render an Operating Statement during or with respect to any subsequent
Operating Year, and shall not eliminate or reduce Tenant's obligation to make
payments of the Operating Payment pursuant to this Article 27 for such Operating
Year.
(C) On the first day of the month following the furnishing to Tenant
of an Operating Statement, Tenant shall pay to Landlord a sum equal to 1/12th of
the Operating Payment shown thereon to be due for the preceding Operating Year
multiplied by the number of months (and any fraction thereof) of the Term then
elapsed since the commencement of such Operating Year in which such Operating
Statement is delivered, less Operating Payments theretofore made by Tenant for
such Operating Year and thereafter, commencing with the then current monthly
installment of Fixed Rent and continuing monthly thereafter until rendition of
the next succeeding Operating Statement, Tenant shall pay on account of the
Operating Payment for such Year an amount equal to 1/12th of the Operating
Payment shown thereon to be due for the preceding Operating Year. Any Operating
Payment shall be collectible by Landlord in the same manner as Fixed Rent.
(D) (1) As used in this Section 27.4, (i) "Tentative Monthly
-----------------
Escalation Charge" shall mean a sum equal to 1/12th of the product of (a)
-----------------
Tenant's Share, and (b) the difference between (x) the Base Operating Expenses
and (y) Landlord's good faith estimate of Operating Expenses for the Current
Year, and (ii) "Current Year" shall mean the Operating Year in which a demand is
------------
made upon Tenant for payment of a Tentative Monthly Escalation Charge.
(2) At any time in any Operating Year, Landlord, at its
option, in lieu of the payments required under Section 27.4(C) hereof, may
demand and collect from Tenant, as additional rent, a sum equal to the Tentative
Monthly Escalation Charge multiplied by the number of months in said Operating
Year preceding the demand and reduced by the sum of all payments theretofore
made under Section 27.4(C) with respect to said Operating Year, and thereafter,
commencing with the month in which the demand is made and continuing thereafter
for each month remaining in said Operating Year, the monthly installments of
Fixed Rent shall be deemed increased by the Tentative Monthly Escalation Charge.
Any amount due to Landlord under this Section 27.4(D) may be included by
Landlord in any Operating Statement rendered to Tenant as provided in Section
27.4(B) hereof.
(E) (1) After the end of the Current Year and at any time that
Landlord renders an Operating Statement or Statements to Tenant as provided in
Section 27.4(B) hereof with respect to the comparison of the Operating Expenses
for said Operating Year or Current Year, with the Base Operating Expenses, as
the case may be, the amounts, if any, collected by Landlord from
67
Tenant under Section 27.4(C) or (D) on account of the Operating Payment or the
Tentative Monthly Escalation Charge, as the case may be, shall be adjusted, and,
if the amount so collected is less than or exceeds the amount actually due under
said Operating Statement for the Operating Year, a reconciliation shall be made
as follows: Tenant shall be debited with any Operating Payment shown on such
Operating Statement and credited with the amounts, if any, paid by Tenant on
account in accordance with the provisions of subsection (C) and subsection
(D)(2) of this Section 27.4 for the Operating Year in question. Tenant shall pay
any net debit balance to Landlord within fifteen (15) days next following
rendition by Landlord of an invoice for such net debit balance; any net credit
balance shall be applied against the next accruing monthly installments of Fixed
Rent.
(2) If the sum of the Tentative Monthly Escalation Charges and
payments made by Tenant in accordance with subsection (C) of this Section 27.4
for any Operating Year shall have exceeded the Operating Payment for such
Operating Year by more than ten percent (10%), interest at the Applicable Rate
on the portion of the overpayment that exceeds the applicable Operating Payment
by more than ten percent (10%) determined as of the respective dates of such
payments by Tenant and calculated from such respective dates to the dates on
which such amounts are credited against the monthly installments of Fixed Rent,
shall be so credited. Any amount owing to Tenant subsequent to the Term shall be
paid to Tenant within ten (10) Business Days after a final determination has
been made of the amount due to Tenant.
Section 27.5. Any Operating Statement sent to Tenant shall be conclusively
-------------
binding upon Tenant unless, within one hundred eighty (180) days after such
Statement is sent, Tenant shall send a written notice to Landlord objecting to
such Statement. If such notice is sent, Tenant (together with its independent
certified public accountants, provided they are one of the so-called "big-five"
accounting firms or if at such time there is no group of accounting firms
commonly referred to as "big-five", then a nationally recognized firm of at
least one hundred fifty (150) partners or principals who are certified public
accountants) may examine Landlord's books and records relating to the Operation
of the Property to determine the accuracy of the Operating Statement. Tenant
recognizes the confidential nature of such books and records and agrees to
maintain the information obtained from such examination in strict confidence. If
after such examination, Tenant still disputes such Operating Statement, either
party may refer the decision of the issues raised to a reputable independent
firm of certified public accountants, selected by Landlord and approved by
Tenant, which approval shall not be unreasonably withheld or delayed as long as
such firm of certified public accountants is one of the so-called "big-five"
public accounting firms or if at such time there is no group of accounting firms
commonly referred to as "big-five", then a nationally recognized firm of at
least one hundred fifty (150) partners or principals who are certified public
accountants, and the decision of such accountants shall be conclusively binding
upon the parties. The fees and expenses involved in such decision shall be borne
by the unsuccessful party (and if both parties are partially successful, such
fees and expenses shall be apportioned between Landlord and Tenant in inverse
proportion to the amount by which such decision is favorable to each party).
Notwithstanding the giving of such notice by Tenant, and pending the resolution
of any such dispute, Tenant shall pay to Landlord when due the amount shown on
any such Operating Statement, as provided in Section 27.4 hereof.
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Section 27.6. The expiration or termination of this Lease during any
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Operating Year or Tax Year shall not affect the rights or obligations of the
parties hereto respecting any payments of Operating Payments for such Operating
Year and any payments of Tax Payments for such Tax Year, and any Operating
Statement relating to such Operating Payment and any Tax Statement relating to
such Tax Payment, may be sent to Tenant subsequent to, and all such rights and
obligations shall survive, any such expiration or termination. In determining
the amount of the Operating Payment for the Operating Year or the Tax Payment
for the Tax Year in which the Term shall expire, the payment of the Operating
Payment for such Operating Year or the Tax Payment for the Tax Year shall be
prorated based on the number of days of the Term which fall within such
Operating Year or Tax Year, as the case may be. Any payments due under such
Operating Statement or Tax Statement shall be payable within thirty (30) days
after such Statement is sent to Tenant.
ARTICLE 28
SERVICES
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Section 28.1. (A) Landlord shall provide passenger elevator service to the
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Premises on Business Days from 8:00 A.M. to 6:00 P.M. and have an elevator
subject to call at all other times.
(B) There shall be one (1) freight elevator serving the Premises and
the entire Building on call on a "first come, first served" basis on Business
Days from 8:00 A.M. to 12:00 P.M. and from 1:00 P.M. to 5:00 P.M., and on a
reservation, "first come, first served" basis from 12:00 P.M. to 1:00 P.M. and
from 5:00 P.M. to 8:00 A.M. on Business Days and at any time on days other than
Business Days. If Tenant shall use the freight elevators serving the Premises
between 12:00 P.M. and 1:00 P.M. and between 5:00 P.M. and 8:00 A.M. on Business
Days or at any time on any other days, Tenant shall pay Landlord, as additional
rent for such use, the standard rates then fixed by Landlord for the Building,
or if no such rates are then fixed, at reasonable rates. Notwithstanding the
foregoing to the contrary, Landlord shall provide Tenant, at no cost to Tenant,
with free freight elevator service during Tenant's initial move into the
Premises.
(C) Landlord shall not be required to furnish any freight elevator
services during the hours from 12:00 P.M. to 1:00 P.M. and from 5:00 P.M. to
8:00 A.M. on Business Days and at any time on days other than Business Days
unless Landlord has received advance notice from Tenant requesting such services
prior to 2:00 P.M. of the day upon which such service is requested or by 2:00
P.M. of the last preceding Business Day if such periods are to occur on a day
other than a Business Day.
Section 28.2. Landlord, at Landlord's expense (but subject to recoupment
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pursuant to Article 27 hereof), shall furnish chilled water to the Building
standard chilled water air-handler unit serving the Premises, when required for
the comfortable occupancy of the Premises, on a year round basis from 8:30 A.M.
to 6:00 P.M. on Business Days and 8:30 A.M. to 1:00 P.M. on Saturdays. In
addition, Landlord shall provide perimeter heating through the existing
radiators
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when required for the comfortable occupancy of the Premises from 8:30 A.M. to
6:00 P.M. on Business Days. Landlord, throughout the Term, shall have free
access to any and all mechanical installations of Landlord, including, but not
limited to, air-cooling, fan, ventilating and machine rooms and electrical
closets; Tenant shall not construct partitions or other obstructions which may
interfere with Landlord's free access thereto, or interfere with the moving of
Landlord's equipment to and from the enclosures containing said installations.
Neither Tenant, nor its agents, employees or contractors shall at any time enter
the said enclosures or tamper with, adjust or touch or otherwise in any manner
affect said mechanical installations. Tenant shall use good faith efforts to
draw and close the draperies or blinds for the windows of the Premises whenever
the HVAC System is in operation and the position of the sun so requires and
shall at all times cooperate fully with Landlord and abide by all of the
regulations and requirements which Landlord may prescribe for the proper
functioning and protection of the HVAC System. If Tenant shall fail to draw and
close the draperies or blinds for the windows of the Premises, Landlord shall
not be responsible for the proper functioning of the HVAC System to the extent
improper functioning on the HVAC System results from such failure.
Section 28.3. The Fixed Rent does not reflect or include any charge to
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Tenant for the furnishing of any chilled water to the Building standard chilled
water air-handler serving the Premises or perimeter heating to the Premises
during periods other than the hours and days set forth above ("Overtime
--------
Periods"). Accordingly, if Landlord shall furnish such electricity to provide
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air conditioning to the air-cooled Building standard air conditioning units
serving the Premises or perimeter heating to the Premises at the request of
Tenant during Overtime Periods, Tenant shall pay Landlord additional rent for
such services at the standard rates then fixed by Landlord for the Building, or
if no such rates are then fixed, at reasonable rates. Landlord shall not be
required to furnish any such services during any Overtime Periods unless
Landlord has received advance notice from Tenant requesting such services prior
to 2:00 P.M. of the day upon which such services are requested or by 2:00 P.M.
of the last preceding Business Day if such Overtime Periods are to occur on a
day other than a Business Day. If Tenant fails to give Landlord such advance
notice, then, failure by Landlord to furnish or distribute any such services
during such Overtime Periods shall not constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement or diminution
of Rental, or relieve Tenant from any of its obligations under this Lease, or
impose any liability upon Landlord or its agents by reason of inconvenience or
annoyance to Tenant, or injury to or interruption of Tenant's business or
otherwise. If more than one tenant utilizing the same system as Tenant requests
the same Overtime Periods for the same services as Tenant, the charge to Tenant
shall be adjusted pro rata.
Section 28.4. Provided Tenant shall keep the Premises in order, Landlord,
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at Landlord's expense, subject to recoupment pursuant to Article 27 hereof,
shall cause the Premises, excluding any portions thereof used for the storage,
preparation, service or consumption of food or beverages, to be cleaned,
substantially in accordance with the standards set forth in Schedule B annexed
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hereto and made a part hereof. Tenant shall pay to Landlord the cost of removal
of any of Tenant's refuse and rubbish from the Premises and the Building to the
extent that the same exceeds the refuse and rubbish usually attendant upon the
use of such Premises as offices. Bills for the same shall be rendered by
Landlord to Tenant at such time as Landlord may elect and shall be due and
payable when rendered as additional rent. Tenant, at Tenant's sole cost and
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expense, shall cause all portions of the Premises used for the storage,
preparation, service or consumption of food or beverages to be cleaned daily in
a manner satisfactory to Landlord, and to be exterminated against infestation by
vermin, rodents or roaches regularly and, in addition, whenever there shall be
evidence of any infestation. Any such exterminating shall be done at Tenant's
sole cost and expense, in a manner satisfactory to Landlord, and by Persons
approved by Landlord. If Tenant shall perform any cleaning services in addition
to the services provided by Landlord as aforesaid, Tenant shall employ the
cleaning contractor providing cleaning services to the Building on behalf of
Landlord or such other cleaning contractor as shall be approved by Landlord.
Tenant shall comply with any recycling program and/or refuse disposal program
(including, without limitation, any program related to the recycling, separation
or other disposal of paper, glass or metals) which Landlord shall impose or
which shall be required pursuant to any Requirements.
Section 28.5. If the New York Board of Fire Underwriters or the Insurance
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Services Office or any Governmental Authority, department or official of the
state or city government shall require or recommend that any changes,
modifications, alterations or additional sprinkler heads or other equipment be
made or supplied by reason of Tenant's particular business, or the location of
the partitions, trade fixtures, or other contents of the Premises, Landlord, at
Tenant's cost and expense, shall promptly make and supply such changes,
modifications, alterations, additional sprinkler heads or other equipment.
Section 28.6. Landlord shall provide to the core of the Premises hot and
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cold water for ordinary drinking, cleaning and lavatory purposes. If Tenant
requires, uses or consumes water for any purpose in addition to ordinary
drinking, cleaning or lavatory purposes, Landlord may install a water meter and
thereby measure Tenant's water consumption. In such event (1) Tenant shall pay
Landlord for the cost of the meter and the cost of the installation thereof and
through the duration of Tenant's occupancy Tenant shall keep said meter and
equipment in good working order and repair at Tenant's own cost and expense; (2)
Tenant shall pay for water consumed as shown on said meter, as additional rent,
and on default in making such payment Landlord may pay such charges and collect
the same from Tenant; and (3) Tenant shall pay the sewer rent, charge or any
other tax, rent, levy or charge which now or hereafter is assessed, imposed or
shall become a lien upon the Premises or the Real Property of which they are a
part pursuant to any Requirement made or issued in connection with any such
metered use, consumption, maintenance or supply of water, water system, or
sewage or sewage connection or system. The ▇▇▇▇ rendered by Landlord for the
above shall be based upon Tenant's consumption and shall be payable by Tenant as
additional rent within ten (10) Business Days after rendition.
Section 28.7. Landlord reserves the right to stop service of the HVAC
-------------
System or the elevator, electrical, plumbing or other Building Systems when
necessary, by reason of accident or emergency, or for repairs, additions,
alterations, replacements or improvements in the judgment of Landlord desirable
or necessary to be made, until said repairs, alterations, replacements or
improvements shall have been completed (which repairs, additions, alterations,
replacements and improvements shall be performed in accordance with Section 4.3
hereof). Landlord shall have no responsibility or liability for interruption,
curtailment or failure to supply HVAC, elevator, electrical, plumbing or other
Building Systems when prevented by Unavoidable
71
Delays or by any Requirement of any Governmental Authority or due to the
exercise of its right to stop service as provided in this Article 28. The
exercise of such right or such failure by Landlord shall not constitute an
actual or constructive eviction, in whole or in part, or entitle Tenant to any
compensation or to any abatement or diminution of Rental, or relieve Tenant from
any of its obligations under this Lease, or impose any liability upon Landlord
or its agents by reason of inconvenience or annoyance to Tenant, or injury to or
interruption of Tenant's business, or otherwise.
Section 28.8. Landlord shall make available to Tenant the computerized
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directory in the lobby of the Building for up to five (5) listings. The initial
programming shall be without charge to Tenant. From time to time, but not more
frequently than once every three (3) months, Landlord shall reprogram the
computerized directory to reflect such changes in the listings therein as Tenant
shall request, and Tenant promptly after request shall pay to Landlord a
reasonable reprogramming charge for each reprogramming Tenant requests. If
Landlord replaces the computerized directory with a standard directory in the
lobby of the Building, Tenant shall be entitled to Tenant's Share of such
listings on such directory.
ARTICLE 29
PARTNERSHIP TENANT
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If Tenant is a partnership (including, without limitation, a limited
liability partnership) or a limited liability company or a professional
corporation (or is comprised of two (2) or more Persons, individually or as co-
partners of a partnership (including, without limitation a limited liability
partnership), as members of a limited liability company or as shareholders of a
professional corporation) or if Tenant's interest in this Lease shall be
assigned to a partnership (including, without limitation, a limited liability
partnership) a limited liability company or a professional corporation (or to
two (2) or more Persons, individually or as co-partners of a partnership, as
members of a limited liability company or shareholders of a professional
corporation) pursuant to Article 12 hereof (any such partnership, professional
corporation and such Persons are referred to in this Article 29 as "Partnership
-----------
Tenant"), the following provisions shall apply to such Partnership Tenant: (a)
------
the liability of each of the parties comprising Partnership Tenant shall be
joint and several; (b) each of the parties comprising Partnership Tenant hereby
consents in advance to, and agrees to be bound by (x) any written instrument
which may hereafter be executed by Partnership Tenant or any successor entity,
changing, modifying, extending or discharging this Lease, in whole or in part,
or surrendering all or any part of the Premises to Landlord, and (y) any
notices, demands, requests or other communications which may hereafter be given
by Partnership Tenant or by any of the parties comprising Partnership Tenant;
(c) any bills, statements, notices, demands, requests or other communications
given or rendered to Partnership Tenant or to any of such parties shall be
binding upon Partnership Tenant and all such parties; (d) if Partnership Tenant
shall admit new partners, shareholders or members, as the case may be,
Partnership Tenant shall give Landlord notice of such event not later than ten
(10) Business Days prior to the admission of such partner(s), shareholder(s) or
member(s) together with an assumption agreement in form and substance
satisfactory to Landlord pursuant to which each of such new partners,
shareholders or
72
members, as the case may be, shall, by their admission to Partnership Tenant,
agree to assume joint and several liability for the performance of all of the
terms, covenants and conditions of this Lease (as the same may have been or
thereafter be amended) on Tenant's part to be observed and performed; it being
expressly understood and agreed that each such new partner, shareholder or
member (as the case may be) shall be deemed to have assumed joint and several
liability for the performance of all of the terms, covenants and conditions of
this Lease (as the same may have been or thereafter be amended), whether or not
such new partner, shareholder or member shall have executed such assumption
agreement, and that neither Tenant's failure to deliver such assumption
agreement nor the failure of any such new partner or shareholder, as the case
may be, to execute or deliver any such agreement to Landlord shall vitiate the
provisions of this clause (d) of this Article 29).
ARTICLE 30
VAULT SPACE
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Notwithstanding anything contained in this Lease or indicated on any
sketch, blueprint or plan, any vaults, vault space or other space outside the
boundaries of the Real Property are not included in the Premises. Landlord makes
no representation as to the location of the boundaries of the Real Property. All
vaults and vault space and all other space outside the boundaries of the Real
Property which Tenant may be permitted to use or occupy are to be used or
occupied under a revocable license, and if any such license shall be revoked, or
if the amount of such space shall be diminished or required by any Governmental
Authority or by any public utility company, such revocation, diminution or
requisition shall not constitute an actual or constructive eviction, in whole or
in part, or entitle Tenant to any abatement or diminution of Rental, or relieve
Tenant from any of its obligations under this Lease, or impose any liability
upon Landlord. Any fee, tax or charge imposed by any Governmental Authority for
any such vaults, vault space or other space occupied by Tenant shall be paid by
Tenant.
ARTICLE 31
SECURITY
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Section 31.1. Tenant shall deposit with Landlord on the signing of this
-------------
Lease the Security Amount for the First Security Period, or at Tenant's option,
a "clean," unconditional, irrevocable and transferable letter of credit (the
"Letter of Credit") in the same amount, satisfactory to Landlord, issued by and
----------------
drawn on a bank satisfactory to Landlord and which is a member of the New York
Clearing House Association, for the account of Landlord, for a term of not less
than one (1) year, as security for the faithful performance and observance by
Tenant of the terms, covenants, conditions and provisions of this Lease,
including, without limitation, the surrender of possession of the Premises to
Landlord as herein provided. If an Event of Default shall occur and be
continuing, Landlord may apply the whole or any part of the security so
deposited, or present the Letter of Credit for payment and apply the whole or
any part of the proceeds thereof, as the case may be, (i) toward the payment of
any Fixed Rent, Escalation Rent or any other item of Rental as to which Tenant
is in default, (ii) toward any sum which Landlord may expend or be required to
expend by reason of Tenant's default in respect of any of the terms,
73
covenants and conditions of this Lease, including, without limitation, any
damage, liability or expense (including, without limitation, reasonable
attorneys' fees and disbursements) incurred or suffered by Landlord, and (iii)
toward any damage or deficiency incurred or suffered by Landlord in the
reletting of the Premises, whether such damages or deficiency accrue or accrues
before or after summary proceedings or other re-entry by Landlord. If Landlord
applies or retains any part of the proceeds of the Letter of Credit or the
security so deposited, 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 Letter of Credit or the security, as the case may be, shall be
returned to Tenant promptly after the Expiration Date and after delivery of
possession of the Premises to Landlord. In the event of a sale or leasing of the
Real Property or the Building, Landlord shall have the right to transfer the
Letter of Credit or security, as the case may be, to the vendee or lessee and
Landlord shall thereupon be released by Tenant from all liability for the return
of such security or the Letter of Credit, as the case may be, and Tenant shall
cause the bank which issued the Letter of Credit to issue an amendment to the
Letter of Credit or issue a new Letter of Credit naming the vendee or lessee as
the beneficiary thereunder. Tenant shall look solely to the new landlord for the
return of the Letter of Credit or the security, as the case may be. The
provisions hereof shall apply to every transfer or assignment of the Letter of
Credit or security made to a new landlord. Tenant shall not assign or encumber
or attempt to assign or encumber the monies deposited herein as security and
neither Landlord nor its successors or assigns shall be bound by any such
assignment, encumbrance, attempted assignment or attempted encumbrance. Tenant
shall renew any Letter of Credit from time to time, at least thirty (30) days
prior to the expiration thereof, and deliver to Landlord a new Letter of Credit
or an endorsement to the Letter of Credit, and any other evidence required by
Landlord that the Letter of Credit has been renewed for a period of at least one
(1) year. If Tenant shall fail to renew the Letter of Credit as aforesaid,
Landlord may present the Letter of Credit for payment and retain the proceeds
thereof as security in lieu of the Letter of Credit.
Section 31.2. Provided no Event of Default shall have occurred and be
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continuing, on the first day of the applicable Security Period, i.e. the Second
Security Period, Third Security Period and Fourth Security Period, (a) if the
Letter of Credit is on deposit, Tenant shall be entitled to replace the Letter
of Credit on deposit with Landlord with a Letter of Credit in the Security
Amount applicable to such Security Period, or (b) if Tenant shall have deposited
with Landlord cash security in lieu of a Letter of Credit, if the Security
Amount for such Security Period is less than the security then on deposit for
the immediately preceding Security Period, and provided that Tenant shall have
fully and faithfully complied with all of the terms, provisions, covenants and
conditions of this Lease, Landlord shall refund to Tenant an amount equal to the
amount by which the Security Amount for such Security Period exceeds the
security then on deposit for the immediately preceding Security Period.
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ARTICLE 32
CAPTIONS
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The captions are inserted only as a matter of convenience and for reference
and in no way define, limit or describe the scope of this Lease nor the intent
of any provision thereof.
ARTICLE 33
PARTIES BOUND
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The covenants, conditions and agreements contained in this Lease shall bind
and inure to the benefit of Landlord and Tenant and their respective legal
representatives, successors, and, except as otherwise provided in this Lease,
their assigns.
ARTICLE 34
BROKER
------
Each party represents and warrants to the other that it has not dealt with
any broker or Person in connection with this Lease other than J. Grotto &
Associates, Inc. ("Broker"). The execution and delivery of this Lease by each
------
party shall be conclusive evidence that such party has relied upon the foregoing
representation and warranty. Landlord agrees to pay Broker pursuant to a
separate agreement between Landlord and Broker. Tenant shall indemnify and hold
Landlord harmless from and against any and all claims for commission, fee or
other compensation by any Person (other than Broker) who shall claim to have
dealt with Tenant in connection with this Lease and for any and all costs
incurred by Landlord in connection with such claims, including, without
limitation, reasonable attorneys' fees and disbursements. The provisions of this
Article 34 shall survive the Expiration Date.
ARTICLE 35
INDEMNITY
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Section 35.1. (A) Tenant shall not do or permit any act or thing to be
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done upon the Premises which may subject Landlord to any liability or
responsibility for injury, damages to persons or property or to any liability by
reason of any violation of any Requirement, and shall exercise such control over
the Premises as to fully protect Landlord against any such liability. Tenant
shall indemnify and save the Indemnitees harmless from and against (a) except to
the extent the same are due to the negligence or willful misconduct of Landlord,
Landlord's employees, agents or licensees, all claims of whatever nature against
the Indemnitees arising from any act, omission or negligence of Tenant, its
contractors, licensees, agents, servants, employees, invitees or visitors, (b)
except to the extent the same are due to the negligence or willful misconduct of
Landlord, Landlord's employees, agents or licensees, all claims against the
Indemnitees arising from any accident, injury or damage whatsoever caused to any
person or to the property of any person and occurring during the Term in or
about the Premises, and (c)
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except to the extent the same are due to the negligence or willful misconduct of
Landlord, Landlord's employees, agents or licensees, all claims against the
Indemnitees arising from any accident, injury or damage occurring outside of the
Premises but anywhere within or about the Real Property, where such accident,
injury or damage results or is claimed to have resulted from an act, omission or
negligence of Tenant or Tenant's contractors, licensees, agents, servants,
employees, invitees or visitors. This indemnity and hold harmless agreement
shall include indemnity from and against any and all liability, fines, suits,
demands, costs and expenses of any kind or nature (including, without
limitation, attorneys' fees and disbursements) incurred in or in connection with
any such claim or proceeding brought thereon, and the defense thereof but except
with respect to claims with respect to bodily injury or death, shall be limited
to the extent any insurance proceeds collectible by Landlord under policies
owned by Landlord or such injured party with respect to such damage or injury
are insufficient to satisfy same. Tenant shall have no liability for any
consequential damages suffered either by Landlord or by any party claiming
through Landlord.
(B) Except as provided in Articles 4, 9, 10, 13, 28, 36 and 37 hereof
and otherwise as expressly provided herein and except to the extent the same are
due to the negligence or willful misconduct of Tenant, Tenant's employees,
agents or licensees, Landlord shall indemnify and save Tenant its shareholders,
directors, officers, Partners, employees and agents harmless from and against
all claims against Tenant arising from any damage to the Premises and any bodily
injury to Tenant's employees, agents or invitees resulting from the acts,
omissions or negligence of Landlord or its agents. This indemnity and hold
harmless agreement shall include indemnity from and against any and all
liability, fines, suits, demands, costs and expenses of any kind or nature
(including, without limitation, reasonable attorneys' fees and disbursements)
incurred in or in connection with any such claim or proceeding brought thereon,
but shall be limited to the extent any insurance proceeds collectible by Tenant
or such injured party with respect to such damage or injury are insufficient to
satisfy same. Landlord shall have no liability for any consequential damages
suffered either by Tenant or by any party claiming through Tenant.
Section 35.2. If any claim, action or proceeding is made or brought
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against either party, which claim, action or proceeding the other party shall be
obligated to indemnify such first party against pursuant to the terms of this
Lease, then, upon demand by the indemnified party, the indemnifying party, at
its sole cost and expense, shall resist or defend such claim, action or
proceeding in the indemnified party's name, if necessary, by such attorneys as
the indemnified party shall approve, which approval shall not be unreasonably
withheld. Attorneys for the indemnifying party's insurer are hereby deemed
approved for purposes of this Section 35.2. Notwithstanding the foregoing, an
indemnified party may retain its own attorneys to defend or assist in defending
any claim, action or proceeding involving potential liability of Five Million
Dollars ($5,000,000) or more, and the indemnifying party shall pay the
reasonable fees and disbursements of such attorneys. The provisions of this
Article 35 shall survive the expiration or earlier termination of this Lease.
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ARTICLE 36
ADJACENT EXCAVATION-SHORING
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If an excavation shall be made upon land adjacent to the Premises, or shall
be authorized to be made, Tenant, upon reasonable advance notice, shall afford
to the person causing or authorized to cause such excavation, a license to enter
upon the Premises for the purpose of doing such work as said person shall deem
necessary to preserve the wall or the Building from injury or damage and to
support the same by proper foundations, without any claim for damages or
indemnity against Landlord, or diminution or abatement of Rental, provided that
Tenant shall continue to have access to the Premises and the Building.
ARTICLE 37
MISCELLANEOUS
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Section 37.1. This Lease is offered for signature by Tenant and it is
-------------
understood that this Lease shall not be binding upon Landlord or Tenant unless
and until Landlord and Tenant shall have executed and unconditionally delivered
a fully executed copy of this Lease to each other.
Section 37.2. The obligations of Landlord under this Lease shall not be
-------------
binding upon Landlord named herein after the sale, conveyance, assignment or
transfer by such Landlord (or upon any subsequent landlord after the sale,
conveyance, assignment or transfer by such subsequent landlord) of its interest
in the Building or the Real Property, as the case may be, and in the event of
any such sale, conveyance, assignment or transfer, Landlord shall be and hereby
is entirely freed and relieved of (i) all covenants and obligations of Landlord
hereunder with respect to which performance of Landlord as due prior to the date
of such sale, conveyance, assignment or transfer, to the extent that such
transferee assumes the obligations of Landlord under this Lease, and (ii) all
covenants and obligations of Landlord hereunder with respect to which
performance of Landlord is due from and after the date of such sale, conveyance,
assignment or transfer. The members, partners, shareholders, directors, officers
and principals, direct and indirect, comprising Landlord (collectively, the
"Parties") shall not be liable for the performance of Landlord's obligations
-------
under this Lease. Tenant shall look solely to Landlord to enforce Landlord's
obligations hereunder and shall not seek any damages against any of the Parties.
The liability of Landlord for Landlord's obligations under this Lease shall be
limited to Landlord's interest in the Real Property and Tenant shall not look to
any other property or assets of Landlord or the property or assets of any of the
Parties in seeking either to enforce Landlord's obligations under this Lease or
to satisfy a judgment for Landlord's failure to perform such obligations. After
any such sale, conveyance, assignment or transfer, the liability of the
immediately former Landlord hereunder that may continue pursuant to clause (i)
above, shall be limited to the proceeds of such sale, conveyance, assignment or
transfer.
Section 37.3. Notwithstanding anything contained in this Lease to the
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contrary, all amounts payable by Tenant to or on behalf of Landlord under this
Lease, whether or not expressly denominated Fixed Rent, Escalation Rent,
additional rent or Rental, shall constitute rent for the purposes of Section
502(b)(7) of the Bankruptcy Code.
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Section 37.4. Tenant's liability for all items of Rental shall survive the
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Expiration Date.
Section 37.5. Tenant shall reimburse Landlord as additional rent, within
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ten (10) days after rendition of a statement, for all expenditures made by, or
damages or fines sustained or incurred by, Landlord, due to any default by
Tenant under this Lease, with interest thereon at the Applicable Rate.
Section 37.6. This Lease shall not be recorded.
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Section 37.7. Tenant hereby waives any claim against Landlord which Tenant
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may have based upon any assertion that Landlord has unreasonably withheld or
unreasonably delayed any consent or approval requested by Tenant, and Tenant
agrees that its sole remedy shall be an action or proceeding to enforce any
related provision or for specific performance, injunction or declaratory
judgment. In the event of a determination that such consent or approval has been
unreasonably withheld or delayed, the requested consent or approval shall be
deemed to have been granted; however, Landlord shall have no liability to Tenant
for its refusal or failure to give such consent or approval. Tenant's sole
remedy for Landlord's unreasonably withholding or delaying consent or approval
shall be as provided in this Section 37.7.
Section 37.8. This Lease contains the entire agreement between the parties
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and supersedes all prior understandings, if any, with respect thereto. This
Lease shall not be modified, changed, or supplemented, except by a written
instrument executed by both parties.
Section 37.9. Tenant hereby (a) irrevocably consents and submits to the
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jurisdiction of any Federal, state, county or municipal court sitting in the
State of New York in respect to any action or proceeding brought therein by
Landlord against Tenant concerning any matters arising out of or in any way
relating to this Lease; (b) irrevocably waives personal service of any summons
and complaint and consents to the service upon it of process in any such action
or proceeding by mailing of such process to Tenant at the address set forth
herein and hereby irrevocably designates ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Ustin LLP or other
law firm located in Manhattan if disclosed to Landlord in writing (or if not so
located, then upon any member of the law firm of ▇▇▇▇▇▇▇▇, Weprin & Ustin LLP,
or their successor, if so located in Manhattan), to accept service of any
process on Tenant's behalf and hereby agrees that such service shall be deemed
sufficient; (c) irrevocably waives all objections as to venue and any and all
rights it may have to seek a change of venue with respect to any such action or
proceedings; (d) agrees that the laws of the State of New York shall govern in
any such action or proceeding and waives any defense to any action or proceeding
granted by the laws of any other country or jurisdiction unless such defense is
also allowed by the laws of the State of New York; and (e) agrees that any final
judgment rendered against it in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit on the judgment
or in any other manner provided by law. Tenant further agrees that any action or
proceeding by Tenant against Landlord in respect to any matters arising out of
or in any way relating to this Lease shall be brought only in the State of New
York, county of New York. In furtherance of the foregoing, Tenant hereby agrees
that its address for notices given by Landlord and service of process under this
Lease shall be the Premises. Notwithstanding the foregoing provisions of this
Section 37.9, Tenant may, by written notice to
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Landlord, change the designated agent for acceptance of service of process to
any other law firm located in the City, county and State of New York.
Section 37.10. Unless Landlord shall render written notice to Tenant to
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the contrary in accordance with the provisions of Article 26 hereof, Mendik
Management Company Inc. is authorized to act as Landlord's agent in connection
with the performance of this Lease, including, without limitation, the receipt
and delivery of any and all notices and consents in accordance with Article 26.
Tenant shall direct all correspondence and requests to, and shall be entitled to
rely upon correspondence received from, Mendik Management Company Inc., as agent
for the Landlord in accordance with Article 26. Tenant acknowledges that Mendik
Management Company Inc. is acting solely as agent for Landlord in connection
with the foregoing, and neither Mendik Management Company Inc. nor any of its
direct or indirect members, partners, officers, shareholders, directors or
employees shall have any liability to Tenant in connection with the performance
of Landlord's obligations under this Lease and Tenant waives any and all claims
against any such party arising out of, or in any way connected with, this Lease
or the Real Property.
Section 37.11. (A) All of the Schedules and Exhibits attached hereto are
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incorporated in and made a part of this Lease, but, in the event of any
inconsistency between the terms and provisions of this Lease and the terms and
provisions of the Schedules and Exhibits hereto, the terms and provisions of
this Lease shall control. Wherever appropriate in this Lease, personal pronouns
shall be deemed to include the other genders and the singular to include the
plural. All Article and Section references set forth herein shall, unless the
context otherwise specifically requires, be deemed references to the Articles
and Sections of this Lease.
(B) If any term, covenant, condition or provision of this Lease, or
the application thereof to any person or circumstance, shall ever be held to be
invalid or unenforceable, then in each such event the remainder of this Lease or
the application of such term, covenant, condition or provision to any other
Person or any other circumstance (other than those as to which it shall be
invalid or unenforceable) shall not be thereby affected, and each term,
covenant, condition and provision hereof shall remain valid and enforceable to
the fullest extent permitted by law.
(C) All references in this Lease to the consent or approval of
Landlord shall be deemed to mean the written consent or approval of Landlord and
no consent or approval of Landlord shall be effective for any purpose unless
such consent or approval is set forth in a written instrument executed by
Landlord.
ARTICLE 38
RENT CONTROL
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If at the commencement of, or at any time or times during the Term of this
Lease, the Rental reserved in this Lease shall not be fully collectible by
reason of any Requirement, Tenant shall enter into such agreements and take such
other steps (without additional expense to Tenant) as Landlord may request and
as may be legally permissible to permit Landlord to collect the
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maximum rents which may from time to time during the continuance of such legal
rent restriction be legally permissible (and not in excess of the amounts
reserved therefor under this Lease). Upon the termination of such legal rent
restriction prior to the expiration of the Term, (a) the Rental shall become and
thereafter be payable hereunder in accordance with the amounts reserved in this
Lease for the periods following such termination, and (b) Tenant shall pay to
Landlord, if legally permissible, an amount equal to (i) the items of Rental
which would have been paid pursuant to this Lease but for such legal rent
restriction less (ii) the rents paid by Tenant to Landlord during the period or
periods such legal rent restriction was in effect.
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IN WITNESS WHEREOF, Landlord and Tenant have respectively executed this
Lease as of the day and year first above written.
570 LEXINGTON COMPANY, L.P., Landlord
By: 570 Lexington Associates, L.P., a general partner
By: Vornado 570 Lexington L.L.C.,
By: Vornado Realty Trust as authorized
signatory
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President and Chief
Financial Officer
THE MUSIC CONNECTION CORPORATION, Tenant
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name:
Title:
Fed. Id. No. ▇▇-▇▇▇▇▇▇▇
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/s/ ▇▇▇▇ ▇▇▇▇▇▇, CFO
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Witness 2/22/99
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